[Federal Register Volume 88, Number 87 (Friday, May 5, 2023)]
[Proposed Rules]
[Pages 29184-29446]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07974]



[[Page 29183]]

Vol. 88

Friday,

No. 87

May 5, 2023

Part II





Environmental Protection Agency





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40 CFR Parts 85, 86, 600, et al.





Multi-Pollutant Emissions Standards for Model Years 2027 and Later 
Light-Duty and Medium-Duty Vehicles; Proposed Rule

  Federal Register / Vol. 88, No. 87 / Friday, May 5, 2023 / Proposed 
Rules  

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 85, 86, 600, 1036, 1037, and 1066

[EPA-HQ-OAR-2022-0829; FRL 8953-03-OAR]
RIN 2060-AV49


Multi-Pollutant Emissions Standards for Model Years 2027 and 
Later Light-Duty and Medium-Duty Vehicles

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: Under its Clean Air Act authority, the Environmental 
Protection Agency (EPA) is proposing new, more stringent emissions 
standards for criteria pollutants and greenhouse gases (GHG) for light-
duty vehicles and Class 2b and 3 (``medium-duty'') vehicles that would 
phase-in over model years 2027 through 2032. In addition, EPA is 
proposing GHG program revisions in several areas, including off-cycle 
and air conditioning credits, the treatment of upstream emissions 
associated with zero-emission vehicles and plug-in hybrid electric 
vehicles in compliance calculations, medium-duty vehicle incentive 
multipliers, and vehicle certification and compliance. EPA is also 
proposing new standards to control refueling emissions from incomplete 
medium-duty vehicles, and battery durability and warranty requirements 
for light-duty and medium-duty plug-in vehicles. EPA is also proposing 
minor amendments to update program requirements related to aftermarket 
fuel conversions, importing vehicles and engines, evaporative emission 
test procedures, and test fuel specifications for measuring fuel 
economy.

DATES: 
    Comments: Written comments must be received on or before July 5, 
2023.
    Comments on the information collection provisions submitted to the 
Office of Management and Budget (OMB) under the Paperwork Reduction Act 
(PRA) are best assured of consideration by OMB if OMB receives a copy 
of your comments on or before June 5, 2023.
    Public Hearing: EPA will announce information regarding the public 
hearing for this proposal in a supplemental Federal Register document.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2022-0829, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov/ 
(our preferred method). Follow the online instructions for submitting 
comments.
     Email: [email protected]. Include Docket ID No. EPA-
HQ-OAR-2022-0829 in the subject line of the message.
     Mail: U.S. Environmental Protection Agency, EPA Docket 
Center, OAR, Docket EPA-HQ-OAR-2022-0829, Mail Code 28221T, 1200 
Pennsylvania Avenue NW, Washington, DC 20460.
     Hand Delivery or Courier (by scheduled appointment only): 
EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution 
Avenue NW, Washington, DC 20004. The Docket Center's hours of 
operations are 8:30 a.m.-4:30 p.m., Monday-Friday (except Federal 
Holidays).
    Instructions: All submissions received must include the Docket ID 
No. for this rulemaking. Comments received may be posted without change 
to https://www.regulations.gov/, including any personal information 
provided. For detailed instructions on sending comments and additional 
information on the rulemaking process, see the ``Public Participation'' 
heading of the SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Michael Safoutin, Office of 
Transportation and Air Quality, Assessment and Standards Division 
(ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann 
Arbor, MI 48105; telephone number: (734) 214-4348; email address: 
[email protected].

SUPPLEMENTARY INFORMATION: 

A. Public Participation

Written Comments

    EPA will keep the comment period open until July 5, 2023. All 
information will be available for inspection at the EPA Air Docket No. 
EPA-HQ-OAR-2022-0829. Submit your comments, identified by Docket ID No. 
EPA-HQ-OAR-2022-0829, at https://www.regulations.gov (our preferred 
method), or the other methods identified in the ADDRESSES section. Once 
submitted, comments cannot be edited or removed from the docket. EPA 
may publish any comment received to its public docket. Do not submit to 
EPA's docket at https://www.regulations.gov any information you 
consider to be Confidential Business Information (CBI) or other 
information whose disclosure is restricted by statute. Multimedia 
submissions (audio, video, etc.) must be accompanied by a written 
comment. The written comment is considered the official comment and 
should include discussion of all points you wish to make. EPA will 
generally not consider comments or comment contents located outside of 
the primary submission (i.e., on the web, cloud, or other file sharing 
system). For additional submission methods, the full EPA public comment 
policy, information about CBI or multimedia submissions, and general 
guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.

Public Hearing

    Please refer to the separate Federal Register notice issued by EPA 
for public hearing details. The hearing notice is available at https://www.epa.gov/regulations-emissions-vehicles-and-engines/proposed-rule-multi-pollutant-emissions-standards-model. Please also refer to this 
website for any updates regarding the hearings. EPA does not intend to 
publish additional documents in the Federal Register announcing 
updates.

B. Does this action apply to me?

    Entities potentially affected by this proposed rule include light-
duty vehicle manufacturers, independent commercial importers, 
alternative fuel converters, and manufacturers and converters of 
medium-duty vehicles (i.e., vehicles between 8,501 and 14,000 pounds 
gross vehicle weight rating (GVWR)). Potentially affected categories 
and entities include:

------------------------------------------------------------------------
                                   NAICS codes   Examples of potentially
            Category                   \A\          affected entities
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Industry.......................          336111  Motor Vehicle
                                         336112   Manufacturers.

[[Page 29185]]

 
Industry.......................          811111  Commercial Importers of
                                         811112   Vehicles and Vehicle
                                         811198   Components.
                                         423110
Industry.......................          335312  Alternative Fuel
                                         811198   Vehicle Converters.
Industry.......................          333618  On-highway medium-duty
                                         336120   engine & vehicle
                                         336211   (8,501-14,000 pounds
                                         336312   GVWR) manufacturers.
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\A\ North American Industry Classification System (NAICS).

    This list is not intended to be exhaustive, but rather provides a 
guide regarding entities potentially affected 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.

C. Did EPA conduct a peer review before issuing this proposed action?

    This proposed regulatory action was supported by influential 
scientific information. EPA therefore conducted peer review in 
accordance with OMB's Final Information Quality Bulletin for Peer 
Review. Specifically, we conducted peer review on five analyses: (1) 
Optimization Model for reducing Emissions of Greenhouse gases from 
Automobiles (OMEGA 2.0), (2) Advanced Light-duty Powertrain and Hybrid 
Analysis (ALPHA3), (3) Motor Vehicle Emission Simulator (MOVES), (4) 
The Effects of New-Vehicle Price Changes on New- and Used-Vehicle 
Markets and Scrappage; (5) Literature Review on U.S. Consumer 
Acceptance of New Personally Owned Light-Duty Plug-in Electric 
Vehicles. All peer review was in the form of letter reviews conducted 
by a contractor. The peer review reports for each analysis are in the 
docket for this action and at EPA's Science Inventory (https://cfpub.epa.gov/si/).

Table of Contents

I. Executive Summary
    A. Purpose of This Proposed Rule and Legal Authority
    B. Summary of Proposed Light- and Medium-Duty Vehicle Emissions 
Programs
    C. Summary of Emission Reductions, Costs, and Benefits
    D. What are the alternatives that EPA is considering?
II. Public Health and Welfare Need for Emission Reductions
    A. Climate Change From GHG Emissions
    B. Background on Criteria and Air Toxics Pollutants Impacted by 
This Proposal
    C. Health Effects Associated With Exposure to Criteria and Air 
Toxics Pollutants
    D. Welfare Effects Associated With Exposure to Criteria and Air 
Toxics Pollutants Impacted by the Proposed Standards
III. EPA Proposal for Light- and Medium-Duty Vehicle Standards for 
Model Years 2027 and Later
    A. Introduction and Background
    B. Proposed GHG Standards for Model Years 2027 and Later
    C. Proposed Criteria and Toxic Pollutant Emissions Standards for 
Model Years 2027-2032
    D. Proposed Modifications to the Medium-Duty Passenger Vehicle 
Definition
    E. What alternatives did EPA consider?
    F. Proposed Certification, Compliance, and Enforcement 
Provisions
    G. Proposed On-Board Diagnostics Program Updates
    H. Coordination With Federal and State Partners
    I. Stakeholder Engagement
IV. Technical Assessment of the Proposed Standards
    A. What approach did EPA use in analyzing potential standards?
    B. EPA's Approach to Considering the No Action Case and 
Sensitivities
    C. How did EPA consider technology feasibility and related 
issues?
    D. Projected Compliance Costs and Technology Penetrations
    E. Sensitivities--LD GHG Compliance Modeling
    F. Sensitivities--MD GHG Compliance Modeling
V. EPA's Basis That the Proposed Standards Are Feasible and 
Appropriate Under the Clean Air Act
    A. Overview
    B. Consideration of Technological Feasibility, Compliance Costs 
and Lead Time
    C. Consideration of Emissions of GHGs and Criteria Air 
Pollutants
    D. Consideration of Impacts on Consumers, Energy, Safety and 
Other Factors
    E. Selection of Proposed Standards Under CAA 202(a)
VI. How would this proposal reduce GHG emissions and their 
associated effects?
    A. Estimating Emission Inventories in OMEGA
    B. Impact on GHG Emissions
    C. Global Climate Impacts Associated With the Proposal's GHG 
Emissions Reductions
VII. How would the proposal impact criteria and air toxics emissions 
and their associated effects?
    A. Impact on Emissions of Criteria and Air Toxics Pollutants
    B. How would the proposal affect air quality?
VIII. Estimated Costs and Benefits and Associated Considerations
    A. Summary of Costs and Benefits
    B. Vehicle Cost and Fueling Impacts
    C. U.S. Vehicle Sales Impacts
    D. Greenhouse Gas Emission Reduction Benefits
    E. Criteria Pollutant Health and Environmental Benefits
    F. Other Impacts Including Maintenance and Repair
    G. Energy Security Impacts
    H. Employment Impacts
    I. Environmental Justice
    J. Additional Non-Monetized Considerations Associated With 
Benefits and Costs: Energy Efficiency Gap
IX. Consideration of Potential Fuels Controls for a Future 
Rulemaking
    A. Impacts of High-Boiling Components on Emissions
    B. Survey of High-Boiling Materials in Market Gasoline
    C. Sources of High-Boiling Compounds in Gasoline Production and 
How Reductions Might Occur
    D. Methods of Compliance Determination
    E. Structure and Costs of Standards
    F. Estimated Emissions and Air Quality Impacts
X. Statutory and Executive Order Reviews
    A. Executive Order 12866: ``Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review''
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: ``Federalism''
    F. Executive Order 13175: ``Consultation and Coordination With 
Indian Tribal Governments''
    G. Executive Order 13045: ``Protection of Children From 
Environmental Health Risks and Safety Risks''
    H. Executive Order 13211: ``Energy Effects''
    I. National Technology Transfer and Advancement Act (NTTAA) and 
1 CFR Part 51
    J. Executive Order 12898: ``Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations''

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XI. Statutory Provisions and Legal Authority

I. Executive Summary

A. Purpose of This Proposed Rule and Legal Authority

1. Proposal for Light- and Medium-Duty Multipollutant Standards for 
Model Years 2027 and Later
    The Environmental Protection Agency (EPA) is proposing 
multipollutant emissions standards for light-duty passenger cars and 
light trucks and Class 2b and 3 vehicles (``medium-duty vehicles'' or 
MDVs) under its authority in section 202(a) of the Clean Air Act (CAA), 
42 U.S.C. 7521(a). The proposed program would establish new, more 
stringent vehicle emissions standards for criteria pollutant and 
greenhouse gas (GHG) emissions from motor vehicles for model years 
(MYs) 2027 through 2032.
    Section 202(a) requires EPA to establish standards for emissions of 
air pollutants from new motor vehicles which, in the Administrator's 
judgment, cause or contribute to air pollution which may reasonably be 
anticipated to endanger public health or welfare. Standards under 
section 202(a) take effect ``after such period as the Administrator 
finds necessary to permit the development and application of the 
requisite technology, giving appropriate consideration to the cost of 
compliance within such period.'' Thus, in establishing or revising 
section 202(a) standards designed to reduce air pollution that 
endangers public health and welfare, EPA also must consider issues of 
technological feasibility, the cost of compliance, and lead time. EPA 
also may consider other factors, and in previous vehicle standards 
rulemakings, as well as in this proposal, has considered the impacts of 
potential standards on emissions of air pollutants and associated 
public health and welfare effects, impacts on the automotive industry, 
impacts on the vehicle purchasers/consumers, oil conservation, energy 
security and other energy impacts, safety, and other relevant 
considerations.
    EPA has conducted outreach with a wide range of interested 
stakeholders to gather input which we have considered in developing 
this proposal, and we will continue to engage with the public and all 
interested stakeholders as part of our regulatory development process.
2. Why does EPA believe the proposed standards are appropriate under 
the CAA?
i. Need for Continued Emissions Reductions Under 202(a) of the Clean 
Air Act
    In 2014, EPA finalized criteria pollutant standards for light-duty 
vehicles (``Tier 3'') that were designed to be implemented alongside 
the GHG standards for light-duty vehicles that EPA had adopted in 2012 
for model years 2017-2025.\1\ In 2020, EPA revised the GHG standards 
that had previously been adopted for model years 2021-2026,\2\ and in 
2021, EPA proposed and finalized a rulemaking (the ``2021 rulemaking'') 
\3\ that again revised GHG standards for light-duty passenger cars and 
light trucks for MYs 2023 through 2026, setting significantly more 
stringent standards for those MYs than had been set by the 2020 
rulemaking, and somewhat more stringent than the standards adopted in 
2012.
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    \1\ 79 FR 23414, April 28, 2014, ``Control of Air Pollution From 
Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel Standards.
    \2\ 85 FR 24174, April 30, 2020, ``The Safer Affordable Fuel-
Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger 
Cars and Light Trucks.''
    \3\ 86 FR 74434, December 30, 2021, ``Revised 2023 and Later 
Model Year Light-Duty Vehicle Greenhouse Gas Emissions Standards.''
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    Despite the significant emissions reductions achieved by these and 
other rulemakings, air pollution from motor vehicles continues to 
impact public health, welfare, and the environment. On August 5, 2021, 
Executive Order 14037, ``Strengthening American Leadership in Clean 
Cars and Trucks,'' directed the Administrator to consider beginning 
work on a rulemaking to establish new multi-pollutant emissions 
standards, including both criteria pollutant and GHG emissions, for 
light- and medium-duty vehicles beginning with MY 2027 and extending 
through and including at least MY 2030. The Administrator determined 
that there was a need to begin work on such a rulemaking and 
accordingly is issuing this proposal.
    Motor vehicle emissions contribute to ozone, particulate matter 
(PM), and air toxics, which are linked with premature death and other 
serious health impacts, including respiratory illness, cardiovascular 
problems, and cancer. This air pollution affects people nationwide, as 
well as those who live or work near transportation corridors. In 
addition, there is consensus that the effects of climate change 
represent a rapidly growing threat to human health and the environment, 
and are caused by GHG emissions from human activity, including motor 
vehicle transportation. Recent trends and developments in emissions 
control technology, including vehicle electrification and other 
advanced vehicle technologies, indicate that more stringent emissions 
standards are feasible at reasonable cost and would achieve significant 
improvements in public health and welfare. Addressing these public 
health and welfare needs will require substantial additional reductions 
in criteria pollutants and GHG emissions from the transportation 
sector.
    Addressing the public health impacts of criteria pollutants 
(including particulate matter (PM), ozone, nitrogen oxides 
(NOX), and carbon monoxide (CO)) will require continued 
reductions in these pollutants from the transportation sector. In 2023, 
mobile sources will account for approximately 54 percent of 
anthropogenic NOX emissions, 5 percent of anthropogenic 
direct PM2.5 emissions, and 19 percent of anthropogenic 
volatile organic compound (VOC) emissions.4 5 6 Light- and 
medium-duty-vehicles will account for approximately 20 percent, 19 
percent, and 41 percent of 2023 mobile source NOX, 
PM2.5, and VOC emissions, respectively.4 5 6 The 
benefits of reductions in criteria pollutant emissions accrue broadly 
across many populations and communities. There are currently 15 
PM2.5 nonattainment areas with a population of more than 32 
million people \7\ and 57 ozone nonattainment areas with a population 
of more than 130 million people. The importance of continued reductions 
in these emissions is detailed at length in Section II.
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    \4\ U.S. Environmental Protection Agency (2021). 2016v1 Platform 
(https://www.epa.gov/air-emissions-modeling/2016v1-platform).
    \5\ U.S. Environmental Protection Agency (2021). 2017 National 
Emissions Inventory (NEI) Data. https://www.epa.gov/air-emissions-inventories/2017-national-emissions-inventory-nei-data.
    \6\ U.S. Environmental Protection Agency (2021). MOVES 3.0.1. 
https://www.epa.gov/moves.
    \7\ The population total is calculated by summing, without 
double counting, the 1997, 2006 and 2012 PM2.5 
nonattainment populations contained in the Criteria Pollutant 
Nonattainment Summary report (https://www.epa.gov/green-book/green-book-data-download).
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    The transportation sector is the largest U.S. source of GHG 
emissions, representing 27.2 percent of total GHG emissions.\8\ Within 
the transportation sector, light-duty vehicles are the largest 
contributor, at 57.1 percent, and thus comprise 15.5 percent of total 
U.S. GHG emissions,\9\ even before considering the contribution of 
medium-duty Class 2b

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and 3 vehicles which are also included under this rule. GHG emissions 
have significant impacts on public health and welfare as evidenced by 
the well-documented scientific record and as set forth in EPA's 
Endangerment and Cause or Contribute Findings under section 202(a) of 
the CAA.\10\ Additionally, major scientific assessments continue to be 
released that further advance our understanding of the climate system 
and the impacts that GHGs have on public health and welfare both for 
current and future generations, as discussed in Section II.A, making it 
clear that continued GHG emission reductions in the motor vehicle 
sector are needed to protect public health and welfare.
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    \8\ Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-
2020 (EPA-430-R-22-003, published April 2022).
    \9\ Ibid.
    \10\ 74 FR 66496, December 15, 2009; 81 FR 54422, August 15, 
2016.
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    In addition to and separate from this proposal, the Administration 
has recognized the need for action to address climate change. Executive 
Order 14008 (``Tackling the Climate Crisis at Home and Abroad,'' 
January 27, 2021) recognizes the need for a government-wide approach to 
addressing the climate crisis, directing Federal departments and 
agencies to facilitate the organization and deployment of such an 
effort. On April 22, 2021, the Administration announced a new target 
for the United States to achieve a 50 to 52 percent reduction from 2005 
levels in economy-wide net greenhouse gas pollution in 2030, consistent 
with the goal of limiting global warming to no more than 1.5 degrees 
Celsius by 2050 and representing the U.S. Nationally Determined 
Contribution (NDC) under the Paris Agreement. These actions, while they 
do not inform the standards proposed here, serve to underscore the 
importance of the EPA's Clean Air Act authority to address pollution 
from motor vehicles.
    Also separately from this proposal, the Administration has 
recognized the recent industry advancements in zero-emission vehicle 
technologies and their potential to bring about dramatic reductions in 
emissions. Executive Order 14037 (``Strengthening American Leadership 
in Clean Cars and Trucks,'' August 5, 2021) identified a goal for 50 
percent of U.S. new vehicle sales to be zero-emission vehicles by 2030. 
Congress passed the Bipartisan Infrastructure Law (BIL) \11\ in 2021, 
and the Inflation Reduction Act (IRA) \12\ in 2022, which together 
provide further support for a government-wide approach to reducing 
emissions by providing significant funding and support for air 
pollution and GHG reductions across the economy, including 
specifically, for the component technology and infrastructure for the 
manufacture, sales, and use of electric vehicles.
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    \11\ Public Law 117-58, November 15, 2021.
    \12\ Public Law 117-169, August 16, 2022.
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    These industry advancements in the production and sales of zero- 
and near-zero emission vehicles are already occurring both domestically 
and globally, due to significant investments from automakers, greatly 
increased acceptance by consumers, and added support from Congress, 
state governments, the European Union and other countries. EPA 
recognizes that these industry advancements, along with the additional 
support provided by the BIL and the IRA, represent an important 
opportunity for achieving the public health goals of the Clean Air Act. 
As the term ``zero-emission vehicle'' suggests, these cars and trucks 
have zero GHG and criteria pollutant emissions from their tailpipes, 
which can represent significant reductions over current emissions 
(particularly for GHG). In part because this technology reduces both 
GHG and criteria pollutant emissions, EPA finds it appropriate to set 
new standards for model years after 2026 for both criteria pollutants 
and GHG at this time, rather than continuing its prior approach of 
coordinating the standards but setting them in separate regulatory 
actions. Although EPA is proposing to set GHG and criteria pollutant 
standards in a single rulemaking, these standards are being proposed to 
meet distinct needs for control of distinct pollutants based on EPA's 
assessment of the available control technologies for those pollutants, 
recognizing that some of the available control technologies may 
overlap.
    Likewise, it is important to recognize that, despite this 
anticipated growth in zero-emission vehicles, many internal combustion 
engine (ICE) vehicles will continue to be sold during the time frame of 
the rule and will remain on the road for many years afterward. In 
addition, some vehicle manufacturers have made public statements \13\ 
that some portion of their light-duty sales will remain ICE-based for 
the foreseeable future, predominantly in large SUVs and pickup trucks. 
EPA anticipates that a compliant fleet under the proposed standards 
will include a diverse range of technologies, including higher 
penetrations of advanced gasoline technologies as well as zero-emission 
vehicles. It is therefore important to consider the environmental and 
other implications of the ICE portion of the fleet.
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    \13\ Gastelu, G., ``General Motors President says `the ICE age 
is not over' amid shift to EVs,'' Fox Business, November 17, 2022. 
Accessed on November 29, 2022 at https://www.foxbusiness.com/lifestyle/general-motors-president-ice-age-evs.
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    The Administrator finds that the standards proposed herein are 
consistent with EPA's responsibilities under the CAA and appropriate 
under CAA section 202(a). EPA has carefully considered the statutory 
factors, including technological feasibility and cost of the proposed 
standards and the available lead time for manufacturers to comply with 
them. Based on our analysis, it is our assessment that the proposed 
standards are appropriate and justified under section 202(a) of the 
CAA. Our analysis for this proposal supports the preliminary conclusion 
that the proposed standards are technologically feasible and that the 
costs of compliance for manufacturers would be reasonable. The proposed 
standards would result in significant reductions in emissions of 
criteria pollutants, GHGs, and air toxics, resulting in significant 
benefits for public health and welfare. We also estimate that the 
proposal would result in reduced vehicle operating costs for consumers 
and that the benefits of the proposed program would significantly 
exceed the costs.
ii. Recent and Ongoing Advancements in Technology Enable Further 
Emissions Reductions
    In designing the scope, structure, and stringency of the proposed 
standards, the Administrator considered previous rulemakings, as well 
as the increasing availability of vehicle technologies that can be 
utilized by manufacturers to further reduce emissions. This proposal 
continues EPA's longstanding approach of establishing an appropriate 
and achievable trajectory of emissions reductions by means of 
performance-based standards, for both criteria pollutant and GHG 
emissions, that can be achieved by employing feasible and available 
emissions-reducing vehicle technologies for the model years for which 
the standard will apply.
    CAA section 202(a) directs EPA to regulate emissions of air 
pollutants from new motor vehicles and engines, which in the 
Administrator's judgment cause or contribute to air pollution that may 
reasonably be anticipated to endanger public health or welfare. While 
standards promulgated pursuant to CAA section 202(a) are based on 
application of technology, the statute does not specify a particular 
technology or technologies that must be used to set such standards; 
rather, Congress has authorized and directed EPA to adapt its standards 
to emerging technologies.

[[Page 29188]]

Thus, as with prior rules, EPA is assessing the feasibility of new 
standards in light of current and anticipated progress by automakers in 
developing and deploying new technologies. The levels of stringency in 
this proposal continue the trend of increased emissions reductions 
which have been adopted by prior EPA rules. The Tier 3 standards 
achieved reductions of up to 80 percent in tailpipe criteria pollutant 
emissions by treating the engine and fuel as an integrated system and 
requiring cleaner fuel as well as improved catalytic emissions control 
systems. Compliance with the EPA GHG standards over the past decade has 
been achieved predominantly through the application of advanced 
technologies to internal-combustion engine (ICE) vehicles. In that same 
time frame, as the EPA GHG standards have increased in stringency, 
automakers have relied to a greater degree on a range of 
electrification technologies, including hybrid electric vehicles (HEVs) 
and, in recent years, plug-in electric vehicles (PEVs) which include 
plug-in hybrid electric vehicles (PHEVs) and battery-electric vehicles 
(BEVs). As these technologies have been advancing rapidly in just the 
past several years, and battery costs have continued to decline, 
automakers have begun to include BEVs and PHEVs as an integral and 
growing part of their current and future product lines, leading to an 
increasing diversity of these clean vehicles planned for high-volume 
production. As a result, zero- and near-zero emission technologies are 
more feasible and cost-effective now than at the time of prior 
rulemakings.
    These industry developments in vehicle electrification are driven 
by a number of factors, including the need to compete in a diverse 
market, as zero-emission transportation policies continue to be 
implemented across the world. An increasing number of U.S. states have 
taken actions to shift the light-duty fleet toward zero-emissions 
technology. In 2022, California finalized the Advanced Clean Cars II 
rule \14\ that will require, by 2035, all new light-duty vehicles sold 
in the state to be zero-emission vehicles,\15\ with New 
York,16 17 Massachusetts,18 19 and Washington 
state \20\ following suit, likely to be followed by Oregon and Vermont 
as well.\21\ Several other states may adopt similar provisions as 
members of the International Zero-Emission Vehicle Alliance.\22\ In 
addition to the U.S., auto manufacturers also compete in a global 
market that is becoming increasingly electrified. Globally, at least 20 
countries, as well as numerous local jurisdictions, have announced 
targets for shifting all new passenger car sales to zero-emission 
vehicles in the coming years, including Norway (2025); Austria, the 
Netherlands, Denmark, Iceland, India, Ireland, Israel, Scotland, 
Singapore, Sweden, and Slovenia (2030); Canada, Chile, Germany, 
Thailand, and the United Kingdom (2035); and France, Spain, and Sri 
Lanka (2040).23 24 25 26 Many of these announcements extend 
to light commercial vehicles as well, and several also target a shift 
to 100 percent all-electric medium- and heavy-duty vehicle sales 
(Norway targeting 2030, Austria 2035, and Canada and the United Kingdom 
2040).
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    \14\ California Air Resources Board, ``California moves to 
accelerate to 100% new zero-emission vehicle sales by 2035,'' Press 
Release, August 25, 2022. Accessed on Nov. 3, 2022 at https://ww2.arb.ca.gov/news/california-moves-accelerate-100-new-zero-emission-vehicle-sales-2035.
    \15\ State of California Office of the Governor, ``Governor 
Newsom Announces California Will Phase Out Gasoline-Powered Cars & 
Drastically Reduce Demand for Fossil Fuel in California's Fight 
Against Climate Change,'' Press Release, September 23, 2020.
    \16\ New York State Senate, Senate Bill S2758, 2021-2022 
Legislative Session. January 25, 2021.
    \17\ Governor of New York Press Office, ``In Advance of Climate 
Week 2021, Governor Hochul Announces New Actions to Make New York's 
Transportation Sector Greener, Reduce Climate-Altering Emissions,'' 
September 8, 2021. Accessed on September 16, 2021 at https://www.governor.ny.gov/news/advance-climate-week-2021-governor-hochul-announces-new-actions-make-new-yorks-transportation.
    \18\ Boston.com, ``Following California's lead, state will 
likely ban all sales of new gas-powered cars by 2035,'' August 27, 
2022. Accessed November 3, 2022 at https://www.boston.com/news/local-news/2022/08/27/following-californias-lead-state-will-likely-ban-all-sales-of-new-gas-powered-cars-by-2035/.
    \19\ Commonwealth of Massachusetts, ``Request for Comment on 
Clean Energy and Climate Plan for 2030,'' December 30, 2020.
    \20\ Washington Department of Ecology, ``Washington sets path to 
phase out gas vehicles by 2035,'' Press Release, Sept. 7, 2022. 
Accessed on Nov. 3, 2022 at https://ecology.wa.gov/About-us/Who-we-are/News/2022/Sept-7-Clean-Vehicles-Public-Comment.
    \21\ Associated Press, ``17 states weigh adopting California's 
electric car mandate,'' September 3, 2022. Accessed on November 4, 
2022 at https://apnews.com/article/technology-california-clean-air-act-vehicle-emissions-standards-eebb48c13e24835f2c5b9cb56796182a.
    \22\ ZEV Alliance, ``International ZEV Alliance Announcement,'' 
Dec. 3, 2015. Accessed on July 16, 2021 at http://www.zevalliance.org/international-zev-alliance-announcement/.
    \23\ Environment and Climate Change Canada, ``Achieving a Zero-
Emission Future for Light-Duty Vehicles: Stakeholder Engagement 
Discussion Document December 17,'' EC21255, December 17, 2021. 
Accessed on February 13, 2023 at https://www.canada.ca/content/dam/eccc/documents/pdf/cepa/achieving-zero-emission-future-light-duty-vehicles.pdf.
    \24\ International Council on Clean Transportation, ``Update on 
the global transition to electric vehicles through 2019,'' July 
2020.
    \25\ International Council on Clean Transportation, ``Growing 
momentum: Global overview of government targets for phasing out new 
internal combustion engine vehicles,'' posted 11 November 2020, 
accessed April 28, 2021 at https://theicct.org/blog/staff/global-ice-phaseout-nov2020.
    \26\ Reuters, ``Canada to ban sale of new fuel-powered cars and 
light trucks from 2035,'' June 29, 2021. Accessed July 1, 2021 from 
https://www.reuters.com/world/americas/canada-ban-sale-new-fuel-powered-cars-light-trucks-2035-2021-06-29/.
---------------------------------------------------------------------------

    Together, the countries that through mid-2022 had set a target of 
100 percent light-duty zero-emission vehicle sales by 2035 represented 
at least 25 percent of today's global light-duty vehicle market.\27\ In 
addition, in February 2023 the European Union gave preliminary approval 
to a measure to phase out sales of ICE passenger vehicles in its 27 
member countries by 2035.28 29 In 2021, BEVs and PHEVs 
together already comprised about 18 percent of the new vehicle market 
in Western Europe,\30\ led by Norway which reached 64.5 percent BEV and 
86.2 percent combined BEV and PHEV sales in 2021, increasing to 79.3 
percent BEV and 87.8 percent combined BEV and PHEV sales in 
2022.31 32 33
---------------------------------------------------------------------------

    \27\ International Energy Agency, ``Global EV Outlook 2022,'' p. 
57, May 2022. Accessed on November 18, 2022 at https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf.
    \28\ Reuters, ``EU approves effective ban on new fossil fuel 
cars from 2035,'' October 28, 2022. Accessed on Nov. 2, 2022 at 
https://www.reuters.com/markets/europe/eu-approves-effective-ban-new-fossil-fuel-cars-2035-2022-10-27/.
    \29\ Reuters, ``EU lawmakers approve effective 2035 ban on new 
fossil fuel cars,'' February 14, 2023. Accessed on February 26, 2023 
at https://www.reuters.com/business/autos-transportation/eu-lawmakers-approve-effective-2035-ban-new-fossil-fuel-cars-2023-02-14/.
    \30\ Ewing, J., ``China's Popular Electric Vehicles Have Put 
Europe's Automakers on Notice,'' New York Times, accessed on 
November 1, 2021 at https://www.nytimes.com/2021/10/31/business/electric-cars-china-europe.html.
    \31\ Klesty, V., ``With help from Tesla, nearly 80% of Norway's 
new car sales are electric,'' Reuters, accessed on November 1, 2021 
at https://www.reuters.com/business/autos-transportation/tesla-pushes-norways-ev-sales-new-record-2021-10-01/.
    \32\ Norwegian Information Council for Road Traffic (OFV), ``New 
car boom and electric car record in September,'' October 1, 2021, 
accessed on November 1, 2021 at https://ofv.no/aktuelt/2021/nybil-boom-og-elbilrekord-i-september.
    \33\ Holland, M., '' Norway's EV Sales Explode Ahead Of Policy 
Changes,'' CleanTechnica, January 4, 2023. Accessed on February 22, 
2023 at https://cleantechnica.com/2023/01/04/norways-ev-sales-explode-ahead-of-policy-changes/.

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[[Page 29189]]

    Recent trends in market penetration of zero and near-zero emission 
vehicles suggest that demand for these vehicles in the U.S. is rapidly 
increasing. Even under current standards, the production of new PEVs 
(including both BEVs and PHEVs) is growing rapidly and roughly doubling 
every year, projected to be 8.4 percent of U.S. light-duty vehicle 
production in MY 2022, up from 4.4 percent in MY 2021 and 2.2 percent 
in MY 2020.\34\ In 2022, BEVs alone accounted for about 807,000 U.S. 
new car sales, or about 5.8 percent of the new light-duty passenger 
vehicle market, up from 3.2 percent BEVs the year before.\35\ In 
California, new light-duty zero-emission vehicle (ZEV) sales in 2022 
reached 18.8 percent of all new cars, up from 12.4 percent in 2021 and 
more than twice the share from 2020.\36\
---------------------------------------------------------------------------

    \34\ Environmental Protection Agency, ``The 2022 EPA Automotive 
Trends Report: Greenhouse Gas Emissions, Fuel Economy, and 
Technology since 1975,'' EPA-420-R-22-029, December 2022.
    \35\ Colias, M., ``U.S. EV Sales Jolted Higher in 2022 as 
Newcomers Target Tesla,'' Wall Street Journal, January 6, 2023.
    \36\ California Energy Commission, ``New ZEV Sales in 
California'' online dashboard, viewed on February 13, 2023 at 
https://www.energy.ca.gov/data-reports/energy-almanac/zero-emission-vehicle-and-infrastructure-statistics/new-zev-sales.
---------------------------------------------------------------------------

    Before the Inflation Reduction Act (IRA) became law, analysts were 
already projecting that significantly increased penetration of plug-in 
electric vehicles would occur in the United States and in global 
markets. For example, in 2021, IHS Markit predicted a nearly 40 percent 
U.S. PEV share by 2030.\37\ More recent projections by Bloomberg New 
Energy Finance suggest that under current policy and market conditions, 
and prior to the IRA, the U.S. was on pace to reach 40 to 50 percent 
PEVs by 2030.\38\ When adjusted for the effects of the Inflation 
Reduction Act, this estimate increases to 52 percent.\39\ Another study 
by the International Council on Clean Transportation (ICCT) and Energy 
Innovation that includes the effect of the IRA estimates that the share 
of BEVs will increase to 56 to 67 percent by 2032.\40\ These 
projections typically are based on assessment of a range of existing 
and developing factors, including state policies (such as the 
California Advanced Clean Cars II program and its adoption by Section 
177 states); although the assumptions and other inputs to these 
forecasts vary, they point to greatly increased penetration of 
electrification across the U.S. light-duty fleet in the coming years, 
without specifically considering the effect of increased emission 
standards under this proposed rule.
---------------------------------------------------------------------------

    \37\ IHS Markit, ``US EPA Proposed Greenhouse Gas Emissions 
Standards for Model Years 2023-2026; What to Expect,'' August 9, 
2021. Accessed on March 9, 2023 at https://www.spglobal.com/mobility/en/research-analysis/us-epa-proposed-greenhouse-gas-emissions-standards-my2023-26.html. The table indicates 32.3% BEVs 
and combined 39.7% BEV, PHEV, and range-extended electric vehicle 
(REX) in 2030.
    \38\ Bloomberg New Energy Finance (BNEF), ``Electric Vehicle 
Outlook 2022,'' Long term outlook economic transition scenario.
    \39\ Tucker, S., ``Study: More Than Half of Car Sales Could Be 
Electric By 2030,'' Kelley Blue Book, October 4, 2022. Accessed on 
February 24, 2023 at https://www.kbb.com/car-news/study-more-than-half-of-car-sales-could-be-electric-by-2030/.
    \40\ International Council on Clean Transportation, ``Analyzing 
the Impact of the Inflation Reduction Act on Electric Vehicle Uptake 
in the US,'' ICCT White Paper, January 2023. Available at https://theicct.org/wp-content/uploads/2023/01/ira-impact-evs-us-jan23.pdf.
---------------------------------------------------------------------------

    These trends echo an ongoing global shift toward electrification. 
Global light-duty passenger PEV sales (including BEVs and PHEVs) 
reached 6.6 million in 2021, bringing the total number of PEVs on the 
road to more than 16.5 million globally.\41\ For fully-electric BEVs, 
global sales rose to 7.8 million in 2022, an increase of about 68 
percent from the previous year and representing about 10 percent of the 
new global light-duty passenger vehicle market.42 43 Leading 
sales forecasts predict that BEV sales will continue to accelerate 
globally in the years to come. For example, in June 2022, Bloomberg New 
Energy Finance predicted that global sales will rise to 21 million in 
2025 (implying an annual growth rate of about 39 percent from 2022), 
with total global vehicle stock reaching 77 million BEVs by 2025 and 
229 million BEVs by 2030.\44\
---------------------------------------------------------------------------

    \41\ International Energy Agency, ``Global EV Outlook 2022,'' p. 
107, May 2022. Accessed on November 18, 2022 at https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf.
    \42\ Boston, W., ``EVs Made Up 10% of All New Cars Sold Last 
Year,'' Wall Street Journal, January 16, 2023.
    \43\ Colias, M., ``U.S. EV Sales Jolted Higher in 2022 as 
Newcomers Target Tesla,'' Wall Street Journal, January 6, 2023.
    \44\ Bloomberg NEF, ``Net-Zero Road Transport By 2050 Still 
Possible, As Electric Vehicles Set To Quintuple By 2025,'' June 1, 
2022. Accessed on February 21, 2023 at https://about.bnef.com/blog/net-zero-road-transport-by-2050-still-possible-as-electric-vehicles-set-to-quintuple-by-2025/.
---------------------------------------------------------------------------

    The year-over-year growth in U.S. PEV sales suggests that an 
increasing share of new vehicle buyers are concluding that a PEV is the 
best vehicle to meet their needs. Many of the zero-emission vehicles 
already on the market today cost less to operate than ICE vehicles, 
offer improved performance and handling, have a driving range similar 
to that of ICE vehicles, and can be charged at a growing network of 
public chargers as well as at home.45 46 47 48 49 50 PEV 
owners often describe these advantages as key factors motivating their 
purchase.\51\ A 2022 survey by Consumer Reports shows that more than 
one third of Americans would either seriously consider or definitely 
buy or lease a BEV today, if they were in the market for a vehicle.\52\ 
Given that most consumers are currently much less familiar with BEVs 
than with ICE vehicles, this share is likely to rapidly grow as 
familiarity increases in response to increasing numbers of BEVs on the 
road and growing visibility of charging infrastructure. Most PEV owners 
who purchase a subsequent vehicle choose another PEV, and often express 
resistance to returning to an ICE vehicle after experiencing PEV 
ownership.53 54
---------------------------------------------------------------------------

    \45\ Department of Energy Vehicle Technologies Office, 
Transportation Office, Transportation Analysis Fact of the Week 
#1186, ``The National Average Cost of Fuel for an Eletric Vehicle is 
about 60% Less than for a Gasoline Vehicle,'' May 17, 2021.
    \46\ Department of Energy Vehicle Technologies Office, 
Transportation Office, Transportation Analysis Fact of the Week 
#1190, ``Battery-Electric Vehicles Have Lower Scheduled Maintenance 
Costs than Other Light-Duty Vehicles,'' June 14, 2021.
    \47\ International Council on Clean Transportation, ``Assessment 
of Light-Duty Electric Vehicle Costs and Consumer Benefits in the 
United States in the 2022-2035 Time Frame,'' October 2022.
    \48\ Consumer Reports, ``Electric Cars 101: The Answers to All 
Your EV Questions,'' November 5, 2020. Accessed June 8, 2021 at 
https://www.consumerreports.org/hybrids-evs/electric-cars-101-the-answers-to-all-your-ev-questions/.
    \49\ Department of Energy Vehicle Technologies Office, 
Transportation Analysis Fact of the Week #1253, ``Fourteen Model 
Year 2022 Light-Duty Electric Vehicle Models Have a Driving Range of 
300 Miles or Greater,'' August 29, 2022.
    \50\ Department of Energy Alternative Fuels Data Center, 
Electric Vehicle Charging Station Locations. Accessed on May 19, 
2021 at https://afdc.energy.gov/fuels/electricity_locations.html#/find/nearest?fuel=ELEC.
    \51\ Hardman, S., and Tal, G., ``Understanding discontinuance 
among California's electric vehicle owners,'' Nature Energy, v.538 
n.6, May 2021 (pp. 538-545).
    \52\ Consumer Reports, ``More Americans Would Buy an Electric 
Vehicle, and Some Consumers Would Use Low-Carbon Fuels, Survey 
Shows,'' July 7, 2022. Accessed on March 8, 2023 at https://www.consumerreports.org/hybrids-evs/interest-in-electric-vehicles-and-low-carbon-fuels-survey-a8457332578/.
    \53\ Muller, J., ``Most electric car buyers don't switch back to 
gas,'' Axios.com. Accessed on February 24, 2023 at https://www.axios.com/2022/10/05/ev-adoption-loyalty-electric-cars.
    \54\ Hardman, S., and Tal, G., ``Understanding discontinuance 
among California's electric vehicle owners,'' Nature Energy, v.538 
n.6, May 2021 (pp. 538-545).
---------------------------------------------------------------------------

    Recent literature indicates that consumer affinity for PEVs is 
strong. A recent study utilizing data from all new light-duty vehicles 
sold in the U.S. between 2014 and 2020, focused on comparisons of BEVs 
with their closest ICE counterparts, found that BEVs are

[[Page 29190]]

preferred to the ICE counterpart in some segments.\55\ In addition, 
when comparing all BEV sales with sales of the closest ICE 
counterparts, BEVs attain a market share of over 30 percent, which is 
significantly greater than the BEV market share among all vehicles.\56\ 
This suggests that the share of PEVs in the marketplace is, at least 
partially, constrained due to the lack of offerings needed to convert 
existing demand into market share.\56\ However, the number and 
diversity of electrified vehicle models is rapidly increasing.\56\ For 
example, the number of PEV models available for sale in the U.S. has 
more than doubled from about 24 in MY 2015 to about 60 in MY 2021, with 
offerings in a growing range of vehicle segments.\57\ Recent 
announcements indicate that this number will increase to more than 80 
models by MY 2023,\58\ and more than 180 models by 2025.\59\
---------------------------------------------------------------------------

    \55\ Gillingham, K., van Benthem, A., Weber, S., Saafi, D., He, 
X. ``Has Consumer Acceptance of Electric Vehicles Been Increasing: 
Evidence from Microdata on Every New Vehicle Sale in the United 
States.'' American Economic Association: Papers & Proceedings, 2023, 
forthcoming. https://resources.environment.yale.edu/gillingham/GBWSH_ConsumerAcceptanceEVs.pdf.
    \56\ Muratori et al., ``The rise of electric vehicles--2020 
status and future expectations,'' Progress in Energy v3n2 (2021), 
March 25, 2021. Accessed July 15, 2021 at https://iopscience.iop.org/article/10.1088/2516-1083/abe0ad.
    \57\ Fueleconomy.gov, 2015 Fuel Economy Guide and 2021 Fuel 
Economy Guide.
    \58\ Environmental Defense Fund and M.J. Bradley & Associates, 
``Electric Vehicle Market Status--Update, Manufacturer Commitments 
to Future Electric Mobility in the U.S. and Worldwide,'' April 2021.
    \59\ Environmental Defense Fund and ERM, ``Electric Vehicle 
Market Update: Manufacturer Commitments and Public Policy 
Initiatives Supporting Electric Mobility in the U.S. and 
Worldwide,'' September 2022.
---------------------------------------------------------------------------

    According to the U.S. Bureau of Labor Statistics, growth in PEV 
sales is driven in part by growing consumer demand and growing 
automaker commitments to electrification and will be further supported 
by policy measures including the Bipartisan Infrastructure Law and the 
Inflation Reduction Act.\60\ As the presence of PEVs in the fleet 
increases, consumers are encountering PEVs more often in their daily 
experience. Many analysts believe that as PEVs continue to increase 
their market share, PEV ownership will continue to broaden its appeal 
as consumers gain more exposure and experience with the technology and 
with the benefits of PEV ownership,\61\ with some analysts suggesting 
that a ``tipping point'' for PEV adoption may then 
result.62 63 64
---------------------------------------------------------------------------

    \60\ U.S. Bureau of Labor Statistics, ``Charging into the 
future: the transition to electric vehicles,'' Beyond the Numbers 
v12 n4, February 2023. Available at: https://www.bls.gov/opub/btn/volume-12/charging-into-the-future-the-transition-to-electric-vehicles.htm.
    \61\ Jackman, D.K., K.S. Fujita (LBNL), H.C. Yang (LBNL), and M. 
Taylor (LBNL). Literature Review of U.S. Consumer Acceptance of New 
Personally Owned Light-Duty (LD) Plug-in Electric Vehicles (PEVs). 
U.S. Environmental Protection Agency, Washington, DC Available at: 
https://cfpub.epa.gov/si/si_public_record_report.cfm?dirEntryId=353465.
    \62\ Car and Driver, ``Electric Cars' Turning Point May Be 
Happening as U.S. Sales Numbers Start Climb,'' August 8, 2022. 
Accessed on February 24, 2023 at https://www.caranddriver.com/news/a39998609/electric-car-sales-usa/.
    \63\ Randall, T., ``US Crosses the Electric-Car Tipping Point 
for Mass Adoption,'' Bloomberg.com, July 9, 2022. Accessed on 
February 24, 2023 at https://www.bloomberg.com/news/articles/2022-07-09/us-electric-car-sales-reach-key-milestone.
    \64\ Romano, P., ``EV adoption has reached a tipping point. 
Here's how today's electric fleets will shape the future of 
mobility,'' Fortune, October 11, 2022. Accessed on February 24, 2023 
at https://fortune.com/2022/10/11/ev-adoption-tesla-semi-tipping-point-electric-fleets-future-mobility-pasquale-romano/.
---------------------------------------------------------------------------

    While the retail price of PEVs is typically higher than for 
comparable ICE vehicles at this time, the price difference is widely 
expected to narrow or disappear, particularly for BEVs, as the cost of 
batteries and other components fall in the coming years.\65\ Among the 
many studies that address cost parity of BEVs vs. ICE vehicles, an 
emerging consensus suggests that purchase price parity is likely to 
occur by the mid-2020s for some vehicle segments and models, and for a 
broader segment of the market on a total cost of ownership (TCO) 
basis.66 67 By some accounts, a compact car with a 
relatively small battery (for example, a 40 kWh battery and 
approximately 150 miles of range) may already be possible to produce 
and sell for the same price as a compact ICE vehicle.\68\ For larger 
vehicles and/or those with a longer range (either of which call for a 
larger battery), many analysts expect examples of price parity to 
increasingly appear over the mid- to late-2020s. Assessments of price 
parity often do not include the effect of various state and Federal 
purchase incentives. For example, the Clean Vehicle Credit provides up 
to $7,500, under the Inflation Reduction Act, effectively making some 
BEVs more affordable to buy and operate today than comparable ICE 
vehicles. Many expect TCO parity to precede price parity by several 
years, as it accounts for the reduced cost of operation and maintenance 
for BEVs.69 70 For example, Kelley Blue Book already 
estimates that the vehicle with lowest TCO in both the full-size pickup 
and luxury car classes of vehicle is a BEV.71 72 TCO parity 
is of particular interest to commercial and fleet operators, for whom 
lower TCO is a compelling business consideration.
---------------------------------------------------------------------------

    \65\ International Council on Clean Transportation, ``Assessment 
of Light-Duty Electric Vehicle Costs and Consumer Benefits in the 
United States in the 2022-2035 Time Frame,'' October 2022.
    \66\ International Council on Clean Transportation, ``Assessment 
of Light-Duty Electric Vehicle Costs and Consumer Benefits in the 
United States in the 2022-2035 Time Frame,'' October 2022.
    \67\ Environmental Defense Fund and ERM, ``Electric Vehicle 
Market Update: Manufacturer Commitments and Public Policy 
Initiatives Supporting Electric Mobility in the U.S. and 
Worldwide,'' September 2022.
    \68\ Walton, R., ``Electric vehicle models expected to triple in 
4 years as declining battery costs boost adoption,'' 
UtilityDive.com, December 14, 2020.
    \69\ International Council on Clean Transportation, ``Assessment 
of Light-Duty Electric Vehicle Costs and Consumer Benefits in the 
United States in the 2022-2035 Time Frame,'' October 2022.
    \70\ Environmental Defense Fund and ERM, ``Electric Vehicle 
Market Update: Manufacturer Commitments and Public Policy 
Initiatives Supporting Electric Mobility in the U.S. and 
Worldwide,'' September 2022.
    \71\ Kelley Blue Book, ``What is 5-Year Cost to Own?'', Full-
size Pickup Truck selected (Ford F-150 Lighting is lowest TCO). 
Accessed on February 28, 2023 at https://www.kbb.com/new-cars/total-cost-of-ownership/.
    \72\ Kelley Blue Book, ``What is 5-Year Cost to Own?'', Luxury 
Car selected (Polestar 2 and Tesla Model 3 are lowest TCO). Accessed 
on February 28, 2023 at https://www.kbb.com/new-cars/total-cost-of-ownership/.
---------------------------------------------------------------------------

    A proliferation of announcements by automakers in the past two 
years signals a rapidly growing shift in product development focus 
among automakers away from internal-combustion technologies and toward 
electrification. For example, in January 2021, General Motors announced 
plans to become carbon neutral by 2040, including an effort to shift 
its light-duty vehicles entirely to zero-emissions by 2035.\73\ In 
March 2021, Volvo announced plans to make only electric cars by 
2030,\74\ and Volkswagen announced that it expects half of its U.S. 
sales will be all-electric by 2030.\75\ In April 2021, Honda announced 
a full electrification plan to take effect by 2040, with 40 percent of 
North American sales expected to be fully electric or fuel cell 
vehicles by 2030, 80 percent by 2035 and 100 percent by 2040.\76\ In 
May 2021, Ford announced that they expect 40 percent of their global 
sales will be all-electric by 2030.\77\ In June 2021, Fiat announced

[[Page 29191]]

a move to all electric vehicles by 2030, and in July 2021 its parent 
corporation Stellantis announced an intensified focus on 
electrification across all of its brands.78 79 Also in July 
2021, Mercedes-Benz announced that all of its new architectures would 
be electric-only from 2025, with plans to become ready to go all-
electric by 2030 where possible.\80\ In December 2021, Toyota announced 
plans to introduce 30 BEV models by 2030.\81\ Figure 1, taken from work 
by the Environmental Defense Fund and ERM, illustrates how these and 
other announcements mean that virtually every major manufacturer of 
light-duty vehicles is already planning to introduce widespread 
electrification across their global fleets in the coming years.\82\
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    \73\ General Motors, ``General Motors, the Largest U.S. 
Automaker, Plans to be Carbon Neutral by 2040,'' Press Release, 
January 28, 2021.
    \74\ Volvo Car Group, ``Volvo Cars to be fully electric by 
2030,'' Press Release, March 2, 2021.
    \75\ Volkswagen Newsroom, ``Strategy update at Volkswagen: The 
transformation to electromobility was only the beginning,'' March 5, 
2021. Accessed June 15, 2021 at https://www.volkswagen-newsroom.com/en/stories/strategy-update-at-volkswagen-the-transformation-to-electromobility-was-only-the-beginning-6875.
    \76\ Honda News Room, ``Summary of Honda Global CEO Inaugural 
Press Conference,'' April 23, 2021. Accessed June 15, 2021 at 
https://global.honda/newsroom/news/2021/c210423eng.html.
    \77\ Ford Motor Company, ``Superior Value From EVs, Commercial 
Business, Connected Services is Strategic Focus of Today's 
`Delivering Ford+' Capital Markets Day,'' Press Release, May 26, 
2021.
    \78\ Stellantis, ``World Environment Day 2021--Comparing 
Visions: Olivier Francois and Stefano Boeri, in Conversation to 
Rewrite the Future of Cities,'' Press Release, June 4, 2021.
    \79\ Stellantis, ``Stellantis Intensifies Electrification While 
Targeting Sustainable Double-Digit Adjusted Operating Income Margins 
in the Mid-Term,'' Press Release, July 8, 2021.
    \80\ Mercedes-Benz, ``Mercedes-Benz prepares to go all-
electric,'' Press Release, July 22, 2021.
    \81\ Toyota Motor Corporation, ``Video: Media Briefing on 
Battery EV Strategies,'' Press Release, December 14, 2021. Accessed 
on December 14, 2021 at https://global.toyota/en/newsroom/corporate/36428993.html.
    \82\ Environmental Defense Fund and ERM, ``Electric Vehicle 
Market Update: Manufacturer Commitments and Public Policy 
Initiatives Supporting Electric Mobility in the U.S. and 
Worldwide,'' September 2022.
[GRAPHIC] [TIFF OMITTED] TP05MY23.004

    Accompanying this global-market focus on electrification, as shown 
in Figure 2, the number of PHEV and BEV models available in the U.S. 
has steadily grown, and a large number of public model announcements by 
manufacturers indicate further steep growth will occur in the years to 
come.

[[Page 29192]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.005

    Globally and domestically, these ongoing announcements indicate a 
strong industry momentum toward electrification that is common to every 
major manufacturer. Given the breadth of these announcements, it is 
instructive to consider the penetrations of PEVs that they imply when 
taken collectively.
    Table 1 compiles public announcements of U.S. and global 
electrification targets to date by major manufacturers. Assuming that 
the MY 2022 U.S. sales shares for each manufacturer were to persist in 
2030, these targets would collectively imply a U.S. PEV sales share 
approaching 50 percent in 2030 (48.6 percent), consisting primarily of 
BEVs.

                       Table 1--Example of U.S. Electrified New Sales Percentages Implied by OEM Announcements for 2030 or Before
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                          Implied OEM
                                                                       Share of total     Stated EV                                     contribution to
          2022 U.S. sales rank                        OEM                 2022 U.S.     share in 2030          Powertrain \3\            2030 total PEV
                                                                        sales \1\ (%)      \2\ (%)                                      market share (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................  General Motors.............            16.4              50  PEV                                           8.2
2.......................................  Toyota.....................            15.4          \4\ 33  BEV                                           5.1
3.......................................  Ford.......................            13.1              50  BEV                                           6.5
4.......................................  Stellantis.................            11.2              50  BEV                                           5.6
5.......................................  Honda......................             7.2              40  BEV                                           2.9
6.......................................  Hyundai....................             5.7              50  BEV                                           2.8
7.......................................  Nissan.....................             5.3              40  BEV                                           2.1
8.......................................  Kia........................             5.0              45  BEV                                           2.3
9.......................................  Subaru.....................             4.1              40  BEV                                           1.6
10......................................  Volkswagen, Audi...........             3.6              50  BEV                                           1.8
11......................................  Tesla......................             3.4             100  BEV                                           3.4
12......................................  Mercedes-Benz..............             2.6             100  BEV                                           2.6
13......................................  BMW........................             2.6              50  BEV                                           1.3
14......................................  Mazda......................             2.1              25  BEV                                           0.5
15......................................  Volvo......................             0.8             100  BEV                                           0.8
16......................................  Mitsubishi.................             0.6              50  PEV \5\                                       0.3
17......................................  Porsche....................             0.5              80  BEV                                           0.4
18......................................  Land Rover.................             0.4              60  BEV                                           0.3
19......................................  Jaguar.....................            0.07             100  BEV                                           0.7
20......................................  Lucid......................            0.02             100  BEV                                          0.02
                                                                      ----------------------------------------------------------------------------------
    Total...............................  ...........................           100.0  ..............  ..............................               48.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\1\ 2022 U.S. sales shares based on data from Ward's Automotive Intelligence.
\2\ Where a U.S. target was not specified, the global target was assumed for the U.S.
\3\ PEV = combination of BEV and PHEV. PEV and BEV may include fuel cell electric vehicles (FCEV).
\4\ Based on announced goal of 3.5 million BEVs globally in 2030, divided by 10.5 million vehicles sold in 2022.
\5\ Announcement includes unspecified amount of HEVs.
A version of this table with supporting citations for each automaker announcement, and the raw data with additional tabulations, are available in the
  Docket.\83\


[[Page 29193]]

    While manufacturer announcements such as these are not binding, and 
often are conditioned as forward-looking and subject to uncertainty, 
they indicate that manufacturers are confident in the suitability of 
PEV technology as an effective and attractive option that can serve the 
functional needs of a large portion of light-duty vehicle buyers.
---------------------------------------------------------------------------

    \83\ See Memo to Docket ID No. EPA-HQ-OAR-2022-0829 titled 
``Electrification Announcements and Implied PEV Penetration by 
2030.''
---------------------------------------------------------------------------

    As seen in Figure 3, an analysis by the International Energy Agency 
similarly concludes that the 2030 U.S. zero-emission vehicle sales 
share collectively implied by such announcements (``range of OEM 
declarations'') would amount to nearly 50 percent if not more, far 
exceeding the 20 percent that IEA considers sufficient to meet existing 
U.S. policies and regulations (``Stated Policies'' scenario).\84\
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    \84\ International Energy Agency, ``Global EV Outlook 2022,'' p. 
107, May 2022. Accessed on November 18, 2022 at https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf.
[GRAPHIC] [TIFF OMITTED] TP05MY23.006

    Fleet electrification plans are not limited to light-duty vehicles. 
Numerous commitments to purchase all-electric medium-duty delivery vans 
have been announced by large fleet owners including FedEx,\85\ 
Amazon,\86\ and Walmart,\87\ in partnerships with various OEMs. For 
example, Amazon has deployed thousands of electric delivery vans in 
over 100 cities, with the goal of 100,000 vans by 2030. Many other 
fleet electrification commitments that include large numbers of medium-
duty and heavier vehicles have been announced by large corporations in 
many sectors of the economy, including not only retailers like Amazon 
and Walmart but also consumer product manufacturers with large delivery 
fleets (e.g. IKEA, Unilever), large delivery firms (e.g. DHL, FedEx, 
USPS), and numerous firms in many other sectors including power and 
utilities, biotech, public transportation, and municipal fleets across 
the country.\88\ As another example, Daimler Trucks North America 
announced in 2021 that it expected 60 percent of its sales in 2030 and 
100 percent of its sales by 2039 would be zero-emission.\89\
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    \85\ BrightDrop, ``BrightDrop Accelerates EV Production with 
First 150 Electric Delivery Vans Integrated into FedEx Fleet,'' 
Press Release, June 21, 2022.
    \86\ Amazon Corporation, ``Amazon's Custom Electric Delivery 
Vehicles from Rivian Start Rolling Out Across the U.S.,'' Press 
Release, July 21, 2022.
    \87\ Walmart, ``Walmart To Purchase 4,500 Canoo Electric 
Delivery Vehicles To Be Used for Last Mile Deliveries in Support of 
Its Growing eCommerce Business,'' Press Release, July 12, 2022.
    \88\ Environmental Defense Fund and ERM, ``Electric Vehicle 
Market Update: Manufacturer Commitments and Public Policy 
Initiatives Supporting Electric Mobility in the U.S. and 
Worldwide,'' September 2022.
    \89\ Carey, N., ``Daimler Truck `all in' on green energy as it 
targets costs,'' May 20, 2021.
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    These announcements and others like them continue a pattern over 
the past several years in which most major manufacturers have taken 
steps to aggressively invest in zero-emission technologies and reduce 
their reliance on the internal-combustion engine in various markets 
around the globe.90 91 According to one analysis, 37 of the 
world's automakers are planning to invest a total of almost $1.2 
trillion by 2030 toward electrification,\92\ a large

[[Page 29194]]

portion of which will be used for construction of manufacturing 
facilities for vehicles, battery cells and packs, and materials, 
supporting up to 5.8 terawatt-hours of battery production and 54 
million BEVs per year globally.\93\ Similarly, an analysis by the 
Center for Automotive Research shows that a significant shift in North 
American investment is occurring toward electrification technologies, 
with $36 billion of about $38 billion in total automaker manufacturing 
facility investments announced in 2021 being slated for 
electrification-related manufacturing in North America, with a similar 
proportion and amount on track for 2022.\94\ For example, in September 
2021, Toyota announced large new investments in battery production and 
development to support an increasing focus on electrification,\95\ and 
in December 2021, announced plans to increase this investment.\96\ In 
December 2021, Hyundai closed its engine development division at its 
research and development center in Namyang, South Korea in order to 
refocus on BEV development.\97\ In summer 2022, Hyundai invested $5.5 
billion to fund new battery and electric vehicle manufacturing 
facilities in Georgia, and recently announced a $1.9 billion joint 
venture with SK to fund additional battery manufacturing in the 
U.S.98 99
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    \90\ Environmental Defense Fund and M.J. Bradley & Associates, 
``Electric Vehicle Market Status--Update, Manufacturer Commitments 
to Future Electric Mobility in the U.S. and Worldwide,'' April 2021.
    \91\ International Council on Clean Transportation, ``The end of 
the road? An overview of combustion-engine car phase-out 
announcements across Europe,'' May 10, 2020.
    \92\ Reuters, ``A Reuters analysis of 37 global automakers found 
that they plan to invest nearly $1.2 trillion in electric vehicles 
and batteries through 2030,'' October 21, 2022. Accessed on November 
4, 2022 at https://graphics.reuters.com/AUTOS-INVESTMENT/ELECTRIC/akpeqgzqypr/.
    \93\ Reuters, ``Exclusive: Automakers to double spending on EVs, 
batteries to $1.2 trillion by 2030,'' October 25, 2022. Accessed on 
November 4, 2022 at https://www.reuters.com/technology/exclusive-automakers-double-spending-evs-batteries-12-trillion-by-2030-2022-10-21/.
    \94\ Center for Automotive Research, ``Automakers Invest 
Billions in North American EV and Battery Manufacturing 
Facilities,'' July 21, 2022. Retrieved on November 10, 2022 at 
https://www.cargroup.org/automakers-invest-billions-in-north-american-ev-and-battery-manufacturing-facilities/.
    \95\ Toyota Motor Corporation, ``Video: Media briefing & 
Investors briefing on batteries and carbon neutrality'' 
(transcript), September 7, 2021. Accessed on September 16, 2021 at 
https://global.toyota/en/newsroom/corporate/35971839.html#presentation.
    \96\ Toyota Motor Corporation, ``Video: Media Briefing on 
Battery EV Strategies,'' Press Release, December 14, 2021. Accessed 
on December 14, 2021 at https://global.toyota/en/newsroom/corporate/36428993.html.
    \97\ Do, Byung-Uk, Kim, Il-Gue, ``Hyundai Motor closes engine 
development division'', The Korea Economic Daily, December 23, 2021. 
Accessed on November 29, 2022 at https://www.kedglobal.com/electric-vehicles/newsView/ked202112230013.
    \98\ Velez, C. ``Hyundai and SK On to bring even more EV battery 
plants to U.S.'' CBT News, November 29, 2022. Accessed on November 
29, 2022 at https://www.cbtnews.com/hyundai-and-sk-on-to-bring-even-more-ev-battery-plants-to-u-s/.
    \99\ Lee, J., Yang, H. ``Hyundai Motor, SK On sign EV battery 
supply pact for N. America'', Reuters, November 29, 2022. Accessed 
on November 29, 2022 at https://www.reuters.com/business/autos-transportation/hyundai-motor-group-sk-ev-battery-supply-pact-n-america-2022-11-29/.
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    On August 5, 2021, many of these automakers, as well as the 
Alliance for Automotive Innovation, expressed continued commitment to 
their announcements of a shift to electrification, and expressed their 
support for the goal of achieving 40 to 50 percent sales of zero-
emission vehicles by 2030.\100\ In September 2022, jointly with the 
Environmental Defense Fund, General Motors announced a set of 
recommendations that ``seek to accelerate a zero-emissions, all-
electric future for passenger vehicles in model year 2027 and beyond,'' 
including a recommendation that EPA establish standards to achieve at 
least a 60 percent reduction in GHG emissions (compared to MY 2021) and 
50 percent zero-emitting vehicles by MY 2030, and that standards be 
consistent with eliminating tailpipe pollution from new passenger 
vehicles by 2035. GM and EDF further recommended that the EPA standards 
extend at least through MY 2032, and that EPA should consider adoption 
through 2035.\101\
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    \100\ The White House, ``Statements on the Biden 
Administration's Steps to Strengthen American Leadership on Clean 
Cars and Trucks,'' August 5, 2021. Accessed on October 19, 2021 at 
https://www.whitehouse.gov/briefing-room/statements-releases/2021/08/05/statements-on-the-biden-administrations-steps-to-strengthen-american-leadership-on-clean-cars-and-trucks/.
    \101\ Environmental Defense Fund, ``GM and EDF Announce 
Recommended Principles on EPA Emissions Standards for Model Year 
2027 and Beyond,'' Press Release, September 20, 2022.
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    Investments in PEV charging infrastructure have grown rapidly in 
recent years and are expected to continue to climb. According to 
BloombergNEF, annual global investment was $62 billion in 2022, nearly 
twice that of the prior year, and while about 10 years was needed for 
cumulative investment to total $100 billion, a total of $200 billion 
could be reached in just three more years.\102\ U.S. infrastructure 
spending has also grown quickly. Combined investments in hardware and 
installation for U.S. home and public charging ports was over $1.2 
billion in 2021, nearly a three-fold increase from 2017.\103\
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    \102\ BloombergNEF, ``Next $100 Billion EV-Charger Spend to be 
Super Fast,'' January 20, 2023. Accessed March 6, 2023, at https://about.bnef.com/blog/next-100-billion-ev-charger-spend-to-be-super-fast/.
    \103\ BloombergNEF, ``Zero-Emission Vehicles Factbook A 
BloombergNEF special report prepared for COP27,'' November 2022. 
Accessed March 4, 2023, at https://www.bloomberg.com/professional/download/2022-zero-emissions-vehicle-factbook/.
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    The U.S. government is making large investments in infrastructure 
through the Bipartisan Infrastructure Law \104\ and the Inflation 
Reduction Act.\105\ However, we expect that private investments will 
also play a critical role in meeting future infrastructure needs. 
Private charging companies have already attracted billions globally in 
venture capital and mergers and acquisitions.\106\ In the United 
States, there was $200 million or more in mergers and acquisition 
activity in 2022 \107\ indicating strong interest in the future of the 
charging industry. And Bain projects that by 2030, the U.S. market for 
electric vehicle charging will be ``large and profitable'' with both 
revenue and profits estimated to grow by a factor of twenty relative to 
2021.\108\ Automakers, electric companies, charging network providers, 
and retailers are among those who have made significant commitments to 
expand charging infrastructure in the coming years.\109\ See Section 
IV.C.4 of this document and DRIA Chapter 5 for a discussion of public 
and private infrastructure investments.
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    \104\ https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf.
    \105\ https://www.congress.gov/117/plaws/publ169/PLAW-117publ169.pdf.
    \106\ Hampleton, ``Autotech & Mobility M&A market report 
1H2023''. Accessed March 4, 2023, at https://www.hampletonpartners.com/fileadmin/user_upload/Report_PDFs/Hampleton-Partners-Autotech-Mobility-Report-1H2023-FINAL.pdf.
    \107\ St. John, A. et al., ``Automakers need way more plug-in 
stations to make their EV plans work. That has sparked a buying 
frenzy as big charging players gobble up smaller ones,'' Insider, 
November 4, 2022. Accessed March 4, 2023, at https://www.businessinsider.com/ev-charging-industry-merger-acquisition-meet-electric-vehicle-demand-2022-11.
    \108\ Zayer, E. et al., ``EV Charging Shifts into High Gear,'' 
Bain & Company, June 20, 2022. Accessed March 4, 2023, at https://www.bain.com/insights/electric-vehicle-charging-shifts-into-high-gear/.
    \109\ Joint Office of Energy and Transportation, ``Private 
Sector Continues to Play Key Part in Accelerating Buildout of EV 
Charging Networks,'' February 15, 2023. Accessed March 6, 2023, at 
https://driveelectric.gov/news/#private-investment.
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    Taken together, these developments indicate that proven, zero-
emissions technologies such as BEVs, PHEVs, and FCEVs are already 
poised to become a rapidly growing segment of the U.S. fleet, as 
manufacturers continue to invest in these technologies and integrate 
them into their product plans, and infrastructure continues to be 
developed. Accordingly, EPA considers these technologies to be an 
available and feasible way to greatly reduce emissions, and expects 
that these technologies will likely play a significant role in meeting 
the proposed standards for both criteria pollutants and GHGs.
    At the same time, EPA anticipates that a compliant fleet under the 
proposed standards would include a diverse range of technologies. The 
advanced gasoline technologies that have played a

[[Page 29195]]

fundamental role in meeting previous standards will continue to play an 
important role going forward as they remain key to reducing the 
criteria and GHG emissions of ICE, mild hybrid (MHEV), and strong HEV 
powertrains as well as PHEVs. The proposed standards will also provide 
regulatory certainty to support the many private automaker 
announcements and investments in zero-emission vehicles that have been 
outlined in the preceding paragraphs. In developing the proposed 
standards, EPA has also considered many of the key issues associated 
with growth in penetration of zero-emission vehicles, including 
charging infrastructure, consumer acceptance, critical minerals and 
mineral security, and others, as well as the need to consider emissions 
from the many ICE vehicles that will enter the fleet during this time. 
We discuss each of these issues in more detail in respective sections 
of the Preamble and Draft Regulatory Impact Analysis (DRIA).
iii. The Bipartisan Infrastructure Law and Inflation Reduction Act
    A particular consideration with regard to the increased penetration 
of zero-emission vehicle technology is Congress' recent passage of the 
Bipartisan Infrastructure Law (BIL) \110\ and the Inflation Reduction 
Act (IRA).\111\ These measures represent significant Congressional 
support for investment in expanding the manufacture, sale, and use of 
zero-emission vehicles by addressing elements critical to the 
advancement of clean transportation and clean electricity generation in 
ways that will facilitate and accelerate the development, production 
and adoption of zero-emission technology during the time frame of the 
rule.
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    \110\ https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf.
    \111\ https://www.congress.gov/117/plaws/publ169/PLAW-117publ169.pdf.
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    The BIL became law in November 2021 and includes a wide range of 
programs and significant funding for infrastructure investments, many 
of which are oriented toward reducing GHG emissions across the U.S. 
transportation network, upgrading power generation infrastructure, and 
making the transportation infrastructure resilient to climate impacts 
such as extreme weather. Notably, in support of light-duty zero-
emissions transportation the BIL included $7.5 billion in funding for 
installation of public charging and other alternative fueling 
infrastructure. This will have a major impact on feasibility of PEVs 
across the U.S. by improving access to charging and other 
infrastructure, and it will further support the Administration's goal 
of deploying 500,000 PEV chargers by 2030. It also includes $5 billion 
for electrification of school buses through the Clean School Bus 
Program, providing for further reductions in emissions from the heavy-
duty sector.112 113 To help ensure that clean vehicles are 
powered by clean energy, it also includes $65 billion to upgrade the 
power infrastructure to facilitate increased use of renewables and 
clean energy.
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    \112\ https://www.epa.gov/cleanschoolbus. Accessed February 14, 
2023.
    \113\ U.S. EPA, ``EPA Clean School Bus Program Second Report to 
Congress,'' EPA 420-R-23-002, February 2023.
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    The IRA became law in August 2022, bringing significant new 
momentum to clean vehicles (PEVs and FCEVs) through measures that 
reduce the cost to purchase and manufacture them, incentivize the 
growth of manufacturing capacity and onshore sourcing of critical 
minerals needed for their manufacture, incentivize buildout of public 
charging infrastructure for PEVs, and promote modernization of the 
electrical grid that will power them. It includes significant purchase 
incentives of up to $7,500 for new clean vehicles (Clean Vehicle 
Credit, IRS 30D) and up to $4,000 for used vehicles (IRS 25E), which 
will have a strong impact on affordability of these vehicles for a wide 
range of customers. These incentives extend not only to light-duty 
vehicles but also to commercial purchase of light- and medium-duty 
vehicles, with a credit of up to $40,000 for the latter (Commercial 
Clean Vehicle Credit, IRS 45W). Manufacturer production tax incentives 
of $35 per kilowatt-hour (kWh) for U.S. production of battery cells, 
$10 per kWh for U.S. production of modules, and 10 percent of 
production cost for U.S.-made critical minerals and battery active 
materials (Production Tax Credit, IRS 45X), will significantly reduce 
the manufacturing cost of these components, further reducing PEV and 
FCEV cost for consumers. In addition, the IRA includes significant tax 
credits for certain charging infrastructure equipment, and sizeable 
incentives for investment in and production of clean electricity.
    With respect to sourcing of critical minerals and building a secure 
supply chain for clean vehicles, the IRA also includes provisions that 
will greatly reduce reliance on foreign imports by strongly supporting 
the continued development of a domestic or North American supply chain 
for these critical products. Manufacturers who want their customers to 
take advantage of the Clean Vehicle Credit must meet a gradually 
increasing requirement for sourcing of critical minerals and battery 
components from U.S. or free-trade countries, and cannot utilize 
content acquired from foreign entities of concern. Manufacturer 
eligibility for the Production Tax Credit for cells and modules is 
conditioned on their manufacture in the U.S., as is eligibility for the 
10 percent credit on the cost of producing critical minerals and 
battery active materials. Manufacturers are already taking advantage of 
these opportunities to improve their sales and reduce their production 
costs by securing eligible sources of critical mineral content and 
siting new production facilities in the 
U.S.114 115 116 117 118 119 120 121 122 There is a 
coordinated effort by Executive Branch agencies, including the 
Department of Energy and the National Laboratories, to provide guidance 
and resources and to administer funding to support this collective 
effort to further develop a robust supply chain for clean vehicles and 
the infrastructure that will support them.123 124 125 
Section IV.C.6 of this

[[Page 29196]]

Preamble and Chapters 3.1.3.2 and 3.1.3.3 of the DRIA discuss these 
provisions and measures in more detail.
---------------------------------------------------------------------------

    \114\ Green Car Congress, ``Ford sources battery capacity and 
raw materials for 600K EV annual run rate by late 2023, 2M by end of 
2026; adding LFP,'' July 22, 2022.
    \115\ Ford Motor Company, ``Ford Releases New Battery Capacity 
Plan, Raw Materials Details to Scale EVs; On Track to Ramp to 600K 
Run Rate by '23 and 2M+ by '26, Leveraging Global Relationships,'' 
Press Release, July 21, 2022.
    \116\ Green Car Congress, ``GM signs major Li-ion supply chain 
agreements: CAM with LG Chem and lithium hydroxide with Livent,'' 
July 26, 2022.
    \117\ Grzelewski, J., ``GM says it has enough EV battery raw 
materials to hit 2025 production target,'' The Detroit News, July 
26, 2022.
    \118\ Hall, K., ``GM announces new partnership for EV battery 
supply,'' The Detroit News, April 12, 2022.
    \119\ Hawkins, A., ``General Motors makes moves to source rare 
earth metals for EV motors in North America,'' TheVerge, December 9, 
2021.
    \120\ Piedmont Lithium, ``Piedmont Lithium Signs Sales Agreement 
With Tesla,'' Press Release, September 28, 2020.
    \121\ Subramanian, P., ``Why Honda's EV battery plant likely 
wouldn't happen without new climate credits,'' Yahoo Finance, August 
29, 2022.
    \122\ LG Chem, ``LG Chem to Establish Largest Cathode Plant in 
US for EV Batteries,'' Press Release, November 22, 2022.
    \123\ Executive Order 14017, Securing America's Supply Chains, 
February 24, 2021. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/02/24/executive-order-on-americas-supply-chains/.
    \124\ The White House, ``FACT SHEET: Biden-Harris Administration 
Driving U.S. Battery Manufacturing and Good-Paying Jobs,'' October 
19, 2022. Available at: https://www.whitehouse.gov/briefing-room/statements-releases/2022/10/19/fact-sheet-biden-harris-administration-driving-u-s-battery-manufacturing-and-good-paying-jobs/.
    \125\ Department of Energy, ``Biden Administration, DOE to 
Invest $3 Billion to Strengthen U.S. Supply Chain for Advanced 
Batteries for Vehicles and Energy Storage,'' February 11, 2022. 
Available at: https://www.energy.gov/articles/biden-administration-doe-invest-3-billion-strengthen-us-supply-chain-advanced-batteries.
---------------------------------------------------------------------------

    Congressional passage of the BIL and IRA represent pivotal 
milestones in the creation of a broad-based infrastructure instrumental 
to the expansion of clean transportation, including light- and medium-
duty zero-emission vehicles, and we have taken these developments into 
account in our assessment of the feasibility of the proposed standards.

B. Summary of Proposed Light- and Medium-Duty Vehicle Emissions 
Programs

    EPA is proposing emissions standards for both light-duty and 
medium-duty vehicles. The light-duty vehicle category includes 
passenger cars and light trucks consistent with previous EPA criteria 
pollutant and GHG rules. In this rule, heavy-duty Class 2b and 3 
vehicles are referred to as ``medium-duty vehicles'' (MDVs) to 
distinguish them from Class 4 and higher vehicles that remain under the 
heavy-duty program. EPA has not previously used the MDV nomenclature, 
referring to these larger vehicles in prior rules as light-heavy-duty 
vehicles,\126\ heavy-duty Class 2b and 3 vehicles,\127\ or heavy-duty 
pickups and vans.\128\ In the context of this rule, the MDV category 
includes primarily large pickups and vans with a gross vehicle weight 
rating (GVWR) of between 8,501 and 14,000 pounds and excludes vehicles 
used primarily as passenger vehicles (medium-duty passenger vehicles, 
or MDPVs).
---------------------------------------------------------------------------

    \126\ 66 FR 5002, January 18, 2001.
    \127\ 79 FR 23414, April 28, 2014.
    \128\ 76 FR 57106, September 15, 2011.
---------------------------------------------------------------------------

    The proposed program consists of several key elements: More 
stringent emissions standards for criteria pollutants, more stringent 
emissions standards for GHGs, changes to certain optional credit 
programs, durability provisions for light-duty electrified vehicle 
batteries and warranty provisions for both electrified vehicles and 
diesel engine-equipped vehicles, and various improvements to several 
elements of the existing light-duty program that will also apply to the 
proposed program.
    The levels of stringency proposed in this rule for both light- and 
medium-duty vehicles continue the trend over the past fifty years for 
criteria pollutants, and over the past decade for GHGs, of EPA 
establishing numerically lower emissions standards based on continued 
advancements in emissions control technology that make it possible to 
achieve important emissions reductions at a reasonable cost. While 
EPA's feasibility assessments in past rulemakings were predominantly 
based on advancements in ICE technologies that provided incremental 
emissions reductions, in this proposal EPA's technology feasibility 
assessment includes the increasing availability of zero and near-zero 
tailpipe emissions technologies, including PEVs, as a cost-effective 
compliance technology. The technological feasibility of PEVs is further 
bolstered by the economic incentives provided in the IRA and the auto 
manufacturers' stated plans for producing significant volumes of zero 
and near-zero emission vehicles in the timeframe of this rule. Because 
of this increased feasibility of zero and near-zero tailpipe emissions 
technologies, EPA believes it is appropriate to propose over the six-
year timeframe of these standards even lower emissions standards than 
has been possible in past rulemakings.
1. GHG Emissions Standards
    EPA is proposing more stringent GHG standards for both light-duty 
vehicles and medium-duty vehicles for MYs 2027 through 2032. EPA also 
seeks comment on whether the standards should continue to increase in 
stringency for future years, such as through MY 2035. For light-duty 
vehicles, EPA is proposing standards that would increase in stringency 
each year over a six-year period, from MYs 2027-2032. The proposed 
standards are projected to result in an industry-wide average target 
for the light-duty fleet of 82 grams/mile (g/mile) of CO2 in 
MY 2032, representing a 56 percent reduction in projected fleet average 
GHG emissions target levels from the existing MY 2026 standards.
    For medium-duty vehicles, EPA is proposing to revise the existing 
standard for MY 2027 given the increased feasibility of GHG emissions 
reducing technologies in this sector in this time frame. EPA's proposed 
standards for MDVs would increase in stringency year over year from MY 
2027 through MY 2032. When phased in, the MDV standards are projected 
to result in an average target of 275 grams/mile of CO2 by 
MY 2032, which would represent a reduction of 44 percent compared to 
the current MY 2026 standards.
    The light-duty CO2 standards continue to be footprint-
based, with separate standards curves for cars and light trucks. EPA 
has updated its assessment of the footprint standards curves to reflect 
anticipated changes in the vehicle technologies that we project will be 
used to meet the standards. EPA also has assessed ways to ensure future 
fleet mix changes do not inadvertently provide an incentive for 
manufacturers to change the size or regulatory class of vehicles as a 
compliance strategy. EPA is proposing to revise the footprint standards 
curves to flatten the slope of each curve and to narrow the numerical 
stringency difference between the car and truck curves. The medium-duty 
vehicle standards continue to be based on a work-factor metric designed 
for commercially-oriented vehicles, which reflects a combination of 
payload, towing and 4-wheel drive equipment.
    EPA has reassessed certain credit programs available under the 
existing GHG programs in light of experience with the program 
implementation to date, trends in technology development, recent 
related statutory provisions, and other factors. EPA is proposing to 
revise the air conditioning (AC) credits program in two ways. First, 
for AC system efficiency credits under the light-duty GHG program, EPA 
is proposing to limit the eligibility for these voluntary credits for 
tailpipe CO2 emissions control to ICE vehicles starting in 
MY 2027 (i.e., BEVs would not earn AC efficiency credits because even 
without such credits they would be counted as zero g/mi CO2 
emissions for compliance calculations). Second, EPA is proposing to 
remove refrigerant-based AC provisions for both light- and medium-duty 
vehicles because, under a separate rulemaking, EPA has proposed to 
disallow the use of high global warming potential refrigerants under 
the American Innovation and Manufacturing (AIM) Act of 2020.
    EPA is also proposing to sunset the off-cycle credits program for 
both light and medium-duty vehicles as follows. First, EPA proposes to 
phase out menu-based credits by reducing the menu credit cap year-over-
year until it is fully phased out in MY 2031. Specifically, EPA is 
proposing a declining menu cap of 10/8/6/3/0 g/mile over MYs 2027-2031 
such that MY 2030 would be the last year manufacturers could generate 
optional off-cycle credits. Second, EPA proposes to eliminate the 5-
cycle and public process pathways starting in MY 2027. Third, EPA 
proposes to limit eligibility for off-cycle credits only to vehicles 
with tailpipe emissions greater than zero (i.e., vehicle equipped with 
IC engines) starting in MY 2027.
    EPA is not reopening its averaging, banking, and trading 
provisions, which continue to be a central part of its fleet average 
standards compliance program and which help manufacturers to employ a 
wide range of compliance

[[Page 29197]]

paths. EPA is also not proposing to restore multiplier incentives for 
BEVs, PHEVs and fuel cell vehicles, which currently end after MY 2024 
under existing regulations. EPA is proposing to revise multiplier 
incentives currently in place for MDVs through MY 2027, established in 
the heavy-duty Phase 2 rule, to end the multipliers a model year 
earlier, in MY 2026. EPA is also proposing that the requirement for 
upstream emissions accounting for BEVs and PHEVs as part of a 
manufacturer's compliance calculation, which under the current 
regulations would begin in MY 2027, would be removed under the proposed 
program; thus, BEVs would continue to be counted as zero grams/mile in 
a manufacturer's compliance calculation as has been the case since the 
beginning of the light-duty GHG program in MY 2012.
    Finally, EPA also is proposing changes to the provisions for small 
volume manufacturers (i.e., production of less than 5,000 vehicles per 
year) to transition them from the existing approach of unique case-by-
case alternative standards to the primary program standards by MY 2032, 
recognizing that additional lead time is appropriate given their 
challenges in averaging across limited product lines.
2. Criteria Pollutant Standards
    EPA is proposing more stringent emissions standards for criteria 
pollutants for both light-duty and medium-duty vehicles for MYs 2027-
2032. For light-duty vehicles, EPA is proposing non-methane organic 
gases (NMOG) plus nitrogen oxides (NOX) standards that would 
phase-down to a fleet average level of 12 mg/mi by MY 2032, 
representing a 60 percent reduction from the existing 30 mg/mi 
standards for MY 2025 established in the Tier 3 rule in 2014. For 
medium-duty vehicles, EPA is proposing NMOG+NOX standards 
that would require a fleet average level of 60 mg/mi by MY 2032, 
representing a 66 percent to 76 percent reduction from the Tier 3 
standards of 178 mg/mi for Class 2b vehicles and 247 mg/mi for Class 3 
vehicles. EPA is proposing cold temperature (-7 [deg]C) 
NMOG+NOX standards for light- and medium-duty vehicles to 
ensure robust emissions control over a broad range of operating 
conditions.
    For both light-duty and all medium-duty vehicles, EPA is proposing 
a particulate matter (PM) standard of 0.5 mg/mi and a requirement that 
the standard be met across three test cycles, including a cold 
temperature (-7 [deg]C) test. This proposed standard would revise the 
existing PM standards established in the 2014 Tier 3 rule. Through the 
application of readily available emissions control technology and 
requiring compliance across the broad range of driving conditions 
represented by the three test cycles, EPA projects the standards will 
reduce tailpipe PM emissions from ICE vehicles by over 95 percent. In 
addition to reducing PM emissions, the proposed standards would reduce 
emissions of mobile source air toxics.
    EPA is also proposing requirements to certify compliance with 
criteria pollutants standards for medium-duty vehicles with high gross 
combined weight rating (GCWR) under the heavy-duty engine program, 
changes to medium-duty vehicle refueling emissions requirements for 
incomplete vehicles, and several NMOG+NOX provisions aligned 
with the CARB Advanced Clean Cars II program for light-duty vehicles. 
EPA is proposing changes to the carbon monoxide and formaldehyde 
standards for light- and medium-duty vehicles, including at -7 [deg]C. 
EPA is also proposing to eliminate commanded enrichment for ICE-powered 
vehicles for power and component protection. Averaging, banking, and 
trading provisions may be employed within the new program, and with 
certain limitations, credits may be transferred from the Tier 3 program 
to provide manufacturers with flexibilities in developing compliance 
strategies.
    In addition to these proposals, EPA is seeking comment on potential 
future gasoline fuel property standards aimed at further reducing PM 
emissions, for consideration in a possible subsequent rulemaking, which 
could provide an important complement to the vehicle standards being 
proposed in the current action. The proposed emissions standards for 
new vehicles in model years 2027 and later would achieve significant 
air quality benefits. However, there is an opportunity to further 
reduce PM emissions from the existing vehicle fleet, the millions of 
vehicles that will be produced during the phase-in period of the 
proposed vehicle standards, as well as millions of nonroad gasoline 
engines, through changes in market fuel composition. Although EPA has 
not undertaken sufficient analysis to propose changes to fuel 
requirements under CAA section 211(c) in this rulemaking and considers 
such changes beyond the scope of this rulemaking, EPA has begun to 
consider the possibility of such changes and, in Section IX, EPA 
describes and requests comment on various aspects of a possible future 
rulemaking aimed at further PM reductions from these sources via 
gasoline fuel property standards.
3. Electrified Vehicle Battery Durability and Warranty Provisions
    As described in more detail in Section III.F.2, the importance of 
battery durability in the context of BEVs and PHEVs as an emission 
control technology is well documented and has been cited by several 
authorities in recent years. Recognizing that electrified vehicles are 
playing an increasing role in automakers' compliance strategies, that 
their durability and reliability are important to achieving the 
emissions reductions projected by this proposed program, and that 
emissions credit calculations are based on mileage over a vehicle's 
full useful life, EPA is proposing new battery durability requirements 
for light-duty and medium-duty BEVs and PHEVs. In addition, the agency 
is proposing revised regulations which would include BEV and PHEV 
batteries and associated electric powertrain components under existing 
emission warranty provisions. Relatedly, EPA is also proposing the 
addition of two new grouping definitions for BEVs and PHEVs (monitor 
family and battery durability family), new reporting requirements, and 
a new calculation for the PHEV charge depletion test to support the 
battery durability requirements. The background and content of the 
proposed battery durability and warranty provisions are outlined in 
Section III.F.2 of this Preamble and are detailed in the regulatory 
text.
4. Light-Duty Vehicle Certification and Testing Program Improvements
    EPA is proposing various improvements to the current light-duty 
program in order to clarify, simplify, streamline and update the 
certification and testing provisions for manufacturers. These proposed 
improvements include: Clarification of the certification compliance and 
enforcement requirements for CO2 exhaust emission standards 
found in 40 CFR 86.1865-12 to more accurately reflect the intention of 
the 2010 light-duty vehicle GHG rule; a revision to the In Use 
Confirmatory Program (IUCP) threshold criteria; changes to the Part 2 
application; updating the On Board Diagnostics (OBD) program to the 
latest version of the CARB OBD regulation and the removal of any 
conflicting or redundant text from EPA's OBD requirements; streamlining 
the test procedures for Fuel Economy Data Vehicles (FEDVs); 
streamlining the manufacturer conducted confirmatory

[[Page 29198]]

testing requirements; updating the emissions warranty for diesel 
powered vehicles (including Class 2b and 3 vehicles) by designating 
major emissions components subject to the 8 year/80,000 mile warranty 
period; making the definition of light-duty truck consistent between 
programs; and miscellaneous other amendments. EPA is also proposing to 
add a new monitoring and warranty requirement for gasoline particulate 
filters (GPFs). These improvements and changes are described in more 
detail in Sections III.F and III.G.

C. Summary of Emission Reductions, Costs, and Benefits

    This section summarizes our analysis of the proposal's estimated 
emission impacts, costs, and monetized benefits, which is described in 
more detail in Sections V through VIII of this preamble. EPA notes 
that, consistent with CAA section 202, in evaluating potential 
standards we carefully weigh the statutory factors, including the 
emissions impacts of the standards, and the feasibility of the 
standards (including cost of compliance in light of available lead 
time). We monetize benefits of the proposed standards and evaluate 
other costs in part to enable a comparison of costs and benefits 
pursuant to E.O. 12866, but we recognize there are benefits that we are 
currently unable to fully quantify. EPA's practice has been to set 
standards to achieve improved air quality consistent with CAA section 
202, and not to rely on cost-benefit calculations, with their 
uncertainties and limitations, as identifying the appropriate 
standards. Nonetheless, our conclusion that the estimated benefits 
considerably exceed the estimated costs of the proposed program 
reinforces our view that the proposed standards are appropriate under 
section 202(a).
    The proposed standards would result in net reductions of emissions 
of GHGs and criteria air pollutants in 2055, considering the impacts 
from light- and medium-duty vehicles, power plants (i.e., electric 
generating units (EGUs)), and refineries. Table 2 shows the GHG 
emission impacts in 2055 while Table 3 shows the cumulative impacts for 
the years 2027 through 2055. We show cumulative impacts for GHGs as 
elevated concentrations of GHGs in the atmosphere are resulting in 
warming and changes in the Earth's climate. Table 4 shows the criteria 
pollutant emissions impacts in 2055. As shown in Table 5, we also 
predict reductions in air toxic emissions from light-and medium-duty 
vehicles. We project that GHG and criteria pollutant emissions from 
EGUs would increase as a result of the increased demand for electricity 
associated with the proposal, although those projected impacts decrease 
over time because of projected increases in renewables in the future 
power generation mix. We also project that GHG and criteria pollutant 
emissions from refineries would decrease as a result of the lower 
demand for liquid fuel associated with the proposed GHG standards. 
Sections VI and VII of this preamble and Chapter 9 of the DRIA provide 
more information on the projected emission reductions for the proposed 
standards and alternatives.

       Table 2--Projected GHG Emission Impacts in 2055 From the Proposed Rule, Light-Duty and Medium-Duty
                                              [Million metric tons]
----------------------------------------------------------------------------------------------------------------
            Pollutant                 Vehicle           EGU         Refinery *      Net impact    Net impact (%)
----------------------------------------------------------------------------------------------------------------
CO2.............................            -440              16               0            -420             -47
CH4.............................         -0.0088         0.00038               0         -0.0084             -45
N2O.............................         -0.0077         0.00003               0         -0.0077             -41
----------------------------------------------------------------------------------------------------------------
* GHG emission rates were not available for calculating GHG inventories from refineries.


 Table 3--Projected Cumulative GHG Emission Impacts Through 2055 From the Proposed Rule, Light-Duty and Medium-
                                                      Duty
                                              [Million metric tons]
----------------------------------------------------------------------------------------------------------------
            Pollutant                 Vehicle           EGU         Refinery *      Net impact    Net impact (%)
----------------------------------------------------------------------------------------------------------------
CO2.............................          -8,000             710               0          -7,300             -26
CH4.............................           -0.16           0.035               0           -0.12             -17
N2O.............................           -0.14          0.0045               0           -0.13             -25
----------------------------------------------------------------------------------------------------------------


  Table 4--Projected Criteria Air Pollutant Impacts in 2055 From the Proposed Rule, Light-Duty and Medium-Duty
                                                   [U.S. tons]
----------------------------------------------------------------------------------------------------------------
            Pollutant                 Vehicle           EGU          Refinery       Net impact    Net impact (%)
----------------------------------------------------------------------------------------------------------------
PM2.5...........................          -9,800           1,500          -6,900         -15,000             -35
NOX.............................         -44,000           2,600         -25,000         -66,000             -41
VOC.............................        -200,000           1,000         -21,000        -220,000             -50
SOX.............................          -2,800           1,600         -11,000         -12,000             -42
CO *............................      -1,800,000               0               0      -1,800,000             -49
----------------------------------------------------------------------------------------------------------------
* EPA did not have data available to calculate CO impacts from EGUs or refineries.


[[Page 29199]]


   Table 5--Projected Air Toxic Impacts From Vehicles in 2055 From the
                Proposed Rule, Light-Duty and Medium-Duty
                               [U.S. tons]
------------------------------------------------------------------------
                Pollutant                     Vehicle       Vehicle (%)
------------------------------------------------------------------------
Acetaldehyde............................            -840             -49
Acrolein................................             -55             -48
Benzene.................................          -2,900             -51
Ethylbenzene............................          -3,400             -50
Formaldehyde............................            -510             -49
Naphthalene.............................            -100             -51
1,3-Butadiene...........................            -340             -51
15 Polyaromatic Hydrocarbons............              -5             -78
------------------------------------------------------------------------

    The GHG emission reductions would contribute toward the goal of 
holding the increase in the global average temperature to well below 2 
[deg]C above pre-industrial levels, and subsequently reduce the 
probability of severe climate change related impacts including heat 
waves, drought, sea level rise, extreme climate and weather events, 
coastal flooding, and wildfires. People of color, low-income 
populations and/or indigenous peoples may be especially vulnerable to 
the impacts of climate change (see Section VIII.I.2).
    The decreases in vehicle emissions would reduce traffic-related 
pollution in close proximity to roadways. As discussed in Section 
II.C.8, concentrations of many air pollutants are elevated near high-
traffic roadways, and populations who live, work, or go to school near 
high-traffic roadways experience higher rates of numerous adverse 
health effects, compared to populations far away from major roads. An 
EPA study estimated that 72 million people live near truck freight 
routes, which includes many large highways and other routes where 
light- and medium-duty vehicles operate.\129\ Our consideration of 
environmental justice literature indicates that people of color and 
people with low income are disproportionately exposed to elevated 
concentrations of many pollutants in close proximity to major roadways 
(see Section VIII.I.3.i).
---------------------------------------------------------------------------

    \129\ U.S. EPA (2021). Estimation of Population Size and 
Demographic Characteristics among People Living Near Truck Routes in 
the Conterminous United States. Memorandum to the Docket.
---------------------------------------------------------------------------

    We expect that increases in criteria and toxic pollutant emissions 
from EGUs and reductions in petroleum-sector emissions could lead to 
changes in exposure to these pollutants for people living in the 
communities near these facilities. Analyses of communities in close 
proximity to these sources (such as EGUs and refineries) have found 
that a higher percentage of communities of color and low-income 
communities live near these sources when compared to national averages 
(see Section VIII.1.3.ii).
    The changes in emissions of criteria and toxic pollutants from 
vehicles, EGUs, and refineries would also impact ambient levels of 
ozone, PM2.5, NO2, SO2, CO, and air 
toxics over a larger geographic scale. As discussed in Section VII.B, 
we expect that in 2055 the proposal would result in widespread 
decreases in ozone, PM2.5, NO2, CO, and some air 
toxics, even when accounting for the impacts of increased electricity 
generation. We expect that in some areas, increased electricity 
generation would increase ambient SO2, PM2.5, 
ozone, or some air toxics. However, as the power sector becomes cleaner 
over time, these impacts would decrease. Although the specific 
locations of increased air pollution are uncertain, we expect them to 
be in more limited geographic areas, compared to the widespread 
decreases that we predict to result from the reductions in vehicle 
emissions.
    EPA estimates that the total benefits of this proposal far exceed 
the total costs. The present value of monetized benefits range from 
$350 billion to $590 billion, with pre-tax fuel savings providing 
another $450 billion to $890 billion. The present value of vehicle 
technology costs range from $180 billion to $280 billion, while the 
present value of repair and maintenance savings are estimated at $280 
billion to $580 billion. The results presented here project the 
monetized environmental and economic impacts associated with the 
proposed program during each calendar year through 2055. Table 6 
summarizes EPA's estimates of total costs, savings, and benefits. Note 
EPA projects lower maintenance and repair costs for several advanced 
technologies (e.g., battery electric vehicles) and those societal 
maintenance and repair savings grow significantly over time, and by 
2040 and later are larger than our projected new vehicle technology 
costs.
    The benefits include climate-related economic benefits from 
reducing emissions of GHGs that contribute to climate change, 
reductions in energy security externalities caused by U.S. petroleum 
consumption and imports, the value of certain particulate matter-
related health benefits, the value of additional driving attributed to 
the rebound effect, and the value of reduced refueling time needed to 
refuel vehicles. Between $63 and $280 billion of the present value of 
total monetized benefits through 2055 (assuming a 7 percent and 3 
percent discount rate, respectively, as well as different long-term PM-
related mortality risk studies) are attributable to reduced emissions 
of criteria pollutants that contribute to ambient concentrations of 
smaller particulate matter (PM2.5). PM2.5 is 
associated with premature death and serious health effects such as 
hospital admissions due to respiratory and cardiovascular illnesses, 
nonfatal heart attacks, aggravated asthma, and decreased lung function. 
The proposed program would also have other significant social benefits 
including $330 billion in climate benefits (with the average SC-GHGs at 
a 3 percent discount rate which is the rate used in past GHG rules when 
we speak of a single value for simplicity in presentation).\130\
---------------------------------------------------------------------------

    \130\ Climate benefits are monetized using estimates of the 
social cost of greenhouse gases (SC-GHG), which in principle 
includes the value of all climate change impacts (both negative and 
positive), however in practice, data and modeling limitations 
naturally restrain the ability of SC-GHG estimates to include all 
the important physical, ecological, and economic impacts of climate 
change, such that the estimates are a partial accounting of climate 
change impacts and will therefore, tend to be underestimates of the 
marginal benefits of abatement. See Chapter 10 of the DRIA for a 
full discussion of the SC-GHG estimates and the important 
considerations and limitations associated with its use.
---------------------------------------------------------------------------

    The analysis also includes estimates of economic impacts stemming 
from additional vehicle use from increased

[[Page 29200]]

rebound driving, such as the economic damages caused by crashes, 
congestion, and noise. See Chapter 10 of the DRIA for more information 
regarding these estimates.
    Note that some non-emission costs are shown as negative values in 
Table 6. Those entries represent savings but are included as costs 
because, traditionally, categories such as repair and maintenance have 
been viewed as costs of vehicle operation. Where negative values are 
shown, we are estimating that those costs are lower in the proposal 
than in the no-action case. Congestion and noise costs are attributable 
to increased congestion and roadway noise resulting our assumption that 
drivers choose to drive more under the proposal versus the No Action 
case. Those increased miles are known as rebound miles and are 
discussed in Section VIII.
    Similarly, some of the traditional benefits of rulemakings that 
result in lower fuel consumption by the transportation fleet, i.e., the 
non-emission benefits, are shown as negative values. Our past GHG rules 
have estimated that time spent refueling vehicles would be reduced due 
to the lower fuel consumption of new vehicles; hence, a benefit. 
However, in this analysis, we are estimating that refueling time would 
increase somewhat due to our assumptions for mid-trip recharging events 
for electric vehicles. Therefore, the increased refueling time 
represents a disbenefit (a negative benefit) as shown. As noted in 
Section VIII and in DRIA Chapter 4, we consider our refueling time 
estimate to be dated considering the rapid changes taking place in 
electric vehicle charging infrastructure driven largely by the 
Bipartisan Infrastructure Law and the Inflation Reduction Act, and we 
request comment and data on how our estimates could be improved.

 Table 6--Monetized Discounted Costs, Benefits, and Net Benefits of the Proposed Program for Calendar Years 2027
                                    Through 2055, Light-Duty and Medium-Duty
                                     [Billions of 2020 dollars] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
                                                   CY 2055       PV, 3%       PV, 7%      EAV, 3%      EAV, 7%
----------------------------------------------------------------------------------------------------------------
                                               Non-Emission Costs
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs.......................           10          280          180           15           15
Repair Costs...................................          -24         -170          -79         -8.9         -6.5
Maintenance Costs..............................          -51         -410         -200          -21          -16
Congestion Costs...............................         0.16          2.3          1.3         0.12         0.11
Noise Costs....................................       0.0025        0.037        0.021       0.0019       0.0017
Sum of Non-Emission Costs......................          -65         -290          -96          -15         -7.8
----------------------------------------------------------------------------------------------------------------
                                                 Fueling Impacts
----------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings...........................           93          890          450           46           37
EVSE Port Costs................................          7.1          120           68          6.2          5.6
Sum of Fuel Savings less EVSE Port Costs.......           86          770          380           40           31
----------------------------------------------------------------------------------------------------------------
                                              Non-Emission Benefits
----------------------------------------------------------------------------------------------------------------
Drive Value Benefits...........................         0.31          4.8          2.7         0.25         0.22
Refueling Time Benefits........................         -8.2          -85          -45         -4.4         -3.6
Energy Security Benefits.......................          4.4           41           21          2.2          1.7
Sum of Non-Emission Benefits...................         -3.6          -39          -21           -2         -1.7
----------------------------------------------------------------------------------------------------------------
                                                Climate Benefits
----------------------------------------------------------------------------------------------------------------
5% Average.....................................           15           82           82          5.4          5.4
3% Average.....................................           38          330          330           17           17
2.5% Average...................................           52          500          500           25           25
3% 95th Percentile.............................          110        1,000        1,000           52           52
----------------------------------------------------------------------------------------------------------------
                                         Criteria Air Pollutant Benefits
----------------------------------------------------------------------------------------------------------------
PM2.5 Health Benefits--Wu et al., 2020.........        16-18          140           63          7.5          5.1
PM2.5 Health Benefits--Pope III et al., 2019...        31-34          280          130           15           10
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
With Climate 5% Average........................      180-200        1,400          610           74           48
With Climate 3% Average........................      200-220        1,600          850           85           60
With Climate 2.5% Average......................      210-230        1,800        1,000           93           67
With Climate 3% 95th Percentile................      280-290        2,300        1,500          120           95
----------------------------------------------------------------------------------------------------------------
\a\ The same discount rate used to discount the value of damages from future emissions (SC-GHG at 5, 3, 2.5
  percent) is used to calculate present and equivalent annualized values of SC-GHGs for internal consistency,
  while all other costs and benefits are discounted at either 3 percent or 7 percent.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
  risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
  The criteria pollutant benefits associated with the standards presented here do not include the full
  complement of health and environmental benefits that, if quantified and monetized, would increase the total
  monetized benefits.
\c\ For net benefits, the range in 2055 uses the low end of the Wu range and the high end of the Pope III et al.
  range. The present and equivalent annualized value of net benefits for a 3 percent discount rate reflect
  benefits based on the Pope III et al. study while the present and equivalent annualized values of net benefits
  for a 7 percent discount rate reflect benefits based on the Wu et al. study.


[[Page 29201]]

    EPA estimates the average upfront per-vehicle cost to meet the 
proposed standards to be approximately $1,200 in MY 2032, as shown in 
Table 7.\131\ We discuss per-vehicle cost in more detail in Section 
IV.C and DRIA Chapter 13. While the average purchase price of vehicles 
is estimated to be higher, this is attributable to the larger share of 
BEVs relative to ICE vehicles. However, after considering purchase 
incentives and their lower operating costs relative to ICE vehicles, 
BEVs are estimated to save vehicle owners money over time. For example, 
a BEV owner of a model year 2032 sedan, wagon, crossover or SUV would 
save more than $9,000 on average on fuel, maintenance, and repair costs 
over an eight-year period (the average period of first ownership) 
compared to a gasoline vehicle. A BEV pickup truck owner would save 
even more--about $13,000. We discuss ownership savings and expenses in 
more detail in DRIA Chapter 4.
---------------------------------------------------------------------------

    \131\ Unless otherwise specified, all monetized values are 
expressed in 2020 dollars.

           Table 7--Average Incremental Vehicle Cost by Reg Class, Relative to the No Action Scenario
                                                 [2020 Dollars]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Cars..............................         $249         $102          $32         $100         $527         $844
Trucks............................          891          767          653          821        1,100        1,385
Total.............................          633          497          401          526          866        1,164
----------------------------------------------------------------------------------------------------------------

    In addition, the proposal would result in significant savings for 
consumers from fuel savings and reduced vehicle repair and maintenance. 
These lower operating costs would offset the upfront vehicle costs. 
Total retail fuel savings for consumers through 2055 are estimated at 
$560 billion to $1.1 trillion (7 percent and 3 percent discount rates, 
see Section VIII.B.2). Also, reduced maintenance and repair costs 
through 2055 are estimated at $280 billion to $580 billion (7 percent 
and 3 percent discount rates, see Section VIII of this preamble and 
Chapter 10 of the DRIA).

D. What are the alternatives that EPA is considering?

1. Description of the Alternatives
    EPA is seeking comment on three alternatives to its proposed 
standards. Alternative 1 is more stringent than the proposal across the 
MY 2027-2032 time period, and Alternative 2 is less stringent. The 
proposal as well as Alternatives 1 and 2 all have a similar 
proportional ramp rate of year over year stringency, which includes a 
higher rate of stringency increase in the earlier years (MYs 2027-2029) 
than in the later years. Alternative 3 achieves the same stringency as 
the proposed standards in MY 2032 but provides for a more consistent 
rate of stringency increase for MY 2027-2031.
    The Alternative 1 projected fleet-wide CO2 targets are 
10 g/mi lower on average than the proposed targets; Alternative 2 
projected fleet-wide CO2 targets averaged 10 g/mi higher 
than the proposed targets.\132\ While the 20 g/mi range of stringency 
options may appear fairly narrow, for the MY 2032 standards the 
alternatives capture a range of 12 percent higher and lower than the 
proposed standards in the final year. Our goal in selecting the 
alternatives was to identify a range of stringencies that we believe 
are appropriate to consider for the final standards because they 
represent a range of standards that are anticipated to be feasible and 
are highly protective of human health and the environment.
---------------------------------------------------------------------------

    \132\ For reference, the targets at a footprint of 50 square 
feet were exactly 10 g/mi lower and greater for the alternatives.
---------------------------------------------------------------------------

    While the proposed standards, Alternative 1 and Alternative 2 all 
have a larger increase in stringency between MY 2026 and MY 2027, 
Alternative 3 was constructed with the goal of evaluating roughly equal 
reductions in absolute g/mi targets over the duration of the program 
while achieving the same overall targets by MY 2032. This has the 
effect of less stringent year-over-year increases in the early years of 
the program.
    EPA is soliciting comment on all of the model year standards of 
Alternatives 1, 2, and 3, and standards generally represented by the 
range across those alternatives. EPA anticipates that the appropriate 
choice of final standards within this range will reflect the 
Administrator's judgments about the uncertainties in EPA's analyses as 
well as consideration of public comment and updated information where 
available. However, EPA proposes to find that standards substantially 
more stringent than Alternative 1 would not be appropriate because of 
uncertainties concerning the cost and feasibility of such standards. 
EPA proposes to find that standards substantially less stringent than 
Alternative 2 or 3 would not be appropriate because they would forgo 
feasible emissions reductions that would improve the protection of 
public health and welfare.
    Table 8, Table 9 and Table 10 compare the projected fleet average 
targets for cars, trucks, and the combined fleet, respectively, across 
the proposed standards and the three alternatives for model years 2027-
2032.\133\ Table 11 compares the relative percentage year-over-year 
reductions of the proposed standards and the three alternatives.
---------------------------------------------------------------------------

    \133\ In these tables, and throughout this proposal, the MY 2026 
targets have been adjusted to reflect differences in off-cycle and 
AC credits between the 2021 Rule and this proposal. This is 
explained in greater detail in III.B.2.iv.

                          Table 8--Comparison of Proposed Car Standards to Alternatives
----------------------------------------------------------------------------------------------------------------
                                                   Proposed stds   Alternative 1   Alternative 2   Alternative 3
                   Model year                      CO2 (g/mile)    CO2 (g/mile)    CO2 (g/mile)    CO2 (g/mile)
 
----------------------------------------------------------------------------------------------------------------
2026 adjusted...................................             152             152             152             152
2027............................................             134             124             144             139
2028............................................             116             106             126             126
2029............................................              99              89             108             112

[[Page 29202]]

 
2030............................................              91              81             100              99
2031............................................              82              72              92              86
2032 and later..................................              73              63              83              73
% reduction vs. 2026............................             52%             59%             46%             52%
----------------------------------------------------------------------------------------------------------------


                         Table 9--Comparison of Proposed Truck Standards to Alternatives
----------------------------------------------------------------------------------------------------------------
                                                   Proposed stds   Alternative 1   Alternative 2   Alternative 3
                   Model year                      CO2 (g/mile)    CO2 (g/mile)    CO2 (g/mile)    CO2 (g/mile)
 
----------------------------------------------------------------------------------------------------------------
2026 adjusted...................................             207             207             207             207
2027............................................             163             153             173             183
2028............................................             142             131             152             163
2029............................................             120             110             130             144
2030............................................             110             100             121             126
2031............................................             100              90             111             107
2032 and later..................................              89              78              99              89
% reduction vs. 2026............................             57%             62%             52%             57%
----------------------------------------------------------------------------------------------------------------


                    Table 10--Comparison of Proposed Combined Fleet Standards to Alternatives
----------------------------------------------------------------------------------------------------------------
                                                   Proposed stds   Alternative 1   Alternative 2   Alternative 3
                   Model year                      CO2 (g/mile)    CO2 (g/mile)    CO2 (g/mile)    CO2 (g/mile)
 
----------------------------------------------------------------------------------------------------------------
2026 adjusted...................................             186             186             186             186
2027............................................             152             141             162             165
2028............................................             131             121             141             148
2029............................................             111             101             122             132
2030............................................             102              92             112             115
2031............................................              93              83             103              99
2032 and later..................................              82              72              92              82
% reduction vs. 2026............................             56%             61%             50%             56%
----------------------------------------------------------------------------------------------------------------


            Table 11--Combined Fleet Year-Over-Year Decreases for Proposed Standards and Alternatives
----------------------------------------------------------------------------------------------------------------
                                                   Proposed Stds   Alternative 1   Alternative 2   Alternative 3
                   Model year                      CO2 (g/mile)    CO2 (g/mile)    CO2 (g/mile)    CO2 (g/mile)
                                                        (%)             (%)             (%)             (%)
----------------------------------------------------------------------------------------------------------------
2027............................................             -18             -24             -13             -11
2028............................................             -13             -14             -13             -10
2029............................................             -15             -16             -14             -11
2030............................................              -8              -9              -8             -12
2031............................................              -9             -10              -8             -15
2032............................................             -11             -13             -10             -17
Average YoY.....................................             -13             -15             -11             -13
----------------------------------------------------------------------------------------------------------------

    The proposed standards will result in industry-wide average GHG 
emissions target for the light-duty fleet of 82 g/mi in MY 2032, 
representing a 56 percent reduction in average emission target levels 
from the existing MY 2026 standards established in 2021. Alternative 1 
is projected to result in an industry-wide average target of 72 grams/
mile (g/mile) of CO2 in MY 2032, representing a 61 percent 
reduction in projected fleet average GHG emissions target levels from 
the existing MY 2026 standards. Alternative 2 is projected to result in 
an industry-wide average target of 92 g/mile of CO2 in MY 
2032, which corresponds to a 50 percent reduction in projected fleet 
average GHG emissions target levels from the existing MY 2026 
standards. Like the proposed standards, Alternative 3 is projected to 
result in an industry-wide average target of 82 g/mile of 
CO2 in MY 2032, which corresponds to a 56 percent reduction 
in projected fleet average GHG emissions target levels from the 
existing MY 2026 standards.
    Table 12 gives a comparison of average incremental per-vehicle 
costs for the proposed standards and the alternatives. As shown, the 
2032 MY industry average vehicle cost increase (compared to the No 
Action case) ranges from approximately $1,000 to $1,800 per vehicle for 
the alternatives, compared to $1,200 per vehicle for the proposed 
standards. These projections represent compliance costs to the industry 
and are not the same as the costs experienced by the consumer when 
purchasing a new vehicle. For

[[Page 29203]]

example, the costs presented here do not include any state and Federal 
purchase incentives that are available to consumers. Also, the 
manufacturer decisions for the pricing of individual vehicles may not 
align exactly with the cost impacts for that particular vehicle. After 
considering purchase incentives and their lower operating costs 
relative to ICE vehicles, BEVs are estimated to save vehicle owners 
money over time. For example, under the proposed standards, a BEV owner 
of a model year 2032 sedan, wagon, crossover or SUV would save more 
than $9,000 on average on fuel, maintenance, and repair costs over an 
eight-year period (the average period of first ownership) compared to a 
gasoline vehicle. A BEV pickup truck owner would save even more--about 
$13,000. Consumer savings would be similar to those of the proposal 
under Alternative 3, somewhat higher under Alternative 1, and somewhat 
lower under Alternative 2. We discuss ownership savings and expenses 
under the proposed standards in more detail in DRIA Chapter 4.

       Table 12--Comparison of Projected Incremental Per-Vehicle Costs Relative to the No Action Scenario
                                                 [2020 Dollars]
----------------------------------------------------------------------------------------------------------------
                                                   Proposed stds   Alternative 1   Alternative 2   Alternative 3
                   Model year                        $/vehicle       $/vehicle       $/vehicle       $/vehicle
----------------------------------------------------------------------------------------------------------------
2027............................................            $633            $668            $462            $189
2028............................................             497             804             355             125
2029............................................             401           1,120             353              45
2030............................................             526           1,262             337             250
2031............................................             866           1,565             718             800
2032............................................           1,164           1,775           1,041           1,256
----------------------------------------------------------------------------------------------------------------

2. Projected Emission Reductions From the Alternatives

       Table 13--Projected GHG Emission Impacts in 2055 From the Proposed Rule, Light-Duty and Medium-Duty
                                              [Million metric tons]
----------------------------------------------------------------------------------------------------------------
                                                                                                      Net impact
                   Pollutant                       Vehicle        EGU       Refinery *   Net impact      (%)
----------------------------------------------------------------------------------------------------------------
                                                  Alternative 1
----------------------------------------------------------------------------------------------------------------
CO2............................................         -480           18            0         -460          -52
CH4............................................      -0.0096      0.00043            0      -0.0092          -49
N2O............................................      -0.0084     0.000034            0      -0.0083          -44
----------------------------------------------------------------------------------------------------------------
                                                  Alternative 2
----------------------------------------------------------------------------------------------------------------
CO2............................................         -400           14            0         -380          -43
CH4............................................      -0.0081      0.00035            0      -0.0078          -42
N2O............................................      -0.0072     0.000027            0      -0.0072          -38
----------------------------------------------------------------------------------------------------------------
                                                  Alternative 3
----------------------------------------------------------------------------------------------------------------
CO2............................................         -440           16            0         -420          -47
CH4............................................      -0.0088      0.00039            0      -0.0084          -45
N2O............................................      -0.0078      0.00003            0      -0.0077          -41
----------------------------------------------------------------------------------------------------------------
* GHG emission rates were not available for calculating GHG inventories from refineries.


 Table 14--Projected Cumulative GHG Emission Impacts Through 2055 From the Proposed Rule, Light-Duty and Medium-
                                                      Duty
                                              [Million metric tons]
----------------------------------------------------------------------------------------------------------------
                                                                                                      Net impact
                   Pollutant                       Vehicle        EGU        Refinery    Net impact      (%)
----------------------------------------------------------------------------------------------------------------
                                                  Alternative 1
----------------------------------------------------------------------------------------------------------------
CO2............................................       -8,900          780            0       -8,100          -29
CH4............................................        -0.17        0.039            0        -0.13          -18
N2O............................................        -0.15        0.005            0        -0.14          -27
----------------------------------------------------------------------------------------------------------------
                                                  Alternative 2
----------------------------------------------------------------------------------------------------------------
CO2............................................       -7,200          630            0       -6,600          -23
CH4............................................        -0.14        0.032            0        -0.11          -15
N2O............................................        -0.13        0.004            0        -0.12          -23
----------------------------------------------------------------------------------------------------------------

[[Page 29204]]

 
                                                  Alternative 3
----------------------------------------------------------------------------------------------------------------
CO2............................................       -7,800          670            0       -7,100          -25
CH4............................................        -0.15        0.033            0        -0.12          -16
N2O............................................        -0.13       0.0042            0        -0.13          -24
----------------------------------------------------------------------------------------------------------------
* GHG emission rates were not available for calculating GHG inventories from refineries.


  Table 15--Projected Criteria Air Pollutant Impacts in 2055 From the Proposed Rule, Light-Duty and Medium-Duty
                                                   [U.S. tons]
----------------------------------------------------------------------------------------------------------------
                                                                                                      Net impact
                   Pollutant                       Vehicle        EGU        Refinery    Net impact      (%)
----------------------------------------------------------------------------------------------------------------
                                                  Alternative 1
----------------------------------------------------------------------------------------------------------------
PM2.5..........................................       -9,800        1,700       -7,600      -16,000          -37
NOX............................................      -47,000        2,800      -27,000      -71,000          -44
VOC............................................     -230,000        1,100      -23,000     -250,000          -55
SOX............................................       -3,000        1,900      -12,000      -13,000          -46
CO *...........................................   -2,000,000            0            0   -2,000,000          -55
----------------------------------------------------------------------------------------------------------------
                                                  Alternative 2
----------------------------------------------------------------------------------------------------------------
PM2.5..........................................       -9,800        1,400       -6,200      -15,000          -34
NOX............................................      -41,000        2,400      -22,000      -61,000          -38
VOC............................................     -190,000          950      -19,000     -200,000          -45
SOX............................................       -2,500        1,500       -9,500      -11,000          -38
CO *...........................................   -1,600,000            0            0   -1,600,000          -45
----------------------------------------------------------------------------------------------------------------
                                                  Alternative 3
----------------------------------------------------------------------------------------------------------------
PM2.5..........................................       -9,800        1,500       -6,900      -15,000          -35
NOX............................................      -44,000        2,600      -25,000      -66,000          -41
VOC............................................     -200,000        1,000      -21,000     -220,000          -50
SOX............................................       -2,800        1,700      -11,000      -12,000          -42
CO *...........................................   -1,800,000            0            0   -1,800,000          -50
----------------------------------------------------------------------------------------------------------------
* EPA did not have data available to calculate CO impacts from EGUs or refineries.


  Table 16--Projected Air Toxic Impacts From Vehicles in 2055 From the
                Proposed Rule, Light-Duty and Medium-Duty
                               [U.S. tons]
------------------------------------------------------------------------
                Pollutant                     Vehicle       Vehicle (%)
------------------------------------------------------------------------
                              Alternative 1
------------------------------------------------------------------------
Acetaldehyde............................            -920             -53
Acrolein................................             -60             -52
Benzene.................................          -3,200             -56
Ethylbenzene............................          -3,700             -55
Formaldehyde............................            -550             -53
Naphthalene.............................            -110             -56
1,3-Butadiene...........................            -370             -56
15 Polyaromatic Hydrocarbons............              -5             -80
------------------------------------------------------------------------
                              Alternative 2
------------------------------------------------------------------------
Acetaldehyde............................            -780             -45
Acrolein................................             -51             -44
Benzene.................................          -2,600             -47
Ethylbenzene............................          -3,100             -46
Formaldehyde............................            -470             -45
Naphthalene.............................             -95             -47
1,3-Butadiene...........................            -310             -47

[[Page 29205]]

 
15 Polyaromatic Hydrocarbons............              -5             -77
------------------------------------------------------------------------
                              Alternative 3
------------------------------------------------------------------------
Acetaldehyde............................            -850             -49
Acrolein................................             -55             -48
Benzene.................................          -2,900             -51
Ethylbenzene............................          -3,400             -50
Formaldehyde............................            -510             -49
Naphthalene.............................            -100             -51
1,3-Butadiene...........................            -340             -51
15 Polyaromatic Hydrocarbons............              -5             -78
------------------------------------------------------------------------

3. Summary of Costs and Benefits of the Alternatives
    Table 17, Table 18., and Table 19 show the summary of costs, 
savings and benefits under alternatives 1, 2 and 3, respectively.

    Table 17--Monetized Discounted Costs, Benefits, and Net Benefits of Alternative 1 for Calendar Years 2027
                                    through 2055, Light-Duty and Medium-Duty
                                     [Billions of 2020 dollars] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
                                                   CY 2055       PV, 3%       PV, 7%      EAV, 3%      EAV, 7%
----------------------------------------------------------------------------------------------------------------
                                               Non-Emission Costs
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs.......................           11          330          220           17           18
Repair Costs...................................          -26         -180          -82         -9.3         -6.7
Maintenance Costs..............................          -57         -450         -220          -24          -18
Congestion Costs...............................         0.11          3.5          2.2         0.18         0.18
Noise Costs....................................       0.0017        0.055        0.034       0.0028       0.0027
Sum of Non-Emission Costs......................          -71         -300          -82          -15         -6.7
----------------------------------------------------------------------------------------------------------------
                                                 Fueling Impacts
----------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings...........................          100          990          510           51           41
EVSE Port Costs................................          7.1          120           68          6.2          5.6
Sum of Fuel Savings less EVSE Port Costs.......           95          870          440           45           36
----------------------------------------------------------------------------------------------------------------
                                              Non-Emission Benefits
----------------------------------------------------------------------------------------------------------------
Drive Value Benefits...........................         0.22          6.5          3.9         0.34         0.32
Refueling Time Benefits........................         -8.8          -90          -47         -4.7         -3.8
Energy Security Benefits.......................          4.8           46           23          2.4          1.9
Sum of Non-Emission Benefits...................         -3.8          -38          -20           -2         -1.6
----------------------------------------------------------------------------------------------------------------
                                                Climate Benefits
----------------------------------------------------------------------------------------------------------------
5% Average.....................................           16           91           91            6            6
3% Average.....................................           41          360          360           19           19
2.5% Average...................................           57          560          560           27           27
3% 95th Percentile.............................          120        1,100        1,100           58           58
----------------------------------------------------------------------------------------------------------------
                                         Criteria Air Pollutant Benefits
----------------------------------------------------------------------------------------------------------------
PM2.5 Health Benefits--Wu et al., 2020.........        16-18          150           66          7.7          5.3
PM2.5 Health Benefits--Pope III et al., 2019...        32-35          290          130           15           11
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
With Climate 5% Average........................      200-210        1,500          660           80           52
With Climate 3% Average........................      220-240        1,800          930           93           65
With Climate 2.5% Average......................      240-260        2,000        1,100          100           73

[[Page 29206]]

 
With Climate 3% 95th Percentile................      300-320        2,500        1,700          130          100
----------------------------------------------------------------------------------------------------------------
\a\ The same discount rate used to discount the value of damages from future emissions (SC-GHG at 5, 3, 2.5
  percent) is used to calculate present and equivalent annualized values of SC-GHGs for internal consistency,
  while all other costs and benefits are discounted at either 3 percent or 7 percent.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
  risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
  The criteria pollutant benefits associated with the standards presented here do not include the full
  complement of health and environmental benefits that, if quantified and monetized, would increase the total
  monetized benefits.
\c\ For net benefits, the range in 2055 uses the low end of the Wu range and the high end of the Pope III et al.
  range. The present and equivalent annualized values for 3 percent use the Pope III et al. values while the 7
  percent values use the Wu values.


    Table 18--Monetized Discounted Costs, Benefits, and Net Benefits of Alternative 2 for Calendar Years 2027
                                    Through 2055, Light-Duty and Medium-Duty
                                     [Billions of 2020 dollars] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
                                                   CY 2055       PV, 3%       PV, 7%      EAV, 3%      EAV, 7%
----------------------------------------------------------------------------------------------------------------
                                               Non-Emission Costs
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs.......................          8.8          230          140           12           12
Repair Costs...................................          -22         -160          -74         -8.3           -6
Maintenance Costs..............................          -47         -370         -180          -19          -14
Congestion Costs...............................        0.064         0.74         0.48        0.039        0.039
Noise Costs....................................        0.001        0.012       0.0078      0.00064      0.00064
Sum of Non-Emission Costs......................          -60         -300         -110          -16         -8.7
----------------------------------------------------------------------------------------------------------------
                                                 Fueling Impacts
----------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings...........................           84          790          400           41           33
EVSE Port Costs................................          7.1          120           68          6.2          5.6
Sum of Fuel Savings less EVSE Port Costs.......           77          680          330           35           27
----------------------------------------------------------------------------------------------------------------
                                              Non-Emission Benefits
----------------------------------------------------------------------------------------------------------------
Drive Value Benefits...........................         0.17          2.4          1.5         0.12         0.12
Refueling Time Benefits........................         -7.6          -79          -41         -4.1         -3.3
Energy Security Benefits.......................          3.9           37           19          1.9          1.5
Sum of Non-Emission Benefits...................         -3.5          -39          -21           -2         -1.7
----------------------------------------------------------------------------------------------------------------
                                                Climate Benefits
----------------------------------------------------------------------------------------------------------------
5% Average.....................................           13           74           74          4.9          4.9
3% Average.....................................           34          290          290           15           15
2.5% Average...................................           47          450          450           22           22
3% 95th Percentile.............................          100          900          900           47           47
----------------------------------------------------------------------------------------------------------------
                                         Criteria Air Pollutant Benefits
----------------------------------------------------------------------------------------------------------------
PM2.5 Health Benefits--Wu et al., 2020.........        15-17          140           61          7.2          4.9
PM2.5 Health Benefits--Pope III et al., 2019...        30-33          270          120           14           10
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
With Climate 5% Average........................      160-180        1,300          550           68           44
With Climate 3% Average........................      180-200        1,500          780           78           54
With Climate 2.5% Average......................      200-210        1,700          930           85           61
With Climate 3% 95th Percentile................      250-270        2,100        1,400          110           86
----------------------------------------------------------------------------------------------------------------
\a\ The same discount rate used to discount the value of damages from future emissions (SC-GHG at 5, 3, 2.5
  percent) is used to calculate present and equivalent annualized values of SC-GHGs for internal consistency,
  while all other costs and benefits are discounted at either 3 percent or 7 percent.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
  risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
  The criteria pollutant benefits associated with the standards presented here do not include the full
  complement of health and environmental benefits that, if quantified and monetized, would increase the total
  monetized benefits.
\c\ For net benefits, the range in 2055 uses the low end of the Wu range and the high end of the Pope III et al.
  range. The present and equivalent annualized values for 3 percent use the Pope III et al. values while the 7
  percent values use the Wu values.


[[Page 29207]]


    Table 19--Monetized Discounted Costs, Benefits, and Net Benefits of Alternative 3 for Calendar Years 2027
                                    Through 2055, Light-Duty and Medium-Duty
                                     [Billions of 2020 dollars] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
                                                   CY 2055       PV, 3%       PV, 7%      EAV, 3%      EAV, 7%
----------------------------------------------------------------------------------------------------------------
                                               Non-Emission Costs
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs.......................           11          270          170           14           14
Repair Costs...................................          -24         -170          -77         -8.6         -6.3
Maintenance Costs..............................          -51         -390         -190          -20          -15
Congestion Costs...............................         0.11          1.5         0.82        0.078        0.066
Noise Costs....................................       0.0016        0.024        0.013       0.0012       0.0011
Sum of Non-Emission Costs......................          -64         -290          -95          -15         -7.8
----------------------------------------------------------------------------------------------------------------
                                                 Fueling Impacts
----------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings...........................           93          850          430           45           35
EVSE Port Costs................................          7.1          120           68          6.2          5.6
Sum of Fuel Savings less EVSE Port Costs.......           86          740          360           38           29
----------------------------------------------------------------------------------------------------------------
                                              Non-Emission Benefits
----------------------------------------------------------------------------------------------------------------
Drive Value Benefits...........................         0.21          3.2          1.8         0.17         0.15
Refueling Time Benefits........................         -8.2          -83          -43         -4.3         -3.5
Energy Security Benefits.......................          4.4           40           20          2.1          1.6
Sum of Non-Emission Benefits...................         -3.6          -39          -21         -2.1         -1.7
----------------------------------------------------------------------------------------------------------------
                                                Climate Benefits
----------------------------------------------------------------------------------------------------------------
5% Average.....................................           15           80           80          5.3          5.3
3% Average.....................................           38          320          320           17           17
2.5% Average...................................           52          490          490           24           24
3% 95th Percentile.............................          110          970          970           51           51
----------------------------------------------------------------------------------------------------------------
                                         Criteria Air Pollutant Benefits
----------------------------------------------------------------------------------------------------------------
PM2.5 Health Benefits--Wu et al., 2020.........        16-18          140           62          7.3          5.0
PM2.5 Health Benefits--Pope III et al., 2019...        31-34          280          120           14           10
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
With Climate 5% Average........................      180-190        1,300          580           71           46
With Climate 3% Average........................      200-220        1,600          820           82           57
With Climate 2.5% Average......................      210-230        1,800          990           90           64
With Climate 3% 95th Percentile................      270-290        2,200        1,500          120           91
----------------------------------------------------------------------------------------------------------------
\a\ The same discount rate used to discount the value of damages from future emissions (SC-GHG at 5, 3, 2.5
  percent) is used to calculate present and equivalent annualized values of SC-GHGs for internal consistency,
  while all other costs and benefits are discounted at either 3 percent or 7 percent.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
  risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
  The criteria pollutant benefits associated with the standards presented here do not include the full
  complement of health and environmental benefits that, if quantified and monetized, would increase the total
  monetized benefits.
\c\ For net benefits, the range in 2055 uses the low end of the Wu range and the high end of the Pope III et al.
  range. The present and equivalent annualized values for 3 percent use the Pope III et al. values while the 7
  percent values use the Wu values.

II. Public Health and Welfare Need for Emission Reductions

A. Climate Change From GHG Emissions

    Elevated concentrations of GHGs have been warming the planet, 
leading to changes in the Earth's climate including changes in the 
frequency and intensity of heat waves, precipitation, and extreme 
weather events, rising seas, and retreating snow and ice. The changes 
taking place in the atmosphere as a result of the well-documented 
buildup of GHGs due to human activities are changing the climate at a 
pace and in a way that threatens human health, society, and the natural 
environment. While EPA is not making any new scientific or factual 
findings with regard to the well-documented impact of GHG emissions on 
public health and welfare in support of this rule, EPA is providing 
some scientific background on climate change to offer additional 
context for this rulemaking and to increase the public's understanding 
of the environmental impacts of GHGs.
    Extensive additional information on climate change is available in 
the scientific assessments and the EPA documents that are briefly 
described in this section, as well as in the technical and scientific 
information supporting them. One of those documents is EPA's 2009 
Endangerment and Cause or Contribute Findings for Greenhouse Gases 
Under section 202(a) of the CAA (74 FR 66496, December 15, 2009). In 
the 2009 Endangerment Finding, the Administrator found under section 
202(a) of the CAA that elevated atmospheric concentrations of six key 
well-mixed GHGs--CO2, methane (CH4), nitrous oxide (N2O), 
HFCs, perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)--``may 
reasonably be anticipated to endanger the public health and welfare of 
current and future generations'' (74 FR 66523). The 2009 Endangerment 
Finding, together with

[[Page 29208]]

the extensive scientific and technical evidence in the supporting 
record, documented that climate change caused by human emissions of 
GHGs threatens the public health of the U.S. population. It explained 
that by raising average temperatures, climate change increases the 
likelihood of heat waves, which are associated with increased deaths 
and illnesses (74 FR 66497). While climate change also increases the 
likelihood of reductions in cold-related mortality, evidence indicates 
that the increases in heat mortality will be larger than the decreases 
in cold mortality in the U.S. (74 FR 66525). The 2009 Endangerment 
Finding further explained that compared with a future without climate 
change, climate change is expected to increase tropospheric ozone 
pollution over broad areas of the U.S., including in the largest 
metropolitan areas with the worst tropospheric ozone problems, and 
thereby increase the risk of adverse effects on public health (74 FR 
66525). Climate change is also expected to cause more intense 
hurricanes and more frequent and intense storms of other types and 
heavy precipitation, with impacts on other areas of public health, such 
as the potential for increased deaths, injuries, infectious and 
waterborne diseases, and stress-related disorders (74 FR 66525). 
Children, the elderly, and the poor are among the most vulnerable to 
these climate-related health effects (74 FR 66498).
    The 2009 Endangerment Finding also documented, together with the 
extensive scientific and technical evidence in the supporting record, 
that climate change touches nearly every aspect of public welfare \134\ 
in the U.S., including: Changes in water supply and quality due to 
changes in drought and extreme rainfall events; increased risk of storm 
surge and flooding in coastal areas and land loss due to inundation; 
increases in peak electricity demand and risks to electricity 
infrastructure; and the potential for significant agricultural 
disruptions and crop failures (though offset to some extent by carbon 
fertilization). These impacts are also global and may exacerbate 
problems outside the U.S. that raise humanitarian, trade, and national 
security issues for the U.S. (74 FR 66530).
---------------------------------------------------------------------------

    \134\ The CAA states in section 302(h) that ``[a]ll language 
referring to effects on welfare includes, but is not limited to, 
effects on soils, water, crops, vegetation, manmade materials, 
animals, wildlife, weather, visibility, and climate, damage to and 
deterioration of property, and hazards to transportation, as well as 
effects on economic values and on personal comfort and well-being, 
whether caused by transformation, conversion, or combination with 
other air pollutants.'' 42 U.S.C. 7602(h).
---------------------------------------------------------------------------

    In 2016, the Administrator issued a similar finding for GHG 
emissions from aircraft under section 231(a)(2)(A) of the CAA.\135\ In 
the 2016 Endangerment Finding, the Administrator found that the body of 
scientific evidence amassed in the record for the 2009 Endangerment 
Finding compellingly supported a similar endangerment finding under CAA 
section 231(a)(2)(A), and also found that the science assessments 
released between the 2009 and the 2016 Findings ``strengthen and 
further support the judgment that GHGs in the atmosphere may reasonably 
be anticipated to endanger the public health and welfare of current and 
future generations'' (81 FR 54424).
---------------------------------------------------------------------------

    \135\ ``Finding that Greenhouse Gas Emissions From Aircraft 
Cause or Contribute to Air Pollution That May Reasonably Be 
Anticipated To Endanger Public Health and Welfare.'' 81 FR 54422, 
August 15, 2016. (``2016 Endangerment Finding'').
---------------------------------------------------------------------------

    Since the 2016 Endangerment Finding, the climate has continued to 
change, with new observational records being set for several climate 
indicators such as global average surface temperatures, GHG 
concentrations, and sea level rise. Additionally, major scientific 
assessments continue to be released that further advance our 
understanding of the climate system and the impacts that GHGs have on 
public health and welfare both for current and future generations. 
These updated observations and projections document the rapid rate of 
current and future climate change both globally and in the 
U.S.136 137 138 139
---------------------------------------------------------------------------

    \136\ USGCRP, 2018: Impacts, Risks, and Adaptation in the United 
States: Fourth National Climate Assessment, Volume II [Reidmiller, 
D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K. 
Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research 
Program, Washington, DC, USA, 1515 pp. doi: 10.7930/NCA4.2018. 
https://nca2018.globalchange.gov.
    \137\ Roy, J., P. Tschakert, H. Waisman, S. Abdul Halim, P. 
Antwi-Agyei, P. Dasgupta, B. Hayward, M. Kanninen, D. Liverman, C. 
Okereke, P.F. Pinho, K. Riahi, and A.G. Suarez Rodriguez, 2018: 
Sustainable Development, Poverty Eradication and Reducing 
Inequalities. In: Global Warming of 1.5 [deg]C. An IPCC Special 
Report on the impacts of global warming of 1.5 [deg]C above pre-
industrial levels and related global greenhouse gas emission 
pathways, in the context of strengthening the global response to the 
threat of climate change, sustainable development, and efforts to 
eradicate poverty [Masson-Delmotte, V., P. Zhai, H.-O. P[ouml]rtner, 
D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. 
P[eacute]an, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. 
Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T. 
Waterfield (eds.)]. In Press. https://www.ipcc.ch/sr15/chapter/chapter-5.
    \138\ National Academies of Sciences, Engineering, and Medicine. 
2019. Climate Change and Ecosystems. Washington, DC: The National 
Academies Press. https://doi.org/10.17226/25504.
    \139\ NOAA National Centers for Environmental Information, State 
of the Climate: Global Climate Report for Annual 2020, published 
online January 2021, retrieved on February 10, 2021, from https://www.ncdc.noaa.gov/sotc/global/202013.
---------------------------------------------------------------------------

B. Background on Criteria and Air Toxics Pollutants Impacted by This 
Proposal

1. Particulate Matter
    Particulate matter (PM) is a complex mixture of solid particles and 
liquid droplets distributed among numerous atmospheric gases which 
interact with solid and liquid phases. Particles in the atmosphere 
range in size from less than 0.01 to more than 10 micrometers ([mu]m) 
in diameter.\140\ Atmospheric particles can be grouped into several 
classes according to their aerodynamic diameter and physical sizes. 
Generally, the three broad classes of particles include ultrafine 
particles (UFPs, generally considered as particles with a diameter less 
than or equal to 0.1 [mu]m [typically based on physical size, thermal 
diffusivity or electrical mobility]), ``fine'' particles 
(PM2.5; particles with a nominal mean aerodynamic diameter 
less than or equal to 2.5 [mu]m), and ``thoracic'' particles 
(PM10; particles with a nominal mean aerodynamic diameter 
less than or equal to 10 [mu]m). Particles that fall within the size 
range between PM2.5 and PM10, are referred to as 
``thoracic coarse particles'' (PM10-2.5, particles with a 
nominal mean aerodynamic diameter greater than 2.5 [mu]m and less than 
or equal to 10 [mu]m). EPA currently has NAAQS for PM2.5 and 
PM10.\141\
---------------------------------------------------------------------------

    \140\ U.S. EPA. Policy Assessment (PA) for the Review of the 
National Ambient Air Quality Standards for Particulate Matter (Final 
Report, 2020). U.S. Environmental Protection Agency, Washington, DC, 
EPA/452/R-20/002, 2020.
    \141\ Regulatory definitions of PM size fractions, and 
information on reference and equivalent methods for measuring PM in 
ambient air, are provided in 40 CFR parts 50, 53, and 58. With 
regard to NAAQS which provide protection against health and welfare 
effects, the 24-hour PM10 standard provides protection 
against effects associated with short-term exposure to thoracic 
coarse particles (i.e., PM10-2.5).
---------------------------------------------------------------------------

    Most particles are found in the lower troposphere, where they can 
have residence times ranging from a few hours to weeks. Particles are 
removed from the atmosphere by wet deposition, such as when they are 
carried by rain or snow, or by dry deposition, when particles settle 
out of suspension due to gravity. Atmospheric lifetimes are generally 
longest for PM2.5, which often remains in the atmosphere for 
days to weeks before being removed by wet or dry deposition.\142\ In 
contrast, atmospheric lifetimes for UFP and PM10-2.5 are 
shorter. Within hours, UFP

[[Page 29209]]

can undergo coagulation and condensation that lead to formation of 
larger particles in the accumulation mode, or can be removed from the 
atmosphere by evaporation, deposition, or reactions with other 
atmospheric components. PM10-2.5 are also generally removed 
from the atmosphere within hours, through wet or dry deposition.\143\
---------------------------------------------------------------------------

    \142\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019. Table 2-
1.
    \143\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019. Table 2-
1.
---------------------------------------------------------------------------

    Particulate matter consists of both primary and secondary 
particles. Primary particles are emitted directly from sources, such as 
combustion-related activities (e.g., industrial activities, motor 
vehicle operation, biomass burning), while secondary particles are 
formed through atmospheric chemical reactions of gaseous precursors 
(e.g., sulfur oxides (SOX), nitrogen oxides (NOX) 
and volatile organic compounds (VOCs)). From 2000 to 2021, national 
annual average ambient PM2.5 concentrations have declined by 
over 35 percent,\144\ largely reflecting reductions in emissions of 
precursor gases.
---------------------------------------------------------------------------

    \144\ See https://www.epa.gov/air-trends/particulate-matter-pm25-trends for more information.
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    There are two primary NAAQS for PM2.5: An annual 
standard (12.0 micrograms per cubic meter ([mu]g/m\3\)) and a 24-hour 
standard (35 [mu]g/m\3\), and there are two secondary NAAQS for 
PM2.5: An annual standard (15.0 [mu]g/m\3\) and a 24-hour 
standard (35 [mu]g/m\3\). The initial PM2.5 standards were 
set in 1997 and revisions to the standards were finalized in 2006 and 
in December 2012 and then retained in 2020. On January 6, 2023, EPA 
announced its proposed decision to revise the PM NAAQS.\145\
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    \145\ https://www.epa.gov/pm-pollution/national-ambient-air-quality-standards-naaqs-pm.
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    There are many areas of the country that are currently in 
nonattainment for the annual and 24-hour primary PM2.5 
NAAQS. As of August 31, 2022, more than 19 million people lived in the 
4 areas that are designated as nonattainment for the 1997 
PM2.5 NAAQS. Also, as of August 31, 2022, more than 31 
million people lived in the 14 areas that are designated as 
nonattainment for the 2006 PM2.5 NAAQS and more than 20 
million people lived in the 5 areas designated as nonattainment for the 
2012 PM2.5 NAAQS. In total, there are currently 15 
PM2.5 nonattainment areas with a population of more than 32 
million people.\146\ The proposed standards would take effect beginning 
in MY 2027 and would assist areas with attaining the NAAQS and may 
relieve areas with already stringent local regulations from some of the 
burden associated with adopting additional local controls. The rule 
would also assist counties with ambient concentrations near the level 
of the NAAQS who are working to ensure long-term attainment or 
maintenance of the PM2.5 NAAQS.
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    \146\ The population total is calculated by summing, without 
double counting, the 1997, 2006 and 2012 PM2.5 nonattainment 
populations contained in the Criteria Pollutant Nonattainment 
Summary report (https://www.epa.gov/green-book/green-book-data-download).
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2. Ozone
    Ground-level ozone pollution forms in areas with high 
concentrations of ambient NOX and VOCs when solar radiation 
is strong. Major U.S. sources of NOX are highway and nonroad 
motor vehicles, engines, power plants and other industrial sources, 
with natural sources, such as soil, vegetation, and lightning, serving 
as smaller sources. Vegetation is the dominant source of VOCs in the 
U.S. Volatile consumer and commercial products, such as propellants and 
solvents, highway and nonroad vehicles, engines, fires, and industrial 
sources also contribute to the atmospheric burden of VOCs at ground-
level.
    The processes underlying ozone formation, transport, and 
accumulation are complex. Ground-level ozone is produced and destroyed 
by an interwoven network of free radical reactions involving the 
hydroxyl radical (OH), NO, NO2, and complex reaction 
intermediates derived from VOCs. Many of these reactions are sensitive 
to temperature and available sunlight. High ozone events most often 
occur when ambient temperatures and sunlight intensities remain high 
for several days under stagnant conditions. Ozone and its precursors 
can also be transported hundreds of miles downwind, which can lead to 
elevated ozone levels in areas with otherwise low VOC or NOX 
emissions. As an air mass moves and is exposed to changing ambient 
concentrations of NOX and VOCs, the ozone photochemical 
regime (relative sensitivity of ozone formation to NOX and 
VOC emissions) can change.
    When ambient VOC concentrations are high, comparatively small 
amounts of NOX catalyze rapid ozone formation. Without 
available NOX, ground-level ozone production is severely 
limited, and VOC reductions would have little impact on ozone 
concentrations. Photochemistry under these conditions is said to be 
``NOX-limited.'' When NOX levels are sufficiently 
high, faster NO2 oxidation consumes more radicals, dampening 
ozone production. Under these ``VOC-limited'' conditions (also referred 
to as ``NOX-saturated'' conditions), VOC reductions are 
effective in reducing ozone, and NOX can react directly with 
ozone, resulting in suppressed ozone concentrations near NOX 
emission sources. Under these NOX-saturated conditions, 
NOX reductions can actually increase local ozone under 
certain circumstances, but overall ozone production (considering 
downwind formation) decreases and even in VOC-limited areas, 
NOX reductions are not expected to increase ozone levels if 
the NOX reductions are sufficiently large--large enough to 
become NOX-limited.
    The primary NAAQS for ozone, established in 2015 and retained in 
2020, is an 8-hour standard with a level of 0.07 ppm.\147\ EPA 
announced that it will reconsider the decision to retain the ozone 
NAAQS.\148\ EPA is also implementing the previous 8-hour ozone primary 
standard, set in 2008, at a level of 0.075 ppm. As of August 31, 2022, 
there were 34 ozone nonattainment areas for the 2008 ozone NAAQS, 
composed of 141 full or partial counties, with a population of more 
than 90 million, and 49 ozone nonattainment areas for the 2015 ozone 
NAAQS, composed of 212 full or partial counties, with a population of 
more than 125 million. In total, there are currently, as of August 31, 
2022, 57 ozone nonattainment areas with a population of more than 130 
million people.\149\
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    \147\ https://www.epa.gov/ground-level-ozone-pollution/ozone-national-ambient-air-quality-standards-naaqs.
    \148\ https://www.epa.gov/ground-level-ozone-pollution/epa-reconsider-previous-administrations-decision-retain-2015-ozone.
    \149\ The population total is calculated by summing, without 
double counting, the 2008 and 2015 ozone nonattainment populations 
contained in the Criteria Pollutant Nonattainment Summary report 
(https://www.epa.gov/green-book/green-book-data-download).
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    States with ozone nonattainment areas are required to take action 
to bring those areas into attainment. The attainment date assigned to 
an ozone nonattainment area is based on the area's classification. The 
attainment dates for areas designated nonattainment for the 2008 8-hour 
ozone NAAQS are in the 2015 to 2032 timeframe, depending on the 
severity of the problem in each area. Attainment dates for areas 
designated nonattainment for the 2015 ozone NAAQS are in the 2021 to 
2038 timeframe, again depending on the severity of the problem in each 
area.\150\

[[Page 29210]]

The proposed standards would take effect starting in MY 2027 and would 
assist areas with attaining the NAAQS and may relieve areas with 
already stringent local regulations from some of the burden associated 
with adopting additional local controls. The rule would also provide 
assistance to counties with ambient concentrations near the level of 
the NAAQS who are working to ensure long-term attainment or maintenance 
of the NAAQS.
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    \150\ https://www.epa.gov/ground-level-ozone-pollution/ozone-naaqs-timelines.
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3. Nitrogen Oxides
    Oxides of nitrogen (NOX) refers to nitric oxide (NO) and 
nitrogen dioxide (NO2). Most NO2 is formed in the 
air through the oxidation of nitric oxide (NO) emitted when fuel is 
burned at a high temperature. NOX is a criteria pollutant, 
regulated for its adverse effects on public health and the environment, 
and highway vehicles are an important contributor to NOX 
emissions. NOX, along with VOCs, are the two major 
precursors of ozone and NOX is also a major contributor to 
secondary PM2.5 formation. There are two primary NAAQS for 
NO2: An annual standard (53 ppb) and a 1-hour standard (100 
ppb).\151\ In 2010, EPA established requirements for monitoring 
NO2 near roadways expected to have the highest 
concentrations within large cities. Monitoring within this near-roadway 
network began in 2014, with additional sites deployed in the following 
years. At present, there are no nonattainment areas for NO2.
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    \151\ The statistical form of the 1-hour NAAQS for 
NO2 is the 3-year average of the yearly distribution of 
1-hour daily maximum concentrations.
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4. Sulfur Oxides
    Sulfur dioxide (SO2), a member of the sulfur oxide 
(SOX) family of gases, is formed from burning fuels 
containing sulfur (e.g., coal or oil), extracting gasoline from oil, or 
extracting metals from ore. SO2 and its gas phase oxidation 
products can dissolve in water droplets and further oxidize to form 
sulfuric acid which reacts with ammonia to form sulfates, which are 
important components of ambient PM.
    EPA most recently completed a review of the primary SO2 
NAAQS in February 2019 and decided to retain the existing 2010 
SO2 NAAQS.\152\ The current primary NAAQS for SO2 
is a 1-hour standard of 75 ppb. As of September 30, 2022, more than two 
million people lived in the 30 areas that are designated as 
nonattainment for the 2010 SO2 NAAQS.\153\
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    \152\ https://www.epa.gov/so2-pollution/primary-national-ambient-air-quality-standard-naaqs-sulfur-dioxide.
    \153\ https://www3.epa.gov/airquality/greenbook/tnsum.html.
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5. Carbon Monoxide
    Carbon monoxide (CO) is a colorless, odorless gas emitted from 
combustion processes. Nationally, particularly in urban areas, the 
majority of CO emissions to ambient air come from mobile sources.\154\ 
There are two primary NAAQS for CO: An 8-hour standard (9 ppm) and a 1-
hour standard (35 ppm). There are currently no CO nonattainment areas; 
as of September 27, 2010, all CO nonattainment areas have been 
redesignated to attainment. The past designations were based on the 
existing community-wide monitoring network. EPA made an addition to the 
ambient air monitoring requirements for CO during the 2011 NAAQS 
review. Those new requirements called for CO monitors to be operated 
near roads in Core Based Statistical Areas (CBSAs) of 1 million or more 
persons, in addition to the existing community-based network (76 FR 
54294, August 31, 2011).
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    \154\ U.S. EPA, (2010). Integrated Science Assessment for Carbon 
Monoxide (Final Report). U.S. Environmental Protection Agency, 
Washington, DC, EPA/600/R-09/019F, 2010. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=218686. See Section 2.1.
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6. Diesel Exhaust
    Diesel exhaust is a complex mixture composed of particulate matter, 
carbon dioxide, oxygen, nitrogen, water vapor, carbon monoxide, 
nitrogen compounds, sulfur compounds and numerous low-molecular-weight 
hydrocarbons. A number of these gaseous hydrocarbon components are 
individually known to be toxic, including aldehydes, benzene and 1,3-
butadiene. The diesel particulate matter present in diesel exhaust 
consists mostly of fine particles (<2.5 [mu]m), of which a significant 
fraction is ultrafine particles (<0.1 [mu]m). These particles have a 
large surface area which makes them an excellent medium for adsorbing 
organics and their small size makes them highly respirable. Many of the 
organic compounds present in the gases and on the particles, such as 
polycyclic organic matter, are individually known to have mutagenic and 
carcinogenic properties.
    Diesel exhaust varies significantly in chemical composition and 
particle sizes between different engine types (heavy-duty, light-duty), 
engine operating conditions (idle, acceleration, deceleration), and 
fuel formulations (high/low sulfur fuel). Also, there are emissions 
differences between onroad and nonroad engines because the nonroad 
engines are generally of older technology. After being emitted in the 
engine exhaust, diesel exhaust undergoes dilution as well as chemical 
and physical changes in the atmosphere. The lifetimes of the components 
present in diesel exhaust range from seconds to days.
7. Air Toxics
    The most recent available data indicate that millions of Americans 
live in areas where air toxics pose potential health 
concerns.155 156 The levels of air toxics to which people 
are exposed vary depending on where people live and work and the kinds 
of activities in which they engage, as discussed in detail in EPA's 
2007 Mobile Source Air Toxics Rule.\157\ According to EPA's Air Toxics 
Screening Assessment (AirToxScreen) for 2018, mobile sources were 
responsible for 40 percent of outdoor anthropogenic toxic emissions and 
were the largest contributor to national average cancer and noncancer 
risk from directly emitted pollutants.158 159 Mobile sources 
are also significant contributors to precursor emissions which react to 
form air toxics.\160\ Formaldehyde is the largest contributor to cancer 
risk of all 71 pollutants quantitatively assessed in the 2018 
AirToxScreen. Mobile sources were responsible for 26 percent of primary 
anthropogenic emissions of this pollutant in 2018 and are significant 
contributors to formaldehyde precursor emissions. Benzene is also a 
large contributor to cancer risk, and mobile sources account for about 
60 percent of

[[Page 29211]]

average exposure to ambient concentrations.
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    \155\ Air toxics are pollutants known to cause or suspected of 
causing cancer or other serious health effects. Air toxics are also 
known as toxic air pollutants or hazardous air pollutants. https://www.epa.gov/AirToxScreen/airtoxscreen-glossary-terms#air-toxics.
    \156\ U.S. EPA (2022) Technical Support Document EPA Air Toxics 
Screening Assessment. 2017AirToxScreen TSD. https://www.epa.gov/system/files/documents/2022-03/airtoxscreen_2017tsd.pdf.
    \157\ U.S. Environmental Protection Agency (2007). Control of 
Hazardous Air Pollutants from Mobile Sources; Final Rule. 72 FR 
8434, February 26, 2007.
    \158\ U.S. EPA. (2022) 2018 Air Toxics Screening Assessment. 
https://www.epa.gov/AirToxScreen/2018-airtoxscreen-assessment-results.
    \159\ AirToxScreen also includes estimates of risk attributable 
to background concentrations, which includes contributions from 
long-range transport, persistent air toxics, and natural sources; as 
well as secondary concentrations, where toxics are formed via 
secondary formation. Mobile sources substantially contribute to 
long-range transport and secondarily formed air toxics.
    \160\ Rich Cook, Sharon Phillips, Madeleine Strum, Alison Eyth & 
James Thurman (2020): Contribution of mobile sources to secondary 
formation of carbonyl compounds, Journal of the Air & Waste 
Management Association, DOI: 10.1080/10962247.2020.1813839.
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C. Health Effects Associated With Exposure to Criteria and Air Toxics 
Pollutants

    Emissions sources impacted by this proposal, including vehicles and 
power plants, emit pollutants that contribute to ambient concentrations 
of ozone, PM, NO2, SO2, CO, and air toxics. This 
section of the preamble discusses the health effects associated with 
exposure to these pollutants.
    Additionally, because children have increased vulnerability and 
susceptibility for adverse health effects related to air pollution 
exposures, EPA's findings regarding adverse effects for children 
related to exposure to pollutants that are impacted by this rule are 
noted in this section. The increased vulnerability and susceptibility 
of children to air pollution exposures may arise because infants and 
children generally breathe more relative to their size than adults do, 
and consequently may be exposed to relatively higher amounts of air 
pollution.\161\ Children also tend to breathe through their mouths more 
than adults and their nasal passages are less effective at removing 
pollutants, which leads to greater lung deposition of some pollutants, 
such as PM.162 163 Furthermore, air pollutants may pose 
health risks specific to children because children's bodies are still 
developing.\164\ For example, during periods of rapid growth such as 
fetal development, infancy and puberty, their developing systems and 
organs may be more easily harmed.165 166 EPA produces the 
report titled ``America's Children and the Environment,'' which 
presents national trends on air pollution and other contaminants and 
environmental health of children.\167\
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    \161\ EPA (2009) Metabolically-derived ventilation rates: A 
revised approach based upon oxygen consumption rates. Washington, 
DC: Office of Research and Development. EPA/600/R-06/129F. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=202543.
    \162\ U.S. EPA Integrated Science Assessment for Particulate 
Matter (Final Report, 2019). U.S. Environmental Protection Agency, 
Washington, DC, EPA/600/R-19/188, 2019. Chapter 4 ``Overall 
Conclusions'' p. 4-1.
    \163\ Foos, B.; Marty, M.; Schwartz, J.; Bennet, W.; Moya, J.; 
Jarabek, A.M.; Salmon, A.G. (2008) Focusing on children's inhalation 
dosimetry and health effects for risk assessment: An introduction. J 
Toxicol Environ Health 71A: 149-165.
    \164\ Children's environmental health includes conception, 
infancy, early childhood and through adolescence until 21 years of 
age as described in the EPA Memorandum: Issuance of EPA's 2021 
Policy on Children's Health. October 5, 2021. Available at https://www.epa.gov/system/files/documents/2021-10/2021-policy-on-childrens-health.pdf.
    \165\ EPA (2006) A Framework for Assessing Health Risks of 
Environmental Exposures to Children. EPA, Washington, DC, EPA/600/R-
05/093F, 2006.
    \166\ U.S. Environmental Protection Agency. (2005). Supplemental 
guidance for assessing susceptibility from early-life exposure to 
carcinogens. Washington, DC: Risk Assessment Forum. EPA/630/R-03/
003F. https://www3.epa.gov/airtoxics/childrens_supplement_final.pdf.
    \167\ U.S. EPA. America's Children and the Environment. 
Available at: https://www.epa.gov/americaschildrenenvironment.
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    Information on environmental effects associated with exposure to 
these pollutants is included in Section II.D, information on 
environmental justice is included in Section VIII.I and information on 
emission reductions and air quality impacts from this rule are included 
in Sections VI and VII of this preamble.
1. Particulate Matter
    Scientific evidence spanning animal toxicological, controlled human 
exposure, and epidemiologic studies shows that exposure to ambient PM 
is associated with a broad range of health effects. These health 
effects are discussed in detail in the Integrated Science Assessment 
for Particulate Matter, which was finalized in December 2019 (2019 PM 
ISA), with a more targeted evaluation of studies published since the 
literature cutoff date of the 2019 PM ISA in the Supplement to the 
Integrated Science Assessment for PM (Supplement).168 169 
The PM ISA characterizes the causal nature of relationships between PM 
exposure and broad health categories (e.g., cardiovascular effects, 
respiratory effects, etc.) using a weight-of-evidence approach.\170\ 
Within this characterization, the PM ISA summarizes the health effects 
evidence for short-term (i.e., hours up to one month) and long-term 
(i.e., one month to years) exposures to PM2.5, 
PM10-2.5, and ultrafine particles, and concludes that 
exposures to ambient PM2.5 are associated with a number of 
adverse health effects. The following discussion highlights the PM 
ISA's conclusions, and summarizes additional information from the 
Supplement where appropriate, pertaining to the health effects evidence 
for both short- and long-term PM exposures. Further discussion of PM-
related health effects can also be found in the 2022 Policy Assessment 
for the review of the PM NAAQS.\171\
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    \168\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
    \169\ U.S. EPA. Supplement to the 2019 Integrated Science 
Assessment for Particulate Matter (Final Report, 2022). U.S. 
Environmental Protection Agency, Washington, DC, EPA/635/R-22/028, 
2022.
    \170\ The causal framework draws upon the assessment and 
integration of evidence from across scientific disciplines, spanning 
atmospheric chemistry, exposure, dosimetry and health effects 
studies (i.e., epidemiologic, controlled human exposure, and animal 
toxicological studies), and assess the related uncertainties and 
limitations that ultimately influence our understanding of the 
evidence. This framework employs a five-level hierarchy that 
classifies the overall weight-of-evidence with respect to the causal 
nature of relationships between criteria pollutant exposures and 
health and welfare effects using the following categorizations: 
causal relationship; likely to be causal relationship; suggestive 
of, but not sufficient to infer, a causal relationship; inadequate 
to infer the presence or absence of a causal relationship; and not 
likely to be a causal relationship (U.S. EPA. (2019). Integrated 
Science Assessment for Particulate Matter (Final Report). U.S. 
Environmental Protection Agency, Washington, DC, EPA/600/R-19/188, 
Section P. 3.2.3).
    \171\ U.S. EPA. Policy Assessment (PA) for the Reconsideration 
of the National Ambient Air Quality Standards for Particulate Matter 
(Final Report, 2022). U.S. Environmental Protection Agency, 
Washington, DC, EPA-452/R-22-004, 2022.
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    EPA has concluded that recent evidence in combination with evidence 
evaluated in the 2009 PM ISA supports a ``causal relationship'' between 
both long- and short-term exposures to PM2.5 and premature 
mortality and cardiovascular effects and a ``likely to be causal 
relationship'' between long- and short-term PM2.5 exposures 
and respiratory effects.\172\ Additionally, recent experimental and 
epidemiologic studies provide evidence supporting a ``likely to be 
causal relationship'' between long-term PM2.5 exposure and 
nervous system effects, and long-term PM2.5 exposure and 
cancer. Because of remaining uncertainties and limitations in the 
evidence base, EPA determined a ``suggestive of, but not sufficient to 
infer, a causal relationship'' for long-term PM2.5 exposure 
and reproductive and developmental effects (i.e., male/female 
reproduction and fertility; pregnancy and birth outcomes), long- and 
short-term exposures and metabolic effects, and short-term exposure and 
nervous system effects.
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    \172\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F.
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    As discussed extensively in the 2019 PM ISA and the Supplement, 
recent studies continue to support a ``causal relationship'' between 
short- and long-term PM2.5 exposures and 
mortality.173 174 For short-term PM2.5 exposure, 
multi-city studies, in combination with single- and multi-city studies 
evaluated in the 2009 PM ISA, provide evidence of consistent, positive 
associations across studies conducted in

[[Page 29212]]

different geographic locations, populations with different demographic 
characteristics, and studies using different exposure assignment 
techniques. Additionally, the consistent and coherent evidence across 
scientific disciplines for cardiovascular morbidity, particularly 
ischemic events and heart failure, and to a lesser degree for 
respiratory morbidity, including exacerbations of chronic obstructive 
pulmonary disease (COPD) and asthma, provide biological plausibility 
for cause-specific mortality and ultimately total mortality. Recent 
epidemiologic studies evaluated in the Supplement, including studies 
that employed alternative methods for confounder control, provide 
additional support to the evidence base that contributed to the 2019 PM 
ISA conclusion for short-term PM2.5 exposure and mortality.
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    \173\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
    \174\ U.S. EPA. Supplement to the 2019 Integrated Science 
Assessment for Particulate Matter (Final Report, 2022). U.S. 
Environmental Protection Agency, Washington, DC, EPA/635/R-22/028, 
2022.
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    The 2019 PM ISA concluded a ``causal relationship'' between long-
term PM2.5 exposure and mortality. In addition to reanalyses 
and extensions of the American Cancer Society (ACS) and Harvard Six 
Cities (HSC) cohorts, multiple new cohort studies conducted in the U.S. 
and Canada consisting of people employed in a specific job (e.g., 
teacher, nurse), and that apply different exposure assignment 
techniques, provide evidence of positive associations between long-term 
PM2.5 exposure and mortality. Biological plausibility for 
mortality due to long-term PM2.5 exposure is provided by the 
coherence of effects across scientific disciplines for cardiovascular 
morbidity, particularly for coronary heart disease, stroke, and 
atherosclerosis, and for respiratory morbidity, particularly for the 
development of COPD. Additionally, recent studies provide evidence 
indicating that as long-term PM2.5 concentrations decrease 
there is an increase in life expectancy. Recent cohort studies 
evaluated in the Supplement, as well as epidemiologic studies that 
conducted accountability analyses or employed alternative methods for 
confounder controls, support and extend the evidence base that 
contributed to the 2019 PM ISA conclusion for long-term 
PM2.5 exposure and mortality.
    A large body of studies examining both short- and long-term 
PM2.5 exposure and cardiovascular effects builds on the 
evidence base evaluated in the 2009 PM ISA. The strongest evidence for 
cardiovascular effects in response to short-term PM2.5 
exposures is for ischemic heart disease and heart failure. The evidence 
for short-term PM2.5 exposure and cardiovascular effects is 
coherent across scientific disciplines and supports a continuum of 
effects ranging from subtle changes in indicators of cardiovascular 
health to serious clinical events, such as increased emergency 
department visits and hospital admissions due to cardiovascular disease 
and cardiovascular mortality. For long-term PM2.5 exposure, 
there is strong and consistent epidemiologic evidence of a relationship 
with cardiovascular mortality. This evidence is supported by 
epidemiologic and animal toxicological studies demonstrating a range of 
cardiovascular effects including coronary heart disease, stroke, 
impaired heart function, and subclinical markers (e.g., coronary artery 
calcification, atherosclerotic plaque progression), which collectively 
provide coherence and biological plausibility. Recent epidemiologic 
studies evaluated in the Supplement, as well as studies that conducted 
accountability analyses or employed alternative methods for confounder 
control, support and extend the evidence base that contributed to the 
2019 PM ISA conclusion for both short- and long-term PM2.5 
exposure and cardiovascular effects.
    Studies evaluated in the 2019 PM ISA continue to provide evidence 
of a ``likely to be causal relationship'' between both short- and long-
term PM2.5 exposure and respiratory effects. Epidemiologic 
studies provide consistent evidence of a relationship between short-
term PM2.5 exposure and asthma exacerbation in children and 
COPD exacerbation in adults as indicated by increases in emergency 
department visits and hospital admissions, which is supported by animal 
toxicological studies indicating worsening allergic airways disease and 
subclinical effects related to COPD. Epidemiologic studies also provide 
evidence of a relationship between short-term PM2.5 exposure 
and respiratory mortality. However, there is inconsistent evidence of 
respiratory effects, specifically lung function declines and pulmonary 
inflammation, in controlled human exposure studies. With respect to 
long term PM2.5 exposure, epidemiologic studies conducted in 
the U.S. and abroad provide evidence of a relationship with respiratory 
effects, including consistent changes in lung function and lung 
function growth rate, increased asthma incidence, asthma prevalence, 
and wheeze in children; acceleration of lung function decline in 
adults; and respiratory mortality. The epidemiologic evidence is 
supported by animal toxicological studies, which provide coherence and 
biological plausibility for a range of effects including impaired lung 
development, decrements in lung function growth, and asthma 
development.
    Since the 2009 PM ISA, a growing body of scientific evidence 
examined the relationship between long-term PM2.5 exposure 
and nervous system effects, resulting for the first time in a causality 
determination for this health effects category of a ``likely to be 
causal relationship.'' The strongest evidence for effects on the 
nervous system come from epidemiologic studies that consistently report 
cognitive decrements and reductions in brain volume in adults. The 
effects observed in epidemiologic studies in adults are supported by 
animal toxicological studies demonstrating effects on the brain of 
adult animals including inflammation, morphologic changes, and 
neurodegeneration of specific regions of the brain. There is more 
limited evidence for neurodevelopmental effects in children, with some 
studies reporting positive associations with autism spectrum disorder 
and others providing limited evidence of an association with cognitive 
function. While there is some evidence from animal toxicological 
studies indicating effects on the brain (i.e., inflammatory and 
morphological changes) to support a biologically plausible pathway for 
neurodevelopmental effects, epidemiologic studies are limited due to 
their lack of control for potential confounding by copollutants, the 
small number of studies conducted, and uncertainty regarding critical 
exposure windows.
    Building off the decades of research demonstrating mutagenicity, 
DNA damage, and other endpoints related to genotoxicity due to whole PM 
exposures, recent experimental and epidemiologic studies focusing 
specifically on PM2.5 provide evidence of a relationship 
between long-term PM2.5 exposure and cancer. Epidemiologic 
studies examining long-term PM2.5 exposure and lung cancer 
incidence and mortality provide evidence of generally positive 
associations in cohort studies spanning different populations, 
locations, and exposure assignment techniques. Additionally, there is 
evidence of positive associations with lung cancer incidence and 
mortality in analyses limited to never smokers. The epidemiologic 
evidence is supported by both experimental and epidemiologic evidence 
of genotoxicity, epigenetic effects, carcinogenic potential, and that 
PM2.5 exhibits several characteristics of carcinogens, which 
collectively

[[Page 29213]]

provides biological plausibility for cancer development and resulted in 
the conclusion of a ``likely to be causal relationship.''
    For the additional health effects categories evaluated for 
PM2.5 in the 2019 PM ISA, experimental and epidemiologic 
studies provide limited and/or inconsistent evidence of a relationship 
with PM2.5 exposure. As a result, the 2019 PM ISA concluded 
that the evidence is ``suggestive of, but not sufficient to infer a 
causal relationship'' for short-term PM2.5 exposure and 
metabolic effects and nervous system effects, and long-term 
PM2.5 exposures and metabolic effects as well as 
reproductive and developmental effects.
    In addition to evaluating the health effects attributed to short- 
and long-term exposure to PM2.5, the 2019 PM ISA also 
conducted an extensive evaluation as to whether specific components or 
sources of PM2.5 are more strongly related with health 
effects than PM2.5 mass. An evaluation of those studies 
resulted in the 2019 PM ISA concluding that ``many PM2.5 
components and sources are associated with many health effects, and the 
evidence does not indicate that any one source or component is 
consistently more strongly related to health effects than 
PM2.5 mass.'' \175\
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    \175\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
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    For both PM10-2.5 and UFPs, for all health effects 
categories evaluated, the 2019 PM ISA concluded that the evidence was 
``suggestive of, but not sufficient to infer, a causal relationship'' 
or ``inadequate to determine the presence or absence of a causal 
relationship.'' For PM10-2.5, although a Federal Reference 
Method (FRM) was instituted in 2011 to measure PM10-2.5 
concentrations nationally, the causality determinations reflect that 
the same uncertainty identified in the 2009 PM ISA with respect to the 
method used to estimate PM10-2.5 concentrations in 
epidemiologic studies persists. Specifically, across epidemiologic 
studies, different approaches are used to estimate PM10-2.5 
concentrations (e.g., direct measurement of PM10-2.5, 
difference between PM10 and PM2.5 
concentrations), and it remains unclear how well correlated 
PM10-2.5 concentrations are both spatially and temporally 
across the different methods used.
    For UFPs, which have often been defined as particles <0.1 [mu]m, 
the uncertainty in the evidence for the health effect categories 
evaluated across experimental and epidemiologic studies reflects the 
inconsistency in the exposure metric used (i.e., particle number 
concentration, surface area concentration, mass concentration) as well 
as the size fractions examined. In epidemiologic studies the size 
fraction examined can vary depending on the monitor used and exposure 
metric, with some studies examining number count over the entire 
particle size range, while experimental studies that use a particle 
concentrator often examine particles up to 0.3 [mu]m. Additionally, due 
to the lack of a monitoring network, there is limited information on 
the spatial and temporal variability of UFPs within the U.S., as well 
as population exposures to UFPs, which adds uncertainty to 
epidemiologic study results.
    The 2019 PM ISA cites extensive evidence indicating that ``both the 
general population as well as specific populations and life stages are 
at risk for PM2.5-related health effects.'' \176\ For 
example, in support of its ``causal'' and ``likely to be causal'' 
determinations, the ISA cites substantial evidence for: (1) PM-related 
mortality and cardiovascular effects in older adults; (2) PM-related 
cardiovascular effects in people with pre-existing cardiovascular 
disease; (3) PM-related respiratory effects in people with pre-existing 
respiratory disease, particularly asthma exacerbations in children; and 
(4) PM-related impairments in lung function growth and asthma 
development in children. The ISA additionally notes that stratified 
analyses (i.e., analyses that directly compare PM-related health 
effects across groups) provide strong evidence for racial and ethnic 
differences in PM2.5 exposures and in the risk of 
PM2.5-related health effects, specifically within Hispanic 
and non-Hispanic Black populations, with some evidence of increased 
risk for populations of low socioeconomic status. Recent studies 
evaluated in the Supplement support the conclusion of the 2019 PM ISA 
with respect to disparities in both PM2.5 exposure and 
health risk by race and ethnicity and provide additional support for 
disparities for populations of lower socioeconomic status.\177\ 
Additionally, evidence spanning epidemiologic studies that conducted 
stratified analyses, experimental studies focusing on animal models of 
disease or individuals with pre-existing disease, dosimetry studies, as 
well as studies focusing on differential exposure suggest that 
populations with pre-existing cardiovascular or respiratory disease, 
populations that are overweight or obese, populations that have 
particular genetic variants, and current/former smokers could be at 
increased risk for adverse PM2.5-related health effects. The 
2022 Policy Assessment for the review of the PM NAAQS also highlights 
that factors that may contribute to increased risk of PM2.5-
related health effects include lifestage (children and older adults), 
pre-existing diseases (cardiovascular disease and respiratory disease), 
race/ethnicity, and socioeconomic status.\178\
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    \176\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
    \177\ U.S. EPA. Supplement to the 2019 Integrated Science 
Assessment for Particulate Matter (Final Report, 2022). U.S. 
Environmental Protection Agency, Washington, DC, EPA/635/R-22/028, 
2022.
    \178\ U.S. EPA. Policy Assessment (PA) for the Reconsideration 
of the National Ambient Air Quality Standards for Particulate Matter 
(Final Report, 2022). U.S. Environmental Protection Agency, 
Washington, DC, EPA-452/R-22-004, 2022, p. 3-53.
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2. Ozone
    This section provides a summary of the health effects associated 
with exposure to ambient concentrations of ozone.\179\ The information 
in this section is based on the information and conclusions in the 
April 2020 Integrated Science Assessment for Ozone (Ozone ISA).\180\ 
The Ozone ISA concludes that human exposures to ambient concentrations 
of ozone are associated with a number of adverse health effects and 
characterizes the weight of evidence for these health effects.\181\ The 
following discussion highlights the Ozone ISA's conclusions pertaining 
to health effects associated with both short-term and long-term periods 
of exposure to ozone.
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    \179\ Human exposure to ozone varies over time due to changes in 
ambient ozone concentration and because people move between 
locations which have notably different ozone concentrations. Also, 
the amount of ozone delivered to the lung is influenced not only by 
the ambient concentrations but also by the breathing route and rate.
    \180\ U.S. EPA. Integrated Science Assessment (ISA) for Ozone 
and Related Photochemical Oxidants (Final Report). U.S. 
Environmental Protection Agency, Washington, DC, EPA/600/R-20/012, 
2020.
    \181\ The ISA evaluates evidence and draws conclusions on the 
causal relationship between relevant pollutant exposures and health 
effects, assigning one of five ``weight of evidence'' 
determinations: causal relationship, likely to be a causal 
relationship, suggestive of a causal relationship, inadequate to 
infer a causal relationship, and not likely to be a causal 
relationship. For more information on these levels of evidence, 
please refer to Table II in the Preamble of the ISA.
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    For short-term exposure to ozone, the Ozone ISA concludes that 
respiratory effects, including lung function decrements, pulmonary 
inflammation, exacerbation of asthma, respiratory-related hospital 
admissions, and mortality, are causally associated with ozone exposure. 
It also concludes that

[[Page 29214]]

metabolic effects, including metabolic syndrome (i.e., changes in 
insulin or glucose levels, cholesterol levels, obesity, and blood 
pressure) and complications due to diabetes are likely to be causally 
associated with short-term exposure to ozone and that evidence is 
suggestive of a causal relationship between cardiovascular effects, 
central nervous system effects and total mortality and short-term 
exposure to ozone.
    For long-term exposure to ozone, the Ozone ISA concludes that 
respiratory effects, including new onset asthma, pulmonary inflammation 
and injury, are likely to be causally related with ozone exposure. The 
Ozone ISA characterizes the evidence as suggestive of a causal 
relationship for associations between long-term ozone exposure and 
cardiovascular effects, metabolic effects, reproductive and 
developmental effects, central nervous system effects and total 
mortality. The evidence is inadequate to infer a causal relationship 
between chronic ozone exposure and increased risk of cancer.
    Finally, interindividual variation in human responses to ozone 
exposure can result in some groups being at increased risk for 
detrimental effects in response to exposure. In addition, some groups 
are at increased risk of exposure due to their activities, such as 
outdoor workers and children. The Ozone ISA identified several groups 
that are at increased risk for ozone-related health effects. These 
groups are people with asthma, children and older adults, individuals 
with reduced intake of certain nutrients (i.e., Vitamins C and E), 
outdoor workers, and individuals having certain genetic variants 
related to oxidative metabolism or inflammation. Ozone exposure during 
childhood can have lasting effects through adulthood. Such effects 
include altered function of the respiratory and immune systems. 
Children absorb higher doses (normalized to lung surface area) of 
ambient ozone, compared to adults, due to their increased time spent 
outdoors, higher ventilation rates relative to body size, and a 
tendency to breathe a greater fraction of air through the mouth. 
Children also have a higher asthma prevalence compared to adults. 
Recent epidemiologic studies provide generally consistent evidence that 
long-term ozone exposure is associated with the development of asthma 
in children. Studies comparing age groups reported higher magnitude 
associations for short-term ozone exposure and respiratory hospital 
admissions and emergency room visits among children than among adults. 
Panel studies also provide support for experimental studies with 
consistent associations between short-term ozone exposure and lung 
function and pulmonary inflammation in healthy children. Additional 
children's vulnerability and susceptibility factors are listed in 
Section X.G of the Preamble.
3. Nitrogen Oxides
    The most recent review of the health effects of oxides of nitrogen 
completed by EPA can be found in the 2016 Integrated Science Assessment 
for Oxides of Nitrogen--Health Criteria (Oxides of Nitrogen ISA).\182\ 
The primary source of NO2 is motor vehicle emissions, and 
ambient NO2 concentrations tend to be highly correlated with 
other traffic-related pollutants. Thus, a key issue in characterizing 
the causality of NO2-health effect relationships consists of 
evaluating the extent to which studies supported an effect of 
NO2 that is independent of other traffic-related pollutants. 
EPA concluded that the findings for asthma exacerbation integrated from 
epidemiologic and controlled human exposure studies provided evidence 
that is sufficient to infer a causal relationship between respiratory 
effects and short-term NO2 exposure. The strongest evidence 
supporting an independent effect of NO2 exposure comes from 
controlled human exposure studies demonstrating increased airway 
responsiveness in individuals with asthma following ambient-relevant 
NO2 exposures. The coherence of this evidence with 
epidemiologic findings for asthma hospital admissions and ED visits as 
well as lung function decrements and increased pulmonary inflammation 
in children with asthma describe a plausible pathway by which 
NO2 exposure can cause an asthma exacerbation. The 2016 ISA 
for Oxides of Nitrogen also concluded that there is likely to be a 
causal relationship between long-term NO2 exposure and 
respiratory effects. This conclusion is based on new epidemiologic 
evidence for associations of NO2 with asthma development in 
children combined with biological plausibility from experimental 
studies.
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    \182\ U.S. EPA. Integrated Science Assessment for Oxides of 
Nitrogen--Health Criteria (2016 Final Report). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-15/068, 2016.
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    In evaluating a broader range of health effects, the 2016 ISA for 
Oxides of Nitrogen concluded that evidence is ``suggestive of, but not 
sufficient to infer, a causal relationship'' between short-term 
NO2 exposure and cardiovascular effects and mortality and 
between long-term NO2 exposure and cardiovascular effects 
and diabetes, birth outcomes, and cancer. In addition, the scientific 
evidence is inadequate (insufficient consistency of epidemiologic and 
toxicological evidence) to infer a causal relationship for long-term 
NO2 exposure with fertility, reproduction, and pregnancy, as 
well as with postnatal development. A key uncertainty in understanding 
the relationship between these non-respiratory health effects and 
short- or long-term exposure to NO2 is copollutant 
confounding, particularly by other roadway pollutants. The available 
evidence for non-respiratory health effects does not adequately address 
whether NO2 has an independent effect or whether it 
primarily represents effects related to other or a mixture of traffic-
related pollutants.
    The 2016 ISA for Oxides of Nitrogen concluded that people with 
asthma, children, and older adults are at increased risk for 
NO2-related health effects. In these groups and lifestages, 
NO2 is consistently related to larger effects on outcomes 
related to asthma exacerbation, for which there is confidence in the 
relationship with NO2 exposure.
4. Sulfur Oxides
    This section provides an overview of the health effects associated 
with SO2. Additional information on the health effects of 
SO2 can be found in the 2017 Integrated Science Assessment 
for Sulfur Oxides--Health Criteria (SOX ISA).\183\ Following 
an extensive evaluation of health evidence from animal toxicological, 
controlled human exposure, and epidemiologic studies, EPA has concluded 
that there is a causal relationship between respiratory health effects 
and short-term exposure to SO2. The immediate effect of 
SO2 on the respiratory system in humans is 
bronchoconstriction. People with asthma are more sensitive to the 
effects of SO2, likely resulting from preexisting 
inflammation associated with this disease. In addition to those with 
asthma (both children and adults), there is suggestive evidence that 
all children and older adults may be at increased risk of 
SO2-related health effects. In free-breathing laboratory 
studies involving controlled human exposures to SO2, 
respiratory effects have consistently been observed following 5-10 min 
exposures at SO2 concentrations >=400

[[Page 29215]]

ppb in people with asthma engaged in moderate to heavy levels of 
exercise, with respiratory effects occurring at concentrations as low 
as 200 ppb in some individuals with asthma. A clear concentration-
response relationship has been demonstrated in these studies following 
exposures to SO2 at concentrations between 200 and 1000 ppb, 
both in terms of increasing severity of respiratory symptoms and 
decrements in lung function, as well as the percentage of individuals 
with asthma adversely affected. Epidemiologic studies have reported 
positive associations between short-term ambient SO2 
concentrations and hospital admissions and emergency department visits 
for asthma and for all respiratory causes, particularly among children 
and older adults (>=65 years). The studies provide supportive evidence 
for the causal relationship.
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    \183\ U.S. EPA. Integrated Science Assessment (ISA) for Sulfur 
Oxides--Health Criteria (Final Report, Dec 2017). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-17/451, 2017.
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    For long-term SO2 exposure and respiratory effects, EPA 
has concluded that the evidence is suggestive of a causal relationship. 
This conclusion is based on new epidemiologic evidence for positive 
associations between long-term SO2 exposure and increases in 
asthma incidence among children, together with animal toxicological 
evidence that provides a pathophysiologic basis for the development of 
asthma. However, uncertainty remains regarding the influence of other 
pollutants on the observed associations with SO2 because 
these epidemiologic studies have not examined the potential for 
copollutant confounding.
    Consistent associations between short-term exposure to 
SO2 and mortality have been observed in epidemiologic 
studies, with larger effect estimates reported for respiratory 
mortality than for cardiovascular mortality. While this finding is 
consistent with the demonstrated effects of SO2 on 
respiratory morbidity, uncertainty remains with respect to the 
interpretation of these observed mortality associations due to 
potential confounding by various copollutants. Therefore, EPA has 
concluded that the overall evidence is suggestive of a causal 
relationship between short-term exposure to SO2 and 
mortality.
5. Carbon Monoxide
    Information on the health effects of carbon monoxide (CO) can be 
found in the January 2010 Integrated Science Assessment for Carbon 
Monoxide (CO ISA).\184\ The CO ISA presents conclusions regarding the 
presence of causal relationships between CO exposure and categories of 
adverse health effects.\185\ This section provides a summary of the 
health effects associated with exposure to ambient concentrations of 
CO, along with the CO ISA conclusions.\186\
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    \184\ U.S. EPA, (2010). Integrated Science Assessment for Carbon 
Monoxide (Final Report). U.S. Environmental Protection Agency, 
Washington, DC, EPA/600/R-09/019F, 2010. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=218686.
    \185\ The ISA evaluates the health evidence associated with 
different health effects, assigning one of five ``weight of 
evidence'' determinations: causal relationship, likely to be a 
causal relationship, suggestive of a causal relationship, inadequate 
to infer a causal relationship, and not likely to be a causal 
relationship. For definitions of these levels of evidence, please 
refer to Section 1.6 of the ISA.
    \186\ Personal exposure includes contributions from many 
sources, and in many different environments. Total personal exposure 
to CO includes both ambient and non-ambient components; and both 
components may contribute to adverse health effects.
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    Controlled human exposure studies of subjects with coronary artery 
disease show a decrease in the time to onset of exercise-induced angina 
(chest pain) and electrocardiogram changes following CO exposure. In 
addition, epidemiologic studies observed associations between short-
term CO exposure and cardiovascular morbidity, particularly increased 
emergency room visits and hospital admissions for coronary heart 
disease (including ischemic heart disease, myocardial infarction, and 
angina). Some epidemiologic evidence is also available for increased 
hospital admissions and emergency room visits for congestive heart 
failure and cardiovascular disease as a whole. The CO ISA concludes 
that a causal relationship is likely to exist between short-term 
exposures to CO and cardiovascular morbidity. It also concludes that 
available data are inadequate to conclude that a causal relationship 
exists between long-term exposures to CO and cardiovascular morbidity.
    Animal studies show various neurological effects with in-utero CO 
exposure. Controlled human exposure studies report central nervous 
system and behavioral effects following low-level CO exposures, 
although the findings have not been consistent across all studies. The 
CO ISA concludes that the evidence is suggestive of a causal 
relationship with both short- and long-term exposure to CO and central 
nervous system effects.
    A number of studies cited in the CO ISA have evaluated the role of 
CO exposure in birth outcomes such as preterm birth or cardiac birth 
defects. There is limited epidemiologic evidence of a CO-induced effect 
on preterm births and birth defects, with weak evidence for a decrease 
in birth weight. Animal toxicological studies have found perinatal CO 
exposure to affect birth weight, as well as other developmental 
outcomes. The CO ISA concludes that the evidence is suggestive of a 
causal relationship between long-term exposures to CO and developmental 
effects and birth outcomes.
    Epidemiologic studies provide evidence of associations between 
short-term CO concentrations and respiratory morbidity such as changes 
in pulmonary function, respiratory symptoms, and hospital admissions. A 
limited number of epidemiologic studies considered copollutants such as 
ozone, SO2, and PM in two-pollutant models and found that CO 
risk estimates were generally robust, although this limited evidence 
makes it difficult to disentangle effects attributed to CO itself from 
those of the larger complex air pollution mixture. Controlled human 
exposure studies have not extensively evaluated the effect of CO on 
respiratory morbidity. Animal studies at levels of 50-100 ppm CO show 
preliminary evidence of altered pulmonary vascular remodeling and 
oxidative injury. The CO ISA concludes that the evidence is suggestive 
of a causal relationship between short-term CO exposure and respiratory 
morbidity, and inadequate to conclude that a causal relationship exists 
between long-term exposure and respiratory morbidity.
    Finally, the CO ISA concludes that the epidemiologic evidence is 
suggestive of a causal relationship between short-term concentrations 
of CO and mortality. Epidemiologic evidence suggests an association 
exists between short-term exposure to CO and mortality, but limited 
evidence is available to evaluate cause-specific mortality outcomes 
associated with CO exposure. In addition, the attenuation of CO risk 
estimates which was often observed in copollutant models contributes to 
the uncertainty as to whether CO is acting alone or as an indicator for 
other combustion-related pollutants. The CO ISA also concludes that 
there is not likely to be a causal relationship between relevant long-
term exposures to CO and mortality.
6. Diesel Exhaust
    In EPA's 2002 Diesel Health Assessment Document (Diesel HAD), 
exposure to diesel exhaust was classified as likely to be carcinogenic 
to humans by inhalation from environmental exposures, in accordance 
with the revised draft 1996/1999 EPA

[[Page 29216]]

cancer guidelines.187 188 A number of other agencies 
(National Institute for Occupational Safety and Health, the 
International Agency for Research on Cancer, the World Health 
Organization, California EPA, and the U.S. Department of Health and 
Human Services) made similar hazard classifications prior to 2002. EPA 
also concluded in the 2002 Diesel HAD that it was not possible to 
calculate a cancer unit risk for diesel exhaust due to limitations in 
the exposure data for the occupational groups or the absence of a dose-
response relationship.
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    \187\ U.S. EPA. (1999). Guidelines for Carcinogen Risk 
Assessment. Review Draft. NCEA-F-0644, July. Washington, DC: U.S. 
EPA. Retrieved on March 19, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=54932.
    \188\ U.S. EPA (2002). Health Assessment Document for Diesel 
Engine Exhaust. EPA/600/8-90/057F Office of research and 
Development, Washington DC. Retrieved on March 17, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060. pp. 1-1 1-2.
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    In the absence of a cancer unit risk, the Diesel HAD sought to 
provide additional insight into the significance of the diesel exhaust 
cancer hazard by estimating possible ranges of risk that might be 
present in the population. An exploratory analysis was used to 
characterize a range of possible lung cancer risk. The outcome was that 
environmental risks of cancer from long-term diesel exhaust exposures 
could plausibly range from as low as 10-5 to as high as 
10-3. Because of uncertainties, the analysis acknowledged 
that the risks could be lower than 10-5, and a zero risk 
from diesel exhaust exposure could not be ruled out.
    Noncancer health effects of acute and chronic exposure to diesel 
exhaust emissions are also of concern to EPA. EPA derived a diesel 
exhaust reference concentration (RfC) from consideration of four well-
conducted chronic rat inhalation studies showing adverse pulmonary 
effects. The RfC is 5 [micro]g/m\3\ for diesel exhaust measured as 
diesel particulate matter. This RfC does not consider allergenic 
effects such as those associated with asthma or immunologic or the 
potential for cardiac effects. There was emerging evidence in 2002, 
discussed in the Diesel HAD, that exposure to diesel exhaust can 
exacerbate these effects, but the exposure-response data were lacking 
at that time to derive an RfC based on these then-emerging 
considerations. The Diesel HAD states, ``With [diesel particulate 
matter] being a ubiquitous component of ambient PM, there is an 
uncertainty about the adequacy of the existing [diesel exhaust] 
noncancer database to identify all of the pertinent [diesel exhaust]-
caused noncancer health hazards.'' The Diesel HAD also noted ``that 
acute exposure to [diesel exhaust] has been associated with irritation 
of the eye, nose, and throat, respiratory symptoms (cough and phlegm), 
and neurophysiological symptoms such as headache, lightheadedness, 
nausea, vomiting, and numbness or tingling of the extremities.'' The 
Diesel HAD notes that the cancer and noncancer hazard conclusions 
applied to the general use of diesel engines then on the market and as 
cleaner engines replace a substantial number of existing ones, the 
applicability of the conclusions would need to be reevaluated.
    It is important to note that the Diesel HAD also briefly summarizes 
health effects associated with ambient PM and discusses EPA's then-
annual PM2.5 NAAQS of 15 [micro]g/m\3\.\189\ There is a 
large and extensive body of human data showing a wide spectrum of 
adverse health effects associated with exposure to ambient PM, of which 
diesel exhaust is an important component. The PM2.5 NAAQS is 
designed to provide protection from the noncancer health effects and 
premature mortality attributed to exposure to PM2.5. The 
contribution of diesel PM to total ambient PM varies in different 
regions of the country and also, within a region, from one area to 
another. The contribution can be high in near-roadway environments, for 
example, or in other locations where diesel engine use is concentrated.
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    \189\ See Section II.B.1 for discussion of the current 
PM2.5 NAAQS standard.
---------------------------------------------------------------------------

    Since 2002, several new studies have been published which continue 
to report increased lung cancer risk associated with occupational 
exposure to diesel exhaust from older engines. Of particular note since 
2011 are three new epidemiology studies that have examined lung cancer 
in occupational populations, including, truck drivers, underground 
nonmetal miners, and other diesel motor-related occupations. These 
studies reported increased risk of lung cancer related to exposure to 
diesel exhaust, with evidence of positive exposure-response 
relationships to varying degrees.190 191 192 These newer 
studies (along with others that have appeared in the scientific 
literature) add to the evidence EPA evaluated in the 2002 Diesel HAD 
and further reinforce the concern that diesel exhaust exposure likely 
poses a lung cancer hazard. The findings from these newer studies do 
not necessarily apply to newer technology diesel engines (i.e., heavy-
duty highway engines from 2007 and later model years) since the newer 
engines have large reductions in the emission constituents compared to 
older technology diesel engines.
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    \190\ Garshick, Eric, Francine Laden, Jaime E. Hart, Mary E. 
Davis, Ellen A. Eisen, and Thomas J. Smith. 2012. Lung cancer and 
elemental carbon exposure in trucking industry workers. 
Environmental Health Perspectives 120(9): 1301-1306.
    \191\ Silverman, D.T., Samanic, C.M., Lubin, J.H., Blair, A.E., 
Stewart, P.A., Vermeulen, R., & Attfield, M.D. (2012). The diesel 
exhaust in miners study: a nested case-control study of lung cancer 
and diesel exhaust. Journal of the National Cancer Institute.
    \192\ Olsson, Ann C., et al. ``Exposure to diesel motor exhaust 
and lung cancer risk in a pooled analysis from case-control studies 
in Europe and Canada.'' American journal of respiratory and critical 
care medicine 183.7 (2011): 941-948.
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    In light of the growing body of scientific literature evaluating 
the health effects of exposure to diesel exhaust, in June 2012 the 
World Health Organization's International Agency for Research on Cancer 
(IARC), a recognized international authority on the carcinogenic 
potential of chemicals and other agents, evaluated the full range of 
cancer-related health effects data for diesel engine exhaust. IARC 
concluded that diesel exhaust should be regarded as ``carcinogenic to 
humans.'' \193\ This designation was an update from its 1988 evaluation 
that considered the evidence to be indicative of a ``probable human 
carcinogen.''
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    \193\ IARC [International Agency for Research on Cancer]. 
(2013). Diesel and gasoline engine exhausts and some nitroarenes. 
IARC Monographs Volume 105. [Online at http://monographs.iarc.fr/ENG/Monographs/vol105/index.php.]
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7. Air Toxics
    Light- and medium-duty engine emissions contribute to ambient 
levels of air toxics that are known or suspected human or animal 
carcinogens, or that have noncancer health effects. These compounds 
include, but are not limited to, acetaldehyde, acrolein, benzene, 1,3-
butadiene, ethylbenzene, formaldehyde, naphthalene, and polycyclic 
organic matter, which were all identified as national or regional 
cancer risk drivers or contributors in the 2018 AirToxScreen 
Assessment.194 195
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    \194\ U.S. EPA (2022) Technical Support Document EPA Air Toxics 
Screening Assessment. 2017AirToxScreen TSD. https://www.epa.gov/system/files/documents/2022-03/airtoxscreen_2017tsd.pdf.
    \195\ U.S. EPA (2022) 2018 AirToxScreen Risk Drivers. https://www.epa.gov/AirToxScreen/airtoxscreen-risk-drivers.
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i. Acetaldehyde
    Acetaldehyde is classified in EPA's IRIS database as a probable 
human carcinogen, based on nasal tumors in rats, and is considered 
toxic by the inhalation, oral, and intravenous

[[Page 29217]]

routes.\196\ The inhalation unit risk estimate (URE) in IRIS for 
acetaldehyde is 2.2 x 10-6 per [micro]g/m\3\.\197\ Acetaldehyde is 
reasonably anticipated to be a human carcinogen by the NTP in the 14th 
Report on Carcinogens and is classified as possibly carcinogenic to 
humans (Group 2B) by the IARC.198 199
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    \196\ U.S. EPA (1991). Integrated Risk Information System File 
of Acetaldehyde. Research and Development, National Center for 
Environmental Assessment, Washington, DC. This material is available 
electronically at https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=290.
    \197\ U.S. EPA (1991). Integrated Risk Information System File 
of Acetaldehyde. This material is available electronically at 
https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=290.
    \198\ NTP (National Toxicology Program). 2016. Report on 
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S. 
Department of Health and Human Services, Public Health Service. 
https://ntp.niehs.nih.gov/go/roc14.
    \199\ International Agency for Research on Cancer (IARC). 
(1999). Re-evaluation of some organic chemicals, hydrazine, and 
hydrogen peroxide. IARC Monographs on the Evaluation of Carcinogenic 
Risk of Chemical to Humans, Vol 71. Lyon, France.
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    The primary noncancer effects of exposure to acetaldehyde vapors 
include irritation of the eyes, skin, and respiratory tract.\200\ In 
short-term (4 week) rat studies, degeneration of olfactory epithelium 
was observed at various concentration levels of acetaldehyde 
exposure.201 202 Data from these studies were used by EPA to 
develop an inhalation reference concentration of 9 [micro]g/m3. Some 
asthmatics have been shown to be a sensitive subpopulation to 
decrements in functional expiratory volume (FEV1 test) and 
bronchoconstriction upon acetaldehyde inhalation.\203\ Children, 
especially those with diagnosed asthma, may be more likely to show 
impaired pulmonary function and symptoms of asthma than are adults 
following exposure to acetaldehyde.\204\
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    \200\ U.S. EPA (1991). Integrated Risk Information System File 
of Acetaldehyde. This material is available electronically at 
https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=290.
    \201\ U.S. EPA. (2003). Integrated Risk Information System File 
of Acrolein. Research and Development, National Center for 
Environmental Assessment, Washington, DC. This material is available 
electronically at https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=364.
    \202\ Appleman, L.M., R.A. Woutersen, and V.J. Feron. (1982). 
Inhalation toxicity of acetaldehyde in rats. I. Acute and subacute 
studies. Toxicology. 23: 293-297.
    \203\ Myou, S.; Fujimura, M.; Nishi K.; Ohka, T.; and Matsuda, 
T. (1993). Aerosolized acetaldehyde induces histamine-mediated 
bronchoconstriction in asthmatics. Am. Rev. Respir.Dis.148(4 Pt 1): 
940-943.
    \204\ California OEHHA, 2014. TSD for Noncancer RELs: Appendix 
D. Individual, Acute, 8-Hour, and Chronic Reference Exposure Level 
Summaries. December 2008 (updated July 2014). https://oehha.ca.gov/media/downloads/crnr/appendixd1final.pdf.
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ii. Acrolein
    EPA most recently evaluated the toxicological and health effects 
literature related to acrolein in 2003 and concluded that the human 
carcinogenic potential of acrolein could not be determined because the 
available data were inadequate. No information was available on the 
carcinogenic effects of acrolein in humans and the animal data provided 
inadequate evidence of carcinogenicity.\205\ In 2021, the IARC 
classified acrolein as probably carcinogenic to humans.\206\
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    \205\ U.S. EPA. (2003). Integrated Risk Information System File 
of Acrolein. Research and Development, National Center for 
Environmental Assessment, Washington, DC. This material is available 
at http://www.epa.gov/iris/subst/0364.htm.
    \206\ International Agency for Research on Cancer (IARC). 
(2021). Monographs on the Identification of Carcinogenic Hazards to 
humans, Volume 128. Acrolein, Crotonaldehyde, and Arecoline, World 
Health Organization, Lyon, France.
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    Lesions to the lungs and upper respiratory tract of rats, rabbits, 
and hamsters have been observed after subchronic exposure to 
acrolein.\207\ The agency has developed an RfC for acrolein of 0.02 
[micro]g/m\3\ and an RfD of 0.5 [micro]g/kg-day.\208\
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    \207\ U.S. EPA. (2003). Integrated Risk Information System File 
of Acrolein. Office of Research and Development, National Center for 
Environmental Assessment, Washington, DC. This material is available 
at http://www.epa.gov/iris/subst/0364.htm.
    \208\ U.S. EPA. (2003). Integrated Risk Information System File 
of Acrolein. Office of Research and Development, National Center for 
Environmental Assessment, Washington, DC. This material is available 
at http://www.epa.gov/iris/subst/0364.htm.
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    Acrolein is extremely acrid and irritating to humans when inhaled, 
with acute exposure resulting in upper respiratory tract irritation, 
mucus hypersecretion and congestion. The intense irritancy of this 
carbonyl has been demonstrated during controlled tests in human 
subjects, who suffer intolerable eye and nasal mucosal sensory 
reactions within minutes of exposure.\209\ These data and additional 
studies regarding acute effects of human exposure to acrolein are 
summarized in EPA's 2003 IRIS Human Health Assessment for 
acrolein.\210\ Studies in humans indicate that levels as low as 0.09 
ppm (0.21 mg/m\3\) for five minutes may elicit subjective complaints of 
eye irritation with increasing concentrations leading to more extensive 
eye, nose and respiratory symptoms. Acute exposures in animal studies 
report bronchial hyper-responsiveness. Based on animal data (more 
pronounced respiratory irritancy in mice with allergic airway disease 
in comparison to non-diseased mice) \211\ and demonstration of similar 
effects in humans (e.g., reduction in respiratory rate), individuals 
with compromised respiratory function (e.g., emphysema, asthma) are 
expected to be at increased risk of developing adverse responses to 
strong respiratory irritants such as acrolein. EPA does not currently 
have an acute reference concentration for acrolein. The available 
health effect reference values for acrolein have been summarized by EPA 
and include an ATSDR MRL for acute exposure to acrolein of 7 [micro]g/
m\3\ for 1-14 days exposure; and Reference Exposure Level (REL) values 
from the California Office of Environmental Health Hazard Assessment 
(OEHHA) for one-hour and 8-hour exposures of 2.5 [micro]g/m\3\ and 0.7 
[micro]g/m\3\, respectively.\212\
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    \209\ U.S. EPA. (2003). Toxicological review of acrolein in 
support of summary information on Integrated Risk Information System 
(IRIS) National Center for Environmental Assessment, Washington, DC. 
EPA/635/R-03/003. p. 10. Available online at: http://www.epa.gov/ncea/iris/toxreviews/0364tr.pdf.
    \210\ U.S. EPA. (2003). Toxicological review of acrolein in 
support of summary information on Integrated Risk Information System 
(IRIS) National Center for Environmental Assessment, Washington, DC. 
EPA/635/R-03/003. Available online at: http://www.epa.gov/ncea/iris/toxreviews/0364tr.pdf.
    \211\ Morris JB, Symanowicz PT, Olsen JE, et al. (2003). 
Immediate sensory nerve-mediated respiratory responses to irritants 
in healthy and allergic airway-diseased mice. J Appl Physiol 
94(4):1563-1571.
    \212\ U.S. EPA. (2009). Graphical Arrays of Chemical-Specific 
Health Effect Reference Values for Inhalation Exposures (Final 
Report). U.S. Environmental Protection Agency, Washington, DC, EPA/
600/R-09/061, 2009. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=211003.
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iii. Benzene
    EPA's Integrated Risk Information System (IRIS) database lists 
benzene as a known human carcinogen (causing leukemia) by all routes of 
exposure, and concludes that exposure is associated with additional 
health effects, including genetic changes in both humans and animals 
and increased proliferation of bone marrow cells in 
mice.213 214 215 EPA states in its IRIS database that data 
indicate a causal relationship between benzene exposure and acute 
lymphocytic leukemia and suggest a

[[Page 29218]]

relationship between benzene exposure and chronic non-lymphocytic 
leukemia and chronic lymphocytic leukemia. EPA's IRIS documentation for 
benzene also lists a range of 2.2 x 10-6 to 7.8 x 10-6 per [micro]g/
m\3\ as the unit risk estimate (URE) for benzene.216 217 The 
International Agency for Research on Cancer (IARC) has determined that 
benzene is a human carcinogen, and the U.S. Department of Health and 
Human Services (DHHS) has characterized benzene as a known human 
carcinogen.218 219
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    \213\ U.S. EPA. (2000). Integrated Risk Information System File 
for Benzene. This material is available electronically at: https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=276.
    \214\ International Agency for Research on Cancer. (1982). IARC 
monographs on the evaluation of carcinogenic risk of chemicals to 
humans, Volume 29, Some industrial chemicals and dyestuffs, 
International Agency for Research on Cancer, World Health 
Organization, Lyon, France 1982.
    \215\ Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.; Henry, 
V.A. (1992). Synergistic action of the benzene metabolite 
hydroquinone on myelopoietic stimulating activity of granulocyte/
macrophage colony-stimulating factor in vitro, Proc. Natl. Acad. 
Sci. 89:3691-3695.
    \216\ A unit risk estimate is defined as the increase in the 
lifetime risk of cancer of an individual who is exposed for a 
lifetime to 1 [micro]g/m\3\ benzene in air.
    \217\ U.S. EPA. (2000). Integrated Risk Information System File 
for Benzene. This material is available electronically at: https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=276.
    \218\ International Agency for Research on Cancer (IARC, 2018. 
Monographs on the evaluation of carcinogenic risks to humans, volume 
120. World Health Organization--Lyon, France. http://publications.iarc.fr/Book-And-Report-Series/Iarc-Monographs-On-The-Identification-Of-Carcinogenic-Hazards-To-Humans/Benzene-2018.
    \219\ NTP (National Toxicology Program). 2016. Report on 
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S. 
Department of Health and Human Services, Public Health Service. 
https://ntp.niehs.nih.gov/go/roc14.
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    A number of adverse noncancer health effects, including blood 
disorders such as preleukemia and aplastic anemia, have also been 
associated with long-term exposure to benzene.220 221 The 
most sensitive noncancer effect observed in humans, based on current 
data, is the depression of the absolute lymphocyte count in 
blood.222 223 EPA's inhalation reference concentration (RfC) 
for benzene is 30 [micro]g/m\3\. The RfC is based on suppressed 
absolute lymphocyte counts seen in humans under occupational exposure 
conditions. In addition, studies sponsored by the Health Effects 
Institute (HEI) provide evidence that biochemical responses occur at 
lower levels of benzene exposure than previously 
known.224 225 226 227 EPA's IRIS program has not yet 
evaluated these new data. EPA does not currently have an acute 
reference concentration for benzene. The Agency for Toxic Substances 
and Disease Registry (ATSDR) Minimal Risk Level (MRL) for acute 
exposure to benzene is 29 [micro]g/m\3\ for 1-14 days 
exposure.228 229
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    \220\ Aksoy, M. (1989). Hematotoxicity and carcinogenicity of 
benzene. Environ. Health Perspect. 82: 193-197. EPA-HQ-OAR-2011-
0135.
    \221\ Goldstein, B.D. (1988). Benzene toxicity. Occupational 
medicine. State of the Art Reviews. 3: 541-554.
    \222\ Rothman, N., G.L. Li, M. Dosemeci, W.E. Bechtold, G.E. 
Marti, Y.Z. Wang, M. Linet, L.Q. Xi, W. Lu, M.T. Smith, N. Titenko-
Holland, L.P. Zhang, W. Blot, S.N. Yin, and R.B. Hayes. (1996). 
Hematotoxicity among Chinese workers heavily exposed to benzene. Am. 
J. Ind. Med. 29: 236-246.
    \223\ U.S. EPA (2002). Toxicological Review of Benzene 
(Noncancer Effects). Environmental Protection Agency, Integrated 
Risk Information System (IRIS), Research and Development, National 
Center for Environmental Assessment, Washington DC. This material is 
available electronically at https://cfpub.epa.gov/ncea/iris/iris_documents/documents/toxreviews/0276tr.pdf.
    \224\ Qu, O.; Shore, R.; Li, G.; Jin, X.; Chen, C.L.; Cohen, B.; 
Melikian, A.; Eastmond, D.; Rappaport, S.; Li, H.; Rupa, D.; 
Suramaya, R.; Songnian, W.; Huifant, Y.; Meng, M.; Winnik, M.; Kwok, 
E.; Li, Y.; Mu, R.; Xu, B.; Zhang, X.; Li, K. (2003). HEI Report 
115, Validation & Evaluation of Biomarkers in Workers Exposed to 
Benzene in China.
    \225\ Qu, Q., R. Shore, G. Li, X. Jin, L.C. Chen, B. Cohen, et 
al. (2002). Hematological changes among Chinese workers with a broad 
range of benzene exposures. Am. J. Industr. Med. 42: 275-285.
    \226\ Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et al. 
(2004). Hematotoxically in Workers Exposed to Low Levels of Benzene. 
Science 306: 1774-1776.
    \227\ Turtletaub, K.W. and Mani, C. (2003). Benzene metabolism 
in rodents at doses relevant to human exposure from Urban Air. 
Research Reports Health Effect Inst. Report No.113.
    \228\ U.S. Agency for Toxic Substances and Disease Registry 
(ATSDR). (2007). Toxicological profile for benzene. Atlanta, GA: 
U.S. Department of Health and Human Services, Public Health Service. 
http://www.atsdr.cdc.gov/ToxProfiles/tp3.pdf.
    \229\ A minimal risk level (MRL) is defined as an estimate of 
the daily human exposure to a hazardous substance that is likely to 
be without appreciable risk of adverse noncancer health effects over 
a specified duration of exposure.
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    There is limited information from two studies regarding an 
increased risk of adverse effects to children whose parents have been 
occupationally exposed to benzene.230 231 Data from animal 
studies have shown benzene exposures result in damage to the 
hematopoietic (blood cell formation) system during 
development.232 233 234 Also, key changes related to the 
development of childhood leukemia occur in the developing fetus.\235\ 
Several studies have reported that genetic changes related to eventual 
leukemia development occur before birth. For example, there is one 
study of genetic changes in twins who developed T cell leukemia at nine 
years of age.\236\
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    \230\ Corti, M; Snyder, CA. (1996) Influences of gender, 
development, pregnancy and ethanol consumption on the hematotoxicity 
of inhaled 10 ppm benzene. Arch Toxicol 70:209-217.
    \231\ McKinney P.A.; Alexander, F.E.; Cartwright, R.A.; et al. 
(1991) Parental occupations of children with leukemia in west 
Cumbria, north Humberside, and Gateshead, Br Med J 302:681-686.
    \232\ Keller, KA; Snyder, CA. (1986) Mice exposed in utero to 
low concentrations of benzene exhibit enduring changes in their 
colony forming hematopoietic cells. Toxicology 42:171-181.
    \233\ Keller, KA; Snyder, CA. (1988) Mice exposed in utero to 20 
ppm benzene exhibit altered numbers of recognizable hematopoietic 
cells up to seven weeks after exposure. Fundam Appl Toxicol 10:224-
232.
    \234\ Corti, M; Snyder, CA. (1996) Influences of gender, 
development, pregnancy and ethanol consumption on the hematotoxicity 
of inhaled 10 ppm benzene. Arch Toxicol 70:209-217.
    \235\ U.S. EPA. (2002). Toxicological Review of Benzene 
(Noncancer Effects). National Center for Environmental Assessment, 
Washington, DC. Report No. EPA/635/R-02/001F. https://cfpub.epa.gov/ncea/iris/iris_documents/documents/toxreviews/0276tr.pdf.
    \236\ Ford, AM; Pombo-de-Oliveira, MS; McCarthy, KP; MacLean, 
JM; Carrico, KC; Vincent, RF; Greaves, M. (1997) Monoclonal origin 
of concordant T-cell malignancy in identical twins. Blood 89:281-
285.
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iv. 1,3-Butadiene
    EPA has characterized 1,3-butadiene as carcinogenic to humans by 
inhalation.237 238 The IARC has determined that 1,3-
butadiene is a human carcinogen and the U.S. DHHS has characterized 
1,3-butadiene as a known human carcinogen.239 240 241 242 
There are numerous studies consistently demonstrating that 1,3-
butadiene is metabolized into genotoxic metabolites by experimental 
animals and humans. The specific mechanisms of 1,3-butadiene-induced 
carcinogenesis are unknown; however, the scientific evidence strongly 
suggests that the carcinogenic effects are mediated by genotoxic 
metabolites. Animal data suggest that females may be more sensitive 
than males for cancer effects associated with 1,3-butadiene exposure; 
there are insufficient data in humans from which to draw conclusions 
about sensitive subpopulations. The URE for 1,3-butadiene is 3 x 10-5 
per [micro]g/m\3\.\243\

[[Page 29219]]

1,3-butadiene also causes a variety of reproductive and developmental 
effects in mice; no human data on these effects are available. The most 
sensitive effect was ovarian atrophy observed in a lifetime bioassay of 
female mice.\244\ Based on this critical effect and the benchmark 
concentration methodology, an RfC for chronic health effects was 
calculated at 0.9 ppb (approximately 2 [micro]g/m\3\).
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    \237\ U.S. EPA. (2002). Health Assessment of 1,3-Butadiene. 
Office of Research and Development, National Center for 
Environmental Assessment, Washington Office, Washington, DC. Report 
No. EPA600-P-98-001F. This document is available electronically at 
https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=54499.
    \238\ U.S. EPA. (2002) ``Full IRIS Summary for 1,3-butadiene 
(CASRN 106-99-0)'' Environmental Protection Agency, Integrated Risk 
Information System (IRIS), Research and Development, National Center 
for Environmental Assessment, Washington, DC https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=139.
    \239\ International Agency for Research on Cancer (IARC). 
(1999). Monographs on the evaluation of carcinogenic risk of 
chemicals to humans, Volume 71, Re-evaluation of some organic 
chemicals, hydrazine and hydrogen peroxide, World Health 
Organization, Lyon, France.
    \240\ International Agency for Research on Cancer (IARC). 
(2008). Monographs on the evaluation of carcinogenic risk of 
chemicals to humans, 1,3-Butadiene, Ethylene Oxide and Vinyl Halides 
(Vinyl Fluoride, Vinyl Chloride and Vinyl Bromide) Volume 97, World 
Health Organization, Lyon, France.
    \241\ NTP (National Toxicology Program). 2016. Report on 
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S. 
Department of Health and Human Services, Public Health Service. 
https://ntp.niehs.nih.gov/go/roc14.
    \242\ International Agency for Research on Cancer (IARC). 
(2012). Monographs on the evaluation of carcinogenic risk of 
chemicals to humans, Volume 100F chemical agents and related 
occupations, World Health Organization, Lyon, France.
    \243\ U.S. EPA. (2002). ``Full IRIS Summary for 1,3-butadiene 
(CASRN 106-99-0)'' Environmental Protection Agency, Integrated Risk 
Information System (IRIS), Research and Development, National Center 
for Environmental Assessment, Washington, DC https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=139.
    \244\ Bevan, C.; Stadler, J.C.; Elliot, G.S.; et al. (1996). 
Subchronic toxicity of 4-vinylcyclohexene in rats and mice by 
inhalation. Fundam. Appl. Toxicol. 32:1-10.
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v. Ethylbenzene
    EPA's inhalation RfC for ethylbenzene is 1 mg/m\3\. This conclusion 
on a weight of evidence determination and RfC are contained in the 1991 
IRIS file for ethylbenzene.\245\ The RfC is based on developmental 
effects. A study in rabbits found reductions in live rabbit kits per 
litter at 1000 ppm. In addition, a study on rats found an increased 
incidence of supernumerary and rudimentary ribs at 1000 ppm, and 
elevated incidence of extra ribs at 100 ppm. In 1988, EPA concluded 
that data were inadequate to give a weight of evidence characterization 
for carcinogenic effects. EPA released an IRIS Assessment Plan for 
Ethylbenzene in 2017 \246\ and EPA will be releasing the Systematic 
Review Protocol for ethylbenzene in 2023.\247\
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    \245\ U.S. EPA. (1991). Integrated Risk Information System File 
for Ethylbenzene. This material is available electronically at: 
https://iris.epa.gov/ChemicalLanding/&substance_nmbr=51.
    \246\ U.S. EPA (2017). IRIS Assessment Plan for Ethylbenzene. 
EPA/635/R-17/332. This document is available electronically at: 
https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=337468.
    \247\ U.S. EPA (2022). IRIS Program Outlook. June, 2022. This 
material is available electronically at: https://www.epa.gov/system/files/documents/2022-06/IRIS%20Program%20Outlook_June22.pdf.
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    California EPA completed a cancer risk assessment for ethylbenzene 
in 2007 and developed an inhalation unit risk estimate of 2.5 x 10-
6.\248\ This value was based on incidence of kidney cancer in male 
rats. California EPA also developed a chronic inhalation noncancer 
reference exposure level (REL) of 2000 [micro]g/m\3\, based on 
nephrotoxicity and body weight reduction in rats, liver cellular 
alterations, necrosis in mice, and hyperplasia of the pituitary gland 
in mice.\249\
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    \248\ California OEHHA, 2007. Adoption of a Unit Risk Value for 
Ethylbenzene. This material is available electronically at: https://oehha.ca.gov/air/report-hot-spots/adoption-unit-risk-value-ethylbenzene.
    \249\ California OEHHA, 2008. Technical Supporting Document for 
Noncancer RELs, Appendix D3. This material is available 
electronically at: https://oehha.ca.gov/media/downloads/crnr/appendixd3final.pdf.
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    ATSDR developed chronic Minimal Risk Levels (MRLs) for ethylbenzene 
of 0.06 ppm based on renal effects, and an acute MRL of 5 ppm based on 
auditory effects.
vi. Formaldehyde
    In 1991, EPA concluded that formaldehyde is a Class B1 probable 
human carcinogen based on limited evidence in humans and sufficient 
evidence in animals.\250\ An Inhalation URE for cancer and a Reference 
Dose for oral noncancer effects were developed by EPA and posted on the 
IRIS database. Since that time, the NTP and IARC have concluded that 
formaldehyde is a known human carcinogen.251 252 253
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    \250\ EPA. Integrated Risk Information System. Formaldehyde 
(CASRN 50-00-0) https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=419.
    \251\ NTP (National Toxicology Program). 2016. Report on 
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S. 
Department of Health and Human Services, Public Health Service. 
https://ntp.niehs.nih.gov/go/roc14.
    \252\ IARC Monographs on the Evaluation of Carcinogenic Risks to 
Humans Volume 88 (2006): Formaldehyde, 2-Butoxyethanol and 1-tert-
Butoxypropan-2-ol.
    \253\ IARC Monographs on the Evaluation of Carcinogenic Risks to 
Humans Volume 100F (2012): Formaldehyde.
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    The conclusions by IARC and NTP reflect the results of 
epidemiologic research published since 1991 in combination with 
previous animal, human, and mechanistic evidence. Research conducted by 
the National Cancer Institute reported an increased risk of 
nasopharyngeal cancer and specific lymphohematopoietic malignancies 
among workers exposed to formaldehyde.254 255 256 A National 
Institute of Occupational Safety and Health study of garment workers 
also reported increased risk of death due to leukemia among workers 
exposed to formaldehyde.\257\ Extended follow-up of a cohort of British 
chemical workers did not report evidence of an increase in 
nasopharyngeal or lymphohematopoietic cancers, but a continuing 
statistically significant excess in lung cancers was reported.\258\ 
Finally, a study of embalmers reported formaldehyde exposures to be 
associated with an increased risk of myeloid leukemia but not brain 
cancer.\259\
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    \254\ Hauptmann, M.; Lubin, J.H.; Stewart, P.A.; Hayes, R.B.; 
Blair, A. 2003. Mortality from lymphohematopoetic malignancies among 
workers in formaldehyde industries. Journal of the National Cancer 
Institute 95: 1615-1623.
    \255\ Hauptmann, M.; Lubin, J.H.; Stewart, P.A.; Hayes, R.B.; 
Blair, A. 2004. Mortality from solid cancers among workers in 
formaldehyde industries. American Journal of Epidemiology 159: 1117-
1130.
    \256\ Beane Freeman, L.E.; Blair, A.; Lubin, J.H.; Stewart, 
P.A.; Hayes, R.B.; Hoover, R.N.; Hauptmann, M. 2009. Mortality from 
lymphohematopoietic malignancies among workers in formaldehyde 
industries: The National Cancer Institute cohort. J. National Cancer 
Inst. 101: 751-761.
    \257\ Pinkerton, L.E. 2004. Mortality among a cohort of garment 
workers exposed to formaldehyde: an update. Occup. Environ. Med. 61: 
193-200.
    \258\ Coggon, D, EC Harris, J Poole, KT Palmer. 2003. Extended 
follow-up of a cohort of British chemical workers exposed to 
formaldehyde. J National Cancer Inst. 95:1608-1615.
    \259\ Hauptmann, M,; Stewart P.A.; Lubin J.H.; Beane Freeman, 
L.E.; Hornung, R.W.; Herrick, R.F.; Hoover, R.N.; Fraumeni, J.F.; 
Hayes, R.B. 2009. Mortality from lymphohematopoietic malignancies 
and brain cancer among embalmers exposed to formaldehyde. Journal of 
the National Cancer Institute 101:1696-1708.
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    Health effects of formaldehyde in addition to cancer were reviewed 
by the Agency for Toxics Substances and Disease Registry in 1999, 
supplemented in 2010, and by the World Health 
Organization.260 261 262 These organizations reviewed the 
scientific literature concerning health effects linked to formaldehyde 
exposure to evaluate hazards and dose response relationships and 
defined exposure concentrations for minimal risk levels (MRLs). The 
health endpoints reviewed included sensory irritation of eyes and 
respiratory tract, reduced pulmonary function, nasal histopathology, 
and immune system effects. In addition, research on reproductive and 
developmental effects and neurological effects were discussed along 
with several studies that suggest that formaldehyde may increase the 
risk of asthma--particularly in the young.
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    \260\ ATSDR. 1999. Toxicological Profile for Formaldehyde, U.S. 
Department of Health and Human Services (HHS), July 1999.
    \261\ ATSDR. 2010. Addendum to the Toxicological Profile for 
Formaldehyde. U.S. Department of Health and Human Services (HHS), 
October 2010.
    \262\ IPCS. 2002. Concise International Chemical Assessment 
Document 40. Formaldehyde. World Health Organization.
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    In June 2010, EPA released a draft Toxicological Review of 
Formaldehyde--Inhalation Assessment through the IRIS program for peer 
review by the National Research Council (NRC) and public comment.\263\ 
That draft assessment reviewed more recent research from animal and 
human studies on cancer and other health effects. The NRC released 
their review report in April 2011.\264\ EPA's draft

[[Page 29220]]

assessment, which addresses NRC recommendations, was suspended in 
2018.\265\ The draft assessment was unsuspended in March 2021, and an 
external review draft was released in April 2022.\266\ This draft 
assessment is now undergoing review by the National Academy of 
Sciences.\267\
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    \263\ EPA (U.S. Environmental Protection Agency). 2010. 
Toxicological Review of Formaldehyde (CAS No. 50-00-0)--Inhalation 
Assessment: In Support of Summary Information on the Integrated Risk 
Information System (IRIS). External Review Draft. EPA/635/R-10/002A. 
U.S. Environmental Protection Agency, Washington DC [online]. 
Available: http://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=223614.
    \264\ NRC (National Research Council). 2011. Review of the 
Environmental Protection Agency's Draft IRIS Assessment of 
Formaldehyde. Washington DC: National Academies Press. http://books.nap.edu/openbook.php?record_id=13142.
    \265\ U.S. EPA (2018). See https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=419.
    \266\ U.S. EPA. IRIS Toxicological Review of Formaldehyde-
Inhalation (Interagency Science Consultation Draft, 2021). U.S. 
Environmental Protection Agency, Washington, DC, EPA/635/R-21/286, 
2021.
    \267\ https://www.nationalacademies.org/our-work/review-of-epas-2021-draft-formaldehyde-assessment.
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vii. Naphthalene
    Naphthalene is found in small quantities in gasoline and diesel 
fuels. Naphthalene emissions have been measured in larger quantities in 
both gasoline and diesel exhaust compared with evaporative emissions 
from mobile sources, indicating it is primarily a product of 
combustion.
    Acute (short-term) exposure of humans to naphthalene by inhalation, 
ingestion, or dermal contact is associated with hemolytic anemia and 
damage to the liver and the nervous system.\268\ Chronic (long term) 
exposure of workers and rodents to naphthalene has been reported to 
cause cataracts and retinal damage.\269\ Children, especially neonates, 
appear to be more susceptible to acute naphthalene poisoning based on 
the number of reports of lethal cases in children and infants 
(hypothesized to be due to immature naphthalene detoxification 
pathways).\270\ EPA released an external review draft of a reassessment 
of the inhalation carcinogenicity of naphthalene based on a number of 
recent animal carcinogenicity studies.\271\ The draft reassessment 
completed external peer review.\272\ Based on external peer review 
comments received, EPA is developing a revised draft assessment that 
considers inhalation and oral routes of exposure, as well as cancer and 
noncancer effects.\273\ The external review draft does not represent 
official agency opinion and was released solely for the purposes of 
external peer review and public comment. The NTP listed naphthalene as 
``reasonably anticipated to be a human carcinogen'' in 2004 on the 
basis of bioassays reporting clear evidence of carcinogenicity in rats 
and some evidence of carcinogenicity in mice.\274\ California EPA has 
released a new risk assessment for naphthalene, and the IARC has 
reevaluated naphthalene and re-classified it as Group 2B: possibly 
carcinogenic to humans.\275\
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    \268\ U.S. EPA. 1998. Toxicological Review of Naphthalene 
(Reassessment of the Inhalation Cancer Risk), Environmental 
Protection Agency, Integrated Risk Information System, Research and 
Development, National Center for Environmental Assessment, 
Washington, DC. This material is available electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
    \269\ U.S. EPA. 1998. Toxicological Review of Naphthalene 
(Reassessment of the Inhalation Cancer Risk), Environmental 
Protection Agency, Integrated Risk Information System, Research and 
Development, National Center for Environmental Assessment, 
Washington, DC. This material is available electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
    \270\ U.S. EPA. (1998). Toxicological Review of Naphthalene 
(Reassessment of the Inhalation Cancer Risk), Environmental 
Protection Agency, Integrated Risk Information System, Research and 
Development, National Center for Environmental Assessment, 
Washington, DC. This material is available electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
    \271\ U.S. EPA. (1998). Toxicological Review of Naphthalene 
(Reassessment of the Inhalation Cancer Risk), Environmental 
Protection Agency, Integrated Risk Information System, Research and 
Development, National Center for Environmental Assessment, 
Washington, DC. This material is available electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
    \272\ Oak Ridge Institute for Science and Education. (2004). 
External Peer Review for the IRIS Reassessment of the Inhalation 
Carcinogenicity of Naphthalene. August 2004. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=84403.
    \273\ U.S. EPA. (2018) See: https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=436.
    \274\ NTP (National Toxicology Program). 2016. Report on 
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S. 
Department of Health and Human Services, Public Health Service. 
https://ntp.niehs.nih.gov/go/roc14.
    \275\ International Agency for Research on Cancer (IARC). 
(2002). Monographs on the Evaluation of the Carcinogenic Risk of 
Chemicals for Humans. Vol. 82. Lyon, France.
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    Naphthalene also causes a number of non-cancer effects in animals 
following chronic and less-than-chronic exposure, including abnormal 
cell changes and growth in respiratory and nasal tissues.\276\ The 
current EPA IRIS assessment includes noncancer data on hyperplasia and 
metaplasia in nasal tissue that form the basis of the inhalation RfC of 
3 [micro]g/m\3\.\277\ The ATSDR MRL for acute and intermediate duration 
oral exposure to naphthalene is 0.6 mg/kg/day based on maternal 
toxicity in a developmental toxicology study in rats.\278\ ATSDR also 
derived an ad hoc reference value of 6 x 10-2 mg/m\3\ for acute (<=24-
hour) inhalation exposure to naphthalene in a Letter Health 
Consultation dated March 24, 2014 to address a potential exposure 
concern in Illinois.\279\ The ATSDR acute inhalation reference value 
was based on a qualitative identification of an exposure level 
interpreted not to cause pulmonary lesions in mice. More recently, EPA 
developed acute RfCs for 1-, 8-, and 24-hour exposure scenarios; the 
<=24-hour reference value is 2 x 10-2 mg/m\3\.\280\ EPA's acute RfCs 
are based on a systematic review of the literature, benchmark dose 
modeling of naphthalene-induced nasal lesions in rats, and application 
of a PBPK (physiologically based pharmacokinetic) model.
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    \276\ U.S. EPA. (1998). Toxicological Review of Naphthalene, 
Environmental Protection Agency, Integrated Risk Information System, 
Research and Development, National Center for Environmental 
Assessment, Washington, DC. This material is available 
electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
    \277\ U.S. EPA. (1998). Toxicological Review of Naphthalene. 
Environmental Protection Agency, Integrated Risk Information System 
(IRIS), Research and Development, National Center for Environmental 
Assessment, Washington, DC https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
    \278\ ATSDR. Toxicological Profile for Naphthalene, 1-
Methylnaphthalene, and 2-Methylnaphthalene (2005). https://www.atsdr.cdc.gov/ToxProfiles/tp67-p.pdf.
    \279\ ATSDR. Letter Health Consultation, Radiac Abrasives, Inc., 
Chicago, Illinois (2014). https://www.atsdr.cdc.gov/HAC/pha/RadiacAbrasives/Radiac%20Abrasives,%20Inc.%20_%20LHC%20(Final)%20_%2003-24-
2014%20(2)_508.pdf.
    \280\ U. S. EPA. Derivation of an acute reference concentration 
for inhalation exposure to naphthalene. Report No. EPA/600/R-21/292. 
https://cfpub.epa.gov/ncea/risk/recordisplay.cfm?deid=355035.
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viii. POM/PAHs
    The term polycyclic organic matter (POM) defines a broad class of 
compounds that includes the polycyclic aromatic hydrocarbon compounds 
(PAHs). One of these compounds, naphthalene, is discussed separately in 
Section II.C.7.vii. POM compounds are formed primarily from combustion 
and are present in the atmosphere in gas and particulate form as well 
as in some fried and grilled foods. Epidemiologic studies have reported 
an increase in lung cancer in humans exposed to diesel exhaust, coke 
oven emissions, roofing tar emissions, and cigarette smoke; all of 
these mixtures contain POM compounds.281 282 In 1991 EPA 
classified seven PAHs (benzo[a]pyrene, benz[a]anthracene, chrysene, 
benzo[b]fluoranthene, benzo[k]fluoranthene, dibenz[a,h]anthracene, and

[[Page 29221]]

indeno[1,2,3-cd]pyrene) as Group B2, probable human carcinogens based 
on the 1986 EPA Guidelines for Carcinogen Risk Assessment.\283\ Studies 
in multiple animal species demonstrate that benzo[a]pyrene is 
carcinogenic at multiple tumor sites (alimentary tract, liver, kidney, 
respiratory tract, pharynx, and skin) by all routes of exposure. An 
increasing number of occupational studies demonstrate a positive 
exposure-response relationship with cumulative benzo[a]pyrene exposure 
and lung cancer. The inhalation URE in IRIS for benzo[a]pyrene is 6 x 
10-4 per [micro]g/m\3\ and the oral slope factor for cancer is 1 per 
mg/kg-day.\284\
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    \281\ Agency for Toxic Substances and Disease Registry (ATSDR). 
(1995). Toxicological profile for Polycyclic Aromatic Hydrocarbons 
(PAHs). Atlanta, GA: U.S. Department of Health and Human Services, 
Public Health Service. Available electronically at http://www.atsdr.cdc.gov/ToxProfiles/TP.asp?id=122&tid=25.
    \282\ U.S. EPA (2002). Health Assessment Document for Diesel 
Engine Exhaust. EPA/600/8-90/057F Office of Research and 
Development, Washington DC. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060.
    \283\ U.S. EPA (1991). Drinking Water Criteria Document for 
Polycyclic Aromatic Hydrocarbons (PAHS). ECAO-CIN-0010. EPA Research 
and Development.
    \284\ U.S. EPA (2017). Toxicological Review of Benzo[a]pyrene. 
This material is available electronically at: https://cfpub.epa.gov/ncea/iris/iris_documents/documents/toxreviews/0136tr.pdf.
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    Animal studies demonstrate that exposure to benzo[a]pyrene is also 
associated with developmental (including developmental neurotoxicity), 
reproductive, and immunological effects. In addition, epidemiology 
studies involving exposure to PAH mixtures have reported associations 
between internal biomarkers of exposure to benzo[a]pyrene 
(benzo[a]pyrene diol epoxide-DNA adducts) and adverse birth outcomes 
(including reduced birth weight, postnatal body weight, and head 
circumference), neurobehavioral effects, and decreased fertility. The 
inhalation RfC for benzo[a]pyrene is 2 x 10-6 mg/m\3\ and 
the RfD for oral exposure is 3 x 10-4 mg/kg-day.\285\
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    \285\ U.S. EPA (2017). Toxicological Review of Benzo[a]pyrene. 
This material is available electronically at: https://cfpub.epa.gov/ncea/iris/iris_documents/documents/toxreviews/0136tr.pdf.
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8. Exposure and Health Effects Associated With Traffic
    Locations in close proximity to major roadways generally have 
elevated concentrations of many air pollutants emitted from motor 
vehicles. Hundreds of studies have been published in peer-reviewed 
journals, concluding that concentrations of CO, CO2, NO, 
NO2, benzene, aldehydes, particulate matter, black carbon, 
and many other compounds are elevated in ambient air within 
approximately 300-600 meters (about 1,000-2,000 feet) of major 
roadways. The highest concentrations of most pollutants emitted 
directly by motor vehicles are found at locations within 50 meters 
(about 165 feet) of the edge of a roadway's traffic lanes.
    A large-scale review of air quality measurements in the vicinity of 
major roadways between 1978 and 2008 concluded that the pollutants with 
the steepest concentration gradients in vicinities of roadways were CO, 
ultrafine particles, metals, elemental carbon (EC), NO, NOX, 
and several VOCs.\286\ These pollutants showed a large reduction in 
concentrations within 100 meters downwind of the roadway. Pollutants 
that showed more gradual reductions with distance from roadways 
included benzene, NO2, PM2.5, and 
PM10. In reviewing the literature, Karner et al., (2010) 
reported that results varied based on the method of statistical 
analysis used to determine the gradient in pollutant concentration. 
More recent studies continue to show significant concentration 
gradients of traffic-related air pollution around major 
roads.287 288 289 290 291 292 293 294 295 296 There is 
evidence that EPA's regulations for vehicles have lowered the near-road 
concentrations and gradients.\297\ Starting in 2010, EPA required 
through the NAAQS process that air quality monitors be placed near 
high-traffic roadways for determining concentrations of CO, 
NO2, and PM2.5 (in addition to those existing 
monitors located in neighborhoods and other locations farther away from 
pollution sources). The monitoring data for NO2 indicate 
that in urban areas, monitors near roadways often report the highest 
concentrations of NO2.\298\ More recent studies of traffic-
related air pollutants continue to report sharp gradients around 
roadways, particularly within several hundred meters.299 300
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    \286\ Karner, A.A.; Eisinger, D.S.; Niemeier, D.A. (2010). Near-
roadway air quality: synthesizing the findings from real-world data. 
Environ Sci Technol 44: 5334-5344.
    \287\ McDonald, B.C.; McBride, Z.C.; Martin, E.W.; Harley, R.A. 
(2014) High-resolution mapping of motor vehicle carbon dioxide 
emissions. J. Geophys. Res. Atmos.,119, 5283-5298, doi:10.1002/
2013JD021219.
    \288\ Kimbrough, S.; Baldauf, R.W.; Hagler, G.S.W.; Shores, 
R.C.; Mitchell, W.; Whitaker, D.A.; Croghan, C.W.; Vallero, D.A. 
(2013) Long-term continuous measurement of near-road air pollution 
in Las Vegas: seasonal variability in traffic emissions impact on 
air quality. Air Qual Atmos Health 6: 295-305. DOI 10.1007/s11869-
012-0171-x.
    \289\ Kimbrough, S.; Palma, T.; Baldauf, R.W. (2014) Analysis of 
mobile source air toxics (MSATs)--Near-road VOC and carbonyl 
concentrations. Journal of the Air & Waste Management Association, 
64:3, 349-359, DOI: 10.1080/10962247.2013.863814.
    \290\ Kimbrough, S.; Owen, R.C.; Snyder, M.; Richmond-Bryant, J. 
(2017) NO to NO2 Conversion Rate Analysis and 
Implications for Dispersion Model Chemistry Methods using Las Vegas, 
Nevada Near-Road Field Measurements. Atmos Environ 165: 23-24.
    \291\ Hilker, N.; Wang, J.W.; Jong, C-H.; Healy, R.M.; Sofowote, 
U.; Debosz, J.; Su, Y.; Noble, M.; Munoz, A.; Doerkson, G.; White, 
L.; Audette, C.; Herod, D.; Brook, J.R.; Evans, G.J. (2019) Traffic-
related air pollution near roadways: discerning local impacts from 
background. Atmos. Meas. Tech., 12, 5247-5261. https://doi.org/10.5194/amt-12-5247-2019.
    \292\ Grivas, G.; Stavroulas, I.; Liakakou, E.; Kaskaoutis, 
D.G.; Bougiatioti, A.; Paraskevopoulou, D.; Gerasopoulos, E.; 
Mihalopoulos, N. (2019) Measuring the spatial variability of black 
carbon in Athens during wintertime. Air Quality, Atmosphere & Health 
(2019) 12:1405-1417. https://doi.org/10.1007/s11869-019-00756-y.
    \293\ Apte, J.S.; Messier, K.P.; Gani, S.; Brauer, M.; 
Kirchstetter, T.W.; Lunden, M.M.; Marshall, J.D.; Portier, C.J.; 
Vermeulen, R.C.H.; Hamburg, S.P. (2017) High-Resolution Air 
Pollution Mapping with Google Street View Cars: Exploiting Big Data. 
Environ Sci Technol 51: 6999-7008. https://doi.org/10.1021/acs.est.7b00891.
    \294\ Dabek-Zlotorzynska, E.; Celo, V.; Ding, L.; Herod, D.; 
Jeong, C-H.; Evans, G.; Hilker, N. (2019) Characteristics and 
sources of PM2.5 and reactive gases near roadways in two 
metropolitan areas in Canada. Atmos Environ 218: 116980. https://doi.org/10.1016/j.atmosenv.2019.116980.
    \295\ Apte, J.S.; Messier, K.R.; Gani, S.; et al. (2017) High-
resolution air pollution mapping with Google Street View cars: 
exploiting big data. Environ Sci Technol 51: 6999-7018, [Online at 
https://doi.org/10.1021/acs.est.7b00891.]
    \296\ Gu, P.; Li, H.Z.; Ye, Q.; et al. (2018) Intercity 
variability of particulate matter is driven by carbonaceous sources 
and correlated with land-use variables. Environ Sci Technol 52: 52: 
11545-11554. [Online at http://dx.doi.org/10.1021/acs.est.8b03833.]
    \297\ Sarnat, J.A.; Russell, A.; Liang, D.; Moutinho, J.L; 
Golan, R.; Weber, R.; Gao, D.; Sarnat, S.; Chang, H.H.; Greenwald, 
R.; Yu, T. (2018) Developing Multipollutant Exposure Indicators of 
Traffic Pollution: The Dorm Room Inhalation to Vehicle Emissions 
(DRIVE) Study. Health Effects Institute Research Report Number 196. 
[Online at: https://www.healtheffects.org/publication/developing-multipollutant-exposure-indicators-traffic-pollution-dorm-room-inhalation.]
    \298\ Gantt, B; Owen, R.C.; Watkins, N. (2021) Characterizing 
nitrogen oxides and fine particulate matter near major highways in 
the United States using the National Near-road Monitoring Network. 
Environ Sci Technol 55: 2831-2838. [Online at https://doi.org/10.1021/acs.est.0c05851.]
    \299\ Apte, J.S.; Messier, K.R.; Gani, S.; et al. (2017) High-
resolution air pollution mapping with Google Street View cars: 
exploiting big data. Environ Sci Technol 51: 6999-7018, [Online at 
https://doi.org/10.1021/acs.est.7b00891.]
    \300\ Gu, P.; Li, H.Z.; Ye, Q.; et al. (2018) Intercity 
variability of particulate matter is driven by carbonaceous sources 
and correlated with land-use variables. Environ Sci Technol 52: 52: 
11545-11554. [Online at http://dx.doi.org/10.1021/acs.est.8b03833.]
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    For pollutants with relatively high background concentrations 
relative to near-road concentrations, detecting concentration gradients 
can be difficult. For example, many carbonyls have high background 
concentrations as a result of photochemical breakdown of precursors 
from many different organic compounds. However, several studies have 
measured carbonyls in multiple weather conditions and found higher 
concentrations of many carbonyls downwind of 
roadways.301 302 These

[[Page 29222]]

findings suggest a substantial roadway source of these carbonyls.
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    \301\ Liu, W.; Zhang, J.; Kwon, J.l; et l. (2006). 
Concentrations and source characteristics of airborne carbonyl 
compounds measured outside urban residences. J Air Waste Manage 
Assoc 56: 1196-1204.
    \302\ Cahill, T.M.; Charles, M.J.; Seaman, V.Y. (2010). 
Development and application of a sensitive method to determine 
concentrations of acrolein and other carbonyls in ambient air. 
Health Effects Institute Research Report 149. Available at https://www.healtheffects.org/system/files/Cahill149.pdf.
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    In the past 30 years, many studies have been published with results 
reporting that populations who live, work, or go to school near high-
traffic roadways experience higher rates of numerous adverse health 
effects, compared to populations far away from major roads.\303\ In 
addition, numerous studies have found adverse health effects associated 
with spending time in traffic, such as commuting or walking along high-
traffic roadways, including studies among 
children.304 305 306 307 The health outcomes with the 
strongest evidence linking them with traffic-associated air pollutants 
are respiratory effects, particularly in asthmatic children, and 
cardiovascular effects.
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    \303\ In the widely-used PubMed database of health publications, 
between January 1, 1990 and December 31, 2021, 1,979 publications 
contained the keywords ``traffic, pollution, epidemiology,'' with 
approximately half the studies published after 2015.
    \304\ Laden, F.; Hart, J.E.; Smith, T.J.; Davis, M.E.; Garshick, 
E. (2007) Cause-specific mortality in the unionized U.S. trucking 
industry. Environmental Health Perspect 115:1192-1196.
    \305\ Peters, A.; von Klot, S.; Heier, M.; Trentinaglia, I.; 
H[ouml]rmann, A.; Wichmann, H.E.; L[ouml]wel, H. (2004) Exposure to 
traffic and the onset of myocardial infarction. New England J Med 
351: 1721-1730.
    \306\ Zanobetti, A.; Stone, P.H.; Spelzer, F.E.; Schwartz, J.D.; 
Coull, B.A.; Suh, H.H.; Nearling, B.D.; Mittleman, M.A.; Verrier, 
R.L.; Gold, D.R. (2009) T-wave alternans, air pollution and traffic 
in high-risk subjects. Am J Cardiol 104: 665-670.
    \307\ Adar, S.; Adamkiewicz, G.; Gold, D.R.; Schwartz, J.; 
Coull, B.A.; Suh, H. (2007) Ambient and microenvironmental particles 
and exhaled nitric oxide before and after a group bus trip. Environ 
Health Perspect 115: 507-512.
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    Numerous reviews of this body of health literature have been 
published. In a 2022 final report, an expert panel of the Health 
Effects Institute (HEI) employed a systematic review focusing on 
selected health endpoints related to exposure to traffic-related air 
pollution.\308\ The HEI panel concluded that there was a high level of 
confidence in evidence between long-term exposure to traffic-related 
air pollution and health effects in adults, including all-cause, 
circulatory, and ischemic heart disease mortality.\309\ The panel also 
found that there is a moderate-to-high level of confidence in evidence 
of associations with asthma onset and acute respiratory infections in 
children and lung cancer and asthma onset in adults. This report 
follows on an earlier expert review published by HEI in 2010, where it 
found strongest evidence for asthma-related traffic impacts. Other 
literature reviews have been published with conclusions generally 
similar to the HEI panels'.310 311 312 313 Additionally, in 
2014, researchers from the U.S. Centers for Disease Control and 
Prevention (CDC) published a systematic review and meta-analysis of 
studies evaluating the risk of childhood leukemia associated with 
traffic exposure and reported positive associations between 
``postnatal'' proximity to traffic and leukemia risks, but no such 
association for ``prenatal'' exposures.\314\ The U.S. Department of 
Health and Human Services' National Toxicology Program (NTP) published 
a monograph including a systematic review of traffic-related air 
pollution and its impacts on hypertensive disorders of pregnancy. The 
NTP concluded that exposure to traffic-related air pollution is 
``presumed to be a hazard to pregnant women'' for developing 
hypertensive disorders of pregnancy.\315\
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    \308\ HEI Panel on the Health Effects of Long-Term Exposure to 
Traffic-Related Air Pollution (2022) Systematic review and meta-
analysis of selected health effects of long-term exposure to 
traffic-related air pollution. Health Effects Institute Special 
Report 23. [Online at https://www.healtheffects.org/publication/systematic-review-and-meta-analysis-selected-health-effects-long-term-exposure-traffic.] This more recent review focused on health 
outcomes related to birth effects, respiratory effects, 
cardiometabolic effects, and mortality.
    \309\ Boogaard, H.; Patton. A.P.; Atkinson, R.W.; Brook, J.R.; 
Chang, H.H.; Crouse, D.L.; Fussell, J.C.; Hoek, G.; Hoffman, B.; 
Kappeler, R.; Kutlar Joss, M.; Ondras, M.; Sagiv, S.K.; Somoli, E.; 
Shaikh, R.; Szpiro, A.A.; Van Vliet E.D.S.; Vinneau, D.; Weuve, J.; 
Lurmann, F.W.; Forastiere, F. (2022) Long-term exposure to traffic-
related air pollution and selected health outcomes: a systematic 
review and meta-analysis. Environ Intl 164: 107262. [Online at 
https://doi.org/10.1016/j.envint.2022.107262.]
    \310\ Boothe, V.L.; Shendell, D.G. (2008). Potential health 
effects associated with residential proximity to freeways and 
primary roads: review of scientific literature, 1999-2006. J Environ 
Health 70: 33-41.
    \311\ Salam, M.T.; Islam, T.; Gilliland, F.D. (2008). Recent 
evidence for adverse effects of residential proximity to traffic 
sources on asthma. Curr Opin Pulm Med 14: 3-8.
    \312\ Sun, X.; Zhang, S.; Ma, X. (2014) No association between 
traffic density and risk of childhood leukemia: a meta-analysis. 
Asia Pac J Cancer Prev 15: 5229-5232.
    \313\ Raaschou-Nielsen, O.; Reynolds, P. (2006). Air pollution 
and childhood cancer: a review of the epidemiological literature. 
Int J Cancer 118: 2920-9.
    \314\ Boothe, VL.; Boehmer, T.K.; Wendel, A.M.; Yip, F.Y. (2014) 
Residential traffic exposure and childhood leukemia: a systematic 
review and meta-analysis. Am J Prev Med 46: 413-422.
    \315\ National Toxicology Program (2019) NTP Monograph n the 
Systematic Review of Traffic-related Air Pollution and Hypertensive 
Disorders of Pregnancy. NTP Monograph 7. https://ntp.niehs.nih.gov/ntp/ohat/trap/mgraph/trap_final_508.pdf.
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    Health outcomes with few publications suggest the possibility of 
other effects still lacking sufficient evidence to draw definitive 
conclusions. Among these outcomes with a small number of positive 
studies are neurological impacts (e.g., autism and reduced cognitive 
function) and reproductive outcomes (e.g., preterm birth, low birth 
weight).316 317 318 319 320
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    \316\ Volk, H.E.; Hertz-Picciotto, I.; Delwiche, L.; et al. 
(2011). Residential proximity to freeways and autism in the CHARGE 
study. Environ Health Perspect 119: 873-877.
    \317\ Franco-Suglia, S.; Gryparis, A.; Wright, R.O.; et al. 
(2007). Association of black carbon with cognition among children in 
a prospective birth cohort study. Am J Epidemiol. doi: 10.1093/aje/
kwm308. [Online at http://dx.doi.org].
    \318\ Power, M.C.; Weisskopf, M.G.; Alexeef, SE; et al. (2011). 
Traffic-related air pollution and cognitive function in a cohort of 
older men. Environ Health Perspect 2011: 682-687.
    \319\ Wu, J.; Wilhelm, M.; Chung, J.; et al. (2011). Comparing 
exposure assessment methods for traffic-related air pollution in and 
adverse pregnancy outcome study. Environ Res 111: 685-6692.
    \320\ Stenson, C.; Wheeler, A.J.; Carver, A.; et al. (2021) The 
impact of traffic-related air pollution on child and adolescent 
academic performance: a systematic review. Environ Intl 155: 106696 
[Online at https://doi.org/10.1016/j.envint.2021.106696.]
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    In addition to health outcomes, particularly cardiopulmonary 
effects, conclusions of numerous studies suggest mechanisms by which 
traffic-related air pollution affects health. For example, numerous 
studies indicate that near-roadway exposures may increase systemic 
inflammation, affecting organ systems, including blood vessels and 
lungs.321 322 323 324 Additionally, long-term exposures in 
near-road environments have been associated with inflammation-
associated conditions, such as atherosclerosis and 
asthma.325 326 327
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    \321\ Riediker, M. (2007). Cardiovascular effects of fine 
particulate matter components in highway patrol officers. Inhal 
Toxicol 19: 99-105. doi: 10.1080/08958370701495238.
    \322\ Alexeef, SE; Coull, B.A.; Gryparis, A.; et al. (2011). 
Medium-term exposure to traffic-related air pollution and markers of 
inflammation and endothelial function. Environ Health Perspect 119: 
481-486. Doi:10.1289/ehp.1002560.
    \323\ Eckel. S.P.; Berhane, K.; Salam, M.T.; et al. (2011). 
Residential Traffic-related pollution exposure and exhaled nitric 
oxide in the Children's Health Study. Environ Health Perspect. 
doi:10.1289/ehp.1103516.
    \324\ Zhang, J.; McCreanor, J.E.; Cullinan, P.; et al. (2009). 
Health effects of real-world exposure diesel exhaust in persons with 
asthma. Res Rep Health Effects Inst 138. [Online at http://www.healtheffects.org].
    \325\ Adar, S.D.; Klein, R.; Klein, E.K.; et al. (2010). Air 
pollution and the microvasculature: a cross-sectional assessment of 
in vivo retinal images in the population-based Multi-Ethnic Study of 
Atherosclerosis. PLoS Med 7(11): E1000372. doi:10.1371/
journal.pmed.1000372. Available at http://dx.doi.org.
    \326\ Kan, H.; Heiss, G.; Rose, K.M.; et al. (2008). Prospective 
analysis of traffic exposure as a risk factor for incident coronary 
heart disease: The Atherosclerosis Risk in Communities (ARIC) study. 
Environ Health Perspect 116: 1463-1468. doi:10.1289/ehp.11290. 
Available at http://dx.doi.org.
    \327\ McConnell, R.; Islam, T.; Shankardass, K.; et al. (2010). 
Childhood incident asthma and traffic-related air pollution at home 
and school. Environ Health Perspect 1021-1026.
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    Several studies suggest that some factors may increase 
susceptibility to

[[Page 29223]]

the effects of traffic-associated air pollution. Several studies have 
found stronger respiratory associations in children experiencing 
chronic social stress, such as in violent neighborhoods or in homes 
with high family stress.328 329 330
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    \328\ Islam, T.; Urban, R.; Gauderman, W.J.; et al. (2011). 
Parental stress increases the detrimental effect of traffic exposure 
on children's lung function. Am J Respir Crit Care Med.
    \329\ Clougherty, J.E.; Levy, J.I.; Kubzansky, L.D.; et al. 
(2007). Synergistic effects of traffic-related air pollution and 
exposure to violence on urban asthma etiology. Environ Health 
Perspect 115: 1140-1146.
    \330\ Chen, E.; Schrier, H.M.; Strunk, R.C.; et al. (2008). 
Chronic traffic-related air pollution and stress interact to predict 
biologic and clinical outcomes in asthma. Environ Health Perspect 
116: 970-5.
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    The risks associated with residence, workplace, or schools near 
major roads are of potentially high public health significance due to 
the large population in such locations. The 2013 U.S. Census Bureau's 
American Housing Survey (AHS) was the last AHS that included whether 
housing units were within 300 feet of an ``airport, railroad, or 
highway with four or more lanes.'' \331\ The 2013 survey reports that 
17.3 million housing units, or 13 percent of all housing units in the 
U.S., were in such areas. Assuming that populations and housing units 
are in the same locations, this corresponds to a population of more 
than 41 million U.S. residents within 300 feet (approximately 90 
meters) of high-traffic roadways or other transportation sources. 
According to the Central Intelligence Agency's World Factbook, based on 
data collected between 2012-2014, the United States had 6,586,610 km of 
roadways, 293,564 km of railways, and 13,513 airports. As such, 
highways represent the overwhelming majority of transportation 
facilities described by this factor in the AHS.
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    \331\ The variable was known as ``ETRANS'' in the questions 
about the neighborhood.
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    We analyzed national databases that allowed us to evaluate whether 
homes and schools were located near a major road and whether 
disparities in exposure may be occurring in these environments. Until 
2009, the AHS included descriptive statistics of over 70,000 housing 
units across the nation and asked about transportation infrastructure 
near respondents' homes every two years.332 333 We also 
analyzed the U.S. Department of Education's Common Core of Data, which 
includes enrollment and location information for schools across the 
U.S.\334\
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    \332\ U.S. Department of Housing and Urban Development, & U.S. 
Census Bureau. (n.d.). Age of other residential buildings within 300 
feet. In American Housing Survey for the United States: 2009 (pp. A-
1). Retrieved from https://www.census.gov/programs-surveys/ahs/data/2009/ahs-2009-summary-tables0/h150-09.html.
    \333\ The 2013 AHS again included the ``etrans'' question about 
highways, airports, and railroads within half a block of the housing 
unit but has not maintained the question since then.
    \334\ http://nces.ed.gov/ccd/.
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    In analyzing the 2009 AHS, we focused on whether a housing unit was 
located within 300 feet of a ``4-or-more lane highway, railroad, or 
airport'' (this distance was used in the AHS analysis).\335\ We 
analyzed whether there were differences between households in such 
locations compared with those in locations farther from these 
transportation facilities.\336\ We included other variables, such as 
land use category, region of country, and housing type. We found that 
homes with a non-White householder were 22-34 percent more likely to be 
located within 300 feet of these large transportation facilities than 
homes with White householders. Homes with a Hispanic householder were 
17-33 percent more likely to be located within 300 feet of these large 
transportation facilities than homes with non-Hispanic householders. 
Households near large transportation facilities were, on average, lower 
in income and educational attainment and more likely to be a rental 
property and located in an urban area compared with households more 
distant from transportation facilities.
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    \335\ This variable primarily represents roadway proximity. 
According to the Central Intelligence Agency's World Factbook, in 
2010, the United States had 6,506,204 km of roadways, 224,792 km of 
railways, and 15,079 airports. Highways thus represent the 
overwhelming majority of transportation facilities described by this 
factor in the AHS.
    \336\ Bailey, C. (2011) Demographic and Social Patterns in 
Housing Units Near Large Highways and other Transportation Sources. 
Memorandum to docket.
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    In examining schools near major roadways, we used the Common Core 
of Data from the U.S. Department of Education, which includes 
information on all public elementary and secondary schools and school 
districts nationwide.\337\ To determine school proximities to major 
roadways, we used a geographic information system (GIS) to map each 
school and roadways based on the U.S. Census's TIGER roadway file.\338\ 
We estimated that about 10 million students attend public schools 
within 200 meters of major roads, about 20 percent of the total number 
of public school students in the U.S.\339\ About 800,000 students 
attend public schools within 200 meters of primary roads, or about 2 
percent of the total. We found that students of color were 
overrepresented at schools within 200 meters of primary roadways, and 
schools within 200 meters of primary roadways had a disproportionate 
population of students eligible for free or reduced-price lunches.\340\ 
Black students represent 22 percent of students at schools located 
within 200 meters of a primary road, compared to 17 percent of students 
in all U.S. schools. Hispanic students represent 30 percent of students 
at schools located within 200 meters of a primary road, compared to 22 
percent of students in all U.S. schools.
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    \337\ http://nces.ed.gov/ccd/.
    \338\ Pedde, M.; Bailey, C. (2011) Identification of Schools 
within 200 Meters of U.S. Primary and Secondary Roads. Memorandum to 
the docket.
    \339\ Here, ``major roads'' refer to those TIGER classifies as 
either ``Primary'' or ``Secondary.'' The Census Bureau describes 
primary roads as ``generally divided limited-access highways within 
the Federal interstate system or under state management.'' Secondary 
roads are ``main arteries, usually in the U.S. highway, state 
highway, or county highway system.''
    \340\ For this analysis we analyzed a 200-meter distance based 
on the understanding that roadways generally influence air quality 
within a few hundred meters from the vicinity of heavily traveled 
roadways or along corridors with significant trucking traffic. See 
U.S. EPA, 2014. Near Roadway Air Pollution and Health: Frequently 
Asked Questions. EPA-420-F-14-044. For a surrogate of lower 
socioeconomic status (SES), we used student eligibility for the U.S. 
Department of Agriculture's (USDA) National School Lunch Program.
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    Research into the impact of traffic-related air pollution on school 
performance is tentative. Two reviews of this literature found some 
evidence that children exposed to higher levels of traffic-related air 
pollution show poorer academic performance than those exposed to lower 
levels of traffic-related air pollution.341 342 However, 
this evidence was judged to be weak due to limitations in the 
assessment methods.
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    \341\ Stenson, C.; Wheeler, A.J.; Carver, A.; et al. (2021) The 
impact of traffic-related air pollution on child and adolescent 
academic performance: a systematic review. Environ Intl 155: 106696. 
[Online at https://doi.org/10.1016/j.envint.2021.106696.]
    \342\ Gartland, N; Aljofi, H.E.; Dienes, K.; Munford, L.A.; 
Theakston, A.L.; van Tongeren, M. (2022) The effects of traffic air 
pollution in and around schools on executive function and academic 
performance in children: a rapid review. Int J Environ Res Public 
Health 10: 749. [Online at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8776123/.]
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    EPA also conducted a study to estimate the number of people living 
near truck freight routes in the United States, which includes many 
large highways and other routes where light- and medium-duty vehicles 
operate.343 344 Based on a population

[[Page 29224]]

analysis using the U.S. Department of Transportation's (USDOT) Freight 
Analysis Framework 4 (FAF4) and population data from the 2010 decennial 
census, an estimated 72 million people live within 200 meters of these 
FAF4 roads, which are used by all types of vehicles.345 346 
This analysis includes the population living within twice the distance 
of major roads compared with the analysis of housing units near major 
roads described earlier in this section. The larger distance and other 
methodological differences explain the difference in the two estimates 
for populations living near major roads. Relative to the rest of the 
population, people of color and those with lower incomes are more 
likely to live near FAF4 roads.
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    \343\ U.S. EPA (2021). Estimation of Population Size and 
Demographic Characteristics among People Living Near Truck Routes in 
the Conterminous United States. Memorandum to the Docket.
    \344\ FAF4 includes the following roadway types: interstate 
highways, other FHWA-designated routes in the National Highway 
System (NHS), National Network (NN) routes not part of the NHS, 
other rural and urban principal arterials, intermodal connectors, 
rural minor arterials for those counties not served by either NHS or 
NN routes, and urban bypass and streets as appropriate for network 
connectivity. Full documentation of the FAF4 road network is found 
at https://fafdev.ornl.gov/fafweb/data/Final%20Report_FAF4_August_2016_BP.pdf.
    \345\ FAF4 is a model from the USDOT's Bureau of Transportation 
Statistics (BTS) and Federal Highway Administration (FHWA), which 
provides data associated with freight movement in the U.S. It 
includes data from the 2012 Commodity Flow Survey (CFS), the Census 
Bureau on international trade, as well as data associated with 
construction, agriculture, utilities, warehouses, and other 
industries. FAF4 estimates the modal choices for moving goods by 
trucks, trains, boats, and other types of freight modes. It includes 
traffic assignments, including truck flows on a network of truck 
routes. https://ops.fhwa.dot.gov/freight/freight_analysis/faf/.
    \346\ The same analysis estimated the population living within 
100 meters of a FAF4 truck route is 41 million.
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    EPA's Exposure Factor Handbook also indicates that, on average, 
Americans spend more than an hour traveling each day, bringing nearly 
all residents into a high-exposure microenvironment for part of the 
day.\347\ The duration of commuting results in another important 
contributor to overall exposure to traffic-related air pollution. 
Studies of health that address time spent in transit have found 
evidence of elevated risk of cardiac impacts.348 349 350
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    \347\ EPA. (2011) Exposure Factors Handbook: 2011 Edition. 
Chapter 16. Online at https://www.epa.gov/expobox/about-exposure-factors-handbook.
    \348\ Riediker, M.; Cascio, W.E.; Griggs, T.R.; et al. (2004) 
Particulate matter exposure in cars is associated with 
cardiovascular effects in healthy young men. Am J Respir Crit Care 
Med 169. [Online at https://doi.org/10.1164/rccm.200310-1463OC.]
    \349\ Peters, A.; von Klot, S.; Heier, M.; et al. (2004) 
Exposure to traffic and the onset of myocardial infarction. New Engl 
J Med 1721-1730. [Online at https://doi.org/10.1056/NEJMoa040203.]
    \350\ Adar, S.D.; Gold, D.R.; Coull, B.A.; (2007) Focused 
exposure to airborne traffic particles and heart rate variability in 
the elderly. Epidemiology 18: 95-103 [Online at 351: https://doi.org/10.1097/01.ede.0000249409.81050.46.]
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D. Welfare Effects Associated With Exposure to Criteria and Air Toxics 
Pollutants Impacted by the Proposed Standards

    This section discusses the welfare effects associated with 
pollutants affected by this rule, specifically particulate matter, 
ozone, NOX, SOX, and air toxics.
1. Visibility
    Visibility can be defined as the degree to which the atmosphere is 
transparent to visible light.\351\ Visibility impairment is caused by 
light scattering and absorption by suspended particles and gases. It is 
dominated by contributions from suspended particles except under 
pristine conditions. Visibility is important because it has direct 
significance to people's enjoyment of daily activities in all parts of 
the country. Individuals value good visibility for the well-being it 
provides them directly, where they live and work, and in places where 
they enjoy recreational opportunities. Visibility is also highly valued 
in significant natural areas, such as national parks and wilderness 
areas, and special emphasis is given to protecting visibility in these 
areas. For more information on visibility see the final 2019 
PMISA.\352\
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    \351\ National Research Council, (1993). Protecting Visibility 
in National Parks and Wilderness Areas. National Academy of Sciences 
Committee on Haze in National Parks and Wilderness Areas. National 
Academy Press, Washington, DC. This book can be viewed on the 
National Academy Press website at https://www.nap.edu/catalog/2097/protecting-visibility-in-national-parks-and-wilderness-areas.
    \352\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
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    EPA is working to address visibility impairment. Reductions in air 
pollution from implementation of various programs associated with the 
Clean Air Act Amendments of 1990 provisions have resulted in 
substantial improvements in visibility and will continue to do so in 
the future. Nationally, because trends in haze are closely associated 
with trends in particulate sulfate and nitrate due to the relationship 
between their concentration and light extinction, visibility trends 
have improved as emissions of SO2 and NOX have 
decreased over time due to air pollution regulations such as the Acid 
Rain Program.\353\ However, in the western part of the country, changes 
in total light extinction were smaller, and the contribution of 
particulate organic matter to atmospheric light extinction was 
increasing due to increasing wildfire emissions.\354\
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    \353\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
    \354\ Hand, JL; Prenni, AJ; Copeland, S; Schichtel, BA; Malm, 
WC. (2020). Thirty years of the Clean Air Act Amendments: Impacts on 
haze in remote regions of the United States (1990-2018). Atmos 
Environ 243: 117865.
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    In the Clean Air Act Amendments of 1977, Congress recognized 
visibility's value to society by establishing a national goal to 
protect national parks and wilderness areas from visibility impairment 
caused by manmade pollution.\355\ In 1999, EPA finalized the regional 
haze program to protect the visibility in Mandatory Class I Federal 
areas.\356\ There are 156 national parks, forests and wilderness areas 
categorized as Mandatory Class I Federal areas.\357\ These areas are 
defined in CAA section 162 as those national parks exceeding 6,000 
acres, wilderness areas and memorial parks exceeding 5,000 acres, and 
all international parks which were in existence on August 7, 1977.
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    \355\ See Section 169(a) of the Clean Air Act.
    \356\ 64 FR 35714, July 1, 1999.
    \357\ 62 FR 38680-38681, July 18, 1997.
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    EPA has also concluded that PM2.5 causes adverse effects 
on visibility in other areas that are not targeted by the Regional Haze 
Rule, such as urban areas, depending on PM2.5 concentrations 
and other factors such as dry chemical composition and relative 
humidity (i.e., an indicator of the water composition of the 
particles). The secondary (welfare-based) PM NAAQS provide protection 
against visibility effects. In recent PM NAAQS reviews, EPA evaluated a 
target level of protection for visibility impairment that is expected 
to be met through attainment of the existing secondary PM 
standards.\358\
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    \358\ On June 10, 2021, EPA announced that it will reconsider 
the decision to retain the PM NAAQS. https://www.epa.gov/pm-pollution/national-ambient-air-quality-standards-naaqs-pm.
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2. Ozone Effects on Ecosystems
    The welfare effects of ozone include effects on ecosystems, which 
can be observed across a variety of scales, i.e., subcellular, 
cellular, leaf, whole plant, population, and ecosystem. Ozone effects 
that begin at small spatial scales, such as the leaf of an individual 
plant, when they occur at sufficient magnitudes (or to a sufficient 
degree) can result in effects being propagated along a continuum to 
higher and higher levels of biological organization. For example, 
effects at the individual plant level, such as altered rates of leaf 
gas exchange, growth, and reproduction, can, when widespread, result in 
broad changes in ecosystems, such as productivity, carbon storage, 
water

[[Page 29225]]

cycling, nutrient cycling, and community composition.
    Ozone can produce both acute and chronic injury in sensitive plant 
species depending on the concentration level and the duration of the 
exposure.\359\ In those sensitive species,\360\ effects from repeated 
exposure to ozone throughout the growing season of the plant can tend 
to accumulate, so even relatively low concentrations experienced for a 
longer duration have the potential to create chronic stress on 
vegetation.361 362 Ozone damage to sensitive plant species 
includes impaired photosynthesis and visible injury to leaves. The 
impairment of photosynthesis, the process by which the plant makes 
carbohydrates (its source of energy and food), can lead to reduced crop 
yields, timber production, and plant productivity and growth. Impaired 
photosynthesis can also lead to a reduction in root growth and 
carbohydrate storage below ground, resulting in other, more subtle 
plant and ecosystems impacts.\363\ These latter impacts include 
increased susceptibility of plants to insect attack, disease, harsh 
weather, interspecies competition and overall decreased plant vigor. 
The adverse effects of ozone on areas with sensitive species could 
potentially lead to species shifts and loss from the affected 
ecosystems,\364\ resulting in a loss or reduction in associated 
ecosystem goods and services. Additionally, visible ozone injury to 
leaves can result in a loss of aesthetic value in areas of special 
scenic significance like national parks and wilderness areas and 
reduced use of sensitive ornamentals in landscaping.\365\ In addition 
to ozone effects on vegetation, newer evidence suggests that ozone 
affects interactions between plants and insects by altering chemical 
signals (e.g., floral scents) that plants use to communicate to other 
community members, such as attraction of pollinators.
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    \359\ 73 FR 16486, March 27, 2008.
    \360\ 73 FR 16491, March 27, 2008. Only a small percentage of 
all the plant species growing within the U.S. (over 43,000 species 
have been catalogued in the USDA PLANTS database) have been studied 
with respect to ozone sensitivity.
    \361\ U.S. EPA. Integrated Science Assessment (ISA) for Ozone 
and Related Photochemical Oxidants (Final Report). U.S. 
Environmental Protection Agency, Washington, DC, EPA/600/R-20/012, 
2020.
    \362\ The concentration at which ozone levels overwhelm a 
plant's ability to detoxify or compensate for oxidant exposure 
varies. Thus, whether a plant is classified as sensitive or tolerant 
depends in part on the exposure levels being considered.
    \363\ 73 FR 16492, March 27, 2008.
    \364\ 73 FR 16493-16494, March 27, 2008. Ozone impacts could be 
occurring in areas where plant species sensitive to ozone have not 
yet been studied or identified.
    \365\ 73 FR 16490-16497, March 27, 2008.
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    The Ozone ISA presents more detailed information on how ozone 
affects vegetation and ecosystems.366 367 The Ozone ISA 
reports causal and likely causal relationships between ozone exposure 
and a number of welfare effects and characterizes the weight of 
evidence for different effects associated with ozone.\368\ The ISA 
concludes that visible foliar injury effects on vegetation, reduced 
vegetation growth, reduced plant reproduction, reduced productivity in 
terrestrial ecosystems, reduced yield and quality of agricultural 
crops, alteration of below-ground biogeochemical cycles, and altered 
terrestrial community composition are causally associated with exposure 
to ozone. It also concludes that increased tree mortality, altered 
herbivore growth and reproduction, altered plant-insect signaling, 
reduced carbon sequestration in terrestrial ecosystems, and alteration 
of terrestrial ecosystem water cycling are likely to be causally 
associated with exposure to ozone.
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    \366\ U.S. EPA. Integrated Science Assessment (ISA) for Ozone 
and Related Photochemical Oxidants (Final Report). U.S. 
Environmental Protection Agency, Washington, DC, EPA/600/R-20/012, 
2020.
    \367\ U.S. EPA. Integrated Science Assessment (ISA) for Ozone 
and Related Photochemical Oxidants (Final Report). U.S. 
Environmental Protection Agency, Washington, DC, EPA/600/R-20/012, 
2020.
    \368\ The Ozone ISA evaluates the evidence associated with 
different ozone related health and welfare effects, assigning one of 
five ``weight of evidence'' determinations: causal relationship, 
likely to be a causal relationship, suggestive of a causal 
relationship, inadequate to infer a causal relationship, and not 
likely to be a causal relationship. For more information on these 
levels of evidence, please refer to Table II of the ISA.
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3. Deposition
    The Integrated Science Assessment for Oxides of Nitrogen, Oxides of 
Sulfur, and Particulate Matter--Ecological Criteria documents the 
ecological effects of the deposition of these criteria air 
pollutants.\369\ It is clear from the body of evidence that oxides of 
nitrogen, oxides of sulfur, and particulate matter contribute to total 
nitrogen (N) and sulfur (S) deposition. In turn, N and S deposition 
cause either nutrient enrichment or acidification depending on the 
sensitivity of the landscape or the species in question. Both 
enrichment and acidification are characterized by an alteration of the 
biogeochemistry and the physiology of organisms, resulting in harmful 
declines in biodiversity in terrestrial, freshwater, wetland, and 
estuarine ecosystems in the U.S. Decreases in biodiversity mean that 
some species become relatively less abundant and may be locally 
extirpated. In addition to the loss of unique living species, the 
decline in total biodiversity can be harmful because biodiversity is an 
important determinant of the stability of ecosystems and their ability 
to provide socially valuable ecosystem services.
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    \369\ U.S. EPA. Integrated Science Assessment (ISA) for Oxides 
of Nitrogen, Oxides of Sulfur and Particulate Matter Ecological 
Criteria (Final Report). U.S. Environmental Protection Agency, 
Washington, DC, EPA/600/R-20/278, 2020.
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    Terrestrial, wetland, freshwater, and estuarine ecosystems in the 
U.S. are affected by N enrichment/eutrophication caused by N 
deposition. These effects have been consistently documented across the 
U.S. for hundreds of species. In aquatic systems increased nitrogen can 
alter species assemblages and cause eutrophication. In terrestrial 
systems nitrogen loading can lead to loss of nitrogen-sensitive lichen 
species, decreased biodiversity of grasslands, meadows and other 
sensitive habitats, and increased potential for invasive species. For a 
broader explanation of the topics treated here, refer to the 
description in Chapter 9 of the DRIA.
    The sensitivity of terrestrial and aquatic ecosystems to 
acidification from nitrogen and sulfur deposition is predominantly 
governed by geology. Prolonged exposure to excess nitrogen and sulfur 
deposition in sensitive areas acidifies lakes, rivers, and soils. 
Increased acidity in surface waters creates inhospitable conditions for 
biota and affects the abundance and biodiversity of fishes, zooplankton 
and macroinvertebrates and ecosystem function. Over time, acidifying 
deposition also removes essential nutrients from forest soils, 
depleting the capacity of soils to neutralize future acid loadings and 
negatively affecting forest sustainability. Major effects in forests 
include a decline in sensitive tree species, such as red spruce (Picea 
rubens) and sugar maple (Acer saccharum).
    Building materials including metals, stones, cements, and paints 
undergo natural weathering processes from exposure to environmental 
elements (e.g., wind, moisture, temperature fluctuations, sunlight, 
etc.). Pollution can worsen and accelerate these effects. Deposition of 
PM is associated with both physical damage (materials damage effects) 
and impaired aesthetic qualities (soiling effects). Wet and dry 
deposition of PM can physically affect materials, adding to the effects 
of natural weathering processes, by potentially promoting or 
accelerating the corrosion of metals, by degrading paints and by 
deteriorating building materials such as

[[Page 29226]]

stone, concrete, and marble.\370\ The effects of PM are exacerbated by 
the presence of acidic gases and can be additive or synergistic due to 
the complex mixture of pollutants in the air and surface 
characteristics of the material. Acidic deposition has been shown to 
have an effect on materials including zinc/galvanized steel and other 
metal, carbonate stone (as monuments and building facings), and surface 
coatings (paints).\371\ The effects on historic buildings and outdoor 
works of art are of particular concern because of the uniqueness and 
irreplaceability of many of these objects. In addition to aesthetic and 
functional effects on metals, stone, and glass, altered energy 
efficiency of photovoltaic panels by PM deposition is also becoming an 
important consideration for impacts of air pollutants on materials.
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    \370\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
    \371\ Irving, P.M., e.d. 1991. Acid Deposition: State of Science 
and Technology, Volume III, Terrestrial, Materials, Health, and 
Visibility Effects, The U.S. National Acid Precipitation Assessment 
Program, Chapter 24, page 24-76.
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4. Welfare Effects Associated With Air Toxics
    Emissions from producing, transporting, and combusting fuel 
contribute to ambient levels of pollutants that contribute to adverse 
effects on vegetation. VOCs, some of which are considered air toxics, 
have long been suspected to play a role in vegetation damage.\372\ In 
laboratory experiments, a wide range of tolerance to VOCs has been 
observed.\373\ Decreases in harvested seed pod weight have been 
reported for the more sensitive plants, and some studies have reported 
effects on seed germination, flowering, and fruit ripening. Effects of 
individual VOCs or their role in conjunction with other stressors 
(e.g., acidification, drought, temperature extremes) have not been well 
studied. In a recent study of a mixture of VOCs including ethanol and 
toluene on herbaceous plants, significant effects on seed production, 
leaf water content and photosynthetic efficiency were reported for some 
plant species.\374\
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    \372\ U.S. EPA. (1991). Effects of organic chemicals in the 
atmosphere on terrestrial plants. EPA/600/3-91/001.
    \373\ Cape JN, ID Leith, J Binnie, J Content, M Donkin, M 
Skewes, DN Price AR Brown, AD Sharpe. (2003). Effects of VOCs on 
herbaceous plants in an open-top chamber experiment. Environ. 
Pollut. 124:341-343.
    \374\ Cape JN, ID Leith, J Binnie, J Content, M Donkin, M 
Skewes, DN Price AR Brown, AD Sharpe. (2003). Effects of VOCs on 
herbaceous plants in an open-top chamber experiment. Environ. 
Pollut. 124:341-343.
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    Research suggests an adverse impact of vehicle exhaust on plants, 
which has in some cases been attributed to aromatic compounds and in 
other cases to NOX.375 376 377 The impacts of 
VOCs on plant reproduction may have long-term implications for 
biodiversity and survival of native species near major roadways. Most 
of the studies of the impacts of VOCs on vegetation have focused on 
short-term exposure and few studies have focused on long-term effects 
of VOCs on vegetation and the potential for metabolites of these 
compounds to affect herbivores or insects.
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    \375\ Viskari E-L. (2000). Epicuticular wax of Norway spruce 
needles as indicator of traffic pollutant deposition. Water, Air, 
and Soil Pollut. 121:327-337.
    \376\ Ugrekhelidze D, F Korte, G Kvesitadze. (1997). Uptake and 
transformation of benzene and toluene by plant leaves. Ecotox. 
Environ. Safety 37:24-29.
    \377\ Kammerbauer H, H Selinger, R Rommelt, A Ziegler-Jons, D 
Knoppik, B Hock. (1987). Toxic components of motor vehicle emissions 
for the spruce Picea abies. Environ. Pollut. 48:235-243.
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III. EPA Proposal for Light- and Medium-Duty Vehicle Standards for 
Model Years 2027 and Later

A. Introduction and Background

    This Preamble Section III outlines the proposed GHG and criteria 
pollutant standards and related provisions that are included in the 
proposal.
    Throughout this section and elsewhere in this NPRM, EPA uses the 
following conventions to identify specific vehicle technology types. 
More information about these vehicle technologies may be found in the 
2016 EPA Draft Technical Assessment Report.\378\
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    \378\ Draft Technical Assessment Report, EPA-420-D-16-900, July 
2016.

 ICE vehicle: an internal combustion engine (ICE) vehicle with 
no powertrain electrification
 BEV: Battery Electric Vehicle
 PHEV: Plug-in Hybrid Electric Vehicle
 PEV: Plug-in Electric Vehicle (refers collectively to BEVs and 
PHEVs)
 HEV: Hybrid Electric Vehicle (or strong hybrid) \379\
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    \379\ Strong hybrids typically operate at high voltage (greater 
than 60 volts and most often up to several hundred volts) to provide 
significant engine assist and regenerative braking, and most 
commonly occur in what are known as P2 and power-split or other 
parallel/series drive configurations. See also Draft Technical 
Assessment Report, EPA-420-D-16-900, July 2016, pp. 5-11 and 5-12.
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 MHEV: Mild Hybrid Electric Vehicle \380\
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    \380\ Mild hybrids most commonly operate at or about 48 volts 
and provide idle-stop capability and launch assistance. See also 
Draft Technical Assessment Report, EPA-420-D-16-900, July 2016, p. 
5-11.
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 Hybrid: refers collectively to HEVs (or strong hybrid) and 
MHEVs
 FCEV: Fuel Cell Electric Vehicle
 Electrified: any of the preceding vehicle types with an 
electric drive, including FCEV
 ZEV: Zero-Emission Vehicle (used primarily in reference to the 
California ZEV program)

    Because ZEV has a specific meaning under the California program, 
EPA in this proposal is generally refraining from using the term except 
in reference to the California program. Executive Order (E.O.) 14037 
also uses the term ``zero-emission vehicle'' to refer generally to 
BEVs, FCEVs, and PHEVs, so EPA may also use ``ZEV'' when referencing 
the E.O.
    Additionally, in the context of the criteria pollutant program, the 
abbreviation LDV refers to light-duty vehicles that are not otherwise 
designated as a light-duty truck (LDT) or medium-duty passenger vehicle 
(MDPV).\381\ In this proposal, the new nomenclature ``medium-duty 
vehicle'' (MDV) refers to Class 2b and 3 vehicles, as described in the 
following section.
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    \381\ Title 40 CFR 86.1803.
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1. What vehicle categories and pollutants are covered by the proposal?
    EPA is proposing emissions standards for both light-duty vehicles 
and medium-duty (Class 2b and 3) vehicles. The light-duty vehicle 
category includes passenger cars, light trucks, and medium-duty 
passenger vehicles (MDPVs), consistent with previous EPA GHG and 
criteria pollutant rules.\382\ In this proposed rule, Class 2b and 3 
vehicles are referred to as ``medium-duty vehicles'' (MDVs) to 
distinguish them from Class 4 and higher vehicles that remain under the 
heavy-duty program in 40 CFR parts 1036 and 1037. EPA has not 
previously used the MDV nomenclature, referring to these larger 
vehicles in prior rules as either heavy-duty Class 2b and 3 vehicles or 
heavy-duty pickups and vans.\383\ The MDV category includes large 
pickups, vans, and incomplete vehicles, but excludes MDPVs. Examples of 
vehicles in this

[[Page 29227]]

category include GM or Stellantis 2500 and 3500 series, and Ford 250 
and 350 series, pickups and vans. EPA notes that it is proposing that 
certain Class 2b and 3 vehicles would be subject to engine-based 
criteria pollutant emissions standards under EPA's heavy-duty engine 
standards rather than being included in the MDV category, as discussed 
in Section III.C.
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    \382\ Light-duty trucks (LDTs) that have gross vehicle weight 
ratings above 6,000 pounds and all MDVs are considered ``heavy-duty 
vehicles'' under the CAA. See section 202(b)(3)(C). For regulatory 
purposes, we generally refer to those LDTs which are above 6,000 
pounds GVWR and at or below 8,500 pounds GVWR as ``heavy light-duty 
trucks'' made up of LDT3s and LDT4s, and we have defined MDPVs 
primarily as vehicles between 8,501 and 10,000 pounds GVWR designed 
primarily for the transportation of persons. See 40 CFR 86.1803-01.
    \383\ See 76 FR 57106 and 79 FR 23414. Heavy-duty vehicles 
subject to standards under 40 CFR part 86, subpart S, are defined at 
40 CFR 86.1803-01 to include all vehicles above 8,500 pounds GVWR, 
and also incomplete vehicles with lower GVWR if they have curb 
weight above 6,000 pounds or basic vehicle frontal area greater than 
45 square feet.
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    EPA is proposing new standards for emissions of GHGs and 
hydrocarbons, oxides of nitrogen (NOX), and particulate 
matter (PM). EPA's proposed standards are based on an assessment of all 
available and potential vehicle emissions control technologies, 
including advancements in gasoline vehicle technologies, strong 
hybridization, and zero-emission technologies over the model years 
affected by the proposal.
2. Light-Duty and Medium-Duty Vehicle Standards: Background and History
    Previously, EPA has addressed medium-duty vehicle emissions as part 
of regulatory programs for GHG emissions along with the heavy-duty 
sector, and for criteria pollutant emissions along with the light-duty 
sector. As a result, the program structure for medium-duty vehicles is 
similar to that of the light-duty program for criteria pollutants but 
differs from that of light-duty program for GHG emissions. This section 
provides a brief overview of the rules and the standards structures for 
EPA's light-duty GHG emissions standards, MDV GHG emissions standards, 
and criteria pollutant emissions standards. While the current proposal 
is addressing both light- and medium-duty vehicles under a single 
umbrella rulemaking, EPA is proposing standards for each class and for 
each pollutant pursuant to the relevant statutory provisions for each 
class and pollutant based on its assessment of the feasibility of more 
stringent standards for each class and pollutant, and the programs 
would continue to follow the basic structures EPA has previously 
adopted.
i. GHG Standards
    EPA has issued four rules establishing light-duty vehicle GHG 
standards, which EPA refers to in this proposal based on the year in 
which the previous final rule was issued, as shown in Table 20.\384\
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    \384\ The first three rules were issued jointly with NHTSA, 
while EPA issued the 2021 Rule in coordination with NHTSA but not as 
a joint rulemaking.

                           Table 20--Previous GHG Light-Duty Vehicles Standards Rules
----------------------------------------------------------------------------------------------------------------
           Rule                    MYs covered                 Title               Federal Register  citation
----------------------------------------------------------------------------------------------------------------
2010 Rule.................  Initial 2010 rule         Light-Duty Vehicle       75 FR 25324, May 7, 2010.
                             established standards     Greenhouse Gas
                             for MYs 2012-2016 and     Emission Standards and
                             later.                    Corporate Average Fuel
                                                       Economy Standards.
2012 Rule.................  Set more stringent        2017 and Later Model     77 FR 62624, October 15, 2012.
                             standards for MYs 2017-   Year Light-Duty
                             2025 and later.           Vehicle Greenhouse Gas
                                                       Emissions and
                                                       Corporate Average Fuel
                                                       Economy Standards.
2020 Rule.................  Revised the standards     The Safer Affordable     85 FR 24174, April 30, 2020.
                             for MYs 2022-2025 to      Fuel-Efficient (SAFE)
                             make them less            Vehicles Rule for
                             stringent and             Model Years 2021-2026
                             established a new         Passenger Cars and
                             standard for MYs 2026     Light Trucks.
                             and later.
2021 Rule.................  Revised the standards     Revised 2023 and Later   86 FR 74434, December 30, 2021.
                             for MYs 2023-2026 to      Model Year Light-Duty
                             make them more            Vehicle Greenhouse Gas
                             stringent, with the MY    Emissions Standards.
                             2026 standards being
                             the most stringent GHG
                             standards established
                             by EPA to date.
----------------------------------------------------------------------------------------------------------------

    The GHG standards have all been based on fleet average 
CO2 emissions. Each vehicle model is assigned a 
CO2 target based on the vehicle's ``footprint'' in square 
feet (ft\2\), generally consisting of the area of the rectangle formed 
by the four points at which the tires rest on the ground. Generally, 
vehicles with larger footprints have higher assigned CO2 
emissions targets. The most recent set of footprint curves established 
by the 2021 rule for model years 2023-2026 are shown in Figure 4 and 
Figure 5, along with the curves for MYs 2021-2022, included for 
comparison. As shown, passenger cars and light trucks have separate 
footprint standards curves, which result in separate fleet average 
standards for the two sets of vehicles. The fleet-average standards are 
the production-weighted fleet average of the footprint targets for all 
the vehicles in a manufacturer's fleet for a given model year. As a 
result, the footprint-based fleet average standards, which 
manufacturers are required to meet on an annual basis, will vary for 
each manufacturer based on its actual production of vehicles in a given 
model year. Individual vehicles are not required to meet their 
footprint-based CO2 targets, although they are required to 
demonstrate compliance with applicable in-use standards.
BILLING CODE 6560-50-P

[[Page 29228]]

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[GRAPHIC] [TIFF OMITTED] TP05MY23.008

BILLING CODE 6560-50-C
    For medium-duty vehicles,\385\ EPA has established GHG standards 
previously as part of our heavy-duty vehicle GHG Phase 1 and 2 rules, 
shown in Table 21.
---------------------------------------------------------------------------

    \385\ Note, the HD GHG rules referred to MDVs as HD pickups and 
vans.

[[Page 29229]]



                               Table 21--Prior Heavy-Duty GHG Rules Covering MDVs
----------------------------------------------------------------------------------------------------------------
            Rule                  MYs covered                Title                Federal Register  citation
----------------------------------------------------------------------------------------------------------------
HD Phase 1.................  Initial MDV           Greenhouse Gas Emissions   76 FR 57106, September 15, 2011.
                              standards phased in   Standards and Fuel
                              over MYs 2014-2018.   Efficiency Standards for
                                                    Medium- and Heavy-Duty
                                                    Engines and Vehicles.
HD Phase 2.................  More stringent MDV    Greenhouse Gas Emissions   81 FR 73478, October 25, 2016.
                              standards phased in   and Fuel Efficiency
                              over MYs 2021-2027.   Standards for Medium-
                                                    and Heavy-Duty Engines
                                                    and Vehicles--Phase 2.
----------------------------------------------------------------------------------------------------------------

    The MDV standards are also attribute-based. However, they are based 
on a ``work factor'' attribute rather than the footprint attribute used 
in the light-duty vehicle program. Work-based measures such as payload 
and towing capability are two key factors that characterize differences 
in the design of vehicles, as well as differences in how the vehicles 
are expected to be regularly used. The work factor attribute combines 
vehicle payload capacity and vehicle towing capacity, in pounds (lb), 
with an additional fixed adjustment for four-wheel drive vehicles. This 
adjustment accounts for the fact that four-wheel drive, critical to 
enabling heavy-duty work (payload or trailer towing) in certain road 
conditions, adds roughly 500 pounds to the vehicle weight. The work 
factor is calculated as follows:

75 percent maximum payload + 25 percent of maximum towing + 375 lb if 
four-wheel drive.

--Maximum payload is calculated as GVWR minus curb weight
--Maximum towing is calculated as Gross Combined Weight Rating (GCWR) 
minus GVWR

    Under this approach, GHG targets are determined for each vehicle 
with a unique work factor (analogous to a target for each discrete 
vehicle footprint in the light-duty vehicle rules). These targets are 
then production weighted and summed to derive a manufacturer's annual 
fleet average standard for its MDVs. The current program includes 
separate standards for gasoline and diesel-fueled vehicles.\386\ The 
Phase 2 work factors are shown in Figure 6 and Figure 7.
---------------------------------------------------------------------------

    \386\ See 81 FR 73736-73739.
---------------------------------------------------------------------------

BILLING CODE 6560-50-P
[GRAPHIC] [TIFF OMITTED] TP05MY23.009


[[Page 29230]]


[GRAPHIC] [TIFF OMITTED] TP05MY23.010

BILLING CODE 6560-50-C
ii. Criteria and Toxic Pollutant Emissions Standards
    Over the last several decades, EPA has set progressively more 
stringent vehicle emissions standards for criteria pollutants. Most 
recently, in 2014, EPA adopted Tier 3 emissions standards. Unlike GHG 
standards, criteria pollutant standards are not attribute-based. The 
Tier 3 rule included standards for both light-duty and medium-duty 
vehicles. Similar to the prior Tier 2 standards, Tier 3 established 
``bins'' of Federal Test Procedure (FTP) standards, shown in Table 22. 
Each bin contains a milligrams per mile (mg/mile) standard for non-
methane organic gases (NMOG) plus oxides of nitrogen (NOX) 
or NMOG+NOX, particulate matter (PM), carbon monoxide (CO), 
and formaldehyde (HCHO).

                                Table 22--Tier 3 FTP Standards for LDVs and MDPVs
                                                    [mg/mile]
----------------------------------------------------------------------------------------------------------------
                                                     NMOG+NOX           PM              CO             HCHO
----------------------------------------------------------------------------------------------------------------
Bin 160.........................................             160               3             4.2               4
Bin 125.........................................             125               3             2.1               4
Bin 70..........................................              70               3             1.7               4
Bin 50..........................................              50               3             1.7               4
Bin 30..........................................              30               3             1.0               4
Bin 20..........................................              20               3             1.0               4
Bin 0...........................................               0               0               0               0
----------------------------------------------------------------------------------------------------------------

    Manufacturers select, or assign, a standards bin to each vehicle 
model and vehicles must meet all of the standards in that bin over the 
vehicle's full useful life. Each manufacturer must also meet a fleet 
average NMOG + NOX standard each model year, which declines 
over a phase-in period for the Tier 3 final standards. The declining 
NMOG+NOX standards are shown in Table 23. As shown, the 
fleet is split between two categories: (1) Passenger cars and small 
light trucks and (2) larger light trucks and MDPVs, with final 
NMOG+NOX fleet average standards of 30 mg/mile for both 
vehicle categories.\387\
---------------------------------------------------------------------------

    \387\ Small light trucks are those vehicles in the LDT1 class, 
while larger light trucks are those in the LDT2-4 classes.

[[Page 29231]]



             Table 23--Tier 3 NMOG+NOX Fleet Average FTP Standards for Light-Duty Vehicles and MDPVs
                                                    [mg/mile]
----------------------------------------------------------------------------------------------------------------
                                                                   Model year
                              ----------------------------------------------------------------------------------
                                                                                                        2025 and
                                 2017     2018     2019     2020     2021     2022     2023     2024     later
----------------------------------------------------------------------------------------------------------------
Passenger cars and small            86       79       72       65       58       51       44       37         30
 trucks......................
Large light trucks and MDPVs.      101       93       83       74       65       56       47       38         30
----------------------------------------------------------------------------------------------------------------

    The Tier 3 rule also established more stringent criteria pollutant 
emissions standards for MDVs. The Tier 3 MDV standards are also based 
on a bin structure, but with generally less stringent bin standards and 
with less stringent NMOG+NOX fleet average standards. As 
discussed in Section III.A.1, the MDV category consists of vehicles 
with gross vehicle weight ratings (GVWR) between 8,501-14,000 pounds. 
For Tier 3, EPA set separate standards for two sub-categories of 
vehicles, Class 2b (8,501-10,000 pounds GVWR) and Class 3 (10,001-
14,000 pounds GVWR) vehicles. Table 24 provides the final Tier 3 FTP 
standards bins for MDVs and Table 25 provides the NMOG+NOX 
fleet average standards that apply to these vehicles in MYs 2018 and 
later. It is important to note that MDVs are tested at a higher test 
weight than light-duty vehicles, as discussed in Section III.B.3, and 
as such the numeric standards are not directly comparable across the 
light-duty and MDV categories.

                                  Table 24--MDV Tier 3 FTP Final Standards Bins
----------------------------------------------------------------------------------------------------------------
                                                     NMOG+NOX           PM              CO             HCHO
----------------------------------------------------------------------------------------------------------------
                                        Class 2b (10,001-14,000 lb GVWR)
----------------------------------------------------------------------------------------------------------------
Bin 250.........................................             250               8             6.4               6
Bin 200.........................................             200               8             4.2               6
Bin 170.........................................             170               8             4.2               6
Bin 150.........................................             150               8             3.2               6
Bin 0...........................................               0               0               0               0
----------------------------------------------------------------------------------------------------------------
                                         Class 3 (8.501-10,000 lb GVWR)
----------------------------------------------------------------------------------------------------------------
Bin 400.........................................             400              10             7.3               6
Bin 270.........................................             270              10             4.2               6
Bin 230.........................................             230              10             4.2               6
Bin 200.........................................             200              10             3.7               6
Bin 0...........................................               0               0               0               0
----------------------------------------------------------------------------------------------------------------


                              Table 25--MDV Final Fleet Average NMOG+NOX Standards
                                                    [mg/mile]
----------------------------------------------------------------------------------------------------------------
                                      2018            2019            2020            2021        2022 and later
----------------------------------------------------------------------------------------------------------------
Class 2b.......................             278             253             228             203              178
Class 3........................             451             400             349             298              247
----------------------------------------------------------------------------------------------------------------

    EPA has also established supplemental Federal test procedure (SFTP) 
standards for light and medium-duty vehicles, as well as cold 
temperature standards for CO and HC. These standards address emissions 
outside of the FTP test conditions such as at high vehicle speeds and 
differing ambient temperatures. EPA is not reopening the current SFTP 
standards in this rulemaking.
3. EPA's Statutory Authority Under the Clean Air Act (CAA)
    Title II of the Clean Air Act provides for comprehensive regulation 
of mobile sources, authorizing EPA to regulate emissions of air 
pollutants from all mobile source categories, including motor vehicles 
under CAA section 202(a). EPA is setting standards under multiple 
provisions of CAA section 202(a). GHG standards for all motor vehicles 
and light duty criteria pollutant standards are set under section 
202(a)(1)-(2). Criteria pollutant standards for larger light-duty 
trucks and MDVs, which are considered ``heavy-duty vehicles'' under the 
CAA by virtue of having GVWR above 6,000 pounds, are being set pursuant 
to section 202(a)(3), which requires that standards applicable to 
emissions of hydrocarbons, NOX, CO, and PM from heavy-duty 
vehicles (which includes MDVs) reflect the greatest degree of emission 
reduction available for the model year to which such standards apply, 
giving appropriate consideration to cost, energy, and safety. In turn, 
CAA section 216(2) defines ``motor vehicle'' as ``any self-propelled 
vehicle designed for transporting persons or property on a street or 
highway.'' Congress has intentionally and consistently used the broad 
term ``any self-propelled vehicle'' since the Motor Vehicle Control Act 
of 1965 so as not to limit standards adopted under CAA section 202 to 
vehicles running on a particular fuel, power source, or system of 
propulsion. Congress's focus was on emissions from classes of motor 
vehicles and the ``requisite technologies'' that could feasibly reduce 
those emissions giving appropriate consideration to cost of compliance 
and lead time, as opposed

[[Page 29232]]

to being limited to any particular type of vehicle.
    Section 202(a)(1) of the CAA states that ``the Administrator shall 
by regulation prescribe (and from time to time revise) . . . standards 
applicable to the emission of any air pollutant from any class or 
classes of new motor vehicles . . . which in his judgment cause, or 
contribute to, air pollution which may reasonably be anticipated to 
endanger public health or welfare.'' CAA section 202(a)(1) also 
requires that any standards promulgated thereunder ``shall be 
applicable to such vehicles and engines for their useful life (as 
determined under [CAA section 202(d)], relating to useful life of 
vehicles for purposes of certification), whether such vehicle and 
engines are designed as complete systems or incorporate devices to 
prevent or control such pollution.''
    While emission standards set by the EPA under CAA section 202(a)(1) 
generally do not mandate use of particular technologies, they are 
technology-based, as the levels chosen must be premised on a finding of 
technological feasibility. Thus, standards promulgated under CAA 
section 202(a) are to take effect only ``after such period as the 
Administrator finds necessary to permit the development and application 
of the requisite technology, giving appropriate consideration to the 
cost of compliance within such period.'' CAA section 202(a)(2); see 
also NRDC v. EPA, 655 F. 2d 318, 322 (D.C. Cir. 1981). EPA must 
consider costs to those entities which are directly subject to the 
standards. Motor & Equipment Mfrs. Ass'n Inc. v. EPA, 627 F. 2d 1095, 
1118 (D.C. Cir. 1979). Thus, ``the [s]ection 202(a)(2) reference to 
compliance costs encompasses only the cost to the motor-vehicle 
industry to come into compliance with the new emission standards, and 
does not mandate consideration of costs to other entities not directly 
subject to the proposed standards.'' Coalition for Responsible 
Regulation, 684 F.3d at 128. EPA is afforded considerable discretion 
under section 202(a) when assessing issues of technical feasibility and 
availability of lead time to implement new technology. Such 
determinations are ``subject to the restraints of reasonableness,'' 
which ``does not open the door to `crystal ball' inquiry.'' NRDC, 655 
F. 2d at 328, quoting International Harvester Co. v. Ruckelshaus, 478 
F. 2d 615, 629 (D.C. Cir. 1973). However, ``EPA is not obliged to 
provide detailed solutions to every engineering problem posed in the 
perfection of [a particular device]. In the absence of theoretical 
objections to the technology, the agency need only identify the major 
steps necessary for development of the device and give plausible 
reasons for its belief that the industry will be able to solve those 
problems in the time remaining. EPA is not required to rebut all 
speculation that unspecified factors may hinder `real world' emission 
control.'' NRDC, 655 F. 2d at 333-34. In developing such technology-
based standards, EPA has the discretion to consider different standards 
for appropriate groupings of vehicles (``class or classes of new motor 
vehicles''), or a single standard for a larger grouping of motor 
vehicles. NRDC, 655 F.2d at 338.\388\
---------------------------------------------------------------------------

    \388\ Additionally, with respect to regulation of vehicular 
greenhouse gas emissions, EPA is not ``required to treat NHTSA's . . 
. regulations as establishing the baseline for the [section 202(a) 
standards].'' Coalition for Responsible Regulation, 684 F.3d at 127 
(noting that the section 202(a) standards provide ``benefits above 
and beyond those resulting from NHTSA's fuel-economy standards'').
---------------------------------------------------------------------------

    Although standards under CAA section 202(a)(1) are technology-
based, they are not based exclusively on technological capability. 
Pursuant to the broad grant of authority in section 202, when setting 
emission standards for light duty vehicles EPA may also consider other 
factors and has done so previously when setting such standards. For 
instance, in recent light duty greenhouse gas rules, EPA has also 
considered such issues as: Technology effectiveness; its cost (per 
vehicle, per manufacturer, and per consumer); the feasibility and 
practicability of potential standards in light of the lead time 
available to implement the technology; the impacts of potential 
standards on emissions reductions of both GHGs and criteria pollutants; 
the impacts of standards on oil conservation and energy security; the 
impacts of standards on fuel savings by consumers; as well as other 
relevant factors such as safety.
    In addition, EPA has clear authority to set standards under CAA 
section 202(a)(1)-(2) that are technology-forcing when EPA considers 
that to be appropriate but is not required to do so (as compared to 
standards under section 202(a)(3), which require the greatest degree of 
emissions reduction achievable, giving appropriate consideration to 
cost, energy and safety factors). CAA section 202(a) does not specify 
the degree of weight to apply to each factor, and EPA accordingly has 
discretion in choosing an appropriate balance among factors. See Sierra 
Club v. EPA, 325 F.3d 374, 378 (D.C. Cir. 2003) (even where a provision 
is technology-forcing, the provision ``does not resolve how the 
Administrator should weigh all [the statutory] factors in the process 
of finding the `greatest emission reduction achievable' ''); National 
Petrochemical and Refiners Ass'n v. EPA, 287 F.3d 1130, 1135 (D.C. Cir. 
2002) (EPA decisions, under CAA provision authorizing technology-
forcing standards, based on complex scientific or technical analysis 
are accorded particularly great deference); see also Husqvarna AB v. 
EPA, 254 F. 3d 195, 200 (D.C. Cir. 2001) (great discretion to balance 
statutory factors in considering level of technology-based standard, 
and statutory requirement ``to [give appropriate] consideration to the 
cost of applying . . . technology'' does not mandate a specific method 
of cost analysis); Hercules Inc. v. EPA, 598 F. 2d 91, 106 (D.C. Cir. 
1978) (``In reviewing a numerical standard we must ask whether the 
agency's numbers are within a zone of reasonableness, not whether its 
numbers are precisely right.'').\389\
---------------------------------------------------------------------------

    \389\ See also; Permian Basin Area Rate Cases, 390 U.S. 747, 797 
(1968) (same); Federal Power Commission v. Conway Corp., 426 U.S. 
271, 278 (1976) (same); Exxon Mobil Gas Marketing Co. v. Federal 
Energy Regulatory Comm'n, 297 F. 3d 1071, 1084 (D.C. Cir. 2002) 
(same).
---------------------------------------------------------------------------

    With regard to the specific technologies that could be used to meet 
the emission standards promulgated under the relevant statutory 
authorities, EPA's rules have historically not required the use of any 
particular technology, but rather have allowed manufacturers to use any 
technology that demonstrates the engines or vehicles meet the standards 
over the applicable test procedures. Similarly, in determining the 
standards, EPA appropriately considers updated data and analysis on 
pollution control technologies, without a priori limiting its 
consideration to a particular set of technologies. Given the continuous 
development of pollution control technologies since the early days of 
the CAA, this approach means that EPA routinely considers novel and 
projected technologies developed or refined since the time of the CAA's 
enactment, including, for instance, electric vehicle technologies. This 
forward-looking regulatory approach keeps pace with real-world 
technological developments and comports with Congressional intent.
    Section 202 does not specify or expect any particular type of motor 
vehicle propulsion system to remain prevalent, and it was clear as 
early as the 1960s that ICE vehicles might be inadequate to achieve the 
country's air quality goals. In 1967, the Senate Committees on Commerce 
and Public Works held five days of hearings on ``electric vehicles and 
other alternatives to the internal

[[Page 29233]]

combustion engine,'' which Chairman Magnuson opened by saying ``The 
electric will help alleviate air pollution. . . . The electric car does 
not mean a new way of life, but rather it is a new technology to help 
solve the new problems of our age.'' \390\ In a 1970 message to 
Congress seeking a stronger CAA, President Nixon stated he was 
initiating a program to develop ``an unconventionally powered, 
virtually pollution free automobile'' because of the possibility that 
``the sheer number of cars in densely populated areas will begin 
outrunning the technological limits of our capacity to reduce pollution 
from the internal combustion engine.'' \391\
---------------------------------------------------------------------------

    \390\ Electric Vehicles and Other Alternatives to the Internal 
Combustion Engine: Joint Hearings before the Comm. on Commerce and 
the Subcomm. on Air and Water Pollution of the Comm. on Pub. Works, 
90th Cong. (1967).
    \391\ Richard Nixon, Special Message to the Congress on 
Environmental Quality (Feb. 10, 1970), https://www.presidency.ucsb.edu/documents/special-message-the-congress-environmental-quality.
---------------------------------------------------------------------------

    Since the earliest days of the CAA, Congress has emphasized that 
the goal of section 202 is to address air quality hazards from motor 
vehicles, not to simply reduce emissions from internal combustion 
engines to the extent feasible. In the Senate Report accompanying the 
1970 CAA Amendments, Congress made clear the EPA ``is expected to press 
for the development and application of improved technology rather than 
be limited by that which exists'' and identified several unconventional 
technologies that could successfully meet air quality-based emissions 
targets for motor vehicles.\392\ In the 1970 amendments Congress 
further demonstrated its recognition that developing new technology to 
ensure that pollution control keeps pace with economic development is 
not merely a matter of refining the ICE, but requires considering new 
types of motor vehicle propulsion. Congress provided EPA with authority 
to fund the development of ``low emission alternatives to the present 
internal combustion engine'' as well as a program to encourage Federal 
purchases of ``low-emission vehicles.'' See CAA section 104(a)(2) 
(previously codified as CAA section 212). Congress also adopted section 
202(e) expressly to grant the Administrator discretion regarding the 
certification of vehicles and engines based on ``new power source[s] or 
propulsion system[s],'' that is to say, power sources and propulsion 
systems beyond the existing internal combustion engine and fuels 
available at the time of the statute's enactment, if those vehicles 
emit pollutants which the Administrator judges contribute to dangerous 
air pollution but has not yet established standards for under section 
202(a). As the D.C. Circuit held in 1973, ``We may also note that it is 
the belief of many experts-both in and out of the automobile industry-
that air pollution cannot be effectively checked until the industry 
finds a substitute for the conventional automotive power plant-the 
reciprocating internal combustion (i.e., ``piston'') engine. . . . It 
is clear from the legislative history that Congress expected the Clean 
Air Amendments to force the industry to broaden the scope of its 
research-to study new types of engines and new control systems.'' 
International Harvester Co. v. Ruckelshaus, 478 F.2d 615, 634-35 (D.C. 
Cir. 1973).
---------------------------------------------------------------------------

    \392\ S. Rep. No. 91-1196, at 24-27 (1970).
---------------------------------------------------------------------------

    Since that time, Congress has continued to emphasize the importance 
of technology development to achieving the goals of the CAA. In the 
1990 amendments, Congress instituted a clean fuel vehicles program to 
promote further progress in emissions reductions and the adoption of 
new technologies and alternative fuels, which also applied to motor 
vehicles as defined under section 216, see CAA section 241(1), and 
explicitly defined motor vehicles qualifying under the program as 
including vehicles running on an alternative fuel or ``power source 
(including electricity),'' CAA section 241(2). Congress also directed 
EPA to phase-in certain section 202(a) standards, see CAA section 
202(g), which confirms EPA's authority to promulgate standards, such as 
fleet averages, phase-ins, and averaging, banking, and trading 
programs, that are fulfilled through compliance over an entire fleet, 
or a portion thereof, rather than through compliance by individual 
vehicles.\393\
---------------------------------------------------------------------------

    \393\ EPA has a long history of exercising its authority to 
include compliance flexibilities in standards. As early as 1983, 
manufacturers could comply with criteria-pollutant standards using 
averaging. EPA introduced banking and trading in 1990. Fleet average 
standards were adopted for light duty vehicles in 2000. All of these 
flexibilities have likewise been part of EPA's GHG standards program 
since the program's inception in 2010, and consistently since then. 
Averaging, banking, and trading is discussed further in Section 
III.B.4 and additional history is discussed in EPA's Answering Brief 
in Texas v. EPA (D.C. Cir., 22-1031).
---------------------------------------------------------------------------

    The recently enacted Inflation Reduction Act \394\ ``reinforces the 
longstanding authority and responsibility of [EPA] to regulate GHGs as 
air pollutants under the Clean Air Act,'' \395\ and ``the IRA clearly 
and deliberately instructs EPA to use'' this authority by ``combin[ing] 
economic incentives to reduce climate pollution with regulatory drivers 
to spur greater reductions under EPA's CAA authorities.'' \396\ The IRA 
specifically affirms Congress's previously articulated statements that 
non-ICE technologies will be a key component of achieving emissions 
reductions from the mobile source sector, and Congress provided a 
number of significant financial incentives for PEVs and the 
infrastructure necessary to support them.\397\ The Congressional Record 
reflects that ``Congress recognizes EPA's longstanding authority under 
CAA section 202 to adopt standards that rely on zero emission 
technologies, and Congress expects that future EPA regulations will 
increasingly rely on and incentivize zero-emission vehicles as 
appropriate.'' \398\
---------------------------------------------------------------------------

    \394\ See Inflation Reduction Act, Public Law 117-169, at 
Sec. Sec.  13403, 13404, 13501, 13502, 60101, 136 Stat. 1818, 
(2022), available at https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf.
    \395\ 168 Cong. Rec. E868-02 (daily ed. Aug. 12, 2022) 
(statement of Rep. Pallone).
    \396\ 168 Cong. Rec. E879-02, at 880 (daily ed. Aug. 26, 2022) 
(statement of Rep. Pallone).
    \397\ See Inflation Reduction Act, Public Law 117-169, at 
Sec. Sec.  13403, 13404, 13501, 13502, 60101, 136 Stat. 1818, 
(2022), available at https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf.
    \398\ 168 Cong. Rec. E879-02, at 880 (daily ed. Aug. 26, 2022) 
(statement of Rep. Pallone).
---------------------------------------------------------------------------

    Consistent with Congress's intent, EPA's CAA Title II emission 
standards have been based on and stimulated the development of a broad 
set of advanced automotive technologies, such as on-board computers and 
fuel injection systems, which have been the building blocks of 
automotive designs and have yielded not only lower pollutant emissions, 
but improved vehicle performance, reliability, and durability. 
Beginning in 2010, EPA has set standards under section 202 for GHGs and 
manufacturers have responded by continuing to develop and deploy a wide 
range of technologies, including more fuel-efficient engine designs, 
transmissions, aerodynamics, tires, materials improvements for mass 
reduction, as well as various levels of electrified vehicle 
technologies including mild hybrids, strong and plug-in hybrids, 
battery electric vehicles, and fuel cell electric vehicles. In 
addition, the continued application of performance-based standards with 
fleet-wide averaging provides an opportunity for all technology 
improvements and innovation to be reflected in a vehicle manufacturer's 
compliance results.
i. Testing Authority
    Under section 203 of the CAA, sales of vehicles are prohibited 
unless the

[[Page 29234]]

vehicle is covered by a certificate of conformity. EPA issues 
certificates of conformity pursuant to section 206 of the CAA, based on 
(necessarily) pre-sale testing conducted either by EPA or by the 
manufacturer. The Federal Test Procedure (FTP or ``city'' test) and the 
Highway Fuel Economy Test (HFET or ``highway'' test) are used for this 
purpose. Compliance with standards is required not only at 
certification but throughout a vehicle's useful life, so that testing 
requirements may continue post-certification. To assure each vehicle 
complies during its useful life, EPA may apply an adjustment factor to 
account for vehicle emission control deterioration or variability in 
use (section 206(a)).
    EPA establishes the test procedures under which compliance with the 
CAA emissions standards is measured. EPA's testing authority under the 
CAA is broad and flexible. EPA has also developed tests with additional 
cycles (the so-called 5-cycle tests) which are used for purposes of 
fuel economy labeling, SFTP standards, and extending off-cycle credits 
under the light-duty vehicle GHG program.
ii. Compliance and Enforcement Authority
    EPA oversees testing, collects and processes test data, and 
performs calculations to determine compliance with CAA standards. CAA 
standards apply not only at certification but also throughout the 
vehicle's useful life. The CAA provides for penalties should 
manufacturers fail to comply with their fleet average standards, and 
there is no option for manufacturers to pay fines in lieu of compliance 
with the standards. Under the CAA, penalties for violation of a fleet 
average standard are typically determined on a vehicle-specific basis 
by determining the number of a manufacturer's highest emitting vehicles 
that cause the fleet average standard violation. Penalties for 
reporting requirements under Title II of the CAA apply per day of 
violation, and other violations apply on a per vehicle, or a per part 
or component basis. See CAA sections 203(a) and 205(a) and 40 CFR 19.4.
    Section 207 of the CAA grants EPA broad authority to require 
manufacturers to remedy vehicles if EPA determines there are a 
substantial number of noncomplying vehicles. In addition, under CAA 
section 207, manufacturers are required to provide emission-related 
warranties. CAA section 207(i) specifies that the warranty period for 
light-duty vehicles is 2 years or 24,000 miles of use (whichever first 
occurs), except for specified major emission control components, for 
which the warranty period is 8 years or 80,000 miles of use (whichever 
first occurs).

B. Proposed GHG Standards for Model Years 2027 and Later

1. Overview
    This Section III.B provides details regarding EPA's proposed GHG 
standards and related program provisions. EPA is proposing 
significantly more stringent GHG standards for light and medium-duty 
vehicles for MYs 2027 and later. For light-duty, the proposed standards 
would further reduce the fleet average GHG emissions target levels by 
56 percent from the MY 2026 standards, the final year of standards 
established in the 2021 rule. For MDVs, the standards would represent a 
reduction of 37 percent compared to the MY 2027 standards, the final 
phase year of the previously established Phase 2 standards for those 
vehicles.
    Section III.B.2 provides details regarding the structure and level 
of the proposed light-duty vehicle standards while Section III.B.3 
provides details regarding EPA's proposed GHG standards for MDVs. 
Additional GHG program provisions are discussed in Sections III.B.4-
III.B.9, including averaging, banking, and trading, proposed air 
conditioning system requirements, proposed phase out of off-cycle 
credits, proposed treatment of PEVs and FCEVs in the GHG fleet average, 
and proposed alternative standards for small volume manufacturers.
2. Proposed Light-Duty Vehicle GHG Standards
i. Structure of the Existing Light-Duty Vehicle CO2 
Standards
    Since MY 2012, EPA has adopted attribute-based standards for 
passenger cars and light trucks. The CAA has no requirement to 
promulgate attribute-based standards, though in past rules EPA has 
relied on both universal and attribute-based standards (e.g., for 
nonroad engines, EPA uses the attribute of horsepower). However, given 
the advantages of using attribute-based standards, from MY 2012 onward 
EPA has adopted and maintained vehicle footprint as the attribute for 
the GHG standards. Footprint is defined as a vehicle's wheelbase 
multiplied by its track width--in other words, the area enclosed by the 
points at which the wheels meet the ground.
    EPA has implemented footprint-based standards since MY 2012 by 
establishing two kinds of standards--fleet average standards determined 
by a manufacturer's fleet makeup, and in-use standards that will apply 
to the individual vehicles that make up the manufacturer's fleet. Under 
the footprint-based standards, each manufacturer has a CO2 
emissions performance target unique to its fleet, depending on the 
footprints of the vehicles produced by that manufacturer. While a 
manufacturer's fleet average standard could be estimated throughout the 
model year based on projected production volume of its vehicle fleet, 
the fleet average standard to which the manufacturer must comply is 
based on its final model year production figures. Each vehicle in the 
fleet has a compliance value which is used to calculate both the in-use 
standard applicable to that vehicle and the fleet average emissions. A 
manufacturer's calculation of fleet average emissions at the end of the 
model year will thus be based on the production-weighted average 
emissions of each vehicle in its fleet. EPA is not reopening the 
footprint-based structure for the standards or seeking comment on any 
alternatives to this structure.
    Each manufacturer has separate footprint-based standards for cars 
and for trucks. EPA is not reopening the existing regulatory 
definitions of passenger cars and light trucks; we propose to continue 
to reference the NHTSA regulatory class definitions as EPA has done 
since the inception of the GHG program. Similarly, EPA is not 
requesting comment on alternatives to the regulatory class definitions 
which are being maintained.
ii. How did EPA determine the proposed slopes and relative stringencies 
of the car and truck footprint standards curves?
    In this proposal, EPA is retaining vehicle footprint, the existing 
car/truck regulatory class definitions, and separate standards curves 
for each regulatory class, as in previous rulemakings. However, we 
propose to adjust the relative slope and offset between the car and 
truck footprint standards curves as described in this section.
    We analyzed the fleet and found that most light-duty vehicles 
(which do not tow or haul) are used to move passengers and their 
nominal cargo and could be represented by a single curve. However, 
within our analysis we identified a subset of light trucks that provide 
additional towing and hauling capabilities which are more appropriately 
controlled with a

[[Page 29235]]

modified set of standards.\399\ We have accommodated those vehicles by 
providing an additional GHG offset for this increased utility which is 
embodied in the truck curve. In this way, we maintain two curves--one 
for cars and one for trucks--that are closely related from an 
analytical perspective.
---------------------------------------------------------------------------

    \399\ This analysis is described in a Memo to Docket ID No. EPA-
HQ-OAR-2022-0829 titled ``Fleet and Vehicle Attribute Analysis for 
the Development of Standard Curves.''
---------------------------------------------------------------------------

    When setting GHG standards, EPA recognizes the current diversity 
and distribution of vehicles in the market and that Americans have 
widely varying preferences in vehicles and that GHG control technology 
is feasible for a wide variety of vehicles. This is one of the primary 
reasons for adopting attribute-based standards and is also an important 
consideration in choosing specific attribute-based standards (i.e., the 
footprint curves). Over time, vehicle footprint sizes have steadily 
increased.\400\ This has partially offset gains in fuel economy and 
reductions in emissions. For example, in MY 2021, average fuel economy 
and emissions were essentially flat (despite improvements in emissions 
for all classes of vehicles) because of increases in the sizes of 
vehicles purchased. In developing footprint curves for this proposal, 
EPA's intent was to establish slopes that would not (of their own 
accord) initiate overall fleet upsizing or downsizing as a compliance 
strategy. A slope too flat would incentivize overall fleet downsizing, 
while a steep slope would foster upsizing. Fuller details on the 
analysis that was used to determine a ``neutral'' slope determination 
is provided in DRIA Chapter 1.1.3.
---------------------------------------------------------------------------

    \400\ The 2022 EPA Automotive Trends Report, https://www.epa.gov/system/files/documents/2022-12/420r22029.pdf.
---------------------------------------------------------------------------

    The slopes proposed in this rulemaking, especially the car curves, 
are flatter than those of prior rulemakings. This is by design and 
reflects our projection of the likelihood that a future fleet will be 
characterized by a greatly increased penetration of BEVs, even in a no-
action scenario. Consider that for the 2012 LD GHG rulemaking, the 
footprint-based curves were originally developed for a fleet that was 
completely made up of internal combustion engine (ICE) vehicles. From a 
physics perspective, a positive footprint slope for ICE vehicles makes 
sense because as a vehicle's size increases, its mass, road loads, and 
required power (and corresponding tailpipe CO2 emissions) 
will increase accordingly. However, because the proposed standards are 
based on tailpipe emissions (and upstream emissions are not included as 
part of a manufacturer's compliance calculation) for all vehicle types 
and BEVs emit zero tailpipe emissions, a fleet of all BEVs would emit 0 
g/mi, regardless of their respective footprints. As the percentage of 
BEVs increases, the percentage of ICE vehicles (those vehicles 
correlated to a positive slope) decrease. Mathematically, the slope of 
the average footprint targets should trend towards zero as the 
percentage of BEVs increases.
    All-wheel drive (AWD) is one of the defining features for crossover 
vehicles to be classified as light trucks,\401\ and for this reason the 
offset in tailpipe emissions targets (i.e., between the car and truck 
regulatory classes) for these vehicles should be appropriately set. The 
design differences for many cross-over vehicle models that are offered 
in both a two-wheel drive (2WD) and an AWD version (aside from their 
driveline) are difficult to detect. They often have the same engine, 
similar curb weight (except for the additional weight of an AWD 
system), and similar operating features (although AWD versions might be 
offered at a premium trim level that is not required of the 
drivetrain). EPA analyzed empirical data for models that were offered 
in both 2WD and AWD versions to quantify the average increase in 
tailpipe emissions due to addition of AWD for an otherwise identical 
vehicle model.
---------------------------------------------------------------------------

    \401\ We use the term AWD to include all types of four-wheel 
drive systems, consistent with SAE standard J1952.
---------------------------------------------------------------------------

    The light truck classification consists of crossovers (ranging from 
compact up through large crossovers), sport utility vehicles and pickup 
trucks. Many crossover vehicles and SUVs exhibit similar towing 
capability between their 2WD and AWD versions (there are some 
exceptions in cases where AWD is packaged with a larger more powerful 
engine than the base 2WD version). However, full size pickup trucks are 
the light-duty market segment with the most towing and hauling 
capability. The purpose of maintaining a unique truck curve is centered 
around accounting for the utility of these vehicles in particular.
    EPA is therefore proposing that the truck curve be based on the car 
curve (to represent the base utility across all vehicles for carrying 
people and their light cargo), but with the additional allowance of 
increased utility that distinguishes these vehicles used for more work-
like activity. EPA determined a relationship between gross combined 
weight rating (GCWR) (which combines the cumulative utility for hauling 
and towing to a vehicle's curb weight) and required engine torque. EPA 
then used its ALPHA model to predict how the tailpipe emissions at 
equivalent test weight (ETW) (curb weight + 300 pounds) would increase 
as a function of increased utility (GCWR) based on required engine 
torque and assumed modest increases in vehicle weight and road loads 
commensurate with a more tow-capable vehicle.
    EPA also assessed the relative magnitude of tow rating across the 
light truck fleet as a function of footprint. Vehicles with the 
greatest utility are full size pickup trucks, while light trucks with 
the least utility tend to be the smaller crossovers, with an increased 
tow or haul rating near zero. As a result, EPA proposes a simple offset 
for the truck curve, compared to the car curve, that increases with 
footprint.
    The offsets for AWD and utility were then scaled as a function of 
the nominal fleet-wide BEV penetrations anticipated to be achieved 
under the proposed stringency levels. For example, in our feasibility 
assessment we would project approximately 50 percent BEV penetration on 
average across the fleet by MY 2030 and thus, the AWD offset and the 
utility-based offset for the MY 2030 were each multiplied by 50 percent 
to reflect the share of the new vehicle sales that are projected to 
remain as ICE vehicles for that year.
    In summary, the truck curve is, mathematically, the sum of the 
scaled AWD and utility-based offsets to the car curve. A more thorough 
description of the truck curve as it relates to the car curve, and a 
discussion of the empirical and modeling data used in developing these 
offsets is presented in DRIA Chapter 1.1.3.2. EPA solicits comments on 
the proposed changes to the shape of the footprint curves, including 
the flattening of the car curve and our approach for deriving the truck 
curve from the car curve.
iii. How did EPA determine the proposed cutpoints for the footprint 
standards curves?
    The cutpoints are defined as the footprint boundaries (low and 
high) within which the sloped portion of the footprint curve resides. 
Above the high, and below the low, cutpoints, the curves are flat. The 
rationale for the setting of the original cutpoints for the 2017-2025 
rule was based on analysis of the distribution of vehicle footprint for 
the 2008 fleet and is discussed in the 2012

[[Page 29236]]

proposal \402\ and the Technical Support Document (TSD).\403\
---------------------------------------------------------------------------

    \402\ Preamble, II.C.6.a,b.
    \403\ 2017-2025 TSD.
---------------------------------------------------------------------------

    EPA is proposing to increase the lower cutpoint for the car and 
truck curves by 1 square foot per year from MY 2027 through MY 2030 
from 41 to 45 square feet. This will provide slightly less stringent 
standards for the smallest vehicles and may encourage more vehicle 
model offerings by manufacturers of these vehicles, which are already 
among the cleanest vehicles and which may be more accessible to lower-
income households. At a minimum, EPA believes the structure of the 
footprint standards should not disincentivize manufacturers from 
offering these smallest vehicles, as the continuation of offerings in 
this segment is an important affordability consideration.
    EPA is also proposing to gradually reduce the upper cutpoint for 
trucks, which will be 74.0 square feet starting in 2023 through 2026, 
and then decreasing by 1.0 square foot per year from MY 2027 through MY 
2030 (down to 70.0 square feet by MY 2030). As the upper cutpoint for 
trucks has increased from 66.0 square feet in 2016 to 69.0 square feet 
in 2020, we have witnessed a corresponding trend towards larger full 
size pickup trucks which are subject to less stringent CO2 
targets. The proposed MY 2030 upper truck cutpoint of 70.0 square feet 
(consistent with the sales-weighted average footprint of current full-
size pickups) is intended to help ensure no loss of emissions 
reductions in the future through upsizing. However, we do not view the 
cutpoints as a primary driver for significant additional emissions 
reductions beyond those achieved by the year-over-year change in the 
curves. Both the truck size trend and an analysis of truck footprint 
vs. CO2 are detailed in DRIA Chapter 1.3. The upper cutpoint 
for cars (56 feet) will remain unchanged.
    EPA requests comments on the proposed cutpoints and may consider 
different cutpoints based on comments in the final rule.
iv. What are the proposed light-duty vehicle CO2 standards?
a. What CO2 footprint standards curves is EPA proposing?
    EPA is proposing separate car and light truck standards--that is, 
vehicles defined as passenger vehicles (``cars'') would have one set of 
footprint-based standards curves, and vehicles defined as light trucks 
would have a different set.\404\ In general, for a given footprint, the 
CO2 g/mile target \405\ for trucks is higher than the target 
for a car with the same footprint. The curves are described 
mathematically in EPA's regulations by a family of piecewise linear 
functions (with respect to vehicle footprint) that gradually and 
continually ramp down from the MY 2026 curves established in the 2021 
rule. EPA's proposed minimum and maximum footprint targets and the 
corresponding cutpoints are provided for cars and trucks, respectively, 
in Table 26 and Table 27 for MYs 2027-2032 along with the slope and 
intercept defining the linear function for footprints falling between 
the minimum and maximum footprint values. For footprints falling 
between the minimum and maximum, the targets are calculated as follows: 
Slope x Footprint + Intercept = Target.
---------------------------------------------------------------------------

    \404\ See 49 CFR part 523. Generally, passenger cars include 
cars and smaller crossovers and SUVs, while the truck category 
includes larger crossovers and SUVs, minivans, and pickup trucks.
    \405\ Because compliance is based on a sales-weighting of the 
full range of vehicles in a manufacturer's car and truck fleets, the 
foot-print based CO2 emission levels of specific vehicles 
within the fleet are referred to as targets, rather than standards.

                                         Table 26--Proposed Footprint-Based Standard Curve Coefficients for Cars
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2027            2028            2029            2030            2031            2032
--------------------------------------------------------------------------------------------------------------------------------------------------------
MIN CO2 (g/mi)..........................................           130.9           114.1            96.9            89.5            81.2            71.8
MAX CO2 (g/mi)..........................................           139.8           121.3           102.5            94.2            85.5            75.6
Slope (g/mi/ft2)........................................            0.64            0.56            0.47            0.43            0.39            0.35
Intercept (g/mi)........................................           104.0            90.2            76.3            70.1            63.6            56.2
MIN footprint (ft2).....................................              42              43              44              45              45              45
MAX footprint (ft2).....................................              56              56              56              56              56              56
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                     Table 27--Proposed Footprint-Based Standard Curve Coefficients for Light Trucks
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2027            2028            2029            2030            2031            2032
--------------------------------------------------------------------------------------------------------------------------------------------------------
MIN CO2 (g/mi)..........................................           133.0           117.5           101.0            94.4            85.6            75.7
MAX CO2 (g/mi)..........................................           212.3           181.7           151.5           137.3           124.5           110.1
Slope (g/mi/ft2)........................................            2.56            2.22            1.87            1.72            1.56            1.38
Intercept (g/mi)........................................            25.6            22.2            18.7            17.2            15.6            13.8
MIN footprint (ft2).....................................              42              43              44              45              45              45
MAX footprint (ft2).....................................              73              72              71              70              70              70
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Figure 8 and Figure 9 show the car and truck curves, respectively, 
for MY 2027 through MY 2032. Included for reference is the original MY 
2026 curve for each. However, to compare tailpipe stringency between MY 
2026 with the proposed standards, it was necessary to adjust the MY 
2026 curve to reflect the proposed reduction in allowable AC and off-
cycle credits \406\ effective in MY 2027. In the figures, the adjusted 
MY 2026 curve has been increased by the amount of the total credits 
reduced from MY 2026 to MY 2027. The magnitude of this adjustment is 
calculated in Table 28.
---------------------------------------------------------------------------

    \406\ As proposed, AC efficiency and off-cycle credits are only 
eligible to ICE vehicles for MY 2027 and beyond. The AC and off-
cycle credits in Table 28 for MY 2027 reflect scaling of a projected 
reduced number of ICE vehicles.

[[Page 29237]]



                          Table 28--Off-Cycle and Air Conditioning (AC) Credit Adjustments Made To Normalize MY 2026 Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         MY 2026 (no action)                     MY 2027 (proposed)               2026
                          Reg class                           -------------------------------------------------------------------------------- Adjust g/
                                                               Off-cycle   AC eff  AC refrig   Total   Off-cycle   AC eff  AC refrig   Total       mi
--------------------------------------------------------------------------------------------------------------------------------------------------------
Car..........................................................       10.0      5.0       13.8     28.8        6.0      3.0          0      9.0       19.8
Truck........................................................       10.0      7.2       17.2     34.4        6.0      4.3          0     10.3       24.1
--------------------------------------------------------------------------------------------------------------------------------------------------------

BILLING CODE 6560-50-P
[GRAPHIC] [TIFF OMITTED] TP05MY23.011


[[Page 29238]]


[GRAPHIC] [TIFF OMITTED] TP05MY23.012

    As discussed in Section III.B.2.ii, the slope of the car curve is 
significantly flatter in 2027 and continues to flatten progressively 
each year through 2032. The truck curve, largely driven by the 
allowance for towing utility, has a similar shape as in past 
rulemakings although its slope also flattens progressively each year 
from 2027 through 2032.
b. What fleet-wide CO2 emissions levels correspond to the 
standards?
    EPA is proposing more stringent standards for MYs 2027-2032 that 
are projected to result in an industry-wide average target for the 
light-duty fleet of 82 g/mile of CO2 in MY 2032. The 
projected average annual decrease in combined industry average targets 
from the current standards in MY 2026 to the new standards in MY 2032 
is 12.8 percent per year. Compared to past rulemakings the annual 
percentage reductions are significantly higher; however, EPA's 
feasibility assessments in past rulemakings were predominantly based on 
ICE-based technologies that provided incremental tailpipe GHG 
reductions. Since then, advancements in BEV technology and the 
increasing feasibility of BEVs as an available and reasonable-cost 
compliance technology have changed the magnitude of the emissions 
reductions that will be achievable during the timeframe of this 
rulemaking compared to prior rules. The combination of economic 
incentives provided in the IRA and the auto manufacturers' stated plans 
for producing significant volumes of zero and near-zero emission 
vehicles in the timeframe of this rule makes it possible for EPA to 
propose standards at a level of stringency greater than was feasible in 
past rules. While tailpipe emissions controls for criteria pollutants 
from conventional ICE-based vehicles can have effectiveness values 
greater than 90 percent under certain circumstances, electrification 
provides 100 percent effectiveness under all operating and 
environmental conditions. This is nearly two orders of magnitude more 
effective than the historical improvements in GHG emission reductions.
    EPA is not reopening its current approach of having separate 
standards for cars and light trucks under existing program definitions. 
The 82 g/mile estimated industry-wide target for MY 2032 noted in the 
previous paragraph is based on EPA's current fleet mix projections for 
MY 2032 (approximately 40 percent cars and 60 percent trucks, assuming 
only slight variations from MY 2026). As is the nature of attribute-
based standards, the final fleet average standards for each 
manufacturer ultimately will depend on each manufacturer's actual 
rather than projected production in each MY from MY 2027 to MY 2032 
under the sales-weighted footprint-based standard curves for the car 
and truck regulatory classes. Figure 10 shows the projected industry-
average CO2 targets based on projected fleet mix through MY 
2032.

[[Page 29239]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.013

BILLING CODE 6560-50-C
    Prior EPA standards have been based in part on EPA's projection of 
average industry wide CO2-equivalent emission reductions 
from AC improvements, where the footprint curves were made numerically 
more stringent by an amount equivalent to this projection of AC 
refrigerant leakage credits. As discussed in Section III.B.5-6, EPA is 
proposing to end refrigerant-based credits in MY 2027, to limit off-
cycle credits and AC efficiency credits to vehicles equipped with an IC 
engine, and to phase-out off-cycle credits.
    Table 29 shows overall fleet average target levels for both cars 
and light trucks that are projected for the proposed standards. A more 
detailed manufacturer by manufacturer break down of the projected 
CO2 targets and achieved levels is provided in DRIA Chapter 
13. The actual fleet-wide average g/mile level that would be achieved 
in any year for cars and trucks will depend on the actual production of 
vehicles for that year, as well as the use of the various credit and 
averaging, banking, and trading provisions. For example, in any year, 
manufacturers would be able to generate credits from cars and use them 
for compliance with the truck standard, or vice versa. In DRIA Chapter 
9.6, EPA discusses the year-by-year estimate of GHG emissions 
reductions that are projected to be achieved by the proposed standards.
    In general, the structure of the proposed standards allows an 
incremental phase-in to the MY 2032 level and reflects consideration of 
the appropriate lead time for manufacturers to take actions necessary 
to meet the proposed standards. The technical feasibility of the 
standards is discussed in Section IV.A and in the DRIA. Note that MY 
2032 is the final MY in which the proposed CO2 standards 
would become more stringent. The MY 2032 standards would remain in 
place for later MYs, unless and until revised by EPA in a future 
rulemaking for those MYs.
    EPA is requesting comments on whether the standards should increase 
in stringency beyond MY 2032. EPA seeks comment on whether the 
trajectory (i.e., the levels of year-over-year stringency rates) of the 
proposed standards for MYs 2027 through 2032 should be extended through 
2033, 2034 or 2035, or whether EPA should consider additional 
approaches to the trajectory of any standards that were to continue 
increasing in stringency beyond 2032. EPA is interested in 
stakeholders' feedback on any additional data and information that 
could inform EPA's consideration of potential standards beyond MY 2032. 
This request for comment on standards beyond MY 2032 is not specific to 
the light-duty GHG program but also for the medium-duty GHG program and 
the criteria pollutant standards as well.
    EPA has estimated the overall fleet-wide CO2 emission 
levels that correspond with the attribute-based footprint standards, 
based on projections of the composition of each manufacturer's fleet in 
each year of the program. As shown in Table 29, for passenger cars, the 
proposed MY 2032 standards are projected to result in CO2 
fleet-average levels of 73 g/mi in MY 2032, which is 52 percent lower 
than that of the (adjusted) MY 2026 standards. For trucks, the 
projected MY 2032 fleet average CO2 target is 89 g/mi which 
is 57 percent lower than that of the (adjusted) MY 2026 standards. The 
projected MY 2032 combined fleet target

[[Page 29240]]

of 82 g/mi is 56 percent lower than that of the (adjusted) MY 2026 
standards.
    The derivation of the 82 g/mile estimate is described in Section 
IV.D. EPA aggregated the estimates for individual manufacturers based 
on projected production volumes into the fleet-wide averages for cars, 
trucks, and the entire fleet.\407\ The combined fleet estimates are 
based on a projected fleet mix of cars and trucks that varies over the 
MY 2027-2032 timeframe.
---------------------------------------------------------------------------

    \407\ Due to rounding during calculations, the estimated fleet-
wide CO2 levels may vary by plus or minus 1 gram.
    \408\ MY 2026 targets are provided for reference, based on for 
fleet mix (40% cars and 60% trucks) and then adjusted (upward) by 20 
g/mi for cars, 24 g/mi for trucks, and 22 g/mi total for the fleet, 
to normalize as a point of comparison to reflect the reduced 
available off-cycle and AC credits as proposed for MY 2027.
    \409\ Fleet CO2 targets are calculated based on 
projected car and truck share. Truck share for the fleet is expected 
at 60% for MY 2026-2029, and 59% for MY 2030 and later.

         Table 29--Estimated Fleet-Wide CO2 Targets Corresponding to the Proposed Standards \408\ \409\
----------------------------------------------------------------------------------------------------------------
                                                                   Cars CO2 (g/   Trucks CO2 (g/   Fleet CO2 (g/
                           Model year                                  mile)           mile)           mile)
----------------------------------------------------------------------------------------------------------------
2026 adjusted...................................................             152             207             186
2027............................................................             134             163             152
2028............................................................             116             142             131
2029............................................................              99             120             111
2030............................................................              91             110             102
2031............................................................              82             100              93
2032 and later..................................................              73              89              82
----------------------------------------------------------------------------------------------------------------

    EPA is proposing standards that set increasingly stringent levels 
of CO2 control from MY 2027 though MY 2032. Applying the 
CO2 footprint curves applicable in each MY to the vehicles 
(and their footprint distributions) expected to be sold in each MY 
produces progressively more stringent estimates of fleet-wide 
CO2 emission standards. EPA believes manufacturers can 
achieve the proposed standards' important CO2 emissions 
reductions through the application of available control technology at 
reasonable cost, as well as the use of program averaging, credit 
banking and trading, and optional air conditioning efficiency credits 
and off-cycle credits, as available.
    While EPA believes the proposed standards are appropriate for 
light-duty vehicle manufacturers on an overall industry basis, we 
recognize that some companies have made public announcements for plans 
for zero emission vehicle product launches (as discussed in Section 
I.A.2.ii) that may lead to CO2 emissions even lower than 
those projected under the proposed standards. The existing program's 
averaging, banking, and trading provisions allow manufacturers to earn 
credits for overcompliance with the standards that can be banked for 
the company's future use (up to five model years) or traded to other 
companies (as discussed further in Section III.B.4). Beyond these 
credit banking and trading provisions, EPA is interested in public 
comments on whether there could be additional ways in which the program 
could provide for alternative pathways that could encourage 
manufacturers to achieve even lower CO2 emissions earlier in 
the program; for example, by producing higher volumes of zero-emission 
vehicles earlier than would be necessitated under the proposed 
standards. Such an alternative pathway could be one way to recognize 
the environmental benefits of earlier introductions of even greater 
volumes of the cleanest vehicles. EPA seeks public comment on the 
potential merits of such an alternative pathway concept, whether it 
would be advantageous for both the GHG as well as the criteria 
pollutant standards program, and how it might be structured.
    The existing program includes several provisions that we are not 
reopening and so would continue during the implementation timeframe of 
this proposed rule. Consistent with the requirement of CAA section 
202(a)(1) that standards be applicable to vehicles ``for their useful 
life,'' the proposed MY 2027-2032 vehicle standards will apply for the 
useful life of the vehicle.\410\ EPA is proposing one test procedure 
change and that is the use of Tier 3 test fuel to demonstrate GHG 
compliance as described in Section III.B.2.iv.c; criteria pollutant 
standard demonstration already require the use of Tier 3 fuel. No other 
changes are proposed to the test procedures over which emissions are 
measured and weighted to determine compliance with the GHG standards. 
These procedures are the Federal Test Procedure (FTP or ``city'' test) 
and the Highway Fuel Economy Test (HFET or ``highway'' test). While EPA 
may consider requiring the use of test procedures other than the 2-
cycle test procedures in a future rulemaking, EPA is not considering 
any test procedure changes in this rulemaking.
---------------------------------------------------------------------------

    \410\ The GHG emission standards apply for a useful life of 10 
years or 120,000 miles for LDVs and LLDTs and 11 years or 120,000 
miles for HLDTs and MDPVs. See 40 CFR 86.1805-17.
---------------------------------------------------------------------------

    EPA has analyzed the feasibility of achieving the proposed 
CO2 standards through the application of currently available 
technologies, based on projections of the technology and technology 
penetration rates to reduce emissions of CO2, during the 
normal redesign process for cars and trucks, taking into account the 
effectiveness and cost of the technology. The results of the analysis 
are discussed in detail in Section IV, and in the DRIA. EPA also 
presents the overall estimated costs and benefits of the proposed car 
and truck CO2 standards in Section VIII.
c. What test fuel is EPA proposing?
    Within the structure of the footprint-based GHG standards, EPA is 
also proposing that gasoline powered vehicle compliance with the 
proposed standards be demonstrated on Tier 3 test fuel. The current GHG 
standards for light-duty gasoline vehicles are set on the required use 
of Indolene, or Tier 2 test fuel. Tier 3 test fuel more closely 
represents the typical market fuel available to consumers in that it 
contains 10 percent ethanol. EPA proposed an adjustment factor to allow 
demonstration of compliance with the existing GHG standards using Tier 
3 test fuel but has not yet adopted those changes (85 FR 28564, May 13, 
2020). This proposal does not include an adjustment factor for tailpipe 
GHG emissions but rather requires manufacturers to test on Tier 3 test 
fuel and use the resultant tailpipe emissions directly in their 
compliance calculation. Such an adjustment factor is not required 
because the technology penetrations, feasibility, and cost

[[Page 29241]]

estimates in this proposal are based on compliance using Tier 3 test 
fuel.
    Both the current and proposed criteria pollutant standards were set 
based on vehicle performance with Tier 3 test fuel; as a result, 
manufacturers currently use two different test fuels to demonstrate 
compliance with GHG and criteria pollutant standards. Setting new GHG 
standards based on Tier 3 test fuel is intended to address concern for 
test burden related to using two different test fuels.
    The difference in GHG emissions between the two fuels is small but 
significant. EPA estimates that testing on Tier 3 test fuel will result 
in about 1.5 percent lower CO2 emissions.\411\ Because this 
difference in GHG emissions between the two fuels is significant in the 
context of measuring compliance with existing GHG standards, but small 
relative to the change in stringency of the proposed GHG standards, and 
because the cost of compliance on Tier 3 test fuel is reflected in this 
analysis for this proposal, EPA believes that this rulemaking and the 
associated proposed new GHG standards create an opportune time to shift 
compliance to Tier 3 fuel.
---------------------------------------------------------------------------

    \411\ EPA-420-R-18-004, ``Tier 3 Certification Fuel Impacts Test 
Program,'' January 2018.
---------------------------------------------------------------------------

    EPA is proposing to apply the change from Indolene to Tier 3 test 
fuel for demonstrating compliance with GHG standards starting in model 
year 2027. Manufacturers may optionally carry-over Indolene-based for 
test results for model years 2027 through 2029. We accordingly propose 
to allow manufacturers to continue to rely on the interim provisions 
adopted in 40 CFR 600.117 through model year 2029. These interim 
provisions address various testing concerns related to the arrangement 
for using different test fuels for different purposes.
    For manufacturers that rely on testing with Indolene in model years 
2027 through 2029, we propose to allow manufacturers to use good 
engineering judgment to apply a downward adjustment of 1.0166 percent 
to GHG emission test results as a correction to correlate with test 
results that would be expected when testing with Tier 3 test fuel. We 
separately proposed to apply an analogous correction for the opposite 
arrangement--testing with Tier 3 test fuel to demonstrate compliance 
with a GHG standard referenced to Indolene test fuel (85 FR 28564; May 
13, 2020). We did not separately finalize the provisions in that 
proposed rule.
    Similar considerations apply for measuring fuel economy, both to 
meet Corporate Average Fuel Economy requirements and to determine 
values for fuel economy labeling. EPA is proposing to apply the 
corrections described in the 2020 proposal. Those changes include: (1) 
New test fuel specifications for specific gravity and carbon weight 
fraction to properly calculate emissions in a way that accounts for the 
fuel properties of ethanol, (2) a revised equation for calculating fuel 
economy that uses an ``R-factor'' of 0.81 to account for the greater 
energy content of Indolene, and (3) amended instructions for 
calculating fuel economy label values based on 5-cycle values and 
derived 5-cycle values. Our overall goal is for manufacturers to 
transition to fuel economy testing with Tier 3 test fuel on the same 
schedule as described for demonstrating compliance with GHG standards 
in the preceding paragraphs. We will be reevaluating comments received 
on the 2020 proposal as well as the comments for this proposal and 
considering if any corrections and adjustments are required, with any 
appropriate modifications based on the comments received and on the 
changing circumstances reflected in the current proposed rule for 
setting new standards for MY 2027 and later vehicles. The proposed 
change to Tier 3 test fuel impacts the demonstration of compliance with 
GHG and fuel economy standards and the fuel economy label. In addition, 
several vehicle manufacturers have requested to move to Tier 3 test 
fuel in advance of the MY 2027 start of this proposed program.
    For the GHG compliance program, we are proposing to evaluate GHG 
compliance with standards that are set using Tier 3 fuel starting in MY 
2027; therefore, any vehicles that continue to be tested on Indolene, 
would need to have the results adjusted to be consistent with results 
on Tier 3 fuel. For the CAFE fuel economy standards, we are proposing 
to continue to evaluate fuel economy compliance with standards that are 
established on Indolene; therefore, any vehicles that are tested on 
Tier 3 fuel would need to have the results adjusted to be consistent 
with results on Indolene. Similar to the CAFE fuel economy standards, 
we are proposing to keep the fuel economy label consistent with the 
current program; therefore, any vehicles that are tested on Tier 3 fuel 
would need to have the results adjusted to be consistent with results 
on Indolene.
    Supported by the data and analysis in the 2020 proposal, EPA 
proposes the following (Table 30) to address fuel-related testing and 
certification requirements through the transition to the proposed 
standards. Vehicle manufacturers may choose to test their vehicles with 
either Indolene or Tier 3 test fuel through MY 2029. Manufacturers must 
certify all vehicles to GHG standards using Tier 3 test fuel starting 
in MY 2027; however, manufacturers may continue to meet fuel economy 
requirements through MY 2029 for any appropriate vehicles based on 
carryover data from testing performed before MY 2027.

                                                             Table 30--Proposed Fuel-Related Testing and Certification Requirements
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                         GHG standards                                          Fuel economy standards                          Fuel economy and environment label values
                 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Test fuel                                                                                                            MY 2030 and                                              MY 2030 and
                      Pre-MY 2027        MYs 2027-2029    MY 2030 and beyond      Pre-MY 2027        MYs 2027-2029          beyond          Pre-MY 2027       MYs 2027-2029          beyond
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Indolene........  No adjustment       Carry-over test     Not allowed.......  No adjustment       Carry-over results  Not allowed......  No adjustment      Carry-over         Not allowed.
                   required.           results only;                           required.           only; no                               required.          results only; no
                                       divide test                                                 adjustment                                                adjustment
                                       results by 1.0166.                                          required.                                                 required.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Tier 3..........  Multiply test       No adjustment required
                   results by 1.0166.
                  Apply revised FE equation proposed in 2020 rule
                  Apply revised FE equation proposed in 2020 rule. Apply
                   proposed CO2 adjustment (multiply test results by
                   1.0166).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 29242]]

    EPA requests comment regarding the implementation of this test fuel 
change and whether the change to Tier 3 test fuel should apply to GHG 
standards only or to GHG standards, fuel economy standards and fuel 
economy and environmental label combined, as described in Table 30.
3. Proposed Medium-Duty Vehicle GHG Standards
i. What CO2 standards curves is EPA proposing?
    Medium-duty vehicles (8,501 to 14,000 pounds GVWR) that are not 
categorized as MDPVs utilize a ``work-factor'' metric for determining 
GHG targets. Unlike the light-duty attribute metric of footprint, which 
is oriented around a vehicle's usage for personal transportation, the 
work-factor metric is designed around work potential for commercially 
oriented vehicles and accounts for a combination of payload, towing and 
4-wheel drive equipment.
    Our proposed GHG standards for MDVs are entirely chassis-
dynamometer based and continue to be work-factor-based as with the 
previous heavy-duty Phase 2 standards. The standards also continue to 
use the same work factor (WF) and GHG target definitions (81 FR 73478, 
October 25, 2016). However, for MDVs above 22,000 pounds GCWR, we are 
proposing to limit the GCWR input into the work factor equation to 
22,000 pounds GCWR in order to prevent increases in the GHG emissions 
target standards that are not fully captured within the loads and 
operation reflected during chassis dynamometer GHG emissions testing. 
The testing methodology does not directly incorporate any GCWR (i.e., 
trailer towing) related direct load or weight increases; however, they 
are reflected in the higher target standards when calculating the GHG 
targets using GCWR values above 22,000 pounds Without some limiting 
``cap,'' the resulting high target standards relative to actual 
measured performance are unsupported and may generate windfall 
compliance credits for higher GCWR ratings.

CO2e Target (g/mi) = [a x WF] + b
WF = Work Factor = [0.75 x [Payload Capacity + xwd] + [0.25 x Towing 
Capacity]
Payload Capacity = GVWR (lb.)-Curb Weight (lb.)
xwd = 500 lb. if equipped with 4-wheel-drive, otherwise 0 lb.
Towing Capacity = GCWR (lb.)-GVWR (lb.)

and with a and b as defined in Table 31:

      Table 31--Proposed Coefficients for MDV Target GHG Standards
------------------------------------------------------------------------
               Model year                        a               b
------------------------------------------------------------------------
2027....................................          0.0348             268
2028....................................          0.0339             261
2029....................................          0.0310             239
2030....................................          0.0280             216
2031....................................          0.0251             193
2032....................................          0.0221             170
------------------------------------------------------------------------

    The MDV target GHG standards are compared to the current HD Phase 2 
gasoline standards in Figure 11. Note that the standards continue 
beyond the data markers shown in Figure 11. The data markers within the 
figure reflect the approximate transition from light-duty trucks to 
MDVs at a WF of approximately 3,000 pounds and the approximate location 
of 22,000 pounds GCWR in work factor space (e.g., a WF of approximately 
5,500 pounds). Beginning in 2027, the MDV GHG program moves gasoline, 
diesel, and PEV MDVs to fuel-neutral standards, i.e., identical 
standards regardless of the fuel or energy source used. We consider 
these standards feasible taking into consideration the opportunities 
for increased MDV electrification, primarily within the van segment.
    The smaller displacement diesel engines remaining within the MDV 
program are currently within the van segment and are all derived from 
passenger car or other light-duty applications. The gasoline MDVs have 
also historically used engines derived from light-duty applications. 
The larger displacement (6L and above) diesel engines in Class 2b and 
Class 3 applications all have GCWR above (in some cases, significantly 
above) 22,000 pounds and were not derived from light-duty applications.
BILLING CODE 6560-50-P

[[Page 29243]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.014

BILLING CODE 6560-50-C
    The agency seeks comment on the proposed target standards for MDV 
for the different model years and the approach of a single target for 
all propulsion fuels including zero emission technologies. The agency 
also seeks comment on the appropriateness of the proposed GCWR input 
limit to the work factor equation to more accurately capture the work 
performed as tested.
ii. What fleet-wide CO2 emissions levels correspond to the 
standards?
    Table 32 shows overall fleet average target levels for both medium-
duty vans and pickup trucks that are projected for the proposed 
standards. A more detailed break-down of the projected CO2 
targets and achieved levels is provided in DRIA Chapter 13. The actual 
fleet-wide average g/mile level that would be achieved in any year for 
medium-duty vans and pickup trucks will depend on the actual production 
of vehicles for that year, as well as the use of the credit averaging, 
banking, and trading provisions.

                      Table 32--Projected Targets for Proposed MDV Standards, by Body Style
----------------------------------------------------------------------------------------------------------------
                                                                                 Pickups CO2 (g/ Combined CO2 (g/
                           Model year                             Vans CO2 (g/        mile)           mile)
                                                                      mile)
----------------------------------------------------------------------------------------------------------------
2027...........................................................             393             462              438
2028...........................................................             379             452              427
2029...........................................................             345             413              389
2030...........................................................             309             374              352
2031...........................................................             276             331              312
2032 and later.................................................             243             292              275
----------------------------------------------------------------------------------------------------------------

iii. MDV Incentive Multipliers
    In HD GHG Phase 1, EPA provided advanced technology credits for 
heavy-duty vehicles and engines, including for MDVs. EPA included 
incentive multipliers in Phase 1 for hybrid powertrains, all-electric 
vehicles, and fuel cell electric vehicles to promote the implementation 
of advanced technologies that were not included in our technical basis 
of the feasibility of the Phase 1 emission standards (see 40 CFR 
86.1819-14(k)(7), 1036.150(h), and 1037.150(p)). For MDV, the HD GHG 
Phase 2 CO2 emission standards that followed Phase 1 were 
premised on the use of mild hybrid powertrains and we removed mild 
hybrid powertrains as an option for advanced technology credits. At the 
time of the HD GHG Phase 2 final rule, we believed the HD GHG Phase 2 
standards themselves provided sufficient incentive to develop those 
specific technologies. However, none of the HD GHG Phase 2 standards 
for MDV were based on projected utilization of the other, even more-
advanced Phase 1 advanced credit technologies (e.g., plug-in hybrid 
electric vehicles, all-electric vehicles, and fuel cell electric 
vehicles). For HD GHG Phase 2, EPA promulgated advanced technology 
credit multipliers

[[Page 29244]]

through MY 2027, as shown in Table 33 (see also 40 CFR 1037.150(p)).

Table 33--Advanced Technology Multipliers in Existing HD GHG Phase 2 for
                          MYs 2021 Through 2027
------------------------------------------------------------------------
                      Technology                           Multiplier
------------------------------------------------------------------------
Plug-in hybrid electric vehicles.....................                3.5
All-electric vehicles................................                4.5
Fuel cell electric vehicles..........................                5.5
------------------------------------------------------------------------

    As stated in the HD GHG Phase 2 rulemaking, our intention with 
these multipliers was to create a meaningful incentive for those 
manufacturers considering developing and applying these qualifying 
advanced technologies into their vehicles. The multipliers under the 
existing program are consistent with values recommended by CARB in 
their HD GHG Phase 2 comments.\412\ CARB's values were based on a cost 
analysis that compared the costs of these advanced technologies to 
costs of other GHG-reducing technologies. CARB's cost analysis showed 
that multipliers in the range we ultimately promulgated as part of the 
HD GHG Phase 2 final rule would make these advanced technologies more 
competitive with the other GHG-reducing technologies and could allow 
manufacturers to more easily generate a viable business case to develop 
these advanced technologies for HD vehicles and bring them to market at 
a competitive price.
---------------------------------------------------------------------------

    \412\ Letter from Michael Carter, CARB, to Gina McCarthy, 
Administrator, EPA and Mark Rosekind, Administrator, NHTSA, June 16, 
2016. EPA Docket ID EPA-HQ-OAR-2014-0827 attachment 2.
---------------------------------------------------------------------------

    In establishing the multipliers in the HD GHG Phase 2 final rule, 
we also considered the tendency of the HD sector to lag behind the 
light-duty sector in the adoption of a number of advanced technologies. 
There are many possible reasons for this, such as:

--HD vehicles are more expensive than light-duty vehicles, which makes 
it a greater monetary risk for purchasers to invest in new 
technologies.
--These vehicles are primarily work vehicles, which makes predictable 
reliability of existing technologies and versatility important.
--Sales volumes are much lower for HD vehicles, especially for some 
specialized vehicles applications.

    At the time of the HD GHG Phase 2 rulemaking, we concluded that as 
a result of factors such as these, and the fact that adoption rates for 
the aforementioned advanced technologies in HD vehicles were 
essentially non-existent in 2016, it seemed unlikely that market 
adoption of these advanced technologies would grow significantly within 
the next decade without additional incentives.
    As we stated in the HD GHG Phase 2 final rule preamble, our 
determination that it was appropriate to provide large multipliers for 
these advanced technologies, at least in the short term, was because 
these advanced technologies have the potential to lead to very large 
reductions in GHG emissions and fuel consumption, and advance 
technology development substantially in the long term. However, because 
the credit multipliers are so large, we also stated that they should 
not be made available indefinitely. Therefore, they were included in 
the HD GHG Phase 2 final rule as an interim program continuing only 
through MY 2027.
    The HD GHG Phase 2 advanced technology credit multipliers represent 
a tradeoff between incentivizing new advanced technologies that could 
have significant benefits well beyond what is required under the 
standards and providing credits that do not reflect real world 
reductions in emissions, which could allow higher emissions from 
credit-using engines and vehicles. At low adoption levels, we believe 
the balance between the benefits of encouraging additional 
electrification as compared to any negative emissions impacts of 
multipliers would be appropriate and would justify maintaining the 
current advanced technology multipliers. At the time we finalized the 
HD GHG Phase 2 program in 2016, we balanced these factors based on our 
estimate that there would be very little market penetration of ZEVs in 
the heavy-duty market in the MY 2021 to MY 2027 timeframe, during which 
the advanced technology credit multipliers would be in effect. 
Additionally, the primary technology packages in our technical 
assessment of the feasibility of the HD GHG Phase 2 standards did not 
include any ZEVs.
    In our assessment conducted during the development of HD GHG Phase 
2, we found only one manufacturer had certified HD BEVs through MY 
2016, and we projected ``limited adoption of all-electric vehicles into 
the market'' for MYs 2021 through 2027.\413\ However, as discussed in 
Section IV, we are now in a transitional period where manufacturers are 
actively increasing their PHEV and BEV vehicle offerings and are being 
further supported through the IRA tax credits, and we expect this 
growth to continue through the remaining timeframe for the HD GHG Phase 
2 program and into the time frame of the proposed program.
---------------------------------------------------------------------------

    \413\ 81 FR 75300 (October 25, 2016).
---------------------------------------------------------------------------

    While we did anticipate some growth in electrification would occur 
due to the credit incentives in the HD GHG Phase 2 final rule when we 
finalized the rule, we did not expect the level of innovation since 
observed, or the IRA or BIL incentives. Based on this new information, 
we believe the existing advanced technology multiplier credit levels 
for MDVs are no longer appropriate for maintaining the balance between 
encouraging manufacturers to continue to invest in new advanced 
technologies over the long term and potential emissions increases in 
the short term. We believe that, if left as is, the MDV multiplier 
credits may allow for backsliding of emission reductions expected from 
ICE vehicles for some manufacturers in the near term (i.e., the 
generation of excess credits which could delay the introduction of 
technology in the near or mid-term) as sales of advanced technology 
MDVs which can generate the incentive credit continue to increase. In 
light of the rapid increase in vehicle electrification in the MDV 
market, EPA proposes to remove the BEV, PHEV, and FCEV multipliers for 
MY 2027 (EPA is not proposing revisions or requesting comment in this 
proposed rulemaking on the Phase 2 multipliers for the vocational 
vehicle and tractor vehicle segments of the heavy-duty Phase 2 
program). We also request comment on phasing out the multipliers over 
multiple model years by revising the multipliers to reduce their 
magnitude for model years prior to MY 2027, for example for MYs 2025-
2026. We note that we did not rely on credits generated from credit 
multipliers in developing the proposed MDV GHG standards, nor did EPA 
assess the

[[Page 29245]]

impacts of the Phase 2 multipliers on our feasibility assessment. We 
request comment, including data & analysis, regarding the potential 
impact of Phase 2 MDV multipliers on our proposed standards in this 
action, and how EPA should consider such comments in the determining 
the continued appropriateness of the Phase 2 multipliers for MDVs.
4. Averaging, Banking, and Trading Provisions for GHG Standards
    Averaging, banking, and trading (ABT) is an important compliance 
flexibility that has long been built into various highway engine and 
vehicle programs (and nonroad engine and equipment programs) to support 
emissions standards that, through the introduction and application of 
new technologies, result in reductions in air pollution. EPA's first 
mobile source program to feature averaging was issued in 1983 and 
included averaging for diesel light-duty vehicles to provide 
flexibility in meeting new PM standards.\414\ EPA introduced 
NOX and PM averaging for highway heavy-duty vehicles in 
1985.\415\ EPA introduced credit banking and trading in 1990 with new 
more stringent highway heavy-duty NOX and PM standards to 
provide additional compliance flexibility for manufacturers.\416\ Since 
those early rules, EPA has included ABT in many programs across a wide 
range of mobile sources.\417\ For light-duty vehicles, EPA has included 
ABT in several criteria pollutant emissions standards rules including 
in the National Low Emissions Vehicle (NLEV) program,\418\ the Tier 2 
standards,\419\ and the Tier 3 standards.\420\ ABT has also been a key 
feature of all GHG rules for both light-duty and heavy-duty 
vehicles.\421\
---------------------------------------------------------------------------

    \414\ 48 FR 33456, July 21, 1983.
    \415\ 50 FR 30584, March 15, 1985.
    \416\ 55 FR 30584, July 26, 1990.
    \417\ We note that in upholding the first HD final rule that 
included averaging, the D.C. Circuit rejected petitioner's challenge 
that Congress meant to prohibit averaging in standards promulgated 
under section 202(a). NRDC v. Thomas, 805 F.2d 410, 425 (D.C. Cir. 
1986). In the 1990 Clean Act Amendments, Congress, noting NRDC v. 
Thomas, opted to let the existing law ``remain in effect,'' 
reflecting that ``[t]he intention was to retain the status quo,'' 
i.e., EPA's existing authority to allow averaging for standards 
under section 202(a). 136 Cong. Rec. 36,713, 1990 WL 1222468 at 
*1136 Cong. Rec. 35,367, 1990 WL 1222469 at *1.
    \418\ 62 FR 31192, June 6, 1997.
    \419\ 65 FR 6698, February 10, 2000.
    \420\ 79 FR 23414, April 28, 2014.
    \421\ The Federal Register citations for previous vehicle GHG 
rules are provided in Section III.A.2.
---------------------------------------------------------------------------

    ABT is important because it can help to address issues of 
technological feasibility and lead-time, as well as considerations of 
cost. In many cases, ABT resolves issues of lead-time or technical 
feasibility, enabling automakers to comply with standards that are more 
economically efficient and with less lead time. This provides important 
environmental benefits and at the same time it increases flexibility 
and reduces costs for the regulated industry. Furthermore, by 
encouraging automakers to exceed minimum requirements where possible, 
the ABT program encourages technological innovation, which makes 
further reductions in fleetwide emissions possible. The light-duty ABT 
program for GHG standards includes existing provisions initially 
established in the 2010 rule for how credits may be generated and used 
within the program.\422\ These provisions include credit carry-forward, 
credit carry-back (also called deficit carry-forward), credit transfers 
(within a manufacturer), and credit trading (across manufacturers). The 
MDV GHG program includes similar ABT provisions. EPA is explaining the 
ABT provisions of the GHG program for the public's convenience and 
information but is not proposing changes or reopening these provisions.
---------------------------------------------------------------------------

    \422\ 40 CFR 86.1865-12.
---------------------------------------------------------------------------

    Credit carry-forward refers to banking (saving) credits for future 
use, after satisfying any needs to offset prior MY debits within a 
vehicle category (car fleet or truck fleet). Credit carry-back refers 
to using credits to offset any deficit in meeting the fleet average 
standards that had accrued in a prior MY. A manufacturer may have a 
deficit at the end of a MY (after averaging across its fleet using 
credit transfers between cars and trucks)--that is, a manufacturer's 
fleet average emissions level may fail to meet the manufacturer's 
required fleet average standard for the MY, for a limited number of 
model years, as provided in the regulations. The CAA does not specify 
or limit the duration of such credit provisions. In previous rules, EPA 
chose to generally adopt 5-year credit carry-forward and 3-year credit 
carry-back provisions \423\ as a reasonable approach that maintained 
consistency between EPA's GHG and NHTSA CAFE regulatory 
provisions.\424\ While some stakeholders had suggested that light-duty 
GHG credits should have an unlimited credit life, EPA did not adopt 
that suggestion for the light-duty GHG program because it would pose 
enforcement challenges and could lead to some manufacturers 
accumulating large banks of credits that could interfere with the 
program's goal to develop and transition to progressively more advanced 
emissions control technologies in the future.
---------------------------------------------------------------------------

    \423\ Although the existing credit carry-forward and carry-back 
provisions generally remained in place for MY 2017 and later 
standards, EPA finalized provisions in the 2012 rule allowing all 
unused (banked) credits generated in MYs 2010-2015 (but not MY 2009 
early credits) to be carried forward through MY 2021. See 77 FR 
62788. In addition, in the 2021 rule, EPA adopted a targeted one-
year extension (6 years total carry-forward) of credit carry-forward 
for MY 2017 and 2018 credits. See 86 FR 74453.
    \424\ The EPCA/EISA statutory framework for the CAFE program 
limits credit carry-forward to 5 years and credit carry-back to 3 
years.
---------------------------------------------------------------------------

    Transferring credits in the GHG program refers to exchanging 
credits between the two averaging sets--passenger cars and light 
trucks--within a manufacturer. For example, credits accrued by 
overcompliance with a manufacturer's car fleet average standard can be 
used to offset debits accrued due to that manufacturer not meeting the 
truck fleet average standard in a given model year.\425\ MDVs are a 
separate averaging set and credits are not allowed to be transferred 
between vehicles meeting the light and medium-duty GHG standards due to 
the very different standards structure, vehicle testing differences 
(e.g., MDVs are tested at an adjusted loaded vehicle weight of vehicle 
curb weight plus half payload whereas light-duty vehicles are tested at 
an estimated test weight of curb weight plus 300 pounds) and 
marketplace competitiveness issues.\426\ This prohibition includes 
traded credits such that, once traded, credits may not be transferred 
between the light and medium-duty fleets. Finally, accumulated credits 
may be traded to another manufacturer. Credit trading has occurred on a 
regular basis in EPA's light-duty vehicle program.\427\ Manufacturers 
acquiring credits may offset credit shortfalls and bank credits for use 
toward future compliance within the carry-forward constraints of the 
program.
---------------------------------------------------------------------------

    \425\ There is a VMT factor included in the credit calculations 
such that light trucks generate and use more credits than passenger 
cars based on higher lifetime VMT projections for light trucks 
compared to passenger cars. The lifetime VMT used for passenger cars 
and light trucks are 195,264 and 225,865, respectively.
    \426\ Only a small subset of manufacturers produce both light 
and medium-duty vehicles and allowing credits to be transferred 
between the two categories could provide additional flexibility to 
those manufacturers not available to manufacturer of only light-duty 
vehicles.
    \427\ EPA provides general information on credit trades annually 
as part of its annual Automotive Trends and GHG Compliance Report. 
The latest report is available at: https://www.epa.gov/automotive-trends and in the docket for this rulemaking.

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

[[Page 29246]]

    The ABT provisions are an integral part of the vehicle GHG program, 
and the agency expects that manufacturers will continue to utilize 
these provisions into the future. EPA's annual Automotive Trends Report 
provides details on the use of these provisions in the GHG 
program.\428\ ABT allows EPA to consider standards more stringent than 
we would otherwise consider by giving manufacturers an important tool 
to resolve any potential lead time and cost issues. EPA is not 
proposing any revisions to the GHG program ABT provisions or reopening 
them.
---------------------------------------------------------------------------

    \428\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas 
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029, December 2022.
---------------------------------------------------------------------------

5. Proposed Vehicle Air Conditioning System Related Provisions
    EPA has included air conditioning (AC) system credits in its light-
duty GHG program since the initial program adopted in the 2010 rule. 
Although the use of AC credits has been voluntary, EPA has consistently 
adjusted the level of the CO2 standards downward, making 
them more stringent, to reflect the availability of the credits. 
Manufacturers opting not to use the AC credits would need to meet the 
standards through additional CO2 reductions. EPA is 
proposing to revise the AC credits program for light-duty vehicles in 
two ways. First, for AC system efficiency credits, EPA is proposing to 
limit the eligibility for voluntary credits for tailpipe CO2 
emissions control to ICE vehicles starting in MY 2027 (i.e., BEVs would 
not earn AC efficiency credits). Second, for AC refrigerant leakage 
control, EPA is proposing to remove the credit. EPA is also proposing 
to sunset the refrigerant-related provisions applicable to MDV 
standards. EPA requests comment on its proposed changes to the AC 
credit program.
i. Background on AC Credits in Current Programs
    There are two mechanisms by which AC systems contribute to the 
emissions of GHGs: Through leakage of hydrofluorocarbon refrigerants 
into the atmosphere (sometimes called ``direct emissions'') and through 
the consumption of fuel to provide mechanical power to the AC system 
(sometimes called ``indirect emissions'').\429\ When EPA established 
the current light-duty refrigerant credits in the 2012 rule, the most 
common refrigerant was hydrofluorocarbon (HFC) 134a which has a global 
warming potential of 1430. The high global warming potential of HFC-
134a, means that leakage of a gram of HFC134(a) would have 1430 times 
the global warming potential of a gram of CO2. Since the 
2012 rule, manufacturers have reduced the impacts of refrigerant 
leakage significantly by using systems that incorporate leak-tight 
components, or, ultimately, by using a refrigerant with a lower global 
warming potential. Manufacturers have steadily increased their use of 
low GWP refrigerant HFO-1234yf which has a GWP of 4, much lower than 
the GWP of the HFC refrigerant it replaces. The AC system also 
contributes to increased tailpipe CO2 emissions through the 
additional work required to operate the compressor, fans, and blowers. 
This additional power demand is ultimately met by using additional 
fuel, which is converted into CO2 by the engine during 
combustion and exhausted through the tailpipe. These emissions can be 
reduced by increasing the overall efficiency of an AC system, thus 
reducing the additional load on the engine from AC operation, which in 
turn means a reduction in fuel consumption and a commensurate reduction 
in CO2 emissions.
---------------------------------------------------------------------------

    \429\ 40 CFR 1867-12 and 40 CFR 86.1868-12.
---------------------------------------------------------------------------

    EPA has consistently adjusted the stringency of the light-duty 
CO2 footprint curves to reflect the availability of AC 
credits by shifting the footprint curves downward. In the 2012 rule and 
again in subsequent rules, EPA increased the stringency of the 
footprint curves by a total of 19 g/mile for cars and 24 g/mile for 
trucks to reflect the availability and anticipated use of the 
relatively low-cost AC credit opportunities.
    For MDVs, EPA adopted a somewhat different approach to address AC 
refrigerant emissions. In the Phase 1 rule, EPA adopted a refrigerant 
leakage standard rather than a voluntary credit program.\430\ This 
approach eliminated the need to adjust the CO2 work factor-
based standards to account for the availability of refrigerant-based 
credit, as EPA has done in setting the prior light-duty standards. EPA 
projected that manufacturers would meet the leakage standard either 
through the use of leak tight components or through the use of 
alternative refrigerants. In the Phase 2 rule, EPA revised the 
refrigerant leakage standard to be refrigerant neutral.\431\ The MDV 
program does not include AC efficiency related credits or 
requirements.\432\
---------------------------------------------------------------------------

    \430\ 76 FR 57194 and 73525.
    \431\ Under the Phase 2 program, loss of refrigerant from air 
conditioning systems may not exceed a total leakage rate of 11.0 
grams per year or a percent leakage rate of 1.50 percent per year, 
whichever is greater. See 81 FR 73742 and 40 CFR 1037.115(e).
    \432\ In the previous heavy-duty GHG rules, EPA discussed but 
did not propose or finalize AC efficiency credits for MDVs. For 
further discussion see 76 FR 57196 and 81 FR 73742.
---------------------------------------------------------------------------

ii. Proposed Modifications to the AC Efficiency Credits
    The current light-duty vehicle AC indirect emissions reduction 
credits in 40 CFR 86.1868-12, which EPA also commonly refers to as AC 
efficiency credits, are based on a technology menu with a testing 
component to confirm that the technologies provide emissions reductions 
when installed as a system on vehicles. The menu includes credits for 
improved system components and air recirculation settings designed to 
reduce the AC load on the IC engine.\433\ The AC efficiency credits are 
capped at 5.0 g/mile for passenger cars and 7.2 g/mile for light 
trucks. In addition, a limited amount of vehicle tailpipe testing 
(i.e., the ``AC17'' test) is required for manufacturers claiming 
credits to verify anticipated emissions reductions are occurring. The 
credits have been effective in incentivizing AC efficiency improvements 
since the program's inception, and manufacturers' use of AC menu 
credits has steadily increased over time. In MY 2021, 17 of 20 
manufacturers reported efficiency credits resulting in an average 
credit of 5.7 g/mile.\434\
---------------------------------------------------------------------------

    \433\ Joint Technical Support Document, Final Rulemaking for 
2017-2025 Light-Duty Vehicle Greenhouse Gas Emission Standards and 
Corporate Average Fuel Economy Standards, EPA-420-R-12-901, August 
2012.
    \434\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas 
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029, December 2022.
---------------------------------------------------------------------------

    EPA is proposing to retain AC efficiency credits but, starting with 
MY 2027, limit eligibility to only vehicles equipped with IC engines. 
Thus, BEVs would no longer be eligible for these credits after MY 2026. 
The AC efficiency credits are based on emissions reductions from ICE 
vehicles. Currently, BEVs are generating credits even though the 
credits are based solely on improvements to ICE vehicles, and not 
representative of emissions reductions for BEVs. When EPA adopted this 
construct in the MY 2012 rule, BEV sales were relatively small, and the 
0 g/mile accounting was temporary with upstream net emissions 
accounting part of the final standards. However, as discussed in 
Section III.B.7, EPA is proposing to continue the 0 g/mile treatment of 
PEV electric operation (by removing the MY 2027 date currently 
specified in the regulations for including upstream emissions in

[[Page 29247]]

compliance calculations for BEVs). Another BEV related issue is that 
BEVs have generated g/mile AC credits even though they have been 
counted as 0 g/mile in the fleet average calculations. This accounting 
has contributed to manufacturers reporting BEV emissions as less than 
zero, which is not representative of actual vehicle emissions and can 
be a source of confusion. For example, in the latest Trends report, 
Tesla, which sells only BEVs, reported a fleet average performance 
value of negative 126 g/mile including 18.8 g/mile of AC credits.\435\ 
Initially, when BEV sales were very low, these issues and their impacts 
were small, and the AC efficiency credits in turn provided some amount 
of incentive for more efficient BEVs overall and resulting upstream 
emission reductions. However, EPA has reconsidered the appropriateness 
of applying AC efficiency credits to BEVs in light of the increasing 
level of BEVs anticipated in future model years and the proposal to 
indefinitely exclude upstream emissions from BEV compliance 
calculations. For all these reasons, EPA believes limiting eligibility 
for AC efficiency credits to only ICE vehicles in the longer term is 
appropriate. EPA notes that the stringency of the proposed standards 
have been adjusted to reflect the inclusion of AC credits only for ICE 
equipped vehicles, as discussed in Section III.B.2.
---------------------------------------------------------------------------

    \435\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas 
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029, December 2022.
---------------------------------------------------------------------------

    In the 2012 rule, as a condition for claiming credits, EPA required 
manufacturers to conduct a limited number of emissions tests to help 
confirm that projected emissions reductions based on the menu are 
occurring with actual vehicles.\436\ The test procedure used for 
testing is the ``AC17'' test and consists of the SC03 driving cycle 
(part of fuel economy label 5-cycle testing, where vehicles are tested 
under high temperature conditions), the fuel economy highway cycle, a 
preconditioning cycle, and a solar peak period (4-hour duration).\437\ 
The AC17 test is mandatory for MYs 2017 and later (with the exception 
that manufacturers are not required to test BEVs).\438\ Testing is at a 
limited ``AC grouping'' level, rather than the every model type level 
required for the CO2 footprint standards. In MYs 2017-2019, 
AC17 test data was required to be reported to EPA but was not used to 
determine the credit levels for vehicles. Starting in MY 2020, the AC17 
test results factor into ``qualifying/adjusting'' the level of credits 
through an A to B comparison with a baseline system. In cases where the 
test results do not support full menu credits, proportional credits may 
be generated based on the test results. Testing is limited in any given 
model year to no more than one vehicle from each vehicle platform that 
generates credits. Manufacturers with vehicles in a platform that are 
generating credits must choose a different vehicle model each year, 
starting with the highest sales volume vehicle, then the next highest 
the following year and so on until all models are tested or the 
platform undergoes a major redesign. EPA is not proposing to change the 
AC17 testing provisions from their current form for manufacturers 
claiming AC efficiency credits.
---------------------------------------------------------------------------

    \436\ See 77 FR 62721.
    \437\ Joint Technical Support Document, Final Rulemaking for 
2017-2025 Light-Duty Vehicle Greenhouse Gas Emission Standards and 
Corporate Average Fuel Economy Standards, Chapter 5, EPA-420-R-12-
901, August 2012.
    \438\ 77 FR 62722.
---------------------------------------------------------------------------

    EPA notes that its proposed approaches for AC efficiency credits 
and off-cycle credits, discussed in detail in Section III.B.6, differ 
even though the types of emissions the credits are designed to address 
(i.e., emissions not considered on the 2-cycle compliance test cycles) 
are similar. As discussed in Section III.B.6, while EPA is proposing to 
phase out the off-cycle credits entirely after MY 2030, EPA is not 
proposing to phase out AC efficiency credits for ICE vehicles or 
reopening them because the AC efficiency credits program is more robust 
as it includes a check of vehicle emissions performance through AC17 
testing. EPA established the AC17 testing requirements as part of the 
2012 rule to provide an assurance that the AC systems earning credits 
were providing anticipated emissions reductions. The off-cycle credits 
program includes no such mechanism to check performance. EPA is not 
reopening or proposing any changes to the existing AC17 testing 
provisions as part of this rule; therefore, the AC17 testing 
requirements of manufacturers earning AC efficiency credits would 
remain in effect under the MY 2027 and later program.
    EPA's MDV work factor-based program does not include AC system 
efficiency provisions \439\ and EPA is not reopening or considering new 
provisions for MDVs in this proposed rule.
---------------------------------------------------------------------------

    \439\ See 81 FR 73742, October 25, 2016.
---------------------------------------------------------------------------

iii. Proposed Removal of AC Credits for Reduced Refrigerant Leakage
    The current light-duty vehicle AC credits program in 40 CFR 
86.1867-12 that was adopted in the 2012 rule also includes credits for 
low refrigerant leakage systems and/or the use of alternative low 
global warming potential (GWP) refrigerants rather than 
hydrofluorocarbons (HFCs). The potential available AC leakage credits 
are larger than the AC efficiency credits. The program caps refrigerant 
related credits for passenger cars and light trucks, respectively, at 
13.8 and 17.2 g/mile when an alternative refrigerant is used and 6.3 
and 7.8 g/mile in cases where an alternative refrigerant is not used. 
Although the credits program has been voluntary since its inception, it 
has been effective in helping to incentivize the use of low GWP 
refrigerants. Since EPA established the voluntary refrigerant-based 
credits, low GWP refrigerant HFO-1234yf has been successfully used by 
many manufacturers to claim the full refrigerant replacement credits. 
As of MY 2021, 95 percent of new vehicles used the low GWP 
refrigerant.\440\ EPA adopted a somewhat different approach for MDVs by 
including in the program a refrigerant leakage standard rather than a 
voluntary credit.\441\
---------------------------------------------------------------------------

    \440\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas 
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029, December 2022.
    \441\ See 40 CFR 1037.115(e) and 81 FR 73726, October 25, 2016.
---------------------------------------------------------------------------

    In December 2020, the American Innovation and Manufacturing (AIM) 
Act (42 U.S.C. 7675) was enacted. The AIM Act, among other things, 
authorizes EPA to phase down production and consumption of HFCs in 
specific sectors and subsectors, including their use in vehicle AC 
systems. The AIM Act has sent a strong signal to all vehicle 
manufacturers that there is no future for using high GWP refrigerants 
in new vehicles. In December 2022, in response to the AIM Act, EPA 
proposed to restrict the use of high GWP refrigerants such as HFCs in 
vehicle applications.\442\ The new restriction on refrigerant use, if 
finalized as proposed, would be effective in MY 2025 for light-duty 
vehicles and MY 2026 for MDVs, well ahead of the start of the new 
CO2 vehicle standards EPA is proposing.\443\

[[Page 29248]]

Auto manufacturers have already successfully developed and employed 
HFO-1234-yf low GWP refrigerants across the large majority of the fleet 
and there is no reason at this time to believe that manufacturers would 
redesign those systems again under the AIM Act, in the absence of EPA 
vehicle-based credits, to develop and use systems equipped with a 
higher GWP refrigerant. In light of the proposed high GWP phase out and 
the fact that EPA has been directed by the AIM Act to do so, EPA 
believes sunsetting the voluntary refrigerant-related credits in MY 
2027 in its vehicles GHG program is appropriate and reasonable. This 
would avoid duplicative programs established under two different 
statutes, simplify EPA's vehicles program, and reduce manufacturer 
reporting burden associated with claiming the voluntary credits. For 
all these reasons, EPA is also ending the MDV refrigerant leakage 
standard in MY 2027. EPA requests comment on its AC refrigerant-related 
proposals. While EPA does not believe continuing the light-duty and 
medium-duty vehicle refrigerants provisions in this program is 
necessary, EPA requests comments on whether there is any value in 
retaining its current provisions. EPA notes that for light-duty 
vehicles the footprint-based standards would need to be adjusted to be 
made more stringent to account for the availability and use of 
refrigerant credits if they are retained, consistent with previous 
light-duty vehicle GHG rules.
---------------------------------------------------------------------------

    \442\ 87 FR 76738.
    \443\ EPA is not reopening or proposing to eliminate the 
refrigerant-based credits for MYs 2025-2026 because such an action 
would need to be accompanied by a proposal to revise the stringency 
of the footprint curves for those model years, established in the 
2021 rule to account for the absence of the availability of 
refrigerant-based credits. EPA is not proposing to revisit the 
standards it established for MYs 2023-2026.
---------------------------------------------------------------------------

6. Off-Cycle Credits Program
i. Background on the Off-Cycle Credits Provisions
    Starting with MY 2008, EPA started employing a ``five-cycle'' test 
methodology to measure fuel economy for purposes of new car window 
stickers (labels) to give consumers better information on the fuel 
economy they could more reasonably expect under real-world driving 
conditions.\444\ However, for GHG compliance, EPA continues to use the 
established ``two-cycle'' (city and highway test cycles, also known as 
the FTP and HFET) test methodology.\445\ As learned through development 
of the ``five-cycle'' methodology and prior rulemakings, there are 
technologies that provide real-world GHG emissions improvements, but 
whose improvements are not fully reflected on the ``two-cycle'' test. 
EPA established the off-cycle credit program in 40 CFR 86.1869-12 to 
provide an appropriate level of CO2 credit for technologies 
that achieve CO2 reductions but may not otherwise be chosen 
as a GHG control strategy, as their GHG benefits are not measured on 
the specified 2-cycle test. For example: High efficiency lighting is 
not measured on EPA's 2-cycle tests because lighting is not turned on 
as part of the test procedure, but it reduces CO2 emissions 
by decreasing the electrical load on the alternator and engine. Both 
light-duty and medium-duty vehicles may generate off-cycle credits, but 
the program is much more limited in the medium-duty work factor-based 
program.
---------------------------------------------------------------------------

    \444\ https://www.epa.gov/vehicle-and-fuel-emissions-testing/dynamometer-drive-schedules. See also 75 FR 25439 for a discussion 
of 5-cycle testing.
    \445\ The city and highway test cycles, commonly referred to 
together as the ``2-cycle tests'' are laboratory compliance tests 
that are effectively required by law for CAFE, and also used for 
determining compliance with the GHG standards. 49 U.S.C. 32904(c).
---------------------------------------------------------------------------

    Under EPA's existing regulations, there are three pathways by which 
a manufacturer may accrue light-duty vehicle off-cycle technology 
credits.\446\ The first pathway is a predetermined list or ``menu'' of 
credit values for specific off-cycle technologies that was effective 
starting in MY 2014.\447\ This pathway allows manufacturers to use 
credit values established by EPA for a wide range of off-cycle 
technologies, with minimal or no data submittal or testing 
requirements. The menu includes a fleetwide cap on credits to address 
the uncertainty of a one-size-fits-all credit level for all vehicles 
and the limitations of the data and analysis used as the basis of the 
menu credits. The menu cap is 10 g/mile except for a temporary 
increased cap of 15 g/mile available only for MYs 2023-2026, adopted by 
EPA in the 2021 rule.\448\ The existing menu technologies and 
associated credits are summarized in Table 34 and Table 35.\449\
---------------------------------------------------------------------------

    \446\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas 
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029, December 2022, for information regarding the use of each 
pathway by manufacturers.
    \447\ See 40 CFR 86.1869-12(b).
    \448\ See 86 FR 74465.
    \449\ See 40 CFR 86.1869-12(b). See also ``Joint Technical 
Support Document: Final Rulemaking for 2017-2025 Light-duty Vehicle 
Greenhouse Gas Emission Standards and Corporate Average Fuel Economy 
Standards for the Final Rule,'' EPA-420-R-12-901, August 2012, for 
further information on the definitions and derivation of the credit 
values.

Table 34--Existing Off-Cycle Technologies and Credits for Cars and Light
                                 Trucks
------------------------------------------------------------------------
                                 Credit for cars (g/   Credit for light
           Technology                   mile)           trucks (g/mile)
------------------------------------------------------------------------
High Efficiency Alternator (at   1.0................  1.0.
 73%; scalable).
High Efficiency Exterior         1.0................  1.0.
 Lighting (at 100W).
Waste Heat Recovery (at 100W;    0.7................  0.7.
 scalable).
Solar Roof Panels (for 75W,      3.3................  3.3.
 battery charging only).
Solar Roof Panels (for 75W,      2.5................  2.5.
 active cabin ventilation plus
 battery charging).
Active Aerodynamic Improvements  0.6................  1.0.
 (scalable).
Engine Idle Start-Stop with      2.5................  4.4.
 heater circulation system.
Engine Idle Start-Stop without   1.5................  2.9.
 heater circulation system.
Active Transmission Warm-Up....  1.5................  3.2.
Active Engine Warm-Up..........  1.5................  3.2
Solar/Thermal Control..........  Up to 3.0..........  Up to 4.3.
------------------------------------------------------------------------


 Table 35--Existing Off-Cycle Technologies and Credits for Solar/Thermal
             Control Technologies for Cars and Light Trucks
------------------------------------------------------------------------
                                  Car credit  (g/      Truck credit (g/
  Thermal control technology           mile)                mile)
------------------------------------------------------------------------
Glass or Glazing..............  Up to 2.9..........  Up to 3.9

[[Page 29249]]

 
Active Seat Ventilation.......  1.0................  1.3
Solar Reflective Paint........  0.4................  0.5
Passive Cabin Ventilation.....  1.7................  2.3
Active Cabin Ventilation......  2.1................  2.8
------------------------------------------------------------------------

    A second pathway allows manufacturers of light-duty vehicles to use 
5-cycle testing to demonstrate and justify off-cycle CO2 
credits.\450\ The additional emissions tests allow emission benefits to 
be demonstrated over some elements of real-world driving not captured 
by the GHG compliance tests, including high speeds, rapid 
accelerations, and cold temperatures. Under this pathway, manufacturers 
submit test data to EPA, and EPA determines whether there is sufficient 
technical basis to approve the off-cycle credits. The third pathway 
allows manufacturers to seek EPA approval, through a notice and comment 
process, to use an alternative methodology other than the menu or 5-
cycle methodology for determining the off-cycle technology 
CO2 credits.\451\ This option is only available if the 
benefit of the technology cannot be adequately demonstrated using the 
5-cycle methodology. For MDVs, the manufacturers may use the public 
process or 5-cycle pathways for generating credits.\452\ There is no 
off-cycle credits menu for MDVs.
---------------------------------------------------------------------------

    \450\ See 40 CFR 86.1869-12(c).
    \451\ See 40 CFR 86.1869-12(d).
    \452\ See 40 CFR 86.1819-14(d)(13).
---------------------------------------------------------------------------

    EPA designed the off-cycle program to provide an incentive for new 
and innovative technologies that reduce real world CO2 
emissions primarily outside of the 2-cycle test procedures (i.e., off-
cycle) such that most of the emissions reductions are not reflected or 
``captured'' during certification testing. The program also provides 
flexibility to manufacturers since off-cycle credits may be used to 
meet their emissions reduction obligations. In past rules, EPA has not 
adjusted the standards levels to reflect the availability of off-cycle 
credits like we did in the case of AC credits. However, in the 2021 
rule, we did include use of off-cycle credits by manufacturers in our 
cost analysis. Specifically, we assumed in our modeling for the 2021 
rule that 10 g/mile of off-cycle credits would be used at an 
incremental cost of $42/grams/mile.\453\ The menu credit levels are 
based on estimated CO2 reductions from ICE vehicles. 
However, the current program also allows BEVs to generate menu credits. 
Allowing vehicles with tailpipe values of 0 g/mile to generate off-
cycle credits has resulted in emissions compliance values of less than 
0 g/mile.
---------------------------------------------------------------------------

    \453\ ``Revised 2023 and Later Model Year Light-Duty Vehicle GHG 
Emissions Standards: Regulatory Impact Analysis,'' EPA-420-R-21-028, 
December 2021.
---------------------------------------------------------------------------

    Since MY 2012, the program has successfully encouraged the 
introduction and use of a variety of off-cycle technologies, especially 
menu technologies under the light-duty program. The use of several menu 
technologies has steadily increased over time, including engine stop-
start, active aerodynamics, high efficiency alternators, high 
efficiency lighting, and thermal controls that reduce AC energy demand. 
The program has allowed manufacturers to reduce emissions by applying 
off-cycle technologies, at lower overall costs, compared to the 
technologies that would have otherwise been used to provide reductions 
over the 2-cycle test, consistent with the intent of the program. Since 
2012, the quantity of off-cycle credits generated by manufacturers 
steadily increased over time. In 2021, the industry averaged 8.7 g/mile 
of credits with more than 95 percent of those credits based on the 
menu. Seven manufacturers (BMW, Ford, GM, Honda, Jaguar Land Rover, 
Stellantis, and VW) claimed the maximum menu credit available of 10 g/
mile, while Honda claimed the highest level of off-cycle credits 
overall at 10.6 g/mile.\454\ Several manufacturers used at least some 
off-cycle technologies on 80-100 percent of vehicles.
---------------------------------------------------------------------------

    \454\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas 
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029, December 2022.
---------------------------------------------------------------------------

    The program has had mixed results for 5-cycle and public process 
pathways. There have been few 5-cycle credit demonstrations, and the 
public process pathway has been challenging due to the complexity of 
demonstrating real-world emissions reductions for technologies not 
listed on the menu. The public process pathway was used successfully by 
several manufacturers for high efficiency alternators, resulting in EPA 
adding them to the off-cycle menu beginning in MY 2021.\455\ The 
program has resulted in a number of concepts for potential off-cycle 
technologies over the years, but few have been implemented, at least 
partly due to the difficulty in demonstrating the quantifiable real-
world emissions reductions associated with using the technology. Many 
credits sought by manufacturers have been relatively small (less than 1 
g/mile). Manufacturers have commented several times that the process 
takes too long, but the length of time is often associated with the 
need for additional data and information or issues regarding whether a 
technology is eligible for credits.
---------------------------------------------------------------------------

    \455\ 85 FR 25236.
---------------------------------------------------------------------------

ii. Proposed Phase Out of Off-Cycle Credits
    EPA is proposing to sunset the off-cycle program for both light and 
medium-duty vehicles as follows: (1) EPA proposes to phase out menu-
based credits in the light-duty vehicle program by reducing the menu 
credit cap year-over-year until it is fully phased out in MY 2031. 
Specifically, EPA is proposing a declining menu cap starting with the 
10 g/mile cap currently in place for MY 2027 and then phasing down to 
8.0/6.0/3.0/0.0 g/mile over MYs 2028-2031 such that MY 2030 would be 
the last year manufacturers could generate credits; (2) EPA proposes to 
eliminate the 5-cycle and public process pathways starting in MY 2027; 
and (3) EPA proposes to limit eligibility for off-cycle credits to 
vehicles with tailpipe emissions greater than zero (i.e., vehicles 
equipped with IC engines) starting in MY 2027. There are several 
factors that have led EPA to propose phasing out the off-cycle credits 
program in this manner, as discussed in this section.
    EPA believes phasing out the off-cycle program is generally 
consistent with EPA's proposed standards and the direction the industry 
is headed in

[[Page 29250]]

changing their vehicle mix away from ICE technologies toward vehicle 
electrification technologies. EPA originally created the off-cycle 
program both to provide flexibility to manufacturers and to encourage 
the development of new and innovative technologies that might not 
otherwise be used because their benefits were not captured on the 2-
cycle test. EPA believes the off-cycle credits program has successfully 
served these purposes. However, the credits were based on estimated 
emissions improvements for ICE vehicle which at the time accounted for 
the vast majority of vehicles produced. Now with the industry focusing 
most R&D resources on vehicle electrification technology development 
and increasing production, as discussed in Section I.A.2,456 
457 458 off-cycle credits are not likely to be a 
key area of focus for manufacturers. In addition, EPA believes that it 
is not likely that manufacturers would invest resources on off-cycle 
technology in the future for their ICE vehicle fleet that is likely to 
become a smaller part of their overall vehicle mix over the next 
several years. For example, in MY 2021, credits per technology 
generated under the public process pathway were all well below 1 g/mile 
\459\ and there is little reason to expect the program to drive 
significant new innovation in the future. The public process pathway 
has been in place since the 2010 rule and manufacturers have had ample 
opportunity to consider potential off-cycle technologies. Also, 
manufacturers would be recouping any investment in off-cycle 
technologies, with relatively small emission reductions, over a 
decreasing number of vehicles as ICE vehicle production declines.
---------------------------------------------------------------------------

    \456\ Reuters, ``A Reuters analysis of 37 global automakers 
found that they plan to invest nearly $1.2 trillion in electric 
vehicles and batteries through 2030,'' October 21, 2022. Accessed on 
November 4, 2022 at https://graphics.reuters.com/AUTOS-INVESTMENT/ELECTRIC/akpeqgzqypr/ .
    \457\ Reuters, ``Exclusive: Automakers to double spending on 
EVs, batteries to $1.2 trillion by 2030,'' October 25, 2022. 
Accessed on November 4, 2022 at https://www.reuters.com/technology/exclusive-automakers-double-spending-evs-batteries-12-trillion-by-2030-2022-10-21/.
    \458\ Center for Automotive Research, ``Automakers Invest 
Billions in North American EV and Battery Manufacturing 
Facilities,'' July 21, 2022. Retrieved on November 10, 2022 at 
https://www.cargroup.org/automakers-invest-billions-in-north-american-ev-and-battery-manufacturing-facilities/.
    \459\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas 
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029, December 2022.
---------------------------------------------------------------------------

    In addition, the off-cycle credits were initially small relative to 
the average fleet emissions and standards. For example, in the 2012 
rule, EPA established menu credits of up to 10 g/mile, a relatively 
small value compared to a projected fleet-wide average compliance value 
of about 243 g/mile in MY 2016 phasing down to 163 g/mile in MY 
2025.\460\ Across the MY 2016-2025 program, therefore, EPA projected 
menu credits would be about 4 percent to 6 percent of the standard. 
Now, EPA is proposing standards that would reduce fleet average 
emissions to about 82 g/mile and therefore off-cycle credits would 
become an outsized portion (e.g., up to 12 percent) of the program if 
they were retained in their current form. One concern is that there is 
not currently a mechanism to check that off-cycle technologies provide 
emissions reductions in use commensurate with the level of the credits 
the menu provides. This is becoming more of a concern as vehicles 
become less polluting overall. The menu credits are based on MY 2008 
vintage engine and vehicle baseline technologies (assessed during the 
2012 rule) and therefore the credit levels are potentially becoming 
less representative of the emissions reductions provided by the off-
cycle technologies as vehicle emissions are reduced. Some stakeholders 
have also become increasingly concerned that the emissions reductions 
reflected in the off-cycle credits may not be being achieved.\461\ 
Also, details such as the synergistic effects and overlap among off-
cycle technologies take on more importance as the credits represent a 
larger portion of the emissions reductions. During the rulemaking to 
revise the MY 2023-2026 standards, EPA received comments that due to 
the potential for loss of GHG emissions reductions, the off-cycle 
program should be further constrained, or discontinued, or that a 
significantly more robust mechanism be implemented for verifying 
purported emissions reductions of off-cycle technologies. The potential 
for a loss of GHG emissions reductions could become further exacerbated 
as the standards become more stringent.\462\
---------------------------------------------------------------------------

    \460\ 77 FR 62641.
    \461\ ``Revised 2023 and Later Model Year Light-Duty Vehicle 
Greenhouse Gas Emission Standards: Response to Comments,'' Chapter 
8, EPA-420-R-21-027, December 2021.
    \462\ Ibid.
---------------------------------------------------------------------------

    Initially, EPA addressed the uncertainty surrounding the precise 
emissions reductions from equipping vehicle models with off-cycle 
technologies by making the initial credit values conservative, but the 
values may no longer be conservative, and may even provide more credits 
than appropriate for later MY vehicles. Because off-cycle credits 
effectively displace two-cycle emissions reductions, EPA has long 
strived to ensure that off-cycle credits are based on real-world 
reductions and do not result in a loss of emissions reductions overall. 
EPA received comments in past rules that it should revise the program 
to better ensure real-world emissions reductions.\463\ However, EPA has 
learned through its experience with the program to date that such 
demonstrations can be exceedingly challenging. At this time, EPA has 
not identified a single robust methodology that can provide sufficient 
assurance across potential off-cycle technologies due to the wide 
variety of off-cycle real world conditions over which a potential 
technology may reduce emissions. EPA does not have a proposed 
methodology that would provide such assurance across a range of 
technologies. Finally, while the off-cycle program provides an 
incentive for off-cycle emissions reduction technologies, it does not 
include full accounting of off-cycle emissions. Vehicle equipment such 
as remote start and even roof racks added at the dealership may well 
increase off-cycle emissions. For all of these reasons, EPA believes 
the role of off-cycle credits should be de-emphasized in the future and 
in the longer term the credits should be phased out.
---------------------------------------------------------------------------

    \463\ Ibid. See also 85 FR 25232-25242.
---------------------------------------------------------------------------

    EPA is proposing to phase out menu credits over the MY 2028-2031 
timeframe as a reasonable way to bring the program to an end. The cap 
would be reduced as shown in Table 36. EPA is proposing to end the 
program through a phase-out rather than simply ending the program 
entirely in MY 2027 to provide a transition period to help 
manufacturers who have made substantial use of the program in their 
product planning. Currently, the cap is applied to individual 
manufacturers by dividing the credits generated by a manufacturer's 
entire vehicle production to determine an average credit level for the 
model year. EPA proposes that starting in MY 2027, the denominator 
would include only eligible vehicles (i.e., vehicles equipped with an 
IC engine) rather than all vehicles produced by the manufacturer. EPA 
requests comment on its approach for phasing out the off-cycle program, 
including the number of years over which the menu phase out would occur 
as well as the proposed menu credit caps in those years.

[[Page 29251]]



         Table 36--Proposed Off-Cycle Menu Credit Cap Phase Down
------------------------------------------------------------------------
                                                         Off-cycle menu
                      Model year                         credit cap (g/
                                                             mile)
------------------------------------------------------------------------
MY 2027 (current program)............................                 10
MY 2028..............................................                8.0
MY 2029..............................................                6.0
MY 2030..............................................                3.0
MY 2031 and later....................................                0.0
------------------------------------------------------------------------

    Also, as discussed in detail in Section III.B.8, EPA is proposing 
to revise the utility factor for PHEVs. While PHEVs would remain 
eligible for off-cycle credits under EPA's proposed eligibility 
criteria, EPA proposes, as a reasonable approach for addressing off-
cycle credits for PHEVs, to scale the menu credit cap for PHEVs by the 
vehicle's assigned utility factor. For example, if a PHEV has a utility 
factor of 0.3, meaning the vehicle is estimated to operate as an ICE 
vehicle 70 percent of the vehicle's VMT, the PHEV would be eligible for 
70 percent of the cap value. For example, if the cap is 10.0 g/mile in 
MY 2027, PHEVs would be eligible for off-cycle credits up to 7.0 g/
mile. Therefore, manufacturers producing PHEVs would not be eligible 
for the full menu credit cap value shown in Table 36. EPA proposes that 
the menu credit cap for each manufacturer's eligible vehicles would be 
the production-weighted average of ICE vehicles counting at the full 
cap amount and PHEVs at their maximum credit allowance. EPA proposes 
that manufacturers would apply the utility factor to the total off-
cycle credits generated by the PHEVs to properly account for the value 
of the off-cycle credit corresponding to expected engine operation. As 
is the case in the current program, individual vehicles could generate 
more credits than the fleetwide cap value but the fleet average credits 
per vehicle must remain at or below the applicable menu cap. EPA 
requests comments on this as well as other potential ways of addressing 
off-cycle credits for PHEVs.
    There are two pathways for generating credits in addition to the 
menu. In cases where additional laboratory testing can demonstrate 
emission benefits, the ``5-cycle'' pathway allows manufacturers to use 
a broader array of emission tests (known as 5-cycle testing because the 
methodology uses five different testing procedures) to demonstrate and 
justify off-cycle CO2 credits. The additional emission tests 
allow emission benefits to be demonstrated over elements of real-world 
driving not captured by the GHG compliance tests, including high 
speeds, rapid accelerations, interior air conditioning and heater usage 
and cold temperature operation. The third pathway for off-cycle 
technology performance credits allows manufacturers to seek EPA 
approval to use an alternative methodology for determining off-cycle 
technology CO2 credits. This option is only available if the 
benefit of the technology cannot be adequately demonstrated using the 
5-cycle methodology. The regulations require that EPA seek public 
comment on and publish each manufacturer's application for credits 
sought using this pathway. After reviewing the petitions submitted by 
manufacturers and the comments, EPA drafts and publishes decision 
documents that explain the impacts and applicability of the unique 
alternative method technologies via the Federal Register. The public 
process pathway is also available for MD vehicles.
    Regarding the 5-cycle pathway, these credits have a more rigorous 
basis compared to credits generated under the other pathways because 
they are based on vehicle testing. However, the 5-cycle pathway has 
been used infrequently. In MY 2021, there were no credits generated 
using the 5-cycle pathway and historically only one manufacturer has 
used the pathway since MY 2012.\464\ MDV manufacturers also are not 
using the 5-cycle pathway. Given that the 5-cycle pathway is not being 
actively used and we are not aware of any OEM plans to make significant 
use of the 5-cycle pathway in the future, EPA believes phasing it out 
for both light-duty and medium-duty vehicles in MY 2027 is reasonable. 
EPA requests comment on this approach for 5-cycle based credits.
---------------------------------------------------------------------------

    \464\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas 
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029, December 2022.
---------------------------------------------------------------------------

    Since MY 2012, manufacturers have used the public process pathway 
more extensively than the 5-cycle pathway. In fact, several 
manufacturers successfully applied for high efficiency alternator 
credits through the public process which led EPA to add the technology 
to the menu as part of the 2020 rule.\465\ However, as of MY 2021, the 
public process pathway is resulting in relatively few credits. While 
there were nine manufacturers generating credits, the average per 
vehicle credit across all manufacturers was 0.2 g/mile. Manufacturers 
claiming credits averaged between 0.0-0.7 g/mile per vehicle.\466\ 
Thus, more than 95 percent of off-cycle credits in MY 2021 were based 
on the menu. For MDVs, manufacturers are not generating any credits 
under the public process pathway. In addition, there are significant 
resources involved both for the manufacturer in developing a 
methodology and submitting it to EPA and for EPA in evaluating the 
applications, including soliciting public comments. Given that the 
pathway is little used, is resulting in few credits, and can be 
resource-intensive for both manufacturers and EPA, EPA is proposing to 
eliminate this pathway in MY 2027 as well. EPA would eliminate the 
pathway for both LD and MDVs. EPA requests comment on its proposal to 
end the public process pathway in MY 2027.
---------------------------------------------------------------------------

    \465\ 85 FR 25236.
    \466\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas 
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029, December 2022.
---------------------------------------------------------------------------

    Regarding EPA's proposal to limit off-cycle credit eligibility to 
vehicles equipped with ICE engine, the menu credits levels were based 
on potential emissions reductions from ICE vehicles and are not 
representative of emissions reductions for BEVs, especially in a 
program based solely on tailpipe emissions. Especially now that EPA is 
proposing to make the 0 g/mile treatment of BEV operation a permanent 
part of the program (see Section III.B.7), with no accounting for 
upstream emissions, EPA believes it is most appropriate to limit 
eligibility for off-cycle credits to vehicle with tailpipe emissions, 
discontinuing off-cycle credits for BEVs. While off-cycle technologies 
may provide some overall efficiency improvement for BEVs (with some 
potential upstream emissions benefit), off-cycle technologies do not 
impact BEV tailpipe emissions, since BEVs have no tailpipe emissions 
and therefore are not relevant for this program. This issue will only 
become more pronounced as the

[[Page 29252]]

implementation of BEV technologies in the fleet increases. Therefore, 
EPA is proposing to end off-cycle credits for vehicles with no IC 
engine beginning in MY 2027.\467\
---------------------------------------------------------------------------

    \467\ EPA is not proposing to reopen previously established 
standards for earlier MYs, for example MYs 2025-2026, to eliminate 
off-cycle credits for BEVs prior to MY 2027 because off-cycle 
credits were integral to EPA's cost analysis for the prior standards 
and such an action would need to be accompanied by a new analysis of 
the footprint standards for those model years to account for the 
elimination of off-cycle credits for BEVs.
---------------------------------------------------------------------------

    EPA is proposing substantial revisions to the off-cycle credits 
program, including restricting eligibility and eliminating credit 
pathways starting in MY 2027 and phasing out the program entirely 
starting with MY 2031. EPA requests comment on these proposals. 
Commenters advocating for continuing the off-cycle program in some form 
are encouraged to consider EPA's concerns as described in this section 
and to provide data to the extent possible to support their comments. 
For example, to the extent commenters support keeping the off-cycle 
menu in some form, EPA would be especially interested in comments 
supported with data on how the level of the credits should be adjusted 
to better reflect emission reductions for future ICE vehicles.
7. Treatment of PEVs and FCEVs in the Fleet Average
    In the 2012 rule, for MYs 2022-2025, EPA allowed manufacturers to 
use a 0 g/mi compliance value (i.e., a value reflecting tailpipe 
emissions only) for the electric-only portion of operation of BEVs/
PHEVs/FCEVs up to a per-company cumulative production cap.\468\ As 
originally envisioned in the 2012 rule, starting with MY 2022, the 
compliance value for BEVs, FCEVs, and the electric portion of PHEVs in 
excess of individual automaker cumulative production caps would be 
based on net upstream emissions accounting (i.e., EPA would attribute a 
pro rata share of national CO2 emissions from electricity 
generation to each mile driven under electric power minus a pro rata 
share of upstream emissions associated with from gasoline production). 
The 2012 rule would have required net upstream emissions accounting for 
all MY 2022 and later electrified vehicles. However, in the 2020 rule, 
prior to upstream accounting taking effect, EPA revised its regulations 
to extend the use of 0 g/mile compliance value through MY 2026 with no 
production cap, effectively continuing the practice of basing 
compliance only on tailpipe emissions for all vehicle and fuel types.
---------------------------------------------------------------------------

    \468\ See 77 FR 62816.
---------------------------------------------------------------------------

    EPA is proposing to make the current treatment of PEVs and FCEVs 
through MY 2026 permanent. EPA proposes to include only emissions 
measured directly from the vehicle in the vehicle GHG program for MYs 
2027 and later (or until EPA changes the regulations through future 
rulemaking) consistent with the treatment of all other vehicles. 
Electric vehicle operation would therefore continue to be counted as 0 
g/mile, based on tailpipe emissions only. Vehicles with no IC engine 
(i.e., BEVs and FCEVs) would be counted as 0 g/mile in compliance 
calculations, while PHEVs would apply the 0 g/mile factor to electric-
only vehicle operation (see also Section III.B.8 for EPA's proposed 
treatment of PHEVs). The program has now been in place for a decade, 
since MY 2012, with no upstream accounting and has functioned as 
intended, encouraging the continued development and introduction of 
electric vehicle technology. These emissions reduction technologies are 
now coming into the mainstream and can serve as the primary 
technologies upon which EPA can base more stringent standards. As a 
separate and independent reason for making the current treatment 
permanent, EPA originally proposed using upstream emissions in PEV 
compliance calculations at a time when there was little if any 
regulation of stationary sources for GHGs, and noted at the time this 
was a departure from its usual practice of relying on stationary source 
programs to address pollution risks from stationary sources.\469\ In 
the 2020 rule, EPA extended 0 g/mi in part because power sector 
emissions were declining and the trend was projected to continue and 
stated ``EPA agrees that, at this time, manufacturers should not 
account for upstream utility emissions.'' \470\ As noted elsewhere, 
power sector emissions are expected to decline further in the future. 
EPA continues to believe that it is appropriate for any vehicle which 
has zero tailpipe emissions to use 0 g/mi as its compliance value.\471\ 
This approach of looking only at tailpipe emissions and letting 
stationary source GHG emissions be addressed by separate stationary 
source programs is consistent with how every other light duty vehicle 
calculates its compliance value. If EPA deviated from this tailpipe 
emissions approach by including upstream accounting, it would appear 
appropriate to do so for all vehicles, including gasoline-fueled 
vehicles. EPA notes that while upstream emissions are not included in 
vehicle compliance determinations, which are based on direct vehicle 
emissions, upstream emissions impacts from fuel production at 
refineries and electricity generating units are considered in EPA's 
analysis of overall estimated emissions impacts and projected benefits.
---------------------------------------------------------------------------

    \469\ 75 FR 25434.
    \470\ 85 FR 25208.
    \471\ See Section IV.C.3 for a full discussion of power sector 
emissions projections.
---------------------------------------------------------------------------

    EPA requests comments on its proposed treatment of electrified 
vehicles in manufacturer compliance calculations.
8. Proposed Approach for the PHEV Utility Factor
    EPA is proposing to revise the light-duty vehicle PHEV Fleet 
Utility Factor curve used in CO2 compliance calculation for 
PHEVs, beginning in MY 2027. The agency believes the current light-duty 
vehicle PHEV compliance methodology significantly underestimates PHEV 
CO2 emissions. The mechanism that is used to apportion the 
benefit of a PHEV's electric operation for purposes of determining the 
PHEV's contribution towards the fleet average GHG requirements is the 
fleet utility factor (FUF). We have analyzed available data and 
compiled literature 472 473 474 475 showing that the current 
utility factors are overestimating the operation of PHEVs on 
electricity, and therefore would underestimate the CO2 g/mi 
compliance result. The current and proposed FUFs are shown in Figure 
12.
---------------------------------------------------------------------------

    \472\ Krajinska, Poliscanova, Mathieu, & Ambel, Transport & 
Environment. 2020. ``A new Dieselgate in the making.'' November: 
https://www.transportenvironment.org/discover/plug-hybrids-europe-heading-new-dieselgate/.
    \473\ Pl[ouml]tz, P., Moll, C., Bieker, G., Mock, P., Li, Y. 
2020. Real-world usage of plug-in hybrid electric vehicles: fuel 
consumption, electric driving, and CO2 emissions. ICCT, 
September 2020. Retrieved from https://theicct.org/publication/real-world-usage-of-plug-in-hybrid-electric-vehicles-fuel-consumption-electric-driving-and-co2-emissions/.
    \474\ Pl[ouml]tz, P., Link, S., Ringelschwendner, H., Keller, 
M., Moll, C., Bieker, G., Dornoff, J., Mock, P. 2022. Real-world 
usage of plug-in hybrid electric vehicles in Europe: A 2022 update 
on fuel consumption, electric driving, and CO2 emissions. 
ICCT, June 2022. Retrieved from https://theicct.org/publication/real-world-phev-use-jun22/.
    \475\ Patrick Pl[ouml]tz et al 2021 Environ. Res. Lett. 16 
054078. From lab-to-road: real-world fuel consumption and 
CO2 emissions of plug-in hybrid electric vehicles. 
https://iopscience.iop.org/article/10.1088/1748-9326/abef8c.

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

[[Page 29253]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.015

    The current FUFs were developed in SAE 2841 \476\ and are used to 
estimate the percentage of operation that is expected to be in charge 
depleting mode (vehicle operation that occurs while the battery charge 
is being depleted, sometimes referred to as electric range). The 
measurement of the charge depleting (CD) range is performed over the 
EPA city and highway test cycles, also called the 2-cycle tests. The 
tested cycle-specific charge depleting range is used as an input to the 
FUF curves (or lookup tables, as shown in Tables 1 and 2 in 40 CFR 
600.116-12) to determine the specific city and highway FUFs. The 
resulting FUFs are used to calculate a composite CO2 value 
for the city and highway CO2 results, by weighting the 
charge depleting CO2 by the FUF and weighting the charge 
sustaining (CS) CO2 by one minus the FUF.
---------------------------------------------------------------------------

    \476\ SAE J2841. ``Utility Factor Definitions for Plug-In Hybrid 
Electric Vehicles Using Travel Survey Data,'' Issued March 2009, 
Revised September 2010.
---------------------------------------------------------------------------

    The FUFs developed in SAE J2841 rely on a few important assumptions 
and underlying data: (1) Trip data from the 2001 National Household 
Travel Survey,\477\ used to establish daily driving distance 
assumptions, and (2) the assumption that the vehicle is fully charged 
before each day's operation. These assumptions are important because 
they affect the shape of the utility factor curves, and therefore 
affect the weighting of CD (primarily electric operation) \478\ 
CO2 and CS (primarily internal combustion engine operation) 
\479\ CO2 in the compliance value calculation. SAE J2841 was 
developed more than ten years ago during the early introduction of 
light-duty PHEVs and at the time was a reasonable approach for 
weighting the CD and CS vehicle performance for a vehicle 
manufacturer's compliance calculation given the available information. 
The PHEV market has since grown and there is significantly more real-
world data available to EPA on which to design an appropriate 
compliance program for PHEVs. The agency believes that the use of an 
FUF is still an appropriate and reasonable means of calculating the 
contribution of PHEVs to GHG emissions and compliance, but the real-
world data available today clearly no longer supports the FUF 
established in SAE J2841 more than a decade ago.
---------------------------------------------------------------------------

    \477\ We used the latest NHTS data (2017) and executed the 
utility factor code that is in SAE J2841, Appendix C, and found that 
the latest NHTS data did not significantly change the utility factor 
curves. NHTS data can be found at U.S. Department of Transportation, 
Federal Highway Administration, 2017 National Household Travel 
Survey. URL: https://nhts.ornl.gov/.
    \478\ The complexity of PHEV designs is such that not all PHEVs 
operate solely on the electric portion of the propulsion system even 
when the battery has energy available. Engine operation during these 
scenarios may be required because of such design aspects as blended 
operation when both the electric power and the engine are being 
utilized, or during conditions such as when heat or air conditioning 
is needed for the cabin and can only be obtained with engine 
operation.
    \479\ Because most CD operation occurs without engine operation, 
the CO2 value for CD operation is often 0 or near 0 g/mi. 
This means that a high utility factor results in a CO2 
compliance value that is heavily-weighted with 0 or near 0 g/mi.
---------------------------------------------------------------------------

    Because the tailpipe CO2 produced from PHEVs varies 
significantly between CD and CS operation, both the charge depleting 
range and the utility factor curves play an important role in 
determining the magnitude of CO2 that is calculated for 
compliance. In charge depleting mode, EPA is proposing to maintain a 
zero gram per mile contribution when the internal combustion engine is 
not running. The significant difference is between, potentially, zero 
grams per mile in CD mode versus CO2 grams per mile that are 
likely to be similar to a hybrid (non-plug-in) vehicle in CS mode. 
Charge depleting range for a PHEV is determined by performing single 
cycle city and highway charge depleting tests according to SAE Standard 
J1711,\480\ Recommended Practice for Measuring the Exhaust Emissions 
and Fuel Economy of Hybrid-Electric Vehicles,

[[Page 29254]]

Including Plug-In Hybrid Vehicles. The charge depleting range is 
determined by arithmetically averaging the city and highway range 
values weighted 55 percent/45 percent, respectively as noted in 40 CFR 
600.311-12(j)(4)(i).
---------------------------------------------------------------------------

    \480\ SAE J1711. 2023. ``Recommended Practice for Measuring the 
Exhaust Emissions and Fuel Economy of Hybrid-Electric Vehicles, 
Including Plug-in Hybrid Vehicles.'' Issued 1999-03, Revised 2010-
06, Revised 2023-02, February.
---------------------------------------------------------------------------

i. FUF Comparisons With Real World Data
    Recent literature and data have identified that the current utility 
factor curves may overestimate the fraction of driving that occurs in 
charge depleting operation.481 482 This literature also 
concludes that vehicles with lower charge depleting ranges have even 
greater discrepancy in CO2 emissions.
---------------------------------------------------------------------------

    \481\ Pl[ouml]tz, P. and J[ouml]hrens, J. (2021): Realistic Test 
Cycle Utility Factors for Plug-in Hybrid Electric Vehicles in 
Europe. Karlsruhe: Fraunhofer Institute for Systems and Innovation 
Research ISI. Retrieved from. https://www.isi.fraunhofer.de/content/dam/isi/dokumente/cce/2021/BMU_Kurzpapier_UF_final.pdf.
    \482\ https://www.transportenvironment.org/wp-content/uploads/2022/06/TE-Anlaysis_-Update-of-PHEV-utility-factors-1.pdf.
---------------------------------------------------------------------------

    EPA and ICCT \483\ have also evaluated recently available OBD data 
\484\ that has been collected through the California Bureau of 
Automotive Repair (BAR) and found that the data shows that, on average, 
there is more charge sustaining operation and more gasoline operation 
than is predicted by the current fleet utility factor curves. The BAR 
OBD data enable the evaluation of real-world PHEV distances travelled 
in various operational modes; these include charge-depleting engine-off 
distance, charge-sustaining engine-on distance, total distance 
traveled, odometer readings, total fuel consumed, and total grid energy 
inputs and outputs of the battery pack. These fields of data allow us 
to use the BAR OBD data to filter the data and calculate 5-cycle 
comparable real-world driving ratios of charge depleting distance to 
total distance and to then compare to the existing FUFs, using the 5-
cycle range from the fuel economy and environment label.\485\
---------------------------------------------------------------------------

    \483\ ``Real world usage of plug-in hybrid vehicles in the 
United States.'' Aaron Isenstadt, Zifei Yang, Stephanie Searle, John 
German, ICCT Report, December 2022.
    \484\ California Air Resource Board [OBD data records dated 
October 2022], https://www.bar.ca.gov/records-requests.
    \485\ Because the data collected is real-world data, we used the 
combined city and highway 5-cycle label range as an input to the FUF 
curve described in SAE J2841, to create an apples-to-apples 
comparison. The existing regulatory FUFs are separate city and 
highway curves, and the charge depleting ranges that are used with 
the city and highway FUF curves are 2-cycle range.
---------------------------------------------------------------------------

    In addition to the BAR OBD data, ICCT also evaluated a dataset from 
Fuelly.com. Fuelly.com is a website and smartphone application that 
allows users to self-report fuel consumption data. The curve that is 
fitted from the Fuelly.com data also yields lower utility factors than 
the SAE J2841 FUF curve, for the same charge depleting distance; 
however, the Fuelly curve is not as low as the BAR OBD curve.
    A comparison of the results of EPA's data analysis as well as the 
ICCT analyses is shown in Figure 13. The FUF applied in the current 
regulations is labeled as ``SAE J2841 FUF''. EPA's data analysis of the 
BAR OBD data is labeled as ``Linear Regression Fit'' and the two ICCT 
curves are labeled as ``ICCT-BAR'' and ``ICCT-FUELLY''. ICCT created 
the ICCT-BAR and ICCT-Fuelly curves by adjusting the normalized 
distances in the UF equation for both the BAR OBD data and the Fuelly 
user-reported data, using sample-size weighted nonlinear least squares 
regression.\486\ As shown in Figure 13, the EPA ``Linear Regression 
Fit'', where about 78 percent of the total data points are between 12- 
to 32-miles for the CD range, lies on top of the ``ICCT-BAR'' curve.
---------------------------------------------------------------------------

    \486\ Supra footnote 483.
---------------------------------------------------------------------------

    The BAR OBD data is a recent and relatively large dataset that 
includes the charge depleting distance (or electric operating distance) 
and total distance, which makes it a reasonable source for evaluating 
the real-world utility factors for recent PHEV usage. However, we 
recognize that the curve developed from this data is a departure from 
the SAE J2841 FUF curves, that the BAR OBD data has some limitations 
(see DRIA Chapter 3), and that the original SAE J2841 FUF methodology 
was also a reasonable approach at the time it was adopted. Therefore, 
we created the proposed curve by averaging the SAE J2841 FUF curve and 
the ICCT-BAR curve. The resulting proposed FUF curve lies almost on top 
of the ICCT-FUELLY curve. Some of the data suggest that a lower curve 
might more appropriately reflect current real-world usage, however, EPA 
recognizes that PHEV technology has the potential to provide 
significant GHG reductions and an overly low FUF curve could 
disincentivize manufacturers to apply this technology. In addition, 
anticipated longer all-electric range and greater all-electric 
performance, partially driven by CARB's ACC II program, as well as 
increased consumer technology familiarity and available infrastructure 
should result in performance more closely matching our proposed curve. 
EPA will continue to monitor real-world data as it becomes available.

[[Page 29255]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.016

    We believe that it is important for PHEV compliance utility factors 
to accurately reflect the apportionment of charge depleting operation, 
for weighting the 2-cycle CO2 test results; therefore, we 
are proposing to update the city and highway fleet utility factor 
curves with a new, single curve that is shown in Figure 12. We are 
proposing a single curve to better reflect real world performance where 
the underlying real-world data is not parsed into city and highway 
data. Since the fleet average calculations are based on a combined city 
and highway CO2 value, a single FUF curve can be used for 
these calculations. EPA is requesting comment on whether the ICCT-BAR 
curve shown in Figure 13 is a more appropriate fleet utility factor 
curve instead of the FUF proposed curve, as shown in the same figure.
    EPA has chosen the proposed FUF curve based on the best data 
available. Commentors may have other data sets from PHEV vehicles; EPA 
would welcome additional data on real-world PHEV operation, which we 
would consider and may use to update the utility factor in a future 
rulemaking. The type of data that would be most useful would have 
measured mileage in charge depleting range and measured total mileage 
for a large number of PHEV vehicles that are nationally representative 
and cover a broad range of PHEV models.
ii. Impact on Compliance
    The proposed revisions to the PHEV FUF curve will increase 
CO2 compliance values for PHEVs because the charge depleting 
test values will be weighted less heavily than they are currently in 
compliance calculations. Based on EPA's review of real-world utility 
factor data it appears the assumptions in SAE J2841 tend to 
overestimate the charge depleting operation of PHEVs. As such, the 
Agency is proposing to use the FUF determined from real world data. 
This change will result in a reduction to the FUF used to determine 
PHEV CO2 compliance values. PHEVs that are designed with a 
large charge depleting range would still have a significantly lower 
compliance value than their hybrid counterparts would have.
iii. Consideration of CARB ACC II PHEV Provisions
    CARB recently set minimum performance requirements for PHEVs in 
their ACC II program. These requirements include performance over the 
US06 test cycle and a minimum range and are meant to set qualifications 
for PHEV's to be included in a manufacturer's ZEV compliance. EPA is 
not proposing to adopt the range and US06 performance requirements or 
fleet penetration limits that are included in the CARB ACC II ZEV 
provisions. EPA agrees that the performance provisions required by CARB 
in ACC II are important real-world performance attributes and have the 
ability to provide greater environmental benefits as compared to PHEVs 
that are less capable. However, unlike the ACC II program, the GHG 
program in this proposal is performance-based and not a ZEV mandate. In 
that regard, EPA believes that it is appropriate to have a robust GHG 
compliance program for PHEVs that properly accounts for their GHG 
emissions independent of a PHEV's range or capability over the US06 
test cycle.
9. Small Volume Manufacturer GHG Standards
i. Background
    EPA's light-duty vehicle greenhouse gas (GHG) program for model 
years (MYs) 2012-2016 provided a conditional exemption for small volume 
manufacturers (SVMs) with annual U.S. sales of less than 5,000 vehicles 
due to unique feasibility issues faced by these SVMs.\487\ The 
exemption was conditioned on the manufacturer making a good faith 
effort to obtain credits from larger volume manufacturers. For the MY 
2017-2025 light-duty vehicle GHG program (i.e., the 2012 rule), EPA 
adopted specific

[[Page 29256]]

regulations allowing SVMs to petition EPA for alternative standards, 
again recognizing that the primary program standards may not be 
feasible for SVMs and could drive these manufacturers from the U.S. 
market.\488\
---------------------------------------------------------------------------

    \487\ 75 FR 25419-25421, May 7, 2010. Note that SVMs are 
generally not small businesses that qualify for EPA's small business 
provisions discussed in Section III.B.10.
    \488\ 77 FR 62789-62795, October 15, 2012.
---------------------------------------------------------------------------

    EPA acknowledged in the 2012 final rule that SVMs may face a 
greater challenge in meeting CO2 standards compared to large 
manufacturers because they only produce a few vehicle models, mostly 
focused on high performance sports cars and luxury vehicles. SVMs have 
limited product lines across which to average emissions, and the few 
vehicles they produce often have very high vehicle CO2 g/
mile levels. EPA also noted that the total U.S. annual vehicle sales of 
SVMs are much less than 1 percent of total sales of all manufacturers 
and contribute minimally to total vehicular GHG emissions, and foregone 
GHG reductions from SVMs likewise are a small percentage of total 
industry-wide reductions. EPA adopted a regulatory pathway for SVMs to 
apply for alternative GHG emissions standards for MYs 2017 and later, 
based on information provided by each SVM on factors such as technical 
feasibility, cost, and lead time.\489\
---------------------------------------------------------------------------

    \489\ 40 CFR 86.1818-12(g).
---------------------------------------------------------------------------

    The regulations established in the 2012 rule outline eligibility 
criteria and a framework for establishing SVM alternative standards. 
Manufacturer average annual U.S. sales must remain below 5,000 vehicles 
to be eligible for SVM alternative standards.\490\ The regulations 
specify the requirements for supporting technical data and information 
that a manufacturer must submit to EPA as part of its application.\491\ 
SVMs may apply for alternative standards for up to five model years at 
a time. SVMs may use the averaging, banking, and trading provisions to 
meet the alternative standards, but may not trade credits to another 
manufacturer.\492\
---------------------------------------------------------------------------

    \490\ 40 CFR 86.1818-12(g)(1).
    \491\ 40 CFR 86.1818-12(g)(4).
    \492\ 40 CFR 86.1818-12(g)(6).
---------------------------------------------------------------------------

    EPA received applications for SVM alternative standards for MYs 
2017-2021 from four manufacturers: Aston Martin, Ferrari, Lotus and 
McLaren.\493\ The regulations require SVMs to submit information, 
including cost information, to EPA as part of their applications. Each 
SVM provided its technical basis for the requested standards including 
a discussion of technologies that could and could not be feasibly 
applied to their vehicles in the time frame of the standards. In 2019, 
EPA issued proposed determinations of SVM alternative standards, 
including background information and EPA's assessment of the proposed 
standards, and requested public comment.\494\ In 2020, EPA finalized 
the SVM alternative standard determinations as proposed, shown in Table 
37.\495\
---------------------------------------------------------------------------

    \493\ Ferrari was previously owned by Fiat Chrysler Automobiles 
(FCA) and petitioned EPA for operationally independent status under 
40 CFR 86.1838-01(d). In a separate decision EPA granted this status 
to Ferrari starting with the 2012 model year, allowing Ferrari to be 
treated as an SVM under EPA's GHG program. Ferrari has since become 
an independent company and is no longer owned by FCA.
    \494\ 84 FR 37277.
    \495\ 85 FR 39561 (July 1, 2020). See also docket EPA-HQ-OAR-
2019-0210 for additional information on the SVM alternative 
standards setting proceedings.

                             Table 37--Summary of Current SVM Alternative Standards
                                                    [g/mile]
----------------------------------------------------------------------------------------------------------------
                                                   Aston Martin       Ferrari          Lotus          McLaren
----------------------------------------------------------------------------------------------------------------
MY 2017.........................................             431             421             361             372
MY 2018.........................................             396             408             361             372
MY 2019.........................................             380             395             344             368
MY 2020.........................................             374             386             341             360
MY 2021.........................................             376             373             308             329
----------------------------------------------------------------------------------------------------------------

ii. Proposed SVM Standards for MY 2022 and Later
    EPA established the SVM alternative standards option in the 2012 
rule when ICE technologies were the primary CO2 control 
technologies and vehicle electrification technologies were in their 
relative infancy. The landscape has fundamentally changed with 
electrification technologies maturing to become significant control 
technologies in this proposal. Vehicle electrification technologies are 
currently being implemented across many vehicle types including both 
luxury and high-performance vehicles by larger manufacturers and EPA 
expects this trend to continue. EPA believes that meeting the 
CO2 standards is becoming less a feasibility issue and more 
a lead time issue for SVMs. Also, the credit trading market has become 
more robust since we initially established the SVM unique standards 
provisions. Now that it has, we would expect SVMs to be able to seek 
credit purchases as a compliance strategy.\496\ As electrification 
technologies become more widespread and commonly used, EPA believes 
there is no reason SVMs cannot adopt similar technological approaches 
with enough lead time (or purchase credits from other OEMs).
---------------------------------------------------------------------------

    \496\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas 
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029, December 2022.
---------------------------------------------------------------------------

    Given this changed landscape for SVMs, EPA believes it is 
appropriate to transition away from unique SVM standards and bring SVMs 
into the primary program. As a reasonable way to transition SVMs into 
the primary program, EPA is proposing to phase in primary standards 
gradually over MYs 2025-2032 resulting in SVMs being ``caught up'' to 
the proposed primary program standards by MY 2032.\497\ Specifically, 
EPA proposes that SVM alternative standards established for MY 2021 
would apply through MY 2024 to provide stability for SVMs so that SVMs 
have an opportunity to reduce their GHG emissions in future years. EPA 
proposes that starting in MY 2025, SVMs would meet primary program 
standards albeit with additional lead-time. As shown in Table 38, EPA 
proposes that SVMs would meet the primary program standards for MY 2023 
in MY 2025, providing two years of additional lead time. EPA is also 
proposing a period of stability rather than year-over-year incremental 
reductions in the standards levels for SVMs. SVMs have fewer vehicle 
models over which to average, and EPA believes a staggered phase down 
in standards with a period of stability between the steps is 
reasonable. As shown in Table 38, EPA proposes that the two-year offset 
would then continue with a period of stability between step changes

[[Page 29257]]

in the standards until SVMs are required to meet the proposed MY 2032 
standards in MY 2032. EPA is not reopening the eligibility requirements 
for the proposed SVM standards currently in the regulations for SVM 
alternative standards and SVMs would need to remain eligible to use 
these proposed provisions.\498\
---------------------------------------------------------------------------

    \497\ See 40 CFR 86.1818-12(c) for the primary program standards 
through MY 2026.
    \498\ See 40 CFR 86.1818-12(g).

   Table 38--Proposed Additional Lead Time for SVM Standards Under the
                             Primary Program
------------------------------------------------------------------------
                                              Primary
                                              program        Years of
               Model year                 standards that    additional
                                               apply         lead time
------------------------------------------------------------------------
2025....................................            2023               2
2026....................................            2023               3
2027....................................            2025               2
2028....................................            2025               3
2029....................................            2027               2
2030....................................            2028               2
2031....................................            2030               1
2032 and later..........................            2032               0
------------------------------------------------------------------------

    This additional lead time approach is similar to the approach EPA 
used in the 2012 rule to provide additional lead time to intermediate 
volume manufacturers.\499\ As with the intermediate volume manufacturer 
temporary lead time flexibility, EPA believes that the proposed 
additional lead time for SVMs will be sufficient to ease the transition 
to more stringent standards in the early years of the proposed program 
that could otherwise present a difficult hurdle for them to overcome. 
The proposed alternative phase-in would provide necessary lead time for 
SVMs to better plan and implement the incorporation of CO2 
reducing technologies and/or provide time needed to seek and secure 
credits from other manufacturers to bring them into compliance with the 
primary standards.
---------------------------------------------------------------------------

    \499\ 77 FR 62623 (October 15, 2023) at 62795.
---------------------------------------------------------------------------

    Importantly, SVMs would continue to remain eligible to use the ABT 
5-year credit carry-forward provisions, allowing SVMs to bank credits 
in these intermediate years to further help smooth the transition from 
one step change in the standards to the next. EPA is, however, 
proposing to prohibit any SVM opting to use the additional lead time 
allowance from trading credits generated under the additional lead time 
standards to another manufacturer. These proposed credit provisions are 
also currently in place as part of the current SVM alternative 
standards. EPA believes that credit banking along with the staggered 
phase down of the standards would help SVMs meet the standards, 
recognizing that they have limited product lines. As with the SVM 
alternative standards, SVMs would have the option of following the 
additional lead time pathway with credit trading restrictions or opt 
into the primary program with no such restrictions. Once opted into the 
primary program, however, manufacturers would no longer be eligible for 
the alternative standards.
    EPA requests comment on the proposal to apply the primary program 
standards, including the proposed standards, to SVMs with the specified 
additional lead time through MY 2032 EPA requests comment on whether 
the phase-in appropriately provides additional lead time for SVMs, 
including whether SVMs should be brought into the primary program 
sooner than proposed.

C. Proposed Criteria and Toxic Pollutant Emissions Standards for Model 
Years 2027-2032

    EPA is proposing changes to criteria pollutant emissions standards 
for both light-duty vehicles and medium duty vehicles (MDV). Light-duty 
vehicles include LDV, LDT, and MDPV. NMOG+NOX changes for 
light-duty vehicles include a fleet average that declines from 2027-
2032 in the early compliance program (or steps down in 2030 for GVWR 
>6,000 pounds in the default program), the elimination of higher 
certification bins, a requirement for the same fleet average emissions 
standard to be met across four test cycles (25 [deg]C FTP, HFET, US06, 
SC03), a change from fleet average NMHC standards to one fleet average 
NMOG+NOX standard in the -7 [deg]C FTP test, and three 
NMOG+NOX provisions similar to requirements defined by the 
CARB Advanced Clean Cars II program. NMOG+NOX changes for 
MDV include a fleet average that declines from 2027-2032 in the early 
compliance program (or steps down in 2030 in the default program), the 
elimination of higher certification bins, a requirement for the same 
fleet average emissions standard to be met across four test cycles (25 
[deg]C FTP, HFET, US06, SC03), and a new fleet average 
NMOG+NOX standard in the -7 [deg]C FTP. EPA is proposing a 
requirement for spark ignition and compression ignition MDV with GCWR 
above 22,000 pounds to comply with engine-dynamometer-based criteria 
pollutant emissions standards under the heavy-duty engine program \500\ 
instead of the chassis-dynamometer-based criteria pollutant emissions 
standards.
---------------------------------------------------------------------------

    \500\ https://www.epa.gov/regulations-emissions-vehicles-and-engines/final-rule-and-related-materials-control-air-pollution.
---------------------------------------------------------------------------

    EPA is proposing to continue light-duty vehicle and MDV fleet 
average FTP NMOG+NOX standards that include both ICE-based 
and zero emission vehicles in a manufacturer's compliance calculation. 
Performance-based standards that include both ICE and zero emission 
vehicles are consistent with the existing NMOG+NOX program 
as well as the GHG program. EPA has considered the availability of 
battery electric vehicles as a compliance strategy in determining the 
appropriate fleet average standards. Given the cost-effectiveness of 
BEVs for compliance with both criteria pollutant and GHG standards, EPA 
anticipates that most (if not all) automakers will include BEVs in 
their compliance strategies. However, the standards continue to be a 
performance-based fleet average standard with multiple paths to 
compliance, depending on choices manufacturers make about deployment of 
a variety of emissions control technologies for ICE as well as 
electrification and credit trading.
    EPA is proposing a PM standard of 0.5 mg/mi for light-duty vehicles 
and MDV

[[Page 29258]]

that must be met across three test cycles (-7 [deg]C FTP, 25 [deg]C 
FTP, US06), a requirement for PM certification tests at the test group 
level, and a requirement that every in-use vehicle program (IUVP) test 
vehicle is tested for PM. The 0.5 mg/mi standard is a per-vehicle cap, 
not a fleet average.
    EPA is proposing CO and formaldehyde (HCHO) emissions requirement 
changes for light-duty vehicles and MDVs including transitioning to 
emissions caps (as opposed to bin-specific standards) for all emissions 
standards, a requirement that CO emissions caps be met across four test 
cycles (25 [deg]C FTP, HFET, US06, SC03), and a CO emissions cap for 
the -7 [deg]C FTP that is the same for all light-duty vehicles and 
MDVs.
    EPA is proposing a refueling standards change to require incomplete 
MDVs to have the same on-board refueling vapor recovery standards as 
complete MDVs. EPA is also proposing eliminating commanded enrichment 
as an AECD for power and component protection.
    The proposal allows light-duty vehicle 25 [deg]C FTP 
NMOG+NOX credits and -7 [deg]C FTP NMHC credits (converting 
to NMOG+NOX credits) to be carried into the new program. It 
only allows MDV 25 [deg]C FTP NMOG+NOX credits to be carried 
into the new program if a manufacturer selects the early compliance 
pathway. New credits may be generated, banked and traded within the new 
program to provide manufacturers with flexibilities in developing 
compliance strategies.
1. Phase-in of Criteria Pollutant Standards
    The proposed phase-in for criteria pollutant standards, including 
NMOG+NOX, PM, CO, HCHO, CARB ACC II NMOG+NOX 
provisions, and elimination of enrichment, is described in this 
section. Proposed refueling standards for incomplete vehicles begin 
with model year 2030 and are not part of the early phase-in scenario 
for the other pollutant standards. Table 39 shows eight phase-in 
scenarios that manufacturers may choose from. Manufacturers may comply 
with phase-in scenarios based on model year (MY) sales or MY U.S. 
directed production volume.
    Under the default compliance scenario shown in the bottom matrix in 
Table 39, 40 percent of vehicles with gross vehicle weight rating 
(GVWR) at or below 6,000 pounds must comply in MY 2027, 80 percent in 
MY 2028, and 100 percent in MY 2029 and after. For the heavier vehicle 
classes, 100 percent of vehicles must comply starting in MY 2030 in a 
single step under the default compliance pathway, which provides a full 
four years of lead time as required by CAA section 202(a)(3)(C). Under 
this default compliance scenario, chassis cert vehicles between 8501 
and 14,000 pounds GVWR may not carry forward Tier 3 NMOG+NOX 
credits (as allowed by the early phase-in schedule), and engine cert 
vehicles between 8501 and 14,000 pounds GVWR may not use HD phase 2 
work factor based GHG standards after 2027 (as allowed by the early 
phase-in schedule). Details are provided in Sections III.B.3, III.C.5, 
and III.C.9.
    The top matrix in Table 39 describes the phase-in scenario where a 
manufacturer chooses an early phase-in schedule for all vehicle 
classes. In this scenario 40 percent of the vehicles of each class 
(each column) comply in MY 2027, 80 percent comply in MY 2028, and 100 
percent comply starting in MY 2029 and after. If a manufacturer chooses 
this phase-in scenario, phase-in percentages for vehicles at or below 
8500 pounds GVWR are calculated as one group. Chassis cert vehicles 
between 8501 and 14,000 pounds GVWR may carry forward Tier 3 
NMOG+NOX credits, and engine cert vehicles between 8501 and 
14,000 pounds GVWR may use the HD phase 2 work factor based GHG 
standards from MY 2026 without a capped GCWR input from MY 2027 to MY 
2029. Then in MY 2030 chassis cert vehicles between 8501 and 14,000 
pounds GVWR must switch to new work factor based GHG standards with the 
capped work factor equation.
    The six phase-in scenarios between default and early show other 
options that manufacturers may select from. Any scenario that follows 
an early phase-in schedule for vehicles at or below 8500 pounds GVWR, 
results in phase-in percentages being calculated as one group. Any 
scenario that follows an early phase-in schedule for chassis cert 
vehicles between 8501 and 14,000 pounds GVWR may carry forward Tier 3 
NMOG+NOX credits. And any scenario that follows an early 
phase-in schedule for engine cert vehicles between 8501 and 14,000 
pounds GVWR may use the HD phase 2 work factor based GHG standards from 
MY 2026 without a capped GCWR input from MY 2027 to MY 2029.
    Vehicles that are not part of the phase-in percentages are 
considered interim vehicles, which must continue to demonstrate 
compliance with all Tier 3 regulations with the exception that all 
vehicles (interim and those that are part of the phase-in percentages) 
contribute to the NMOG+NOX fleet average standards shown in 
Table 40 and Table 41.
    EPA requests comment on increasing or decreasing the proposed 
phase-in percentages shown in Table 39.

               Table 39--Proposed Criteria Pollutant Phase-In Scenarios Available to Manufacturers
----------------------------------------------------------------------------------------------------------------
                                                                              8,501-14,000 lb.  8,501-14,000 lb.
                         Model year                             <=8,500 lb.     GVWR Chassis    GVWR Engine cert
                                                                 GVWR (%)         cert (%)             (%)
----------------------------------------------------------------------------------------------------------------
                          Early phase-in schedule for all vehicle classes (Scenario A)
----------------------------------------------------------------------------------------------------------------
2027........................................................              40                40                40
2028........................................................              80                80                80
2029........................................................             100               100               100
2030+.......................................................             100               100               100
----------------------------------------------------------------------------------------------------------------
                                       Intermediate scenario (Scenario B)
----------------------------------------------------------------------------------------------------------------
2027........................................................              40                 0                40
2028........................................................              80                 0                80
2029........................................................             100                 0               100
2030+.......................................................             100               100               100
----------------------------------------------------------------------------------------------------------------

[[Page 29259]]

 
                                       Intermediate scenario (Scenario C)
----------------------------------------------------------------------------------------------------------------
2027........................................................              40                40                 0
2028........................................................              80                80                 0
2029........................................................             100               100                 0
2030+.......................................................             100               100               100
----------------------------------------------------------------------------------------------------------------
                                       Intermediate scenario (Scenario D)
----------------------------------------------------------------------------------------------------------------
2027........................................................              40                 0                 0
2028........................................................              80                 0                 0
2029........................................................             100                 0                 0
2030+.......................................................             100               100               100
----------------------------------------------------------------------------------------------------------------


 
                                                                              8,501-14,000 lb.  8,501-14,000 lb.
                 Model year                     <=6,000 lb.   6,001-8500 lb.    GVWR Chassis    GVWR Engine cert
                                                   GVWR          GVWR (%)         cert (%)             (%)
----------------------------------------------------------------------------------------------------------------
                                       Intermediate scenario (Scenario E)
----------------------------------------------------------------------------------------------------------------
2027........................................              40               0                40                40
2028........................................              80               0                80                80
2029........................................             100               0               100               100
2030+.......................................             100             100               100               100
----------------------------------------------------------------------------------------------------------------
                                       Intermediate scenario (Scenario F)
----------------------------------------------------------------------------------------------------------------
2027........................................              40               0                 0                40
2028........................................              80               0                 0                80
2029........................................             100               0                 0               100
2030+.......................................             100             100               100               100
----------------------------------------------------------------------------------------------------------------
                                       Intermediate scenario (Scenario G)
----------------------------------------------------------------------------------------------------------------
2027........................................              40               0                40                 0
2028........................................              80               0                80                 0
2029........................................             100               0               100                 0
2030+.......................................             100             100               100               100
----------------------------------------------------------------------------------------------------------------
                                    Default compliance scenario (Scenario H)
----------------------------------------------------------------------------------------------------------------
2027........................................              40               0                 0                 0
2028........................................              80               0                 0                 0
2029........................................             100               0                 0                 0
2030+.......................................             100             100               100               100
----------------------------------------------------------------------------------------------------------------

2. Proposed NMOG+NOX Standards
    EPA is proposing new NMOG+NOX standards for MY 2027 and 
later. The standards are structured to take into account the increased 
electrification of new light-duty vehicles and MDVs that is projected 
to occur over the next decade.
    The current Tier 3 fleet average NMOG+NOX emissions 
standards were fully phased-in for Class 2b and Class 3 (MDV within 
this proposal) in MY 2022 at 178 and 247 mg/mi, respectively. Tier 3 
standards for light-duty vehicles, including LDT3 and LDT4 above 6,000 
pounds GVWR and medium-duty passenger vehicles (MDPVs), will be fully 
phased into the Tier 3 30 mg/mi fleet average NMOG+NOX 
standard in MY 2025. Tier 3 standards include a Bin 0 which allows 
PEV's to be averaged with conventional ICE-based vehicles. In the 
absence of our proposed NMOG+NOX standards, as sales of PEVs 
continue to increase, there would be an opportunity for the ICE portion 
of light-duty vehicles and MDVs to reduce emission control system 
content (i.e., system costs) and comply with less stringent 
NMOG+NOX standard bins under Tier 3. If this were to occur, 
it would have the effect of increasing NMOG+NOX emissions 
from the ICE portion of the light-duty vehicle and MDV fleet and delay 
the overall fleet emission reductions of NMOG+NOX that would 
have occurred from increased penetration of PEVs into the light-duty 
vehicle and MDV fleets.
    The structure of the proposed NMOG+NOX standards has 
been designed to cap the NMOG+NOX contribution of ICE 
vehicles at approximately Tier 3 levels for light-duty vehicles and at 
approximately 100 mg/mi NMOG+NOX for MDV. The feasibility of 
ICE MDV meeting 100 mg/mi NMOG+NOX by 2027 is discussed in 
further detail within Chapter 3.2.1.3 of the DRIA. EPA projects the 
year-over-year reductions in MY 2027 and later light-duty vehicle and 
MDV NMOG+NOX standards from an average of 30 mg/mi and 100 
mg/mi,

[[Page 29260]]

respectively, thus would occur primarily from increased year-over-year 
electrification of new vehicle sales and the resulting averaging of 
zero emission vehicles with ICE vehicles within the fleet average 
light-duty vehicle and MDV NMOG+NOX standards.
    The CAA requires 4 years of lead time and 3 years of standards 
stability for heavy-duty vehicles. There are three categories of 
vehicles that are currently regulated as light-duty vehicles but are 
defined within the CAA as heavy-duty vehicles for purposes of lead time 
and standards stability: The heavy-light-duty truck categories (LDT3 
and LDT4) and MDPV.\501\ Furthermore, MDVs are also defined as heavy-
duty vehicles under the CAA. EPA is proposing several alternative 
pathways for these three categories of vehicles for compliance with the 
proposed NMOG+NOX standards. The Agency's early compliance 
NMOG+NOX program would apply to all LDV, LDT, MDPV, and MDV 
vehicles beginning in 2027 in order to coincide with the timing of 
increased electrification of these vehicles. However, mandatory 
regulations beginning in 2027 would not provide 4 years of lead time as 
required for vehicles defined as heavy-duty under the CAA. To address 
this issue, we are proposing two schedules for compliance with 
NMOG+NOX standards for LDT3, LDT4, MDPV, and MDV. The eight 
alternatives describe the breadth of compliance scenarios. The two 
schedules referenced here include one for early compliance and one for 
later compliance for each reg class.
---------------------------------------------------------------------------

    \501\ Light-duty truck 3 (LDT3) is defined as any truck with 
more than 6,000 pounds GVWR and with an ALVW of 5,750 pounds or 
less. Light-duty truck 4 (LDT4) is defined as any truck is defined 
as any truck with more than 6,000 pounds GVWR and with an ALVW of 
more than 5,750 pounds. See 40 CFR 86.1803-01--Definitions. For 
current and proposed MDPV definitions, see Section III.D.
---------------------------------------------------------------------------

    The early compliance pathway shown in Table 40 has LDT3, LDT4 and 
MDPV meeting identical and gradually declining fleet average 
NMOG+NOX emissions standards to those for LDV, LDT1 and LDT2 
as described in Section III.C.2.iii; and includes separate gradually 
declining fleet average NMOG+NOX emissions standards for MDV 
at or below 22,000 pounds GCWR as described in Section III.C.2.iv. This 
pathway for earlier compliance with NMOG+NOX emissions 
standards for LDT3, LDT4, MDPV, and MDV includes additional 
flexibilities. We request comment on the addition of a temporary ``bin 
200'' (200 mg/mi NMOG+ NOX) that would apply solely to MY 
2027 and MY 2028 Class 3 MDV for manufacturers opting into early 
compliance for MDV.
    The second, and default, schedule to NMOG+NOX compliance 
shown in Table 41 has LDV, LDT1, and LDT2 meeting a gradually declining 
fleet average NMOG+NOX standards from 2027 through 2032. 
Vehicles in the LDT3, LDT4, and MDPV categories would continue to meet 
Tier 3 standards through the end of MY 2029 and then would proceed to 
meeting a 12 mg/mi NMOG+NOX standard in a single step in MY 
2030 in order to comply with CAA provisions for 4 years of lead time 
and 3 years of standards stability. Similarly, MDVs would continue to 
meet Tier 3 standards through the end of MY 2029 and then MDVs at or 
below 22,000 pounds GCWR would proceed to meeting a 60 mg/mi 
NMOG+NOX standard in a single step in 2030 in order to 
comply with CAA provisions for 4 years of lead time and 3 years of 
standards stability.
    We are also proposing a similar choice between early compliance and 
default compliance pathways for MDVs with high GCWR, which are defined 
as being above 22,000 pounds. Under the early compliance pathway, high 
GCWR MDVs would comply with MY 2027 and later heavy-duty engine 
criteria pollutant emissions standards beginning with MY 2027 (Section 
III.C.5). Manufacturers with high GCWR MDVs choosing the early 
compliance pathway would have additional flexibilities with respect to 
GHG compliance. They could delay entry into the MDV GHG work factor-
based fleet average standards until the beginning of MY 2030 (see 
Section III.B.3).
    Under the default compliance path, high GCWR MDVs would continue to 
comply with Tier 3 standards until the end of MY 2029 and then would 
comply with MY 2027 and later heavy-duty engine criteria pollutant 
emissions standards beginning with MY 2030 in order to comply with CAA 
provisions for 4 years of lead time. Under this default compliance 
path, high GCWR MDVs would comply with fleet average MDV GHG emissions 
beginning with MY 2027 (see Section III.B.3).

      Table 40--LDV, LDT, MDPV, and MDV Fleet Average NMOG+NOX Standards Under the Early Compliance Pathway
----------------------------------------------------------------------------------------------------------------
                                                             LDV, LDT1, LDT2,      MDV[dagger] NMOG+NOX (mg/mi)
                                                              LDT3[dagger],
                       Model year                             LDT4[dagger] &     -------------------------------
                                                          MDPV[dagger] NMOG+NOX
                                                                 (mg/mi)             Class 2b         Class 3
----------------------------------------------------------------------------------------------------------------
2026...................................................                     * 30           * 178           * 247
2027...................................................                       22             160
2028...................................................                       20             140
2029...................................................                       18             120
2030...................................................                       16             100
2031...................................................                       14              80
2032 and later.........................................                       12              60
----------------------------------------------------------------------------------------------------------------
* Tier 3 standards provided for reference.
[dagger] NMOG+NOX credit generated under Tier 3 can be carried forward for 5 years after it is generated. MDV
  standards only apply for vehicles at or below 22,000 lb. GCWR.


[[Page 29261]]


     Table 41--LDV, LDT, MDPV and MDV Fleet Average NMOG+NOX Standards under the Default Compliance Pathway
----------------------------------------------------------------------------------------------------------------
                                                                                   MDV[dagger] NMOG+NOX (mg/mi)
                                    LDV, LDT1 & LDT2        LDT3, LDT4 & MDPV
          Model year                NMOG+NOX (mg/mi)         NMOG+NOX (mg/mi)    -------------------------------
                                                                                     Class 2b         Class 3
----------------------------------------------------------------------------------------------------------------
2026..........................                     * 30                     * 30           * 178           * 247
2027..........................                       22                     * 30           * 178           * 247
2028..........................                       20                     * 30           * 178           * 247
2029..........................                       18                     * 30           * 178           * 247
2030..........................                       16                       12              60
2031..........................                       14                       12              60
2032 and later................                       12                       12              60
----------------------------------------------------------------------------------------------------------------
* Tier 3 standards provided for reference.
[dagger] MDV standards only apply for vehicles at or below 22,000 lb GCWR.

i. NMOG+NOX Bin Structure for Light-Duty Vehicles and MDVs
    The bin structure being proposed for light-duty vehicles and MDVs 
is shown in Table 42. The upper two bins (Bin 160 and Bin 125) are only 
available to MDV at or below 22,000 pounds GCWR.\502\
---------------------------------------------------------------------------

    \502\ MDV at or above 22,000 pounds GCWR must comply with 2027 
and later heavy-duty engine emissions standards.
---------------------------------------------------------------------------

    For light-duty vehicles, the proposed bin structure removes the two 
highest Tier 3 bins (Bin 160 and Bin 125) and adds several new bins 
(Bin 60, Bin 40, Bin 10). For MDV, the proposed bin structure moves 
away from separate bins for Class 2b and Class 3 vehicles, adopting 
light-duty vehicle bins with higher bins only available to MDV.

       Table 42--Light-Duty Vehicle and MDV NMOG+NOX Bin Structure
------------------------------------------------------------------------
                                                           NMOG+NOX (mg/
                         LDV bin                                mi)
------------------------------------------------------------------------
Bin 160 *...............................................             160
Bin 125 *...............................................             125
Bin 70..................................................              70
Bin 60..................................................              60
Bin 50..................................................              50
Bin 40..................................................              40
Bin 30..................................................              30
Bin 20..................................................              20
Bin 10..................................................              10
Bin 0...................................................               0
------------------------------------------------------------------------
* MDV only.

ii. Smog Scores for the Fuel Economy and Environment Label
    This proposed rule includes new Tier 4 bins that do not directly 
align with the existing smog scores used on the Fuel Economy and 
Environment Label (see 40 CFR 600.311-12(g)). We are therefore seeking 
comment on fitting the new Tier 4 bins into the existing MY 2025 Tier 3 
smog score structure for the Tier 4 phase-in period (MY 2027-2029), and 
we are also seeking comment on a new Tier 4 smog score structure for MY 
2030 and later. For both ratings structures, it is important to avoid 
having any bin assigned to a higher score in a newer model year than it 
was assigned in an older model year (no ``backsliding'' for smog score 
ratings).
    For MY 2027-2029, EPA is seeking comment on how the new Tier 4 bins 
and California LEV IV categories should fit into the existing Tier 3 
bin structure for smog scores. For example, EPA seeks comment on what 
smog score should apply to the new Tier 4, bin 10 and new California 
LEV IV category of SULEV 15. The current MY 2025 Tier 3 rating system 
in Table 1 of 40 CFR 600.311-12(g) has a smog score of 10 for bin 0 and 
a score of 7 for bin 20, suggesting that a smog score of 8 might be 
appropriate for SULEV 15 and a smog score of 9 might be appropriate for 
bin 10; however we may also consider assigning bin 10 and SULEV 15 to 
the same rating, either 8 or 9. In addition, EPA is seeking comment on 
the smog scores that should apply to Tier 4 bin 60/LEV IV ULEV 60, Tier 
4 bin 40/LEV 40, and SULEV 25. We seek comment on assigning bin 60/ULEV 
60 a score of 4, sharing a rating with bin 70 ULEV 70; assigning bin 
40/ULEV 40 a rating of 5, sharing a rating with bin 50; and assigning 
SULEV 25 a rating of 6, sharing a rating with bin 30. These assignments 
would allow the MY 2025 Tier 3 ratings to remain in place, while 
placing the new Tier 4 bins and LEV IV categories in logical locations.
    For MY 2030 and later, we seek comment on maintaining the smog 
rating bin assignments from MY 2027-2029 for bin 40/ULEV 40 and lower 
bins. Since there is no longer a need for Tier 3 bin 160 or bin 125 
after MY 2029, we seek comment on assigning a smog score of 2 to bin 
70/ULEV 70, a score of 3 to bin 60/ULEV 60, and a score of 4 to bin 50/
ULEV 50. This approach allows bin 40 through bin 70 to each correspond 
to a single smog score.
    We welcome comment on this approach and after consideration of 
comment may adopt final smog scores that are higher or lower.
iii. NMOG+NOX Standards and Test Cycles for Light-Duty 
Vehicles
    EPA is proposing increasingly stringent light-duty vehicle 
NMOG+NOX standards (Table 43) for the sales weighted average 
inclusive of all LDV, LDT and MDPV (e.g. ICE vehicles, BEVs, PHEVs, 
fuel cell, vehicles, etc.). The proposed phase-in of the standards by 
vehicle category is described in Section III.C.1.
    EPA recognizes that vehicles will differ with respect to their 
levels of NMOG+NOX emissions control depending on degree of 
electrification, choice of fuel, ICE technology, and other differences. 
The proposed fleet average standards are feasible in light of 
anticipated technology penetration rates commensurate with the GHG 
technology implementation during this same time period and increasing 
electrification of light-duty vehicles.

  Table 43--NMOG+NOX Fleet Average Standards Over the FTP [dagger] for
                          Light-Duty Vehicles *
------------------------------------------------------------------------
                                                           NMOG+NOX (mg/
                       Model year                               mi)
------------------------------------------------------------------------
2027....................................................              22
2028....................................................              20
2029....................................................              18
2030....................................................              16
2031....................................................              14
2032 and later..........................................              12
------------------------------------------------------------------------
[dagger] As defined in 40 CFR 1066.801(c)(1)(i) and 1066.815.
* For a complete description of fleet average NMOG+NOX standards for
  LDT3, LDT4, and MDPV under both the early compliance and default
  programs, see Section III.C.1.

    The declining fleet average standards over the FTP cycle ensure 
that NMOG+NOX continues to decrease over time for the light-
duty fleet. The

[[Page 29262]]

elimination of the two highest bins (Table 42) caps the maximum 
NMOG+NOX emissions from an individual new vehicle model. EPA 
anticipates that electrified technology, including BEVs, will play a 
significant role within the compliance strategies for meeting the fleet 
average NMOG+NOX standards for each manufacturer. However, 
EPA anticipates that manufacturers may use multiple technology 
solutions to comply with fleet average NMOG+NOX standards. 
For example, a manufacturer may choose to offset any ICE increases with 
increased BEV sales, or could alternatively improve engine and exhaust 
aftertreatment designs to reduce emissions for ICE vehicles while 
planning for a more conservative percentage of BEV sales as part of 
their compliance with the declining fleet average NMOG+NOX 
standards reflected in Table 43.
    Since technologies are available to further reduce 
NMOG+NOX emissions relative to the current fleet, and since 
more than 20 percent of MY 2021 Bin 30 vehicle certifications already 
show an FTP certification value under 15 mg/mi NMOG+NOX, 
achieving reduced NMOG+NOX emissions through improved ICE 
technologies is feasible and reasonable. Regardless of the compliance 
strategy chosen, overall, the fleet will become significantly cleaner.
    EPA is proposing that the same bin-specific numerical standards be 
applied across four test cycles: 25 [deg]C FTP,\503\ HFET,\504\ US06 
\505\ and SC03.\506\ This means that a manufacturer certifying a 
vehicle to comply with Bin 30 NMOG+NOX standards would be 
required to meet the Bin 30 emissions standards for all four test 
cycles. Meeting the same NMOG+NOX standards across four 
cycles is an increase in stringency from Tier 3, which had one standard 
for the higher of FTP and HFET, and a less stringent composite based 
standard for the SFTP (weighted average of 0.35*FTP + 0.28*US06 + 
0.37*SC03).
---------------------------------------------------------------------------

    \503\ 40 CFR 1066.801(c)(1)(i) and 1066.815.
    \504\ 40 CFR 1066.840.
    \505\ 40 CFR 1066.831.
    \506\ 40 CFR 1066.835.
---------------------------------------------------------------------------

    Present-day engine, transmission, and exhaust aftertreatment 
control technologies allow closed-loop air-to-fuel (A/F) ratio control 
and good exhaust catalyst performance throughout the US06 and SC03 
cycles. As a result, higher emissions standards over these cycles are 
no longer necessary. Approximately 60 percent of the test group/vehicle 
model certifications from MY 2021 have higher NMOG+NOX 
emissions over the FTP cycle as compared to the US06 cycle, supporting 
the conclusion that a single standard is feasible and appropriate.
    EPA is proposing to replace the existing -7 [deg]C FTP NMHC fleet 
average standard of 300 mg/mi for passenger cars and LDT1, and 500 mg/
mi fleet average standard for LDT2 through LDT4 and MDPV, with a single 
NMOG+NOX fleet average standard of 300 mg/mi for LDV, LDT1 
through 4 and MDPVs to harmonize with the combined NMOG+NOX 
approach adopted in Tier 3 for all other cycles (i.e., 25 [deg]C FTP, 
HFET, US06, and SC03 cycles). EPA emissions testing at -7 [deg]C FTP 
showed that a 300 mg/mi standard is feasible with a large compliance 
margin for NMOG+NOX. See DRIA for additional certification 
data to support the proposed fleet average NMOG+NOX standard 
of 300 mg/mi. EPA did not include EVs in the assessment of the proposed 
fleet average standard and therefore EVs and other zero emission 
vehicles are not included and not averaged into the fleet average -7 
[deg]C FTP NMOG+NOX standards.
    Since -7 [deg]C FTP and 25 [deg]C FTP are both cold soak tests that 
include TWC operation during light-off and at operating temperature, it 
is appropriate to apply the same Tier 3 useful life to both standards.
    EPA requests comment on whether a 400 mg/mi cap should replace the 
proposed 300 mg/mi fleet average for the -7 [deg]C FTP 
NMOG+NOX standard. Additional discussion on the feasibility 
of the proposed standards can be found in DRIA Chapter 3.2.
    The proposed standards apply equally at high altitude, rather than 
including compliance relief provisions from Tier 3 for certification at 
high altitude. Modern engine management systems can use idle speed, 
engine spark timing, valve timing, and other controls to offset the 
effect of lower air density on exhaust catalyst performance at high 
altitudes.
iv. NMOG+NOX Standards and Test Cycles for MDV at or Below 
22,000 lb GCWR
    The proposed MDV (medium duty vehicles, 8,501 to 14,000 pounds 
GVWR) NMOG+NOX standards for vehicles at or below 22,000 
pounds GCWR are shown in Table 44. Certification data show that for MY 
2022-2023, 75 percent of sales-weighted Class 2b/3 gasoline vehicle 
certifications were below 120 mg/mi in FTP and US06 tests. Diesel-
powered MDVs designed for high towing capability (i.e., GCWR above 
22,000 pounds) were higher (75 percent were below 180 mg/mi) but they 
are not being used to inform the proposed MDV standard because the 
Agency is proposing the requirement that MDVs (diesel and gasoline) 
with GCWR (gross combined weight rating) above 22,000 pounds comply 
with criteria pollutant emissions standards under the HD engine 
program, as described in Section I.A.1, MDVs at or below 22,000 pounds 
GCWR have comparable emissions performance to LDVs and LDTs. The year-
over-year fleet average FTP standards for MDV at or below 22,000 pounds 
GCWR and the rationale for the manufacturer's choice of early 
compliance and default compliance pathways is described in Section 
III.C.1. For further discussion of MDV NMOG+NOX feasibility, 
please refer to Chapter 3.2 of the DRIA.
    The proposed MDV NMOG+NOX standards are based on 
applying existing light-duty vehicle technologies, including 
electrification, to MDV. As with the light-duty vehicle categories, EPA 
anticipates that there will be multiple compliance pathways, such as 
increased electrification of vans together with achieving 100 mg/mile 
NMOG+NOX for ICE-power MDV. Present-day MDV engine and 
aftertreatment technology allows fast catalyst light-off after cold-
start followed by closed-loop A/F control and excellent exhaust 
catalyst emission control on MDV, even at the adjusted loaded vehicle 
weight, ALVW [(curb + GVWR)/2] test weight, which is higher than loaded 
vehicle weight, LVW (curb + 300 pounds) used for testing light-duty 
vehicles. The proposed MDV standards begin to take effect in 2030, 
consistent with the CAA section 202(a)(3)(C) lead time requirement for 
these vehicles.

[[Page 29263]]



     Table 44--MDV Fleet Average NMOG+NOX Standards Under the Early
                       Compliance Pathway [dagger]
------------------------------------------------------------------------
                                                 NMOG+NOX (mg/mi)
               Model year                -------------------------------
                                             Class 2b         Class 3
------------------------------------------------------------------------
2026....................................           * 178           * 247
2027....................................             160
2028....................................             140
2029....................................             120
2030....................................             100
2031....................................              80
2032 and later..........................              60
------------------------------------------------------------------------
[dagger] Please refer to Section III.C.1 for further discussion of the
  early compliance and default compliance pathways.
* Tier 3 standards provided for reference.


 Table 45--MDV Fleet Average Chassis Dynamometer FTP NMOG+NOX Standards
                  Under the Default Compliance Pathway
------------------------------------------------------------------------
                                           MDV [dagger] NMOG+NOX (mg/mi)
 
               Model year                -------------------------------
                                             Class 2b         Class 3
------------------------------------------------------------------------
2026....................................           * 178           * 247
2027....................................           * 178          * 247;
2028....................................           * 178           * 247
2029....................................           * 178           * 247
2030....................................              60
2031....................................              60
2032 and later..........................              60
------------------------------------------------------------------------
* Tier 3 standards provided for reference.
[dagger] MDV chassis dynamometer NMOG+NOX standards only apply for
  vehicles at or below 22,000 lb GCWR.

    If a manufacturer has a fleet mix with relatively high sales of MDV 
BEV, that would ease compliance with MDV NMOG+NOX fleet 
average standards for MDV ICE-powered vehicles. If the manufacturer has 
a fleet mix with relatively low BEV sales, then improvements in 
NMOG+NOX emissions control for ICE-powered vehicles would be 
required to meet the fleet average standards. Improvements to 
NMOG+NOX emissions from ICE-powered vehicles are feasible 
with available engine, aftertreatment, and sensor technology, and has 
been shown within an analysis of MY 2022-2023 MDV certification data 
(see DRIA Chapter 3.2). Fleet average NMOG+NOX will continue 
to decline to well below the final Tier 3 NMOG+NOX standards 
of 178 mg/mi and 247 mg/mi for Class 2b and 3 vehicles, respectively.
    The proposed standards require the same MDV numerical standards be 
met across all four test cycles, the 25 [deg]C FTP, HFET, US06 and 
SC03, consistent with the proposed approach for light-duty vehicles 
described in Section III.C.1.ii. This would mean that a manufacturer 
certifying a vehicle to bin 60 would be required to meet the bin 60 
emissions standards for all four cycles.
    Meeting the same NMOG+NOX standard across four cycles is 
an increase in stringency from Tier 3, which had one standard over the 
FTP and less stringent bin standards for the HD-SFTP (weighted average 
of 0.35xFTP + 0.28xHDSIM + 0.37xSC03, where HDSIM is the driving 
schedule specified in 40 CFR 86.1816-18(b)(1)(ii)). Current MDV control 
technologies allow closed-loop A/F control and high exhaust catalyst 
emissions conversion throughout the US06 and SC03 cycles, so compliance 
with higher numerical emissions standards over these cycles is no 
longer needed. Manufacturer submitted certification data and EPA 
testing show that Tier 3 MDV typically have similar NMOG+NOX 
emissions in US06 and 25 [deg]C FTP cycles, and NMOG+NOX 
from the SC03 is typically much lower. Testing of a 2022 F250 7.3L at 
EPA showed average NMOG+NOX emissions of 56 mg/mi in the 25 
[deg]C FTP and 48 mg/mi in the US06. Manufacturer-submitted 
certifications show that MY 2021+2022 gasoline 2b/3 trucks achieved, on 
average, 69/87 mg/mi in the FTP, and 75/NA \507\ mg/mi in the US06, and 
18/25 mg/mi in the SC03.
---------------------------------------------------------------------------

    \507\ Tier 3 US06 certification data are not available for class 
3 trucks because Tier 3 requires them to certify using the LA92 
instead of the US06.
---------------------------------------------------------------------------

    Several Tier 3 provisions would end with the elimination of the HD-
SFTP and the combining of bins for Class 2b and class 3 vehicles. 
First, Class 2b vehicles with power-to-weight ratios at or below 0.024 
hp/pound could no longer replace the full US06 component of the SFTP 
with the second of three sampling bags from the US06. Second, class 3 
vehicles would no longer use the LA-92 cycle in the HD-SFTP calculation 
but would rather have to meet the NMOG+NOX standard in each 
of four test cycles (25 [deg]C FTP, HFET, US06 and SC03). Third, the 
SC03 could no longer be replaced with the FTP in the SFTP calculation.
    The proposed standards do not include relief provisions for MDV 
certification at high altitude. Modern engine systems can use idle 
speed, engine spark timing, valve timing, and other controls to offset 
the effect of lower air density on catalyst light-off at high 
altitudes.
    EPA is also proposing a new -7 [deg]C FTP NMOG+NOX fleet 
average standard of 300 mg/mi for gasoline and diesel MDV. EPA testing 
has demonstrated the feasibility of a single fleet average -7 [deg]C 
FTP NMOG+NOX standard of 300 mg/mi across light-duty 
vehicles and MDV. EPA did not include EV's in the assessment of the 
proposed fleet average standard and therefore EVs and other zero 
emission vehicles are not included and not averaged into the fleet 
average -7 [deg]C FTP NMOG+NOX standards.

[[Page 29264]]

    Since -7 [deg]C FTP and 25 [deg]C FTP are both cold soak tests that 
include TWC operation during light-off and at operating temperature, it 
is appropriate to apply the same Tier 3 useful life to both standards.
    EPA requests comment on whether a 400 mg/mi cap should replace the 
proposed 300 mg/mi fleet average for the -7 [deg]C FTP 
NMOG+NOX standard. Additional discussion on the feasibility 
of the proposed standards can be found in DRIA 3.2.
3. Revised PM Standard
i. PM Standard and Test Cycles for Light-Duty Vehicles and MDV
    EPA is proposing several changes to the current Tier 3 p.m. 
requirements. These changes include a more stringent standard for the 
25 [deg]C FTP and US06 test cycles, and addition of a cold PM standard 
for the existing Cold Test (-7 [deg]C FTP). The same numerical standard 
of 0.5 mg/mi and the same certification test cycles are being proposed 
for both light-duty vehicles (LDV, LDT, and MDPV) and MDV (Class 2b and 
3 vehicles) at or below 22,000 pounds GCWR, as shown in Table 46 for 
light-duty vehicles and Table 47 for MDV. Comparisons to current Tier 3 
p.m. standards are provided for reference. The same Tier 3 defined 
useful life standard applies to all three test cycles.

           Table 46--Proposed Light-Duty Vehicle PM Standards
------------------------------------------------------------------------
                                                            Proposed PM
           Test cycle              Tier 3 standards (mg/   standard (mg/
                                            mi)                 mi)
------------------------------------------------------------------------
25 [deg]C FTP...................  3.....................             0.5
US06............................  6.....................             0.5
-7 [deg]C FTP...................  Not applicable........             0.5
------------------------------------------------------------------------


                 Table 47--Proposed MDV (Class 2b and 3) at or Below 22,000 lb GCWR PM Standards
----------------------------------------------------------------------------------------------------------------
                                                                                                    Proposed PM
                Test cycle                                Tier 3 standards (mg/mi)                 standard (mg/
                                                                                                        mi)
----------------------------------------------------------------------------------------------------------------
25 [deg]C FTP.............................  8/10 for 2b/3 vehicles..............................             0.5
US06......................................  10/7 for 2b/3 vehicle on SFTP.......................             0.5
-7 [deg]C FTP.............................  Not applicable......................................             0.5
----------------------------------------------------------------------------------------------------------------

    EPA believes that these standards are appropriate and feasible to 
reduce PM emissions over the broadest range of vehicle operating and 
environmental conditions. The current Tier 3 p.m. standards capture 
only a portion of vehicle operation. EPA has observed that PM emissions 
increase dramatically during cold cold-starts and during high engine 
power driving not captured by on-cycle tests. While several vehicles in 
the current fleet demonstrate emissions performance that could comply 
with the proposed standards at 25 [deg]C, the -7 [deg]C PM standard 
will most likely lead to the adoption of Gasoline Particulate Filters 
(GPF) as the most practical and cost-effective means to control PM 
emissions. GPF is a mature and cost-effective technology that operates 
under all vehicle operating conditions. Current GPF technology (e.g., 
MY 2022 GPFs) has high filtration efficiency, even during and 
immediately after GPF regenerations, when the GPF cannot rely on soot 
loading to improve filtration. GPFs are being widely used in Europe and 
China and vehicle manufacturers are already building GPF-equipped 
vehicles in the United States for sale in other countries.
    In support of the proposed PM standards, EPA has conducted robust 
and detailed GPF testing to characterize GPF performance. During this 
testing EPA not only measured the change in PM and polyaromatic 
hydrocarbon (PAH) emissions, with and without the GPF installed, but 
also assessed impacts on GHG emissions and vehicle performance. In 
summary, EPA noted that with a properly sized GPF, no measurable impact 
on GHG emissions and only slight impact on vehicle performance should 
occur, while PM emissions are typically reduced by over 95 percent and 
filter-collected PAH emissions are typically reduced by over 99 
percent. A review of GPF technology, analyses of its benefits, 
challenges and costs, and demonstration of the feasibility of the 
proposed PM standard are discussed in Chapter 3.2 of the DRIA.
ii. Phase-In for Light-Duty Vehicles and MDV at or Below 22,000 lb GCWR
    The proposed phase-in for the PM standard is the same as for other 
criteria emissions, as described in Section III.C.1. EPA requests 
comment on accelerating the phase-in for PM relative to other criteria 
emissions requirements of this rule (NMOG+NOX, CO, HCHO, 
NMOG+NOX previsions aligned with the CARB ACC II program, 
certifying high GCWR MDV under the HD engine program for criteria 
pollutants, evaporative emissions, and elimination of enrichment) 
because GPFs are a mature technology that has been in mass production 
since 2017 in Europe, since 2020 in China, and since 2023 in India, and 
because several manufacturers assemble vehicles equipped with GPF in 
the U.S. for export to other markets. An accelerated phase-in could 
also be supported by increased availability of BEVs. EPA requests 
comment on accelerating PM phase-in to 50% or 80% in MY 2027 and 100% 
in MY 2028 for vehicles with GVWR<=14,000 pounds under the early 
compliance pathway, and for vehicles with GVWR<=6000 pounds under the 
default compliance pathway.
iii. Feasibility of the PM Standard and Selection of Test Cycles
    The PM standards that EPA is proposing would require vehicle 
manufacturers to produce vehicles that emit PM at GPF-equipped levels 
(GPF-level PM). The proposed rule does not require that GPF hardware be 
used on vehicles, but rather reflects EPA's judgement that it is 
feasible and appropriate to achieve the proposed PM standards 
considering the availability of this technology. It is expected that 
GPF technology will be the most practical and cost-effective pathway 
for meeting the standard, especially in -7 [deg]C FTP and US06 test 
cycles.

[[Page 29265]]

    To establish what level of PM standards are appropriate for this 
proposal, EPA conducted a test program that considered multiple vehicle 
types and powertrain technologies as well as GPF technology. Much like 
many other aspects of aftertreatment technology and emissions controls, 
GPFs have gone through considerable development since their initial 
introduction and as a result have provided significantly improved 
effectiveness with each successive iteration. EPA evaluated available 
technology with respect to the emissions benefits observed over the 
regulated cycles, including two generations of GPF technology.
    The PM test program included five chassis dynamometer test cells at 
EPA, Environment and Climate Change Canada (ECCC), and FEV North 
America Inc., and five test vehicles (2011 F150, 2019 F150, 2021 F150 
HEV, 2021 Corolla, 2022 F250) tested in stock and GPF configurations. 
These test vehicles include a passenger car, three Class 2a trucks, and 
one Class 2b truck. The two generations of GPFs include series 
production MY 2019 and series production MY 2022 models, catalyzed and 
bare substrates, and close-coupled and underfloor GPF installations. 
Results from the test program are summarized in Figure 14. The study 
demonstrates that Tier 3 light-duty vehicles and MDV equipped with GPFs 
that are currently in series production in Europe and China (i.e., MY 
2022 GPF) can easily meet the proposed standard of 0.5 mg/mi in all 
three test cycles with a large compliance margin.
    In Figure 14, tests without GPFs are shown in black, tests with MY 
2019 GPFs are shown in gray, and tests performed with MY 2022 GPFs are 
shown in stripes. The top of each bar represents the highest 
measurement set mean of one vehicle in one laboratory and the bottom of 
each bar represents the lowest measurement set mean. The tops of the 
black bars are off scale in this figure, but their values are indicated 
with numbers above the bars.
    The striped bars include PM measurements from two vehicles: A 2021 
F150 HEV (Class 2a vehicle) retrofit with a MY 2022 bare GPF in the 
underfloor location, and a 2022 F250 7.3L (Class 2b vehicle) retrofit 
with two MY 2022 bare GPFs, one for each engine bank, in the underfloor 
location.
    Results show that only the GPF-equipped vehicles could meet the 0.5 
mg/mi proposed standard in the -7 [deg]C FTP test. The MY 2019 GPFs 
failed to meet the proposed standard in the US06 because passive GPF 
regeneration occurred as a result of high exhaust gas temperatures (GPF 
inlet gas temperature greater than 600 [deg]C). GPF regeneration 
oxidizes stored soot and reduces GPF filtration efficiency during and 
immediately after the regeneration. Vehicles equipped with MY 2022 GPFs 
met the 0.5 mg/mi standard in all three test cycles with a compliance 
margin of 100 percent or more. The MY 2022 GPFs showed high filtration 
efficiencies generally over 95 percent, even in the US06 cycle because 
they did not rely on stored soot for high filtration efficiency. The 
mean of test sets with MY 2022 GPF are over 95 percent lower than the 
mean of non-GPF test sets in each of the three test cycles.
    The data show that MY 2022 GPFs are capable of emissions 
performance commensurate with EPA's goal of requiring GPF-level 
emissions over the broadest range of vehicle operating and 
environmental conditions. The results support the conclusion that a 0.5 
mg/mi PM standard over the -7 [deg]C FTP, 25 [deg]C FTP, and US06 test 
cycles is feasible and appropriate.
    The -7 [deg]C FTP test cycle is crucial to the proposed PM standard 
because it differentiates vehicles with GPF-level PM from vehicles with 
Tier 3 levels of PM, and because -7 [deg]C is an important real-world 
temperature that addresses uncontrolled cold PM emissions in Tier 3.
    The US06 cycle is similarly crucial to the proposed PM standard 
because it induces passive GPF regeneration across vehicle-GPF 
combinations (i.e., light-duty vehicles and MDV, naturally aspirated 
and turbocharged engines, close-coupled and underfloor GPF 
installations, bare and catalyzed GPFs), and GPF regeneration is an 
important mode of operation with respect to emissions. GPF regeneration 
does not occur in the -7 [deg]C FTP, 25 [deg]C FTP, and LA-92 across 
vehicle and exhaust system combinations. Including a certification test 
in which passive GPF regeneration occurs is important because it 
ensures low tailpipe PM during and immediately after GPF regenerations, 
which occur during high load operation, including road grades, towing, 
and driving at higher speeds.
    Older GPF technology does not exhibit high PM filtration during and 
immediately after GPF regeneration. Older GPF technology can have 
filtration efficiency as low as 50 percent, as opposed to generally 
more than 95 percent demonstrated by the MY 2022 GPFs shown in Figure 
14. Without the US06 test cycle, manufacturers could employ old GPF 
technology that has poor PM control during high load operation. Average 
US06 p.m. from the MY 2019 GPFs is 15 times higher than average US06 
p.m. from the MY 2022 GPFs from the data shown in Figure 14.
BILLING CODE 6560-50-P

[[Page 29266]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.017

BILLING CODE 6560-50-C
    MDVs are certified at higher test weights and road load 
coefficients than light-duty vehicles, but measurements show that 
series production MY 2022 GPF technology enables meeting the proposed 
0.5 mg/mi standard equally well on MDV as light-duty vehicles, with 
compliance margins of over 100 percent. Measurements comparing PM from 
a Class 2b vehicle with a current technology GPF (MDV MY 2022 F250 with 
a MY 2022 GPF), to a Class 2a vehicle with a current technology GPF 
(LDV MY 2021 F150 HEV with a MY 2022 GPF) are shown in Figure 15. 
Additional testing supports the same conclusion for Class 3 vehicles.

[[Page 29267]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.018

    As was the case for light-duty vehicles, the -7 [deg]C FTP cycle is 
crucial because it differentiates Tier 3 levels of PM from GPF-level PM 
and because -7 [deg]C is an important real-world temperature that 
addresses uncontrolled cold PM emissions in Tier 3. Furthermore, as was 
the case for light-duty vehicles, the US06 cycle is crucial to the 
proposed PM standard for MDV because the US06 induces passive GPF 
regeneration across different vehicle-GPF combinations and GPF 
regeneration is an important mode of operation with respect to 
emissions. The LA-92, which was used instead of the US06 cycle on Class 
3 vehicles in Tier 3, does not induce GPF regeneration, and for this 
reason the US06 cycle is required for all light-duty vehicles and MDV 
in the proposed standard.
    GPF inlet gas temperatures measured on the MY 2022 F250 7.3L during 
sampled US06, sampled hot LA-92, and -7 [deg]C FTP operation, are shown 
in Figure 16. Fast soot oxidation begins in a GPF around 600 
[deg]C.\508\ The US06 is the only cycle where GPF inlet gas temperature 
of the MY 2022 F250 exceeded 600 [deg]C and it exceeded it for a 
significant amount of time (265 seconds), resulting in passive GPF 
regeneration. Peak inlet gas temperature was 674 [deg]C in the US06. In 
contrast, GPF inlet gas temperature never exceeded 600 [deg]C in the 
LA-92 and only exceeded 500 [deg]C for a limited period of time. Peak 
GPF inlet gas temperature in the LA-92 (566 [deg]C) was closer to the -
7 [deg]C FTP (493 [deg]C) than the US06 (674 [deg]C).
---------------------------------------------------------------------------

    \508\ Achleitner, E., Frenzel, H., Grimm, J., Maiwald, O., 
R[ouml]sel, G., Senft, P., Zhang, H., ``System approach for a 
vehicle with gasoline direct injection and particulate filter for 
RDE,'' 39th International Vienna Motor Symposium, Vienna, April 26-
27, 2018.
---------------------------------------------------------------------------

    In this vehicle configuration, GPF regeneration does not occur in 
LA-92, 25 [deg]C FTP, or -7 [deg]C FTP cycles to a significant degree, 
which makes those cycles unable to force PM emissions control 
commensurate with MY 2022 GPF technology. Additional tests performed 
with the MY 2022 F250 with MY 2022 GPFs using test weight and road load 
coefficients from a MY 2022 F350 Class 3 vehicle show that even with 
the higher test weight and road load, the GPFs did not undergo 
substantial regeneration in the LA-92 cycle. Without requiring the US06 
as a certification cycle for MDV, the GPF may not undergo GPF 
regeneration and high PM filtration, which new GPF technology offers, 
would not be ensured during high load operation, including trailer 
towing, road grades, or high speeds, for which these vehicles are 
designed.

[[Page 29268]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.019

    Under the proposed standards, Class 2b vehicles with power-to-
weight ratios at or below 0.024 hp/pound could no longer replace the 
full US06 component of the SFTP with the second of three phases of the 
US06 for their PM certification. If a test vehicle is unable to follow 
the trace, it must perform maximum effort to follow the trace, and that 
would not result in a voided test. This procedure mimics how vehicles 
with low power-to-weight tend to be driven in the real world.
    Also, Class 3 vehicles would not use the LA-92 for PM 
certification, as they did in Tier 3. Instead, Class 3 vehicles would 
have to meet the 0.5 mg/mi PM standard across the same three test 
cycles as light-duty vehicles and other MDV: -7 [deg]C FTP, 25 [deg]C 
FTP, and US06.
    GPF technology is both mature and cost effective. It has been used 
in series production on all new pure gasoline direct injection (GDI) 
vehicle models in Europe since 2017 (WLTC and RDE test cycles) and on 
all pure GDI vehicles in Europe since first registration of 2019 (WLTC 
and RDE test cycles) to meet Europe's emissions standards. All gasoline 
vehicles in China have had to meet similar standards in the WLTC since 
2020, and in the WLTC and RDE starting in 2023. All pure GDI vehicles 
in India also have to meet similar GPF-forcing standards starting in 
2023. GPFs like the MY 2022 GPFs described by Figure 14 and Figure 15 
are being used in series production by U.S., European, and Asian 
manufacturers, and several manufacturers currently assemble vehicles 
equipped with GPF in the U.S. for export to other markets.
    Further details and discussion of test vehicles, GPFs, test 
procedures, and results are provided in the DRIA 3.2.
iv. PM Measurement Considerations
    Current test procedures, as outlined in 40 CFR part 1066, allow 
robust gravimetric PM measurements well below the proposed PM standard 
of 0.5 mg/mi. Repeat measurements in EPA laboratories, at different 
levels of PM below 0.5 mg/mi, are shown in Figure 17. The size of the 
error bars relative to the measurement averages at and below 0.5 mg/mi 
demonstrates that the measurement methodology is sufficiently precise 
to support a 0.5 mg/mi standard. Other than selecting test settings 
appropriate for quantifying low PM, no test procedure changes are 
needed. Good engineering judgment should be used with respect to 
dilution factor, filter media selection, filter flow rate, using a 
single filter for all phases of a test cycle, filter static charge 
removal, robotic weighing, and minimizing contamination during filter 
handling. EPA is not reopening the test procedures, nor does the agency 
believe that test procedure changes are required, to measure PM for the 
proposed PM standards. Further discussion of selecting test settings is 
discussed in the DRIA.

[[Page 29269]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.020

v. Pre-Production Certification
    EPA is proposing that PM emissions be certified over -7 [deg]C FTP, 
25 [deg]C FTP, and US06 cycles with at least one Emissions Data Vehicle 
(EDV) per test group in model years 2027, 2028, and 2029+ for light-
duty vehicles and MDV compliant with the new 0.5 mg/mi standard in the 
early compliance program. In the default program, PM emissions would be 
certified with at least one EDV per test group in model years 2027, 
2028, and 2029+ for light-duty vehicles compliant with the new 
standard, and with at least one EDV per test group in 2030+ for MDV 
compliant with the new standard. See 40 CFR 86.1829-15. This level of 
certification testing matches the requirement to certify gaseous 
criteria emissions at the test group level and ensures that the 
significantly lower PM emissions standard of 0.5 mg/mi is being met 
across a wide range of ICE technologies. The requirement to certify PM 
emissions at the test group level is an increase in testing 
requirements relative to Tier 3, where PM emissions could be certified 
at the durability group level. The increase in testing requirement is 
tempered by the phase-in of the PM standard described in Table 39, and 
since BEVs do not require testing.
    EPA solicits comment on whether pre-production PM certification 
should go back to testing at the durability group level in 2030 for 
light-duty vehicles and in 2031 for MDV after PM control technologies 
have been demonstrated across a range of ICE technologies. If PM 
certification were to go back to testing at the durability level in 
2030/2031, manufacturers would still have to attest that the 0.5 mg/mi 
standard is being met by all test groups.
    EPA is proposing to update the instructions to select a worst-case 
test vehicle from each test group by considering -7 [deg]C FTP testing 
with all the other criteria standards. This contrasts with the current 
approach, in which manufacturers select worst-case test vehicles 
separate from -7 [deg]C FTP testing and then select a test vehicle for 
-7 [deg]C FTP testing from those test vehicles included in the same 
durability group. The current approach is appropriate for measuring CO 
and NMHC for -7 [deg]C FTP testing. However, the concern for PM 
emissions with -7 [deg]C FTP testing are on par with concern for the 
other standards already considered for selecting a worst-case test 
vehicle to represent the test group. EPA requests comments on different 
approaches for selecting test vehicles to most effectively apply test 
resources to ensure compliance with the range of emission standards.
vi. In-Use Compliance Testing
    In addition to pre-production certification, the proposed PM 
standard requires in-use compliance testing as part of the in-use 
vehicle program (IUVP). The proposed PM standard requires that PM from 
each in-use test vehicle be tested using 25 [deg]C FTP and US06 cycles 
and meet the 0.5 mg/mi PM standard. In-use vehicles are also required 
to comply with the -7 [deg]C FTP standard, but manufacturers are not 
required to test using this cycle to reduce testing burden. EPA may 
test in-use vehicles using -7 [deg]C FTP, 25 [deg]C FTP, and US06 
cycles to ensure compliance. Given the certification test demonstration 
for meeting the -7 [deg]C FTP PM standard, along with expected IUVP 
testing over 25 [deg]C FTP and US06 cycles and the potential for EPA 
testing, we find that there is not enough justification to require the 
additional test burden associated with IUVP testing for PM emissions 
over the -7 [deg]C FTP cycle.
vii. OBD Monitoring
    Since GPF technology is expected to be an important enabler for 
meeting the proposed PM standard, OBD monitoring of the GPF system is 
necessary. If a vehicle uses a GPF, the OBD system must detect GPF-
related malfunctions, store trouble codes related to detected 
malfunctions, and alert operators appropriately.
    It is expected that the OBD system detect system tampering and 
major malfunctions using, for example, using a pressure sensor. The 
same pressure

[[Page 29270]]

sensor that senses GPF soot overloading may be used to detect system 
tampering and major malfunctions. It is expected that if a pressure 
sensor is used for OBD functions, it should detect a GPF pressure drop 
greater than zero and less than an expected maximum as a function of 
engine operating point. Further OBD discussion is provided in Section 
III.G.
viii. GPF Cost
    A GPF cost model is described in DRIA Chapter 3.2 and GPF cost is 
included in the OMEGA model. The model anticipates the direct 
manufacturing cost (DMC) for a bare downstream GPF ranges from $51 
dollars for a 1.0-liter engine using a relatively low GPF volume to 
engine displacement ratio, up to $166 dollars for a 7.0 liter engine 
using a relatively high GPF volume to engine displacement ratio.
4. Revised CO and Formaldehyde (HCHO) Standards
i. CO and HCHO Standards for Light-Duty Vehicles
    EPA is proposing CO and formaldehyde (HCHO) emissions caps for 
light-duty vehicles shown in Table 48. The proposed value of the CO 
emissions cap for the 25 [deg]C FTP, HFET, US06, SC03 test cycles, 1.7 
g/mi, is the same as the Tier 3 bin-specific standards for Bin 50 and 
Bin 70, but it must be met across four cycles instead of the Tier 3 
cycles of 25 [deg]C FTP and a separate standard for the SFTP.
    The proposed value of the HCHO emissions cap, 4 mg/mi, is the same 
as the Tier 3 bin-specific standards for Bin 20 through Bin 160. The 
HCHO cap only applies to the 25 [deg]C FTP, as in Tier 3.
    The proposed CO emissions cap for the -7 [deg]C FTP is 10.0 g/mi. 
This differs from the current standards in that the same cap applies to 
all light-duty vehicles. The current CO cap is 10.0 g/mi for LDV and 
LDT1, and 12.5 g/mi for LDT2, LDT3, LDT4, and MDPV.

         Table 48--Light-Duty Vehicle CO and HCHO Emissions Caps
------------------------------------------------------------------------
 
------------------------------------------------------------------------
CO cap for 25 [deg]C FTP, HFET, US06, SC03 (g/mi).......             1.7
HCHO cap for 25 [deg]C FTP (mg/mi)......................               4
CO cap for -7 [deg]C FTP (g/mi).........................            10.0
------------------------------------------------------------------------

ii. CO and HCHO Standards for MDV at or Below 22,000 lb GCWR
    EPA is proposing CO and formaldehyde (HCHO) emissions caps for MDV 
at or below 22,000 pounds GCWR shown in Table 49. The proposed value of 
the CO emissions cap for the 25 [deg]C FTP, HFET, US06, SC03 test 
cycles, 3.2 g/mi, is the same as the Tier 3 bin-specific standard for 
Bin 20 through Bin 160, but it must be met across four cycles instead 
of the Tier 3 cycles of 25 [deg]C FTP and a separate standard for the 
SFTP.
    The proposed value of the HCHO emissions cap, 6 mg/mi, is the same 
as the Tier 3 bin-specific standards for Bin 20 through Bin 160. The 
HCHO cap only applies to the 25 [deg]C FTP, as in Tier 3.
    The proposed CO emissions cap for the -7 [deg]C FTP is 10.0 g/mi.

   Table 49--MDV at or Below 22,000 lb GCWR CO and HCHO Emissions Caps
------------------------------------------------------------------------
 
------------------------------------------------------------------------
CO cap for 25 [deg]C FTP, HFET, US06, SC03 (g/mi)..............      3.2
HCHO cap for 25 [deg]C FTP (mg/mi).............................        6
CO cap for -7 [deg]C FTP (g/mi)................................     10.0
------------------------------------------------------------------------

    Present-day MDV gasoline engine aftertreatment technology allows 
fast catalyst light-off followed by closed-loop A/F control and 
excellent emissions conversion on Class 2b and 3 vehicles, even at the 
ALVW [(curb + GVW)/2] test weight, which is higher than light-duty 
vehicle test weight of LVW (curb + 300 pounds). Testing of a 2022 F250 
7.3L in the -7 [deg]C FTP at EPA showed average CO emissions of 2.7 g/
mi CO, demonstrating that a 10.0 g/mi standard is feasible for MDV.
5. Requirements To Certify MDV With High GCWR Under the HD Engine 
Program for Criteria Emissions
    The Agency is proposing mandatory engine certification for 
compliance with criteria pollutant emissions standards for MDVs above 
22,000 pounds GCWR. The proposed standards would include both spark 
ignition and compression ignition (diesel) engines, complete and 
incomplete vehicles, and require compliance with all of the same engine 
certification criteria pollutant requirements and standards as for 2027 
and later engines installed in Class 4 and higher HD vehicles, 
including NMHC, CO, NOX and PM standards, useful life, 
warranty and in-use requirements that were finalized in December 
2022.\509\ Complete MDVs would still require chassis dynamometer 
testing for demonstrating compliance with GHG standards as described in 
Section III.B.3 and would be included within the fleet average MDV GHG 
emissions standards along with the other MDVs at or below 22,000 GCWR. 
Manufacturers could certify incomplete MDVs to GHG standards under 40 
CFR 86.1819 or 40 CFR part 1037. Note that existing regulations (40 CFR 
1037.150(l)) allow a comparable dual testing methodology, which 
utilizes engine dynamometer certification for demonstration of 
compliance with criteria pollutant emissions standards while 
maintaining chassis dynamometer certification for demonstration of 
compliance with GHG emissions standards under 40 CFR 86.1819. One 
manufacturer has been using this provision to certify all gasoline 
vehicles over 14,000-pound GVWR and the corresponding engines since MY 
2016. Proposed requirements are summarized in Table 50.
---------------------------------------------------------------------------

    \509\ See https://www.epa.gov/regulations-emissions-vehicles-and-engines/final-rule-and-related-materials-control-air-pollution.
---------------------------------------------------------------------------

    The purpose of this proposed change is to ensure that criteria 
pollutant emissions are controlled under the sustained high load 
conditions that many of these vehicles encounter, particularly during 
heavy towing operation. Some Class 2b and Class 3 trucks have towing 
capability exceeding that of Class 4 and Class 5 trucks. Some diesel 
Class 3 emissions families have GCWR in excess of 40,000 pounds. The 
agency considers trucks above 22,000 pounds GCWR to be predominantly 
work vehicles that will reasonably encounter significant towing and/or 
other highly loaded use during normal operation. Many of these vehicles 
currently do not have exhaust aftertreatment sized for effective 
emissions control under sustained high loads. Current chassis 
dynamometer test cycles used for demonstrating compliance do not 
include such sustained high load operation. Manufacturers have also 
indicated to the agency that there is a trade-off between sustained 
high load exhaust aftertreatment performance and cold-start light off 
performance over the FTP cycle. It is more appropriate that trucks 
above 22,000 pounds GCWR be tested as heavy-duty engines due 
capabilities and predominant use that are much more closely aligned 
with Class 4 and above heavy-duty applications than with light-duty 
vehicles and light-duty trucks.
    Based on an analysis of the MY 2022 and MY 2023 emissions 
certification data, most MDV complete and incomplete diesel pickup 
trucks would be required to switch to engine dynamometer certification; 
MY 2022 vans would not be required to use engine dynamometer 
certification; and only a small number of gasoline pickup trucks would 
be required to switch to engine certification.

[[Page 29271]]

    As described in Section III.C.1, under the CAA trucks over 6,000 
pounds GVWR are allowed 4 years of lead time before they are required 
to begin implementation of new criteria pollutant emission standards. 
The agency is providing an earlier implementation pathway beginning in 
2027 in order for manufacturers to better plan for program changes over 
a larger time window and to encourage earlier emissions reductions. 
Because of this earlier opportunity for manufacturers and the potential 
for the agency to realize earlier emission reductions, we are providing 
additional flexibilities.
    Manufacturers who choose to optionally implement this engine 
certification requirement for all their trucks above 22,000 pounds GCWR 
beginning in 2027 model year will be allowed an additional GHG 
compliance flexibility. If manufacturers choose to certify their 
vehicles to these proposed standards in 2027 MY, they will be allowed 
to continue to use the HD GHG Phase 2 based final 2026 work factor-
based target GHG standards, without a capped GCWR input for the work 
factor-based target standard. This allowance would continue through 
2029 MY, after which vehicle manufacturers would be required to switch 
to the new work factor standards and the capped GCWR work factor 
equation input proposed in Section III.B.3 in 2030. This will provide 
an opportunity for manufacturers to balance the implementation of new 
GHG program plans for these much higher GCWR vehicles while also 
achieving important criteria pollutant emission reductions earlier in 
the program. The agency seeks comments on additional flexibilities that 
achieve the same or similar emission reductions.
    The default compliance pathway for MDV would be compliance with 
2027 and later HD engine emissions standards beginning in 2030. Under 
the default compliance pathway, GHG compliance flexibilities to extend 
compliance with the heavy-duty Phase 2 GHG standards beyond the 2026 
model year do not apply and manufacturers would need to meet the 
proposed MDV GHG standards described in Section III.B.3 beginning with 
the 2027 model year.
    The Agency seeks comment on several alternatives for high GCWR MDV 
criteria pollutant emissions standards: (1) MDV above 22,000 pounds 
GCWR would comply with the MDV chassis dynamometer standards proposed 
in Section III.C with the introduction of additional engine-
dynamometer-based standards over the Supplemental Emissions Test as 
finalized within the Heavy-duty 2027 and later standards; (2) MDV above 
22,000 pounds GCWR would comply with the MDV chassis dynamometer 
standards proposed in Section III.C with additional in-use testing and 
standards comparable to those used within the California ACC II; (3) 
Introduction of other test procedures for demonstration of effective 
criteria pollutant emissions control under the sustained high-load 
conditions encountered during operation above 22,000 pounds GCWR.

                           Table 50--Certification Requirements of High GCWR Vehicles
----------------------------------------------------------------------------------------------------------------
                                                                   Criteria
           Vehicle                GVWR (lb)       GCWR (lb)       pollutant      GHG standards     Compared to
                                                                  standards                           tier 3
----------------------------------------------------------------------------------------------------------------
Complete.....................     8500-14,000        <=22,000  Part 86........  Part 86........  Same.
                                              ------------------------------------------------------------------
Incomplete...................     8500-14,000        <=22,000               Part 86              Same.
                                                                             -OR-
                                                                  Part 1036 Part 1036 & 1037
                                              ------------------------------------------------------------------
Complete.....................     8500-14,000         >22,000  Part 1036......  Part 86........  New for
                                                                                                  criteria.
Incomplete...................     8500-14,000         >22,000  Part 1036......  Part 86 or 1037  New for
                                                                                                  criteria.
----------------------------------------------------------------------------------------------------------------

6. Refueling Standards for Incomplete Spark-Ignition Vehicles
    The agency is proposing to require that incomplete medium duty 
vehicles meet the same on-board refueling vapor recovery (ORVR) 
standards as complete vehicles. Incomplete vehicles have not been 
required to comply with the ORVR requirements to date because of the 
potential complexity of their fuel systems, primarily the filler neck 
and fuel tank. Unlike complete vehicles, which have permanent fuel 
system designs that are fully integrated into the vehicle structure at 
time of original construction by manufacturers, it was previously 
believed that incomplete vehicles may need to change or modify some of 
fuel system components during their finishing assembly. For this 
reason, it was previously determined that ORVR might introduce 
complexity for the upfitters that is unnecessarily burdensome.
    Since then, the agency has newly assessed both current ORVR 
equipped vehicles and their incomplete versions. Based on our updated 
assessment, the agency believes that the fuel system designs are almost 
identical with only the ORVR components removed for the incomplete 
version. The complete and incomplete vehicles appear to share the same 
fuel tanks, lines, and filler tubes. The original thought that 
extensive differences between the original manufacturer's designs and 
the upfitter modifications to the fuel system would be required have 
not been observed. Therefore, the agency believes that all incomplete 
vehicles can comply with the same ORVR standards as complete vehicles 
with the addition of the same ORVR components on the incomplete 
vehicles as the complete version of the vehicle possesses.
    The current practice of manufacturers of the original incomplete 
vehicles is to specify to the upfitter that modifications of the fuel 
system are not allowed by the upfitter. This is because the incomplete 
vehicle manufacturers are responsible for all current evaporative 
requirements (2-day, 3-day, running loss, spitback, etc.) and almost 
any modification could compromise compliance with those program 
standards. There is also an aspect of compliance with crash and safety 
requirements that prevent upfitters from making changes to the fuel 
system components. For these reasons, with rare exception, the fuel 
system design and installation is completed by the original vehicle 
manufacturer. The exception that the agency observed is that some 
incomplete vehicles do not have the filler tube permanently mounted to 
a body structure until the upfitter adds the finishing body hardware 
(i.e., flatbed, box). In these cases, the upfitter is limited to only 
attaching the filler tube to their added structure but must maintain 
the original manufacturer designs that are certified to meet

[[Page 29272]]

existing EPA evaporative emission standards.
    Net emission impacts are expected to be small in the context of the 
entire inventory and were not estimated for the NPRM, but the VOC and 
air toxics reductions will be important in locations where these 
vehicles are commonly refueled.
i. Summary of Medium Duty Vehicle Refueling Emission Standards and Test 
Procedures
    Compliance with evaporative and refueling emission standards is 
demonstrated at the vehicle level. The vehicle manufacturers produce MD 
spark-ignition (SI) complete vehicles and, in some instances, sell 
incomplete vehicles to secondary manufacturers. As noted in the 
following sections, we are proposing refueling emission standards for 
incomplete vehicles 8501 to 14,000 pounds GVWR. These proposed 
standards would apply over a useful life of 15 years or 150,000 miles, 
whichever occurs first, consistent with existing evaporative emission 
standards for these vehicles and for complete versions. No changes to 
evaporative and refueling emission standards for complete vehicles are 
being proposed by this rulemaking.
ii. Current Refueling Emission Standard and Test Procedures
    Spark-ignition medium duty vehicles generally operate with volatile 
liquid fuel (such as gasoline or ethanol) or gaseous fuel (such as 
natural gas or LPG) that have the potential to release high levels of 
evaporative and refueling HC emissions. As a result, EPA has issued 
evaporative emission standards that apply to vehicles operated on these 
fuels.\510\ Refueling emissions are evaporative emissions that result 
when the pumped liquid fuel displaces the vapor in the vehicle tank. 
Without refueling emission controls, most of those vapors are released 
into the ambient air. The HC emissions emitted are a function of 
temperature and the Reid Vapor Pressure (RVP).\511\ The emissions 
control technology which collects and stores the vapor generated during 
refueling events is the Onboard Refueling Vapor Recovery (ORVR) system.
---------------------------------------------------------------------------

    \510\ 40 CFR 86.1813-17.
    \511\ E.M. Liston, American Petroleum Institute, and Stanford 
Research Institute. A Study of Variables that Effect the Amount of 
Vapor Emitted During the Refueling of Automobiles. Available online: 
http://books.google.com/books?id=KW2IGwAACAAJ, 1975.
---------------------------------------------------------------------------

    Light-duty vehicles and chassis-certified complete medium-duty 
vehicles that are 14,000 pounds GVWR and under have been meeting 
evaporative and refueling requirements for many years. ORVR 
requirements for light-duty vehicles started phasing in as part of 
EPA's National Low Emission Vehicle (NLEV) and Clean Fuel Vehicle (CFV) 
programs in 1998.\512\ In EPA's Tier 2 vehicle program, all complete 
vehicles with a GVWR of 8,501 to 14,000 pounds were required to phase-
in ORVR requirements between 2004 and 2006 model years.\513\ In the 
Tier 3 rulemaking, all complete vehicles were required to meet a more-
stringent standard of 0.20 grams of HC per gallon of gasoline dispensed 
by MY 2022 (see 40 CFR 86.1813-17(b)).\514\ The recent 2027 heavy duty 
final rule added refueling standards for incomplete heavy-duty vehicles 
over 14,000 pounds GVWR. This left incomplete medium duty SI engine 
powered vehicles 8,501 to 14,000 pounds GVWR as the only SI vehicles 
not required to meet refueling standards.
---------------------------------------------------------------------------

    \512\ 62 FR 31192 (June 6, 1997) and 63 FR 926 (January 7, 
1998).
    \513\ 65 FR 6698 (February 10, 2000).
    \514\ 79 FR 23414 (April 28, 2014) and 80 FR 0978 (February 19, 
2015).
---------------------------------------------------------------------------

    While the agency does not believe manufacturers of the very limited 
volumes of incomplete LD vehicles (i.e., mainly some LD pick-ups for 
commercial customers who upfit application specific boxes and flatbeds) 
are currently ``removing'' any ORVR related hardware already required 
for the complete vehicle version like what has been observed in the MDV 
applications, and this proposal focuses on the known incomplete 
vehicles without ORVR in MDVs, the agency seeks comment on whether to 
extend this ORVR requirement to all incomplete LDVs and MDVs to prevent 
any future removal of ORVR from LDVs.
iii. Proposed ORVR HC Standard
    We are proposing a refueling emission standard of 0.20 grams HC per 
gallon of dispensed fuel for incomplete vehicles 8,501 to 14,000 pounds 
GVWR (0.15 grams for gaseous-fueled vehicles), which is the same as the 
existing refueling standards for complete vehicles.\515\ We note that 
these proposed refueling emission standards would apply to all liquid-
fueled and gaseous-fueled spark-ignition medium-duty vehicles, 
including gasoline and ethanol blends.\516\ We believe it is feasible 
for manufacturers to achieve these standards by adopting the technology 
in use on complete vehicles.
---------------------------------------------------------------------------

    \515\ 40 CFR 86.1813-17.
    \516\ Refueling requirements for incomplete medium duty vehicles 
that are fueled by CNG or LNG would be the same as the current 
complete gaseous-fueled Spark-ignition medium-duty vehicle 
requirements.
---------------------------------------------------------------------------

    We are proposing to apply the refueling standards for new 
incomplete vehicles starting with model year 2030. This meets the 
statutory obligation to allow four years of lead time for new emissions 
standards for criteria pollutants for heavy-duty vehicles. This 
schedule also complements the alternative phase-in provisions adopted 
in our final rule setting these same standards for vehicles above 
14,000 pounds GVWR (88 FR 4296, January 24, 2023). Those alternative 
phase-in provisions allowed for manufacturers to phase in certification 
of all their incomplete medium-duty and heavy-duty vehicles to the new 
standards from 2027 through 2030. This proposed rule provides a 
complete set of options for manufacturers. Specifically, manufacturers 
may certify incomplete heavy-duty vehicles above 14,000 pounds GVWR to 
the refueling standards in 2027 and incomplete medium-duty vehicles to 
the refueling standards in 2030. The second option is to meet the 
phase-in for the combined set of vehicles for 2027 through 2030.
    We request comment on our proposed standards.
iv. Impact on Secondary Manufacturers
    For incomplete vehicles 8,501 to 14,000 pounds GVWR, the chassis 
manufacturer performs the evaporative emissions testing and obtains the 
vehicle certificate from EPA. When the chassis manufacturer sells the 
incomplete vehicle to a secondary vehicle manufacturer, the chassis 
manufacturer provides specific instructions to the secondary 
manufacturer indicating what they must do to maintain the certified 
configuration, how to properly install components, and what, if any, 
modifications may be performed. For the evaporative emission system, a 
chassis manufacturer may require specific tube lengths and locations of 
certain hardware, and modifications to the fuel tank, fuel lines, 
evaporative canister, filler tube, gas cap and any other certified 
hardware would likely be limited.
    We anticipate that the addition of any ORVR hardware and all ORVR-
related aspects of the certified configuration would continue to be 
managed and controlled by the chassis manufacturer that holds the 
vehicle certificate. The engineering associated with all aspects of the 
fuel system design, which would include the ORVR system, is closely 
tied to the engine design, and the chassis manufacturer is the most 
qualified party to ensure its performance and

[[Page 29273]]

compliance with applicable standards. Example fuel system changes the 
OEM may implement include larger canisters bracketed to the chassis 
frame close to the fuel tanks. Additional valves may be necessary to 
route the vapors to the canister(s) during refueling. Most other 
evaporative and fuel lines would remain in the same locations to meet 
existing evaporative requirements. There may be slightly different 
filler neck tube designs (smaller fuel transfer tube) as well as some 
additional tubes and valves to allow proper fuel nozzle turn-off (click 
off) at the pump, but this is not expected to include relocating the 
filler neck. Based on the comments received during the 2027 HD rule 
making that established refueling requirements for incomplete vehicles 
over 14,000 GVWR, we believe these changes would not adversely impact 
the secondary manufacturers finishing the vehicles.\517\
---------------------------------------------------------------------------

    \517\ See comments from the Manufacturers of Emission Controls 
Association (EPA-HQ-OAR-2019-0055-0365) and Ingevity Corporation 
(EPA-HQ-OAR-2019-0055-0271).
---------------------------------------------------------------------------

    The instructions provided by the chassis manufacturer to the 
secondary manufacturer to meet our proposed refueling standards should 
include new guidelines to maintain the certified ORVR configuration. We 
do not expect the new ORVR system to require significant changes to the 
vehicle build process, since chassis manufacturers would have a 
business incentive to ensure that the ORVR system integrates smoothly 
in a wide range of commercial vehicle bodies. Accordingly, we do not 
expect that addition of the ORVR hardware would result in any 
appreciable change in the secondary manufacturer's obligations or 
require secondary builders to perform significant modifications to 
their products.
v. Feasibility Analysis for the Proposed Refueling Emission Standards
    This section describes the effectiveness and projected costs of the 
emissions technologies that we analyzed for our proposed refueling 
standards. Feasibility of the proposed refueling standard of 0.20 grams 
of HC per gallon is based on the widespread adoption of ORVR systems 
used in the light-duty and complete medium-duty vehicle sectors. As 
described in this section, we believe manufacturers can effectively use 
the same technologies already implemented in the complete medium-duty 
versions of the same vehicles to meet the proposed standard.
vi. Summary of Refueling Emission Technologies Considered
    This section summarizes the specific technologies we considered as 
the basis for our analysis of the proposed refueling emission 
standards. The technologies presented in this section are described in 
greater detail in the DRIA.
    Instead of releasing HC vapors into the ambient air, ORVR systems 
capture HC emissions during refueling events when liquid fuel displaces 
HC vapors present in the vehicle fuel tank as the tank is filled. These 
systems recover the HC vapors and store them for later purging from the 
system and use as fuel to operate the engine. An ORVR system consists 
of four main components that are incorporated into the existing fuel 
system: Filler pipe and seal, flow control valve, carbon canister, and 
purge system.
    The filler pipe is the section of line from the fuel tank to where 
fuel enters the fuel system from the fuel nozzle. The filler pipe is 
typically sized to handle the maximum fill rate of liquid fuel allowed 
by law and integrates either a mechanical or liquid seal to prevent 
fuel vapors from exiting through the filler pipe to the atmosphere. The 
flow control valve senses that the fuel tank is getting filled and 
triggers a unique low-restriction flow path to the canister. The carbon 
canister is a container of activated charcoal designed to effectively 
capture and store fuel vapors. Carbon canisters are already a part of 
MD SI fuel systems to control evaporative emissions. Fuel systems with 
ORVR would require additional capacity, by increasing either the 
canister volume or the effectiveness of the carbon material. The purge 
system is an electro-mechanical valve used to redirect fuel vapors from 
the fuel tank and canister to the running engine where they are burned 
in the combustion chamber.\518\
---------------------------------------------------------------------------

    \518\ This process displaces some amount of the liquid fuel that 
would otherwise be used from the fuel tank and results in a small 
fuel savings.
---------------------------------------------------------------------------

    The fuel systems on 8,501 to 14,000 pounds GVWR incomplete heavy-
duty vehicles are similar, if not identical to those on complete 
medium-duty vehicles that are currently subject to refueling standards. 
These incomplete vehicles may have slightly larger fuel tanks than most 
certified (complete) medium-duty vehicles and in some applications may 
have dual fuel tanks. These differences may necessitate greater ORVR 
system storage capacity and possibly some unique accommodations for 
dual tanks (e.g., separate fuel filler locations), as commented by ORVR 
suppliers in response to the similar program in the HD 2027 ANPR.\519\
---------------------------------------------------------------------------

    \519\ See comments from the Manufacturers of Emission Controls 
Association (EPA-HQ-OAR-2019-0055-0365) and Ingevity Corporation 
(EPA-HQ-OAR-2019-0055-0271).
---------------------------------------------------------------------------

vii. Projected Refueling Emission Technology Packages
    The ORVR emission controls we projected in our feasibility analysis 
build upon four components currently installed on complete medium-duty 
vehicles 8,501 to 14,000 pounds GVWR to meet the Tier 3 evaporative 
emission standards: The carbon canister, flow control valves, filler 
pipe and seal, and the purge system. For our feasibility analysis, we 
assumed a 35-gallon fuel tank to represent an average tank size \520\ 
of medium-duty gasoline fueled vehicles 8,501 to 14,000 pounds GVWR. A 
summary of the projected technology updates and costs are presented in 
this section. See the DRIA for additional details.
---------------------------------------------------------------------------

    \520\ Advertised MY 2022 fuel tank sizes ranged from 31 to 43 
gallons.
---------------------------------------------------------------------------

    In order to capture the vapor volume of fuel tanks during 
refueling, we project manufacturers would increase canister vapor or 
``working'' capacity of their liquid-sealed canisters by 15 to 40 
percent depending on the individual vehicle systems. If a manufacturer 
chooses to increase the canister volume using conventional carbon, we 
project a canister meeting Tier 3 evaporative emission requirements 
with approximately 2.5 liters of conventional carbon would need up to 
an additional 1 liters of carbon to capture refueling emissions from a 
35-gallon fuel tank. A change in canister volume to accommodate 
additional carbon would result in increased costs for retooling and 
additional canister plastic, as well as design considerations to fit 
the larger canister on the vehicle. Alternatively, a manufacturer could 
choose to use the same size fuel tank and canister currently used to 
meet refueling requirements for complete medium duty vehicles to avoid 
the re-tooling costs. Another approach, based on discussions with 
canister and carbon manufacturers, could be for manufacturers to use a 
higher adsorption carbon and modify compartmentalization within the 
existing shell to increase the canister working capacity. We do not 
have data to estimate the performance or cost of higher adsorption 
carbon and so did not include this additional approach in our analysis.
    The projected increase in canister volumes assumes manufacturers 
would use a liquid seal in the filler pipe, which

[[Page 29274]]

is less effective than a mechanical seal. For a manufacturer that 
replaces their liquid seal with a mechanical seal, we assumed an 
approximate 20 percent reduction in the necessary canister volume. 
Despite the greater effectiveness of a mechanical seal, manufacturers 
in the past have not preferred this approach because it introduces 
another wearable part that can deteriorate, introduces safety concerns, 
and may require replacement during the useful life of the vehicle. To 
meet the proposed ORVR standards, manufacturers may choose the 
mechanical seal design to avoid retooling charges. We included this 
potential compliance approach in our cost analysis. We assumed a cost 
of $10.00 per seal for a manufacturer to convert from a liquid seal to 
a mechanical seal. We also analyzed costs based on the use of liquid 
seals, and we assumed zero cost in our analysis for manufacturers to 
maintain their current liquid seal approach for filler pipes already 
used in the complete medium-duty applications.
    In order to manage the large volume of vapors during refueling, 
manufacturers' ORVR updates would include flow control valves 
integrated into the roll-over/vapor lines. We assumed manufacturers 
would, on average, install one flow control valve per vehicle that 
would cost $6.50 per valve. And lastly, we project manufacturers may 
need to update their purge strategy to account for the additional fuel 
vapors from refueling. Manufacturers may add hardware and optimize 
calibrations to ensure adequate purge in the time allotted over the 
preconditioning drive cycle of the demonstration test.
    Table 51 presents the ORVR system specifications and assumptions 
used in our cost analysis, including key characteristics of the 
baseline incomplete vehicle's evaporative emission control system. 
Currently manufacturers may size the canisters of their Tier 3 
evaporative emission control systems based on the diurnal 3-day test 
and the Bleed Emission Test Procedure (BETP).\521\ During the diurnal 
test, the canister is loaded with hydrocarbons over two or three days, 
allowing the hydrocarbons to load a conventional carbon canister (1,500 
GWC, gasoline working capacity) at a 70 g/L effectiveness. In contrast, 
a refueling event takes place over a few minutes, and the ORVR directs 
the vapor from the gas tank onto the carbon in the canister at a 
canister loading effectiveness of 50 g/L. For our analysis, we added a 
design safety margin of 10 percent extra carbon to our ORVR systems. 
While less overall vapor mass may be vented into the canister from the 
fuel tank during a refueling event compared to the three-day diurnal 
test period, a higher amount of carbon is needed to contain the faster 
rate of vapor loaded at a lower efficiency during a refueling event. 
These factors were used to calculate the canister volumes for the two 
filler neck options in our cost analysis.
---------------------------------------------------------------------------

    \521\ 40 CFR 86.1813-17(a).

   Table 51--ORVR Specifications and Assumptions Used in the Cost Analysis for HD SI Incomplete Vehicles Above
                                                 14,000 lbs GVWR
----------------------------------------------------------------------------------------------------------------
                                                                              ORVR filler neck options
                                            Tier 3 baseline       ----------------------------------------------
                                                                          Mechanical seal           Liquid seal
----------------------------------------------------------------------------------------------------------------
                                      Diurnal....................  ORVR
----------------------------------------------------------------------------------------------------------------
Diurnal Heat Build..................  72-96 [deg]F...............  80 [deg]F
                                     ---------------------------------------------------------------------------
RVP.................................  9 psi
                                     ---------------------------------------------------------------------------
Nominal Tank Volume.................  35 gallons
                                     ---------------------------------------------------------------------------
Fill Volume.........................  40%........................  10% to 100%
                                     ---------------------------------------------------------------------------
Air Ingestion Rate..................  ...........................  0%...........................          13.50%
                                     ---------------------------------------------------------------------------
Mass Vented per heat build, g/d.....  60.........................  .............................  ..............
Mass Vented per refueling event.....  ...........................  128..........................             158
Hot Soak Vapor Load.................  2.5........................  .............................  ..............
Mass vented over 48-hour test.......  114........................  .............................  ..............
Mass vented over 72-hour test.......  162........................  .............................  ..............
1,500 GWC, g/L \a\..................  70.........................  50...........................              50
Excess Capacity.....................  10%........................  10%..........................             10%
----------------------------------------------------------------------------------------------------------------
Estimated Canister Volume
 Requirement, liters \b\
    48-hour Evaporative only........  1.8........................  .............................  ..............
    72-hour Evaporative only........  2.5........................  .............................  ..............
    Total of 72-hour + ORVR \c\.....  ...........................  2.8..........................             3.5
----------------------------------------------------------------------------------------------------------------
\a\ Efficiency of conventional carbon.
\b\ Canister Volume = 1.1 (mass vented)/1,500 GWC (Efficiency).
\c\ ORVR adds .3 liters and 1 liter for Mechanical Seal and Liquid Seal, respectively.

    The ORVR components described in this section represent 
technologies that we think most manufacturers would choose to adopt to 
meet our proposed refueling requirements. It is possible that 
manufacturers may choose a different approach, or that unique fuel 
system characteristics may require additional hardware modifications 
not described here, but we do not have reason to believe costs would be 
significantly higher than presented in the following section. We 
request comment, including data, on our assumptions related to the 
increased canister working capacity demands, the appropriateness of our 
average fuel tank size, the technology costs for the

[[Page 29275]]

specific ORVR components considered and any additional information that 
can improve our cost projections in the final rule analysis.
viii. Summary of Costs To Meet Proposed Refueling Emission Standards
    Table 52 shows cost estimations for the different approaches 
evaluated. In calculating the overall cost of our proposed program, we 
used $19, the average of both approaches, to represent the cost for 
manufacturers to adopt the additional canister capacity and hardware to 
meet our proposed refueling emission standards for incomplete medium 
duty vehicles. See Section V of this preamble for a summary of our 
overall program cost and Chapter 3 of the DRIA for more details.

 Table 52--Estimated Direct Manufacturing Costs for ORVR Over Tier 3 as
                                Baseline
------------------------------------------------------------------------
                                       Liquid seal      Mechanical seal
                                   -------------------------------------
                                       New canister       New canister
------------------------------------------------------------------------
Additional Canister Costs.........                $10                 $4
Additional Tooling \a\............               0.50               0.50
Flow Control Valves...............               6.50               6.50
Seal..............................                  0                 10
                                   -------------------------------------
    Total \b\.....................                 17                 21
------------------------------------------------------------------------
\a\ Assumes the retooling costs will be spread over a five-year period.
\b\ Possible additional hardware for spitback requirements.

    Incomplete vehicles may include dual fuel tanks, which may require 
some unique accommodations to adopt ORVR systems. A dual fuel tank 
chassis configuration would need separate canisters and separate filler 
pipes and seals for each fuel tank. Depending on the design, a dual 
fuel tank chassis configuration may require a separate purge valve for 
each fuel tank. We assume manufacturers would install one additional 
purge valve for dual fuel tank applications that also incorporate 
independent canisters for the second fuel tank/canister configuration 
and manufacturers adopting a mechanical seal in their filler pipe would 
install an anti-spitback valve for each filler pipe. See the DRIA for a 
summary of the design considerations for these fuel tank 
configurations. We did not include an estimate of the population or 
impact of dual fuel tank vehicles in our cost analysis of our proposed 
refueling emission standards because we believe that is a very rare 
option found on only one manufacturer's MY 2022 incomplete pickup 
model.
ix. Summary of Additional Program Considerations
    We are requesting comment regarding the cost, feasibility, and 
appropriateness of our proposed refueling emission standard for 
incomplete light-duty trucks. While we do not believe that any 
significant volume of incomplete LD vehicles is produced, we request 
comment on extending this proposal to all incomplete vehicles. The 
proposed standard is based on the current refueling standard that 
applies to complete light-duty and medium-duty gasoline-fueled 
vehicles. We are proposing that compliance with these standards may be 
demonstrated under an existing regulatory provision allowing them to 
group incomplete vehicles with completes if they share identical 
evaporative emission hardware and meet other engineering and 
temperature profile requirements impacting evaporative emissions and 
durability.
    EPA has identified a potential issue with Non-Integrated Refueling 
Canister Only Systems (NIRCOS) designed fuel vapor handling designs. 
During refueling events, because the sealed system may be under 
pressure and the pressure must be released before the fuel cap is 
removed, these NIRCOS systems initially release any tank vapors into 
the canister prior to the cap removal and the refueling event. These 
initial pressurized fuel vapors are not allowed to be simply vented 
through the gas cap and are therefore appropriately released into and 
absorbed by the carbon canister. However, the identified issue relates 
to the ORVR test procedure which does not account for this extra fuel 
vapor loading prior to the refueling event. The testing procedure for 
ORVR certification starts with a fully purged canister with no vapor 
loading from the release of the pressurized vapors prior to the cap 
removal that would likely occur in actual operation in the real world.
    To address this limited issue, instead of a challenging change to 
the established ORVR test procedure, the agency is seeking comment for 
the need for an engineering requirement related to the canister working 
capacity that would provide an increase in the capacity in order to 
properly capture this initial pressurized vapor load and still have the 
needed capacity to handle the vapors generated during the refueling 
event. The agency requests comment on the need to address this limited 
issue.
    EPA requests comment on the proposed evaporative emissions 
standards.
7. NMOG+NOX Provisions Aligned With CARB ACC II Program
    EPA proposes the adoption of three NMOG+NOX provisions 
for light-duty vehicles (LDV, LDT, MDPV) aligned with the CARB ACC II 
program. Each provision addresses frequently encountered vehicle 
operating conditions that are not currently captured in EPA test 
procedures and produce significant criteria pollutant emissions. The 
operating conditions include high power cold starts in plug-in hybrid 
vehicles, early drive-away (i.e., drive-away times shorter than in the 
FTP), and mid-temperature engine starts. EPA believes that the 
rationale and technical assessment performed by CARB applies not only 
for vehicles sold in California but for products sold across the 
country. EPA would require vehicle manufacturers to attest to meeting 
the three specific CARB ACC II program standards using CARB-defined 
test procedures.\522\ The proposed phase-in for the three CARB ACC II 
program provisions is the same as for other criteria emissions 
standards and is described in Section III.C.1.
---------------------------------------------------------------------------

    \522\ CARB Title 16, Section 1961.4. Final Regulation Order. 
Exhaust Emission Standards and Test Procedures--2026 and Subsequent 
Model Year Passenger Cars, Light-Duty Trucks, and Medium-Duty 
Vehicles.

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

[[Page 29276]]

i. PHEV High Power Cold Starts
    The first provision addresses NMOG+NOX emissions from 
PHEV high power cold starts (HPCS), which is when a driver demands more 
torque than the battery and electric motor can supply, and the ICE is 
started and immediately produces high torque while also working to 
light off the catalyst. NMOG+NOX exhaust emissions for this 
provision are measured over the Cold Start US06 Charge-Depleting 
Emission Test, as described in, ``California Test Procedures for 2026 
and Subsequent Model Year Zero-Emission Vehicles and Plug-in Hybrid 
Electric Vehicles, in the Passenger Car, Light-Duty Truck and Medium-
Duty Vehicle Classes.'' \523\
---------------------------------------------------------------------------

    \523\ CARB Title 16, Section 1961.4. Final Regulation Order. 
Exhaust Emission Standards and Test Procedures--2026 and Subsequent 
Model Year Passenger Cars, Light-Duty Trucks, and Medium-Duty 
Vehicles.
---------------------------------------------------------------------------

    EPA's proposed bin-specific standards are shown in Table 53. The 
bins are slightly different than the ACC II bins. Specifically, EPA is 
not proposing Bin 125, Bin 25 or Bin 15, as found in CARB ACC II, and 
is instead proposing Bin 10. EPA is proposing Step 1 of this provision 
to start with MY 2027, one year later than CARB, and for Step 2 of the 
provision to start in MY 2029, which is the same as CARB.

                                    Table 53--High Power Cold Start Standards
----------------------------------------------------------------------------------------------------------------
                     Cold start US06 PHEV standards (150,000-mile durability vehicle basis)
-----------------------------------------------------------------------------------------------------------------
                                                                                  NMOG+NOX (g/mi)
                    Vehicle emission category                    -----------------------------------------------
                                                                    Step 1: 2027 to 2028 MY    Step 2: 2029+ MY
----------------------------------------------------------------------------------------------------------------
Bin 70..........................................................                       0.320               0.200
Bin 60..........................................................                       0.280               0.175
Bin 50..........................................................                       0.240               0.150
Bin 40..........................................................                       0.200               0.125
Bin 30..........................................................                       0.150               0.100
Bin 20..........................................................                       0.100               0.067
Bin 10..........................................................                       0.050               0.034
----------------------------------------------------------------------------------------------------------------

    For Step 1, PHEVs with Cold Start US06 all-electric range of at 
least 10 miles are exempt from the standard. For Step 2, PHEVs with 
Cold Start US06 all-electric range of at least 40 miles are exempt from 
the standard. CARB testing identified several existing PHEVs that 
started on the US06 and met the standard by a small margin.
    EPA requests comment on Step 2 of the PHEV HPCS standard, 
specifically whether the Step 2 standard should (1) be finalized as 
proposed, (2) have a start date later than MY 2029, (3) have an 
alternative stringency, either for all light-duty vehicles or just for 
LDT3 and LDT4, or (4) should be removed, leaving Step 1 to apply 
indefinitely. EPA encourages commenters to provide underlying data to 
support their comments, particularly addressing any technical 
challenges regarding the lead time or feasibility of the Step 2 
standard. EPA will consider the comments along with any additional 
available data in assessing the Step 2 standards for the final rule.
ii. Early Driveaway
    EPA is proposing NMOG+NOX emissions standards that 
address emissions from earlier gear engagement and drive-away described 
by the CARB ACC II program.\524\ In a regular 25 [deg]C FTP, gear 
engagement happens at 15 seconds and driveaway happens at 20 seconds, 
but studies have shown many drivers begin driving earlier than this. 
Vehicle manufacturers have historically designed their aftertreatment 
systems and controls to meet emissions standards based on the timing of 
the FTP drive away. However, given the existing field data regarding 
the propensity of drivers to drive off sooner than the delay 
represented in the FTP and that vehicle manufacturers have demonstrated 
that they are able to address and reduce the emissions associated with 
this event, EPA feels it is appropriate to require vehicle 
manufacturers to meet this ACC II requirement.
---------------------------------------------------------------------------

    \524\ CARB Title 16, Section 1961.4. Final Regulation Order. 
Exhaust Emission Standards and Test Procedures--2026 and Subsequent 
Model Year Passenger Cars, Light-Duty Trucks, and Medium-Duty 
Vehicles.
---------------------------------------------------------------------------

    EPA believes that CARB has properly captured early driveaway 
vehicle operation in the test procedures developed for ACC II. The bin-
specific standards are shown in Table 54, which are congruent with 
those of the ACC II program. The bins are slightly different than the 
ACC II bins. Specifically, EPA is not proposing Bin 125, Bin 25 or Bin 
15, as found in ACC II, and is instead proposing Bin 10.

                   Table 54--Early Driveaway Standards
------------------------------------------------------------------------
                                                            NMOG+NOX (g/
                Vehicle emissions category                       mi)
------------------------------------------------------------------------
Bin 70....................................................         0.082
Bin 60....................................................         0.072
Bin 50....................................................         0.062
Bin 40....................................................         0.052
Bin 30....................................................         0.042
Bin 20....................................................         0.032
Bin 10....................................................         0.022
------------------------------------------------------------------------

    Vehicles are exempt from the ACC II early driveaway bin standards 
if the vehicle prevents engine starting during the first 20 seconds of 
a cold-start FTP test interval and the vehicle does not use technology 
(e.g., electrically heated catalyst) that would cause the engine or 
emission controls to be preconditioned such that NMOG+NOX 
emissions would be higher during the first 505 seconds of the early 
driveaway emission test compared to the NMOG+NOX emissions 
during the first 505 seconds of the standard FTP emission test.
iii. Intermediate Soak Mid-Temperature Starts
    EPA also proposes to adopt a third provision defined by the CARB 
ACC II program that addresses NMOG+NOX emissions from 
intermediate soak mid-temperature starts.\525\ Current EPA test

[[Page 29277]]

procedures capture emissions from vehicle cold start and vehicle hot 
start. However, many vehicles in actual operation experience starts 
after an intermediate time (i.e., soak times between 10 minutes and 12 
hours). Vehicle manufacturers are not currently required to control the 
emissions associated with these mid-temperature starts to the same 
degree that they manage cold and hot starts.
---------------------------------------------------------------------------

    \525\ CARB Title 16, Section 1961.4. Final Regulation Order. 
Exhaust Emission Standards and Test Procedures--2026 and Subsequent 
Model Year Passenger Cars, Light-Duty Trucks, and Medium-Duty 
Vehicles.
---------------------------------------------------------------------------

    Tier 3 vehicles achieve low start emissions when soak times are 
short because the engine and aftertreatment are still hot from prior 
operation. Start emissions after long soak periods are addressed by the 
12+ hour soak of the 25 [deg]C FTP, which requires vehicle calibrations 
to quickly heat the catalyst and sensors from an engine at ambient 
temperature. The mid-temperature intermediate soak provision addresses 
emissions from intermediate soak times where the engine and 
aftertreatment have cooled but may still be warmer than ambient 
temperature.
    Vehicle manufacturers have demonstrated that they are able to 
address and reduce the emissions associated with this type of event, 
and EPA feels it is appropriate to require vehicle manufacturers to 
meet this requirement. EPA believes that CARB has properly captured the 
vehicle operation in the test procedures they developed for ACC II.
    The bin-specific proposed standards shown in Table 55, are 
congruent with those of the ACC II program. The bins are slightly 
different than the ACC II bins. Specifically, EPA is not proposing Bin 
125, Bin 25, or Bin 15, as found in ACC II, and is instead proposing 
Bin 10.
    Manufacturers would need to submit data at each of the three 
standards: 9-11 minutes for the 10-minute requirement, 39-41 minutes 
for the 40-minute requirement, and 5-7 hours for the 3-12 hour 
requirement, and attest to meeting the standards at other soak times by 
linearly interpolating between 10 minutes and 40 minutes, and between 
40 minutes and 12 hours. The proposed intermediate soak mid-temperature 
standards are shown in Table 55.

                           Table 55--Intermediate Soak Mid-Temperature Start Standards
----------------------------------------------------------------------------------------------------------------
                                                             10-Minute soak    40-Minute soak    3-12 hour soak
                Vehicle emissions category                   NMOG+NOX (g/mi)   NMOG+NOX (g/mi)   NMOG+NOX (g/mi)
 
----------------------------------------------------------------------------------------------------------------
Bin 70....................................................             0.035             0.054             0.070
Bin 60....................................................             0.030             0.046             0.060
Bin 50....................................................             0.025             0.038             0.050
Bin 40....................................................             0.020             0.031             0.040
Bin 30....................................................             0.015             0.023             0.030
Bin 20....................................................             0.010             0.015             0.020
Bin 10....................................................             0.005             0.008             0.010
----------------------------------------------------------------------------------------------------------------

    EPA recognized that requiring compliance to an emissions standard 
represented by a curve requires more testing effort than requiring 
compliance to a point standard and thus requests comment on whether to 
simplify the compliance requirements of this provision, in light of 
benefits and costs.
8. Elimination of Commanded Enrichment for Power or Component 
Protection
    EPA is proposing to eliminate the allowance of the use of commanded 
enrichment as an AECD on SI engines used in light-duty vehicles and MDV 
for either power or component protection during normal operation and 
use. Normal operation is defined at 40 CFR 86.1803-01 to include 
vehicle speeds and grades of public roads, and vehicle loading and 
towing within manufacturer recommendations, even if the operation 
occurs infrequently. Commanded enrichment includes lean best torque 
enrichment.
    Brief rich excursions are allowed during (1) engine start, (2) 
lambda dithering \526\ or slight lambda biasing to achieve optimal 
three-way catalyst (TWC) conversion efficiency of criteria emissions, 
(3) catalyst re-wetting after deceleration fuel cut off (DFCO), (4) 
brief lambda excursions during engine transients, (5) intrusive OBD 
monitoring of aftertreatment, evaporative canister purge valve, etc., 
and (6) in vehicle ``limp-home'' operation where the malfunction 
indicator light (MIL, commonly known as the ``check engine light'') or 
other warning systems are triggered.
---------------------------------------------------------------------------

    \526\ Lambda dithering is an engine-TWC control strategy that 
commands or allows small fluctuations in exhaust lambda that can 
expand the lambda range over which a TWC exhibits good conversion of 
hydrocarbons, carbon monoxide and oxides of nitrogen. Lambda is 
actual air fuel ratio divided by stoichiometric air fuel ratio.
---------------------------------------------------------------------------

    Most current vehicles incorporate AECDs that utilize enrichment 
(i.e., commanding air/fuel ratio less than the stoichiometric air/fuel 
ratio) for the purpose of protecting components in the exhaust system 
from thermal damage during normal operation and use. Some vehicles 
incorporate similar strategies for the purpose of increasing the power 
output of the engine. Such strategies significantly reduce the 
effectiveness of the aftertreatment system.
    Technologies exist that can prevent thermal damage of engine and/or 
exhaust system components without the use of enrichment during normal 
operation and use (see DRIA Chapter 3 for technology discussion). 
Modern vehicles have sufficient power without the use of enrichment. 
The use of enrichment only has the potential to incrementally increase 
power but significantly reduces the effectiveness of the catalytic 
aftertreatment system, resulting in a ten-fold or greater increase of 
CO and HC emissions.
    EPA requests comment on the proposed prohibition of commanded 
enrichment as an AECD, including analyses of benefits and costs, and 
additional exceptions where brief rich operation should be allowed.
9. Averaging, Banking, and Trading Provisions
    Section III.B.4 describes averaging, banking, and trading (ABT) 
credit provisions included in the proposed GHG program and the basis 
for providing them. ABT provisions are also included in the proposed 
criteria pollutant program for NMOG+NOX standards. ABT has a 
long history for both light duty and heavy duty vehicles and EPA is not 
reopening or soliciting comment on the basic structure of the ABT 
program for criteria pollutants or GHG.

[[Page 29278]]

    As introduced in Sections III.C.1 and III.C.2, EPA is proposing to 
allow light-duty vehicle (LDV, LDT, MDPV) 25 [deg]C FTP 
NMOG+NOX credits to be transferred into the proposed program 
up to the end of the Tier 3 five-year credit life. Light-duty vehicle -
7 [deg]C FTP NMHC credits may also be transferred into the proposed 
program on a 1:1 basis for -7 [deg]C FTP NMOG+NOX credits up 
to the end of the five-year credit life. EPA is proposing to consider -
7 [deg]C FTP NMHC credits to be equal in value and freely exchangeable 
with the credits corresponding to the proposed -7 [deg]C FTP 
NMOG+NOX standards.
    EPA proposes that MDV (Class 2b and 3 vehicles) 25 [deg]C FTP 
NMOG+NOX credits may only be transferred into the proposed 
program if a manufacturer selects the early compliance schedule for 
MDV. If so, these MDV credits may be transferred into the program up to 
the end of the Tier 3 five-year credit life. There were no -7 [deg]C 
FTP NMHC or NMOG+NOX standards for MDV in Tier 3 so there 
are no MDV -7 [deg]C FTP credits to transfer.
    New credits may be generated, banked, and traded within the new 
program to provide manufacturers with flexibilities in developing 
compliance strategies.

D. Proposed Modifications to the Medium-Duty Passenger Vehicle 
Definition

    In EPA's 2000 Tier 2 criteria pollutant rule, EPA established a new 
medium-duty passenger vehicle (MDPV) regulatory classification \527\ to 
bring passenger vehicles over 8,500 pounds GVWR into the Tier 2 
program.\528\ EPA created the MDPV classification under the Tier 2 
program because the agency determined that a portion of the MDV fleet 
was predominantly being utilized as passenger vehicles instead of being 
used for ``work,'' for example, to transport goods or pull trailers. 
These larger vehicles were driven in the same way as passenger 
vehicles, despite the fact their weight threshold put them in the HD 
category, and from an emissions control standpoint we found it was 
feasible for these vehicles to meet the same set of emissions standards 
as other passenger vehicles. The MDPV definition was focused primarily 
on the largest SUVs and passenger vans above 8,500 pounds GVWR. These 
vehicles would have otherwise remained subject to less stringent heavy-
duty vehicle standards. When EPA established its GHG standards in 2010, 
EPA included MDPVs in the light-duty vehicle GHG program as well. 
Essentially, MDPVs are heavy-duty vehicles that are included in light-
duty vehicle programs.
---------------------------------------------------------------------------

    \527\ 65 FR 6697 (February 10, 2000) at 6749.
    \528\ EPA defined medium-duty passenger vehicles as any complete 
heavy-duty vehicle less than 10,000 pounds GVWR designed primarily 
for the transportation of persons including conversion vans (i.e., 
vans which are intended to be converted to vans primarily intended 
for the transportation of persons). The definition does not include 
any vehicle that (1) has a capacity of more than 12 persons total 
or, (2) that is designed to accommodate more than 9 persons in 
seating rearward of the driver's seat or, (3) has a cargo box (e.g., 
a pickup box or bed) of six feet or more in interior length.
---------------------------------------------------------------------------

    As we did in the Tier 2 rule, we are once again cognizant of 
potential market changes that could move passenger vehicles out of the 
LD regulatory class, and we have examined changes to the MDPV 
definition to avoid this situation. For example, the new GM Hummer 
pickup and SUVs are over 10,000 pounds GVWR due to battery weight but 
do not have significant work capabilities (e.g., towing and hauling), 
as measured by the work factor, relative to other vehicles in the MDV 
category. EPA is proposing two modifications to the MDPV definition 
starting in MY 2027 to address passenger vehicles that could 
potentially fall outside the current definition. First, EPA is 
proposing to include in the MDPV definition any passenger vehicles at 
or below 14,000 pounds GVWR with a work factor at or below 5,000 pounds 
except for pickups with an open bed interior length of eight feet or 
larger which would continue to be excluded from the MDPV category.\529\ 
This modification would address new BEVs that are primarily passenger 
vehicles but fall above the current 10,000 pound MDPV threshold 
primarily due to battery pack weight increasing the vehicle's GVWR. EPA 
believes these vehicles should be in the light-duty vehicle program 
because they are passenger vehicles and would likely displace the 
purchase of other passenger vehicles rather than a heavy-duty vehicle 
due to their relatively low utility. In selecting the proposed 5,000-
pound work factor cut point, EPA reviewed current vehicle offerings and 
does not believe this threshold would pull into the MDPV category a 
significant number of work vans or trucks. EPA requests comment on this 
approach for addressing heavy passenger vehicles as well as other 
approaches that might more effectively capture these types of new 
vehicles.
---------------------------------------------------------------------------

    \529\ In the proposed regulatory text, EPA is proposing that 
pickups with an interior bed length of 94 inches or greater would be 
excluded, which would exclude pickups with eight-foot beds (96 
inches) with a 2-inch allowance for vehicle design variability. This 
also applies for the second change to the MDPV definition.
---------------------------------------------------------------------------

    Currently, the MDPV category generally includes pickups below 
10,000 pounds GVWR with an open cargo bed length of less than six feet 
(72.0 inches). The second proposed MDPV definition modification is to 
include in the MDPV category any pickups with a GVWR below 9,900 pounds 
and an interior bed length less than eight feet regardless of whether 
the vehicle work factor is above 5,000 pounds. Pickups at or above 
9,900 pounds up to 14,000 pounds GVWR with a work factor above 5,000 
pounds would be included as MDPVs only if their interior bed length is 
less than six feet.
    Currently, there is a clear distinction between pickups in the 
light-duty vehicle category and those in the medium-duty category. 
Light-duty pickups are those pickups with a GVWR at or below 8,500 
pounds and they currently generally have a GVWR below 8,000 pounds. MD 
pickups are those pickups that are at or above 8,501 pounds and all 
such vehicles currently have a GVWR above 9,900 pounds.\530\ The 
proposed changes to the MDPV definition are intended to account for any 
new pickup offerings that would fall into the GVWR ``space'' at or 
above 8,501 pounds but below 9,900 pounds. EPA is not aware of any 
current or planned products that would be covered by this proposed 
modification. However, EPA is concerned that differences between the 
light-duty and medium-duty pickups could become blurred if 
manufacturers were to offer somewhat more capable pickups with GVWR 
just above 8,500 pounds. Manufacturers could in essence move their 
light-duty pickups up into the medium-duty category through relatively 
minor vehicle modifications. EPA believes it is appropriate to address 
this possibility given that the light-duty vehicle footprint standards, 
as proposed, would be more stringent compared to the proposed work 
factor-based standards for MDVs and could provide an unintended 
incentive for manufacturers to take such an approach. EPA requests 
comment on this proposed change in the MDPV category.
---------------------------------------------------------------------------

    \530\ Currently, these pickups are covered by HDV standards in 
40 CFR 86.1816-18.
---------------------------------------------------------------------------

    Table 56 summarizes the MDPV proposal in terms of what vehicles 
would not be covered as MDPVs under EPA's proposed changes to the 
qualifying criteria.

[[Page 29279]]



Table 56--Summary of Exclusions for the Proposed Revised MDPV Definition
------------------------------------------------------------------------
                   A vehicle would not be an MDPV if:
-------------------------------------------------------------------------
                                            Work factor (WF)
                               -----------------------------------------
                                    WF <5,000 lbs.       WF >5,000 lbs.
------------------------------------------------------------------------
GVWR <9,900 lbs...............  bed length >94.0        bed length >94.0
                                 inches.                 inches.
9,900 lb <=GVWR <=14,000 lbs..  bed length >94.0        bed length >72.0
                                 inches.                 inches.
------------------------------------------------------------------------

    Finally, EPA is also clarifying that MDPVs will include only 
vehicles with seating behind the driver's seat such that vehicles like 
cargo vans and regular cab pickups with no rear seating would remain in 
the MDV category and subject to work factor-based standards regardless 
of the proposed changes to the MDPV definition. Also, pickups with 8-
foot beds would continue to be excluded from the MDPV category under 
all circumstances. Prior to MY 2027, EPA proposes that a manufacturer 
may optionally place vehicles that are brought into the MDPV category 
by the proposed MDPV definition revisions into the light-duty vehicles 
program rather than the MDV program. Due to lead time concerns, EPA is 
proposing that the changes would be mandatory starting in MY 2027. In 
addition, for the proposed Tier 4 criteria pollutant standards 
discussed in Section III.C, manufacturers opting for the Tier 4 full 
lead time optional standards would not be required to include vehicles 
meeting the revised MDPV definition in their Tier 4 fleet calculations 
until their fleet is fully covered by the Tier 4 standards to ensure 
the program would be compliant with applicable CAA lead time 
requirements. In the meantime, manufacturers would continue to certify 
those vehicles to the Tier 3 standards for heavy-duty vehicles in 40 
CFR 86.1816-18. EPA requests comment on its proposed revisions to the 
MDPV category including timing of implementation.
    Historically, consumers without the need for the additional utility 
offered by medium-duty pickups have sound reasons for buying the light-
duty versions. Medium-duty versions compared to their light-duty 
counterparts tend to be higher priced, less fuel efficient, less 
maneuverable, and may also have a harsher ride when unloaded due to 
heavier suspensions. However, EPA recognizes that there is the 
possibility that the pickup market could shift from light-duty versions 
to medium-duty versions of pickups due to consumer preference changes, 
but also due to manufacturer changes to vehicle designs and pricing and 
marketing strategies. At this time, EPA is not proposing to 
fundamentally change its program to pull a large portion of medium-duty 
pickups into the light-duty program to address this possibility due to 
the potential disruption such an approach would have both for the 
vehicle industry and for consumers needing highly capable work 
vehicles. EPA plans to monitor vehicle market trends over the next 
several years to identify any new trends that could potentially lead to 
the loss of emissions reductions, and if so, to explore appropriate 
ways to address such a situation. EPA is requesting comment on the 
potential likelihood of this type of market shift from the light- to 
the medium-duty sector, and potential ways to address the issue if 
needed in a future rulemaking.
    EPA performed a study to assess the GHG increases of a medium duty 
pickup compared to a similar sized light-duty pickup when they are 
operated similarly as primarily unloaded vehicles transporting just the 
operator and also if they are lightly loaded with \1/2\ the payload 
capacity. This comparison reflects the issue that medium-duty pickups 
have certain heavier duty design aspects (frames, axles, brakes, 
transmissions, etc.) intended for trailer towing work that negatively 
impact GHG emissions when they are only operated with lighter loads 
similar to the expected operation from a light-duty pickup.
    Figure 18 summarizes the chassis test data for the F150 and the 
F250, each tested in its original configuration and alternative 
configuration (as a 2b for the F150, and as a 2a for the F250). The 
F250 with the 7.3L engine, tested at curb+300 pounds. ETW, emitted 172 
g/mi more than the F150. Similarly, the F250 emitted 170 g/mi more than 
the F150 with both tested at ALVW.
[GRAPHIC] [TIFF OMITTED] TP05MY23.021

    The GHG emission difference observed in the data indicates that 
light to medium load operation results in much higher CO2 
emissions in the medium-duty pickup under similar passenger or payload 
conditions. The medium-duty pickup is designed primarily for regular 
towing and therefore may have higher emissions under other operating 
conditions compared to light-duty pickups designed more for 
transportation of passengers or cargo in the bed.

E. What alternatives did EPA consider?

    EPA is seeking comment on three alternatives to its proposed light-
duty

[[Page 29280]]

GHG standards. Alternative 1 is more stringent than the proposal across 
the MY 2027-2032 time period, and Alternative 2 is less stringent. The 
proposal as well as Alternatives 1 and 2 all have a similar 
proportional ramp rates of year over year stringency, which includes a 
higher rate of stringency increase in the earlier years (MYs 2027-2029) 
than in the later years. Alternative 3 achieves the same stringency as 
the proposed standards in MY 2032 but provides for a more consistent 
rate of stringency increase for MY 2027-2031.
    In selecting the stringencies for the alternatives, EPA assessed a 
range available technologies (including the costs and pace of 
deployment) along with the resulting emissions reductions associated 
with each alternative. Each of the stringency alternatives are 
supported by a set of feasible technologies. The Alternative 1 
projected fleet-wide CO2 targets are 10 g/mi lower on 
average than the proposed targets; Alternative 2 projected fleet-wide 
CO2 targets averaged 10 g/mi higher than the proposed 
targets.\531\ While the 20 g/mi range of stringency options may appear 
fairly narrow, for the MY 2032 standards the alternatives capture a 
range of 12 percent higher and lower than the proposed standards in the 
final year. Our goal in selecting the alternatives was to identify a 
range of stringencies that we believe are appropriate to consider for 
the final standards because they represent a range of standards that 
are anticipated to be feasible and are highly protective of human 
health and the environment.
---------------------------------------------------------------------------

    \531\ For reference, the targets at a footprint of 50 square 
feet were exactly 10 g/mi lower and greater for the alternatives.
---------------------------------------------------------------------------

    While the proposed standards, Alternative 1 and Alternative 2 are 
all characterized by larger increases in stringency between in the 
earlier years than in the later years, Alternative 3 was constructed 
with the goal of evaluating roughly equal reductions in absolute g/mi 
targets over the duration of the program while achieving the same 
overall targets as the proposed standards by MY 2032. This has the 
effect of less stringent year-over-year increases in the early years of 
the program.
    As noted elsewhere in this preamble, EPA may choose to update its 
modeling for the final rulemaking, e.g., by updating inputs for costs 
to reflect newly available information or to incorporate PHEV 
technology as outlined in the DRIA while considering information and 
views provided by stakeholders in public comments. Thus, we recognize 
that our cost estimates and assessments of feasibility may change, and 
EPA is soliciting comment on all of the model year standards of 
Alternatives 1, 2, and 3, and standards generally represented by the 
range across those alternatives. EPA anticipates that the appropriate 
choice of final standards within this range will reflect the 
Administrator's judgments about the uncertainties in EPA's analyses as 
well as consideration of public comment and updated information where 
available. However, EPA proposes to find that standards substantially 
more stringent than Alternative 1 would not be appropriate because of 
uncertainties concerning the cost and feasibility of such standards. 
EPA proposes to find that standards substantially less stringent than 
Alternative 2 would not be appropriate because they would forgo 
feasible emissions reductions that would improve the protection of 
public health and welfare.
    Table 57 and Table 58 give the details for the car and truck curves 
for Alternative 1, and Table 59 and Table 60 give details for 
Alternative 2. Table 61 and Table 62 provide details for Alternative 3 
for cars and trucks.

                  Table 57--Footprint-Based Standard Curve Coefficients for Cars--Alternative 1
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2028         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
MIN CO2 (g/mi)....................        121.3        104.4         87.2         79.7         71.5         62.0
MAX CO2 (g/mi)....................        129.6        111.0         92.3         83.9         75.3         65.3
Slope (g/mi/ft2)..................         0.59         0.51         0.42         0.38         0.34         0.30
Intercept (g/mi)..................         96.4         82.6         68.6         62.4         56.0         48.6
MIN footprint (ft2)...............           42           43           44           45           45           45
MAX footprint (ft2)...............           56           56           56           56           56           56
----------------------------------------------------------------------------------------------------------------


                 Table 58--Footprint-Based Standard Curve Coefficients for Trucks--Alternative 1
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2028         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
MIN CO2 (g/mi)....................        124.3        108.6         92.0         85.3         76.5         66.5
MAX CO2 (g/mi)....................        198.4        168.1        138.0        124.0        111.2         96.7
Slope (g/mi/ft2)..................         2.39         2.05         1.70         1.55         1.39         1.21
Intercept (g/mi)..................         23.9         20.5         17.0         15.5         13.9         12.1
MIN footprint (ft2)...............           42           43           44           45           45           45
MAX footprint (ft2)...............           73           72           71           70           70           70
----------------------------------------------------------------------------------------------------------------


                  Table 59--Footprint-Based Standard Curve Coefficients for Cars--Alternative 2
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2028         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
MIN CO2 (g/mi)....................        140.5        123.8        106.6         99.2         91.0         81.5
MAX CO2 (g/mi)....................        150.1        131.6        112.8        104.5         95.8         85.9
Slope (g/mi/ft2)..................         0.69         0.60         0.52         0.48         0.44         0.39
Intercept (g/mi)..................        111.6         97.9         83.9         77.7         71.3         63.9
MIN footprint (ft2)...............           42           43           44           45           45           45
MAX footprint (ft2)...............           56           56           56           56           56           56
----------------------------------------------------------------------------------------------------------------


[[Page 29281]]


                 Table 60--Footprint-Based Standard Curve Coefficients for Trucks--Alternative 2
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2028         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
MIN CO2 (g/mi)....................        141.7        126.3        110.0        103.6         94.8         84.8
MAX CO2 (g/mi)....................        226.1        195.4        165.0        150.7        137.9        123.4
Slope (g/mi/ft2)..................         2.72         2.38         2.04         1.88         1.72         1.54
Intercept (g/mi)..................         27.2         23.8         20.4         18.8         17.2         15.4
MIN footprint (ft2)...............           42           43           44           45           45           45
MAX footprint (ft2)...............           73           72           71           70           70           70
----------------------------------------------------------------------------------------------------------------


                  Table 61--Footprint-Based Standard Curve Coefficients for Cars--Alternative 3
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2028         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
MIN CO2 (g/mi)....................        135.9        123.8        110.6         98.2         85.3         71.8
MAX CO2 (g/mi)....................        145.2        131.6        117.0        103.4         89.8         75.6
Slope (g/mi/ft2)..................         0.66         0.60         0.54         0.47         0.41         0.35
Intercept (g/mi)..................        108.0         97.9         87.0         76.9         66.8         56.2
MIN footprint (ft2)...............           42           43           44           45           45           45
MAX footprint (ft2)...............           56           56           56           56           56           56
----------------------------------------------------------------------------------------------------------------


                 Table 62--Footprint-Based Standard Curve Coefficients for Trucks--Alternative 3
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2028         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
MIN CO2 (g/mi)....................        150.3        136.8        122.7        108.8         91.8         75.7
MAX CO2 (g/mi)....................        239.9        211.7        184.0        158.3        133.5        110.1
Slope (g/mi/ft2)..................         2.89         2.58         2.27         1.98         1.67         1.38
Intercept (g/mi)..................         28.9         25.8         22.7         19.8         16.7         13.8
MIN footprint (ft2)...............           42           43           44           45           45           45
MAX footprint (ft2)...............           73           72           71           70           70           70
----------------------------------------------------------------------------------------------------------------

    The proposed standards will result in industry-wide average GHG 
emissions target of 82 g/mi of CO2 in MY 2032, representing 
a 56 percent reduction in average emissions levels from the existing MY 
2026 standards established in 2021. Alternative 1 is projected to 
result in an industry-wide average target for the light-duty fleet of 
72 g/mi in MY 2032, representing a 61 percent reduction in projected 
fleet average GHG emissions target levels from the existing MY 2026 
standards. Alternative 2 is projected to result in an industry-wide 
average target of 92 g/mile of CO2 in MY 2032, representing 
a 50 percent reduction in projected fleet average GHG emissions target 
levels from the existing MY 2026 standards. Alternative 3 would result 
in the same MY 2032 industry-wide target as the proposed standards (82 
g/mi) albeit at a more gradual rate, as shown in the less stringent 
targets prior to MY 2031.
    Figure 19 compares the projected targets for the proposed standards 
and the alternatives. Further analysis of the alternatives is provided 
in Section IV.D.4.

[[Page 29282]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.022

F. Proposed Certification, Compliance, and Enforcement Provisions

1. Electric Vehicle Test Procedures
    Under the current program, manufacturers and EPA test light-duty 
BEVs to determine the vehicle's miles per gallon equivalent (MPGe) and 
the vehicle range. PHEVs are also tested to determine the PHEV's charge 
depleting range. The results of these tests are used to generate range 
and fuel economy values published on the fuel economy label.
    Currently, BEV testing consists of performing a full charge-
depleting test using the multi-cycle test (MCT) outlined in the 2012 or 
2017 version of SAE standard J1634, Battery Electric Vehicle Energy 
Consumption and Range Test Procedure. The multi-cycle test consists of 
8 cycles: Four urban dynamometer driving schedule (UDDS) cycles, two 
highway fuel economy test (HFET) cycles, and two constant speed cycles 
(CSCs). The test is used to determine the vehicle's usable battery 
energy (UBE) in DC Watt-hours, cycle energy consumption in Watt-hours 
per mile (Wh/mi), and AC recharge energy in AC watt-hours. These 
results are used to determine the BEV's unadjusted range and MPGe.
    The MCT generates unadjusted city (UDDS) and highway (HFET) two-
cycle test results. These results are adjusted to 5-cycle values which 
are then published on the fuel economy label. EPA regulations allow 
manufacturers to multiply their two-cycles using a defined 0.7 
adjustment factor or determine a BEV 5-cycle adjustment factor by 
running all of the EPA 5-cycle tests (FTP, HFET, US06, SC03, and 20 
[deg]F FTP). This adjustment is performed to account for the 
differences between vehicle operation observed on the two-cycle tests 
and vehicle operation occurring at higher speeds and loads along with 
hot and cold ambient temperatures not seen on the UDDS or HFET cycles.
    PHEVs include both an internal combustion engine and an electric 
motor and can be powered by the battery or engine or a combination of 
both power devices. Charge depleting operation is when the electric 
motor is primarily propelling the vehicle with energy from the battery. 
Charge sustaining operation is when the internal combustion engine is 
contributing energy to power the vehicle and maintain a specific state 
of charge. PHEVs are tested in both charge depleting and charge 
sustaining operation to determine the electrical range capability of 
the vehicle and the charge sustaining fuel economy.
    PHEV charge depletion testing consists of performing a single cycle 
charge depleting UDDS test and a single cycle charge depleting HFET 
test. These tests are specified in the 2010 version of SAE Standard 
J1711, Recommended Practice for Measuring the Exhaust Emissions and 
Fuel Economy of Hybrid-Electric Vehicles, Including Plug-In Hybrid 
Vehicles. The result of these tests is the actual charge depleting 
distance the vehicle can drive. The actual charge depleting distance is 
multiplied by a 0.7 adjustment factor to determine the 5-cycle charge 
depleting range. The UDDS and HFET distances are averaged to determine 
an estimated all-electric range for the vehicle. SAE Standard J1711 
does not specify a methodology for determining UBE when performing 
charge depleting tests on PHEVs.
    As part of this rulemaking, EPA is proposing to adopt battery 
durability and warranty requirements for light-duty and medium-duty 
BEVs and PHEVs (see Sections III.F.2 and III.F.3). The adoption of 
battery durability requirements would create a requirement for 
additional testing of

[[Page 29283]]

BEVs and PHEVs by manufacturers to be performed several times during 
their useful life, and reporting requirements to demonstrate that the 
vehicles are meeting the proposed durability requirements.
    As described in Section III.F.2, the proposed battery durability 
program would require manufacturers to develop and implement an on-
board battery state-of-health monitor and demonstrate its accuracy 
through in-use vehicle testing. For this testing, the tests would be 
based on the currently-used charge depletion tests that are used for 
range and fuel economy labeling of light-duty BEVs and PHEVs, with the 
addition of the recording of the vehicle monitor value and comparison 
of the results from the charge depleting test to the monitor value 
reported by the vehicle. Specifically, light-duty and Class 2b and 3 
BEVs would be tested according to the MCT to determine the vehicle's 
UBE and range. PHEVs would be tested according to the single cycle UDDS 
and HFET test to determine the vehicle's charge depleting UBE and 
range. Class 2b and 3 BEVs and PHEVs would be tested at adjusted loaded 
vehicle weight (ALVW),\532\ consistent with the testing required for 
measuring criteria and GHG emissions. These testing requirements are 
described in more detail in Section III.F.2.
---------------------------------------------------------------------------

    \532\ ALVW is the numerical average of vehicle curb weight and 
gross vehicle weight rating.
---------------------------------------------------------------------------

    In addition to manufacturers performing these dynamometer tests, 
onboard state-of-health monitor values would be collected from a larger 
sample of in-use vehicles to demonstrate that the vehicles are meeting 
the durability requirements, as described further in Section III.F.2. 
This would not involve additional dynamometer testing but only 
acquisition of monitor data from in-use vehicles.
    The calculations performed for the PHEV charge depleting tests 
would have an additional step to determine the total charge depletion 
energy during the single cycle tests. Currently, PHEV charge depletion 
testing consists of observing when the vehicle is no longer depleting 
the battery by measuring the net ampere-hours. Once this measurement 
determines that the vehicle has switched to a mode in which it is 
maintaining rather than depleting the battery charge, the conclusion of 
the charge depletion test is identified.
    To determine UBE for a PHEV, EPA is proposing that manufacturers 
measure the DC discharge energy of the PHEV's rechargeable energy 
storage system (RESS, i.e. the high-voltage battery) by measuring the 
change in state-of-charge in ampere-hours over each cycle and the 
average voltage of each cycle as required by SAE J1711. The average 
voltage can be either an average of continuous voltage measurements 
over the entire cycle, or the average voltage measured prior to the 
start of the cycle and at the conclusion of the cycle as defined in SAE 
J1711. The measured DC discharge energy in watt-hours for each cycle 
would be determined by multiplying the average cycle voltage by the 
cycle's change in ampere-hours. The DC discharge energy is added for 
all the charge depleting cycles including the transition cycles used to 
determine the charge depleting cycle range, Rcdc as defined 
in SAE J1711.
    EPA is seeking comment regarding this proposed methodology for 
determining UBE for PHEVs using the data captured during full charge 
testing according to the 2010 version of SAE J1711.
    EPA is also seeking comment regarding the proposed use of the 
method described for light-duty vehicle with SAE J1711 for determining 
UBE for Class 2b and 3 PHEVs. In addition, EPA is seeking comment on 
whether to perform the tests on Class 2b and 3 PHEVs at ALVW as 
proposed, or at loaded vehicle weight (LVW), which is curb weight plus 
300 pounds.
    EPA is also seeking comment regarding the proposed use of the 2017 
version of SAE J1634 for determining UBE for class 2b and 3 BEVs. In 
addition, EPA is seeking comment on whether to perform charge depleting 
tests on Class 2b and 3 BEVs at ALVW as proposed, or at loaded vehicle 
weight (LVW), which is curb weight plus 300 pounds.
    EPA is not reopening or proposing changes to the MCT test for 
testing BEVs.
2. Battery Durability
    EPA emissions standards are currently and have historically been 
standards that apply for the full useful life of the vehicle, as is 
required under CAA section 202(a)(1) (``Such standards shall be 
applicable to such vehicles and engines for their useful life''). 
Accordingly, EPA has historically required manufacturers to demonstrate 
the durability of their engines and emission control systems on 
vehicles with ICE engines including under our CAA section 206 
authority, and has also specified minimum warranty requirements for ICE 
emission control components. Without durability demonstration 
requirements, EPA would not be able to assess whether vehicles 
originally manufactured in compliance with relevant emissions standards 
would remain compliant over the course of their useful life. 
Recognizing that PEVs are playing an increasing role in automakers' 
compliance strategies, and that emissions credit calculations are based 
on mileage over a vehicle's full useful life, the same logic applies to 
PEV durability. Under 40 CFR 86.1865-12(k), credits are calculated by 
determining the grams/mile each vehicle achieves beyond the standard 
and multiplying that by the number of such vehicles and a lifetime 
mileage attributed to each vehicle (195,264 miles for passenger 
automobiles and 225,865 miles for light trucks). Having a lifetime 
mileage figure for each vehicle is integral to calculating the credits 
attributable to that vehicle, whether those credits are used for 
calculating compliance with fleet average standards, or for banking or 
trading. Compliance with fleet average standards in particular depends 
on all vehicles in the fleet achieving their certified level of 
emissions performance throughout their useful life. Without durability 
requirements applicable to PEVs guaranteeing certain performance over 
the entire useful life of the vehicles, EPA has no guarantee that a 
manufacturer's overall compliance with fleet emissions standards would 
continue throughout that useful life. Similarly, EPA would have no 
assurance that the proposed standards would achieve the emissions 
reductions projected by this proposed program. Therefore, EPA is 
proposing new battery durability monitoring and performance 
requirements for light-duty BEVs and PHEVs, and battery durability 
monitoring requirements for Class 2b and 3 BEVs and PHEVs, beginning 
with MY 2027.
    As implemented by manufacturers in current BEVs and PHEVs, lithium-
ion battery technology has been shown to be effective and durable for 
use in these vehicles. It is also well known that the energy capacity 
of a battery will naturally degrade to some degree with time and usage, 
resulting in a reduction in driving range as the vehicle ages. The 
degree of this energy capacity and range reduction effectively becomes 
an issue of durability if it negatively affects how the vehicle can be 
used, or how many miles it is likely to be driven during its useful 
life.
    HEV and PHEV manufacturers are currently required to account for 
potential battery degradation that could result in an increase in 
CO2 emissions. In addition, vehicle manufacturers are 
required to demonstrate compliance with criteria pollutant standards 
using

[[Page 29284]]

fully aged emission control components that represent expected 
degradation during useful life. EPA is applying this well-established 
requirement to the durability of BEV and PHEV batteries.
    The importance of battery durability in the context of zero- and 
near-zero emission vehicles, such as BEVs and PHEVs, has been cited by 
several authorities in recent years. In their 2021 Phase 3 report,\533\ 
the National Academies of Science (NAS) identified battery durability 
as an important issue with the rise of electrification.\534\ Several 
rulemaking bodies have also recognized the importance of battery 
durability in a world with rapidly increasing numbers of zero-emission 
vehicles. In 2015 the United Nations Economic Commission for Europe (UN 
ECE) began studying the need for a Global Technical Regulation (GTR) 
governing battery durability in light-duty vehicles. In April 2022 it 
published United Nations Global Technical Regulation No. 22, ``In-
Vehicle Battery Durability for Electrified Vehicles,'' \535\ or GTR No. 
22, which provides a regulatory structure for contracting parties to 
set standards for battery durability in light-duty BEVs and PHEVs.\536\ 
The European Commission and other contracting parties have also 
recognized the importance of durability provisions and are working to 
adopt the GTR standards in their local regulatory structures. In 
addition, the California Air Resources Board, as part of the Advanced 
Clean Cars II (ACC II) program, has also included battery durability 
\537\ and warranty \538\ requirements as part of a suite of customer 
assurance provisions designed to ensure that zero-emission vehicles 
maintain similar standards for usability, useful life, and maintenance 
as for ICE vehicles. Additional background on UN GTR No. 22 and the 
California Air Resources Board battery durability and warranty 
requirements may be found in DRIA Chapter 1.3.
---------------------------------------------------------------------------

    \533\ National Academies of Sciences, Engineering, and Medicine 
2021. ``Assessment of Technologies for Improving Light-Duty Vehicle 
Fuel Economy 2025-2035''. Washington, DC: The National Academies 
Press. https://doi.org/10.17226/26092.
    \534\ Among the findings outlined in that report, NAS noted 
that: ``battery capacity degradation is considered a barrier for 
market penetration of BEVs,'' (p. 5-114), and that ``[knowledge of] 
real-world battery lifetime could have implications on R&D 
priorities, warranty provision, consumer confidence and acceptance, 
and role of electrification in fuel economy policy.'' (p. 5-115). 
NAS also noted that ``life prediction guides battery sizing, 
warranty, and resale value [and repurposing and recycling]'' (p. 5-
115), and discussed at length the complexities of SOH estimation, 
life-cycle prediction, and testing for battery degradation (p. 5-113 
to 5-115).
    \535\ United Nations Economic Commission for Europe, Addendum 
22: United Nations Global Technical Regulation No. 22, United 
Nations Global Technical Regulation on In-vehicle Battery Durability 
for Electrified Vehicles, April 14, 2022. Available at: https://unece.org/sites/default/files/2022-04/ECE_TRANS_180a22e.pdf.
    \536\ EPA representatives chaired the informal working group 
that developed this GTR and worked closely with global regulatory 
agencies and industry partners to complete its development in a form 
that could be adopted in various regions of the world, including 
potentially the United States.
    \537\ State of California, California Code of Regulations, title 
13, section 1962.4.
    \538\ State of California, California Code of Regulations, title 
13, section 1962.8.
---------------------------------------------------------------------------

    EPA concurs with the emerging consensus that battery durability is 
an important issue. The ability of a zero-emission vehicle to achieve 
the expected emission reductions during its lifetime depends in part on 
the ability of the battery to maintain sufficient driving range, 
capacity, power, and general operability for a period of use comparable 
to that expected of a conventional vehicle. Durable and reliable 
electrified vehicles are therefore critical to ensuring that projected 
emissions reductions are achieved by this proposed program.
    Vehicle manufacturers can use powertrain electrification as an 
emissions control technology to comply with EPA standards and to 
generate credits for use in averaging, banking, and trading. EPA 
believes that, as with other emission control technologies, it is 
appropriate to set requirements to ensure that electrified vehicles 
certifying to EPA standards are durable and capable of providing the 
emissions reductions for which they are credited under the structure of 
the rule. To expand on the previous discussion, under the EPA GHG 
program, vehicles of all types (including ICE vehicles as well as PEVs) 
are assessed on a fleet average basis in which credits that are 
generated by vehicles that over-comply with their footprint-based 
standard act to offset debits generated by vehicles that do not 
themselves meet the proposed standards, and these credits can also be 
traded among manufacturers. Credits and debits are based on a 
calculation of Megagrams of CO2 emitted per vehicle over the 
assumed lifetime mileage of 195,264 miles for cars, and 225,865 miles 
for light-duty trucks. Generally, credits generated by PEVs will offset 
debits generated by ICE vehicles. In order for the environmental 
benefits that are credited to PEVs to be fully realized under this 
structure, it is important that their potential to achieve a similar 
mileage during their lifetime be comparable to that of ICE vehicles, 
and this depends in part on the life of the battery. In particular, and 
especially for BEVs and PHEVs with shorter driving ranges, loss of a 
large portion of the original driving range capability as the vehicle 
ages could reduce total lifetime mileage and the ability for electric 
miles to displace conventional miles traveled. PHEVs could also 
experience higher fuel consumption and increased criteria pollutant 
emissions if the battery undergoes excessive degradation.
    EPA is thus including in this proposal a requirement for battery 
durability that is applicable to BEVs and PHEVs. The requirements and 
general framework of the proposed battery durability program are 
largely identical to those outlined in GTR No. 22 and broadly parallel 
the GTR in terms of the minimum performance requirements, as well as 
the hardware, monitoring and compliance requirements, the associated 
statistical methods and metrics that apply to determination of 
compliance, and criteria for establishing battery durability and 
monitor families. We are proposing to incorporate the April 14, 2022, 
version of GTR No. 22 by reference, with the exception of some naming 
conventions and procedural changes required to adapt the GTR to EPA-
based testing and compliance demonstration, and modification of some 
specific provisions (for example, not requiring an SOCR monitor).
    The battery durability requirements consist of two primary 
components as shown in Table 63. The first component is a requirement 
for manufacturers to provide a customer-readable battery state-of-
health (SOH) monitor for both light-duty and Class 2b and 3 BEVs and 
PHEVs. The second component is the definition of a minimum performance 
requirement (MPR) for the SOH of the high voltage battery, applicable 
only to light-duty BEVs and PHEVs. HEVs and FCEVs are not included in 
the scope of GTR No. 22 or the proposed durability program.

[[Page 29285]]



Table 63--Applicability of Battery Durability Requirements to Light-Duty
                         and Class 2b/3 Vehicles
------------------------------------------------------------------------
                                    Light-duty BEVs     Class 2b and 3
      Proposed requirement             and PHEVs        BEVs and PHEVs
------------------------------------------------------------------------
Battery State of Health (SOH)     Yes...............  Yes.
 Monitor.
Monitor accuracy requirement....  Yes...............  Yes.
Minimum Performance Requirement   Yes...............  No.
 (MPR).
------------------------------------------------------------------------

    Manufacturers would be required to install a battery SOH monitor 
which estimates, monitors, and communicates the vehicle's state of 
certified energy (SOCE) as defined in GTR No. 22, and which can be read 
by the vehicle owner. This would require manufacturers to implement 
onboard algorithms to estimate the current state of certified energy of 
the battery, in terms of its current usable battery energy (UBE) 
expressed as a percentage of the original UBE when the vehicle was new. 
The state of certified range (SOCR) monitor defined in GTR No. 22 would 
not be required.
    For light-duty BEVs and PHEVs, the information provided by this 
monitor would be used for demonstrating compliance with a minimum 
performance requirement (MPR) which specifies a minimum percentage 
retention of the original UBE when the vehicle was new. As shown in 
Table 64, under the proposed rule, light-duty BEV and PHEV batteries 
would be subject to an MPR that requires them to retain no less than 80 
percent of their original UBE at 5 years or 62,000 miles, and no less 
than 70 percent at 8 years or 100,000 miles.

           Table 64--Proposed Minimum Performance Requirements
------------------------------------------------------------------------
                                    Light-duty BEVs     Class 2b and 3
        Years or mileage               and PHEVs        BEVs and PHEVs
------------------------------------------------------------------------
5 years or 62,000 miles.........  80 percent SOCE...  N/A.
8 years or 100,000 miles........  70 percent SOCE...  N/A.
------------------------------------------------------------------------

    In alignment with GTR No. 22, which does not currently subject UN 
ECE Category N vehicles of Category 2 (work vehicles that primarily 
carry goods) to the MPR requirement, Class 2b and 3 PEVs would not be 
subject to the MPR. In developing GTR No. 22, the EVE IWG chose not to 
set an MPR for Category 2 PEVs at this time, largely because the early 
stage of adoption of these vehicles meant that in-use data regarding 
battery performance of these vehicles was not readily available. MPR 
requirements for category 2 PEVs were therefore reserved for possible 
inclusion in a future amendment to the GTR, but monitoring requirements 
were retained in order to allow information on degradation to be 
collected from these vehicles to help inform a future amendment. For 
similar reasons, EPA is retaining the monitor requirement for Class 2b 
and 3 PEVs but is not requiring the MPR.
    The proposed durability requirements would require manufacturers to 
perform testing beyond what is currently required. Currently, light-
duty vehicle manufacturers are required to perform range testing on 
BEVs and PHEVs, the latter in Charge Depleting mode. These results are 
currently used to inform the fuel economy label and are not required 
for vehicle certification. Class 2b/3 vehicles do not currently have 
this requirement. Under the proposal, manufacturers would be required 
to determine and report the UBE of light-duty and Class 2b/3 BEVs and 
PHEVs when new, and demonstrate through in-use vehicle testing that the 
SOCE monitor meets an accuracy standard.
    Under the proposal, manufacturers would group the PEVs that they 
manufacture into monitor families and battery durability families as 
defined in GTR No. 22 (and described in more detail in Section 
III.F.4). Because a certified UBE value is needed for vehicles in each 
durability family in order to determine monitor accuracy and compliance 
of that family with the MPR, and the testing program that is currently 
performed for fuel economy labeling purposes does not necessarily 
determine such a value for all vehicle configurations that would need 
it for durability purposes, additional testing of vehicles that would 
not otherwise need to be tested for labeling purposes may need to be 
performed at time of certification.
    For both light-duty and medium-duty vehicles, as described in the 
``Part A'' monitor accuracy provisions outlined in GTR No. 22, 
manufacturers will be required to meet a standard for accuracy of their 
on-board SOCE monitors. To determine the accuracy of the monitors, 
between 3 and 16 vehicles from each monitor family would be recruited 
and procured in-use at each of 1 year, 3 years, and 5 years. The 
onboard monitor values for SOCE would be recorded, and each vehicle 
would then be tested to determine actual (measured) UBE capability of 
the battery. As described in Section III.F.1, for this testing EPA is 
proposing to use SAE Standard J1634 for determining UBE for BEVs and is 
proposing a method for determining UBE for PHEVs based on SAE J1711. 
The UBE measured by the test would be used to calculate the measured 
SOCE of the battery, as the measured UBE divided by the certified UBE. 
The measured SOCE would be compared to the value reported by the SOCE 
monitor prior to the test. The accuracy of the SOCE monitor must be 
within 5 percent of the measured SOCE, as defined and determined via 
the Part A statistical method defined in GTR No. 22.
    For light-duty vehicles, in a similar manner to the ``Part B'' 
compliance provisions of GTR No. 22, once having demonstrated Part A 
accuracy for the SOCE monitor of vehicles within a monitor family, 
manufacturers would demonstrate compliance with the MPR by collecting 
the values of the onboard SOCE monitors of a statistically adequate and 
representative sample of in-use vehicles, in general no less than 500 
vehicles from each battery durability family that shares that monitor 
family, and reporting the data and results to EPA. The manufacturer 
would use good engineering judgment in determining that the sample is 
statistically adequate and representative of the in-use vehicles 
comprising each durability family, subject to specific provisions in 
the regulation and approval by EPA. Manufacturers may

[[Page 29286]]

obtain this sample by any appropriate method, for example by over-the-
air data collection or by other means. A battery durability family 
(described further in a later section) would pass if 90 percent or more 
of the monitor values read from the sample are above the MPR.
    In the case that a monitor family fails the Part A accuracy 
requirement, the manufacturer would be required to recall the vehicles 
in the failing monitor family to bring the SOCE monitor into 
compliance, as demonstrated by passing the Part A statistical test with 
vehicles using the repaired monitor. In the case that a durability 
family fails the Part B durability performance requirement, 
manufacturers would have to adjust their credit balance to remove 
compliance credits previously earned by those vehicles.
    For Part B, GTR No. 22 does not specify a means of data collection, 
although for many manufacturers it might most easily be achieved via 
means such as telematics (remote, wireless queries) which is becoming 
increasingly present in new vehicles. EPA is proposing that 
manufacturers may use any sampling technique which accurately collects 
data from the number of vehicles outlined in the GTR. For example, 
vehicle manufacturers may choose to physically connect to the required 
number of vehicles and read the SOCE values directly in lieu of a 
remote, telematics-based data collection.
    Many of the organizations and authorities that have examined the 
issue of battery durability, including the UN Economic Commission for 
Europe (UN ECE), the European Commission, and the California Air 
Resources Board, have recognized that monitoring the state of a 
vehicle's full-charge driving range capability (instead of or in 
addition to UBE capability) as an indicator of battery durability 
performance may be an attractive option because driving range is a 
metric that is more directly experienced and understood by the 
consumer. To this end, GTR No. 22 requires manufacturers to install a 
state of certified range (SOCR) monitor in addition to an SOCE monitor. 
In developing GTR No. 22, the UN ECE felt that developing an accurate 
SOCR monitor may be more difficult than developing an SOCE monitor. In 
GTR No. 22 the SOCR monitor is therefore not required to be customer 
facing, and its information is collected only for information gathering 
purposes to inform the possible development of an SOCR-based 
performance requirement in the future. EPA also notes that the 
California Air Resources Board has based its ACC II battery durability 
requirement on a range metric instead of an SOCE metric. In this 
proposal, EPA is not proposing a requirement for an SOCR monitor and is 
not proposing that the durability performance requirement utilize a 
range-based metric. However, EPA recognizes the potential advantage 
that an accurate range-based metric may offer, as well as the value of 
collecting information to evaluate the performance of an SOCR monitor 
for possible future adoption. EPA requests comment on the inclusion of 
a requirement for an SOCR monitor and associated reporting requirements 
as specified in GTR No. 22.
    EPA also recognizes that the California Air Resources Board 
durability program includes a specific provision that requires 
manufacturers to disclose and account for any battery reserve capacity 
that the manufacturer has chosen to initially withhold from use for 
release later in the life of the vehicle in order to maintain driving 
range or usable energy capacity after degradation has occurred. This 
provision of the California regulation is meant to allow consumers to 
know the state of chemical degradation of the battery independently of 
apparent range or energy capacity. Although EPA is not proposing a 
similar requirement, EPA requests comment on including a reserve 
capacity declaration requirement and use of reserve capacity 
information in calculating an SOCE or SOCR metric.
    EPA also requests comment on all other aspects of the proposed 
battery durability standards, particularly with respect to: The minimum 
performance requirements, the testing and compliance requirements for 
Part A and Part B, and the possibility of adopting more stringent or 
less stringent battery durability standards.
    Additional background on UN GTR No. 22 and the California Air 
Resources Board battery durability and warranty requirements may be 
found in DRIA Chapter 1.3.
3. Battery and Vehicle Component Warranty
    EPA is also proposing new warranty requirements for BEV and PHEV 
batteries and associated electric powertrain components (e.g., electric 
machines, inverters, and similar key electric powertrain components). 
The proposed warranty requirements build on existing emissions control 
warranty provisions by establishing specific new requirements tailored 
to the emission control-related role of the high-voltage battery and 
associated electric powertrain components in the durability and 
emissions performance of PEVs.
    For light-duty BEVs and PHEVs, EPA is proposing to designate the 
high-voltage battery and associated electric powertrain components as 
specified major emission control components under CAA section 
207(i)(2), subject to a warranty period of 8 years or 80,000 miles. For 
medium-duty (Class 2b and 3) BEVs and PHEVs, EPA is proposing to 
specify the warranty period of 8 years or 80,000 miles for the battery 
and associated electric powertrain components on such vehicles.
    As described in the previous section, the National Academies of 
Science (NAS) in their 2021 Phase 3 report \539\ identified battery 
warranty along with battery durability as an important issue with the 
rise of electrification. The proposed warranty requirements would be 
equivalent to those that EPA has the authority to require and has 
historically applied to other specified major emission control-related 
components for ICE vehicles under EPA's light-duty vehicle regulations, 
and would similarly implement and be under the authority of CAA section 
207. EPA believes that this practice of ensuring a minimum level of 
warranty protection should be extended to the high-voltage battery and 
other electric powertrain components of BEVs and PHEVs for multiple 
reasons. Recognizing that BEVs and PHEVs are playing an increasing role 
in manufacturers' compliance strategies, the high-voltage battery and 
the powertrain components that depend on it are emission control 
devices critical to the operation and emission performance of BEVs and 
PHEVs, as they play a critical role in reducing the emissions of PHEVs 
and in allowing BEVs to operate with zero tailpipe emissions. Further, 
EPA anticipates that compliance with the proposed program is likely to 
be achieved with larger penetrations of BEVs and PHEVs than under the 
current program. Although the projected emissions reductions are based 
on a spectrum of control technologies, in light of the cost-effective 
reductions achieved, especially by BEVs, EPA anticipates most if not 
all automakers will include credits generated by BEVs and PHEVs as part 
of their compliance strategies, even if those credits are obtained from 
other manufacturers; thus this is a particular concern given that the 
calculation of credits for averaging (as well as banking and trading) 
depend on the battery and emission

[[Page 29287]]

performance being maintained for the full useful life of the vehicle. 
Additionally, warranty provisions are a strong complement to the 
proposed battery durability requirements. We believe that a component 
under warranty is more likely to be properly maintained and repaired or 
replaced if it fails, which would help ensure that credits granted for 
BEV and PHEV sales represent real emission reductions achieved over the 
life of the vehicle.
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    \539\ National Academies of Sciences, Engineering, and Medicine 
2021. ``Assessment of Technologies for Improving Light-Duty Vehicle 
Fuel Economy 2025-2035''. Washington, DC: The National Academies 
Press. https://doi.org/10.17226/26092.
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    It is our assessment that the high-voltage battery systems and 
associated electric powertrain components of both light-duty and 
medium-duty BEVs and PHEVs qualify for warranty designation by the 
Administrator as provided under CAA section 207(i). The high-voltage 
battery and the powertrain components that depend on it are emissions 
control devices critical to the emissions performance of the vehicle, 
as they play a critical role in reducing the emissions of PHEVs, and in 
allowing BEVs to operate with zero tailpipe emissions.
    CAA section 207(i)(1) specifies that the warranty period for light-
duty vehicles is 2 years or 24,000 miles of use (whichever first 
occurs), except for specified major emission control components (SMECC) 
described in 207(i)(2), for which the warranty period is 8 years or 
80,000 miles of use (whichever first occurs). For other vehicles, CAA 
207(i)(1) specifies that the warranty period shall be the period 
established by the Administrator.
    For light-duty vehicles, 207(i)(2) specifically identifies 
catalytic converters, electronic emissions control units (ECUs), and 
onboard emissions diagnostic devices as SMECC. Currently, BEV and PHEV 
battery and electric powertrain components are not so specified, which 
limits their coverage requirement to the 2 years or 24,000 miles of CAA 
section 207(i)(1), a period which EPA believes is not sufficient, given 
the importance of these components to the operation and emissions 
performance of these vehicles. As discussed in connection with battery 
durability, this is of particular concern given that the calculation of 
fleet average performance and of credits for banking and trading depend 
on the battery and emissions performance being maintained for the full 
useful life of the vehicle. However, to allow for designation of other 
pollution control components as SMECC, CAA section 207(i)(2) provides 
that the Administrator may so designate any other pollution control 
device or component, subject to the conditions that the device or 
component was not in general use on vehicles and engines manufactured 
prior to the model year 1990 and that the retail cost (exclusive of 
installation costs) of such device or component exceeds $200 (in 1989 
dollars), adjusted for inflation or deflation as calculated by the 
Administrator at the time of such determination.\540\ Adjusted for 
inflation, the $200 retail cost threshold would be about $500 today. As 
BEVs and PHEVs were not in general use prior to 1990, and their high-
voltage battery systems and associated powertrain components exceed 
this cost threshold, the Administrator proposes to determine that these 
emission control devices meet the criteria for designation as specified 
major emission control components. Accordingly, the Administrator 
proposes to designate these components as specified major emission 
control components according to his authority under CAA section 
207(i)(2).
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    \540\ See 42 U.S.C. 7541(i)(2).
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    In addition, for medium-duty (Class 2b and 3) BEVs and PHEVs, the 
Administrator proposes to establish a warranty period of 8 years or 
80,000 miles for the battery and associated electric powertrain 
components on these vehicles, according to his authority under CAA 
section 207(i)(1). The proposed program would provide warranty coverage 
for the emission control components on Class 2b and 3 BEVs and PHEVs 
equal to that proposed for the same components on light-duty BEVs and 
PHEVs.
    EPA requests comment on all aspects of the proposed warranty 
provisions for light-duty and medium-duty PEVs, batteries, and 
associated electric powertrain components.
4. Definitions of Durability Group, Monitor Family, and Battery 
Durability Family
    EPA is proposing revisions to the durability group definition for 
vehicles with an IC engine, and proposing to add two new grouping 
definitions, monitor family and battery durability family, for BEVs and 
PHEVs.
i. Proposed Durability Group Revisions
    EPA anticipates the adoption and use of gasoline particulate 
filters (GPFs) to reduce PM emissions to the levels required with the 
proposed PM standard. Particulate filters are currently utilized on 
diesel-powered vehicles to meet the existing Tier 3 PM standard. EPA's 
durability group definition in 40 CFR 86.1820-01 includes a catalyst 
grouping statistic based on the engine displacement and catalyst volume 
and loading to define the acceptable range of designs that may be 
combined into a single durability group. Currently EPA does not require 
manufacturers to consider PM filters in the determination of the 
durability group.
    PM filters can also be coated with precious metals resulting in the 
particulate filter performing the functions of a three-way catalyst in 
addition to reducing particulates. The Agency expects that 
manufacturers may choose to adopt PM filters with three-way catalyst 
coatings on some applications to reduce aftertreatment system cost by 
not increasing the number of substrates. We are accordingly proposing 
to clarify that manufacturers need to include the volume and precious 
metal loading of the PM filter along with the corresponding values from 
catalyst when calculating the catalyst grouping statistic. The volume 
of the PM filter would not be included in the catalyst grouping 
statistic if the PM filter does not include precious metals.
    The durability group is used to specify groups of vehicles which 
are expected to have similar emission deterioration and emission 
component durability characteristics throughout their useful life. The 
inclusion of a particulate filter on a gasoline-fueled vehicle 
aftertreatment system can have an impact on the durability 
characteristics of the aftertreatment system and as such the Agency 
proposes that this device, or the lack of a PM filter in the 
aftertreatment system, needs to be included in the durability group 
determination for internal combustion engine aftertreatment systems. 
Specifically, we are proposing that vehicles may be included in the 
same durability group only if all the vehicles have no particulate 
filter, or if all the vehicles have non-catalyzed particulate filters, 
or if all the vehicles have catalyzed particulate filters.
    We are proposing to apply these updates to durability groups 
equally for both gasoline and diesel applications. However, diesel 
vehicles certified under 40 CFR part 86, subpart S, generally use a 
consistent configuration with particulate filters, so the proposed 
changes are not likely to lead to changes in certification practices 
for those vehicles.
    We request comment on all aspects of the proposed changes for 
durability groups in 40 CFR 86.1820-01.
ii. BEV and PHEV Monitor Family
    As described in Section III.F.2, EPA is proposing battery 
durability requirements for BEVs and PHEVs. As part of this durability 
proposal, the Agency is proposing two new groupings for BEVs and PHEVs, 
a monitor family and a battery durability family. For

[[Page 29288]]

BEVs, the new monitor family and new battery durability family would 
replace the current regulatory requirement to define BEV test and 
durability groups. Manufacturers would be required to define a 
durability group, test group, evaporative/refueling family, monitor 
family, and battery durability family for PHEVs.
    To support the proposed monitor accuracy evaluation requirements 
described in Section III.F.2, manufacturers would install a battery SOH 
monitor which accurately estimates, monitors, and communicates the SOCE 
of the high-voltage battery (as defined in GTR No. 22 and described in 
Section III.F.2) at the current point in the vehicle's lifetime. To 
evaluate the accuracy of the monitor during the life of the vehicle, 
manufacturers would procure and test consumer vehicles in-use. The SOCE 
monitor would be subject to the accuracy standard.
    It is expected that the accuracy of the monitors may be similar for 
vehicles with sufficiently similar design characteristics. To account 
for this and thus reduce test burden, EPA is proposing to create 
monitor families for BEVs and PHEVs. As described in GTR No. 22, 
vehicles that are sufficiently similar in their characteristics such 
that the monitor can be expected to perform with the same accuracy may 
be assigned to the same monitor family. The criteria for inclusion in 
the same monitor family includes characteristics such as the algorithm 
used for SOCE monitoring, electrified vehicle type (BEV or PHEV), 
sensor characteristics and sensor configuration, and battery cell 
characteristics that would not be expected to influence SOCE monitor 
accuracy.
    More specifically, for vehicles to be in the same monitor family: 
The SOCE monitoring algorithm needs to utilize the same logic and have 
the same value for all calibration variables used in the algorithm; the 
algorithm used to determine UBE needs to utilize the same sampling and 
integration periods and the same integration technique; the locations 
of the sensor(s) (i.e. at the pack, module, or battery cell level) for 
monitoring DC discharge energy need to be the same; and the accuracy of 
the sensor(s) and the tolerance of the sensor(s) accuracy used for 
monitoring energy and range need to be the same. BEVs and PHEVs cannot 
be included in the same monitor family.
    If a manufacturer determines that additional vehicle 
characteristics affect the accuracy of SOCE estimation, the 
manufacturer can request the Administrator to allow the creation of 
additional monitor families. To request additional monitor families, 
the manufacturer will seek Agency approval and describe in their 
application the factors which produce SOCE estimation errors and how 
the monitor family will be divided to reduce the estimation errors.
    Manufacturers can request the Administrator include in the same 
monitor family vehicles for which these characteristics would not 
otherwise allow them to be in the same monitor family (except for 
including BEVs and PHEVs in the same monitor family). The manufacturer 
will need to include data demonstrating that these differences do not 
cause errors in the estimation of SOCE when seeking Agency approval.
iii. BEV and PHEV Battery Durability Family
    It is expected that the degradation of UBE (as indicated by SOCE) 
may be similar for vehicles with sufficiently similar design 
characteristics. To account for this and thus reduce test burden, EPA 
is proposing to create battery durability families for BEVs and PHEVs. 
As described in GTR No. 22, vehicles that are sufficiently similar in 
their characteristics such that the UBE may be expected to degrade in 
the same way may be assigned to the same battery durability family. The 
following powertrain characteristics and design features would be used 
to determine battery durability families: Maximum specified charging 
power, method of battery thermal management, battery capacity, battery 
(cathode) chemistry, and the net power of the electrical machines. In 
addition, BEVs and PHEVs cannot be placed in the same battery 
durability family.
    Manufacturers can request the Administrator include in the same 
battery durability family vehicles for which these characteristics 
would not otherwise allow them to be in the same battery durability 
family (except for including BEVs and PHEVs in the same battery 
durability family). The manufacturer will need to include data with 
their request which demonstrates that these differences do not impact 
the durability of the vehicles with respect to maintaining UBE 
throughout the life of the BEV or PHEV.
    If a manufacturer determines that additional vehicle 
characteristics result in durability differences which impact UBE, the 
Manufacturer can request the Administrator to allow the creation of 
additional battery durability families. To request additional battery 
durability families the manufacturer will seek Agency approval. In 
their request for approval, the Manufacturer will describe the factors 
which produce differences in vehicle aging and how the durability 
grouping will be divided to better capture the differences in expected 
deterioration.
5. Light-Duty Program Improvements
i. GHG Compliance and Enforcement Requirements
    EPA is proposing to clarify the certification compliance and 
enforcement requirements for GHG exhaust emission standards found in 40 
CFR 86.1865-12 to more accurately reflect the intention of the 2010 
light-duty vehicle GHG rule (75 FR 253243, May 7, 2010). In the 2010 
rule, EPA set full useful life greenhouse gas emissions standards for 
which each vehicle is required to comply. The preamble to that rule 
clearly explained that the CAA requires a vehicle to comply with 
emission standards over its regulatory useful life and affords EPA 
broad authority for the implementation of this requirement and that EPA 
has authority to require a manufacturer to remedy any noncompliance 
issues. EPA also explained that there may be cases where a repairable 
defect could cause the non-compliance and in those cases a recall could 
be the appropriate remedy. Alternatively, there may be scenarios in 
which a GHG non-compliance exists with no repairable cause of the 
exceedance. Therefore, the remedy can range from adjusting a 
manufacturer's credit balance to the voluntary or mandatory recall of 
noncompliant vehicles.
    In the 2010 rule EPA clearly intended to use its existing recall 
authority to remedy greenhouse gas non-compliances when appropriate and 
to use the authority to correct the greenhouse gas credit balance as a 
remedy when no practical repair for in-use vehicles could be identified 
(see 75 FR 25474). However, the regulations did not describe these in-
use compliance provisions with as much clarity as the preambular 
statements. Therefore, EPA is proposing clarifications to 40 CFR 
86.1865-12(j) to make clear that EPA may use its existing recall 
authority to remedy greenhouse gas non-compliances when appropriate and 
specifically may use such authority to correct a manufacturer's 
greenhouse gas credit balance as a remedy when no practical repair can 
be identified.
    In the 2010 rule, EPA set vehicle in-use emissions standards for 
CREE to be 10 percent above the vehicle-level emission test results or 
model-type value if no subconfiguration test data are available. This 
10 percent factor was intended to account for test-to test variability 
or production variability

[[Page 29289]]

within a subconfiguration or model type. EPA clearly did not intend for 
this factor to be used as an allowance for manufacturers to design and 
produce vehicles which generate CO2 emissions up to 10 
percent higher than the actual values they use to certify and to 
calculate the year end fleet average. In fact, EPA expressed concerns 
in the rule making that ``this in-use compliance factor could be 
perceived as providing manufacturers with the ability to design their 
fleets to generate CO2 emissions up to 10 percent higher 
than the actual values they use to certify'' (see 75 FR 25476). Given 
the expectation that in-use vehicles should be designed to perform 
consistent with the values used to calculate the year end fleet 
average, EPA is taking comment on whether the Agency should eliminate 
the 10 percent compliance factor adjustment for the in-use standard. 
Instead, EPA would apply a 10 percent factor to the threshold used for 
determining when additional testing is required in the In-Use 
Confirmatory Program (IUCP).
    For the reasons that EPA articulated in the 2010 rulemaking, EPA 
expects that some in-use vehicles may generate slightly more 
CO2 than the certified values and some vehicles may emit 
slightly less, but the average CO2 emissions of a 
manufacturer's fleet and each model within it should be very close to 
the levels reported to EPA and used to calculate overall fleet average. 
The in-use data submitted over the last ten years largely supports this 
expectation. Nevertheless, EPA believes it is important that 
manufacturers understand their obligations under the in-use program and 
that EPA has the appropriate tools to hold manufacturers responsible 
should they fail to meet these obligations. Therefore, EPA is 
requesting comment on two different regulatory options, either of which 
would align with our original intent in the 2010 rule.
    The first option is to clarify the regulatory language to make it 
clear that if a manufacturer's in-use data demonstrates that a 
manufacturer's CO2 results are consistently higher than the 
values used for calculation of the fleet average for any class or 
category of vehicle, EPA may use its authority to correct a 
manufacturer's greenhouse gas credit balance to ensure the 
manufacturer's GHG fleet average is representative of the actual 
vehicles it produces. This means that the credit balance post-
correction will reflect the actual in-use performance of the vehicles. 
In other words, if the manufacturer reports a value of X g/mi in 
calculating its fleet average, but its vehicles emit X+A g/mi in-use, 
we may correct the manufacturer's balance by the entire discrepancy 
(A).
    The second option is to set the in-use standards at the vehicle-
level emission test results or model-type average value if no 
subconfiguration test data are available in the GHG report. Under this 
approach, manufacturers will have the option to voluntarily raise the 
GHG values submitted in the GHG report if they wish to create an in-use 
compliance margin. The proposed change in this second option would make 
the GHG ABT program consistent with all other ABT programs used in the 
light duty program. In all other ABT programs (e.g., FTP 
NMOG+NOX, MSAT, SFTP), manufacturers must choose a bin level 
or Family Emissions Limit (FEL) in which to certify. Manufacturers 
typically design their vehicle to emit well below the bin level or FEL 
to establish a compliance margin; however, the fleet average emissions 
are calculated based on the bin level or FEL, not the actual 
certification level. In those cases, the fleet average emissions 
calculated in the ABT report would be representative of the actual 
fleet as long as the vehicles comply with the certified bin level or 
FEL. Only the light duty GHG ABT program allowed manufacturers to 
calculate the fleet average emissions based on the certification level. 
EPA allowed this with the expectation that vehicles in actual use would 
not normally emit more CO2 than they did at the time of 
certification (i.e., CO2 emissions are not expected to 
increase with time or mileage).
    Under either option, EPA is seeking to further clarify our position 
on this issue: When EPA uses its recall authority or its authority to 
correct a manufacturer's greenhouse gas credit balance to remedy 
greenhouse gas non-compliances, EPA may require a remedy that fully 
accounts for the difference in the actual in-use GHG emissions and the 
values the manufacturer used to certify and to calculate the year end 
fleet average. EPA is seeking comment on both proposed options, either 
of which may be adopted in the final rule.
    The overarching principle of compliance to the fleet average 
standards is that the calculated fleet average in the GHG report must 
accurately represent the actual fleet of vehicles a manufacture 
produced. If a manufacturer provides false, inaccurate, or 
unrepresentative data as part of their GHG report, the manufacturer may 
be subject to enforcement and EPA may void ab initio the certificates 
of conformity which relied on that data. Vehicles are covered by a 
certificate of conformity only if they are in all material respects as 
described in the manufacturer's application for certification (Part I 
and Part II) including the GHG report. If vehicles generate 
substantially more CO2 emissions in actual use than what was 
reported, those vehicles are not covered by the certificate of 
conformity. EPA is proposing two changes to the regulatory language 
that are designed to clarify the Agency's understanding of its 
authority to void certificates and/or find that vehicles were sold in 
violation of a condition of a certificate. Currently 40 CFR 86.1850 
states that if a manufacturer submits false or incomplete information 
or renders inaccurate any test data which it submits, or fails to make 
a good engineering judgment, EPA may deny issuance of, suspend, or 
revoke a previously issued certificate of conformity. However, 
suspension or revocation of a certificate of conformity shall extend no 
further than to forbid the introduction into commerce of vehicles 
previously covered by the certificate which are still in the possession 
of the manufacturer. Since the GHG report is not required to be 
submitted until May 1 of the calendar year after the model year has 
ended, suspending or revoking a certificate is no longer a relevant 
remedy. Therefore, because of situations where certificate suspension 
or revocation is no longer relevant, EPA is proposing to allow the 
Agency to void ab initio a previously issued certificate of conformity 
in the list of possible actions the agency may take if a manufacturer 
commits any of the infractions listed in 40 CFR 86.1850(b). In 
addition, EPA is proposing edits to 40 CFR 86.1848 to make it clearer 
that any vehicles sold that fail to meet any condition upon which the 
certificate was issued are not covered by the certificate and thus were 
sold in violation of CAA 203(a)(1).
ii. In-Use Confirmatory Program (IUCP)
    Currently, EPA regulations require manufacturers to conduct in-use 
testing as a condition of certification. Specifically, manufacturers 
must commit to later procure and test privately-owned vehicles that 
have been normally used and maintained. The vehicles are tested to 
determine the in-use levels of criteria pollutants when they are in 
their first and fourth years of service. This testing is referred to as 
the In-Use Verification Program (IUVP) testing, which was first 
implemented as part of EPA's CAP 2000 certification program.\541\
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    \541\ 64 FR 23906, May 4, 1999.

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[[Page 29290]]

    Another component of the CAP 2000 certification program is the In-
Use Confirmatory Program (IUCP). This is a manufacturer-conducted in-
use test program that can be used as the basis for EPA to order an 
emission recall (although it is not the only potential basis for 
recall). For vehicles tested in the IUVP to qualify for IUCP, there is 
a threshold of 1.30 times the certification emission standard for 
criteria emissions (e.g., NMOG+NOX, CO) and an additional 
requirement that at least 50 percent of the test vehicles for the test 
group fail for the same substance. If these criteria are met for a test 
group, the manufacturer is required to test an additional 10 vehicles 
which are screened for proper use and maintenance.
    The 2010 light-duty GHG rule set full useful life greenhouse gas 
emissions standards for which each vehicle is required to comply and 
required in-use testing under the In-Use Verification Program (IUVP) 
testing provisions. At that time, EPA did not set criteria for In-Use 
Confirmatory Program (IUCP) for GHG but indicated that IUCP will be a 
valuable future tool for achieving compliance and that EPA would 
reassess IUCP thresholds for GHG in a future rule when more data is 
available.\542\
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    \542\ 75 FR 25475, May 7, 2010.
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    Since the 2010 rule, EPA has received in-use greenhouse gas 
emissions test results from over 9,500 vehicles. EPA believes there is 
now sufficient data to establish IUCP threshold criteria based on 
greenhouse gas emissions and that doing so is warranted.
    The 2010 rule established an in-use CO2 standard to be 
10 percent above the vehicle-level emission test results or model-type 
value if no subconfiguration test data are available. Over 95 percent 
of the test results EPA received complied with this in-use standard 
based on the 10 percent margin. Therefore, EPA is proposing two options 
for approaches to setting the in-use GHG standards: Either (1) if the 
in-use standard continues to include a 10 percent adjustment factor 
applied to the reported GHG result, set the IUCP threshold criteria to 
be at least 50 percent of the test vehicles for the test group exceed 
the relevant in-use CO2 standard; or (2) if the in-use 
standard is identical to the reported GHG result, set the IUCP 
threshold criteria to be at least 50 percent of the test vehicles for 
the test group exceed the relevant in-use CO2 standard by at 
least 10 percent. In either approach EPA is not proposing an additional 
criteria based on the average emissions of the test group. The 50 
percent failure rate is consistent with the IUCP criteria for criteria 
emissions that has existed since the CAP 2000 rule was finalized. 
However, unlike the IUCP criteria for criteria emissions, EPA is not 
proposing a threshold for the average emissions of the test group 
(which is 1.3 times for criteria emissions) for a number of reasons. 
First, unlike criteria pollutants where the in-use standards are 
generally the same as the certification standards, EPA is proposing a 
margin of 10 percent above the reported GHG result for the IUCP 
criteria. Adding an additional multiplier on top of that would be 
unnecessary, and EPA believes a 10 percent exceedance threshold (either 
as a part of the in-use standard or as a threshold criteria) is 
appropriate given the Agency's experience with GHG compliance over the 
past decade. Second, unlike for criteria pollutants, the CO2 
emissions performance of vehicles is generally not expected to 
deteriorate with age and mileage (see the 2010 rule). Third, unlike 
with criteria pollutants, the in-use GHG standards are not consistent 
within a test group and the compliance level is not determined by the 
same emissions data vehicle. GHG in-use standards can be different for 
each subconfiguration or model type. Fourth, the review of the data 
supports ten percent above the reported GHG value as an appropriate 
criterion, because over 95 percent of the test results EPA received 
complied with this in-use standard based on the 10 percent margin. The 
proposed IUCP criteria is intended to capture vehicles with both 
unusually high increase in CO2 emissions compared to the 
reported value and an unusually high failure rate.
iii. Part 2 Application Changes
    EPA is also proposing changes to 40 CFR 86.1844-01(e) ``Part 2 
Application'' to make it clearer that the part 2 application must 
include the part numbers and descriptions of the GHG emissions related 
parts, components, systems, software or elements of design, and AECDs 
including those used to qualify for GHG credits (e.g., air conditioning 
credits, off cycle credits, advanced technology vehicle credits) as 
previously specified in EPA guidance letter CD-14-19. These changes are 
not intended to alter the existing reporting requirements, but rather 
to clarify the existing requirement.
    EPA is also proposing changes to 40 CFR 86.1844-01(e) ``Part 2 
Application'' and 40 CFR 85.2110 to no longer accept paper copies of 
service manuals, Technical Service Bulletins (TSB), owner's manuals, or 
warranty booklets. In response to the National Archives and Records 
Administration (NARA) mandate and OMB's Memorandum for Heads of 
Executive Departments and Agencies, M-19-21, Transition to Electronic 
Records, EPA will no longer accept paper copies of these documents.
iv. Fuel Economy and In-Use Verification Test Procedure Streamlining
    The ``Federal Test Procedure'' (FTP) defines the process for 
measuring vehicle exhaust emissions, evaporative emissions, and fuel 
economy and is outlined in 40 CFR 1066.801(e). The process includes 
preconditioning steps to ensure the repeatability of the test results, 
as described in 40 CFR 86.132-96. EPA proposes two changes to the 
preconditioning process used for testing of only fuel economy data 
vehicles (FEDVs) (not emission data vehicles) in order reduce the 
testing burden while maintaining the repeatability and improving the 
accuracy of the test results.\543\ The proposed changes are related to 
the fuel drain and refueling step and the preconditioning of the 
evaporative canister. EPA is also proposing to remove one fuel drain 
and refueling step for in-use surveillance vehicles. In addition, we 
are proposing changes to the fuel cap placement during vehicle storage 
for all emission data and fuel economy vehicles.
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    \543\ See proposed regulations in 40 CFR 86.132-96 and 
1066.801(e).
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    Currently, all FEDVs must follow the regulations in for 
preconditioning before conducting the cold-start portion of the test. 
Included in this preconditioning is the requirement to drain and refuel 
the fuel tank twice. We propose to remove the second fuel drain step, 
that occurs after running the Urban Dynamometer Driving Schedule (UDDS) 
preconditioning cycle, but before the cold start test. The fuel drain 
and refuel step was originally included in the test procedure because 
fresh fuel was important for carbureted engines and could impact the 
test results. However, with today's fuel injection systems, EPA's 
assessment is that the refueling of the vehicle with fresh fuel does 
not impact the measured fuel economy of the vehicle.\544\ Removing this 
step would save a significant amount of fuel for each test run by the 
manufacturer and run by EPA and reduce the number of voided tests due 
to mis-fueling and fueling time violations. It would also reduce the 
labor associated with refueling the vehicle for each test. EPA also 
proposes to remove this step for in-use vehicle testing on vehicles 
tested

[[Page 29291]]

under 40 CFR 86.1845-04 (verification testing). It is difficult to 
drain fuel from an in-use vehicle because they normally do not have 
fuel drains. Removing this step will save time and fuel from the in-use 
verification process as well. EPA will still require this step for in-
use confirmatory vehicles tested under 40 CFR 86.1846-01.
---------------------------------------------------------------------------

    \544\ Memo to Docket. ``EPA FTP Streamlining Test Results.'' See 
Docket EPA-HQ-OAR-2022-0829. March 2023.
---------------------------------------------------------------------------

    EPA also proposes to remove the canister loading, and purging as 
appropriate, steps from the preconditioning for FEDVs. This would 
provide the following benefits to manufacturers and EPA: The time to 
run the test would be reduced, less butane would be consumed by the 
laboratories which reduces the cost of running a test, and the fuel 
economy measurement accuracy would improve. EPA conservatively 
estimates that at least 88 kg of butane was consumed by manufacturers 
in the 2021 calendar year for the purposes of fuel economy testing, 
based on 909 fuel economy test submissions to EPA and assuming 97 grams 
of butane per canister. The measurement accuracy would improve because 
the calculations for fuel economy assume that 100 percent of the fuel 
consumed during the testing has the carbon balance of the liquid fuel 
in the tank. The butane vapor that is added to the canister during 
preconditioning has a different carbon content, and thus causes very 
small inaccuracies in the fuel economy results. EPA's test program also 
shows that the canister loading does not have any statistically 
significant effect on the fuel economy results from the cold start and 
highway fuel economy tests.\545\
---------------------------------------------------------------------------

    \545\ Ibid.
---------------------------------------------------------------------------

    Finally, the regulations in 40 CFR 86.132-96(a) currently state 
that fuel cap(s) shall be removed during any period when the vehicle is 
parked outside awaiting testing but may be in place while in the test 
area. EPA proposes to revise the regulations such that the vehicle 
shall always be stored in a way that prevents fuel contamination and 
unnatural loading of the evaporative control system while awaiting 
testing regardless of location. At this time EPA considers the 
possibility of contaminates getting into the fuel system while the fuel 
cap is off to be more significant that any possible ``overloading'' of 
the canister. Modern vehicles purge the canister sufficiently during 
the preconditioning cycles to ensure that tests completed on vehicles 
that have been parked will not affect testing results significantly. 
Custodians of test vehicles should avoid parking test vehicles outdoors 
during hot conditions for long periods of time.
    We request comment and data quantifying any effects of removing the 
second fuel drain and fill step and removing the canister loading steps 
from the FTP for fuel economy data vehicles and in-use verification 
vehicles, along with any impacts of keeping the fuel tank cap in place 
prior to testing.
v. Miscellaneous Amendments
    We are proposing to amend the pre-certification exemption in 40 CFR 
85.1702 and 85.1706 to clarify that the exemption is limited to 
companies that already hold a certificate showing that they meet EPA 
emission standards. This has been a longstanding practice for highway 
and nonroad engines and vehicles. Companies that are not certificate 
holders may continue to request a testing exemption under 40 CFR 
85.1705.
    We are proposing to update the test procedures in 40 CFR 86.113 to 
reference test fuel specifications in 40 CFR part 1065 for diesel fuel, 
natural gas, and LPG. We do not expect this change to cause 
manufacturers to change the test fuels they use for certification, or 
to prevent any manufacturer from using carryover data to continue 
certifying vehicles in later model years. In the case of diesel fuel, 
the two sets of specifications are very similar except that 40 CFR 
1065.703 takes a different approach for aromatic content of the fuel by 
specifying a minimum aromatic content of 100 g/kg. We expect current 
diesel test fuels to meet this specification. In the case of natural 
gas, 40 CFR 1065.715 decreases the minimum methane content from 89 to 
87 percent, with corresponding adjustments in allowable levels of 
nonmethane compounds. In this case too, manufacturers would be able to 
continue meeting test fuel specifications without changing their 
current practice. In the case of LPG, 40 CFR 86.113-94 directs 
manufacturers to ask EPA to approve a test fuel. In the absence of any 
other specific requirements, we would likely rely on the published fuel 
specifications in 40 CFR 1065.720 even without a direct reference. We 
request comment on these proposed changes to fuel specifications. In 
particular, we request comment on any unintended conflict between the 
old and the new specifications, and on any potential need to adjust 
test fuel specifications to maintain consistency with existing 
requirements.
    The regulation currently requires manufacturers to include 
information in the application for certification for fuel-fired heaters 
(40 CFR 86.1844-01(d)(15)). The regulation also requires manufacturers 
to account for fuel-fired heater emissions in credit calculations for 
Tier 2 vehicles (40 CFR 86.1860-04(f)(4)). The Tier 3 regulation 
inadvertently omitted the requirement related to credit calculations in 
40 CFR 86.1860-17. We are proposing to restore the requirement to 
account for emissions from fuel-fired heaters in credit calculations in 
40 CFR 86.1844-01(d)(15).
    This proposed rule includes several structural changes that lead to 
a need to make several changes to the regulations for correct 
terminology and appropriate organization, including the following 
examples:
     We are replacing cold temperature NMHC standards with cold 
temperature NMOG+NOX standards, and we are adding a cold 
temperature PM standard. The proposed rule includes updates to refer to 
cold temperature standards generally, or to cold temperature 
NMOG+NOX standards instead of or in addition to cold 
temperature NMHC standards. 40 CFR 86.1864-10 is similarly adjusted to 
refer to cold temperature fleet average standards and cold temperature 
emission credits instead of referencing NMHC.
     We are setting separate emission standards for US06 and 
SC03 driving schedules rather than setting standards based on a 
composite calculation for the driving schedules that make up the 
Supplemental FTP. As a result, we are generally adjusting terminology 
for Tier 4 vehicles to refer to the specific cycles rather than the 
Supplemental FTP.
     The existing regulation includes several references to 
Tier 3 standards (or Tier 3 emission credits, etc.). Those references 
were generally written to say when regulatory provisions started to 
apply. Some of those provisions need to continue into Tier 4, but not 
all. The proposed rule includes new language in several places to 
clarify whether or how those provisions apply for Tier 4 vehicles.
     The proposed rule eliminates many of the differences in 
the way we apply emission standards for light-duty and heavy-duty 
vehicles (we are also starting to refer to heavy-duty vehicles as 
medium-duty vehicles). As a result, we are proposing the new criteria 
exhaust emission standards for all these vehicles in 40 CFR 86.1811 
rather than continuing to rely on a separate section (40 CFR 86.1816) 
for heavy-duty vehicles.
    The proposal includes several instances of removing regulatory text 
that has been obsolete for several years. Removing obsolete text is 
important to prevent people from making errors from thinking that 
obsolete text continues to

[[Page 29292]]

apply. The final rule may include additional housekeeping amendments to 
remove obsolete text and to remove or update cross references to 
obsolete or removed regulatory text.
    One case of obsolete text is related to special test procedures as 
specified in 40 CFR 86.1840-01. Vehicle manufacturers have completed a 
transition to following the exhaust test procedures specified in 40 CFR 
part 1066, such that those new test procedures apply instead of the 
test procedures in 40 CFR part 86, subpart B, starting with model year 
2022. Since we address special test procedures in 40 CFR 
1066.10(copyright), which in turn relies on 40 CFR 1065.10(c)(2), we no 
longer need to rely on 40 CFR 86.1840-01 for special test procedures. 
We note the following aspects of the transition for special test 
procedures:
     We are proposing to apply the provisions for special 
procedures equally to all vehicles certified under 40 CFR part 86, 
subpart S. The special test procedures were written in a way that did 
not apply for incomplete vehicles certified under 40 CFR part 86, 
subpart S. This is very likely an artifact of the changing scope of the 
regulation since 2001.
     We are keeping the reference to infrequently regenerating 
aftertreatment devices in 40 CFR 86.1840-01 as an example of special 
test procedures to clarify that we are not proposing to change the way 
manufacturers demonstrate compliance for vehicles with infrequently 
regenerating aftertreatment devices. Specifically, we are not proposing 
to adopt the measurement and reporting requirements that apply for 
heavy-duty engines under 40 CFR 1065.680.
     We are proposing to apply the provisions related to 
infrequently regenerating aftertreatment devices equally to all 
vehicles certified under 40 CFR part 86, subpart S. The provisions in 
40 CFR 86.1840-01 were written in a way that they did not apply for 
medium-duty passenger vehicles. This is very likely an artifact of the 
changing scope of the regulation since 2001.
    We are proposing the following additional amendments:
     Section 85.1510(d): Waiving the requirement for 
Independent Commercial Importers to apply fuel economy labels to 
electric vehicles. Performing the necessary measurements to determine 
label values would generally require accessing high-voltage portions of 
the vehicles electrical system. Manufacturers can appropriately and 
safely make these measurements as part of product development and 
testing. These measurements can pose an unreasonable safety risk when 
making these measurements on production vehicles. The benefit of 
labeling information for these vehicles is not enough to outweigh the 
safety risks of generating that information.
     Section 86.1816-18: The published final rule to adopt the 
Tier 3 exhaust emission standards for Class 2b and Class 3 vehicles 
inadvertently increased the numerical value of those standards a 
trillion-fold by identifying the units as Tg/mile. We are proposing to 
revert to g/mile as we intended by adopting the Tier 3 standards.
6. Light- and Medium-Duty Emissions Warranty for Certain ICE Components
    EPA is proposing to designate several emission control components 
of light-duty ICE vehicles as specified major emission control 
components. These include components of the diesel Selective Reductant 
Catalysts (SRC) system, components of the diesel Exhaust Gas 
Recirculation (EGR) system, and diesel and gasoline particulate filters 
(DPFs and GPFs). As the result of this designation, these components 
will have the same warranty requirements as other components that have 
been established as specified major emission control components.
    As described in Section III.F.3, CAA section 207(i) specifies that 
the warranty period for light-duty vehicles is 2 years or 24,000 miles 
of use (whichever first occurs), except the warranty period for 
specified major emission control components is 8 years or 80,000 miles 
of use (whichever first occurs). The Act defines the term ``specified 
major emission control component'' to mean only a catalytic converter, 
an electronic emissions control unit (ECU), and an onboard emissions 
diagnostic device, except that the Administrator may designate any 
other pollution control device or component as a specified major 
emission control component if--
    (A) the device or component was not in general use on vehicles and 
engines manufactured prior to the model year 1990; and
    (B) the Administrator determines that the retail cost (exclusive of 
installation costs) of such device or component exceeds $200 (in 1989 
dollars),\546\ adjusted for inflation or deflation as calculated by the 
Administrator at the time of such determination.
---------------------------------------------------------------------------

    \546\ Equivalent to approximately $500 today.
---------------------------------------------------------------------------

    EPA believes that GPFs meet the requirements set forth in CAA 
section 207(i) and should be designated as specified major emission 
control components. GPFs were not in general use prior to model year 
1990 and their cost exceeds the threshold specified in the CAA. EPA 
anticipates that the PM standards in this proposal will require the 
application of a GPF. In the event of a GPF failure, PM emissions will 
most likely exceed the proposed standards. It is imperative that a 
properly functioning GPF be installed on a vehicle in order to achieve 
the environmental benefits projected by this proposal.
    In order to meet the current emissions standards, diesel vehicles 
utilize Selective Reductant Catalysts (SRC) as the primary catalytic 
converter for NOX emissions controls and well as a Diesel 
Oxidation Catalyst (DOC) as the primary catalytic converter for CO and 
hydrocarbons and a Diesel Particulate Filter (DPF) as the primary 
catalytic converter to control particulate matter (PM). In the event 
that any one of these components fail, EPA anticipates that the 
relevant standard will be exceeded. The proper functioning of each of 
these components is necessary for the relevant emissions benefits to be 
achieved.
    More specifically, the SCR catalytic converter relies on a system 
of components needed to inject a liquid reductant called Diesel Exhaust 
Fluid (DEF) into the catalytic converter. This system includes pumps, 
injectors, NOX sensors, DEF level and quality sensors, 
storage tanks, DEF heaters and other components that all must function 
properly for the catalytic converter to work. These components meet the 
criteria for designation as specified major emission control 
components.
    Vehicles with diesel engines do not rely solely on aftertreatment 
to control emissions. Diesel engines utilize Exhaust Gas Recirculation 
(EGR) to control engine out emissions as a critical element of the 
emissions control system. Components of the EGR system such as 
electronic EGR valves and EGR coolers meet the criteria for designation 
as specified major emission control components.
    The emission-related warranty period for heavy duty engines and 
vehicles under CAA section 207(i) is ``the period established by the 
Administrator by regulation (promulgated prior to November 15, 1990) 
for such purposes unless the Administrator subsequently modifies such 
regulation.'' The regulations specify that the warranty period for 
light heavy-duty vehicles under 40 CFR 1037.120 is 5 years or 50,000 
miles of use (whichever first occurs). EPA is proposing to clarify that 
this same warranty period applies for medium-duty vehicles certified 
under 40 CFR part 86, subpart S, except that a longer warranty period 
of 8 years or

[[Page 29293]]

80,000 miles would apply for engine-related components described in 
this section as specified major emission control components.
    The warranty provisions in CAA section 207 do not explicitly apply 
to medium-duty passenger vehicles. However, as with the new standards 
in this proposed rule, we are proposing to apply warranty requirements 
to medium-duty passenger vehicles in the same way that they apply to 
light-duty vehicles.
7. Definition of Light-Duty Truck
    EPA currently has separate regulatory definitions for light truck 
for GHG standards and light-duty truck for criteria pollutant 
standards. Historically this was not an issue because the car versus 
truck definition was clear. Nearly all vehicles were passenger cars or 
pickup trucks with open cargo beds. The earliest sport utility vehicles 
(SUVs) were primarily derived from pickup truck platforms and were 
therefore considered light trucks. However, current versions of some of 
these SUVs are now built off of car-based platforms and have carlike 
features. Current differences between the two light truck definitions 
leads to some SUVs being certified to GHG standards as a truck and to 
criteria pollutant standards as a car. To address this concern, we are 
proposing to transition to a single definition of light-duty truck with 
the implementation of the Tier 4 criteria pollutant emission standards.
    Currently, the first ``light truck'' definition is used for 
determining compliance with the light-duty GHG emission standards (40 
CFR 600.002). This definition matches the definition that NHTSA uses in 
determining compliance with their fuel economy standards (49 CFR 
523.5). This definition contains specific vehicle design 
characteristics that must be met to qualify a vehicle as a truck.
    The second ``light-duty truck'' definition is used for certifying 
vehicles to the criteria pollutant standards (40 CFR 86.1803-01). This 
broader definition allows for some SUVs to qualify as trucks even if 
the specific vehicle does not contain the truck-like design attributes. 
The definition also includes some ambiguity that requires the 
manufacturers and EPA to apply judgment to determine the appropriate 
classification.
    To address this concern, we are proposing to revise the definition 
of light-duty truck used in the criteria pollutant standards to simply 
refer to the definition of light-truck used in the GHG standards. This 
proposed change would eliminate any confusion and simplify reporting 
for manufacturers because each vehicle would be treated consistently as 
either a car or a truck for all standards and reporting requirements. 
We request comment on this proposed revision.

G. Proposed On-Board Diagnostics Program Updates

    EPA regulations state that onboard diagnostics (OBD) systems must 
generally detect malfunctions in the emission control system, store 
trouble codes corresponding to detected malfunctions, and alert 
operators appropriately. EPA adopted at 40 CFR 86.1806-17 a requirement 
for manufacturers to meet the 2013 California Air Resources Board 
(CARB) OBD regulation as a requirement for an EPA certificate, with 
certain additional provisions, clarifications and exceptions, in the 
Tier 3 Motor Vehicle Emission and Fuel Standards final rulemaking (79 
FR 23414, April 28, 2014). Since that time, CARB has made several 
updates to their OBD regulations and continues to consider changes 
periodically. In this NPRM, EPA is proposing to update to the latest 
version of the CARB OBD regulation (California's 2022 OBD-II 
requirements that are part of title 13, section 1968.2 of the 
California Code of Regulations, approved on November 22, 2022). This is 
accomplished by adding a new section for model year 2027 and later 
vehicles and only putting in requirements in that section that are not 
in the new CARB regulation. For example, EPA is adding a new monitoring 
requirement for gasoline particulate filters (GPFs) since the CARB 
regulation does not specifically have a requirement for a particulate 
filter diagnostic for gasoline vehicles and EPA is projecting that 
manufacturers will utilize GPFs as a control strategy in meeting the 
proposed PM standards. Details are available in DRIA Chapter 3.3.

H. Coordination With Federal and State Partners

    Executive Order 14037 directs EPA and DOT to coordinate, as 
appropriate and consistent with applicable law, during consideration of 
this rulemaking. EPA has coordinated and consulted with DOT/NHTSA, both 
on a bilateral level during the development of the proposed program as 
well as through the interagency review of the EPA proposal led by the 
Office of Management and Budget. EPA has set some previous light-duty 
vehicle GHG emission standards in joint rulemakings where NHTSA also 
established CAFE standards. Most recently, in establishing standards 
for model year 2023-2026, EPA and NHTSA concluded that it was 
appropriate to coordinate and consult but not to engage in joint 
rulemaking. EPA has similarly concluded that it is not necessary for 
this EPA proposal to be issued in a joint action with NHTSA. In 
reaching this conclusion, EPA notes there is no statutory requirement 
for joint rulemaking and that the agencies have different statutory 
mandates and their respective programs have always reflected those 
differences. As the Supreme Court has noted ``EPA has been charged with 
protecting the public's `health' and `welfare,' a statutory obligation 
wholly independent of DOT's mandate to promote energy efficiency.'' 
\547\ Although there is no statutory requirement for EPA to consult 
with NHTSA, EPA has consulted significantly with NHTSA in the 
development of this rule. For example, staff of the two agencies met 
frequently to discuss various technical issues including modeling 
inputs and assumptions, shared technical information, and shared views 
related to the assessments conducted for each rule.
---------------------------------------------------------------------------

    \547\ Massachusetts v. EPA, 549 U.S. at 532.
---------------------------------------------------------------------------

    EPA also has consulted with analysts from other Federal agencies in 
developing this proposal, including the Federal Energy Regulatory 
Commission, the Department of Energy and several national labs. EPA 
collaborates with DOE and Argonne National Laboratory on battery cost 
analyses and critical materials forecasting. EPA, National Renewable 
Energy Laboratory (NREL) and DOE collaborate on forecasting the 
development of a national charging infrastructure and projecting 
regional charging demand for input into EPA's power sector modeling. 
EPA also coordinates with the Joint Office of Energy and Transportation 
on charging infrastructure. EPA and the Lawrence Berkeley National 
Laboratory collaborate on issues of consumer acceptance of plug-in 
electric vehicles. EPA and the Oak Ridge National Laboratory 
collaborate on energy security issues. EPA also participates in the 
Federal Consortium for Advanced Batteries led by DOE and the Joint 
Office of Energy and Transportation. EPA and DOE also have entered into 
a Joint Memorandum of Understanding to provide a framework for 
interagency cooperation and consultation on electric sector resource 
adequacy and operational reliability.\548\
---------------------------------------------------------------------------

    \548\ Joint Memorandum on Interagency Communication and 
Consultation on Electric Reliability, U.S. Department of Energy and 
U.S. Environmental Protection Agency, March 8, 2023.

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

[[Page 29294]]

    E.O. 14037 also directs EPA to coordinate with California and other 
states that are leading the way in reducing vehicle emissions. EPA has 
engaged with the California Air Resources Board on technical issues in 
developing this proposal. EPA has considered certain aspects of the 
CARB Advanced Clean Cars II program, adopted in August 2022, as 
discussed elsewhere in this notice. We also have engaged with other 
states, including members of the National Association of Clean Air 
Agencies, Northeast States for Coordinated Air Use Management, and the 
Ozone Transport Commission.

I. Stakeholder Engagement

    EPA has conducted extensive engagement with a diverse range of 
interested stakeholders in developing this proposal. We have engaged 
with those groups with whom E.O. 14037 specifically directs EPA to 
engage, including labor unions, states, industry, environmental justice 
organizations and public health experts. In addition, we have engaged 
with NGOs representing environmental, public health and consumer 
interests, automotive manufacturers, suppliers, dealers, utilities, 
charging providers, local governments, Tribal governments, alternative 
fuels industries, and other organizations. For example, in April-May 
2022, EPA held a series of engagement sessions with various interested 
stakeholder groups so that EPA could hear early input in developing its 
proposal. These engagement sessions included all of the identified 
stakeholder groups. EPA has continued engagement with many of these 
stakeholders throughout the development of this proposal. EPA looks 
forward to hearing from all stakeholders through comments on this 
proposal and during the public hearing.

IV. Technical Assessment of the Proposed Standards

A. What approach did EPA use in analyzing potential standards?

    For this proposal, EPA has conducted a new technical assessment of 
the proposed standards, along with an assessment of alternative 
standards and sensitivity cases. The overall approach used here is 
consistent with our prior rulemakings for GHG and criteria pollutants 
for light- and medium-duty vehicles. We continue to refer to the 
extensive body of prior technical work that has underpinned those 
rules, and where appropriate we have incorporated both updated and new 
tools, models and data in conducting this assessment. Some of the areas 
of particular focus are related to the significant developments in 
vehicle electrification that have continued to occur since our most 
recent previous technical assessment published with the 2021 rule. 
Battery costs continue to decline, and vehicle manufacturers have 
continued to introduce PEV products in increased volumes and new market 
segments, improving the ability to characterize the cost and 
performance of best-practice designs. New legislation also has provided 
significant incentives for both the manufacture and purchase of PEVs, 
and the expansion of charging infrastructure. Additionally, in light of 
the projected levels of electrification anticipated under the proposed 
standards, EPA's new technical assessment contains significantly 
increased focus on the availability of critical minerals, supply chain 
development, battery manufacturing capacity, and mineral security.
    Our modeling can be broadly divided into two categories. The first 
category is compliance modeling for the vehicle manufacturers, which 
includes the potential design and technology application decisions to 
achieve compliance under the modeled standard. The second category is 
`effects' modeling, which is intended to capture how changes in vehicle 
design and use will impact human health, the environment, and other 
factors that are relevant to a societal benefits-costs analysis.
    As in the 2010 and 2012 rules, EPA is again using the Optimization 
Model for reducing Emissions of Greenhouse gases from Automobiles 
(OMEGA) to model vehicle manufacturer compliance with GHG standards. In 
the 2021 GHG rule EPA used DOT's CAFE Compliance and Effects Modeling 
System (CCEMS). This approach helped to maintain consistency with the 
CCEMS modeling used for the 2020 rule allowing for a more direct 
comparison of results given a single modeling tool having been used for 
both analyses. For this proposal, EPA is returning to the use of the 
OMEGA model, and we do so for a few important reasons. For one, the 
updated version of OMEGA extends the prior version's projections of 
cost-effective manufacturer compliance decisions by also accounting for 
the relationship between manufacturer compliance decisions and consumer 
demand and including important constraints on technology adoption. 
Also, the updated OMEGA allows for evaluation of the influence of other 
policies beyond the GHG standards being evaluated, such as state-level 
ZEV policies. These features make this updated version of OMEGA well-
suited for analyzing standards in a market where BEVs are expected to 
account for a steadily increasing share of new vehicle sales. EPA has 
utilized the OMEGA model in evaluating the effects of not only the GHG 
program but the criteria pollutant emissions program as well. Finally, 
despite the strengths of the CCEMS and its modeling approach, it is 
designed around the CAFE program and the statute behind that program, 
while OMEGA is designed around EPA's GHG program and the Clean Air Act.
    This model takes as inputs detailed information about existing 
vehicles, technologies, costs, and definitions of the policies under 
consideration. From these inputs, the model projects the stock of 
vehicles and vehicle attributes, and their use over the analysis 
period. For the analysis supporting this proposal, EPA has developed an 
updated and peer-reviewed version of the OMEGA model to better account 
for the significant evolution over the past decade in vehicle markets, 
technologies, and mobility services. In particular, recent advancements 
in BEVs and their introduction into the full range of market segments 
provides strong evidence that increased vehicle electrification can 
play a central role in achieving greater levels of emissions reduction 
in the future. Among the key new features of OMEGA is the 
representation of consumer-producer interactions when modeling 
compliance pathways and the associated technology penetration into the 
vehicle fleet. This capability allows us to project the impacts of the 
producer and consumer incentives contained in the IRA and BIL 
legislation. Compared to the previous model version, the updated 
version of OMEGA has extended capability to model a wider range of GHG 
program provisions, and it has been critical in the assessment of 
various policy alternatives that were considered for this proposal. 
OMEGA is described in detail in DRIA Chapter 2.2.
    The ALPHA vehicle simulation model is used to estimate emissions, 
energy rates, and other relevant vehicle performance estimates. These 
ALPHA simulation results create the inputs to the OMEGA model for the 
range of technologies considered in this rulemaking. We have built upon 
our existing library of benchmarked engines and transmissions used in 
previous rulemakings by adding several new technologies for non-hybrid 
and hybrid ICE vehicles, and newly refined models of BEV powertrains. 
For this proposal, we have also adopted an updated approach for 
representing the ALPHA simulation results in OMEGA, using `response 
surfaces' of emissions and

[[Page 29295]]

energy rates. These continuous technology representations can be 
applied across vehicles of different size, weight, and performance 
characteristics without requiring that vehicles be binned into discrete 
vehicle classes. The response surface approach also simplifies the 
model validation process, since the absolute values of absolute 
emissions and energy rates that are produced can be readily checked 
against actual vehicle test data. This is in contrast to the validation 
process needed for the incremental effectiveness values that were 
estimated in previous rulemakings using either a `lumped parameter 
model' or direct table lookup of effectiveness. The modeling in ALPHA 
and generation of response surfaces is described in DRIA Chapter 2.4.
    The technology cost estimates used in this assessment are from both 
new and previously referenced sources, including some values used in 
recent rulemakings where those remain the best available estimates. 
Vehicle teardown studies remain an important source of detailed cost 
estimates, and for this rulemaking EPA has contracted a new teardown 
study that compares ICE and BEV manufacturing costs for a high-volume 
crossover utility vehicle. Battery costs are an especially important 
element for this rulemaking. Consistent with prior rulemakings, we have 
used DOE's BatPaC model to estimate current battery pack costs which, 
similar to other technology costs, are assumed to decline over time as 
production volumes grow and manufacturing efficiencies improve. The 
costing approaches and assumptions are described in more detail in DRIA 
Chapter 2.5.
    The main function of the OMEGA compliance modeling is to simulate 
how a manufacturer can meet future GHG standards through the 
application of technologies. Among multiple pathways that typically 
exist for achieving compliance, OMEGA aims to find the pathway that 
minimizes costs for the manufacturer given a set of inputs that 
includes technology costs and emissions rates. The compliance modeling 
for this rulemaking also includes constraints on new vehicle production 
and sales that are informed by our assessment of manufacturer and 
consumer decisions, and in some cases account for factors that were not 
included in the technical assessments in our prior rulemakings.
    EPA also consulted and considered data and forecasts from 
government agencies, analyst firms, and industry in order to assess 
capacity for battery production and to thereby establish appropriate 
constraints on PEV battery production (in terms of gigawatt-hours (GWh) 
in a given year) during the time frame of the proposal.\549\ This 
effectively acts as an upper limit on BEV production, particularly 
during the earlier years of the analysis, and represents, for example, 
considerations such as availability of critical minerals and the lead 
time required to construct battery production facilities. The 
development of the battery GWh constraint and the sources considered 
are described in detail in DRIA Chapter 3.1.3.2.
---------------------------------------------------------------------------

    \549\ Sources included, among others, Wood Mackenzie proprietary 
forecasts of battery manufacturing capacity, battery costs, and 
critical mineral availability; Department of Energy analyses and 
forecasts of critical mineral availability and battery manufacturing 
capacity; and other public sources. See DRIA Chapter 3.1.3.2 for a 
description of these sources and how they were used.
---------------------------------------------------------------------------

    Consistent with compliance modeling for past rulemakings, the OMEGA 
model also limits the rate at which new vehicle designs can be 
introduced by applying redesign cycle constraints (DRIA Chapter 2.6). 
EPA has evaluated historic vehicle data (e.g., the rate of product 
redesigns) to ensure that the technology production pace in the 
modeling is feasible. In addition to vehicle production constraints, 
market assumptions and limits on manufacturer pricing cross-
subsidization have been implemented to constrain the number of BEVs 
that can enter the fleet. EPA has evaluated market projections from 
both public and proprietary sources to calibrate the OMEGA model's 
representation of the consumer market's ICE-BEV share response. A 
detailed discussion of the constraints used in EPA's compliance 
modeling is provided in DRIA Chapter 2.7.
    As in prior rulemakings, this assessment is a projection of the 
future, and is subject to a range of uncertainties. We have assessed a 
number of sensitivity cases for key assumptions in order to evaluate 
how they would impact the results.

B. EPA's Approach To Considering the No Action Case and Sensitivities

    EPA has assessed the effects of this proposal with respect to a No 
Action case, for all stringency alternatives and several sensitivities. 
The Office of Management and Budget (OMB) provides guidance for 
regulatory analysis through Circular A4. Circular A4 describes, in 
general, how a regulatory agency should conduct an analysis in support 
of a future regulation and includes a requirement for assessing the 
baseline, or ``no action'', condition: ``what the world will be like if 
the proposed rule is not adopted''. In addition, Circular A4 provides 
that the regulating agency may also consider ``alternative baselines,'' 
which EPA has considered via several sensitivities in this proposal. In 
the development of a No Action case, EPA also considers existing 
finalized rulemakings. For this proposal, these finalized rules include 
the 2014 Tier 3 criteria pollutant regulation, the 2016 Phase 2 GHG 
standards for medium-duty vehicles, and the recently finalized MY 2023-
2026 light-duty GHG standards.
    EPA recognizes that during the timeframe of our existing standards 
the industry and market has already developed considerable momentum 
toward continuing increases in BEV uptake (as discussed at length 
throughout this preamble). This dynamic raises an important question 
about what the projected market penetration for BEVs in the absence of 
the proposed standards will be. EPA also recognizes there are many 
projections from third parties and various stakeholders for increased 
BEV penetration into the future. There are a range of assumptions that 
vary across such projections such as consumer adoption, financial 
incentives, manufacturing capacity and vehicle price. Vehicle price is 
also impacted by range and efficiency assumptions (more efficient EVs 
require smaller batteries to travel the same distance and smaller 
batteries cost less). Depending on what specific assumptions regarding 
the future are made, there can be significant variation in future BEV 
projections. Increasingly favorable consumer sentiment towards BEVs, 
decreasing costs (either through a reduction in manufacturing costs or 
through financial incentives), and a broadening number of BEV product 
offerings all support a projected higher number of new vehicle BEV 
sales in the future, independent of additional regulatory action. As 
described in preamble Section I.A.2.ii, EPA reviewed several recent 
reports and studies containing BEV projections which altogether span a 
range from 32 to 50 percent of new vehicle sales in 2030 and as high as 
67 percent by 2032.
    EPA has considered a similar set of factors as those studies 
conducted by other stakeholders to develop the No Action case for this 
proposal. EPA's No Action case has been primarily informed by the 
technical assessment conducted by the agency in support of this 
proposal. This includes detailed vehicle and battery cost analyses, 
impacts of consumer and manufacturing financial incentives (such as 
those provided by the Inflation Reduction

[[Page 29296]]

Act), consumer acceptance studies, vehicle performance modeling and 
technology applications, and battery manufacturing assessments.
    The No Action case in our central analysis reaches 39 percent BEVs 
in 2032, shown in Table 81, compared to an actual 3 percent BEV share 
of new vehicles in MY 2021. This projected BEV increase is driven by 
EPA's projections of an increase in consumer interest and acceptance 
over that period, the availability of economic incentives for electric 
vehicles for both manufacturers and consumers provided by the IRA, cost 
learning for BEV technology over time, and the ongoing effect of the 
2021 rulemaking and the associated stringency increases in MYs 2022 
through 2026. In the absence of this proposed rulemaking, the MY 2026 
standards carry forward indefinitely into future years and define the 
No Action policy case for the analysis in this proposal. Notably, this 
projection does not include announcements made by manufacturers about 
their future plans and corporate goals, or state laws that have 
recently been adopted or are likely to be adopted in the next decade. 
While our projected BEV penetrations in the No Action case show a 
substantial increase over time, the 39 percent value in MY 2032 is 
lower than some third-party projections and manufacturer 
announcements.\550\ For example, the International Energy Agency (IEA) 
synthesized industry announcements to date and concluded that if 
industry follows its announced plans, 50 percent of new vehicle sales 
in the U.S. would be zero-emission by 2030.\551\ The same IEA analysis 
found that the combined effect of all current policies without 
consideration of these announcements would result in more than 20 
percent BEV sales in 2030. Our own projection of the No Action BEV 
share of new vehicles falls between these two IEA cases, and well below 
the higher case of what the industry has announced it will do. While we 
consider manufacturer announcements as additional evidence that high 
levels of BEV penetration are feasible, for purposes of this proposal 
we have not integrated manufacturer announcements directly into our 
modeling of the No Action baseline. We note here that there are two key 
reasons why our central No-Action case projections of BEV penetration 
for this rulemaking are lower than announcements from some manufacturer 
and some third-party projections. First, our analysis does not include 
the effect of state-level policies whereas projections from other 
sources may include those policies. We did not include these policies 
because many are still not in effect; however, we do anticipate that in 
the next decade, state-level policies may play an important role in 
driving BEV penetration. For this reason, we have included a 
sensitivity No Action case, which includes the ZEV requirements of the 
California Advanced Clean Car (ACC) II program for California and other 
participating states. Second, our analysis is based on the assumption 
that manufacturers follow a purely cost-minimizing compliance strategy. 
We do not account for strategic business decisions or corporate 
policies that might cause a manufacturer to pursue a higher-BEV 
strategy such as the numerous manufacturer announcements and published 
corporate goals that suggest this approach may underestimate the rate 
of BEV adoption in a No Action scenario.
---------------------------------------------------------------------------

    \550\ A summary of industry announcements and third-party 
projections of BEV penetrations is provided in Section I.A.2.
    \551\ International Energy Agency, ``Global EV Outlook 2022,'' 
p. 107, May 2022. Accessed on November 18, 2022 at https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf.
---------------------------------------------------------------------------

    As a way to explore the impact that alternative assumptions would 
have on the future BEV penetrations under the No Action case, the 
agency has also conducted a range of sensitivities in addition to a 
central No Action case. Specifically, EPA conducted three categories of 
sensitivity cases to explore how various input assumptions affected the 
No Action case as well as the Proposal and the Alternatives. First, EPA 
explored a sensitivity reflecting state adoption of the California 
Advanced Clean Cars II (ACC II) program. Second, EPA conducted 
sensitivities of both higher and lower battery costs. Third, EPA made 
assumptions about a faster or slower pace of consumer acceptance of 
BEVs. Our central No Action case projects 39 percent BEVs in MY2032. 
Across the sensitivity analyses, MY2032 BEV projections ranged from 29 
to 66 percent in their respective No Action cases. Each of the 
sensitivity cases is discussed in more detail in Section IV.E. Our 
projections through MY 2032 for BEV penetrations in the No Action case 
are shown in Figure 20.

[[Page 29297]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.023

    We acknowledge the range of possible assumptions, and on balance, 
we believe that EPA's approach to assessing potential No Action cases 
provides a technically robust method of determining the feasibility and 
costs associated with the emissions reductions required by the proposed 
standards.
    EPA requests comment on our approach to the No Action case, both 
the methodologies and detailed technical inputs used by EPA to develop 
the No Action case for this proposal, and also on other approaches EPA 
may consider as an alternative to the approach used in this proposal. 
EPA will assess the comments and other information gathered in response 
to this proposal in determining an appropriate approach to the No 
Action case for the final rule.

C. How did EPA consider technology feasibility and related issues?

1. Light- and Medium-Duty Technology Feasibility
    The levels of stringency considered in this proposal continue a 
trend of more stringent emission standards established by EPA in prior 
rulemakings based on EPA's consideration of available and projected 
technologies consistent with the factors EPA must consider when 
establishing standards under the Clean Air Act. As with prior rules, as 
part of the development of this proposed rulemaking, EPA has assessed 
the feasibility of the proposed standards in light of current and 
anticipated progress by automakers in developing and deploying new 
emissions-reducing technologies.
    Compliance with the EPA GHG and criteria pollutant standards over 
the past decade has been achieved predominantly through the application 
of advanced technologies and improved aftertreatment systems to 
internal combustion engine (ICE) vehicles. For example, in the analyses 
performed for the 2012 GHG rule, a significant portion of EPA's 
analysis included an assessment of technologies available to 
manufacturers for achieving compliance with the standards. Advanced ICE 
technologies were identified as playing a major role in manufacturer 
compliance with the emission reductions required by those rules.
    In that same time frame, as the EPA standards have increased in 
stringency, automakers have relied to an increasing degree on a range 
of electrification technologies, including hybrid electric vehicles 
(HEVs) and, in recent years, plug-in hybrid electric vehicles (PHEVs) 
and battery-electric vehicles (BEVs). As these technologies have been 
advancing rapidly over the past decade, and as battery costs have 
continued to decline, automakers have begun to include BEVs and PHEVs 
(together referred to as PEVs or plug-in electric vehicles) as an 
integral and growing part of their current and future product lines, 
leading to an increasing diversity of these clean vehicles planned for 
high-volume production. HEV and PHEV vehicle architectures not only 
decrease GHG emissions but provide the vehicle manufacturers with 
additional technology options for reducing criteria pollutant 
emissions. Blended ICE and electric operation allow the vehicle 
manufacturers to control the engine for optimal operating conditions to 
reduce criteria pollutants. In addition, the inclusion of a higher 
voltage battery provides the opportunity to preheat the catalyst to 
reduce cold start emissions. In EPA's 2021 rule that set GHG emission 
standards for MYs 2023 through 2026, we projected that manufacturers 
would comply with the 2026 standards with about 17 percent PEVs at the 
industry-wide level, reflecting the increased cost-effectiveness of PEV 
technologies in achieving compliance with increasingly stringent 
emissions standards.
    This trend in technology application for light-duty vehicles is 
evidence of a continuing shift toward electrification as an important 
technology for both criteria pollutant and GHG compliance. As many 
advanced ICE technologies have now reached high penetrations across the 
breadth of manufacturers' product lines, electrification technology 
becomes increasingly attractive as a cost-effective pathway to further 
emission reductions. As described in detail in the Executive Summary, 
manufacturers have increasingly begun to shift research and development 
investment away from ICE technologies and are allocating large amounts 
of new investment to electrification technologies. For more discussion 
of this rapidly increasing trend, see preamble Section I.A.2.
    In addition to the light-duty vehicle sector, the medium-duty 
sector is also experiencing a shift toward

[[Page 29298]]

electrification in several important market segments. As described in 
Section I.A.2 of this preamble, numerous commitments to produce all-
electric medium-duty delivery vans have been announced by large fleet 
companies in partnerships with various OEMs. This rapid shift to BEVs 
in a fleet that is currently predominantly gasoline- and diesel-fueled 
suggests that the operators of these fleets consider BEV delivery vans 
the best available and most cost-effective technology for meeting their 
needs. Owing to the large size of these vehicle fleets, this segment 
alone is likely to represent a significant portion of the future 
electrification of the medium-duty vehicle fleet.
    These trends in light- and medium-duty vehicle technology suggest 
that electrification is already poised to play a rapidly increasing 
role in the onroad fleet and provides further evidence that BEV and 
PHEV technologies are increasingly seen as an effective and feasible 
set of vehicle technologies that are available to manufacturers to help 
comply with increasing levels of emission reductions.
    EPA has assessed the feasibility of the proposed standards in light 
of current and anticipated progress by automakers in developing and 
deploying new emissions-reducing technologies and has presented the 
bulk of this analysis in Chapter 3 of the DRIA. DRIA 3.1.1 provides 
further discussion of recent trends and feasibility of light-duty 
vehicle technologies that manufacturers have available to meet the 
proposed standards. DRIA 3.1.2 discusses recent trends in 
electrification of medium-duty vehicles. The following paragraphs 
summarize other aspects of PEV feasibility, such as technology costs, 
consumer acceptance, charging infrastructure, supply chain, 
manufacturing capacity, critical minerals, and effects of BEV 
penetration on upstream emissions; the respective chapters of the DRIA 
provide additional detail.
    While EPA has not specifically modeled the adoption of plug-in 
hybrid electric vehicle (PHEV) architectures in the analysis for this 
proposal, the agency recognizes that PHEVs can provide significant 
reductions in GHG emissions and that some vehicle manufacturers may 
choose to utilize this technology as part of their technology offering 
portfolio in response to customer demands/needs and in response to EPA 
emission standards (as some firms are already doing today). PHEVs have 
been available in the light-duty vehicle market in the U.S. for more 
than a decade and a number of models are available now across a larger 
breadth of vehicle types, including sedans, such as the Toyota Prius 
Prime, and crossover SUVs, such as the Subaru Crosstrek, Ford Escape 
PHEV, Kia Niro Plug-in Hybrid, Kia Sportage Plug-In Hybrid, Hyundai 
Tucson Plug-In Hybrid, Mitsubishi Outlander PHEV and Toyota RAV4 Prime. 
Stellantis currently offers a minivan PHEV in its Chrysler Pacifica 
Hybrid. Large PHEV SUVs are also currently available, including the 
Jeep Grand Cherokee and Jeep Wrangler 4xe, the Kia Sorento Plug in 
Hybrid, the Lincoln Corsair Grand Touring, the Lincoln Aviator, and the 
Volvo XC90 Recharge.
    Although no PHEV pickup truck applications currently exist, EPA 
believes the PHEV architecture may lend itself well to future pickup 
truck applications, including some MDV pickup truck applications. One 
major manufacturer, Stellantis, recently announced at the 2023 Consumer 
Electronics Show that a range-extender will be an option on their new 
full-size Ram 1500 REV electric pickup.\552\ A PHEV pickup architecture 
would provide several benefits: Some amount of zero-emission electric 
range (depending on battery size); increased total vehicle range during 
heavy towing and hauling operations using both charge depleting and 
charge sustaining modes (depending on ICE-powertrain sizing); job-site 
utility with auxiliary power capabilities similar to portable worksite 
generators, and the efficiency improvements normally associated with 
strong hybrids that provide regenerative braking, extended engine idle-
off, and launch assist for high torque demand applications. Depending 
on the vehicle architecture, PHEVs used in pickup truck applications 
may also offer additional capabilities, similar to BEV pickups, with 
respect to torque control and/or torque vectoring to reduce wheel slip 
during launch in trailer towing applications. In addition, PHEVs may 
help provide a bridge for consumers that may not be ready to adopt a 
fully electric vehicle.
---------------------------------------------------------------------------

    \552\ Kiley, D. Ram 1500 BEV Expected To Hit Market With 500 
Miles of Range. ``Wards Auto'', January 5, 2023. https://www.wardsauto.com/print/389039.
---------------------------------------------------------------------------

    The MY 2023 Jeep Grand Cherokee 4xe with the ``Trailhawk'' package 
is an example of a large SUV with significant tow capability and 
similar packages may eventually be used in pickup truck applications. 
The vehicle has a 6,125 pound GVWR and a 12,125-pound GCWR using a 
combination of a 270 bhp turbocharged GDI engine with P2 and P0 
electric machines of 100kW and 33kW, respectively. The vehicle also 
uses a 17.3 kWh (nominal size) battery pack that provides 25 miles of 
all-electric range. The MY 2023 Jeep Wrangler 4xe uses a similar 
powertrain and battery pack. The Wrangler 4xe equipped with the 
``Rubicon'' package has a 6,400-pound GVWR and a 9,200-pound GCWR.
    EPA requests comment on the types of PHEVs EPA could consider in 
our analysis for the final rulemaking, including whether or not EPA 
should explicitly model PHEVs in light-duty and MDV pickup 
applications. EPA also requests comment on recommendations for likely 
PHEV architectures that should be investigated, and any relevant 
performance or utility data that may help inform our modeling and 
analyses. EPA has initiated contract work with Southwest Research 
Institute to investigate likely technology architectures of both PHEV 
and internal combustion engine range-extended electric light-duty and 
MDV pickup trucks that we anticipate will provide data in time for the 
final rule. In addition, within DRIA Chapter 2.6.1.4 ``PHEV Powertrain 
Costs,'' EPA provides component technology descriptions and cost 
estimates that include the major components needed to manufacture a 
PHEV, including batteries, e-motors, power electronics and other 
ancillary systems. EPA requests comment on our PHEV cost estimates 
contained in the DRIA. EPA may rely upon those estimates and other 
information gathered in response to this proposal and EPA's on-going 
technical work for estimating the costs for PHEVs for the final rule.
    Many light-duty and medium-duty PHEVs purchased for commercial use 
would be eligible for the Commercial Clean Vehicle Credit (45W) under 
the IRA, which provides a credit of up to $7,500 for qualified vehicles 
with gross vehicle weight ratings (GVWRs) of under 14,000 pounds and up 
to $40,000 for qualified vehicles above 14,000 pounds GVWR. As the 
amount of the credit depends on the GVWR and the incremental cost of 
the vehicle relative a comparable ICE vehicle, EPA also requests 
comment on estimating the amount of the credit that will on average 
apply to commercial MDV PHEVs, such as PHEV pickups, and other 
commercial PHEVs and BEVs.
2. Approach To Estimating Electrification Technology Costs
    Among the various technology costs that are relevant to technology 
feasibility, costs for electrification technology are of particular 
interest due to the increased penetrations of

[[Page 29299]]

electrified vehicles that are projected in the compliance analysis.
    This section provides a general review of how battery and other 
electrification component costs were developed for this analysis. A 
more detailed discussion of the development of the electrification cost 
estimates used in the proposal, and the sources we considered, may be 
found in DRIA Chapter 2.
    To develop battery cost estimates for PEVs, EPA relied on a number 
of resources. First, as part of our ongoing research activities, we 
followed recent and anticipated trends in PEV battery design and 
configuration in order to understand the general design parameters of 
batteries that are appearing in high-production PEV models and whose 
cost therefore should be modeled in the analysis. To identify 
appropriate pack designs, we sought to model batteries with pack 
topologies, cell sizes, and chemistry that are similar to those seen in 
emerging high-production battery platforms, such as for example the GM 
Ultium battery platform, the VW MEB vehicle platform, and the Hyundai 
E-GMP vehicle platform. EPA considers these platforms to exemplify the 
trend toward BEV-specific vehicle platforms with battery packs of 
several capacities that are constructed from various numbers of modules 
that utilize one or two standard cell sizes of relatively large 
capacity, generally forming a flat battery pack assembly suitable for 
residing in the vehicle floor.
    EPA then used Argonne National Laboratory's BatPaC model version 
5.0 as a key tool to generate base year (2022) direct manufacturing 
cost estimates for battery packs of such a design, as they are likely 
to be experienced today in a well optimized, high-volume battery 
production facility. As described in more detail in DRIA Chapter 
2.5.2.1.2, we generated a population of pack costs for various pack 
energy capacities (kWh) and developed curve fits to express base year 
cost per kWh as a function of gross kWh,\553\ for a number of annual 
production volumes.
---------------------------------------------------------------------------

    \553\ As described in DRIA Chapter 2, larger packs tend to 
achieve a lower cost per kWh, and this tendency is evident in BatPaC 
results.
---------------------------------------------------------------------------

    To determine battery manufacturing costs in future years of the 
analysis, we first looked to industry forecasts and other literature 
regarding expected cost reductions for typical BEV battery packs in 
future years, expected to result from factors commonly cited in these 
forecasts, such as improved manufacturing efficiency and increasing 
production volumes. We then used this information to derive a nominal 
reference trajectory for future battery pack cost per kWh for an 
average BEV battery pack. The development of the reference trajectory 
is described in DRIA 2.5.2.1.3.
    This generic reference trajectory was used as a reference point 
with which to qualitatively compare BEV battery costs per kWh that are 
output by the OMEGA model. When the OMEGA model generates a compliant 
fleet in a given future year of the analysis, battery costs for BEVs in 
that year are determined dynamically, by applying a learning cost 
reduction to the base year cost. The learning factor is calculated 
based on the cumulative GWh of battery production necessary to supply 
the number of BEVs that OMEGA has thus far placed in the analysis 
fleet, up to that analysis year. This is consistent with ``learning by 
doing,'' a standard basis for representing cost reductions due to 
learning in which a specific percentage cost reduction occurs with each 
doubling of cumulative production over time. This dynamic method of 
assigning a cost reduction due to learning means that OMEGA runs that 
result in different cumulative battery production levels will result in 
somewhat different battery costs.
    Because it is concerned with projecting a compliant U.S. fleet, 
OMEGA estimates only the cumulative GWh of battery production needed to 
supply the U.S. PEV fleet. On a global scale, and across other battery 
applications such as stationary storage or other classes of vehicles, 
cumulative GWh of battery production is likely to be much larger than 
that for the U.S. fleet alone, and could potentially lead to a greater 
potential for learning to occur over the same time frame. Therefore, 
our use of cumulative U.S. production may be conservative with respect 
to the potential for volume-based learning to occur. EPA invites 
comment on whether and how EPA should consider the issue of global 
battery production in the context of our application of learning for 
the final rule analysis.
    As an example of the pack direct manufacturing costs used in the 
analysis, Figure 21 shows the sales-weighted average battery pack 
direct manufacturing cost per kWh generated by OMEGA for the central 
case of the proposal, alongside the reference trajectory. The Proposal 
costs compare quite favorably to the reference trajectory and vary 
generally as expected. From 2022 to 2025 they are somewhat lower, due 
to the substantially larger average pack size (96 to 103 kWh) compared 
to the 75 kWh of the reference trajectory. Post-2027, the Proposal 
costs are also lower than the reference trajectory, again due in part 
to the larger pack size, and increasingly, to the growing cumulative 
production volume due to the additional BEVs driven by the proposal.

[[Page 29300]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.024

    The average pack size for BEVs generated by OMEGA is plotted on the 
right axis. The 96 kWh to 103 kWh average pack capacity is due in part 
to their use in relatively large vehicles, such as large SUVs and light 
trucks, which form a significant part of the OMEGA modeled compliance 
fleet and to which OMEGA directs a significant amount of 
electrification in its identification of a least cost compliance 
pathway. Another factor is the use of a 300-mile driving range for all 
BEVs in the analysis, which is a longer average range than in some 
other studies but which EPA believes is an appropriate modeling choice 
to reflect currently prevailing range expectations by consumers.\554\ 
More discussion of the OMEGA model and the OMEGA results can be found 
in Section IV.C and in the DRIA.
---------------------------------------------------------------------------

    \554\ For light-duty, OMEGA uses a 300 mile range for BEVs. For 
medium-duty, OMEGA uses a 300 mile range for pickup BEVs and a 150 
mile range for van BEVs.
---------------------------------------------------------------------------

    To reflect the anticipated effect of the Inflation Reduction Act 
(IRA) on battery production costs to manufacturers, we applied a 
further battery cost reduction based on the Section 45X Advanced 
Manufacturing Production Tax Credit. This provision of the IRA provides 
a $35 per kWh tax credit for manufacturers of battery cells, and an 
additional $10 per kWh for manufacturers of battery modules, as well as 
a credit equal to 10 percent of the manufacturing cost of electrode 
active materials and another 10 percent for the manufacturing cost of 
critical minerals (all applicable only to manufacture in the United 
States). The credits, with the exception of the critical minerals 
credit, are available immediately to manufacturers who meet the U.S. 
production requirement and phase out from 2030 to 2032.
    We assumed that manufacturer ability to take advantage of the $35 
cell credit and the $10 module credit would ramp up linearly from 60 
percent of total cells and modules in 2023 (a conservative estimate of 
the current percentage of U.S.-based battery and cell manufacturing 
likely to be eligible today for the credit) \555\ \556\ \557\ to 100 
percent in 2027, and then ramping down by 25 percent per year as the 
law phases out the credit from 2030 (75 percent) through 2033 (zero 
percent). Although a large percentage of 2023 U.S. BEV battery and cell 
manufacturing is represented by the production of one OEM, we expect 
that the many large U.S. battery production facilities that are being 
actively developed by suppliers and other OEMs (as described in Section 
IV.C.6 of this Preamble) will allow benefit of the credit to be 
accessible to all manufacturers by 2027.
---------------------------------------------------------------------------

    \555\ U.S. Department of Energy, ``FOTW #1192, June 28, 2021: 
Most U.S. Light-Duty Plug-In Electric Vehicle Battery Cells and 
Packs Produced Domestically from 2018 to 2020,'' June 28, 2021. 
https://www.energy.gov/eere/vehicles/articles/fotw-1192-june-28-2021-most-us-light-duty-plug-electric-vehicle-battery.
    \556\ Argonne National Laboratory, ``Lithium-Ion Battery Supply 
Chain for E-Drive Vehicles in the United States: 2010-2020,'' ANL/
ESD-21/3, March 2021.
    \557\ U.S. Department of Energy, ``Vehicle Technologies Office 
Transportation Analysis Fact of the Week #1278, Most Battery Cells 
and Battery Packs in Plug-in Vehicles Sold in the United States From 
2010 to 2021 Were Domestically Produced,'' February 20, 2023.
---------------------------------------------------------------------------

    Because RPE is meant to be a multiplier against the direct 
manufacturing cost, and the 45X credit does not reduce the actual 
direct manufacturing cost at the factory but only compensates the cost 
after the fact, we felt that it was most appropriate to apply the 45X 
credit to the marked-up cost. The 45X cell and module credits per kWh 
were applied by first marking up the direct manufacturing cost by the 
1.5 RPE factor to determine the indirect cost (i.e., 50 percent of the 
manufacturing cost), then deducting the credit amount from the marked-
up cost to create a post-credit marked-up cost. The post-credit direct 
manufacturing cost would then become the post-credit marked-up cost 
minus the indirect cost. Details on the application of the 45X credit 
in OMEGA can be found in DRIA 2.5.2.1.
    EPA did not apply a further cost reduction to represent the 10 
percent electrode active material or critical mineral production 
credits under 45X,

[[Page 29301]]

which are also available to be utilized by manufacturers. Although not 
explicitly modeled, these credits could have a substantial impact on 
reducing battery costs for some manufacturers in the short term and 
many in the long term, and so their exclusion from the currently 
modeled cost estimates represents a conservative assumption. EPA 
requests comment on how the effect of these specific credits might be 
quantitatively represented in battery production cost for the final 
rule analysis.
    The IRA also includes consumer purchase incentives, which do not 
affect battery manufacturing cost, but reduce vehicle purchase cost to 
consumers.
    A substantial Clean Vehicle Credit (CVC, or IRS 30D) of up to 
$7,500 is available to eligible buyers of eligible PEVs, subject to a 
number of requirements such as location of final assembly (in North 
America), critical minerals and battery component origin, vehicle 
retail price, and buyer income. Similarly, a Commercial Clean Vehicle 
Credit (CCVC, or IRS 45W) of up to $7,500 is available for light-duty 
vehicles purchased for commercial use. Guidance by the Internal Revenue 
Service indicates that vehicles leased to consumers (rather than sold) 
are commercial vehicles that will qualify for the full credit to be 
paid to the lessor.\558\ EPA recognizes that this guidance could lead 
to increased relevance of the CCVC for vehicles and buyers that would 
not otherwise be eligible for the CVCC, and that this could constitute 
an additional PEV cost reduction for certain consumers. Relevant 
considerations in quantifying the extent to which the CVCC may 
influence cost of PEVs to consumers would include factors such as the 
degree to which the value of the CVCC credit (paid to lessor) would be 
represented in reduced payments to the lessee, and the degree to which 
manufacturers and dealers that currently sell vehicles outright choose 
to switch to a leasing model.
---------------------------------------------------------------------------

    \558\ Internal Revenue Service, ``Topic G--Frequently Asked 
Questions About Qualified Commercial Clean Vehicles Credit,'' 
February 3, 2023. https://www.irs.gov/newsroom/topic-g-frequently-asked-questions-about-qualified-commercial-clean-vehicles-credit.
---------------------------------------------------------------------------

    Because of the requirements of the 30D credit and the uncertainties 
regarding utilization of the 45W credit, EPA is not assuming that all 
BEV sales will qualify for the full $7,500 30D or 45W credit. A portion 
of the market that is unable to capture the 30D credit may be capable 
of utilizing the 45W credit. For these reasons, in the OMEGA model we 
have applied a portion of the $7,500 maximum from either incentive. For 
2023 we estimated that an average credit amount (across all PEV 
purchases) of $3,750 per vehicle could reasonably be expected to be 
realized through a combination of the 30D and 45W tax credits. For 
later years, we recognized that the attractiveness of the credits to 
manufacturers and consumers would likely increase eligibility over 
time. To reflect this, we ramped the value linearly to $6,000 by 2032, 
the last year of the credits. We did not ramp to the full theoretical 
value of $7,500, in expectation that not all purchases will qualify for 
30D due to MSRP or income limitations, and that not all PEVs are likely 
to enter the market through leasing.
    The credit amount is modeled in OMEGA as a direct reduction to the 
consumer purchase costs,\559\ and therefore has an influence on the 
shares of BEVs demanded by consumers. The purchase incentive is assumed 
to be realized entirely by the consumer and does not impact the vehicle 
production costs for producer. For more discussion and the values used 
by OMEGA, please see DRIA Chapter 2.6.8.
---------------------------------------------------------------------------

    \559\ As described in Chapter 4.1 of the DRIA, the modeling of 
consumer demand for ICE and BEV vehicles considers purchase and 
ownership costs as components of a ``consumer generalized cost'' for 
the ICE and BEV options. The purchase cost reflects the vehicle 
purchase price and any assumed purchase incentives under 30D of the 
IRA.
---------------------------------------------------------------------------

    EPA also considered potential impacts on battery manufacturing cost 
that might result from the proposed battery durability and warranty 
requirements described in Sections III.F.2 and III.F.3. Because the 
durability minimum performance requirement and the minimum battery 
warranty are similar to currently observed industry practices regarding 
durability performance and warranty terms, EPA does not expect that the 
proposed requirements will result in an increase in battery 
manufacturing costs.
    Forecasting of future battery costs is a very active research area, 
particularly at this time of rapidly increasing demand in an actively 
evolving industry. As new forecasts of battery cost become available, 
EPA plans to consider this information for the final rule analysis. One 
example of the potential for new information to emerge periodically on 
this active topic is the recently released report (December 6, 2022) 
from Bloomberg New Energy Finance (BNEF) describing the results of 
their annual Battery Price Survey, which indicates that after years of 
steady decline, the global average price for lithium-ion battery packs 
(volume-weighted across the passenger, commercial, bus, and stationary 
markets) climbed by about 7 percent in 2022, from $141 per kWh the year 
before to $151 per kWh in 2022.560 561 For passenger BEV 
batteries the average price paid was reported to be $138 per kWh. 
Although the BNEF report is useful to understand trends in prices that 
are reported as being paid across the industry, it is difficult to 
compare the BNEF costs to the modeled costs in our analysis, which 
apply to a specific class of pack design manufactured in large 
quantities at a large manufacturing facility, to fulfill large orders 
for a major OEM. In contrast, the survey respondents are likely to 
include both large and small purchasers of diverse battery packs whose 
designs and average gross capacities may differ from those modeled in 
the analysis. Recognizing these and other uncertainties, EPA believes 
that our proposed battery cost estimates are reasonable based on the 
record at this time. To improve upon these estimates for the final rule 
analysis, EPA plans to continue to monitor emerging studies and will 
review the cost estimates based on available information and public 
comment. We also plan to work with ANL to continue updating our 
estimates of battery cost for current and future years, by adjusting 
key inputs to the BatPaC model to represent expected improvements to 
production processes, forecasts of future mineral costs, and design 
improvements. This will allow refinement of the scaling factors based 
on BatPaC modeling in addition to our consideration of industry 
forecasts.
---------------------------------------------------------------------------

    \560\ Bloomberg New Energy Finance, ``Rising Battery Prices 
Threaten to Derail the Arrival of Affordable EVs,'' December 6, 
2022. Accessed on December 6, 2022 at: https://www.bloomberg.com/news/articles/2022-12-06/rising-battery-prices-threaten-to-derail-the-arrival-of-affordable-evs.
    \561\ Bloomberg New Energy Finance, ``Lithium-ion Battery Pack 
Prices Rise for First Time to an Average of $151/kWh,'' December 6, 
2022. Accessed on December 6, 2022 at: https://about.bnef.com/blog/lithium-ion-battery-pack-prices-rise-for-first-time-to-an-average-of-151-kwh/.
---------------------------------------------------------------------------

    In Figure 22 we compare the example battery costs of Figure 21 to 
the high and low battery cost sensitivities that were examined in the 
2021 rule. The dotted lines show the high- and low-cost sensitivities 
in the 2021 rule, applicable to a 60-kWh pack as per the discussion 
that was provided in the 2021 rule. For comparison to the current 
proposal, the solid line shows the example OMEGA cost per kWh shown in 
Figure 21. The average battery size generated for BEVs by OMEGA is 
larger than the 60 kWh example from the 2021 rule, at about 100 kWh.

[[Page 29302]]

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    It can be seen that the average battery costs in the current 
proposal remain with the band delineated by the high and low 
sensitivities of the 2021 final rule analysis, out to MY 2028-2029. At 
MY 2029, the cost begins to decline below the lower sensitivity in the 
2021 rule. In general, part of the lower cost is due to the larger pack 
capacity. Also, in the central case of the 2021 final rule analysis, we 
had chosen to hold the battery cost learning rate constant after MY 
2029, essentially subjecting it to a floor that was meant to represent 
uncertainty about the potential for continued reductions due to rising 
demand and prices for critical minerals that were beginning to become 
apparent at the time of the rulemaking. We had noted that this was a 
conservative assumption, reflecting uncertainty at the time about what 
the appropriate level of learning would be in light of emerging cost 
increases for critical minerals. We also noted that we would continue 
to study the potential for cost reductions in batteries during and 
after the time frame of the rule, noting that pending updates to the 
ANL BatPaC model, as well as collection of emerging data on forecasts 
for future mineral prices and production capacity, would make it 
possible to more confidently characterize the rate of decline in 
battery costs, and that we would incorporate this information in the 
current proposal.
---------------------------------------------------------------------------

    \562\ For valid comparison to the example costs reported in the 
2021 final rule, the costs depicted in the figure represent a 60-kWh 
pack and thus are slightly higher than the cost trajectory shown in 
DRIA Chapter 2.5.2.1.3 (``Trajectory of future battery pack 
manufacturing costs for a 75 kWh BEV pack'') which represents a 75-
kWh pack.
---------------------------------------------------------------------------

    Since then, these developments have improved our ability to 
understand the potential for cost reductions past 2029, in place of the 
lower limit we had assumed in the 2021 analysis. While predicting the 
actual cost of batteries this far into the future is highly uncertain, 
most analysts expect continued progress to occur as a result of 
continued improvement in battery manufacturing and battery chemistry 
during this extended future timeframe.
    Forecasting of future battery costs is subject to a great deal of 
uncertainty due to factors such as the ongoing and active development 
of the technology and rapidly increasing demand. EPA welcomes comment 
on the battery costs used in this analysis and how to best represent 
future expectations of trends in battery costs, as well as additional 
data and information that EPA should consider in assessing battery 
costs for the final rule analysis.
    Detailed discussion of the development of the battery cost 
estimates used in the proposal and the sources we considered may be 
found in DRIA Chapter 2.
    EPA has also updated the non-battery powertrain costs that were 
used to determine the direct manufacturing cost of electrified 
powertrains. We referred to a variety of industry and academic sources, 
focusing primarily on teardowns of components and vehicles conducted by 
leading engineering firms. These included the 2017 teardown of the 
Chevy Bolt conducted by Munro and Associates for UBS; \563\ a 2018 
teardown of several electrified vehicle components conducted by Ricardo 
for the California Air Resources Board; \564\ a set of commercial 
teardown reports published in 2019 and 2020 by Munro & Associates; 
565 566 567 568 569 570 and the

[[Page 29303]]

2021 NAS Phase 3 report.\571\ Throughout the process of compiling the 
results of these studies, we collaborated with technical experts from 
the California Air Resources Board and NHTSA. More discussion of the 
technical basis for the non-battery electrified vehicle cost estimates 
used in the proposal may be found in DRIA Chapter 2.
---------------------------------------------------------------------------

    \563\ UBS AG, ``Q-Series: UBS Evidence Lab Electric Car 
Teardown--Disruption Ahead?'' UBS Evidence Lab, May 18, 2017.
    \564\ California Air Resources Board, ``Advanced Strong Hybrid 
and Plug-In Hybrid Engineering Evaluation and Cost Analysis,'' CARB 
Agreement 15CAR018, prepared for CARB and California EPA by Munro & 
Associates, Inc. and Ricardo Strategic Consulting, April 21, 2017.
    \565\ Munro and Associates, ``Twelve Motor Side-by-Side 
Analysis,'' provided November 2020.
    \566\ Munro and Associates, ``6 Inverter Side-by-Side 
Analysis,'' provided January 2021.
    \567\ Munro and Associates, ``3 Inverter Side-by-Side 
Analysis,'' provided November 2020.
    \568\ Munro and Associates, ``BMW i3 Cost Analysis,'' dated 
January 2016, provided November 2020.
    \569\ Munro and Associates, ``2020 Tesla Model Y Cost 
Analysis,'' provided November 2020.
    \570\ Munro and Associates, ``2017 Tesla Model 3 Cost 
Analysis,'' dated 2018, provided November 12, 2020.
    \571\ National Academies of Sciences, Engineering, and Medicine 
2021. ``Assessment of Technologies for Improving Light-Duty Vehicle 
Fuel Economy 2025-2035''. Washington, DC: The National Academies 
Press. https://doi.org/10.17226/26092.
---------------------------------------------------------------------------

    We also commissioned a new full-vehicle teardown study comparing a 
gasoline-fueled VW Tiguan to the battery-electric VW ID.4, conducted 
for EPA by FEV of America.\572\ The study was designed to compare the 
manufacturing cost and assembly labor requirements for two comparable 
vehicles, one an ICE vehicle and one a BEV, both of which were built on 
respective dedicated-ICE \573\ and dedicated-BEV \574\ platforms by the 
same manufacturer. The teardown applies a bill-of-materials approach to 
both vehicles and derives cost and assembly labor estimates for each 
component. The report was delivered to EPA in February 2023 and will 
undergo a contractor-managed peer review process to be completed by 
mid-2023. The results of this study will be used to inform the analysis 
for the final rulemaking where appropriate. For example, component 
costs for the BEV and ICE vehicle may be used to support or update our 
battery or non-battery costs for electrified vehicles, or our costs for 
ICE vehicles; assembly labor data may be used to further inform the 
employment analysis; and any other qualitative or quantitative 
information that may be drawn from the report may be used in the 
analysis. An additional task under this work assignment was for FEV to 
review the non-battery electric powertrain costs EPA has described in 
Chapter 2.6.1 of the DRIA, with respect to the cost values used and the 
method of scaling these costs across different vehicle performance 
characteristics and vehicle classes, and to suggest alternative values 
or scalings where applicable. More details about the goals of the 
teardown study can be found in DRIA 2.5.2.2.3. The complete teardown 
report, the associated bill-of-materials data worksheets, and the FEV 
review of non-battery costs and scaling are available in the 
Docket.\575\ \576\ EPA may rely on this information and other 
information gathered in response to this proposal and EPA's ongoing 
technical work for estimating the costs for ICE vehicles and PEVs for 
the final rule.
---------------------------------------------------------------------------

    \572\ FEV Consulting Inc., ``Cost and Technology Evaluation, 
Conventional Powertrain Vehicle Compared to an Electrified 
Powertrain Vehicle, Same Vehicle Class and OEM,'' prepared for 
Environmental Protection Agency, EPA Contract No. 68HERC19D00008, 
February 2023.
    \573\ VW MQB A2 (``Modularer Querbaukasten'' or ``Modular 
Transversal Toolkit'', version A2) global vehicle platform.
    \574\ VW MEB (``Modularer E-Antriebs Baukasten'' or ``modular 
electric-drive toolkit) global vehicle platform.
    \575\ Memo to Docket ID No. EPA-HQ-OAR-2022-0829, titled ``Cost 
and Technology Evaluation, Conventional Powertrain Vehicle Compared 
to an Electrified Powertrain Vehicle, Same Vehicle Class and OEM.''
    \576\ Memo to Docket ID No. EPA-HQ-OAR-2022-0829, titled ``EV 
Non-Battery Cost Review by FEV.''
---------------------------------------------------------------------------

    EPA requests comment on all aspects of the battery and non-battery 
costs used in this analysis, including the base year costs, the 
forecast and estimation of future battery costs, assumptions relating 
to driving range, and similar issues that would affect modeling of 
battery and non-battery costs. EPA also requests comment on alternative 
ways to account for the effect of the IRA provisions, including the 
45X, 30D, 45W, and other relevant provisions, in the estimation of 
battery or vehicle production cost to manufacturers or other impacts on 
the cost of PEVs to consumers, and will consider such comments for the 
analysis for the final rulemaking. We also request comment on our 
application of learning to battery cost reduction, and evidence and 
data related to the potential use of global battery production volumes 
instead of domestic volumes in that context, and/or the use of battery 
production volumes in related sectors.
3. Analysis of Power Sector Emissions
    As PEVs are anticipated to represent a significant share of the 
future U.S. light- and medium-duty vehicle fleet, EPA has developed new 
approaches to estimate the upstream emissions (i.e., from electricity 
generation and transmission) of increased PEV charging demand as part 
of the assessment of the proposed standards. Electric generation was 
modeled using EPA's Power Sector Modeling Platform, which in turn uses 
the Integrated Planning Model (IPM).\577\ IPM provides projections of 
least-cost capacity expansion, electricity dispatch, and emission 
control strategies for meeting energy demand and environmental, 
transmission, dispatch, and reliability constraints represented within 
74 regions of the 48 contiguous United States. The power sector 
modeling used for determining the PEV upstream emissions inventory and 
costs for the proposal and alternatives included changes to the 
platform to better represent the impacts of both the Bipartisan 
Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) on 
electric power generation.
---------------------------------------------------------------------------

    \577\ https://www.epa.gov/power-sector-modeling.
---------------------------------------------------------------------------

    The regionalization of IPM and the anticipation of a highly 
regionalized initial rollout of electric vehicles under the California 
ZEV program necessitated modeling of the regionalization of PEV charge 
demand in order to fully capture emissions and other impacts on the 
electric power sector. National-level VMT and charge demand from 
scenarios modeled within the OMEGA compliance model were regionalized 
into the 74 IPM regions using the EVI-X modeling suite of electric 
vehicle charging infrastructure analysis tools developed by the 
National Renewable Energy Laboratory (NREL) combined with a PEV likely 
adopter model. Chapter 5 of the DRIA contains a detailed description of 
the analysis of PEV charging demand, electric generation and the 
resulting emissions and cost for different projected vehicle 
electrification scenarios.
    Power sector modeling results of generation and grid mix from 2030 
to 2050 and CO2 emissions from 2028 to 2050 for the 
contiguous United States (CONUS) are shown in Figure 23. Power sector 
CO2 emissions for the proposal are compared to a no-action 
case in Figure 24. Power sector modeling results are summarized in more 
detail within Chapter 5 of the DRIA. The results show significant 
continued year-over-year growth in both total generation and the use of 
renewables for electric generation (Figure 23) and year-over-year 
reductions in CO2 emissions (Figure 24). Emissions of 
NOX (Figure 25), SO2 (Figure 26), 
PM2.5, and other EGU emissions followed similar general 
trends to the CO2 emissions results. The largest differences 
in modeled EGU emissions between the proposal and No Action case were 
in 2035, when CO2, NOX and SO2 were 
approximately 7 percent, 6 percent and 9 percent higher, respectively. 
It should be noted, however, that this represents EGU emissions only 
and does not include anticipated emissions reductions from vehicle 
tailpipe or refinery emissions. By 2050, modeled EGU PM2.5, 
and NOX emissions increased by less than 3 percent for the 
proposal than for a No Action case and by less than 5 percent for 
CO2 and SO2 emissions.
    Power sector modeling results showed that the increased use of 
renewables will largely displace coal and (to a lesser

[[Page 29304]]

extent) natural gas EGUs and will primarily be driven by provisions of 
the IRA. By 2035, power sector modeling results also showed that non-
hydroelectric renewables (primarily wind and solar) will be the largest 
source of electric generation (approximately 46 percent of total 
generation), and they would account for more than 70 percent of 
generation by 2050. This displacement of coal EGUs by renewables was 
also the primary factor in the year-over-year reductions in 
CO2, NOX, SO2, PM2.5, and 
other EGU emissions. Impacts on EGU GHG and criteria pollutant 
emissions due to grid-related IRA provisions were substantially larger 
than the impact of increased electricity demand due to increased 
electrification of light and medium-duty vehicles within the proposal. 
As EGU emissions continue to decrease between 2028 and 2050 due to 
increasing use of renewables, and as vehicles increasingly electrify, 
the power sector GHG and criteria pollutant emissions associated with 
light- and medium-duty vehicle operation will continue to decrease.
    Power sector modeling also showed a significant increase in the use 
of batteries for grid storage. When modeling PEV charge demand for both 
the proposal and for a No Action case, grid battery storage capacity 
increased from approximately zero capacity in 2020 to approximately 70 
GW in 2030 and 170 GW in 2050, representing the equivalent of 
approximately 100 GWh and 300 GWh of annual generation, respectively. 
The increase in grid battery storage was primarily due to modeling of 
incentives put in place under the IRA.
BILLING CODE 6560-50-P
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BILLING CODE 6560-50-C
4. PEV Charging Infrastructure Considerations
    Charging infrastructure has been growing rapidly in the past few 
years. There are over 50,000 non-residential public and private 
charging stations in the U.S. today with more than 140,000 electric 
vehicle supply equipment (EVSE) ports (or outlets that can charge 
vehicles simultaneously).\578\ This is an increase from just over 
85,000 EVSE ports as of the end of 2019.\579\ While estimates for 
future infrastructure needs vary widely in the literature, an NREL 
report found that the overall ratio of EVSE ports to the number of PEVs 
on the road today generally compares favorably to projected needs in 
two national studies.\580\ Of course, keeping up with charging needs as 
PEV adoption grows will require continued expansion of charging 
infrastructure.
---------------------------------------------------------------------------

    \578\ U.S. DOE, Alternative Fuels Data Center, ``Electric 
Vehicle Charging Infrastructure Trends''. Accessed February 28, 
2023, at https://afdc.energy.gov/fuels/electricity_infrastructure_trends.html.
    \579\ Ibid.
    \580\ Brown, A. et al., ``Electric Vehicle Charging 
Infrastructure Trends from the Alternative Fueling Station Locator: 
Second Quarter 2022,'' December 2022, Golden, CO: National Renewable 
Energy Laboratory. NREL/TP-5400-84263. Accessed March 6, 2023, at 
https://www.nrel.gov/docs/fy23osti/84263.pdf.
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    EPA anticipates a mix of public and private investments will be 
available to help meet these future infrastructure needs. The 
Bipartisan Infrastructure Law (BIL) provides up to $7.5 billion over 
five years to build out a national PEV charging network.\581\ Two-
thirds of this funding is for the National Electric Vehicle 
Infrastructure (NEVI) Formula Program with the remaining $2.5 billion 
for the Charging and Fueling Infrastructure (CFI) Discretionary Grant 
Program. Both programs are administered under the Federal Highway 
Administration with support from the Joint Office of Energy and 
Transportation. The first phase of NEVI funding--a formula program for 
states--was launched in 2022 and initial plans for all 50 states, DC, 
and Puerto Rico have now been approved. Together, this initial $1.5 
billion of investments will help deploy or expand charging 
infrastructure on about 75,000 miles of highway.\582\ In March 2023, 
the first funding opportunity was opened under the CFI Program with up 
to $700 million to deploy PEV charging and hydrogen, propane, or 
natural gas fueling infrastructure in communities and along 
corridors.\583\ Ensuring equitable access to charging is one of the 
stated goals of these infrastructure funds. Accordingly,

[[Page 29308]]

FHWA instructed states to incorporate public engagement in their 
planning process for the NEVI Formula Program, including reaching out 
to Tribes, and rural, underserved, and disadvantaged communities.\584\ 
Both the formula funding and discretionary grant program are subject to 
the Justice40 target that 40 percent of the benefits go to 
disadvantaged communities. Other programs with funding authorizations 
under the BIL that could be used in part to support charging 
infrastructure installations include the Congestion Mitigation & Air 
Quality Improvement Program, National Highway Performance Program, and 
Surface Transportation Block Grant Program among others.\585\
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    \581\ Enacted as the Infrastructure Investment and Jobs Act, 
Public Law 117-58. 2021. Accessed January 10, 2023, at https://www.congress.gov/bill/117th-congress/house-bill/3684.
    \582\ U.S. DOT, FHWA, ``Historic Step: All Fifty States Plus 
D.C. and Puerto Rico Greenlit to Move EV Charging Networks Forward, 
Covering 75,000 Miles of Highway,'' September 27, 2022. Accessed 
January 10, 2023, at https://highways.dot.gov/newsroom/historic-step-all-fifty-states-plus-dc-and-puerto-rico-greenlit-move-ev-charging-networks.
    \583\ Joint Office of Energy and Transportation, ``Biden-Harris 
Admin Opens First Round Applications for $2.5 Billion Program to 
Build EV Charging in U.S. Communities,'' March 14, 2023. Accessed 
March 31, 2023, at https://driveelectric.gov/news/#charging-fueling-infrastructure.
    \584\ U.S. DOT, FHWA, ``The National Electric Vehicle 
Infrastructure (NEVI) Formula Program Guidance,'' February 10, 2022. 
Accessed January 10, 2023, at https://www.fhwa.dot.gov/environment/alternative_fuel_corridors/nominations/90d_nevi_formula_program_guidance.pdf.
    \585\ Ibid.
---------------------------------------------------------------------------

    The Inflation Reduction Act (IRA) signed into law on August 16, 
2022, can also help reduce the costs for deploying infrastructure.\586\ 
The IRA extends the Alternative Fuel Refueling Property Tax Credit 
(Section 13404) through Dec 31, 2032, with modifications. Under the new 
provisions, residents in low-income or rural areas would be eligible 
for a 30 percent credit for the cost of installing residential charging 
equipment up to a $1,000 cap. Businesses would be eligible for up to 30 
percent of the costs associated with purchasing and installing charging 
equipment in these areas (subject to a $100,000 cap per item) if 
prevailing wage and apprenticeship requirements are met and up to 6 
percent otherwise. The Joint Committee on Taxation estimates the cost 
of this tax credit from FY 2022-2031 to be $1.738 billion,\587\ which 
reflects a significant level of support for charging infrastructure and 
other eligible alternative fuel property.
---------------------------------------------------------------------------

    \586\ Inflation Reduction Act of 2022, Public Law 117-169, 2022. 
Accessed December 2, 2022, at https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf.
    \587\ Joint Committee on Taxation, ``Estimated Budget Effects of 
the Revenue Provisions of Title I--Committee on Finance, of an 
Amendment in the Nature of a Substitute to H.R. 5376, ``An Act to 
Provide for Reconciliation Pursuant to Title II of S. Con. Res. 
14,'' as Passed by the Senate on August 7, 2022, and Scheduled for 
Consideration by the House of Representatives on August 12, 2022'' 
JCX-18-22, August 9, 2022. Accessed January 11, 2023, at https://www.jct.gov/publications/2022/jcx-18-22/.
---------------------------------------------------------------------------

    States, utilities, auto manufacturers, charging network providers, 
and others are also investing in and supporting PEV charging 
infrastructure deployment. California announced plans in 2021 to invest 
over $300 million in light-duty charging infrastructure and nearly $700 
million in medium- and heavy-duty ZEV infrastructure.\588\ Several 
states including New Jersey and Utah offer partial rebates for 
residential, workplace, or public charging while others such as Georgia 
and DC offer tax credits.\589\ The NC Clean Energy Technology Center 
identified more than 200 actions taken across 38 states and DC related 
to providing financial incentives for electric vehicles and or charging 
infrastructure in 2022, a four-fold increase over the number of actions 
in 2017.\590\ The Edison Electric Institute estimates that electric 
companies have already invested nearly $3.7 billion.\591\ And over 60 
electric companies and cooperatives serving customers in 48 states and 
the District of Columbia have joined together to advance fast charging 
through the National Electric Highway Coalition.\592\ Auto 
manufacturers are investing in charging infrastructure by offering 
consumers help with costs to install home charging or providing support 
for public charging. For example, GM will pay for a standard 
installation of a Level 2 (240 VAC) outlet for customers purchasing or 
leasing a new Bolt.\593\ GM is also partnering with charging provider 
EVgo to deploy over 2,700 DCFC ports \594\ and charging provider FLO to 
deploy as many as 40,000 L2 ports.\595\ Volkswagen, Hyundai, and Kia 
all offer customers complimentary charging at Electrify America's 
public charging stations (subject to time limits or caps) in 
conjunction with the purchase of select new EV models.\596\ Ford has 
agreements with several charging providers to make it easier for their 
customers to charge and pay across different networks \597\ and plans 
to install publicly accessible DCFC ports at nearly 2,000 
dealerships.\598\ Mercedes-Benz recently announced that it is planning 
to build 2,500 charging points in North America by 2027.\599\ Tesla has 
its own network with over 17,000 DCFC ports and nearly 10,000 Level 2 
ports in the United States.\600\ Tesla recently announced that by 2024, 
7,500 or more existing and new ports (including 3,500 DCFC) would be 
open to all PEVs.\601\
---------------------------------------------------------------------------

    \588\ California Energy Commission, ``CEC Approves $1.4 Billion 
Plan for Zero-Emission Transportation Infrastructure and 
Manufacturing,'' November 15, 2021. Accessed January 11, 2023, at 
https://www.energy.ca.gov/news/2021-11/cec-approves-14-billion-plan-zero-emission-transportation-infrastructure-and.
    \589\ Details on eligibility, qualifying expenses, and rebate or 
tax credit amounts vary by state. See DOE Alternative Fuels Data 
Center, State Laws and Incentives. Accessed January 11, 2023, at 
https://afdc.energy.gov/laws/state.
    \590\ Apadula, E. et al., ``50 States of Electric Vehicles Q4 
2022 Quarterly Report & 2022 Annual Review Executive Summary,'' 
February 2023, NC Clean Energy Technology Center. Accessed March 8, 
2023, at https://nccleantech.ncsu.edu/wp-content/uploads/2023/02/Q4-22_EV_execsummary_Final.pdf. (Note: Includes actions by states and 
investor-owned utilities.)
    \591\ EEI, ``Issues & Policy: National Electric Highway 
Coalition''. Accessed January 11, 2023, at https://www.eei.org/issues-and-policy/national-electric-highway-coalition. (Note: $3.7 
billion total includes infrastructure deployments and other customer 
programs to advance transportation electrification.)
    \592\ Ibid.
    \593\ Chevrolet, ``Installation Made Easy. Home Charging 
Installation on Us.'' Accessed March 3, 2023, at https://www.chevrolet.com/electric/living-electric/home-charging-installation.
    \594\ GM, ``To Put 'Everybody In' an Electric Vehicle, GM 
introduces Ultium Charge 360,'' Accessed January 11, 2023, at 
https://media.gm.com/media/us/en/gm/home.detail.html/content/Pages/news/us/en/2021/apr/0428-ultium-charge-360.html.
    \595\ Joint Office of Transportation and Energy, ``Private 
Sector Continues to Play Key Part in Accelerating Buildout of EV 
Charging Networks,'' February 15, 2023. Accessed March 6, 2023, at 
https://driveelectric.gov/news/#private-investment.
    \596\ Details of complimentary charging and eligible vehicle 
models vary by auto manufacturer. See: https://www.vw.com/en/models/id-4.html, https://www.hyundaiusa.com/us/en/electrified/charging, 
and https://owners.kia.com/content/owners/en/kia-electrify.html.
    \597\ Ford, ``Ford Introduces North America's Largest Electric 
Vehicle Charging Network, Helping Customers Confidently Switch to an 
All-Electric Lifestyle,'' October 17, 2019. Accessed January 11, 
2023, at https://media.ford.com/content/fordmedia/fna/us/en/news/2019/10/17/ford-introduces-north-americas-largest-electric-vehicle-charting-network.html.
    \598\ Joint Office of Transportation and Energy, ``Private 
Sector Continues to Play Key Part in Accelerating Buildout of EV 
Charging Networks,'' February 15, 2023. Accessed March 6, 2023, at 
https://driveelectric.gov/news/#private-investment.
    \599\ Reuters, ``Mercedes to launch vehicle-charging network, 
starting in North America,'' January 6, 2023. Accessed January 11, 
2023, at https://www.reuters.com/business/autos-transportation/mercedes-launch-vehicle-charging-network-starting-north-america-2023-01-05/.
    \600\ DOE, Alternative Fuels Data Center, ``Electric Vehicle 
Charging Station Locations''. Accessed February 28, 2023, at https://afdc.energy.gov/fuels/electricity_locations.html#/find/nearest?fuel=ELEC.
    \601\ The White House, ``Fact Sheet: Biden-Harris Administration 
Announces New Standards and Major Progress for a Made-in-America 
National Network of Electric Vehicle Chargers,'' February 15, 2023. 
Accessed March 6, 2023, at https://www.whitehouse.gov/briefing-room/statements-releases/2023/02/15/fact-sheet-biden-harris-administration-announces-new-standards-and-major-progress-for-a-made-in-america-national-network-of-electric-vehicle-chargers/.
---------------------------------------------------------------------------

    Other charging networks are also expanding. Francis Energy, which 
has fewer than 1,000 EVSE ports today,\602\ aims to deploy over 50,000 
by the end of the decade.\603\ Electrify America

[[Page 29309]]

plans to more than double its network size \604\ to 10,000 fast 
charging ports across 1,800 U.S. and Canadian stations by 2026. This is 
supported in part by a $450 million investment from Siemens and 
Volkswagen Group.\605\ Blink plans to invest over $60 million to grow 
its network over the next decade. Charging companies are also 
partnering with major retailers, restaurants, and other businesses to 
make charging available to customers and the public. For example, EVgo 
is deploying DCFC at certain Meijer locations, CBL properties, and 
Wawa. Volta is installing DCFC and L2 ports at select Giant Food, 
Kroger, and Stop and Shop stores, while ChargePoint and Volvo Cars are 
partnering with Starbucks to make charging available at select 
Starbucks locations.\606\ Other efforts will expand charging access 
along major highways, including at up to 500 Pilot and Flying J travel 
centers (through a partnership between Pilot, GM, and EVgo) and 200 
TravelCenters of America and Petro locations (through a partnership 
between TravelCenters of America and Electrify America).\607\ BP plans 
to invest $1 billion toward charging infrastructure by the end of the 
decade, including through a partnership to provide charging at various 
Hertz locations across the country that could support rental and 
ridesharing vehicles, taxis, and the general public.\608\
---------------------------------------------------------------------------

    \602\ DOE, Alternative Fuels Data Center, ``Electric Vehicle 
Charging Station Locations''. Accessed March 6, 2023, at https://afdc.energy.gov/fuels/electricity_locations.html#/find/nearest?fuel=ELEC.
    \603\ Joint Office of Transportation and Energy, ``Private 
Sector Continues to Play Key Part in Accelerating Buildout of EV 
Charging Networks,'' February 15, 2023. Accessed March 6, 2023, at 
https://driveelectric.gov/news/#private-investment.
    \604\ DOE, Alternative Fuels Data Center, ``Electric Vehicle 
Charging Station Locations''. Accessed March 6, 2023, at https://afdc.energy.gov/fuels/electricity_locations.html#/find/nearest?fuel=ELEC.
    \605\ Joint Office of Transportation and Energy, ``Private 
Sector Continues to Play Key Part in Accelerating Buildout of EV 
Charging Networks,'' February 15, 2023. Accessed March 6, 2023, at 
https://driveelectric.gov/news/#private-investment.
    \606\ Ibid.
    \607\ Ibid.
    \608\ Ibid.
---------------------------------------------------------------------------

    We assess the infrastructure needs and the associated costs for 
this proposal from 2027 to 2055. We start with estimates of electricity 
demand for the PEV penetration levels in the proposal compared to those 
in the No Action case using the methodology described in Section 
IV.C.3.\609\ A suite of NREL models is used to characterize the 
quantity and mix of EVSE ports that could meet this demand, including 
EVI-Pro to simulate charging demand from typical daily travel, EVI-
RoadTrip to simulate demand from long-distance travel, and EVI-OnDemand 
to simulate demand from ride-hailing applications. EVSE ports are 
broken out by charging location (home, work, or public) and by charging 
type and power level: AC Level 1 (L1), AC Level 2 (L2), and DC fast 
charging with a maximum power of 50 kW, 150 kW, 250 kW, or 350 kW (DC-
50, DC-150, DC-250, and DC-350). We anticipate that the highest number 
of ports will be needed at homes, growing from under 12 million in 2027 
to over 75 million in 2055 under the proposal. This is followed by 
workplace charging, estimated at about 400,000 EVSE ports in 2027 and 
over 12.7 million in 2055. Finally, we estimate public charging needs 
growing from just over 110,000 ports to more than 1.9 million in that 
timeframe.\610\ Figure 27 illustrates the growth in charging network 
size needed for the proposal and No Action case over select years.\611\
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    \609\ The No Action case referred to as part of the 
infrastructure cost analysis was based on earlier work with lower 
projected PEV penetration rates than the No Action case used for 
compliance modeling and described in Section IV.B. (See discussion 
in DRIA Chapter 5.3.2.6.)
    \610\ The number of EVSE ports needed to meet a given level of 
electricity demand will vary based on assumptions about the mix of 
charging ports, charging preferences, and other factors. See DRIA 
Chapter 5 for a more detailed description of the assumptions 
underlying the EVSE port counts shown here.
    \611\ See DRIA Chapter 5 for estimated port counts for each year 
from 2027 to 2055 in the proposal and No Action case.

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[[Page 29310]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.030

    We estimate the costs to deploy the number of EVSE ports needed 
each year (2027-2055) to achieve the modeled network sizes for the 
proposal and No Action case.\612\ Costs for each EVSE port are sourced 
from recent literature and are intended to reflect upfront hardware and 
installation costs. PEVs typically come with a charging cord that can 
be used for L1 charging by plugging it into a standard 120 V outlet, 
and, in some cases, for L2 charging by plugging into a 240 V outlet. We 
include the cost for this cord as part of the vehicle costs described 
in DRIA Chapter 2, and therefore we do not include it here. We make the 
simplifying assumption that PEV owners opting for L1 home charging 
already have access to a 120 V outlet and therefore do not incur 
installation costs.\613\ Table 65 shows our assumed costs per EVSE 
port.
---------------------------------------------------------------------------

    \612\ We assume a 15-year equipment lifetime for EVSE ports. We 
did not estimate costs for EVSE maintenance or repair though we note 
that this may be able to extend equipment lifetimes. See discussion 
in DRIA Chapter 5.
    \613\ For Level 2 home charging, some PEV owners may opt to 
simply install or upgrade to a 240 V outlet for use with a charging 
cord while others may choose to purchase or install a wall-mounted 
or other Level 2 charging unit. We assume a 50%:50% mix for the 
costs shown in Table 65.

                            Table 65--Costs (Hardware and Installation) per EVSE Port
                                              [2019 dollars] \614\
----------------------------------------------------------------------------------------------------------------
                 Home                      Work                                Public
----------------------------------------------------------------------------------------------------------------
     L1         SFH L2      Other L2        L2           L2         DC-50       DC-150      DC-250      DC-350
----------------------------------------------------------------------------------------------------------------
        $0       $1,100       $3,700       $5,900       $5,900      $56,000    $121,000    $153,000    $185,000
----------------------------------------------------------------------------------------------------------------

    There are many factors that can impact equipment and installation 
costs, including whether a charging unit has multiple EVSE ports, how 
many ports are installed per site as well as regional differences. 
Costs also vary in the literature. EPA welcomes comments on additional 
studies or information that EPA should consider in assessing PEV 
charging infrastructure costs for the final rule.
---------------------------------------------------------------------------

    \614\ Costs shown are expressed in 2019 dollars, consistent with 
the original sources from the literature.
---------------------------------------------------------------------------

    See DRIA Chapter 5 for a more complete discussion of this analysis 
including low and high sensitivities not shown here. The final PEV 
charging infrastructure costs are presented in Section VIII of this 
Preamble.

[[Page 29311]]

    EPA acknowledges that there may be additional infrastructure needs 
and costs beyond those associated with charging equipment itself. While 
planning for additional electricity demand is a standard practice for 
utilities and not specific to PEV charging, the buildout of public and 
private charging stations (particularly those with multiple high-
powered DC fast charging units) could in some cases require upgrades to 
local distribution systems. For example, a recent study found power 
needs as low as 200 kW could trigger a requirement to install a 
distribution transformer.\615\ The use of onsite power control systems, 
battery storage or renewables may be able to reduce the need for some 
distribution upgrades; station operators may also opt to install these 
to mitigate demand charges associated with peak power.\616\ However, 
there is considerable uncertainty associated with the uptake of these 
technologies as well as with future distribution upgrade needs, and we 
do not model them directly as part of our infrastructure cost analysis. 
We welcome comments on this and other aspects of our cost analysis.
---------------------------------------------------------------------------

    \615\ Borlaug, B. et al., ``Heavy-duty truck electrification and 
the impacts of depot charging on electricity distribution systems,'' 
Nat Energy 6, 673-682 (2021). Accessed on January 11, 2023, at 
https://doi.org/10.1038/s41560-021-00855-0.
    \616\ Alexander, M. et al., ``Assembly Bill 2127: Electric 
Vehicle Charging Infrastructure Assessment,'' July 2021, California 
Energy Commission. Accessed March 9, 2023, at https://www.energy.ca.gov/programs-and-topics/programs/electric-vehicle-charging-infrastructure-assessment-ab-2127.
---------------------------------------------------------------------------

    As discussed in the previous section, we model changes to power 
generation due to the increased electricity demand anticipated in the 
proposal as part of our upstream analysis. We project the additional 
generation needed to meet the demand of the light- and medium-duty PEVs 
in the proposal to be relatively modest compared to the No Action case, 
ranging from less than 0.4 percent in 2030 to approximately 4 percent 
in 2050 (as shown in Figure 23). The U.S. electricity end use between 
the years 1992 and 2021 increased by around 25% \617\ without any 
adverse effects on electric grid reliability or electricity generation 
capacity shortages. As the proposal is estimated to increase electric 
power end use by electric vehicles by between 0.1% (2028) and 4.2% 
(2055)--approximately 18% of the increase that occurred between 1995 
and 2021--grid reliability is not expected to be adversely affected by 
the modest increase in electricity demand associated with electric 
vehicle charging.
---------------------------------------------------------------------------

    \617\ Annual Energy Outlook 2022, U.S. Energy Information 
Administration, March 3, 2022 (https://www.eia.gov/outlooks/aeo/narrative/introduction/sub-topic-01.php).
---------------------------------------------------------------------------

    The private sector and the government share responsibility for the 
reliability of the electric power grid. Most of the electric power 
grid--the commercial electric power transmission and distribution 
system comprising power lines and other infrastructure--is owned and 
operated by private industry. However, Federal, state, local, Tribal, 
and territorial governments also have significant roles in enhancing 
the reliability of the electric power grid.\618\ The Federal government 
plays a key role in enhancing electric power grid reliability.\619\ For 
instance, the Department of Homeland Security (DHS) is responsible for 
coordinating the overall Federal effort to promote the security and 
reliability of the nation's critical infrastructure sectors; the 
Department of Energy (DOE) leads Federal efforts to ensure that the 
nation's energy delivery system is secure, resilient, and reliable, 
including research and technology development by national laboratories; 
and the Federal Energy Regulatory Commission (FERC) regulates wholesale 
electricity markets and is responsible for reviewing and approving 
mandatory electric Reliability Standards, which are developed by the 
North American Electric Reliability Corporation (NERC). NERC is the 
federally designated U.S. electric reliability organization which 
develops and enforces Reliability Standards; annually assesses seasonal 
and long-term reliability; monitors the bulk power system through 
system awareness; and educates, trains, and certifies industry 
personnel. These efforts help to keep the U.S. electric power grid is 
reliable.\620\ We also consulted with FERC and EPRI staff on bulk power 
system reliability and related issues.
---------------------------------------------------------------------------

    \618\ Federal Efforts to Enhance Grid Resilience. General 
Accounting Office, GAO-17-153, 1/25/2017. https://www.gao.gov/assets/gao-17-153.pdf.
    \619\ Electricity Grid Resilience. General Accounting Office, 
GAO-21-105403, 9/20/2021, https://www.gao.gov/assets/gao-21-105403.pdf.
    \620\ https://www.nerc.com/AboutNERC/Pages/default.aspx.
---------------------------------------------------------------------------

    U.S. electric power utilities routinely upgrade the nation's 
electric power system to improve grid reliability and to meet new 
electric power demands. For example, when confronted with rapid 
adoption of air conditioners in the 1960s and 1970s, U.S. electric 
power utilities successfully met the new demand for electricity by 
planning and building upgrades to the electric power distribution 
system. Likewise, U.S. electric power utilities planned and built 
distribution system upgrades required to service the rapid growth of 
power-intensive data centers and server farms over the past two 
decades. U.S. electric power utilities have already successfully 
designed and built the distribution system infrastructure required for 
1.4 million battery electric vehicles.\621\ Utilities have also 
successfully integrated 46.1 GW of new utility-scale electric 
generating capacity into the grid (EIA, 2022).\622\
---------------------------------------------------------------------------

    \621\ U.S. DOE Alternative Fuels Data Center, Maps and Data--
Electric Vehicle Registrations by State, https://afdc.energy.gov/data/.
    \622\ EIA, Electric Power Annual 2021, November 2022. https://www.eia.gov/electricity/annual/html/epa_01_01.html.
---------------------------------------------------------------------------

    When taking into consideration ongoing upgrades to the U.S. 
electric power grid, and that the U.S. electric power utilities 
generally have more capacity to produce electricity than is consumed 
(EIA, 2022), the expected increase in electric power demand 
attributable to vehicle electrification is not expected to adversely 
affect grid reliability due to the modest increase in electricity 
demand associated with electric vehicle charging. Moreover, 
distribution system infrastructure became the largest share of capital 
expenditures for U.S. investor-owned utilities (IOUs) in 2018, 
according to the Edison Electric Institute (EEI).\623\ EEI also 
projected that such expenditures would constitute one-third of total 
IOU spending in 2022.
---------------------------------------------------------------------------

    \623\ https://www.eei.org/-/media/Project/EEI/Documents/Issues-and-Policy/Finance-And-Tax/bar_cap_ex.pdf?la=en&hash=3D08D74D12F1CCA51EE89256F53EBABEEAAF4673.
---------------------------------------------------------------------------

    The California Public Utilities Commission (CPUC) \624\ and the 
California Energy Commission (CEC) \625\ have been actively engaged in 
Vehicle-Grid Integration (VGI) efforts for over a decade, along with 
the California Independent System Operator \626\ (California ISO), 
large private and public electrical utilities (SCE, PG&E, SDG&E, etc.), 
most major automakers (Ford, GM, FCA, BMW, Audi, Nissan,

[[Page 29312]]

Toyota, Honda, and others), and EV charger companies, the Electric 
Power Research Institute (EPRI), and various other research 
organizations.
---------------------------------------------------------------------------

    \624\ Order Instituting Rulemaking to Continue the Development 
of Rates and Infrastructure for Vehicle Electrification. California 
Public Utilities Commission, Rulemaking 18-12-006, 12/21/2020.
    \625\ Chhaya, Sunil, Norman McCollough, Viswanath Ananth, 
Arindam Maitra, Ramakrishnan Ravikumar, Jamie Dunckley--Electric 
Power Research Institute; George Bellino--Clean Fuel Connection, 
Eric Cutter, Energy & Environment Economics, Michael Bourton, Kitu 
Systems, Inc., Richard Scholer, Fiat Chrysler Automobiles, Charlie 
Botsford, AeroVironment, Inc., 2019. Distribution System Constrained 
Vehicle-to-Grid Services for Improved Grid Stability and 
Reliability. California Energy Commission. Publication Number: CEC-
500-2019-027.
    \626\ California Independent System Operator (CAISO). 2014. 
California VGI Roadmap: Enabling Vehicle-based Grid Services. 
https://www.caiso.com/Documents/Vehicle-GridIntegrationRoadmap.pdf.
---------------------------------------------------------------------------

    These ongoing research efforts have demonstrated the ability of 
U.S. electric utilities to reschedule up to 20 percent of electric 
vehicle charging loads occurring at any hour of the day to any other 
hour of the day.\627\ Conversely, these research efforts have also 
demonstrated the ability of U.S. electric power utilities to reschedule 
up to 30 percent of electric vehicle charging loads occurring at any 
hour of day to any particular hour of that day. As the expected 
increase in electric power demand resulting from PEV charging in this 
proposal will be well under 20 percent, we do not anticipate it to pose 
grid reliability issues.
---------------------------------------------------------------------------

    \627\ Lipman, Timothy, Alissa Harrington, and Adam Langton. 
2021. Total Charge Management of Electric Vehicles. California 
Energy Commission. Publication Number: CEC-500-2021- 055.
---------------------------------------------------------------------------

    The ability to shift and curtail electric power is a feature that 
can improve grid operations and, therefore, grid reliability. 
Integration of electric vehicle charging into the power grid, by means 
of vehicle-to-grid software and systems that allow management of 
vehicle charging time and rate, has been found to create value for 
electric vehicle drivers, electric grid operators, and ratepayers.\628\ 
Management of PEV charging can reduce overall costs to utility 
ratepayers by delaying electric utility customer rate increases 
associated with equipment upgrades and may allow utilities to use 
electric vehicle charging as a resource to manage intermittent 
renewables. The development of new electric utility tariffs, including 
those for submetering for electric vehicles, will also help to 
facilitate the management of electric vehicle charging.
---------------------------------------------------------------------------

    \628\ Chhaya, S., et al., ``Distribution System Constrained 
Vehicle-to-Grid Services for Improved Grid Stability and 
Reliability; Publication Number: CEC-500-2019-027, 2019. Accessed 
December 13, 2022 at https://www.energy.ca.gov/sites/default/files/2021-06/CEC-500-2019-027.pdf.
---------------------------------------------------------------------------

    We also note that DOE is engaged in multiple efforts to modernize 
the grid and improve resilience and reliability. For example, in 
November 2022, DOE announced $13 billion in funding opportunities under 
BIL to support transmission and distribution infrastructure. This 
includes $3 billion for smart grid grants with a focus on PEV 
integration among other topics.\629\
---------------------------------------------------------------------------

    \629\ DOE, ``Biden-Harris Administration Announces $13 Billion 
to Modernize and Expand America's Power Grid,'' November 18, 2022. 
Accessed January 11, 2023, at https://www.energy.gov/articles/biden-harris-administration-announces-13-billion-modernize-and-expand-americas-power-grid.
---------------------------------------------------------------------------

5. Consumer Acceptance
    Consumer uptake of zero-emission vehicle technology is expected to 
continue to grow with the key enablers of PEV acceptance, namely 
increasing market presence, more model choices, expanding 
infrastructure, and decreasing costs to consumers.\630\ First, annual 
sales of light-duty PEVs in the U.S. have grown robustly and are 
expected to continue to grow. New PEV sales represented 2.2 percent 
(1.7 percent BEV and 0.5 percent PHEV) of new light-duty vehicle sales 
in 2020 (Davis and Boundy 2021; U.S. Environmental Protection Agency 
2021b), and annual PEV market share in 2021 was 4.6 percent (3.4 
percent for BEVs and 1.2 percent for PHEVs). As of May 2022, actual PEV 
market share was 6.6 percent (5.2 percent for BEVs and 1.4 percent for 
PHEVs).\631\ This history of robust growth combined with vehicle 
manufacturers' plans to expand of PEV production strongly suggests that 
PEV market share will continue to grow rapidly. Second, the number of 
PEV models available to consumers is increasing, meeting to consumers 
demand for a variety of body styles and price points. Specifically, the 
number of BEV and PHEV models available for sale in the U.S. has more 
than doubled from about 24 in MY 2015 to about 60 in MY 2021, with 
offerings in a growing range of vehicle segments.\632\ Recent model 
announcements indicate that this number will increase to more than 80 
models by MY 2023,\633\ and more than 180 models by 2025.\634\ Third, 
the expansion of charging infrastructure has been keeping up with PEV 
adoption. This trend is widely expected to continue, particularly in 
light of very large public and private investments. Lastly, while the 
initial purchase price of BEVs is currently higher than for most ICE 
vehicles, the price difference is likely to narrow or become 
insignificant as the cost of batteries fall and PEV production rises in 
the coming years.\635\ Among the many studies that address cost parity, 
an emerging consensus suggests that purchase price parity is likely to 
be achievable by the mid-2020s for some vehicle segments and models, 
and TCO parity even sooner for a broader segment of the 
market.636 637
---------------------------------------------------------------------------

    \630\ Jackman, D K, K S Fujita, H C Yang, and M Taylor. 2023. 
Literature Review of U.S. Consumer Acceptance of New Personally 
Owned Light Duty Plug-in Electric Vehicles. Washington, DC: U.S. 
Environmental Protection Agency.
    \631\ https://www.autosinnovate.org/resources/electric-vehicle-sales-dashboard.
    \632\ Fueleconomy.gov, 2015 Fuel Economy Guide and 2021 Fuel 
Economy Guide.
    \633\ Environmental Defense Fund and M.J. Bradley & Associates, 
``Electric Vehicle Market Status--Update, Manufacturer Commitments 
to Future Electric Mobility in the U.S. and Worldwide,'' April 2021.
    \634\ Environmental Defense Fund and ERM, ``Electric Vehicle 
Market Update: Manufacturer Commitments and Public Policy 
Initiatives Supporting Electric Mobility in the U.S. and 
Worldwide,'' September 2022.
    \635\ International Council on Clean Transportation, 
``Assessment of Light-Duty Electric Vehicle Costs and Consumer 
Benefits in the United States in the 2022-2035 Time Frame,'' October 
2022.
    \636\ Ibid.
    \637\ Environmental Defense Fund and ERM, ``Electric Vehicle 
Market Update: Manufacturer Commitments and Public Policy 
Initiatives Supporting Electric Mobility in the U.S. and 
Worldwide,'' September 2022.
---------------------------------------------------------------------------

    EPA, in coordination with the Lawrence Berkeley National 
Laboratory, conducted a peer-reviewed literature review of consumer 
acceptance of PEVs. In this literature review, we present what we refer 
to as the ``4A framework,'' consisting of awareness, access, approval, 
and adoption, that we use to define acceptance and organize a 
comprehensive review of the scientific literature on this topic.\638\ 
Through that review, we identify enablers and obstacles to consumer 
acceptance of PEVs. Across all stages of the 4A framework, we find that 
the enablers and obstacles of PEV acceptance are largely external to 
the consumer. We conclude that there is no evidence in the reviewed 
literature to suggest anything immutable within consumers or inherent 
to PEVs that irremediably obstructs acceptance. Rather, acceptance of 
PEVs is achievable among mainstream consumers. For more information on 
LD vehicle purchase considerations, see DRIA Chapter 4.1.
---------------------------------------------------------------------------

    \638\ Jackman, D K, K S Fujita, H C Yang, and M Taylor. 2023. 
Literature Review of U.S. Consumer Acceptance of New Personally 
Owned Light Duty Plug-in Electric Vehicles. Washington, DC: U.S. 
Environmental Protection Agency.
---------------------------------------------------------------------------

6. Supply Chain, Manufacturing, and Mineral Security Considerations
    Although the market share of PEVs in the U.S. is already rapidly 
growing, EPA recognizes that the proposed standards may accelerate this 
trend. Assessing the feasibility of incremental penetrations of PEVs 
that may result from the proposed standards includes consideration of 
the capability of the supply chain to provide the required quantities 
of critical minerals, components, and battery manufacturing capacity. 
This section provides a general review of how we considered supply 
chain and manufacturing considerations in this analysis, the sources we 
considered, and how we used this information in the analysis. It also 
provides a high-level discussion of the security implications

[[Page 29313]]

of increased demand for minerals and other commodities used to 
manufacture electrified vehicles. Additional details on these aspects 
of the analysis may be found in DRIA Chapter 3.1.3, including how we 
used this information to develop modeling constraints on PEV 
penetration for the compliance analysis.
    In performing this analysis, we considered the ability for global 
and domestic manufacturing and critical mineral capacity to respond to 
the projected demand for zero-emission vehicles that manufacturers may 
choose to produce to comply under the various Alternatives. We 
consulted with industry and government agency sources (including DOE, 
USGS, and several analysis firms) to collect information on production 
capacity, price forecasts, global mineral markets, and related topics, 
and have considered this information to inform our assumptions about 
future manufacturing capabilities and costs. We have included 
consideration of the influence of critical minerals and materials 
availability as well as vehicle and battery manufacturing capacities on 
production of PEVs at various market penetration scenarios.
    We believe that the proposed rate of stringency is appropriate in 
light of this assessment. It is also our assessment that widespread 
automotive electrification in the U.S. will not lead to a critical 
long-term dependence on foreign imports of minerals or components, nor 
that increased demand for these products will become a vulnerability to 
national security. First, in many cases the reason that these products 
are often sourced from outside of the U.S. is not because the products 
cannot be produced in the U.S., but because other countries have 
already invested in developing a supply chain for their production. It 
is likely that a domestic supply chain for these products would develop 
over time as U.S. manufacturers work to secure reliable and 
geographically proximate supplies of the components and materials 
needed to build the products they manufacture, and to remain 
competitive in a global market where electrification is already 
proceeding rapidly. Second, many automakers, suppliers, startups, and 
related industries have already recognized the need for increased 
domestic production capacity as a business opportunity and are basing 
business models on building out various aspects of the supply chain. 
Third, Congress and the Administration have taken significant steps to 
accelerate this activity by funding, facilitating, and otherwise 
promoting the rapid growth of U.S. supply chains for these products 
through the Inflation Reduction Act, the Bipartisan Infrastructure Law, 
and numerous Executive Branch initiatives. EPA has confidence that 
these efforts are effectively addressing supply chain concerns. 
Finally, utilization of critical minerals is different from the 
utilization of foreign oil, in that oil is consumed as a fuel while 
minerals become a constituent of manufactured vehicles. Minerals that 
are imported for vehicle production remain in the vehicle and can be 
reclaimed through recycling. Each of these points will be expanded in 
more detail in the following sections.
i. Critical Minerals
    Critical minerals are commonly taken to include a large diversity 
of products, ranging from relatively plentiful materials that are 
constrained primarily by production capacity and refining, such as 
aluminum, to those that are both relatively rare and costly to process, 
such as the rare-earth metals that are used in magnets for permanent-
magnet synchronous motors (PMSMs) and some semiconductor products. 
Extraction, processing, and recycling of certain critical minerals (for 
example, lithium, cobalt, nickel, manganese, graphite, and rare earth 
metals) are important parts of the supply chain supporting the 
production of electrified vehicle components.
    These minerals are also experiencing increasing demand across many 
other sectors of the global economy, not just the transportation 
industry, as the world seeks to reduce carbon emissions. As with any 
emerging technology, a transition period must take place in which a 
robust supply chain develops to support production of these products. 
At the present time in the U.S. many of these minerals are commonly 
sourced from global suppliers and do not yet benefit from a fully 
developed domestic supply chain. As demand for these materials 
increases due to increasing production of PEVs, current mining and 
processing capacity across the world will be driven to expand over 
time. The process of establishing new mining capacity, as well as 
processing capacity for the mined product, can be subject to uncertain 
issues such as permitting, investor expectations of demand and future 
prices, and many others, making it difficult to predict with precision 
the rate at which new capacity will be brought online in the future. 
For example, depending on the source (hardrock mining or brine), 
lithium mining capacity can take from five to ten years to develop a 
new mine or mineral source, and has in some cases taken longer. 
However, industry interest and motivation toward developing these 
resources has become very high and is expected to remain so, as the 
demand outlook for lithium and other battery minerals is very robust. 
For example, rapid growth in lithium demand has driven new development 
of resources and robust growth in supply, which is likely a factor in 
recently observed reductions in lithium price, with strong profit 
margins remaining even afterward.\639\ Due to such factors the price of 
lithium is likely to stabilize at or near its historical levels by the 
mid-2020s,\640\ a perspective also supported, for example, in 
proprietary battery price forecasts such as those EPA has examined from 
Wood Mackenzie.641 642 This expected stabilization of prices 
after a period of elevation is a common feature of commodity markets 
that experience rapid growth in demand, and further supports the 
outlook that sufficient chemical product will be available to meet 
growing demand.
---------------------------------------------------------------------------

    \639\ New York Times, ``Falling Lithium Prices Are Making 
Electric Cars More Affordable,'' March 20, 2023. Accessed on March 
23, 2023 at https://www.nytimes.com/2023/03/20/business/lithium-prices-falling-electric-vehicles.html.
    \640\ Sun et al., ``Surging lithium price will not impede the 
electric vehicle boom,'' Joule, doi:10.1016/j.joule. 2022.06.028 
(https://dx.doi.org/10.1016/j.joule.2022.06.028).
    \641\ Wood Mackenzie, ``Battery & raw materials--Investment 
horizon outlook to 2032,'' September 2022 (filename: brms-q3-2022-
iho.pdf). Available to subscribers.
    \642\ Wood Mackenzie, ``Battery & raw materials--Investment 
horizon outlook to 2032,'' accompanying data set, September 2022 
(filename: brms-data-q3-2022.xlsx). Available to subscribers.
---------------------------------------------------------------------------

    The U.S. Geological Survey (USGS) lists 50 minerals as ``critical 
to the U.S. economy and national security.'' 643 644 
According to USGS, the Energy Act of 2020 defines a ``critical 
mineral'' as ``a non-fuel mineral or mineral material essential to the 
economic or national security of the U.S. and which has a supply chain 
vulnerable to disruption.'' \645\ Critical minerals are not

[[Page 29314]]

necessarily short in supply but are seen as essential to the 
manufacture of products that are important to the economy or national 
security. The risk to their availability may stem from geological 
scarcity, geopolitics, trade policy, or similar factors.\646\
---------------------------------------------------------------------------

    \643\ U.S. Geological Survey, ``U.S. Geological Survey Releases 
2022 List of Critical Minerals,'' February 22, 2022. Available at: 
https://www.usgs.gov/news/national-news-release/us-geological-survey-releases-2022-list-critical-minerals.
    \644\ The full list includes: Aluminum, antimony, arsenic, 
barite, beryllium, bismuth, cerium, cesium, chromium, cobalt, 
dysprosium, erbium, europium, fluorspar, gadolinium, gallium, 
germanium, graphite, hafnium, holmium, indium, iridium, lanthanum, 
lithium, lutetium, magnesium, manganese, neodymium, nickel, niobium, 
palladium, platinum, praseodymium, rhodium, rubidium, ruthenium, 
samarium, scandium, tantalum, tellurium, terbium, thulium, tin, 
titanium, tungsten, vanadium, ytterbium, yttrium, zinc, and 
zirconium.
    \645\ U.S. Geological Survey, ``U.S. Geological Survey Releases 
2022 List of Critical Minerals,'' February 22, 2022. Available at: 
https://www.usgs.gov/news/national-news-release/us-geological-survey-releases-2022-list-critical-minerals.
    \646\ International Energy Agency, ``The Role of Critical 
Minerals in Clean Energy Transitions,'' World Energy Outlook Special 
Report, Revised version. March 2022.
---------------------------------------------------------------------------

    Emission control catalysts for ICE vehicles utilize critical 
minerals including cerium, palladium, platinum, and rhodium. These are 
also required for PHEVs due to the presence of the ICE. Critical 
minerals most relevant to lithium-ion battery production include 
cobalt, graphite, lithium, manganese, and nickel, which are important 
constituents of electrode active materials, their presence and relative 
amounts depending on the chemistry formulation. Aluminum is also used 
for cathode foils and in some cell chemistries. Rare-earth metals are 
used in permanent-magnet electric machines, and include several 
elements such as dysprosium, neodymium, and samarium.
    Some of the electrification technologies that use critical minerals 
have alternatives that use other minerals or eliminate them entirely. 
For these, automakers in some cases have some flexibility to modify 
their designs to reduce or avoid use of minerals that are difficult or 
expensive to procure. For example, in some PEV battery applications it 
is feasible and increasingly common to employ an iron phosphate cathode 
which has lower energy density but does not require cobalt, nickel, or 
manganese. Similarly, rare earths used in permanent-magnet electric 
machines have potential alternatives in the form of ferrite or other 
advanced magnets, or the use of induction machines or advanced 
externally excited motors, which do not use permanent magnets.
    This discussion therefore focuses on minerals that are most 
critical for battery production, including nickel, cobalt, graphite, 
and lithium.
    Availability of critical minerals for use in battery production 
depends on two primary considerations: Production of raw minerals from 
mining (or recycling) operations, and refining operations that produce 
purified and processed substances (precursors, electrolyte solutions, 
and finished electrode powders) made from the raw minerals, that can 
then be made into battery cells.
    As shown in Figure 28, in 2019 about 50 percent of global nickel 
production occurred in Indonesia, Philippines, and Russia, with the 
rest distributed around the world. Nearly 70 percent of cobalt 
originated from the Democratic Republic of Congo, with some significant 
production in Russia and Australia, and about 20 percent in the rest of 
the world. More than 60 percent of graphite production occurred in 
China, with significant contribution from Mozambique and Brazil for 
another 20 percent. About half of lithium was mined in Australia, with 
Chile accounting for another 20 percent, and China about 10 percent.
[GRAPHIC] [TIFF OMITTED] TP05MY23.032

    According to the Administration's 100-day review under E.O. 14017, 
of the major actors in mineral refining, 60 percent of lithium refining 
occurred in China, with 30 percent in Chile, and 10 percent in 
Argentina. 72 percent of cobalt refining occurred in China, with 
another 17 percent distributed among Finland, Canada, and Norway. 21 
percent of Class 1 nickel refining occurred in Russia, with 16 percent 
in China, 15 percent in Japan, and 13 percent in Canada.\648\ Similar 
conclusions were reached in an analysis by the International Energy 
Agency, shown in Figure 29.
---------------------------------------------------------------------------

    \647\ International Energy Agency, ``The Role of Critical 
Minerals in Clean Energy Transitions,'' World Energy Outlook Special 
Report, Revised version. March 2022.
    \648\ The White House, ``Building Resilient Supply Chains, 
Revitalizing American Manufacturing, and Fostering Broad-Based 
Growth,'' 100-Day Reviews under Executive Order 14017, June 2021 (p. 
121).

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

[[Page 29315]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.033

    Currently, the U.S. is lagging behind much of the rest of the world 
in critical mineral production. Although the U.S. has nickel reserves, 
and opportunity also exists to recover significant nickel from mine 
waste remediation and similar activities, it is more convenient for 
U.S. nickel to be imported from other countries, with 68 percent coming 
from Canada, Norway, Australia, and Finland, countries with which the 
U.S. has good trade relations.\650\ According to the USGS, ample 
reserves of nickel exist in the U.S. and globally, potentially 
constrained only by processing capacity.\651\ The U.S. has numerous 
cobalt deposits but few are developed while some have produced cobalt 
only in the past; about 72 percent of U.S. consumption is 
imported.\652\ Similar observations may be made about graphite and 
lithium. Significant lithium deposits do exist in the U.S. in Nevada 
and California as well as several other locations,653 654 
and are currently the target of development by suppliers and 
automakers.\655\ U.S. deposits of natural graphite also exist but 
graphite has not been produced in the U.S. since the 1950s and 
significant known resources are largely undeveloped.\656\
---------------------------------------------------------------------------

    \649\ International Energy Agency, ``The Role of Critical 
Minerals in Clean Energy Transitions,'' World Energy Outlook Special 
Report, Revised version. March 2022.
    \650\ The White House, ``Building Resilient Supply Chains, 
Revitalizing American Manufacturing, and Fostering Broad-Based 
Growth,'' 100-Day Reviews under Executive Order 14017, June 2021.
    \651\ Ibid.
    \652\ U.S. Geological Survey, ``Cobalt Deposits in the United 
States,'' June 1, 2020. Available at https://www.usgs.gov/data/cobalt-deposits-united-states.
    \653\ U.S. Geological Survey, ``Mineral Commodity Summaries 
2022--Lithium'', January 2022. Available at https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-lithium.pdf.
    \654\ U.S. Geological Survey, ``Lithium Deposits in the United 
States,'' June 1, 2020. Available at https://www.usgs.gov/data/lithium-deposits-united-states.
    \655\ Investing News, ``Which Lithium Juniors Have Supply Deals 
With EV Makers?,'' February 8, 2023. Accessed on March 24, 2023 at 
https://investingnews.com/lithium-juniors-ev-supply-deals/ deals/.
    \656\ U.S. Geological Survey, ``USGS Updates Mineral Database 
with Graphite Deposits in the United States,'' February 28, 2022.
---------------------------------------------------------------------------

    As described in the following sections, the development of mining 
and processing capacity in the U.S. is a primary focus of efforts on 
the part of both industry and the Administration toward building a 
robust domestic supply chain for electrified vehicle production and 
will be greatly facilitated by the provisions of the BIL and the IRA as 
well as large private business investments that are already underway 
and continuing.
ii. Battery and Mineral Production Capacity
    Although much of the content needed for electrified vehicle 
manufacture is currently imported from other countries, a number of 
prominent examples of rapid U.S. manufacturing growth and supply chain 
development already indicate that this is rapidly changing. For 
example, even though most global battery manufacturing capacity is 
currently located outside the U.S., most of the batteries and cells 
present in the domestic PEV fleet were manufactured in the U.S. 
Specifically, about 57 percent of cells and 84 percent of assembled 
packs sold in the U.S. from 2010 to 2021 were produced in the 
U.S.657 658 This indicates that U.S. PEV production has not 
been exclusively reliant on foreign manufacture of batteries and cells, 
and suggests that it need not become so as PEV penetration increases. 
Many manufacturers are rapidly building battery and cell manufacturing 
facilities in the U.S. and are also taking steps to secure domestically 
sourced minerals and related commodities to supply production for these 
plants. Highlights of these developments and what they mean for the 
domestic supply chain going forward are described in this section.
---------------------------------------------------------------------------

    \657\ Argonne National Laboratory, ``Lithium-Ion Battery Supply 
Chain for E-Drive Vehicles in the United States: 2010-2020,'' ANL/
ESD-21/3, March 2021.
    \658\ U.S. Department of Energy, ``Vehicle Technologies Office 
Transportation Analysis Fact of the Week #1278, Most Battery Cells 
and Battery Packs in Plug-in Vehicles Sold in the United States From 
2010 to 2021 Were Domestically Produced,'' February 20, 2023.
---------------------------------------------------------------------------

    Battery manufacturing, in terms of constructed and planned plant 
capacity for assembly of cells and packs, does not appear to pose a 
critical constraint to expected uptake of PEVs, either globally or 
domestically. A 2021 report from Argonne National Laboratory (ANL) 
\659\ examined the state of the global supply

[[Page 29316]]

chain for electrified vehicles and included a comparison of recent 
projections of future global battery manufacturing capacity and 
projections of future global battery demand from various analysis firms 
out to 2030, as seen in Figure 30. The three most recent projections of 
capacity (from BNEF, Roland Berger, and S&P Global in 2020-2021) that 
were collected by ANL exceed the corresponding projections of demand by 
a significant margin in every year for which they were projected, 
suggesting that global battery manufacturing capacity is generally 
expected to respond strongly to increasing demand.
---------------------------------------------------------------------------

    \659\ Argonne National Laboratory, ``Lithium-Ion Battery Supply 
Chain for E-Drive Vehicles in the United States: 2010-2020,'' ANL/
ESD-21/3, March 2021.
[GRAPHIC] [TIFF OMITTED] TP05MY23.034

    Global demand for zero-emission vehicles has led to widespread and 
ongoing investment in manufacturing capacity for the vehicles and their 
components, including electric machines, power electronics, and 
batteries. The need to further develop a robust domestic supply chain 
for these components has accordingly received broad attention in the 
industry. As described in Section I.A.2.ii of this Preamble, 
manufacturers are increasingly adopting product plans with high levels 
of electrification and are continuing to make very large investments 
toward increasing manufacturing capacity and securing sources and 
suppliers for critical minerals, materials, and components.
---------------------------------------------------------------------------

    \660\ Argonne National Laboratory, ``Lithium-Ion Battery Supply 
Chain for E-Drive Vehicles in the United States: 2010-2020,'' ANL/
ESD-21/3, March 2021.
    \661\ Federal Consortium for Advanced Batteries, ``National 
Blueprint for Lithium Batteries 2021-2030,'' June 2021 (Figure 2). 
Available at https://www.energy.gov/sites/default/files/2021-06/FCAB%20National%20Blueprint%20Lithium%20Batteries%200621_0.pdf.
---------------------------------------------------------------------------

    As also noted, one analysis indicates that 37 of the world's 
automakers are planning to invest a total of almost $1.2 trillion by 
2030 toward electrification,\662\ a large portion of which will be used 
for construction of manufacturing facilities for vehicles, battery 
cells and packs, and materials, supporting up to 5.8 terawatt-hours of 
battery production and 54 million BEVs per year globally.\663\ 
Similarly, an analysis by the Center for Automotive Research shows that 
a significant shift in North American investment is occurring toward 
electrification technologies, with $36 billion of about $38 billion in 
total automaker manufacturing facility investments

[[Page 29317]]

announced in 2021 being slated for electrification-related 
manufacturing in North America, with a similar proportion and amount on 
track for 2022.\664\
---------------------------------------------------------------------------

    \662\ Reuters, ``A Reuters analysis of 37 global automakers 
found that they plan to invest nearly $1.2 trillion in electric 
vehicles and batteries through 2030,'' October 21, 2022. Accessed on 
November 4, 2022 at https://graphics.reuters.com/AUTOS-INVESTMENT/ELECTRIC/akpeqgzqypr/.
    \663\ Reuters, ``Exclusive: Automakers to double spending on 
EVs, batteries to $1.2 trillion by 2030,'' October 25, 2022. 
Accessed on November 4, 2022 at https://www.reuters.com/technology/exclusive-automakers-double-spending-evs-batteries-12-trillion-by-2030-2022-10-21/.
    \664\ Center for Automotive Research, ``Automakers Invest 
Billions in North American EV and Battery Manufacturing 
Facilities,'' July 21, 2022. Retrieved on November 10, 2022 at 
https://www.cargroup.org/automakers-invest-billions-in-north-american-ev-and-battery-manufacturing-facilities/.
---------------------------------------------------------------------------

    According to the Department of Energy, at least 13 new battery 
plants, most of which will include cell manufacturing, are expected to 
become operational in the U.S. in the next four years.\665\ Among 
these, in partnership with SK Innovation, Ford is building three large 
new battery plants in Kentucky and Tennessee \666\ and a fourth in 
Michigan.\667\ General Motors is partnering with LG Chem to build 
another three plants in Tennessee, Michigan, and Ohio, and considering 
another in Indiana. LG Chem has also announced plans for a cathode 
material production facility in Tennessee, said to be sufficient to 
supply 1.2 million high-performance electric vehicles per year by 
2027.\668\ Contemporary Amperex (CATL) is considering construction of 
plants in Arizona, Kentucky, and South Carolina. Panasonic, already 
partnering with Tesla for its factories in Texas and Nevada, are 
planning two new factories in Oklahoma and Kansas. Toyota plans to be 
operational with a plant in Greensboro, North Carolina in 2025, and 
Volkswagen in Chattanooga, Tennessee at about the same time. According 
to a May 2022 forecast by S&P Global, announcements such as these could 
result in a U.S. annual manufacturing capacity of 382 GWh by 2025,\669\ 
or 580 GWh by 2027,\670\ up from roughly 60 GWh671 
672 today. A more recent forecast by the Department of 
Energy, as shown in Figure 31, illustrates the rapid recent growth in 
new plant announcements, estimating that announcements for North 
America to date will enable an estimated 838 GWh of annual capacity by 
2025, 896 GWh by 2027, and 998 GWh by 2030, the vast majority of which 
is cell manufacturing capacity, enough to supply from 10 to 13 million 
BEVs per year.\673\
---------------------------------------------------------------------------

    \665\ Department of Energy, Fact of the Week #1217, ``Thirteen 
New Electric Vehicle Battery Plants Are Planned in the U.S. Within 
the Next Five Years,'' December 20, 2021.
    \666\ Ford Media Center, ``Ford to Lead America's Shift to 
Electric Vehicles with New Mega Campus in Tennessee and Twin Battery 
Plants in Kentucky; $11.4B Investment to Create 11,000 Jobs and 
Power New Lineup of Advanced EVs,'' Press Release, September 27, 
2021.
    \667\ Ford Media Center, ``Ford Taps Michigan for New LFP 
Battery Plant; New Battery Chemistry Offers Customers Value, 
Durability, Fast Charging, Creates 2,500 More New American Jobs,'' 
Press Release, February 13, 2023.
    \668\ LG Chem, ``LG Chem to Establish Largest Cathode Plant in 
US for EV Batteries,'' Press Release, November 22, 2022.
    \669\ S&P Global Market Intelligence, ``US ready for a battery 
factory boom, but now it needs to hold the charge,'' October 3, 
2022. Accessed on November 22, 2022 at https://www.spglobal.com/ 
marketintelligence/ en/news-insights/latest-news-headlines /us-
ready-for-a-battery-factory-boom- but-now-it-needs-to- hold-the-
charge-72262329.
    \670\ S&P Global Mobility, ``Growth of Li-ion battery 
manufacturing capacity in key EV markets,'' May 20, 2022. Accessed 
on November 22, 2022 at https://www.spglobal.com/mobility/en/research- analysis/growth-of-liion-battery- manufacturing-
capacity.html.
    \671\ Federal Consortium for Advanced Batteries, ``National 
Blueprint for Lithium Batteries 2021-2030,'' June 2021.
    Available at https://www.energy.gov/sites/default /files/2021-
06/FCAB%20National %20Blueprint%20Lithium %20Batteries%200621_0.pdf.
    \672\ S&P Global Mobility, ``Growth of Li-ion battery 
manufacturing capacity in key EV markets,'' May 20, 2022. Accessed 
on November 22, 2022 at https://www.spglobal.com/mobility/en/research-analysis/growth-of-liion-battery-manufacturing-capacity.html.
    \673\ Argonne National Laboratory, ``Assessment of Light-Duty 
Plug-in Electric Vehicles in the United States, 2010-2021,'' ANL-22/
71, November 2022.
[GRAPHIC] [TIFF OMITTED] TP05MY23.035


[[Page 29318]]


    For comparison, Figure 32 shows the annual gross battery production 
needed for BEVs in the U.S. new vehicle fleet in the central case of 
the Proposal analysis. The annual battery production required for the 
compliant fleet generated by OMEGA is about 925 GWh in 2030, less than 
the 998 GWh of North American capacity projected for the same year in 
Figure 31. Demand reaches about 1,050 GWh per year in 2032. These 
figures compare to a maximum of about 620 GWh under the No Action case.
[GRAPHIC] [TIFF OMITTED] TP05MY23.036

    In order to produce at the levels indicated when fully built out, 
the North American battery plants represented in Figure 31 will require 
access to sufficient inputs in the form of cathode and anode powders, 
foils, separators, parts, and other commodities. In conjunction with 
these construction plans, manufacturers are also moving to secure 
supplies of the minerals and components necessary to produce batteries 
at these facilities. For example, Ford has recently moved to secure 
sources of raw materials for its battery needs; 674 
675 General Motors has signed similar supply chain 
agreements, for battery materials 676 677 
678 as well as for rare-earth metals for electric machines; 
\679\ and Tesla has also moved to secure a domestic lithium 
supply.\680\ Announcements in this general vein occur frequently and 
are evidence of widespread industry attention to this business need.
---------------------------------------------------------------------------

    \674\ Green Car Congress, ``Ford sources battery capacity and 
raw materials for 600K EV annual run rate by late 2023, 2M by end of 
2026; adding LFP,'' July 22, 2022.
    \675\ Ford Motor Company, ``Ford Releases New Battery Capacity 
Plan, Raw Materials Details to Scale EVs; On Track to Ramp to 600K 
Run Rate by '23 and 2M+ by '26, Leveraging Global Relationships,'' 
Press Release, July 21, 2022.
    \676\ Green Car Congress, ``GM signs major Li-ion supply chain 
agreements: CAM with LG Chem and lithium hydroxide with Livent,'' 
July 26, 2022.
    \677\ Grzelewski, J., ``GM says it has enough EV battery raw 
materials to hit 2025 production target,'' The Detroit News, July 
26, 2022.
    \678\ Hall, K., ``GM announces new partnership for EV battery 
supply,'' The Detroit News, April 12, 2022.
    \679\ Hawkins, A., ``General Motors makes moves to source rare 
earth metals for EV motors in North America,'' The Verge, December 
9, 2021.
    \680\ Piedmont Lithium, ``Piedmont Lithium Signs Sales Agreement 
With Tesla,'' Press Release, September 28, 2020.
---------------------------------------------------------------------------

    In addition, the Inflation Reduction Act (IRA) and the Bipartisan 
Infrastructure Law (BIL) are providing significant support to 
accelerate these efforts to build out a U.S. supply chain for mineral, 
cell, and battery production. The IRA offers sizeable incentives and 
other support for further development of domestic and North American 
manufacture of these vehicles and components. According to the 
Congressional Budget Office, an estimated $30.6 billion will be 
realized by manufacturers through the Advanced Manufacturing Production 
Credit, which includes a tax credit to manufacturers for battery 
production in the U.S. According to one third party estimate based on 
information from Benchmark Mineral Intelligence, the recent increase in 
U.S. battery manufacturing plant announcements could increase this 
figure to $136 billion or more.\681\ Another $6.2 billion or more may 
be realized through expansion of the Advanced Energy Project Credit, a 
30 percent tax credit for investments in projects that reequip, expand, 
or establish certain energy manufacturing facilities.\682\ The IRA also 
provides for Clean Vehicle Credits of up to $7,500 toward the purchase 
or lease of clean vehicles with significant critical mineral and 
battery component content

[[Page 29319]]

manufactured in North America. Together, these provisions create a 
strong motivation for manufacturers to support the continued 
development of a North American supply chain and already appear to be 
proving influential on the plans of manufacturers to procure domestic 
or North American mineral and component sources and to construct 
domestic manufacturing facilities to claim the benefits of the 
act.683 684
---------------------------------------------------------------------------

    \681\ Axios.com, ``Axios What's Next,'' February 1, 2023. 
Accessed on March 1, 2023 at https://www.axios.com/newsletters/axios-whats-next-1185bdcc-1b58-4a12-9f15-8ffc8e63b11e.html?chunk=0&utm_term=emshare#story0.
    \682\ Congressional Research Service, ``Tax Provisions in the 
Inflation Reduction Act of 2022 (H.R. 5376),'' August 10, 2022.
    \683\ Subramanian, P., ``Why Honda's EV battery plant likely 
wouldn't happen without new climate credits,'' Yahoo Finance, August 
29, 2022.
    \684\ LG Chem, ``LG Chem to Establish Largest Cathode Plant in 
US for EV Batteries,'' Press Release, November 22, 2022.
---------------------------------------------------------------------------

    In addition, the BIL provides $7.9 billion to support development 
of the domestic supply chain for battery manufacturing, recycling, and 
critical minerals.\685\ Notably, it supports the development and 
implementation of a $675 million Critical Materials Research, 
Development, Demonstration, and Commercialization Program administered 
by the Department of Energy (DOE),\686\ and has created numerous other 
programs in related areas, such as for example, critical minerals data 
collection by the U.S. Geological Survey (USGS).\687\ Provisions extend 
across several areas including critical minerals mining and recycling 
research, USGS energy and minerals research, rare earth elements 
extraction and separation research and demonstration, and expansion of 
DOE loan programs in critical minerals and zero-carbon 
technologies.688 689 The Department of Energy is working to 
facilitate and support further development of the supply chain, by 
identifying weaknesses for prioritization and rapidly funding those 
areas through numerous programs and funding 
opportunities.690 691 692 According to 
a final report from the Department of Energy's Li-Bridge alliance,\693\ 
``the U.S. industry can double its value-added share by 2030 (capturing 
an additional $17 billion in direct value-add annually and 40,000 jobs 
in 2030 from mining to cell manufacturing), dramatically increase U.S. 
national and economic security, and position itself on the path to a 
near-circular economy by 2050.'' \694\ The $7.9 billion provided by the 
BIL for U.S. battery supply chain projects \695\ represents a total of 
about $14 billion when industry cost matching is 
considered.696 697 Other recently announced 
projects will utilize another $40 billion in private funding.\698\ 
According to DOE's Li-Bridge alliance, the total of these commitments 
already represents more than half of the capital investment that Li-
Bridge considers necessary for supply chain investment to 2030.\699\
---------------------------------------------------------------------------

    \685\ Congressional Research Service, ``Energy and Minerals 
Provisions in the Infrastructure Investment and Jobs Act (Pub. L. 
117-58)'', February 16, 2022. https://crsreports.congress.gov/product/pdf/R/R47034.
    \686\ Department of Energy, ``Biden-Harris Administration 
Launches $675 Million Bipartisan Infrastructure Law Program to 
Expand Domestic Critical Materials Supply Chains,'' August 9, 2022. 
Available at https://www.energy.gov/articles/biden-harris-administration-launches-675-million-bipartisan-infrastructure-law-program.
    \687\ U.S. Geological Survey, ``Bipartisan Infrastructure Law 
supports critical-minerals research in central Great Plains,'' 
October 26, 2022. Available at https://www.usgs.gov/news/state-news-release/bipartisan-infrastructure-law-supports-critical-minerals-research-central.
    \688\ Congressional Research Service, ``Energy and Minerals 
Provisions in the Infrastructure Investment and Jobs Act (Pub. L. 
117-58)'', February 16, 2022. https://crsreports.congress.gov/product/pdf/R/R47034.
    \689\ International Energy Agency, ``Infrastructure and Jobs 
act: Critical Minerals,'' October 26, 2022. https://www.iea.org/policies/14995-infrastructure-and-jobs-act-critical-minerals.
    \690\ Department of Energy, Li-Bridge, ``Building a Robust and 
Resilient U.S. Lithium Battery Supply Chain,'' February 2023.
    \691\ The White House, ``Building Resilient Supply Chains, 
Revitalizing American Manufacturing, and Fostering Broad-Based 
Growth,'' 100-Day Reviews under Executive Order 14017, June 2021.
    \692\ Federal Consortium for Advanced Batteries, ``National 
Blueprint for Lithium Batteries 2021-2030,'' June 2021.
    Available at https://www.energy.gov/sites/default/files/2021-06/FCAB%20National%20Blueprint%20Lithium%20Batteries%200621_0.pdf.
    \693\ https://www.anl.gov/li-bridge.
    \694\ Department of Energy, Li-Bridge, '' Building a Robust and 
Resilient U.S. Lithium Battery Supply Chain,'' February 2023.
    \695\ Congressional Research Service, ``Energy and Minerals 
Provisions in the Infrastructure Investment and Jobs Act (Pub. L. 
117-58)'', February 16, 2022. https://crsreports.congress.gov/product/pdf/R/R47034.
    \696\ Department of Energy, Li-Bridge, ``Building a Robust and 
Resilient U.S. Lithium Battery Supply Chain,'' February 2023 (p. 9).
    \697\ Department of Energy, EERE Funding Opportunity Exchange, 
EERE Funding Opportunity Announcements. Accessed March 4, 2023 at 
https://eere-exchange.energy.gov/Default.aspx#FoaId0596def9-c1cc-478d-aa4f-14b472864eba.
    \698\ Federal Reserve Bank of Dallas, ``Automakers' bold plans 
for electric vehicles spur U.S. battery boom,'' October 11, 2022. 
Accessed on March 4, 2023 at https://www.dallasfed.org/research/economics/2022/1011.
    \699\ Department of Energy, Li-Bridge, ``Building a Robust and 
Resilient U.S. Lithium Battery Supply Chain,'' February 2023 (p. 9).
---------------------------------------------------------------------------

    Further, the DOE Loan Programs Office is administering a major 
loans program focusing on extraction, processing and recycling of 
lithium and other critical minerals that will support continued market 
growth,\700\ through the Advanced Technology Vehicles Manufacturing 
(ATVM) Loan Program and Title 17 Innovative Energy Loan Guarantee 
Program. This program includes over $20 billion of available loans and 
loan guarantees to finance critical materials projects. Some examples 
of recent projects, amounting to $3.4 billion in loan support, are 
outlined in DRIA 3.1.3.2.
---------------------------------------------------------------------------

    \700\ Department of Energy Loan Programs Office, ``Critical 
Materials Loans & Loan Guarantees,'' https://www.energy.gov/sites/default/files/2021-06/DOE-LPO_Program_Handout_Critical_Materials_June2021_0.pdf.
---------------------------------------------------------------------------

    Although predicting mineral supply and demand into the future is 
highly uncertain, it is possible to identify general trends likely to 
occur in the future. As seen in Figure 33 and Figure 34, preliminary 
projections prepared by Li-Bridge for DOE,\701\ and presented to the 
Federal Consortium for Advanced Batteries (FCAB) \702\ in November 
2022, indicate that global supplies of cathode active material (CAM) 
and lithium chemical product are expected to be sufficient through 
2035.
---------------------------------------------------------------------------

    \701\ Slides 6 and 7 of presentation by Li-Bridge to Federal 
Consortium for Advanced Batteries (FCAB), November 17, 2022.
    \702\ https://www.energy.gov/eere/vehicles/federal-consortium-advanced-batteries-fcab.
---------------------------------------------------------------------------

BILLING CODE 6560-50-P

[[Page 29320]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.037

[GRAPHIC] [TIFF OMITTED] TP05MY23.038

BILLING CODE 6560-50-C
    Similarly, the International Energy Agency (IEA) published its 
Global EV Outlook 2022 which examined the outlook for supply and demand 
for lithium, cobalt, and nickel between 2020 and 2030 under several 
demand scenarios.\703\ As shown in Figure 35, it found that the supply 
should be sufficient for their ``Stated Policies'' (STEPS) scenario, in 
which the projected demand represents ``existing policies and measures, 
as well as policy ambitions and targets that have been legislated by 
governments around the world,'' and includes ``current EV-related 
policies and regulations and future developments based on the expected 
impacts of announced deployments and plans from industry

[[Page 29321]]

stakeholders.'' Under their ``Announced Pledges'' (APS) scenario, a 
higher demand scenario which ``assumes that the announced ambitions and 
targets made by governments around the world, including the most recent 
ones, are met in full and on time,'' nickel and cobalt would still be 
at sufficient supply, but lithium would begin to fall short after 2025.
---------------------------------------------------------------------------

    \703\ International Energy Agency, ``Global EV Outlook 2022,'' 
p. 185, May 2022. 
[GRAPHIC] [TIFF OMITTED] TP05MY23.039

    Although the IEA Global EV Outlook 2022 was published in May 2022, 
more recent information indicates that the market is responding 
robustly to demand \704\ and lithium supplies are expanding as new 
resources are characterized, projects continue through engineering 
economic assessments, and others begin permitting or construction. For 
example, in October 2022, the IEA projected that global Lithium 
Carbonate Equivalent (LCE) production from operating mines and those 
under construction would sufficiently meet primary demand until at 
least 2028 under the Stated Policies Scenario.\705\ Even 2028 is likely 
a very conservative estimate. In March 2023, DOE communicated to EPA 
that an ongoing DOE assessment of U.S. lithium resource development 
projects had identified additional resources not represented in leading 
assessments. For example, DOE determined that a December 2022 BNEF 
projection that lithium mine production could meet end-use demand until 
at least 2028 did not include additional U.S. resources later 
identified by DOE and Argonne National Laboratory.\706\ Specifically, 
the BNEF data included only three U.S. projects: Silver Peak (phase I 
and II), Rhyolite Ridge (phase I), and Carolina Lithium (phase I). As 
depicted in Figure 36, adding to the BNEF assessment, DOE and Argonne 
National Laboratory had identified 19 additional lithium production 
projects in the United States in addition to the three identified in 
the December 2022 BNEF data. Some of these projects are likely to ramp 
in before 2030 and if considered in the other projections likely would 
advance lithium sufficiency well beyond 2028. For example, the 19 U.S. 
projects potentially represent an additional 1,000 kilotons per year 
LCE not accounted for in the BNEF analysis,\707\ which would be enough 
to meet the BNEF Net-Zero demand projection, as depicted in Figure 36. 
Note that these do not include recycling projects, which could increase 
domestic lithium supply beyond that shown, nor an additional five U.S. 
projects for which potential LCE production capacity is not yet 
established. The identification of these additional projects exemplify 
the dynamic nature of the industry and the likely conservative aspect 
of existing assessments.
---------------------------------------------------------------------------

    \704\ Bloomberg New Energy Finance, ``Lithium-ion Battery Pack 
Prices Rise for First Time to an Average of $151/kWh,'' December 6, 
2022. Accessed on December 6, 2022 at: https://about.bnef.com/blog/lithium-ion-battery-pack-prices-rise-for-first-time-to-an-average-of-151-kwh/.
    \705\ International Energy Agency, ``Committed mine production 
and primary demand for lithium, 2020-2030,'' October 26, 2022. 
Accessed on March 9, 2023 at https://www.iea.org/data-and-statistics/charts/committed-mine-production-and-primary-demand-for-lithium-2020-2030.
    \706\ Department of Energy, communication to EPA titled 
``Lithium Supplies--additional datapoints and research,'' March 8, 
2023. See memorandum to Docket ID No. EPA-HQ-OAR-2022-0829 titled 
``DOE Communication to EPA Regarding Critical Mineral Projects.''
    \707\ Department of Energy, communication to EPA titled 
``Lithium Supplies--additional datapoints and research,'' March 8, 
2023. See Memo to Docket ID No. EPA-HQ-OAR-2022-0829, titled ``DOE 
Communication to EPA Regarding Critical Mineral Projects.''

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

[[Page 29322]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.040

    Recent unexpected drops (as of March 2023) in lithium prices are 
believed to have been the result of robust growth in lithium supply 
from developments similar to these,\708\ and further supports the 
expectation of a stabilization in commodity prices, which in turn 
supports an expectation that sufficient supply will be developed.
---------------------------------------------------------------------------

    \708\ New York Times, ``Falling Lithium Prices Are Making 
Electric Cars More Affordable,'' March 20, 2023. Accessed on March 
23, 2023 at https://www.nytimes.com/2023/03/20/business/lithium-prices-falling-electric-vehicles.html.
---------------------------------------------------------------------------

    In addition, the Inflation Reduction Act's requirement that 
qualification for $3,750 of the Clean Vehicle Credit depends in part on 
sourcing of critical minerals from the U.S. or countries with which the 
U.S. has a free trade agreement has spurred other countries to consider 
action that would expand lithium supply. For example, the European 
Union is seeking to promote rapid development of Europe's battery 
supply chains by considering targeted measures such as accelerating 
permitting processes and encouraging private investment. To these ends 
the European Parliament proposed a Critical Raw Materials Act on March 
16, 2023, which includes these and other measures to encourage the 
development of new supplies of critical minerals not currently 
anticipated in market projections.709 710 711
---------------------------------------------------------------------------

    \709\ European Union, ``7th High-Level Meeting of the European 
Battery Alliance: main takeaways by the Chair Maro[scaron] 
[Scaron]ef[ccaron]ovi[ccaron] and the Council Presidency,'' March 1, 
2023. Accessed on March 9, 2023 at https://single-market-economy.ec.europa.eu/system/files/2023-03/Main%20takeaways_7th%20High-Level%20Meeting%20of%20EBA.pdf.
    \710\ New York Times, ``U.S. Eyes Trade Deals With Allies to 
Ease Clash Over Electric Car Subsidies,'' February 24, 2023.
    \711\ European Parliament, ``Proposal for a regulation of the 
European Parliament and of the Council establishing a framework for 
ensuring a secure and sustainable supply of critical raw 
materials,'' March 16, 2023. https://single-market-economy.ec.europa.eu/publications/european-critical-raw-materials-act_en.
---------------------------------------------------------------------------

    In DRIA 3.1.3.2 and 3.1.3.3 we detail these and many other examples 
that demonstrate how momentum has picked up in the lithium market since 
IEA's May 2022 report. For more discussion, please see DRIA Chapters 
3.1.3.2 and 3.1.3.3.
    In the critical mineral analysis outlined in DRIA Chapter 3.1.3.2, 
we selected lithium supply as the primary mineral-based limiting factor 
in constraining the potential rate of BEV penetration for modeling 
purposes. Of the IEA scenarios considered, in those that anticipated a 
potential shortfall in any mineral, lithium demand was the first to 
show potential for exceeding supply in some scenarios. In addition, 
with respect to other cathode and anode minerals, we note that there is 
some flexibility in choice of these minerals, as in many cases, 
opportunity will exist to reduce cobalt and manganese content or to 
substitute with iron-phosphate chemistries that do not utilize nickel, 
cobalt or manganese, or use other forms of carbon in the anode, or in 
conjunction with silicon. However, all currently produced chemistries 
require lithium in the electrolyte and the cathode, and these have no 
viable

[[Page 29323]]

substitute at this time.\712\ Accordingly, in DRIA 3.1.3.2 we focused 
on lithium availability as a potential limiting factor on the rate of 
growth of PEV production, and thus the most appropriate basis for 
establishing a modeling constraint on the rate of PEV penetration into 
the fleet over the time frame of the proposed rule. In that analysis, 
we conclude that lithium supply is likely to be adequate to meet 
anticipated demand as demand increases and supply grows.
---------------------------------------------------------------------------

    \712\ In DRIA 3.1.3.3 we discuss the outlook for alternatives to 
lithium in battery chemistries that are under development.
---------------------------------------------------------------------------

    Despite recent short-term fluctuations in price, the price of 
lithium is expected to stabilize at or near its historical levels by 
the mid-2020s.713 714 This perspective is also supported by 
proprietary battery price forecasts by Wood Mackenzie that include the 
predicted effect of temporarily elevated mineral prices and show 
battery costs falling again past 2024.715 716 This is 
consistent with the BNEF battery price outlook 2022 which expects 
battery prices to start dropping again in 2024, and BNEF's 2022 Battery 
Price Survey which predicts that average pack prices should fall below 
$100/kWh by 2026.\717\ Taken together these outlooks support the 
perspective that lithium is not likely to encounter a critical shortage 
as supply responds to meet growing demand. For more discussion of the 
mineral supply outlook for the time frame of the proposed rule, see 
Chapter 3.1.3.2 of the DRIA.
---------------------------------------------------------------------------

    \713\ Sun et al., ``Surging lithium price will not impede the 
electric vehicle boom,'' Joule, doi:10.1016/j.joule. 2022.06.028 
(https://dx.doi.org/10.1016/j.joule.2022.06.028).
    \714\ Green Car Congress, ``Tsinghua researchers conclude 
surging lithium price will not impede EV boom,'' July 29, 2022.
    \715\ Wood Mackenzie, ``Battery & raw materials--Investment 
horizon outlook to 2032,'' September 2022 (filename: brms-q3-2022-
iho.pdf). Available to subscribers.
    \716\ Wood Mackenzie, ``Battery & raw materials--Investment 
horizon outlook to 2032,'' accompanying data set, September 2022 
(filename: brms-data-q3-2022.xlsx). Available to subscribers.
    \717\ Bloomberg New Energy Finance, ``Lithium-ion Battery Pack 
Prices Rise for First Time to an Average of $151/kWh,'' December 6, 
2022. Accessed on December 6, 2022 at: https://about.bnef.com/blog/lithium-ion-battery-pack-prices-rise-for-first-time-to-an-average-of-151-kwh/.
---------------------------------------------------------------------------

    EPA has considered this information on the development of the 
supply chain to meet future PEV production needs and has represented 
this information in developing modeling constraints for use by the 
OMEGA model that represent limitations on annual rate of growth of PEV 
production imposed by the rate of growth of the global supply chain for 
batteries and minerals. Specifically, in our compliance modeling we 
imposed an upper limit on Gigawatt-hours (GWh) of gross battery energy 
capacity that can be produced and made available for production of BEVs 
that enter the new U.S. vehicle market in a given year of the analysis. 
The development of this constraint used by the OMEGA model is discussed 
in Chapter 3.1.3.2 of the DRIA.
    EPA requests comment on the GWh constraint described in that DRIA 
chapter, and on alternative methods for representing constraints on 
future PEV production that may result from limitations on the supply 
chain for batteries and the critical minerals and other components that 
are used in their manufacture.
iii. Mineral Security
    As stated at the beginning of this section, it is our assessment 
that increased automotive electrification in the U.S. does not 
constitute a vulnerability to national security, for several reasons 
supported by the discussion in this Section IV.C.6 and in DRIA 3.1.3.2.
    A domestic supply chain for battery and cell manufacturing is 
rapidly forming by the actions of stakeholders including automakers and 
suppliers who wish to take advantage of the business opportunities that 
this need presents, and by automakers who recognize the need to remain 
competitive in a global market that is shifting to electrification. It 
is, therefore, already a goal of the U.S. manufacturing industry to 
create a robust supply chain for these products, in order to supply not 
only the domestic vehicle market, but also all of the other 
applications for these products in global markets as the world 
decarbonizes.
    Further, the Inflation Reduction Act and the Bipartisan 
Infrastructure Law are proving to be a highly effective means by which 
Congress and the Administration have provided support for the building 
of a robust supply chain, and to accelerate this activity to ensure 
that it forms as rapidly as possible. An example is the work of Li-
Bridge, a public-private alliance committed to accelerating the 
development of a robust and secure domestic supply chain for lithium-
based batteries. It has set forth a goal that by 2030 the United States 
should capture 60 percent of the economic value associated with the 
U.S. domestic demand for lithium batteries. Achieving this target would 
double the economic value expected in the U.S. under ``business as 
usual'' growth.\718\ More evidence of recent growth in the supply chain 
is found in a February 2023 report by Pacific Northwest National 
Laboratory (PNNL), which documents robust growth in the North American 
lithium battery industry.\719\
---------------------------------------------------------------------------

    \718\ Department of Energy, Li-Bridge, ``Building a Robust and 
Resilient U.S. Lithium Battery Supply Chain,'' February 2023.
    \719\ Pacific Northwest National Laboratory, ``North American 
Lithium Battery Materials V 1.2,'' February 2023. Available at 
https://www.pnnl.gov/projects/north-american-lithium-battery-materials-industry-report.
---------------------------------------------------------------------------

    Finally, it is important to note that utilization of critical 
minerals is different from the utilization of foreign oil, in that oil 
is consumed as a fuel while minerals become a constituent of 
manufactured vehicles. That is, mineral security is not a perfect 
analogy to energy security. Supply disruptions and fluctuating prices 
are relevant to critical minerals as well, but the impacts of such 
disruptions are felt differently and by different parties. Disruptions 
in oil supply or gasoline price has an immediate impact on consumers 
through higher fuel prices, and thus constrains the ability to travel. 
In contrast, supply disruptions or price fluctuations of minerals 
affect only the production and price of new vehicles. In practice, 
short-term price fluctuations do not always translate to higher 
production cost as most manufacturers purchase minerals via long-term 
contracts that insulate them to a degree from changes in spot prices. 
Moreover, critical minerals are not a single commodity but a number of 
distinct commodities, each having its own supply and demand dynamics, 
and some being capable of substitution by other minerals. Importantly, 
while oil is consumed as a fuel and thus requires continuous supply, 
minerals become part of the vehicle and have the potential to be 
recovered and recycled. Thus, even when minerals are imported from 
other countries, their acquisition adds to the domestic mineral stock 
that is available for domestic recycling in the future.
    Over the long term, battery recycling will be a critical component 
of the PEV supply chain and will contribute to mineral security and 
sustainability, effectively acting as a domestically produced mineral 
source that reduces overall reliance on foreign-sourced products. While 
growth in the return of end-of-life PEV batteries will lag the market 
penetration of PEVs, it is important to consider the development of a 
battery recycling supply chain during the time frame of the rule and 
beyond.
    By 2050, battery recycling could be capable of meeting 25 to 50 
percent of total lithium demand for battery

[[Page 29324]]

production.720 721 To this end, battery recycling is a very 
active area of research. The Department of Energy coordinates much 
research in this area through the ReCell Center, described as ``a 
national collaboration of industry, academia and national laboratories 
working together to advance recycling technologies along the entire 
battery life-cycle for current and future battery chemistries.'' \722\ 
Funding is also being disbursed as directed by the Bipartisan 
Infrastructure Law.\723\ A growing number of private companies are 
entering the battery recycling market as the rate of recyclable 
material becoming available from battery production facilities and 
salvaged vehicles has grown, and manufacturers are already reaching 
agreements to use these recycled materials for domestic battery 
manufacturing. For example, Panasonic has contracted with Redwood 
Materials Inc. to supply domestically processed cathode material, much 
of which will be sourced from recycled batteries.\724\ Ford and Volvo 
have also partnered with Redwood to collect end-of-life batteries for 
recycling and promote a circular, closed-loop supply chain utilizing 
recycled materials.\725\ Redwood has also announced a battery active 
materials plant in South Carolina with capacity to supply materials for 
100 GWh per year of battery production, and is likely to provide these 
materials to many of the ``battery belt'' factories that are developing 
in a corridor between Michigan and Georgia.\726\ General Motors and LG 
Energy Solution have also partnered with Li-Cycle to provide recycling 
of GM's Ultium cells.\727\
---------------------------------------------------------------------------

    \720\ Sun et al., ``Surging lithium price will not impede the 
electric vehicle boom,'' Joule, doi:10.1016/j.joule. 2022.06.028 
(https://dx.doi.org/10.1016/j.joule.2022.06.028).
    \721\ Ziemann et al., ``Modeling the potential impact of lithium 
recycling from EV batteries on lithium demand: a dynamic MFA 
approach,'' Resour. Conserv. Recycl. 133, pp. 76-85. https://doi.org/10.1016/j.resconrec. 2018.01.031.
    \722\ https://recellcenter.org/about/.
    \723\ Department of Energy, ``Biden-Harris Administration 
Announces Nearly $74 Million To Advance Domestic Battery Recycling 
And Reuse, Strengthen Nation's Battery Supply Chain,'' Press 
Release, November 16, 2022.
    \724\ Randall, T., ``The Battery Supply Chain Is Finally Coming 
to America,'' Bloomberg, November 15, 2022.
    \725\ Automotive News Europe, ``Ford, Volvo join Redwood in EV 
battery recycling push in California,'' February 17, 2022. https://europe.autonews.com/automakers/ford-volvo-join-redwood-ev-battery-recycling-push-california.
    \726\ Wards Auto, ``Battery Recycler Redwood Plans $3.5 Billion 
South Carolina Plant,'' December 27, 2022. https://www.wardsauto.com/industry-news/battery-recycler-redwood-plans-35-billion-south-carolinaplant.
    \727\ General Motors, ``Ultium Cells LLC and Li-Cycle 
Collaborate to Expand Recycling in North America,'' Press Release, 
May 11, 2021. https://news.gm.com/newsroom.detail.html/Pages/news/us/en/2021/may/0511-ultium.html.
---------------------------------------------------------------------------

    Recycling infrastructure is one of the targets of several 
provisions of the BIL. It includes a Battery Processing and 
Manufacturing program, which grants significant funds to promote U.S. 
processing and manufacturing of batteries for automotive and electric 
grid use, by awarding grants for demonstration projects, new 
construction, retooling and retrofitting, and facility expansion. It 
will provide a total of $3 billion for battery material processing, $3 
billion for battery manufacturing and recycling, $10 million for a 
lithium-ion battery recycling prize competition, $60 million for 
research and development activities in battery recycling, an additional 
$50 million for state and local programs, and $15 million to develop a 
collection system for used batteries. In addition, the Electric Drive 
Vehicle Battery Recycling and Second-Life Application Program will 
provide $200 million in funds for research, development, and 
demonstration of battery recycling and second-life applications.\728\
---------------------------------------------------------------------------

    \728\ Environmental Defense Fund and ERM, ``Electric Vehicle 
Market Update: Manufacturer Commitments and Public Policy 
Initiatives Supporting Electric Mobility in the U.S. and 
Worldwide,'' September 2022.
---------------------------------------------------------------------------

    The efforts to fund and build a mid-chain processing supply chain 
for active materials and related products will also be important to 
reclaiming minerals through domestic recycling. While domestic 
recycling can recover minerals and other materials needed for battery 
cell production, they commonly are recovered in elemental forms that 
require further midstream processing into precursor substances and 
active material powders that can be used in cell production. The DOE 
ReCell Center coordinates extensive research on development of a 
domestic lithium-ion recycling supply chain, including direct 
recycling, in which materials can be recycled for direct use in cell 
production without destroying their chemical structure, and advanced 
resource recovery, which uses chemical conversion to recover raw 
minerals for processing into new constituents.\729\
---------------------------------------------------------------------------

    \729\ Department of Energy, ``The ReCell Center for Advanced 
Battery Recycling FY22 Q4 Report,'' October 20, 2022. Available at: 
https://recellcenter.org/2022/12/15/recell-advanced-battery-recycling-center-fourth-quarter-progress-report-2022/.
---------------------------------------------------------------------------

    Currently, pilot-scale battery recycling research projects and 
private recycling startups have access to only limited amounts of 
recycling stock that originate from sources such as manufacturer waste, 
crashed vehicles, and occasional manufacturer recall/repair events. As 
PEVs are currently only a small portion of the U.S. vehicle stock, some 
time will pass before vehicle scrappage can provide a steady supply of 
end-of-life batteries to support large-scale battery recycling. During 
this time, we expect that the midchain processing portion of the supply 
chain will continue to develop and will be able to capture much of the 
resources made available by the recycling of used batteries coming in 
from the fleet.

D. Projected Compliance Costs and Technology Penetrations

1. CO2 Targets and Compliance Levels
i. Light-Duty Vehicle Targets and Compliance Levels
    The proposed footprint standards curve coefficients for light-duty 
vehicles were presented in Section III.B.2.iv. Here we present the 
projected industry average fleet targets for both the Proposal and the 
No Action case for reference. These average targets (for the proposed 
standards and the No Action case,\730\ respectively) are presented for 
both the car and truck regulatory classes in Table 66 and Table 67, and 
then for three different modeled body styles: Sedans, crossovers and 
SUVs, and pickup trucks,\731\ in Table 68 and Table 69. The projected 
targets for each are based on the industry sales weighted average of 
vehicle models (and their respective footprints) within the regulatory 
class or body style.\732\
---------------------------------------------------------------------------

    \730\ The No-Action case continues MY 2026 flexibilities for the 
off-cycle and A/C credits available to OEMs as defined in the 2021 
Final Rule.
    \731\ All sedans are of the car regulatory class; crossovers and 
SUVs include both cars and trucks; and all pickups are of the truck 
regulatory class.
    \732\ Note that these targets are projected based on both 
projected future sales in applicable MYs and our proposed standards; 
after the standards are finalized the targets will change depending 
on each manufacturer's actual sales.

[[Page 29325]]



                   Table 66--Projected Targets for Proposed LDV Standards, by Regulatory Class
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Cars..............................          134          116           99           91           82           73
Trucks............................          163          142          120          110          100           89
                                   -----------------------------------------------------------------------------
    Total.........................          152          131          111          102           93           82
----------------------------------------------------------------------------------------------------------------


                     Table 67--Projected Targets for LDV No-Action Case, by Regulatory Class
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Cars..............................          131          132          132          132          131          131
Trucks............................          183          182          183          183          183          183
                                   -----------------------------------------------------------------------------
    Total.........................          162          162          163          162          162          161
----------------------------------------------------------------------------------------------------------------


                      Table 68--Projected Targets for Proposed LDV Standards, by Body Style
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Sedans............................          134          117           99           91           82           73
Crossovers/SUVs...................          149          130          110          101           92           81
Pickups...........................          195          166          141          129          118          105
                                   -----------------------------------------------------------------------------
    Total.........................          152          131          111          102           93           82
----------------------------------------------------------------------------------------------------------------


                        Table 69--Projected Targets for LDV No-Action Case, by Body Style
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Sedans............................          132          132          133          132          132          131
Crossovers/SUVs...................          161          161          162          161          161          161
Pickups...........................          222          219          220          222          222          223
                                   -----------------------------------------------------------------------------
    Total.........................          162          162          163          162          162          161
----------------------------------------------------------------------------------------------------------------

    The modeled achieved CO2 levels for the proposed 
standards and the No Action case are shown for both the car and truck 
regulatory class in Table 70 and Table 71 and then by body style in 
Table 72 and Table 73, respectively. These values were produced by the 
modeling analysis and represent the projected certification emissions 
values for possible compliance approaches with the proposed standards, 
grouped by body style. These achieved values, shown as sales weighted 
averages over the respective sedan, crossover/SUV, and pickup truck 
body styles, include the 2-cycle tailpipe emissions based on the 
modeled application of emissions-reduction technologies minus the 
modeled application of off-cycle credit technologies and A/C efficiency 
credits.

                      Table 70--Proposed LDV Standards--Achieved Levels by Regulatory Class
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Cars..............................          115          100           84           72           68           60
Trucks............................          176          149          123          113          106           95
                                   -----------------------------------------------------------------------------
    Total.........................          151          129          107           97           91           81
----------------------------------------------------------------------------------------------------------------


                        Table 71--LDV No-Action Case--Achieved Levels by Regulatory Class
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Cars..............................          117          111          104          102          109          113
Trucks............................          183          169          155          153          158          160
                                   -----------------------------------------------------------------------------

[[Page 29326]]

 
    Total.........................          157          146          135          132          138          141
----------------------------------------------------------------------------------------------------------------


                         Table 72--Proposed LDV Standards--Achieved Levels by Body Style
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Sedans............................          108           93           78           63           57           47
Crossovers/SUVs...................          140          123          102           97           97           95
Pickups...........................          276          220          181          160          131           91
                                   -----------------------------------------------------------------------------
    Total.........................          151          129          107           97           91           81
----------------------------------------------------------------------------------------------------------------


                           Table 73--LDV No Action Case--Achieved Levels by Body Style
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Sedans............................          106          101           96           95          103          108
Crossovers/SUVs...................          149          139          129          130          139          141
Pickups...........................          279          251          227          211          204          203
                                   -----------------------------------------------------------------------------
    Total.........................          157          146          135          132          138          141
----------------------------------------------------------------------------------------------------------------

    Comparing the target and achieved values it can be seen that the 
achieved values are over target (higher emissions) for the average 
pickup truck, and under target (lower emissions) for the average sedan. 
This is a feature of the unlimited credit transfer provision, which 
results in a compliance determination that is based on the combined car 
and truck fleet credits for each manufacturer, rather than a separate 
determination of each fleet's compliance. The application of 
technologies is influenced by the relative cost-effectiveness of 
technologies among each manufacturer's vehicles. For the combined 
fleet, the achieved values are typically close to or slightly under the 
target values, which would represent the banking of credits that can be 
carried over into other model years. This indicates that overall, the 
modeled fleet tracks the standards very closely from year-to-year. Note 
that an achieved value for a manufacturer's combined fleet that is 
above the target in a given model year does not indicate a likely 
failure to comply with the standards, since the model includes the GHG 
program credit banking provisions that allow credits from one year to 
be carried into another year.
    The modeling predicts that the industry will over comply against 
the MY 2027-2032 standards in the No Action scenario, driven by the 
projected significant increase in BEVs. This is in part due to the 
economic opportunities provided for BEVs to both manufacturers and 
consumers by the IRA. Figure 37 shows a plot of industry average 
achieved tailpipe g/mi compared to the projected targets for both the 
No Action case and the proposed standards. The modeling shows that the 
industry as a whole should be able to achieve the proposed standards 
over the MY 2027-2032 time frame.

[[Page 29327]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.041

ii. Medium-Duty Vehicle Targets and Compliance Levels
    Based on the proposed work-factor based standards curve 
coefficients described in Section III.B.3, we present the projected 
industry average medium-duty vehicle fleet targets for both the 
proposed standards and the No Action case in Table 74 and Table 75. 
These average targets are shown for two different modeled body styles: 
Vans and pickup trucks. The projected targets for each case are based 
on the industry sales weighted average of vehicle models (and their 
respective work factors) within each body style.\733\
---------------------------------------------------------------------------

    \733\ Note that these targets are projected based on both 
projected future sales in applicable MYs and our proposed standards; 
the targets will change each MY depending on each manufacturer's 
actual sales.

                      Table 74--Projected Targets for Proposed MDV Standards, by Body Style
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Vans..............................          393          379          345          309          276          243
Pickups...........................          462          452          413          374          331          292
                                   -----------------------------------------------------------------------------
    Total.........................          438          427          389          352          312          275
----------------------------------------------------------------------------------------------------------------


                   Table 75--Projected Targets for MD Vehicles, No-Action Case, by Body Style
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Vans..............................          410          410          410          410          410          410
Pickups...........................          517          517          517          518          518          518
                                   -----------------------------------------------------------------------------
    Total.........................          480          480          480          481          481          481
----------------------------------------------------------------------------------------------------------------


[[Page 29328]]

    The modeled achieved CO2 levels for the proposed 
standards are shown for both vans and pickups in Table 76. These values 
were produced by the modeling analysis and represent the projected 
certification emissions values for possible compliance approaches with 
the proposed standards, grouped by body style.

              Table 76--Proposed Standards for MD Vehicles--Projected Achieved Levels by Body Style
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Vans..............................          292          202          119           36           12           10
Pickups...........................          515          546          534          512          466          410
                                   -----------------------------------------------------------------------------
    Total.........................          437          426          390          347          310          272
----------------------------------------------------------------------------------------------------------------

2. Compliance Costs per Vehicle for the Proposed Standards
i. Light-Duty Projected Compliance Costs
    EPA has performed an assessment of the estimated per-vehicle costs 
for manufacturers to meet the proposed MY 2027-2032 GHG and criteria 
air pollutant standards. The fleet average costs per vehicle, again 
grouped by both regulatory class and body style, are shown in Table 77 
and Table 78. As shown, the combined cost for cars and trucks increases 
gradually from MY 2027 through MY 2032. Incremental costs for pickups 
(shown in Table 78) decrease slightly in MY 2029 and 2030 before 
increasing again as the incentives in the IRA begin to phase out.

       Table 77--Average Incremental Vehicle Cost by Regulatory Class, Relative to the No Action Scenario
                                                 [2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Cars..............................         $249         $102          $32         $100         $527         $844
Trucks............................          891          767          653          821        1,100        1,385
                                   -----------------------------------------------------------------------------
    Total.........................          633          497          401          526          866        1,164
----------------------------------------------------------------------------------------------------------------


          Table 78--Average Incremental Vehicle Cost by Body Style, Relative to the No Action Scenario
                                                 [2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Sedans............................         $181          $79          $51         $194         $625       $1,015
Crossovers/SUVs...................          657          448          332          487          804          962
Pickups...........................        1,374        1,478        1,333        1,324        1,574        2,266
                                   -----------------------------------------------------------------------------
    Total.........................          633          497          401          526          866        1,164
----------------------------------------------------------------------------------------------------------------

    Overall, EPA estimates the average costs of today's proposal at 
approximately $1,200 per vehicle in MY 2032 relative to meeting the No 
Action scenario in MY 2032. However, these estimates represent the 
incremental costs to manufacturers; for consumers, these costs are 
offset by savings in the reduced fuel costs, maintenance and repair 
costs, as discussed in Section VIII. Additionally, consumers may also 
benefit from IRA purchase incentives for PEVs.
ii. Medium-Duty Projected Compliance Costs
    EPA's assessment of the estimated per-vehicle costs for 
manufacturers to meet the proposed MY 2027-2032 GHG and criteria air 
pollutant standards for medium-duty vehicles is presented here. The 
fleet average costs per vehicle, grouped by body style, are shown in 
Table 79. As shown, the combined cost for vans and pickups generally 
increases from MY 2027 through MY 2032.

                 Table 79--Average Incremental Vehicle Cost by Body Style, Medium-Duty Vehicles
                                                 [2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Vans..............................         $322         $658         $711       $1,184       $1,592       $1,932
Pickups...........................          386           31           67          374          603        1,706
                                   -----------------------------------------------------------------------------
    Total.........................          364          249          290          654          944        1,784
----------------------------------------------------------------------------------------------------------------

    Overall, EPA estimates the average costs of today's proposal at 
approximately $1,800 per medium-duty vehicle in MY 2032 relative to 
meeting the No Action scenario in MY 2032. Similar to our light-duty 
costs, these estimates represent the incremental costs to 
manufacturers; for consumers, these costs are offset by savings in the

[[Page 29329]]

reduced fuel costs, maintenance and repair costs, as discussed in 
Section VIII. Additionally, consumers may also benefit from IRA 
purchase incentives for PEVs.
3. Technology Penetration Rates
i. Light-Duty Technology Penetrations
    In this section, we discuss the projected new sales technology 
penetration rates from EPA's analysis for the proposed standards. Table 
80 and Table 81 show the EPA projected penetration rates of BEV 
technology under the proposed standards and No Action case, 
respectively, by body style. It is important to note that this is a 
projection and represents one out of many possible compliance pathways 
for the industry. The proposed standards are performance-based and do 
not mandate any specific technology for any manufacturer or any vehicle 
type. Each manufacturer is free to choose its own set of technologies 
with which it will demonstrate compliance with the standards. In our 
projection, as the proposed standards become more stringent over MYs 
2027 to 2032, the penetration of BEVs increases by almost 30 percentage 
points over this 6-year period, from 36 percent in MY 2027 up to 67 
percent of overall vehicle production in MY 2032.
    It is important to note that EPA's current analysis does not 
include PHEVs, though we recognize that many manufacturers' product 
plans include PHEVs. EPA recognizes that the inclusion of PHEVs could 
potentially increase the combined ZEV share projection beyond the BEV 
penetration levels shown in Table 81. EPA plans to incorporate PHEVs 
into our analysis for the final rule. In DRIA Chapter 2.6.4, we present 
information on the potential costs for PHEVs. We seek comment on this 
information and on any other data and information we should consider in 
developing the technical approach to incorporating PHEVs as a 
compliance technology option in our assessment for the final rule.

               Table 80--Fleet BEV Penetration Rates, by Body Style, Under the Proposed Standards
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................           45           53           61           69           73           78
Crossovers/SUVs...................           38           46           56           59           61           62
Pickups...........................           11           23           37           45           55           68
                                   -----------------------------------------------------------------------------
    Total.........................           36           45           55           60           63           67
----------------------------------------------------------------------------------------------------------------


                 Table 81--Fleet BEV Penetration Rates, by Body Style, Under the No Action Case
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................           39           41           45           46           44           43
Crossovers/SUVs...................           26           32           37           40           39           39
Pickups...........................            7           16           24           29           31           33
                                   -----------------------------------------------------------------------------
    Total.........................           27           32           37           40           40           39
----------------------------------------------------------------------------------------------------------------

    Table 82 and Table 83 show the projected market penetrations for 
strong HEVs in the proposed standards and the No Action case. While a 
relatively small percentage of HEVs is projected in the early years of 
the proposed standards, HEVs were generally not projected in the 
compliance modeling for the No Action case. While manufacturers may in 
fact choose HEVs, the modeling indicates they are less cost effective 
than the BEVs which have been subsidized by the IRA and emit 0 g/mi 
tailpipe CO2. Moreover, in the No Action case, the modeling 
indicates that the industry is already overachieving the standards, 
resulting in less need for HEVs. In the proposed standards case, the 
steady decline in projected HEVs is primarily a result of continued 
projected reductions in battery costs which make BEVs increasingly more 
cost effective relative to HEVs.

                    Table 82--Fleet Strong HEV Penetration Rates Under the Proposed Standards
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................            4            3            2            2            1            0
Crossovers/SUVs...................            2            2            2            1            1            0
Pickups...........................            6            2            1            1            1            0
                                   -----------------------------------------------------------------------------
    Total.........................            3            2            2            1            1            0
----------------------------------------------------------------------------------------------------------------


                     Table 83--Fleet Strong HEV Penetrations Rates Under the No Action Case
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................            6            6            4            4            0            0
Crossovers/SUVs...................            3            3            3            1            0            0
Pickups...........................            4            0            0            0            0            0
                                   -----------------------------------------------------------------------------

[[Page 29330]]

 
    Total.........................            4            3            3            2            0            0
----------------------------------------------------------------------------------------------------------------

    Consistent with past rulemakings, EPA has evaluated a range of 
advanced technologies for ICE vehicles. Two of these technologies were 
noteworthy in the modeling results: Advanced turbocharged downsized 
engines (TURB12) and advanced Atkinson (ATK) engines.\734\ Further 
details on EPA's modeling of engine technologies can be found in DRIA 
Chapters 2.4.5.1 and 3.5.1. Turbocharged engines and Atkinson engines 
are some of the most cost-effective ICE technologies for GHG 
compliance, however, like HEVs, are still not as cost-effective as BEVs 
subsidized by the IRA. Similar to the trends in projected HEV 
penetration, the advanced ICE technologies are projected to decline as 
BEVs become more cost effective over the period of the proposed 
standards; however, for the No Action case, penetrations of TURB12 and 
ATK increase. Table 84 and Table 85 show the projected market 
penetrations for downsized turbocharged engines in the proposed 
standards and the No Action case, while Table 86 and Table 87 show the 
projections for Atkinson engines.
---------------------------------------------------------------------------

    \734\ As summarized in Table 86 and Table 87, the Atkinson 
engines also include a turbocharged variant (Miller cycle), however 
this is a very small portion of the technology penetrations shown.

                         Table 84--TURB12 Penetration Rates Under the Proposed Standards
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................           22           20           17           16           18           14
Crossovers/SUVs...................            3            3            5            6            8            8
Pickups...........................            6            0            0            0            0            0
                                   -----------------------------------------------------------------------------
    Total.........................            8            7            7            8           10            9
----------------------------------------------------------------------------------------------------------------


                          Table 85--TURB12 Penetrations Rates Under the No Action Case
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................           28           29           29           31           39           40
Crossovers/SUVs...................            3            3            5            9           13           13
Pickups...........................            6            0            0            0            0            0
                                   -----------------------------------------------------------------------------
    Total.........................           10            9           11           14           18           19
----------------------------------------------------------------------------------------------------------------


                          Table 86--ATK Penetration Rates Under the Proposed Standards
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................           28           23           19           13            8            7
Crossovers/SUVs...................           55           49           37           34           30           29
Pickups...........................           35           75           61           54           44           31
                                   -----------------------------------------------------------------------------
    Total.........................           45           46           36           31           26           23
----------------------------------------------------------------------------------------------------------------


                            Table 87--ATK Penetrations Rates Under the No Action Case
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................           25           24           21           18           16           17
Crossovers/SUVs...................           68           63           54           49           48           48
Pickups...........................           42           84           76           71           68           66
                                   -----------------------------------------------------------------------------
    Total.........................           53           55           49           44           42           42
----------------------------------------------------------------------------------------------------------------


[[Page 29331]]

ii. Medium-Duty Technology Penetrations
    In this section we discuss the projected new MDV \735\ sales 
technology penetration rates from EPA's analysis for the proposed 
standards. Table 88 shows the EPA projected penetration rates of BEV 
technology under the proposed standards by body style. It is important 
to note that this is a projection and represents one out of many 
possible compliance pathways for the industry. The proposed standards 
are performance-based and do not mandate any specific technology for 
any manufacturer or any vehicle type. Each manufacturer is free to 
choose its own set of technologies with which it will demonstrate 
compliance with the standards. As the proposed standards become more 
stringent over MYs 2027 to 2032, the projected penetration of BEVs 
(driven mostly by electrification of vans) increases from 17 percent in 
MY 2027 up to 46 percent of overall vehicle production in MY 2032.
---------------------------------------------------------------------------

    \735\ MDVs were not broken down into separate Class 2b and Class 
3 categories in the analysis for the proposal. The proposed GHG and 
criteria pollutant emissions standards regulate Class 2b and Class 3 
as a single MDV class. The analysis did include a breakdown between 
MDV vans and MDV pickups due to differences in use-case and 
applicable technologies between MDV vans and MDV pickups.

           Table 88--Fleet BEV Penetration Rates, by Body Style, Under the Proposed Standards for MDVs
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Vans..............................           35           55           73           92           97           98
Pickups...........................            7            1            3            4           15           19
                                   -----------------------------------------------------------------------------
    Total.........................           17           20           28           34           43           46
----------------------------------------------------------------------------------------------------------------

4. Alternative Light-Duty GHG Standards: Projected CO2 Fleet 
Targets, Costs and Technology Penetrations
    In Section III.E, we describe three alternative sets of standards 
that we considered in developing the level of stringency of the 
proposed program--Alternative 1 (more stringent than the proposed 
program), Alternative 2 (less stringent), and Alternative 3 (a slower 
phase-in of the 2032 MY stringency level in the proposed standards). 
All four potential programs would incorporate fairly linear year-over-
year increases in GHG stringency from MY 2027 through MY 2032, with 
stringencies that vary by (on average) 10 g/mi between the alternatives 
and the proposed standards. The alternatives are projected to result in 
reductions in average GHG emissions targets ranging from 51 percent to 
67 percent from the MY 2026 standards, compared to a projected 56 
percent reduction for the proposed standards.
    Alternative 1 projected fleet-wide CO2 targets are 10 g/
mi lower on average than the proposed targets; Alternative 2 projected 
fleet-wide CO2 targets averaged 10 g/mi higher than the 
proposed targets.\736\ Alternative 3 projected targets in MY 2032 match 
those of the proposed standards. Table 89, Table 90 and Table 91 show 
the projected sales weighted averaged targets (MY 2027-2032) for cars, 
trucks, and the fleet total for the three alternatives. Similarly, 
Table 92, Table 93, and Table 94 show targets for sedans, crossovers/
SUVs and pickups for the three alternatives. Table 95 provides a 
comparison for the projected industry-wide targets for the alternatives 
compared to the proposed standards.
---------------------------------------------------------------------------

    \736\ For reference, the targets at a footprint of 50 square 
feet were exactly 10 g/mi lower and greater for the alternatives.

                 Table 89--Projected Targets by Regulatory Class [CO2 grams/mile]--Alternative 1
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Cars..............................          124          106           89           81           72           63
Trucks............................          153          131          110          100           90           78
                                   -----------------------------------------------------------------------------
    Total.........................          141          121          101           92           83           72
----------------------------------------------------------------------------------------------------------------


                 Table 90--Projected Targets by Regulatory Class [CO2 grams/mile]--Alternative 2
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Cars..............................          144          126          108          100           92           83
Trucks............................          173          152          130          121          111           99
                                   -----------------------------------------------------------------------------
    Total.........................          162          141          122          112          103           92
----------------------------------------------------------------------------------------------------------------


                 Table 91--Projected Targets by Regulatory Class [CO2 grams/mile]--Alternative 3
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Cars..............................          139          126          112           99           86           73

[[Page 29332]]

 
Trucks............................          183          163          144          126          107           89
                                   -----------------------------------------------------------------------------
    Total.........................          165          148          132          115           99           82
----------------------------------------------------------------------------------------------------------------


                            Table 92--Projected Targets by Body Style--Alternative 1
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Sedans............................          124          107           89           81           73           63
Crossovers/SUVs...................          139          120          100           91           82           71
Pickups...........................          182          154          129          117          105           91
                                   -----------------------------------------------------------------------------
    Total.........................          141          121          101           92           83           72
----------------------------------------------------------------------------------------------------------------


                            Table 93--Projected Targets by Body Style--Alternative 2
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Sedans............................          144          126          108          101           92           83
Crossovers/SUVs...................          158          139          120          111          101           91
Pickups...........................          207          179          153          142          130          116
                                   -----------------------------------------------------------------------------
    Total.........................          162          141          122          112          103           92
----------------------------------------------------------------------------------------------------------------


                            Table 94--Projected Targets by Body Style--Alternative 3
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Sedans............................          139          126          112           99           87           73
Crossovers/SUVs...................          165          148          131          115           98           81
Pickups...........................          216          190          169          148          126          104
                                   -----------------------------------------------------------------------------
    Total.........................          165          148          132          115           99           82
----------------------------------------------------------------------------------------------------------------


                     Table 95--Comparison of Proposed Combined Fleet Targets to Alternatives
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                 Model year                    Proposed stds    Alternative 1    Alternative 2    Alternative 3
----------------------------------------------------------------------------------------------------------------
2026 adjusted...............................              186              186              186              186
2027........................................              152              141              162              165
2028........................................              131              121              141              148
2029........................................              111              101              122              132
2030........................................              102               92              112              115
2031........................................               93               83              103               99
2032 and later..............................               82               72               92               82
----------------------------------------------------------------------------------------------------------------

    Table 96, Table 97 and Table 98 provide the modeled fleet BEV 
penetration rates, by body style, for MY 2027-2032 for the three 
alternatives. Table 98 compares the projected BEV penetration rates for 
the alternatives compared to the proposed standards.

                    Table 96--Fleet BEV Penetration Rates, by Body Style, Under Alternative 1
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................           46           52           59           68           75           75
Crossovers/SUVs...................           39           49           57           65           65           71
Pickups...........................           12           27           38           47           45           52
                                   -----------------------------------------------------------------------------

[[Page 29333]]

 
    Total.........................           37           46           54           63           65           69
----------------------------------------------------------------------------------------------------------------


                    Table 97--Fleet BEV Penetration Rates, by Body Style, Under Alternative 2
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................           44           49           60           62           69           72
Crossovers/SUVs...................           34           41           53           54           56           63
Pickups...........................           12           21           33           45           53           52
                                   -----------------------------------------------------------------------------
    Total.........................           33           40           52           55           59           64
----------------------------------------------------------------------------------------------------------------


                    Table 98--Fleet BEV Penetration Rates, by Body Style, Under Alternative 3
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................           43           49           52           60           69           75
Crossovers/SUVs...................           33           40           47           53           59           64
Pickups...........................           10           20           32           43           55           68
                                   -----------------------------------------------------------------------------
    Total.........................           32           39           46           54           62           68
----------------------------------------------------------------------------------------------------------------


            Table 99--Comparison of Projected BEV Penetrations for Alternatives vs Proposed Standards
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                               Proposed stds    Alternative 1    Alternative 2    Alternative 3
               Model year (%)                       (%)              (%)              (%)              (%)
----------------------------------------------------------------------------------------------------------------
2027........................................               36               37               33               32
2028........................................               45               46               40               39
2029........................................               55               54               52               46
2030........................................               60               63               55               54
2031........................................               63               65               59               62
2032........................................               67               69               64               68
----------------------------------------------------------------------------------------------------------------

    As shown in Table 100 for Alternative 1, Table 101 for Alternative 
2, and Table 102 for Alternative 3, the 2032 MY industry average 
vehicle cost increase (compared to the No Action case) ranges from 
approximately $1,000 to $1,800 per vehicle for the alternatives, 
compared to $1,200 per vehicle for the proposed standards.

          Table 100--Fleet Average Cost Per Vehicle Relative to the No Action Scenario [2020 dollars]--
                                                  Alternative 1
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Sedans............................         $204         $276         $480         $601       $1,143       $1,301
Crossovers/SUVs...................          704          740        1,228        1,422        1,788        2,056
Pickups...........................        1,382        2,033        1,871        1,866        1,469        1,544
                                   -----------------------------------------------------------------------------
    Total.........................          668          804        1,120        1,262        1,565        1,775
----------------------------------------------------------------------------------------------------------------


          Table 101--Fleet Average Cost per Vehicle Relative to the No Action Scenario [2020 dollars]--
                                                  Alternative 2
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Sedans............................         $106         -$74          $16           $8         $556         $827
Crossovers/SUVs...................          391          233          263          250          599        1,029
Pickups...........................        1,406        1,656        1,353        1,328        1,511        1,503
                                   -----------------------------------------------------------------------------
    Total.........................          462          355          353          337          718        1,041
----------------------------------------------------------------------------------------------------------------


[[Page 29334]]


          Table 102--Fleet Average Cost per Vehicle Relative to the No Action Scenario [2020 dollars]--
                                                  Alternative 3
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Sedans............................         -$21         -$28        -$208         -$65         $562       $1,030
Crossovers/SUVs...................          251          122           58          288          786        1,142
Pickups...........................          320          421          467          698        1,311        2,148
                                   -----------------------------------------------------------------------------
    Total.........................          189          125           45          250          800        1,256
----------------------------------------------------------------------------------------------------------------


             Table 103--Comparison of Projected Incremental Costs Relative to the No Action Scenario
                                        [CO2 grams/mile)] [2020 Dollars]
----------------------------------------------------------------------------------------------------------------
                 Model year                    Proposed stds    Alternative 1    Alternative 2    Alternative 3
----------------------------------------------------------------------------------------------------------------
2027........................................             $633             $668             $462             $189
2028........................................              497              804              355              125
2029........................................              401            1,120              353               45
2030........................................              526            1,262              337              250
2031........................................              866            1,565              718              800
2032........................................            1,164            1,775            1,041            1,256
----------------------------------------------------------------------------------------------------------------

E. Sensitivities--LD GHG Compliance Modeling

    EPA often conducts sensitivity analyses to help assess key areas of 
uncertainty in both underlying data and modeling assumptions, 
consistent with OMB Circular No. A-94 which establishes guidelines for 
conducting benefit-cost analysis of Federal programs. In the analysis 
for this proposal, EPA has evaluated the feasibility and 
appropriateness of the proposed standards using the central case 
assumptions for technology, market acceptance, and various other 
assumptions described throughout this Preamble and DRIA. For a select 
number of these key assumptions, we have conducted sensitivity analyses 
for the proposed and alternative policies using alternative sets of 
assumptions. We believe that together with the central case 
assumptions, these sensitivities span ranges of values that reasonably 
cover the uncertainty in the critical areas of battery costs and the 
market for BEVs.
1. State-Level ZEV Policies (ACC II)
    We have provided an analysis that accounts for state-level zero-
emissions vehicle (ZEV) policies as described by California's ACC II 
program and other participating states under CAA Section 177. At the 
time this analysis was conducted, California had not yet submitted to 
EPA a request for a waiver for its ACC II program and EPA is not 
prejudging the outcome of any waiver process or whether or not certain 
states are able to adopt California's regulations under the criteria of 
section 177.\737\ Nevertheless, it is an important question to analyze 
what the potential effect of state adoption of ZEV policies might be in 
the context of the No Action case, particularly since manufacturers may 
be adjusting product plans to account for ACC II, and thus we are 
providing this sensitivity analysis to explore this question. As shown 
in Table 104, state adoption of ACC II is projected to amount to about 
30 percent of total U.S. light-duty sales in 2027 and beyond. Within 
the states adopting ACC II, manufacturers are required to sell a 
certain portion of vehicles that meet the ZEV definition, which 
includes BEVs, FCEVs, and a limited number of PHEVs that satisfy a 
minimum requirement for charge depleting range. The required ZEV shares 
increase by model year, reaching 100 percent in 2035 as shown in Table 
105.
---------------------------------------------------------------------------

    \737\ If California were to submit a waiver request for the ACC 
II program and EPA were to subsequently grant the waiver, then it 
may be appropriate to update the No Action case in the final 
rulemaking to reflect the ACC II program.

    Table 104--Sales Share of U.S. New Light-Duty Vehicles in States
                     Adopting ACC II, by Model Year
------------------------------------------------------------------------
                               Portion of U.S. new   States adopting ACC
         Model years          light-duty sales (%)           II
------------------------------------------------------------------------
2018 to 2025................                  12.6  CA.
2026........................                  22.6  CA, MA, NY, OR, VT,
                                                     WA.
2027 and later..............                  30.4  CA, CO, CT, MA, MD,
                                                     ME, NJ, NY, OR, RI,
                                                     VT, WA.
------------------------------------------------------------------------


                                Table 105--ZEV Percentage Sales Requirements Within States Adopting ACC II, by Model Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
   2022       2023       2024       2025       2026       2027       2028       2029       2030       2031       2032       2033       2034       2035
--------------------------------------------------------------------------------------------------------------------------------------------------------
   14.5       17.0       19.5       22.0       35.0       43.0       51.0       59.0       68.0       76.0       82.0       88.0       94.0      100.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    EPA's analysis of state-level ZEV mandates was conducted by 
separating the base year fleet into two regions. We applied a minimum 
BEV sales share constraint to the portion of new vehicles in the ACC 
II-adopting states, using the

[[Page 29335]]

values in Table 105. For the remainder of new vehicles, a minimum BEV 
sales share value of zero was specified. In both ZEV and non-ZEV 
regions, the OMEGA modeling allowed manufacturers to exceed the minimum 
BEV shares if it resulted in lower producer generalized cost, while 
still meeting other modeling constraints including compliance with the 
National GHG standards for the particular policy case and satisfying 
the consumer demand for BEVs. The results of the analysis for this 
state-level ZEV mandate sensitivity are summarized in Table 106 through 
Table 109.

    Table 106--Projected Targets With ACC II, for No Action Case, Proposed and Alternatives--Cars and Trucks
                                                    Combined
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
No Action.........................          164          164          165          165          164          164
Proposed..........................          151          131          111          102           93           82
Alternative 1.....................          141          121          102           92           83           72
Alternative 2.....................          161          141          121          112          103           92
Alternative 3.....................          166          149          132          115           99           82
----------------------------------------------------------------------------------------------------------------


Table 107--Projected Achieved Levels With ACC II, for No Action Case, Proposed and Alternatives--Cars and Trucks
                                                    Combined
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
No Action.........................          146          123          104          100          103           99
Proposed..........................          149          129          107           96           90           81
Alternative 1.....................          145          122           99           83           73           66
Alternative 2.....................          153          132          119          110          100           90
Alternative 3.....................          154          133          122          113           96           81
----------------------------------------------------------------------------------------------------------------


Table 108--BEV Penetrations With ACC II, for No Action Case, Proposed and Alternatives--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action.........................           32           42           49           52           52           54
Proposed..........................           37           45           55           61           64           68
Alternative 1.....................           38           47           55           63           68           72
Alternative 2.....................           37           46           51           57           61           65
Alternative 3.....................           36           45           50           55           62           68
----------------------------------------------------------------------------------------------------------------


             Table 109--Average Incremental Vehicle Cost vs. No Action Case With ACC II, Proposed and Alternatives--Cars and Trucks Combined
                                                                     [2020 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2027         2028         2029         2030         2031         2032       6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed.....................................................         $172          $56          $11          $57         $268         $423         $164
Alternative 1................................................          454          639        1,130        1,050        1,212        1,186          945
Alternative 2................................................          106         -$29        -$184        -$188           73          235            2
Alternative 3................................................           85          -43         -221         -182          214          483           56
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Battery Costs
    We have included sensitivities for battery pack costs that are (a) 
25 percent higher and (b) 15 percent lower (on a $/kWh basis) than the 
battery pack costs in the central case. The high and low sensitivities 
were selected so as to bound what EPA considered to be a reasonable 
envelope for future nominal battery pack cost per kWh, as informed by 
the full range of forecasts in the literature (see the discussion of 
battery cost forecasts we considered in Preamble Section IV.C.2 and 
DRIA Chapter 2.5.2.1.3).
i. Low Battery Costs

[[Page 29336]]



   Table 110--Projected Targets With Low Battery Costs for No Action Case, Proposed and Alternatives--Cars and
                                                 Trucks Combined
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
No Action.........................          162          162          164          164          164          163
Proposed..........................          152          132          111          102           93           82
Alternative 1.....................          141          122          102           93           83           72
Alternative 2.....................          161          141          121          113          103           92
Alternative 3.....................          165          148          131          115           99           82
----------------------------------------------------------------------------------------------------------------


Table 111--Projected Achieved Levels With Low Battery Costs, for No Action Case, Proposed and Alternatives--Cars
                                               and Trucks Combined
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
No Action.........................          152          138          108          106           99          111
Proposed..........................          154          130          110          100           83           80
Alternative 1.....................          154          125          102           83           70           65
Alternative 2.....................          157          136          119           96           98           90
Alternative 3.....................          161          141          124          109           95           80
----------------------------------------------------------------------------------------------------------------


   Table 112--BEV Penetrations With Low Battery Costs, for No Action Case, Proposed and Alternatives--Cars and
                                                 Trucks Combined
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action.........................           34           39           51           52           55           51
Proposed..........................           38           46           54           59           66           68
Alternative 1.....................           38           46           54           63           68           71
Alternative 2.....................           37           46           53           63           62           66
Alternative 3.....................           36           44           51           58           63           69
----------------------------------------------------------------------------------------------------------------


        Table 113--Average Incremental Vehicle Cost vs. No Action Case for Low Battery Costs, Proposed and Alternatives--Cars and Trucks Combined
                                                                     [2020 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2027         2028         2029         2030         2031         2032       6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed.....................................................         $623         $553         $303         $313         $365         $490         $441
Alternative 1................................................          623        1,441        1,690        1,568        1,392        1,443        1,360
Alternative 2................................................          319          213          -13          112            7          286          154
Alternative 3................................................          161          128          -81          -22           64          446          116
--------------------------------------------------------------------------------------------------------------------------------------------------------

ii. High Battery Costs

  Table 114--Projected Targets With High Battery Costs for No Action Case, Proposed and Alternatives--Cars and
                                                 Trucks Combined
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
No Action.........................          166          165          164          163          161          161
Proposed..........................          153          132          112          102           93           82
Alternative 1.....................          143          122          102           92           83           72
Alternative 2.....................          163          142          122          112          103           92
Alternative 3.....................          167          150          133          116           99           82
----------------------------------------------------------------------------------------------------------------


[[Page 29337]]


  Table 115--Projected Achieved Levels with High Battery Costs, for No Action Case, Proposed and Alternatives--
                                            Cars and Trucks Combined
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
No Action.........................          162          153          152          155          160          159
Proposed..........................          151          130          110          100           92           81
Alternative 1.....................          144          121          100           90           82           71
Alternative 2.....................          159          139          119          110          101           92
Alternative 3.....................          164          147          131          115           98           83
----------------------------------------------------------------------------------------------------------------


  Table 116--BEV Penetrations With High Battery Costs, for No Action Case, Proposed and Alternatives--Cars and
                                                 Trucks Combined
----------------------------------------------------------------------------------------------------------------
                                     2027  (%)    2028  (%)    2029  (%)    2030  (%)    2031  (%)    2032  (%)
----------------------------------------------------------------------------------------------------------------
No Action.........................           21           26           28           29           29           29
Proposed..........................           33           41           51           55           60           65
Alternative 1.....................           36           44           54           60           63           69
Alternative 2.....................           29           36           47           52           56           60
Alternative 3.....................           27           33           42           50           58           64
----------------------------------------------------------------------------------------------------------------


       Table 117--Average Incremental Vehicle Cost vs. No Action Case for High Battery Costs, Proposed and Alternatives--Cars and Trucks Combined
                                                                     [2020 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2027         2028         2029         2030         2031         2032       6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed.....................................................       $1,246       $1,057       $1,329       $1,553       $2,103       $2,505       $1,632
Alternative 1................................................        1,884        1,676        1,768        1,885        2,430        2,750        2,066
Alternative 2................................................          888          874        1,227        1,347        1,938        2,340        1,436
Alternative 3................................................          820          785        1,138        1,484        2,242        2,803        1,545
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Consumer Acceptance
    We have included sensitivities on the rate of BEV acceptance as 
well. Given the prevalence of automaker announcements in the media, we 
estimate results assuming a faster rate of BEV acceptance for all body 
styles. We also acknowledge that, though unlikely given available data 
and current trends, BEV acceptance may be slower than we estimate in 
our central case, possibly due to use cases such as towing or 
populations in remote locations. For information on what these BEV 
acceptance rates are, refer to DRIA Chapter 4.1.3. Results assuming a 
faster rate of BEV acceptance are provided in Table 118 through Table 
121. Results assuming a slower rate of BEV acceptance are shown in 
Table 122 through Table 125.
i. Faster BEV Acceptance

 Table 118--Projected Targets With Faster BEV Acceptance for No Action Case, Proposed and Alternatives--Cars and
                                                 Trucks Combined
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
No Action.........................          163          163          164          165          165          166
Proposed..........................          151          132          112          103           93           83
Alternative 1.....................          141          122          102           93           83           72
Alternative 2.....................          161          141          121          113          103           93
Alternative 3.....................          165          148          132          116           99           82
----------------------------------------------------------------------------------------------------------------


Table 119--Projected Achieved Levels With Faster BEV Acceptance, for No Action Case, Proposed and Alternatives--
                                            Cars and Trucks Combined
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
No Action.........................          147          131          100           76           79           71
Proposed..........................          157          129          107           86           73           59
Alternative 1.....................          156          128          104           80           66           53
Alternative 2.....................          157          136          116          100           80           71
Alternative 3.....................          159          140          118           96           90           76
----------------------------------------------------------------------------------------------------------------


[[Page 29338]]


 Table 120--BEV Penetrations With Faster BEV Acceptance, for No Action Case, Proposed and Alternatives--Cars and
                                                 Trucks Combined
----------------------------------------------------------------------------------------------------------------
                                     2027  (%)    2028  (%)    2029  (%)    2030  (%)    2031  (%)    2032  (%)
----------------------------------------------------------------------------------------------------------------
No Action.........................           36           42           54           63           63           66
Proposed..........................           38           46           55           63           69           75
Alternative 1.....................           38           46           55           63           69           76
Alternative 2.....................           38           46           54           61           69           73
Alternative 3.....................           38           46           54           63           66           71
----------------------------------------------------------------------------------------------------------------


      Table 121--Average Incremental Vehicle Cost vs. No Action Case for Faster BEV Acceptance, Proposed and Alternatives--Cars and Trucks Combined
                                                                     [2020 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2027         2028         2029         2030         2031         2032       6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed.....................................................         $287         $982         $809         $602         $746         $712         $690
Alternative 1................................................          317        1,001        1,209        1,533        1,675        1,445        1,196
Alternative 2................................................          212          214          -34         -194          179          163           90
Alternative 3................................................           54           33         -176         -235          -66           53          -56
--------------------------------------------------------------------------------------------------------------------------------------------------------

ii. Slower BEV Acceptance

 Table 122--Projected Targets With Slower BEV Acceptance for No Action Case, Proposed and Alternatives--Cars and
                                                 Trucks Combined
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
No Action.........................          164          162          162          161          161          160
Proposed..........................          153          133          112          103           93           82
Alternative 1.....................          143          122          102           92           83           72
Alternative 2.....................          163          142          122          112          103           92
Alternative 3.....................          167          149          132          115           99           82
----------------------------------------------------------------------------------------------------------------


Table 123--Projected Achieved Levels With Slower BEV Acceptance, for No Action Case, Proposed and Alternatives--
                                            Cars and Trucks Combined
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
No Action.........................          161          160          154          159          152          158
Proposed..........................          150          131          110          101           92           82
Alternative 1.....................          144          118           99           90           81           74
Alternative 2.....................          160          140          119          111          101           90
Alternative 3.....................          164          148          128          113           97           80
----------------------------------------------------------------------------------------------------------------


 Table 124--BEV Penetrations With Slower BEV Acceptance, for No Action Case, Proposed and Alternatives--Cars and
                                                 Trucks Combined
----------------------------------------------------------------------------------------------------------------
                                     2027  (%)    2028  (%)    2029  (%)    2030  (%)    2031  (%)    2032  (%)
----------------------------------------------------------------------------------------------------------------
No Action.........................           22           23           28           27           33           31
Proposed..........................           34           42           53           59           63           68
Alternative 1.....................           36           47           55           61           66           69
Alternative 2.....................           29           39           50           55           59           64
Alternative 3.....................           28           35           45           53           61           68
----------------------------------------------------------------------------------------------------------------


      Table 125--Average Incremental Vehicle Cost vs. No Action Case for Slower BEV Acceptance, Proposed and Alternatives--Cars and Trucks Combined
                                                                     [2020 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2027         2028         2029         2030         2031         2032       6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed.....................................................         $877       $1,135         $755         $898         $995       $1,498       $1,026

[[Page 29339]]

 
Alternative 1................................................        1,336        1,470        1,143        1,244        1,393        1,731        1,386
Alternative 2................................................          695          853          560          689          888        1,344          838
Alternative 3................................................          508          734          473          702        1,005        1,621          841
--------------------------------------------------------------------------------------------------------------------------------------------------------

4. Impact of Sensitivities on Proposed LD GHG Standards
    The following is a summary of the sensitivities conducted and a 
comparison on resulting BEV penetrations and incremental technology 
costs for the proposed standards compared to the respective No Action 
case.
    As can be seen, the projected targets for the proposed standards 
are not affected by the range of sensitivities discussed in this 
section. It is important to note that manufacturers are able to meet 
the targets for the proposed standards in every year for the range of 
sensitivities analyzed here. However, the achieved levels do vary in 
each sensitivity: in some cases, there is greater level of 
overcompliance (most notably in the High BEV acceptance case).
    Table 126 and Table 127 give a comparison for the projected targets 
and achieved levels for the proposed standards, based on the various 
identified sensitivities. While BEV penetrations projected to meet the 
proposed standards (shown in Table 128) do not vary much across the 
sensitivity cases, BEV penetrations in the No Action case do vary 
significantly: projected MY 2032 BEV penetrations range from 31 percent 
to 61 percent based on different input assumptions which affect either 
required BEV share (in the case of the State-level Policies scenario) 
or consumer demand for electric vehicles. The range of BEV penetrations 
in the No Action case is provided in Table 129.
    Of the metrics considered, the range of sensitivities have the 
greatest impact on incremental vehicle cost compared to the No Action 
case. Compared to a 6-year average incremental costs of about $1100 for 
the Central Case, these sensitivities result in a range of 6-year 
average incremental costs from $200 per vehicle to about $1600. The two 
sensitivity cases which result in less BEV penetrations in the No 
Action case--High Battery Costs and the Slower BEV Acceptance cases--
result in the highest incremental costs, while the lower incremental 
costs are for the three sensitivity cases that result in more BEVs in 
the No Action case: The Low Battery Costs, Faster BEV Acceptance, and 
the State-Level Policies scenario.

                  Table 126--Range of Targets for Proposed Standards--Cars and Trucks Combined
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Central Case......................          152          131          111          102           93           82
State-level Policies..............          151          131          111          102           93           82
Low Battery Costs.................          152          132          111          102           93           82
High Battery Costs................          153          132          112          102           93           82
Faster BEV Acceptance.............          151          132          112          103           93           83
Slower BEV Acceptance.............          153          133          112          103           93           82
----------------------------------------------------------------------------------------------------------------


              Table 127--Range of Achieved Levels for Proposed Standards--Cars and Trucks Combined
                                                [CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Central Case......................          151          129          107           97           91           81
State-level Policies..............          149          129          107           96           90           81
Low Battery Costs.................          154          130          110          100           83           80
High Battery Costs................          151          130          110          100           92           81
Faster BEV Acceptance.............          157          129          107           86           73           59
Slower BEV Acceptance.............          150          131          110          101           92           82
----------------------------------------------------------------------------------------------------------------


              Table 128--Range of BEV Penetrations for Proposed Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
                                     2027  (%)    2028  (%)    2029  (%)    2030  (%)    2031  (%)    2032  (%)
----------------------------------------------------------------------------------------------------------------
Central Case......................           36           45           55           60           63           67
State-level Policies..............           38           46           54           59           66           68
Low Battery Costs.................           38           46           54           59           66           68
High Battery Costs................           33           41           51           55           60           65
Faster BEV Acceptance.............           38           46           55           63           69           75
Slower BEV Acceptance.............           34           42           53           59           63           68
----------------------------------------------------------------------------------------------------------------


[[Page 29340]]


                Table 129--Range of BEV Penetrations for No Action Case--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
                                     2027  (%)    2028  (%)    2029  (%)    2030  (%)    2031  (%)    2032  (%)
----------------------------------------------------------------------------------------------------------------
Central Case......................           27           32           37           40           40           39
State-level Policies..............           32           42           49           52           52           54
Low Battery Costs.................           34           39           51           52           55           51
High Battery Costs................           21           26           28           29           29           29
Faster BEV Acceptance.............           36           42           54           63           63           66
Slower BEV Acceptance.............           22           23           28           27           33           31
----------------------------------------------------------------------------------------------------------------


                    Table 130--Range of Incremental Vehicle Cost vs. No Action Case for Proposed Standards--Cars and Trucks Combined
                                                                     [2020 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2027         2028         2029         2030         2031         2032       6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Central Case.................................................         $633         $497         $401         $526         $866       $1,164         $681
State-level Policies.........................................          172           56           11           57          268          423          164
Low Battery Costs............................................          623          553          303          313          365          490          441
High Battery Costs...........................................        1,246        1,057        1,329        1,553        2,103        2,505        1,632
Faster BEV Acceptance........................................          287          982          809          602          746          712          690
Slower BEV Acceptance........................................          877        1,135          755          898          995        1,498        1,026
--------------------------------------------------------------------------------------------------------------------------------------------------------

F. Sensitivities--MD GHG Compliance Modeling

1. Battery Costs (Low and High)
    For medium duty vehicles, we have carried over the high and low 
battery pack cost sensitivities, similar to those conducted for the 
light-duty GHG analysis (for more information refer to Section IV.E.2). 
The low and high battery pack cost sensitivities have been combined 
into the summary tables in this section.
    Table 131 and Table 132 gives a comparison for the targets and the 
projected achieved levels for the proposed standards, based on battery 
costs assumed for the central case and the low and high cost 
sensitivity cases.
    The range of BEV penetrations for the proposed MD standards are 
provided in Table 133.
    Battery costs have the greatest impact on incremental vehicle cost 
compared to the No Action case. Compared to a 6-year average 
incremental costs of about $700 for the Central Case, these 
sensitivities result in a range of incremental costs from $300 per 
vehicle to about $1500. Incremental vehicle costs for the proposed 
standards for the three sensitivities are provided in Table 134.

  Table 131--Projected Targets for Proposed Standards: Central Case, Low and High Battery Sensitivities--Medium
                                                  Duty Vehicles
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Central Case......................          438          427          389          352          312          275
Low Battery Costs.................          437          423          386          349          312          275
High Battery Costs................          439          428          390          355          316          276
----------------------------------------------------------------------------------------------------------------


 Table 132--Projected Achieved Levels for Proposed Standards: Central Case, Low and High Battery Sensitivities--
                                              Medium Duty Vehicles
----------------------------------------------------------------------------------------------------------------
                                        2027         2028         2029         2030         2031         2032
----------------------------------------------------------------------------------------------------------------
Central Case......................          437          426          390          347          310          272
Low Battery Costs.................          436          423          385          350          307          273
High Battery Costs................          439          428          389          352          313          273
----------------------------------------------------------------------------------------------------------------


  Table 133--BEV Penetrations for Proposed Standards: Central Case, Low and High Battery Sensitivities--Medium
                                                  Duty Vehicles
----------------------------------------------------------------------------------------------------------------
                                      2027 (%)     2028 (%)     2029 (%)     2030 (%)     2031 (%)     2032 (%)
----------------------------------------------------------------------------------------------------------------
Central Case......................           17           20           28           34           43           46
Low Battery Costs.................           17           18           26           33           38           44
High Battery Costs................           14           17           25           27           36           43
----------------------------------------------------------------------------------------------------------------


[[Page 29341]]


  Table 134--Average Incremental Vehicle Cost vs. No Action Case for Proposed Standards: Central Case, Low and High Battery Sensitivities--Medium Duty
                                                                        Vehicles
                                                                     [2020 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2027         2028         2029         2030         2031         2032       6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Central Case.................................................         $364         $249         $290         $654         $944       $1,784         $714
Low Battery Costs............................................          118            4         -142            5          564        1,094          274
High Battery Costs...........................................          810          640          919        1,648        2,191        3,072        1,547
--------------------------------------------------------------------------------------------------------------------------------------------------------

V. EPA's Basis That the Proposed Standards Are Feasible and Appropriate 
Under the Clean Air Act

A. Overview

    As discussed in Section II of this preamble, there is a critical 
need for further criteria pollutant and GHG reductions to address the 
adverse impacts of air pollution from light and medium duty vehicles on 
public health and welfare. With continued advances in internal 
combustion emissions controls and vehicle electrification technologies 
coming into the mainstream as primary vehicle emissions controls, EPA 
believes substantial further emissions reductions are feasible and 
appropriate under the Clean Air Act.
    The Clean Air Act authorizes EPA to establish emissions standards 
for motor vehicles to regulate emissions of air pollutants that 
contribute to air pollution which, in the Administrator's judgment, may 
reasonably be anticipated to endanger public health or welfare. As 
discussed in Section II, emissions from motor vehicles contribute to 
ambient levels of pollutants for which EPA has established health-based 
NAAQS. These pollutants are linked with respiratory and/or 
cardiovascular problems and other adverse health impacts leading to 
increased medication use, hospital admissions, emergency department 
visits, and premature mortality.
    In addition, light and medium-duty vehicles are significant 
contributors to the U.S. GHG emissions inventories, and additional 
reductions in GHGs from vehicles are needed to avoid the worst 
consequences of climate change as discussed in Section II.
    This proposed rule also considers the large potential impact that 
the Inflation Reduction Act (IRA) will have on facilitating production 
and adoption of PEV technology, which is highly effective technology 
for controlling tailpipe emissions of criteria pollutants and GHGs. 
Prior to the passage of the IRA, EPA received input from auto 
manufacturers that increasing the market share of PEVs is now 
technologically feasible but that it is important to address consumer 
issues such as charging infrastructure and the cost to purchase a PEV, 
as well as manufacturing issues such as battery supply and 
manufacturing costs. The IRA provides powerful incentives in all of 
these areas that will help facilitate increased market penetration of 
PEV technology in the time frame considered in this rulemaking. Thus, 
it is an important element of EPA's cost and feasibility assessment, 
and EPA has considered the impacts of the IRA in our assessment of the 
appropriate proposed standards.\738\
---------------------------------------------------------------------------

    \738\ It is important to note that, although E.O. 14037 
identified a goal for 50 percent of U.S. new vehicle sales to be 
zero-emission vehicles by 2030, the E.O. only directed EPA to 
consider beginning work on a new rulemaking and to do so consistent 
with applicable law. EPA exercised its technical judgment based on 
the record before it in developing this proposal consistent with the 
authority of section 202 of the Clean Air Act.
---------------------------------------------------------------------------

B. Consideration of Technological Feasibility, Compliance Costs and 
Lead Time

    The technological readiness of the auto industry to meet the 
proposed standards for model years 2027-2032 is best understood in the 
context of over a decade of light-duty vehicle emissions reduction 
programs in which the auto industry has introduced emissions-reducing 
technologies in a wide lineup of ever more cost effective, efficient, 
and high-volume vehicle applications . Among the range of technologies 
that have been demonstrated over the past decade, electrification 
technologies have seen particularly rapid development and lower costs, 
and as a result the number of PEVs projected across all the policy 
alternatives considered here is much higher than in any of EPA's prior 
rulemaking analyses. In particular, BEVs have zero tailpipe emissions 
and so are capable of supporting rates of annual stringency increases 
that are much greater than were typical in earlier rulemakings.
    In this rulemaking, unlike some prior vehicle emissions standards, 
the technology necessary to achieve significantly more stringent 
standards has already been developed and demonstrated in production 
vehicles. PEVs are now being produced in large numbers in every segment 
and size of the current light-duty fleet, ranging from small cars such 
as GM's Bolt EV to light trucks such as Ford's F150 Lightning, and 
their production for the U.S. market is roughly doubling every 
year.\739\ Large fleet owners have also begun fulfilling fleet 
electrification commitments by taking delivery of rapidly growing 
numbers of BEV medium-duty delivery vans.\740\ In setting standards, 
EPA considers the extent of further deployment that is warranted in 
light of the benefits to public health and welfare, and potential 
constraints, such as costs, raw material availability, component 
supplies, redesign cycles, infrastructure, and consumer acceptance. The 
extent of these potential constraints has diminished significantly, 
even since the 2021 rule, in light of increased investment by 
automakers, increased acceptance by consumers, and significant support 
from Congress to address such areas as upfront purchase price, charging 
infrastructure, critical mineral supplies, and domestic supply chain 
manufacturing.
---------------------------------------------------------------------------

    \739\ Estimated at 8.4 percent of production in MY 2022, up from 
4.4 percent in MY 2021 and 2.2 percent in MY 2020. See also the 
discussion of U.S. PEV penetration in I.A.2.ii.
    \740\ See the discussion of fleet electrification commitments in 
I.A.2.ii.
---------------------------------------------------------------------------

    At the same time, in response to the increased stringency of the 
proposed standards, automakers would be expected to adopt advanced 
technologies at an increasing pace across more of their vehicle fleets. 
EPA has carefully considered potential constraints on further 
deployment of these advanced technologies. For example, in addition to 
considering the breadth of current product offerings, EPA has also 
considered vehicle redesign cycles. Based on previous public comments 
and industry trends, manufacturers generally require about five years 
to design, develop, and produce a new vehicle model.\741\ EPA's 
technical assessment for this proposal

[[Page 29342]]

accounts for these redesign limits.\742\ Within the modeling that EPA 
conducted to support this proposal, we have assumed limits to the rate 
at which a manufacturer can choose to ramp in the transition from an 
ICE vehicle to a BEV. We have also applied limits to the ramp up of 
battery production, considering the time needed to increase the 
availability of raw materials and construct or expand battery 
production facilities. Constraints for redesign and battery production 
in our compliance modeling are described in more detail in Chapter 2.6 
of the DRIA. Our modeling also incorporates constraints related to 
consumer acceptance. Under our central case analysis assumptions, the 
model anticipates that consumers will in the near term tend to favor 
ICE vehicles over PEVs when two vehicles are comparable in cost and 
capability.\743\ Taking into account individual consumer preferences, 
we anticipate that PEV acceptance and adoption will continue to 
accelerate as consumer familiarity with PEVs grows, as demonstrated in 
the scientific literature on PEV acceptance and consistent with typical 
diffusion of innovation. Adoption of PEVs is expected to be further 
supported by expansion of key enablers of PEV acceptance, namely 
increasing market presence of PEV, more model choices, expanding 
infrastructure, and decreasing costs to consumers.\744\ See also 
Preamble Section IV.C.5 and DRIA Chapter 4. Overall, given the number 
and breadth of current low- or zero-emission vehicles and the 
assumptions we have made to limit the rate at which new vehicle 
technologies are adopted, our assessment shows that there is sufficient 
lead time for the industry to more broadly deploy existing technologies 
and successfully comply with the proposed standards.
---------------------------------------------------------------------------

    \741\ For example, in its comments on the 2012 rule, Ford stated 
that manufacturers typically begin to firm up their product plans 
roughly five years in advance of actual production. (Docket OAR-
2009-0472-7082.1, p. 10.)
    \742\ In our compliance modeling, we have limited vehicle 
redesign opportunities through MY 2029 in our compliance modeling to 
every 7 years for light- and medium-duty pickup trucks and medium-
duty vans, and 5 years for all other vehicles. We are assuming that 
manufacturers have sufficient lead team to adjust product redesign 
years after MY 2029, so we do not continue to apply redesign 
constraints for MYs 2030 and beyond.
    \743\ EPA's compliance modeling estimates the consumer demand 
for BEV and ICE vehicles using a consumer ``generalized cost'' that 
includes elements of the purchase cost (including any purchase 
incentives), vehicle maintenance and repair costs, and fuel 
operating costs as described in DRIA Chapter 4.1.
    \744\ Jackman, D K, K S Fujita, H C Yang, and M Taylor. 2023. 
Literature Review of U.S. Consumer Acceptance of New Personally 
Owned Light Duty Plug-in Electric Vehicles. Washington, DC: U.S. 
Environmental Protection Agency.
---------------------------------------------------------------------------

    Our analysis projects that for the industry overall, 65 percent of 
new vehicles in MY 2032 would be BEVs. EPA believes that this is an 
achievable level based on our technical assessment for this proposal 
that includes consideration of the feasibility and lead time required 
for BEVs and acceptance of BEVs in the market. Our assessment of the 
appropriateness of the level of BEVs in our analysis is also informed 
by public announcements by manufacturers about their plans to 
transition fleets to electrified vehicles, as described in Section 
I.A.2 of this Preamble and further developed in DRIA 3.1.3.1. More 
detail about our technical assessment, and the assumptions for the 
production feasibility and consumer acceptance of BEVs is provided in 
Section IV of this Preamble, and Chapters 2, 3, 4, and 6 of the DRIA.
    At the same time, we note that the proposed standards are 
performance-based and do not mandate any specific technology for any 
manufacturer or any vehicle. Moreover, the overall industry does not 
necessarily need to reach this level of BEVs in order to comply--the 
projection in our analysis is one of many possible compliance pathways 
that manufacturers could choose to take under the performance-based 
standards. For example, manufacturers that choose to increase their 
sales of HEV and PHEV technologies or apply more advanced technology to 
non-hybrid ICE vehicles would require a smaller number of BEVs than we 
have projected in our assessment to comply with the proposed standards.
    In considering feasibility of the proposed standards, EPA also 
considers the impact of available compliance flexibilities on 
automakers' compliance options.\745\ The advanced technologies that 
automakers are continuing to incorporate in vehicle models today 
directly contribute to each company's compliance plan (i.e., these 
vehicle models have lower criteria pollutant and GHG emissions), and 
manufacturers can choose to comply with the proposed standards outright 
through their choice of emissions reducing technologies. In addition, 
automakers typically have widely utilized the program's established 
averaging, banking, and trading (ABT) provisions which provide a 
variety of flexible paths to plan compliance. We have discussed this 
dynamic at length in past rules, and we anticipate that this same 
dynamic will support compliance with this rulemaking. Although the ABT 
program for GHG and criteria pollutants have some differences (as 
discussed in detail in Sections III.B.4 and III.C.9), they 
fundamentally operate in a similar fashion. The credit program was 
designed to recognize that automakers typically have compliance 
opportunities and strategies that differ across their fleet, as well a 
multi-year redesign cycle, so not every vehicle will be redesigned 
every year to add emissions-reducing technology. Moreover, when 
technology is added, it will generally not achieve emissions reductions 
corresponding exactly to a single year-over-year change in stringency 
of the standards. Instead, in any given model year, some vehicles will 
be ``credit generators,'' over-performing compared to their criteria 
pollutant standards or footprint-based CO2 emissions targets 
in that model year, while other vehicles will be ``debit generators'' 
and under-performing against their standards or targets. As the 
proposed standards reach increasingly lower numerical emissions levels, 
some vehicle designs that had generated credits in earlier model years 
may instead generate debits in later model years. In MY 2032 when the 
proposed standards reach the lowest level, it is possible that only 
BEVs and PHEVs are generating positive credits, and all ICE vehicles 
generate varying levels of deficits. Even in this case, the application 
of ICE technologies can remain an important part of a manufacturer's 
compliance strategy by reducing the amount of debits generated by these 
vehicles. A greater application of ICE technologies (e.g., strong 
hybrids) can enable compliance with fewer BEVs than if less ICE 
technology was adopted, and therefore enable the tailoring of a 
compliance strategy to the manufacturer's specific market and product 
offerings. Together, an automaker's mix of credit-generating and debit-
generating vehicles determine its compliance with both criteria 
pollutant and GHG standards for that year.
---------------------------------------------------------------------------

    \745\ While EPA is considering these compliance flexibilities in 
assessing the feasibility of the proposed standards, EPA is not 
reopening such flexibilities, except to the extent that we are 
proposing or soliciting comment on a specific flexibility as in 
Section III of this preamble. Specifically, EPA is not reopening 
ABT.
---------------------------------------------------------------------------

    Moreover, the trading provisions of the program allow manufacturers 
to design a compliance strategy relying not only on overcompliance and 
undercompliance by different vehicles or in different years, but even 
by different manufacturers. Credit trading is a compliance flexibility 
provision that allows one vehicle manufacturer to purchase credits from 
another, accommodating the ability of manufacturers to make strategic 
choices in planning for and reacting to normal fluctuations in an 
automotive business cycle. When credits are available for less

[[Page 29343]]

than the marginal cost of compliance, EPA would anticipate that an 
automaker might choose to adopt a compliance strategy relying on 
purchasing credits.
    The proposed performance-based standards with ABT provisions give 
manufacturers a degree of flexibility in the design of specific 
vehicles and their fleet offerings, while allowing industry overall to 
meet the standards and thus achieve the health and environmental 
benefits projected for this rulemaking at a lower cost. EPA has 
considered ABT in the feasibility assessments for many previous 
rulemakings since EPA first began incorporating ABT credits provisions 
in mobile source rulemakings in the 1980s (see Section III.B.4 for 
further information on the history of ABT) and continues that practice 
here. First, by fully averaging across vehicles in the car and truck 
regulatory classes and by allowing for credit banking across years, 
manufacturers have the flexibility to adopt emissions-reducing 
technologies in the manner that best suits their particular market and 
business circumstances. Similarly, with the opportunity to trade 
credits with other firms, each manufacturer can, in effect, average 
credits among a pool of vehicles that extends beyond their own fleet. 
EPA's annual Automotive Trends Report illustrates how different 
automakers have chosen to make use of the GHG program's various credit 
features.\746\ It is clear that manufacturers are widely utilizing the 
various credit programs available, and we have every expectation that 
manufacturers will continue to take advantage of the compliance 
flexibilities and crediting programs to their fullest extent, thereby 
providing them with additional tools in finding the lowest cost 
compliance solutions in light of the proposed revised standards.
---------------------------------------------------------------------------

    \746\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas 
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029 December 2022.
---------------------------------------------------------------------------

    While the potential value of credit trading as a means of reducing 
costs to automakers was always clear, there is increasing evidence that 
automakers have successfully adopted credit trading as an important 
compliance strategy that reduces costs. The market for trading credits 
is now well established. As shown in the most recent EPA Trends Report, 
19 vehicle firms collectively have participated in nearly 100 credit 
trading transactions totaling 169 Tg of credits since the inception of 
the EPA program through Model Year 2021. These firms include many of 
the largest automotive firms.\747\ Several of these manufacturers have 
publicly acknowledged the importance of considering credit purchase or 
sales as part of their business plans to improve their competitive 
position.748 749 For firms with new vehicle production made 
up entirely or primarily of credit-generating vehicles, the revenue 
generated from credit sales can help to fund the development of GHG-
reducing technologies and offset production costs. Other firms have the 
option of purchasing credits if they choose to make a fleet that is 
overall deficit-generating. This can be a cost-effective compliance 
strategy, especially for companies that make lower-volume vehicles 
where the incremental development costs for GHG-reducing technologies 
would be higher on a per-vehicle basis than for another company. The 
opportunity to purchase credits can also enable a company to continue 
specializing in vehicle applications where the application of advanced 
GHG-reducing technologies may be more costly than purchasing credits. 
For example, manufacturers of light- and medium-duty pickups might 
choose to purchase credits rather than apply BEV technology to some of 
those vehicles used frequently for long distance towing applications, 
at least in the shorter term when higher capacity batteries might be 
used to accommodate the existing charging infrastructure.
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    \747\ EPA 2020 Trends Report, page 110 and Figure 5.15.
    \748\ ``FCA historically pursued compliance with fuel economy 
and greenhouse gas regulations in the markets where it operated 
through the most cost effective combination of developing, 
manufacturing and selling vehicles with better fuel economy and 
lower GHG emissions, purchasing compliance credits, and, as allowed 
by the U.S. federal Corporate Average Fuel Economy (``CAFE'') 
program, paying regulatory penalties.'' Stellantis N.V. (2020). 
``Annual Report and Form 20-F for the year ended December 31, 
2020.''
    \749\ ``We have several options to comply with existing and 
potential new global regulations. Such options include increasing 
production and sale of certain vehicles, such as EVs, and curtailing 
production of less fuel efficient ICE vehicles; technology changes, 
including fuel consumption efficiency and engine upgrades; payment 
of penalties; and/or purchase of credits from third parties. We 
regularly evaluate our current and future product plans and 
strategies for compliance with fuel economy and GHG regulations'' 
General Motors Company (2022). ``Annual Report and Form 10-K for the 
fiscal year ended December 31, 2021.''
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    In light of the evidence of increased adoption of trading as a 
compliance strategy, EPA has included the ability of manufacturers to 
trade credits as part of our central case compliance modeling for this 
proposal, rather than as a sensitivity analysis as we did in the 
modeling for the 2021 rule. We anticipate that the economic 
efficiencies of credit trading will generally be attractive to 
automakers, and thus we consider it appropriate to take trading into 
account in estimating the costs of the standards. However, trading is 
an optional compliance flexibility, and we recognize that automakers 
may choose to use it in their compliance strategies to varying degrees. 
If a manufacturer chooses not to participate in credit trading for 
whatever reason, additional compliance strategies can be used to 
supplement the adoption of emissions-reducing technologies. For 
example, such manufacturers also could elect to shift market segments 
and sales volumes as a strategy for increasing the proportion of 
credit-generating vehicles relative to debit-generating vehicles. Thus, 
reduced use of credit trading may result in somewhat higher costs for 
the program, but we do not believe it would alter our conclusion that 
the standards are feasible.
    As part of its assessment of technological feasibility and lead 
time, EPA has considered the cost for the auto industry to comply with 
the proposed revised standards. See Section VI.B and Chapter 10 of the 
DRIA for our analysis of compliance costs.
    The estimated average costs to manufacturers to meet the proposed 
standards are approximately $1,200 (2020 dollars) per vehicle in MY 
2032, which is within the range of costs projected in prior rules, 
which EPA estimated at about $1,800 (2010 dollars) and $1,000 (2018 
dollars) per vehicle for the 2012 and 2021 rules respectively. Across 
the range of sensitivities, the projected costs are approximately $200 
to $1,600 per vehicle in MY 2032, which is a range EPA believes is 
reasonable and within the range of cost estimates in prior rules. The 
estimated MY 2032 costs of $1,200 represent under 3 percent of the 
average cost of a new vehicle today (about $46,000 in 2022).\750\
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    \750\ Note that these values are averages across all body 
styles, powertrains, makes, models, and trims, and there will be 
differences for each individual vehicle. Also note that, as 
discussed in DRIA Chapter 4.2, the price of a new vehicle has been 
increasing over time due to factors not associated with our rules. 
If the average price of a MY 2032 vehicle is higher than that of a 
MY 2022 vehicle, this estimated increase in cost could well be 
smaller than 3 percent compared to the cost of a new MY 2032 
vehicle.
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    As also discussed in Section I.A.2.ii of this Preamble, EPA has 
observed a shift toward electrification both in vehicle sales and 
across the automotive industry at large, and that these changes are 
being driven to a large degree by the technological innovation of the 
automotive industry and the significant funds, estimated at $1.2 
trillion by at

[[Page 29344]]

least one analysis,751 752 those firms intend to spend by 
2030 on developing and deploying electrification technologies. EPA 
believes its standards will support this very significant investment 
and, particularly in light of the available compliance flexibilities 
and multiple paths for compliance, are feasible and will not cause 
economic disruption in the automotive industry. We do not believe the 
estimated increase in marginal vehicle cost will lead to detrimental 
effects to automakers for multiple reasons, including the fact that 
macroeconomic effects are a much larger factor in OEM revenues (for 
example, the chip shortage), and that automakers regularly adjust 
product plans and choose the mix of vehicles they produce to maximize 
profits. We also note that through the third quarter of 2022, domestic 
automakers reported their highest profits since 2016, even though 
domestic vehicle sales fell from the previous year. In addition, the 
significant investments by industry and Congress (e.g., BIL and IRA) in 
supporting technology which eliminates both criteria and GHG tailpipe 
emissions, presents an opportunity for a significant step forward in 
achieving the goals of the Clean Air Act. The compliance costs per 
vehicle in this proposal are reasonable and consistent with those in 
past GHG rules while the standards would achieve substantially greater 
emissions reductions of GHGs and substantial emissions reductions for 
criteria pollutants as well.
---------------------------------------------------------------------------

    \751\ Reuters, ``A Reuters analysis of 37 global automakers 
found that they plan to invest nearly $1.2 trillion in electric 
vehicles and batteries through 2030,'' October 21, 2022. Accessed on 
November 4, 2022 at https://graphics.reuters.com/AUTOS-INVESTMENT/ELECTRIC/akpeqgzqypr/.
    \752\ Reuters, ``Exclusive: Automakers to double spending on 
EVs, batteries to $1.2 trillion by 2030,'' October 25, 2022. 
Accessed on November 4, 2022 at https://www.reuters.com/technology/exclusive-automakers-double-spending-evs-batteries-12-trillion-by-2030-2022-10-21/.
---------------------------------------------------------------------------

    For this proposal, EPA finds that the expected compliance costs for 
automakers are reasonable in light of the emissions reductions in air 
pollutants and the resulting benefits for public health and welfare.

C. Consideration of Emissions of GHGs and Criteria Air Pollutants

    An essential factor that EPA considered in determining the 
appropriate level of the proposed standards is the reductions in air 
pollutant emissions that would result from the program, including 
emissions of GHGs, criteria pollutants and air toxics and associated 
public health and welfare impacts.
    The cumulative GHG emissions reductions through 2055 are projected 
to be 7,400 MMT of CO2, 0.12 MMT of CH4 and 0.13 
MMT of N2O, as the fleet turns over year-by-year to new 
vehicles that meet the proposed light- and medium-duty standards. This 
represents a 26 percent reduction in CO2 over that time 
period relative to the no-action case. See Section VI and Chapter 9 of 
the DRIA. We also project, in calendar year 2055, 35 percent to 40 
percent reductions in PM2.5, NOX, and 
SOX emissions. Further, we project over 40 percent reduction 
in VOC emissions in the year 2055. See Section VII and Chapter 9 of the 
DRIA. EPA finds that the additional emissions reductions that would be 
achieved under these proposed standards are important in reducing the 
public health and welfare impacts of air pollution.
    As discussed in Section VIII, we monetize benefits of the proposed 
standards and evaluate other costs in part to enable a comparison of 
costs and benefits pursuant to E.O. 12866, but we recognize there are 
benefits that we are currently unable to fully quantify. EPA's practice 
has been to set standards to achieve improved air quality consistent 
with CAA section 202, and not to rely on cost-benefit calculations, 
with their uncertainties and limitations, as identifying the 
appropriate standards. Nonetheless, our conclusion that the estimated 
benefits considerably exceed the estimated costs of the proposed 
program reinforces our view that the proposed standards are appropriate 
under section 202(a).
    The present value of climate benefits attributable to the proposed 
standards are estimated at $83 billion to $1.0 trillion across a range 
of discount rates and values for the social cost of carbon (present 
values in 2027 for GHG reductions through 2055). See Section VIII and 
Chapter 10 of the DRIA for a full discussion of the SC-GHG estimates 
used to monetize climate benefits and the data and modeling limitations 
that naturally restrain the ability of SC-GHG estimates to include all 
the important physical, ecological, and economic impacts of climate 
change, such that the estimates are a partial accounting of climate 
change impacts and will therefore, tend to be underestimates of the 
marginal benefits of abatement. The present value of PM2.5-
related health benefits attributable to the proposed standards through 
2055 are estimated to total $64 billion to $290 billion (assuming a 7 
percent and 3 percent discount rate, respectively, as well as different 
long-term PM-related mortality risk studies; see Section VIII.E).\753\
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    \753\ The criteria pollutant benefits associated with the 
standards presented here do not include the full complement of 
health and environmental benefits that, if quantified and monetized, 
would increase the total monetized benefits (such as the benefits 
associated with reductions in human exposure to ambient 
concentrations of ozone). See Section VIII.E and DRIA Chapter 7 for 
more information about benefits we are not currently able to fully 
quantify.
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D. Consideration of Impacts on Consumers, Energy, Safety and Other 
Factors

    EPA also considered the impact of the proposed light- and medium-
duty standards on consumers as well as on energy and safety. EPA 
concludes that the proposed standards would be beneficial for consumers 
because the lower operating costs would offset increases in vehicle 
technology costs, irrespective of BEV purchase incentives in the IRA. 
Vehicle technology cost increases for light-and medium-duty vehicles 
through 2055 are estimated at $260 billion to $380 billion (7 and 3 
percent discount rates.) Total fuel savings, net of reduced liquid fuel 
and increased electricity, for consumers through 2055 are estimated at 
$560 billion to $1.1 trillion (7 percent and 3 percent discount rates.) 
Reduced maintenance and repair costs through 2055 are estimated at $280 
billion to $580 billion (7 percent and 3 percent discount rates) (See 
Sections VIII.B and VIII.F and Chapter 10 of the DRIA). Thus, the 
proposal would result in significant savings for consumers.
    EPA also carefully considered the consumer impacts of these 
proposed standards. We recognize that increases in upfront purchase 
costs are likely to be of particular concern to low-income households, 
but we anticipate that automakers will continue to offer a variety of 
models at different price points (see Chapter 4 of the DRIA). Moreover, 
because lower-income households spend more of their income on fuel than 
other households, the effects of reduced fuel costs may be especially 
important for these households. Similarly, low-income households are 
more likely to buy used vehicles and own older vehicles, and thus would 
benefit from significant savings in repair and maintenance costs if 
they purchase electric vehicles. Furthermore, for used BEVs, there is 
evidence that the original purchase incentive is passed on to the next 
buyer (i.e., reduces the used price of BEVs). In addition, BEV purchase 
incentives for used vehicles are provided for the first time ever 
through the IRA.

[[Page 29345]]

    EPA also evaluated the impacts of the proposed light- and medium-
duty standards on energy, in terms of fuel consumption and energy 
security. This proposal is projected to reduce U.S. gasoline 
consumption by 950 billion gallons through 2055 (see DRIA Chapter 9). 
EPA considered the impacts of this projected reduction in fuel 
consumption on energy security, specifically the avoided costs of 
macroeconomic disruption (See Section VIII.G). A reduction of U.S. net 
petroleum imports reduces both financial and strategic risks caused by 
potential sudden disruptions in the supply of petroleum to the U.S., 
thus increasing U.S. energy security. We estimate the energy security 
benefits of the proposal through 2055 at $21 billion to $42 billion (7 
percent and 3 percent discount rate, see Chapter 10 of the DRIA). EPA 
considers this proposal to be beneficial from an energy security 
perspective.
    Section 202(a)(4)(A) of the CAA specifically prohibits the use of 
an emission control device, system or element of design that will cause 
or contribute to an unreasonable risk to public health, welfare, or 
safety. EPA has a long history of considering the safety implications 
of its emission standards,\754\ up to and including the more recent 
light-duty GHG regulations: The 2010 rule which established the MY 
2012-2016 light-duty vehicle GHG standards, the 2012 rule which first 
established MY 2017-2025 light-duty vehicle GHG standards, and the 2020 
and 2021 rules. The relationship between GHG emissions standards and 
safety is multi-faceted, and can be influenced not only by control 
technologies, but also by consumer decisions about vehicle ownership 
and use. EPA has estimated the impacts of this proposal on safety by 
accounting for changes in new vehicle purchase, fleet turnover and VMT, 
changes in vehicle footprint, and vehicle weight changes that are in 
some cases lower (as an emissions control strategy) and in other cases 
higher (with the additional weight often associated with electrified 
vehicles). EPA finds that under this proposal, there is no 
statistically significant change in the estimated risk of fatalities 
per distance traveled. EPA is presenting non-statistically significant 
values here in part to enable comparison with prior rules. We have 
found virtually no change in fatality risk as a result of the proposed 
standards, with an estimated increase of 0.2 percent per distance 
traveled (see Section VIII.F). However, as the costs of driving decline 
due to the improvement in fuel economy, consumers overall will choose 
to drive more miles (this is the ``VMT rebound'' effect). As a result 
of this personal decision by consumers to drive more due to the reduced 
cost of driving, EPA projects this will result in an increase in 
accidents, injuries, and fatalities (i.e., although the rate of injury 
per mile stays virtually unchanged, an increase in miles driven results 
in an increase in total number of injuries). EPA's goal in setting 
motor vehicle standards is to protect public health and welfare while 
recognizing the importance of the mobility choices of Americans. 
Because the only statistically significant projected increase in 
accidents, injuries, and fatalities would be the result of consumers' 
voluntary choices to drive more when operating costs are reduced, EPA 
believes it Is appropriate to place emphasis on the level of risk of 
injury per mile traveled, and to consider the projected change in 
injuries in that context.
---------------------------------------------------------------------------

    \754\ See, e.g., 45 FR 14496, 14503 (1980) (``EPA would not 
require a particulate control technology that was known to involve 
serious safety problems.'').
---------------------------------------------------------------------------

    The increase in fatalities per distance traveled is not 
statistically significant, and the only statistically significant 
increase in fatalities is due to consumers' voluntary choices to drive 
more. As with the 2021 rule, EPA considers safety impacts in the 
context of all projected health impacts from the rule including public 
health benefits from the projected reductions in air pollution. In 
considering these estimates in the context of anticipated public health 
benefits, EPA notes that the estimated present value of monetized 
benefits of reduced PM2.5 through 2055 is between $63 
billion and $280 billion (depending on study and discount rate), and 
that the illustrative air quality modeling which, as discussed further 
in Chapter 8 of the DRIA assesses a regulatory scenario with lower 
rates of PEV penetration than EPA is projecting in this proposal, 
estimates that in 2055 such a scenario would prevent between 730 and 
1,400 premature deaths associated with exposure to PM2.5 and 
prevent between 15 and 330 premature deaths associated with exposure to 
ozone. We expect that the cumulative number of premature deaths avoided 
that would occur during the entire period of 2027-2055 as a result of 
the proposed rule would be much larger than the 2055 estimate.

E. Selection of Proposed Standards Under CAA 202(a)

    Under section 202(a) EPA has a statutory obligation to set 
standards to reduce air pollution from classes of motor vehicles that 
the Administrator has found contribute to air pollution that may be 
expected to endanger public health and welfare. Consistent with our 
longstanding approach to setting motor vehicle standards, the 
Administrator has considered a number of factors in proposing these 
vehicles standards. In setting such standards, the Administrator must 
provide adequate lead time for the development and application of 
technology to meet the standards, taking into consideration the cost of 
compliance. Furthermore, in setting standards for NMOG+NOX, 
PM and CO for heavy duty vehicles (including MDVs and light trucks over 
6,000 pounds GWVR), standards shall reflect the greatest degree of 
emissions reduction that the Administrator determines is achievable for 
the model year, giving appropriate consideration to cost, energy and 
safety factors. EPA's proposed standards properly implement these 
statutory provisions. As discussed in Sections II, VI, and VII, the 
proposed standards will achieve significant and important reductions in 
emissions of a wide range of air pollutants that endanger public health 
and welfare. Furthermore, as discussed throughout this preamble, the 
emission reduction technologies needed to meet the proposed standards 
have already been developed and are feasible and available for 
manufacturers to utilize in their fleets at reasonable cost in the 
timeframe of these proposed standards, even after considering key 
constraints including battery manufacturing capacity, critical 
materials availability, and vehicle redesign cadence.
    Moreover, the flexibilities already available under EPA's existing 
regulations, including fleet average standards and the ABT program--in 
effect enabling manufacturers to spread the compliance requirement for 
any particular model year across multiple model years--support EPA's 
conclusion that the proposed standards provide sufficient time for the 
development and application of technology, giving appropriate 
consideration to cost.
    Section 202(a)(3) is explicit that, for certain pollutants for 
certain vehicles, the Administrator shall establish standards that 
achieve the greatest degree of emissions reduction achievable, although 
the provision identifies other factors to consider and requires the 
Administrator to exercise judgment in weighing those factors. Section 
202(a)(1)-(2) provides greater discretion to the Administrator to weigh 
various factors but, as with the 2021 rule, the Administrator notes 
that the purpose of adopting standards under that provision of the 
Clean Air Act is to

[[Page 29346]]

address air pollution that may reasonably be anticipated to endanger 
public health and welfare and that reducing air pollution has 
traditionally been the focus of such standards. Thus, for this proposal 
the agency's focus in identifying proposed standards, and a range of 
alternative standards, is on achieving significant emissions 
reductions, within the constraints identified by CAA section 202.
    There have been very significant developments in the adoption of 
PEVs since EPA promulgated the 2021 rule. While at the time of the 2021 
rule, estimates of financial commitments to electric vehicles by the 
automotive industry were in the range of $500-600 billion, more recent 
estimates are $1.2 trillion, approximately twice that of only two years 
ago.755 756 The European Union has given preliminary 
approval to a requirement to end tailpipe GHG emissions by 2035 (with a 
55% reduction for cars by 2030), to complement other countries' 
decisions to phase out ICE engines. In the United States, sales of PEVs 
have continued to follow an accelerated rate of growth, reaching 8.4 
percent of U.S. light-duty vehicle production in 2022, up from 4.4 
percent in MY 2021 and 2.2 percent in MY 2020.\757\ In 2022, BEVs alone 
accounted for about 807,000 U.S. new car sales, or about 5.8 percent of 
the new light-duty passenger vehicle market, up from 3.2 percent BEVs 
the year before.\758\ The year-over-year growth in U.S. BEV sales 
suggests that an increasing share of new vehicle buyers are concluding 
that a PEV is the best vehicle to meet their needs. Waiting lists for 
BEVs, as well as recent published studies, indicate that consumer 
demand for PEVs is strong, and that limited availability is likely a 
greater constraint than consumer acceptance.\759\
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    \755\ Reuters, ``A Reuters analysis of 37 global automakers 
found that they plan to invest nearly $1.2 trillion in electric 
vehicles and batteries through 2030,'' October 21, 2022. Accessed on 
November 4, 2022 at https://graphics.reuters.com/AUTOS-INVESTMENT/ELECTRIC/akpeqgzqypr/.
    \756\ Reuters, ``Exclusive: Automakers to double spending on 
EVs, batteries to $1.2 trillion by 2030,'' October 25, 2022. 
Accessed on November 4, 2022 at https://www.reuters.com/technology/exclusive-automakers-double-spending-evs-batteries-12-trillion-by-2030-2022-10-21/.
    \757\ Environmental Protection Agency, ``The 2022 EPA Automotive 
Trends Report: Greenhouse Gas Emissions, Fuel Economy, and 
Technology since 1975,'' (forthcoming).
    \758\ Colias, M., ``U.S. EV Sales Jolted Higher in 2022 as 
Newcomers Target Tesla,'' Wall Street Journal, January 6, 2023.
    \759\ Gillingham, K, A van Benthem, S Weber, D Saafi, and X He. 
2023. ``Has Consumer Acceptance of Electric Vehicles Been 
Increasing: Evidence from Microdata on Every New Vehicle Sale in the 
United States.'' American Economics Association: Papers & 
Proceedings, forthcoming, Bartlett, Jeff. 2022. More Americans Would 
Buy and Electric Vehicle, and Some Consumers Would Use Low-Carbon 
Fuels, Survey Shows. Consumer Reports. July 7. Accessed March 2, 
2023. https://www.consumerreports.org/hybrids-evs/interest-in-electric-vehicles-and-low-carbon-fuels-survey-a8457332578/.
---------------------------------------------------------------------------

    One of the most significant developments for U.S. automakers and 
consumers is Congressional passage of the IRA, which takes a 
comprehensive approach to addressing many of the potential barriers to 
wider adoption of PEVs in the United States. The IRA provides tens of 
billions of dollars in tax credits and direct Federal funding to reduce 
the upfront cost to consumers of purchasing PEVs, to increase the 
number of charging stations across the country, to reduce the cost of 
manufacturing batteries, and to promote domestic sources of critical 
minerals and other important elements of the PEV supply chain. By 
addressing all of these potential obstacles to wider PEV adoption in a 
coordinated, well-financed, strategy, Congress significantly advanced 
the potential for PEV adoption in the near term.
    In developing this proposal, EPA has recognized that these 
significant developments in automaker investment, PEV market growth, 
and Congressional support through the BIL and IRA represent a 
significant opportunity to ensure that the emissions reductions these 
developments make possible will be realized as fully as possible and at 
a reasonable cost over the time frame of the rule. It is clear that 
these prior developments have already led to PEVs being increasingly 
employed across the fleet in both light-duty and medium-duty 
applications, largely independent of EPA's prior standards. Although 
the 2021 rule projected a PEV penetration rate of 17 percent for 2026, 
our updated modeling of the No Action case for this rule suggests a PEV 
penetration rate for 2027 of 27 percent, even with no change in the 
standards. This projection is consistent with, if not more conservative 
than, the projections of third-party analysts.760 761 This 
proposal seeks to build on the trends that these developments and 
projections indicate, and accelerate the continued deployment of these 
technologies to achieve further emissions reductions in 2027 and 
beyond.
---------------------------------------------------------------------------

    \760\ In 2021, IHS Markit projected 27.8 percent BEV, PHEV, and 
range-extended electric vehicle (REX) for 2027. ``US EPA Proposed 
Greenhouse Gas Emissions Standards for Model Years 2023-2026; What 
to Expect,'' August 9, 2021. Accessed on October 28, 2021 at https://www.spglobal.com/mobility/en/research-analysis/us-epa-proposed-greenhouse-gas-emissions-standards-my2023-26.html.
    \761\ In early 2023 ICCT projected 39 percent PEVs for 2027 
under the moderate IRA impact scenario. See International Council on 
Clean Transportation, ``Analyzing the Impact of the Inflation 
Reduction Act on Electric Vehicle Uptake in the US,'' ICCT White 
Paper, January 2023. Available at https://theicct.org/wp-content/uploads/2023/01/ira-impact-evs-us-jan23.pdf.
---------------------------------------------------------------------------

    In developing our PEV penetration estimates, EPA considered a 
variety of constraints which have to date limited PEV adoption and/or 
could limit it in the future, including: Cost to manufacturers and 
consumers; refresh and redesign cycles for manufacturers; availability 
of raw materials, batteries, and other necessary supply chain elements; 
adequate electricity supply and distribution; and barriers to consumer 
acceptance such as adequate charging infrastructure and a wide range of 
vehicle model choices that meet a diverse set of consumer needs.\762\ 
EPA has consulted with analysts from other agencies, including the 
Federal Energy Regulatory Commission, DOE, DOT, and the Joint Office 
for Energy and Transportation, extensively reviewed published 
literature and other data, and, as discussed thoroughly in this 
preamble and the accompanying DRIA, has incorporated limitations into 
our modeling to address these potential constraints, as appropriate.
---------------------------------------------------------------------------

    \762\ Although has considered consumer acceptance (including 
consumer costs) in exercising our discretion under the statute based 
on the record before us, to assess the feasibility and 
appropriateness of the proposed standards, we note that it is not a 
statutorily-enumerated factor under section 202(a)(1)-(3).
---------------------------------------------------------------------------

    We also developed further analyses, recognizing that there are 
uncertainties in our projections. For example, battery costs may turn 
out to be higher, or lower, than we project, and consumers may adopt 
PEVs faster or slower than we anticipate. Overall, we identified a 
range of potential costs and PEV penetrations which we view as 
representing a wider range of possible, and still feasible and 
reasonable, compliance pathways under the proposed standards.
    Taking both the significant developments in the automotive market 
and all of these potential constraints and uncertainties into account, 
EPA's analyses found that it would be feasible to reduce net emissions 
(compared to the No Action case) by 46 percent for CO2, 35 
percent for PM2.5, 40 percent for NOX, and 47 
percent for VOCs by the final year analyzed. EPA also analyzed a range 
of standards which are somewhat more stringent and somewhat less 
stringent than the proposed standards. EPA anticipates that the 
appropriate choice of final standards within this range will reflect 
the Administrator's judgments about the uncertainties in EPA's analyses 
as well

[[Page 29347]]

as consideration of public comment and updated information where 
available. However, EPA proposes to find that standards substantially 
more stringent than Alternative 1 would not be appropriate because of 
uncertainties concerning the cost and feasibility of such standards. 
EPA proposes to find that standards substantially less stringent than 
Alternative 2 or 3 would not be appropriate because they would forgo 
feasible emissions reductions that would improve the protection of 
public health and welfare.
    Taking into consideration the importance of reducing criteria 
pollutant and GHG emissions and the primary purpose of CAA section 202 
to reduce the threat posed to human health and the environment by air 
pollution, the Administrator finds it is appropriate and consistent 
with the text and purpose of section 202 to adopt standard that, when 
implemented, would result in significant reductions of light-duty 
vehicle emissions both in the near term and over the longer term, 
taking into consideration the cost of compliance within the available 
lead time. Likewise, the Administrator concludes that these standards 
are consistent with the text and purpose of section 202 for heavy-duty 
vehicles by achieving significant reductions of GHGs, taking into 
consideration the cost of compliance within the available lead time, 
and by achieving the greatest degree of emissions reduction achievable 
for certain other pollutants, taking into consideration cost, lead-
time, energy and safety factors.
    Finally, EPA notes that the estimated benefits of the proposed 
standards exceed the estimated costs, and estimates net benefits of 
this proposal through 2055 at $850 billion to $1.6 trillion (7 percent 
and 3 percent discount rates, with 3 percent SC-GHG) (see Section VIII 
and Chapter 10 of the DRIA). We recognize the uncertainties and 
limitations in these estimates (including unquantified benefits), and 
the Administrator has not relied on these estimates in identifying the 
appropriate standards under section 202. Nonetheless, our conclusion 
that the estimated benefits considerably exceed the estimated costs of 
the proposed program reinforces our view that the proposed standards 
are appropriate.
    In summary, after consideration of the very significant reductions 
in criteria pollutant and GHG emissions, given the technical 
feasibility of the proposed standards and the moderate costs per 
vehicle in the available lead time, and taking into account a number of 
other factors such as the savings to consumers in operating costs over 
the lifetime of the vehicle, safety, the benefits for energy security, 
and the significantly greater quantified benefits compared to 
quantified costs, EPA believes that the proposed standards are 
appropriate under EPA's section 202(a) authority.

VI. How would this proposal reduce GHG emissions and their associated 
effects?

A. Estimating Emission Inventories in OMEGA

    To estimate emission inventory effects due to a potential policy, 
OMEGA uses as inputs a set of vehicle, refinery and electricity 
generating unit (EGU) emission rates. In an iterative process, we first 
generate emission inventories using very detailed emissions models that 
estimate inventories from vehicles (EPA's MOVES model) and EGUs (EPA's 
Power Sector Modeling Platform, v.6.21763 764). 
The generation of those inventories is described in Chapters 8 and 5, 
respectively, of the DRIA. However, upstream EGU inventories used a set 
of bounding runs that looked at two possible futures--one with a low 
level of fleet electrification and another with a higher level of 
electrification. These bounding runs represented our best estimate of 
these two possible futures--the continuation of the 2021 rule (lower) 
and our proposal (upper)--at the time that those model runs were 
conducted. With those bounded sets of inventories, and the associated 
electricity demands within them, we can calculate emission rates for 
the two ends of these bounds. Using those rates, we can interpolate, 
using the given OMEGA policy scenario's fuel demands, to generate a 
unique set of emission rates for that OMEGA policy scenario. Using 
those unique rates, OMEGA then generates emission inventories for any 
future OMEGA policy scenario depending on the liquid fuel and 
electricity demands of that specific policy. This is explained in 
greater detail in Chapter 9 of the DRIA.
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    \763\ https://www.epa.gov/power-sector-modeling.
    \764\ https://www.epa.gov/power-sector-modeling/epas-power-sector-modeling-platform-v6-using-ipm-summer-2021-reference-case.
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    For vehicle criteria pollutant emissions (which are discussed 
further in Preamble Section VII), CH4 and N2O 
emissions, EPA used two sets of MOVES emission inventory runs--one 
assuming no future use of gasoline particulate filters and one assuming 
such use. Using the miles traveled (for tailpipe, tire wear, and brake 
wear emissions) and liquid fuel consumed (for evaporative and fuel 
spillage emissions), we can then generate sets of emission rates for 
use in OMEGA. Using those rates, which are specific to fuel types and 
vehicle types (car vs. truck, etc.), we can then generate unique 
emission inventories for the given OMEGA policy scenario. This is 
important given the changing nature of the transportation fleet (BEV vs 
ICE, car vs CUV vs pickup) and the way those change for any possible 
policy scenario and the many factors within OMEGA that impact the 
future fleet composition and the very different vehicle emission rates 
for BEVs vs ICE vehicles. This is especially true given the consumer 
choice elements within OMEGA and the wide variety of input parameters 
that can have significant impacts on the projected future fleet. This 
is explained in greater detail in Chapter 9 of the DRIA. Note that 
OMEGA estimates CO2 emissions based on the policy scenario.
    Regarding refinery emissions, EPA did not have GHG refinery 
emissions from which to generate GHG emission rates associated with 
refineries. We did estimate refinery emissions in OMEGA for some 
criteria air pollutants and describe that in Section VII.

B. Impact on GHG Emissions

    Using OMEGA as described in Section VI.A, we estimated annual GHG 
emissions impacts (accounting for vehicles and EGUs) associated with 
the proposed program for the calendar years 2027 through 2055, as shown 
in Table 135. The table shows that the proposed program would result in 
significant net GHG reductions compared to the No Action scenario. The 
cumulative CO2, CH4 and N2O emissions 
reductions from the proposed program total 7,300 MMT, 0.12 MMT, and 
0.13 MMT, respectively, through 2055. Table 136, Table 137 and Table 
138 show the analogous results for alternatives 1, 2 and 3, 
respectively.

[[Page 29348]]



               Table 135--Estimated GHG Impacts of the Proposed Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Emission impacts relative to no action          Percent change from no action
                                                                           (million metric tons per year)         --------------------------------------
                          Calendar year                           ------------------------------------------------
                                                                         CO2             CH4             N2O           CO2          CH4          N2O
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.............................................................            -5.8       -0.000025        -0.00013         -0.4         -0.1         -0.6
2028.............................................................             -15       -0.000076        -0.00029         -1.2         -0.2         -1.3
2029.............................................................             -27        -0.00017        -0.00052         -2.3         -0.4         -2.4
2030.............................................................             -42        -0.00028        -0.00078         -3.6         -0.8         -3.8
2031.............................................................             -60        -0.00043         -0.0011         -5.4         -1.2         -5.7
2032.............................................................             -82        -0.00062         -0.0015         -7.6         -1.9         -7.9
2033.............................................................            -110        -0.00087          -0.002        -10.1         -2.9        -10.4
2034.............................................................            -130         -0.0012         -0.0024          -13         -4.1          -13
2035.............................................................            -150         -0.0015         -0.0028          -16         -5.6          -16
2036.............................................................            -170         -0.0018         -0.0032          -18         -7.1          -18
2037.............................................................            -200         -0.0022         -0.0036          -21         -9.0          -20
2038.............................................................            -220         -0.0027          -0.004          -24          -11          -23
2039.............................................................            -240         -0.0031         -0.0044          -26          -14          -25
2040.............................................................            -260         -0.0036         -0.0048          -29          -16          -27
2041.............................................................            -280         -0.0041         -0.0052          -31          -19          -29
2042.............................................................            -300         -0.0045         -0.0055          -34          -21          -31
2043.............................................................            -320          -0.005         -0.0058          -36          -24          -33
2044.............................................................            -330         -0.0054          -0.006          -38          -27          -34
2045.............................................................            -350         -0.0059         -0.0063          -39          -30          -35
2046.............................................................            -360         -0.0063         -0.0065          -41          -32          -37
2047.............................................................            -370         -0.0067         -0.0067          -42          -35          -38
2048.............................................................            -390         -0.0072         -0.0069          -44          -38          -39
2049.............................................................            -400         -0.0076         -0.0071          -45          -40          -39
2050.............................................................            -410          -0.008         -0.0073          -46          -43          -40
2051.............................................................            -410         -0.0081         -0.0074          -46          -44          -40
2052.............................................................            -420         -0.0082         -0.0075          -47          -44          -41
2053.............................................................            -420         -0.0083         -0.0076          -47          -45          -41
2054.............................................................            -420         -0.0084         -0.0077          -47          -45          -41
2055.............................................................            -420         -0.0084         -0.0077          -47          -45          -41
Sum..............................................................          -7,300           -0.12           -0.13          -26          -17          -25
--------------------------------------------------------------------------------------------------------------------------------------------------------
* GHG emission rates were not available for calculating GHG inventories from refineries.


                   Table 136--Estimated GHG Impacts of Alternative 1 Relative to the No Action Scenario, Light-Duty and Medium-Duty *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Emission impacts relative to no action          Percent change from no action
                                                                           (million metric tons per year)         --------------------------------------
                          Calendar year                           ------------------------------------------------
                                                                         CO2             CH4             N2O           CO2          CH4          N2O
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.............................................................            -6.1       -0.000027        -0.00014         -0.5         -0.1         -0.6
2028.............................................................             -17       -0.000073        -0.00031         -1.3         -0.2         -1.4
2029.............................................................             -31        -0.00015        -0.00053         -2.5         -0.4         -2.5
2030.............................................................             -49        -0.00026        -0.00084         -4.2         -0.7         -4.1
2031.............................................................             -69        -0.00042         -0.0012         -6.2         -1.2         -6.0
2032.............................................................             -93        -0.00062         -0.0016         -8.6         -1.9         -8.3
2033.............................................................            -120        -0.00089         -0.0021        -11.5         -2.9        -11.0
2034.............................................................            -150         -0.0012         -0.0026          -14         -4.2          -14
2035.............................................................            -170         -0.0016          -0.003          -17         -5.8          -17
2036.............................................................            -200          -0.002         -0.0034          -20         -7.5          -19
2037.............................................................            -220         -0.0024         -0.0039          -23         -9.6          -22
2038.............................................................            -250         -0.0028         -0.0043          -26          -12          -24
2039.............................................................            -270         -0.0033         -0.0048          -29          -14          -27
2040.............................................................            -290         -0.0038         -0.0052          -32          -17          -29
2041.............................................................            -320         -0.0043         -0.0056          -35          -20          -32
2042.............................................................            -330         -0.0048         -0.0059          -37          -23          -33
2043.............................................................            -360         -0.0054         -0.0062          -40          -26          -35
2044.............................................................            -370         -0.0059         -0.0065          -42          -29          -37
2045.............................................................            -390         -0.0064         -0.0068          -43          -32          -38
2046.............................................................            -400         -0.0069         -0.0071          -45          -35          -40
2047.............................................................            -410         -0.0073         -0.0073          -47          -38          -41
2048.............................................................            -430         -0.0078         -0.0075          -48          -41          -42
2049.............................................................            -440         -0.0083         -0.0077          -50          -44          -43
2050.............................................................            -450         -0.0088         -0.0079          -51          -47          -43
2051.............................................................            -450         -0.0089          -0.008          -51          -48          -44
2052.............................................................            -460          -0.009         -0.0081          -51          -48          -44
2053.............................................................            -460         -0.0091         -0.0082          -52          -49          -44

[[Page 29349]]

 
2054.............................................................            -460         -0.0091         -0.0083          -52          -49          -44
2055.............................................................            -460         -0.0092         -0.0083          -52          -49          -44
Sum..............................................................          -8,100           -0.13           -0.14          -29          -18          -27
--------------------------------------------------------------------------------------------------------------------------------------------------------
*GHG emission rates were not available for calculating GHG inventories from refineries.


                   Table 137--Estimated GHG Impacts of Alternative 2 Relative to the No Action Scenario, Light-Duty and Medium-Duty *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Emission impacts relative to no action          Percent change from no action
                                                                           (million metric tons per year)         --------------------------------------
                          Calendar year                           ------------------------------------------------
                                                                         CO2             CH4             N2O           CO2          CH4          N2O
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.............................................................            -4.2       -0.000021         -0.0001         -0.3          0.0         -0.4
2028.............................................................             -11       -0.000058        -0.00021         -0.9         -0.1         -1.0
2029.............................................................             -22        -0.00014        -0.00042         -1.8         -0.4         -2.0
2030.............................................................             -34        -0.00023        -0.00064         -2.9         -0.6         -3.1
2031.............................................................             -49        -0.00036        -0.00094         -4.4         -1.0         -4.8
2032.............................................................             -69        -0.00054         -0.0013         -6.4         -1.7         -6.8
2033.............................................................             -92        -0.00077         -0.0017         -8.8         -2.5         -9.2
2034.............................................................            -120         -0.0011         -0.0022          -11         -3.7          -12
2035.............................................................            -140         -0.0014         -0.0026          -14         -5.0          -14
2036.............................................................            -150         -0.0017         -0.0029          -16         -6.4          -16
2037.............................................................            -180          -0.002         -0.0033          -19         -8.2          -19
2038.............................................................            -200         -0.0024         -0.0037          -21          -10          -21
2039.............................................................            -220         -0.0028         -0.0041          -24          -12          -23
2040.............................................................            -240         -0.0033         -0.0044          -26          -15          -25
2041.............................................................            -260         -0.0037         -0.0048          -28          -17          -27
2042.............................................................            -270         -0.0041         -0.0051          -30          -20          -29
2043.............................................................            -290         -0.0046         -0.0054          -32          -22          -31
2044.............................................................            -300          -0.005         -0.0056          -34          -25          -32
2045.............................................................            -310         -0.0054         -0.0058          -35          -27          -33
2046.............................................................            -330         -0.0059         -0.0061          -37          -30          -34
2047.............................................................            -340         -0.0063         -0.0063          -38          -32          -35
2048.............................................................            -350         -0.0067         -0.0065          -40          -35          -36
2049.............................................................            -360         -0.0071         -0.0066          -41          -38          -37
2050.............................................................            -370         -0.0075         -0.0068          -42          -40          -37
2051.............................................................            -370         -0.0076         -0.0069          -42          -40          -38
2052.............................................................            -380         -0.0076          -0.007          -42          -41          -38
2053.............................................................            -380         -0.0077         -0.0071          -42          -41          -38
2054.............................................................            -380         -0.0077         -0.0071          -43          -41          -38
2055.............................................................            -380         -0.0078         -0.0072          -43          -42          -38
Sum..............................................................          -6,600           -0.11           -0.12          -23          -15          -23
--------------------------------------------------------------------------------------------------------------------------------------------------------
*GHG emission rates were not available for calculating GHG inventories from refineries.


                   Table 138--Estimated GHG Impacts of Alternative 3 Relative to the No Action Scenario, Light-Duty and Medium-Duty *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Emission impacts relative to no action          Percent change from no action
                                                                           (million metric tons per year)         --------------------------------------
                          Calendar year                           ------------------------------------------------
                                                                         CO2             CH4             N2O           CO2          CH4          N2O
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.............................................................            -3.4       -0.000023        -0.00009         -0.3         -0.1         -0.4
2028.............................................................            -8.9       -0.000062        -0.00019         -0.7         -0.1         -0.9
2029.............................................................             -16        -0.00012        -0.00033         -1.3         -0.3         -1.6
2030.............................................................             -27         -0.0002        -0.00054         -2.3         -0.5         -2.6
2031.............................................................             -44        -0.00033        -0.00088         -4.0         -1.0         -4.4
2032.............................................................             -66        -0.00051         -0.0013         -6.2         -1.6         -6.7
2033.............................................................             -91        -0.00075         -0.0017         -8.7         -2.5         -9.2
2034.............................................................            -120          -0.001         -0.0022          -11         -3.7          -12
2035.............................................................            -140         -0.0014         -0.0027          -14         -5.1          -15
2036.............................................................            -160         -0.0017          -0.003          -17         -6.6          -17
2037.............................................................            -190         -0.0021         -0.0035          -20         -8.5          -19
2038.............................................................            -210         -0.0026         -0.0039          -22          -11          -22
2039.............................................................            -230          -0.003         -0.0043          -25          -13          -24

[[Page 29350]]

 
2040.............................................................            -250         -0.0035         -0.0047          -28          -15          -27
2041.............................................................            -280         -0.0039         -0.0051          -31          -18          -29
2042.............................................................            -290         -0.0044         -0.0054          -33          -21          -31
2043.............................................................            -310         -0.0049         -0.0057          -35          -24          -32
2044.............................................................            -330         -0.0053          -0.006          -37          -26          -34
2045.............................................................            -340         -0.0058         -0.0062          -39          -29          -35
2046.............................................................            -360         -0.0063         -0.0065          -41          -32          -37
2047.............................................................            -370         -0.0067         -0.0067          -42          -35          -38
2048.............................................................            -390         -0.0072         -0.0069          -43          -38          -39
2049.............................................................            -400         -0.0076         -0.0071          -45          -40          -39
2050.............................................................            -410         -0.0081         -0.0073          -46          -43          -40
2051.............................................................            -410         -0.0082         -0.0074          -46          -44          -41
2052.............................................................            -420         -0.0083         -0.0075          -47          -44          -41
2053.............................................................            -420         -0.0083         -0.0076          -47          -45          -41
2054.............................................................            -420         -0.0084         -0.0077          -47          -45          -41
2055.............................................................            -420         -0.0084         -0.0077          -47          -45          -41
Sum..............................................................          -7,100           -0.12           -0.13          -25          -16          -24
--------------------------------------------------------------------------------------------------------------------------------------------------------
*GHG emission rates were not available for calculating GHG inventories from refineries.

C. Global Climate Impacts Associated With the Proposal's GHG Emissions 
Reductions

    The transportation sector is the largest U.S. source of GHG 
emissions, representing 27.2 percent of total GHG emissions.\765\ 
Within the transportation sector, light-duty vehicles are the largest 
contributor, at 57.1 percent, and thus comprise 15.5 percent of total 
U.S. GHG emissions,\766\ even before considering the contribution of 
medium-duty Class 2b and 3 vehicles which are also included under this 
rule. Reducing GHG emissions, including the three GHGs (CO2, 
CH4, and N2O) affected by this program, will 
contribute toward the goal of holding the increase in the global 
average temperature to well below 2 [deg]C above pre-industrial levels, 
and subsequently reducing the probability of severe climate change 
related impacts including heat waves, drought, sea level rise, extreme 
climate and weather events, coastal flooding, and wildfires. While EPA 
did not conduct modeling to specifically quantify changes in climate 
impacts resulting from this rule in terms of avoided temperature change 
or sea-level rise, we did quantify the climate benefits by monetizing 
the emission reductions through the application of the social cost of 
greenhouse gases (SC-GHGs), as described in Section VIII.D of this 
preamble.
---------------------------------------------------------------------------

    \765\ Inventory of U.S. Greenhouse Gas Emissions and Sinks: 
1990-2020 (EPA-430-R-22-003, published April 2022).
    \766\ Ibid.
---------------------------------------------------------------------------

VII. How would the proposal impact criteria and air toxics emissions 
and their associated effects?

    As described in Section VI.A (and in more detail in Chapter 9 of 
the DRIA), EPA has used OMEGA to estimate criteria air pollutant and 
air toxic emission inventories associated with the proposed standards 
and with Alternatives 1 and 2. These estimates are presented in Section 
VII.A. OMEGA's emissions estimates include emissions from vehicles 
(using MOVES), electricity generation (using IPM, as described in 
Section IV.B.3), and refineries.\767\
---------------------------------------------------------------------------

    \767\ Illustrative Air Quality Analysis for the Light and Medium 
Duty Vehicle Multipollutant Proposed Rule Technical Support Document 
(TSD) contained in the docket.
---------------------------------------------------------------------------

    Section VII.B discusses the air quality impacts of these emissions 
changes.

A. Impact on Emissions of Criteria and Air Toxics Pollutants

    Table 139 through Table 142 present changes in emissions of 
criteria air pollutants from vehicles for the light-duty proposal and 
each of the light-duty alternatives. Each of these tables also includes 
changes in emissions of criteria air pollutants from vehicles due to 
the medium-duty proposal.
    Table 143 through Table 146 present changes in emissions from EGUs 
and refineries for the light-duty proposal and each of the light-duty 
alternatives. Each of these tables also includes changes in emissions 
from EGUs and refineries due to the medium-duty proposal.
    Table 147 through Table 150 present net changes in emissions of 
criteria air pollutants from vehicles, EGUs and refineries due to the 
light-duty proposal and each of the light-duty alternatives. Each of 
these tables also include changes due to the medium-duty proposal.
    Table 151 presents net changes in emissions of criteria air 
pollutants from vehicles and EGUs without any impacts associated with 
refinery emissions. This table shows results for the proposal and 
includes changes due to the medium-duty proposal. We present these 
results as a sensitivity given the uncertainty surrounding how changes 
in domestic demand for liquid fuel may or may not impact domestic 
refining of liquid fuel.
    Table 152 through Table 155 present changes in emissions of air 
toxic pollutants from vehicles due to the light-duty proposal and each 
of the light-duty alternatives. Each of these tables also includes 
changes in air toxic emissions from vehicles due to the medium-duty 
proposal.
    The vehicle reductions in PM2.5, NOX, NMOG, 
and CO emissions shown in Table 139 through Table 142 are related to 
the proposed standards for these pollutants and the technologies we 
project that manufacturers will choose to use to comply with them, 
including both BEV technologies and, for gasoline-powered vehicles, 
gasoline particulate filters. Vehicle SOX emissions are a 
function of the sulfur content of gasoline and diesel fuel. Therefore, 
the reductions in SOX emissions from vehicles result from 
the decrease in

[[Page 29351]]

gasoline and diesel fuel consumption associated with the GHG standards.

Table 139--OMEGA Estimated Vehicle Criteria Emission Impacts of the Proposed Standards Relative to the No Action
                                      Scenario, Light-duty and Medium-Duty
                                              [U.S. tons per year]
----------------------------------------------------------------------------------------------------------------
          Calendar year                PM2.5            NOX            NMOG             SOX             CO
----------------------------------------------------------------------------------------------------------------
2027............................             -68            -720          -1,100             -50         -24,000
2028............................            -170          -1,700          -3,400            -130         -61,000
2029............................            -310          -3,200          -7,200            -230        -110,000
2030............................            -790          -4,800         -12,000            -350        -180,000
2031............................          -1,300          -6,800         -18,000            -490        -250,000
2032............................          -1,800          -9,100         -25,000            -650        -330,000
2033............................          -2,300         -12,000         -33,000            -830        -430,000
2034............................          -2,900         -14,000         -42,000          -1,000        -530,000
2035............................          -3,400         -17,000         -52,000          -1,200        -640,000
2036............................          -4,000         -19,000         -62,000          -1,300        -720,000
2037............................          -4,500         -21,000         -73,000          -1,500        -820,000
2038............................          -5,100         -24,000         -85,000          -1,600        -930,000
2039............................          -5,600         -26,000         -96,000          -1,800      -1,000,000
2040............................          -6,100         -28,000        -110,000          -1,900      -1,100,000
2041............................          -6,600         -30,000        -120,000          -2,000      -1,200,000
2042............................          -7,000         -32,000        -130,000          -2,100      -1,300,000
2043............................          -7,500         -33,000        -140,000          -2,300      -1,400,000
2044............................          -7,900         -35,000        -150,000          -2,300      -1,400,000
2045............................          -8,200         -36,000        -160,000          -2,400      -1,500,000
2046............................          -8,500         -37,000        -170,000          -2,500      -1,600,000
2047............................          -8,800         -38,000        -180,000          -2,500      -1,600,000
2048............................          -9,000         -39,000        -180,000          -2,600      -1,700,000
2049............................          -9,200         -40,000        -190,000          -2,600      -1,700,000
2050............................          -9,400         -41,000        -190,000          -2,700      -1,700,000
2051............................          -9,500         -42,000        -200,000          -2,700      -1,800,000
2052............................          -9,600         -43,000        -200,000          -2,700      -1,800,000
2053............................          -9,700         -43,000        -200,000          -2,700      -1,800,000
2054............................          -9,800         -44,000        -200,000          -2,800      -1,800,000
2055............................          -9,800         -44,000        -200,000          -2,800      -1,800,000
----------------------------------------------------------------------------------------------------------------


Table 140--OMEGA Estimated Vehicle Criteria Emission Impacts of the Proposed Standards Relative to the No Action
                                      Scenario, Light-Duty and Medium-Duty
                                              [U.S. tons per year]
----------------------------------------------------------------------------------------------------------------
          Calendar year                PM2.5            NOX            NMOG             SOX             CO
----------------------------------------------------------------------------------------------------------------
2027............................             -70            -750          -1,200             -53         -25,000
2028............................            -180          -1,800          -3,600            -140         -65,000
2029............................            -320          -3,100          -7,200            -250        -110,000
2030............................            -790          -4,900         -12,000            -400        -180,000
2031............................          -1,300          -6,900         -19,000            -550        -260,000
2032............................          -1,800          -9,300         -26,000            -730        -350,000
2033............................          -2,300         -12,000         -35,000            -940        -450,000
2034............................          -2,900         -15,000         -46,000          -1,100        -570,000
2035............................          -3,400         -18,000         -57,000          -1,300        -680,000
2036............................          -4,000         -20,000         -69,000          -1,500        -780,000
2037............................          -4,500         -23,000         -81,000          -1,700        -900,000
2038............................          -5,100         -25,000         -94,000          -1,800      -1,000,000
2039............................          -5,600         -27,000        -110,000          -2,000      -1,100,000
2040............................          -6,100         -30,000        -120,000          -2,100      -1,200,000
2041............................          -6,600         -32,000        -130,000          -2,300      -1,300,000
2042............................          -7,100         -34,000        -140,000          -2,400      -1,400,000
2043............................          -7,500         -36,000        -160,000          -2,500      -1,500,000
2044............................          -7,900         -37,000        -170,000          -2,600      -1,600,000
2045............................          -8,200         -39,000        -180,000          -2,700      -1,700,000
2046............................          -8,600         -40,000        -190,000          -2,800      -1,700,000
2047............................          -8,800         -41,000        -190,000          -2,800      -1,800,000
2048............................          -9,100         -42,000        -200,000          -2,900      -1,800,000
2049............................          -9,300         -43,000        -210,000          -2,900      -1,900,000
2050............................          -9,500         -44,000        -210,000          -3,000      -1,900,000
2051............................          -9,600         -45,000        -220,000          -3,000      -1,900,000
2052............................          -9,700         -46,000        -220,000          -3,000      -2,000,000
2053............................          -9,700         -46,000        -220,000          -3,000      -2,000,000
2054............................          -9,800         -47,000        -220,000          -3,000      -2,000,000
2055............................          -9,800         -47,000        -230,000          -3,000      -2,000,000
----------------------------------------------------------------------------------------------------------------


[[Page 29352]]


Table 141--OMEGA Estimated Vehicle Criteria Emission Impacts of the Proposed Standards Relative to the No Action
                                      Scenario, Light-Duty and Medium-Duty
                                              [U.S. tons per year]
----------------------------------------------------------------------------------------------------------------
          Calendar year                PM2.5            NOX            NMOG             SOX             CO
----------------------------------------------------------------------------------------------------------------
2027............................             -49            -570            -810             -36         -17,000
2028............................            -120          -1,300          -2,400             -91         -42,000
2029............................            -250          -2,600          -5,600            -180         -88,000
2030............................            -730          -3,900          -9,400            -280        -140,000
2031............................          -1,200          -5,800         -14,000            -400        -200,000
2032............................          -1,700          -7,900         -20,000            -540        -270,000
2033............................          -2,300         -10,000         -28,000            -720        -360,000
2034............................          -2,800         -13,000         -36,000            -890        -460,000
2035............................          -3,400         -15,000         -45,000          -1,000        -560,000
2036............................          -3,900         -17,000         -54,000          -1,200        -640,000
2037............................          -4,500         -20,000         -64,000          -1,300        -730,000
2038............................          -5,000         -22,000         -74,000          -1,500        -830,000
2039............................          -5,500         -24,000         -85,000          -1,600        -920,000
2040............................          -6,100         -26,000         -96,000          -1,700      -1,000,000
2041............................          -6,500         -28,000        -110,000          -1,800      -1,100,000
2042............................          -7,000         -29,000        -120,000          -1,900      -1,200,000
2043............................          -7,400         -31,000        -130,000          -2,000      -1,300,000
2044............................          -7,800         -32,000        -130,000          -2,100      -1,300,000
2045............................          -8,200         -34,000        -140,000          -2,200      -1,400,000
2046............................          -8,500         -35,000        -150,000          -2,200      -1,400,000
2047............................          -8,800         -36,000        -160,000          -2,300      -1,500,000
2048............................          -9,000         -37,000        -160,000          -2,300      -1,500,000
2049............................          -9,200         -38,000        -170,000          -2,400      -1,600,000
2050............................          -9,400         -39,000        -170,000          -2,400      -1,600,000
2051............................          -9,500         -39,000        -180,000          -2,500      -1,600,000
2052............................          -9,600         -40,000        -180,000          -2,500      -1,600,000
2053............................          -9,700         -40,000        -180,000          -2,500      -1,600,000
2054............................          -9,700         -41,000        -180,000          -2,500      -1,600,000
2055............................          -9,800         -41,000        -190,000          -2,500      -1,600,000
----------------------------------------------------------------------------------------------------------------


Table 142--OMEGA Estimated Vehicle Criteria Emission Impacts of the Proposed Standards Relative to the No Action
                                      Scenario, Light-Duty and Medium-Duty
                                              [U.S. tons per year]
----------------------------------------------------------------------------------------------------------------
          Calendar year                PM2.5            NOX            NMOG             SOX             CO
----------------------------------------------------------------------------------------------------------------
2027............................             -43            -550            -800             -30         -15,000
2028............................            -110          -1,200          -2,300             -75         -39,000
2029............................            -190          -2,100          -4,500            -130         -68,000
2030............................            -670          -3,400          -7,800            -220        -110,000
2031............................          -1,200          -5,400         -12,000            -360        -180,000
2032............................          -1,600          -7,700         -19,000            -530        -260,000
2033............................          -2,200         -10,000         -26,000            -710        -360,000
2034............................          -2,800         -13,000         -35,000            -910        -470,000
2035............................          -3,300         -16,000         -44,000          -1,100        -570,000
2036............................          -3,800         -18,000         -54,000          -1,200        -660,000
2037............................          -4,400         -20,000         -65,000          -1,400        -770,000
2038............................          -5,000         -23,000         -76,000          -1,600        -870,000
2039............................          -5,500         -25,000         -88,000          -1,700        -980,000
2040............................          -6,000         -27,000        -100,000          -1,900      -1,100,000
2041............................          -6,500         -29,000        -110,000          -2,000      -1,200,000
2042............................          -7,000         -31,000        -120,000          -2,100      -1,300,000
2043............................          -7,400         -33,000        -130,000          -2,200      -1,400,000
2044............................          -7,800         -34,000        -140,000          -2,300      -1,400,000
2045............................          -8,100         -36,000        -150,000          -2,400      -1,500,000
2046............................          -8,500         -37,000        -160,000          -2,500      -1,600,000
2047............................          -8,700         -38,000        -170,000          -2,500      -1,600,000
2048............................          -9,000         -39,000        -180,000          -2,600      -1,700,000
2049............................          -9,200         -40,000        -190,000          -2,600      -1,700,000
2050............................          -9,400         -41,000        -190,000          -2,700      -1,700,000
2051............................          -9,500         -42,000        -200,000          -2,700      -1,800,000
2052............................          -9,600         -43,000        -200,000          -2,700      -1,800,000
2053............................          -9,700         -43,000        -200,000          -2,700      -1,800,000
2054............................          -9,800         -44,000        -200,000          -2,800      -1,800,000
2055............................          -9,800         -44,000        -200,000          -2,800      -1,800,000
----------------------------------------------------------------------------------------------------------------


[[Page 29353]]

    Table 143 through Table 146 show the ``upstream'' emissions impacts 
from EGUs and refineries. As explained in Section IV.B.3, our power 
sector modeling predicts that EGU emissions will decrease between 2028 
and 2055 due to increasing use of renewables. As a result, the increase 
in EGU emissions associated with the proposal's increased electricity 
generation would peak in the late 2030's/early 2040's (depending on the 
pollutant) and then generally decrease or level off through 2055. 
Section VI.A provides more detail on the estimation of refinery 
emissions, which we predict would decrease as a result of the decreased 
demand for liquid fuel associated with the proposed GHG standards.

 Table 143--OMEGA Estimated Upstream Criteria Emission Impacts of the Proposed Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                EGU                                          Refinery
                                                         -----------------------------------------------------------------------------------------------
                                                             PM2.5        NOX        NMOG         SOX        PM2.5        NOX        NMOG         SOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027....................................................         140         800          68         660        -130        -510        -440        -200
2028....................................................         310       1,800         150       1,500        -330      -1,200      -1,100        -490
2029....................................................         540       3,100         260       2,500        -590      -2,300      -1,900        -890
2030....................................................         790       4,400         380       3,600        -900      -3,400      -2,900      -1,400
2031....................................................       1,100       5,900         510       4,800      -1,300      -4,800      -4,100      -1,900
2032....................................................       1,300       7,500         660       6,000      -1,700      -6,400      -5,500      -2,600
2033....................................................       1,600       9,000         800       7,100      -2,100      -8,100      -7,000      -3,300
2034....................................................       1,900      10,000         940       8,100      -2,600      -9,900      -8,500      -4,000
2035....................................................       2,100      11,000       1,100       8,800      -3,100     -12,000      -9,900      -4,700
2036....................................................       2,300      12,000       1,100       9,000      -3,400     -13,000     -11,000      -5,200
2037....................................................       2,400      12,000       1,200       9,300      -3,800     -14,000     -12,000      -5,800
2038....................................................       2,500      13,000       1,300       9,300      -4,200     -16,000     -13,000      -6,400
2039....................................................       2,600      13,000       1,300       9,100      -4,500     -17,000     -14,000      -6,900
2040....................................................       2,600      13,000       1,400       8,700      -4,900     -18,000     -16,000      -7,400
2041....................................................       2,600      12,000       1,400       8,100      -5,200     -19,000     -16,000      -7,900
2042....................................................       2,600      12,000       1,400       7,300      -5,500     -20,000     -17,000      -8,300
2043....................................................       2,600      11,000       1,400       6,500      -5,700     -21,000     -18,000      -8,700
2044....................................................       2,400      10,000       1,400       5,400      -5,900     -22,000     -19,000      -9,000
2045....................................................       2,300       9,200       1,300       4,200      -6,100     -22,000     -19,000      -9,300
2046....................................................       2,200       8,100       1,300       2,900      -6,300     -23,000     -20,000      -9,600
2047....................................................       2,000       6,700       1,200       1,500      -6,400     -23,000     -20,000      -9,700
2048....................................................       1,900       5,400       1,100       1,500      -6,500     -24,000     -20,000     -10,000
2049....................................................       1,700       4,000       1,100       1,600      -6,600     -24,000     -21,000     -10,000
2050....................................................       1,500       2,500       1,000       1,600      -6,700     -24,000     -21,000     -10,000
2051....................................................       1,500       2,500       1,000       1,600      -6,800     -25,000     -21,000     -10,000
2052....................................................       1,500       2,500       1,000       1,600      -6,800     -25,000     -21,000     -10,000
2053....................................................       1,500       2,600       1,000       1,600      -6,900     -25,000     -21,000     -10,000
2054....................................................       1,500       2,600       1,000       1,600      -6,900     -25,000     -21,000     -11,000
2055....................................................       1,500       2,600       1,000       1,600      -6,900     -25,000     -21,000     -11,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CO emission rates were not available for calculating CO inventories from EGUs or refineries.


 Table 144--OMEGA Estimated Upstream Criteria Emission Impacts of the Proposed Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                EGU                                          Refinery
                                                         -----------------------------------------------------------------------------------------------
                                                             PM2.5        NOX        NMOG         SOX        PM2.5        NOX        NMOG         SOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027....................................................         140         830          71         680        -140        -530        -450        -210
2028....................................................         350       2,000         170       1,600        -370      -1,400      -1,200        -560
2029....................................................         570       3,300         280       2,700        -660      -2,500      -2,200        -990
2030....................................................         860       4,900         420       4,000      -1,000      -3,900      -3,400      -1,600
2031....................................................       1,100       6,300         550       5,100      -1,400      -5,400      -4,700      -2,200
2032....................................................       1,400       7,900         700       6,300      -1,900      -7,200      -6,200      -2,900
2033....................................................       1,800       9,700         860       7,700      -2,400      -9,200      -7,900      -3,700
2034....................................................       2,100      11,000       1,000       8,800      -2,900     -11,000      -9,500      -4,500
2035....................................................       2,300      12,000       1,100       9,500      -3,400     -13,000     -11,000      -5,200
2036....................................................       2,500      13,000       1,200       9,900      -3,800     -14,000     -12,000      -5,800
2037....................................................       2,600      14,000       1,300      10,000      -4,300     -16,000     -14,000      -6,500
2038....................................................       2,800      14,000       1,400      10,000      -4,700     -17,000     -15,000      -7,100
2039....................................................       2,800      14,000       1,500      10,000      -5,100     -19,000     -16,000      -7,700
2040....................................................       2,900      14,000       1,500       9,600      -5,400     -20,000     -17,000      -8,300
2041....................................................       2,900      14,000       1,500       9,000      -5,800     -21,000     -18,000      -8,800
2042....................................................       2,900      13,000       1,500       8,100      -6,100     -22,000     -19,000      -9,200
2043....................................................       2,800      12,000       1,500       7,200      -6,400     -23,000     -20,000      -9,700
2044....................................................       2,700      11,000       1,500       6,000      -6,600     -24,000     -21,000     -10,000
2045....................................................       2,600      10,000       1,500       4,600      -6,700     -25,000     -21,000     -10,000

[[Page 29354]]

 
2046....................................................       2,400       8,900       1,400       3,200      -7,000     -25,000     -22,000     -11,000
2047....................................................       2,200       7,500       1,300       1,700      -7,100     -26,000     -22,000     -11,000
2048....................................................       2,100       6,000       1,300       1,700      -7,200     -26,000     -22,000     -11,000
2049....................................................       1,900       4,400       1,200       1,800      -7,300     -27,000     -23,000     -11,000
2050....................................................       1,600       2,800       1,100       1,800      -7,400     -27,000     -23,000     -11,000
2051....................................................       1,700       2,800       1,100       1,800      -7,500     -27,000     -23,000     -11,000
2052....................................................       1,700       2,800       1,100       1,800      -7,500     -27,000     -23,000     -12,000
2053....................................................       1,700       2,800       1,100       1,800      -7,500     -27,000     -23,000     -12,000
2054....................................................       1,700       2,800       1,100       1,800      -7,600     -27,000     -23,000     -12,000
2055....................................................       1,700       2,800       1,100       1,900      -7,600     -27,000     -23,000     -12,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CO emission rates were not available for calculating CO inventories from EGUs or refineries.


 Table 145--OMEGA Estimated Upstream Criteria Emission Impacts of the Proposed Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                EGU                                          Refinery
                                                         -----------------------------------------------------------------------------------------------
                                                             PM2.5        NOX        NMOG         SOX        PM2.5        NOX        NMOG         SOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027....................................................         100         580          49         470         -96        -370        -320        -150
2028....................................................         220       1,300         110       1,000        -240        -900        -780        -360
2029....................................................         420       2,400         210       2,000        -470      -1,800      -1,500        -710
2030....................................................         620       3,500         300       2,800        -710      -2,700      -2,300      -1,100
2031....................................................         860       4,800         420       3,900      -1,000      -3,900      -3,400      -1,600
2032....................................................       1,100       6,200         540       4,900      -1,400      -5,300      -4,600      -2,100
2033....................................................       1,400       7,800         700       6,100      -1,900      -7,100      -6,100      -2,800
2034....................................................       1,700       9,100         830       7,100      -2,300      -8,700      -7,500      -3,500
2035....................................................       1,900      10,000         940       7,800      -2,700     -10,000      -8,700      -4,100
2036....................................................       2,000      11,000       1,000       8,000      -3,000     -11,000      -9,700      -4,600
2037....................................................       2,200      11,000       1,100       8,400      -3,400     -13,000     -11,000      -5,200
2038....................................................       2,300      12,000       1,200       8,400      -3,800     -14,000     -12,000      -5,700
2039....................................................       2,400      12,000       1,200       8,300      -4,100     -15,000     -13,000      -6,200
2040....................................................       2,400      12,000       1,300       8,000      -4,400     -16,000     -14,000      -6,700
2041....................................................       2,400      12,000       1,300       7,500      -4,700     -17,000     -15,000      -7,200
2042....................................................       2,400      11,000       1,300       6,800      -4,900     -18,000     -16,000      -7,500
2043....................................................       2,400      10,000       1,300       6,000      -5,200     -19,000     -16,000      -7,900
2044....................................................       2,300       9,500       1,300       4,900      -5,300     -20,000     -17,000      -8,100
2045....................................................       2,100       8,500       1,200       3,800      -5,500     -20,000     -17,000      -8,400
2046....................................................       2,000       7,400       1,200       2,700      -5,700     -21,000     -18,000      -8,700
2047....................................................       1,900       6,200       1,100       1,400      -5,800     -21,000     -18,000      -8,800
2048....................................................       1,700       5,000       1,100       1,400      -5,900     -22,000     -18,000      -9,000
2049....................................................       1,500       3,700       1,000       1,400      -6,000     -22,000     -19,000      -9,200
2050....................................................       1,400       2,300         930       1,500      -6,100     -22,000     -19,000      -9,300
2051....................................................       1,400       2,300         940       1,500      -6,200     -22,000     -19,000      -9,400
2052....................................................       1,400       2,300         940       1,500      -6,200     -22,000     -19,000      -9,500
2053....................................................       1,400       2,300         950       1,500      -6,200     -22,000     -19,000      -9,500
2054....................................................       1,400       2,400         950       1,500      -6,200     -22,000     -19,000      -9,500
2055....................................................       1,400       2,400         950       1,500      -6,200     -22,000     -19,000      -9,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CO emission rates were not available for calculating CO inventories from EGUs or refineries.


 Table 146--OMEGA Estimated Upstream Criteria Emission Impacts of the Proposed Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                EGU                                          Refinery
                                                         -----------------------------------------------------------------------------------------------
                                                             PM2.5        NOX        NMOG         SOX        PM2.5        NOX        NMOG         SOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027....................................................          84         490          42         400         -78        -300        -260        -120
2028....................................................         190       1,100          95         910        -200        -750        -650        -300
2029....................................................         320       1,800         160       1,500        -350      -1,300      -1,100        -520
2030....................................................         500       2,900         250       2,300        -570      -2,200      -1,900        -870
2031....................................................         780       4,400         380       3,500        -930      -3,500      -3,000      -1,400
2032....................................................       1,100       6,100         540       4,900      -1,400      -5,200      -4,500      -2,100

[[Page 29355]]

 
2033....................................................       1,400       7,700         690       6,100      -1,800      -7,000      -6,000      -2,800
2034....................................................       1,700       9,300         850       7,300      -2,400      -8,900      -7,600      -3,600
2035....................................................       2,000      10,000         970       8,100      -2,800     -11,000      -9,100      -4,300
2036....................................................       2,100      11,000       1,100       8,400      -3,200     -12,000     -10,000      -4,800
2037....................................................       2,300      12,000       1,200       8,800      -3,600     -13,000     -12,000      -5,500
2038....................................................       2,400      12,000       1,200       8,900      -4,000     -15,000     -13,000      -6,100
2039....................................................       2,500      12,000       1,300       8,800      -4,400     -16,000     -14,000      -6,600
2040....................................................       2,600      12,000       1,300       8,500      -4,700     -18,000     -15,000      -7,200
2041....................................................       2,600      12,000       1,400       8,000      -5,100     -19,000     -16,000      -7,700
2042....................................................       2,600      12,000       1,400       7,200      -5,300     -20,000     -17,000      -8,100
2043....................................................       2,500      11,000       1,400       6,400      -5,600     -21,000     -18,000      -8,600
2044....................................................       2,400      10,000       1,300       5,300      -5,800     -21,000     -18,000      -8,900
2045....................................................       2,300       9,200       1,300       4,100      -6,000     -22,000     -19,000      -9,200
2046....................................................       2,200       8,100       1,300       2,900      -6,200     -23,000     -19,000      -9,500
2047....................................................       2,000       6,800       1,200       1,500      -6,300     -23,000     -20,000      -9,700
2048....................................................       1,900       5,400       1,200       1,600      -6,500     -24,000     -20,000      -9,900
2049....................................................       1,700       4,000       1,100       1,600      -6,600     -24,000     -20,000     -10,000
2050....................................................       1,500       2,500       1,000       1,600      -6,700     -24,000     -21,000     -10,000
2051....................................................       1,500       2,500       1,000       1,600      -6,800     -25,000     -21,000     -10,000
2052....................................................       1,500       2,600       1,000       1,600      -6,800     -25,000     -21,000     -10,000
2053....................................................       1,500       2,600       1,000       1,600      -6,900     -25,000     -21,000     -10,000
2054....................................................       1,500       2,600       1,000       1,700      -6,900     -25,000     -21,000     -11,000
2055....................................................       1,500       2,600       1,000       1,700      -6,900     -25,000     -21,000     -11,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CO emission rates were not available for calculating CO inventories from EGUs or refineries.

    Table 147 through Table 150 show the net impact of the proposed 
standards and alternatives on emissions of criteria pollutants, 
accounting for vehicle, EGU, and refinery emissions. In 2055, when the 
fleet will be largely comprised of vehicle meeting the proposed 
standards, there would be a net decrease in emissions of 
PM2.5, NOX, and SOX (i.e., all of the 
pollutants for which we have emissions estimates from all three source 
sectors). The proposal would result in net reductions of 
PM2.5, NOX, NMOG, and CO emissions for all years 
between 2028 and 2055. Net SOX emissions would be reduced 
beginning in 2040. Until then, the increased electricity generation 
associated with the proposed standards would result in net increases in 
SOX emissions, which would peak in the mid-2030's.

    Table 147--OMEGA Estimated Net Criteria Emission Impacts of the Proposed Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                              Vehicles, EGUs and Refineries
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    Emission impacts relative to no action (thousand U.S. tons)               Percent change from no action
                                  ----------------------------------------------------------------------------------------------------------------------
          Calendar year                                                                           PM2.5 (%)    NOX (%)               SOX (%)
                                      PM2.5        NOX        NMOG         SOX          CO                                NMOG (%)               CO (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.............................         -62        -430      -1,500         410       -24,000       -0.11      -0.070      -0.13       0.89      -0.22
2028.............................        -180      -1,100      -4,300         860       -61,000       -0.33       -0.21      -0.42        1.9      -0.60
2029.............................        -360      -2,300      -8,900       1,400      -110,000       -0.68       -0.49      -0.91        3.1       -1.2
2030.............................        -900      -3,700     -15,000       1,900      -180,000        -1.8        -0.9       -1.6        4.2       -2.0
2031.............................      -1,500      -5,700     -21,000       2,400      -250,000        -3.0        -1.5       -2.5        5.3       -3.1
2032.............................      -2,100      -8,100     -30,000       2,800      -330,000        -4.4        -2.4       -3.6        6.3       -4.5
2033.............................      -2,800     -11,000     -39,000       3,000      -430,000        -6.0        -3.5       -5.1        7.0       -6.2
2034.............................      -3,600     -14,000     -50,000       3,100      -530,000        -7.7        -4.9       -6.9        7.3       -8.3
2035.............................      -4,400     -17,000     -61,000       3,000      -640,000        -9.5        -6.5       -8.9        7.2        -11
2036.............................      -5,100     -20,000     -72,000       2,600      -720,000         -11        -8.2        -11        6.3        -13
2037.............................      -5,900     -23,000     -84,000       2,000      -820,000         -13         -10        -14        5.1        -16
2038.............................      -6,700     -26,000     -97,000       1,300      -930,000         -15         -13        -17        3.4        -19
2039.............................      -7,500     -30,000    -110,000         400    -1,000,000         -17         -15        -20        1.1        -22
2040.............................      -8,400     -33,000    -120,000        -650    -1,100,000         -19         -17        -23       -1.8        -25
2041.............................      -9,200     -37,000    -130,000      -1,800    -1,200,000         -21         -20        -26       -5.2        -28
2042.............................      -9,900     -40,000    -150,000      -3,100    -1,300,000         -23         -22        -29         -9        -31
2043.............................     -11,000     -43,000    -160,000      -4,500    -1,400,000         -25         -25        -32        -14        -34
2044.............................     -11,000     -46,000    -170,000      -6,000    -1,400,000         -26         -27        -35        -19        -37
2045.............................     -12,000     -49,000    -180,000      -7,500    -1,500,000         -28         -29        -37        -25        -39
2046.............................     -13,000     -52,000    -190,000      -9,200    -1,600,000         -30         -31        -40        -32        -41
2047.............................     -13,000     -55,000    -190,000     -11,000    -1,600,000         -31         -34        -42        -39        -43
2048.............................     -14,000     -58,000    -200,000     -11,000    -1,700,000         -32         -36        -44        -40        -44
2049.............................     -14,000     -61,000    -210,000     -11,000    -1,700,000         -33         -38        -45        -40        -46

[[Page 29356]]

 
2050.............................     -15,000     -63,000    -210,000     -11,000    -1,700,000         -34         -40        -46        -41        -47
2051.............................     -15,000     -64,000    -220,000     -11,000    -1,800,000         -35         -40        -47        -41        -47
2052.............................     -15,000     -65,000    -220,000     -12,000    -1,800,000         -35         -40        -48        -41        -48
2053.............................     -15,000     -65,000    -220,000     -12,000    -1,800,000         -35         -41        -49        -42        -49
2054.............................     -15,000     -66,000    -220,000     -12,000    -1,800,000         -35         -41        -49        -42        -49
2055.............................     -15,000     -66,000    -220,000     -12,000    -1,800,000         -35         -41        -50        -42        -49
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CO emission rates were not available for calculating CO inventories from EGUs or refineries.


 Table 148--OMEGA Estimated Net Criteria Emission Impacts of the Alternative 1 Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                              Vehicles, EGUs and Refineries
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    Emission impacts relative to no action (thousand U.S. tons)               Percent change from no action
                                  ----------------------------------------------------------------------------------------------------------------------
          Calendar year                                                                           PM2.5 (%)    NOX (%)               SOX (%)
                                      PM2.5        NOX        NMOG         SOX          CO                                NMOG (%)               CO (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.............................         -65        -440      -1,500         420       -25,000       -0.11      -0.072      -0.14       0.92      -0.23
2028.............................        -200      -1,200      -4,600         940       -65,000       -0.37       -0.22      -0.45        2.1      -0.65
2029.............................        -400      -2,400      -9,000       1,400      -110,000       -0.76       -0.49      -0.93        3.1       -1.2
2030.............................        -970      -3,900     -15,000       2,000      -180,000        -1.9        -0.9       -1.7        4.4       -2.1
2031.............................      -1,600      -6,000     -23,000       2,400      -260,000        -3.2        -1.6       -2.6        5.3       -3.2
2032.............................      -2,200      -8,600     -32,000       2,700      -350,000        -4.6        -2.5       -3.9        6.2       -4.7
2033.............................      -3,000     -12,000     -42,000       3,100      -450,000        -6.2        -3.8       -5.5        7.0       -6.6
2034.............................      -3,800     -15,000     -54,000       3,100      -570,000        -8.0        -5.3       -7.5        7.4       -8.8
2035.............................      -4,500     -18,000     -67,000       3,000      -680,000        -9.9        -7.0       -9.8        7.2        -11
2036.............................      -5,300     -21,000     -80,000       2,600      -780,000         -12        -8.9        -12        6.4        -14
2037.............................      -6,100     -25,000     -93,000       2,100      -900,000         -14         -11        -15        5.2        -17
2038.............................      -7,000     -29,000    -110,000       1,300    -1,000,000         -16         -14        -18        3.4        -20
2039.............................      -7,800     -32,000    -120,000         340    -1,100,000         -18         -16        -22        0.9        -24
2040.............................      -8,700     -36,000    -140,000        -780    -1,200,000         -20         -19        -25       -2.2        -27
2041.............................      -9,500     -40,000    -150,000      -2,100    -1,300,000         -22         -21        -29       -5.9        -31
2042.............................     -10,000     -43,000    -160,000      -3,500    -1,400,000         -24         -24        -32        -10        -34
2043.............................     -11,000     -47,000    -180,000      -5,000    -1,500,000         -26         -27        -35        -15        -37
2044.............................     -12,000     -50,000    -190,000      -6,600    -1,600,000         -27         -29        -38        -21        -40
2045.............................     -12,000     -53,000    -200,000      -8,300    -1,700,000         -29         -32        -41        -28        -43
2046.............................     -13,000     -57,000    -210,000     -10,000    -1,700,000         -31         -34        -44        -35        -45
2047.............................     -14,000     -59,000    -210,000     -12,000    -1,800,000         -32         -36        -46        -43        -47
2048.............................     -14,000     -63,000    -220,000     -12,000    -1,800,000         -33         -39        -48        -44        -49
2049.............................     -15,000     -66,000    -230,000     -12,000    -1,900,000         -35         -41        -50        -45        -50
2050.............................     -15,000     -69,000    -230,000     -13,000    -1,900,000         -36         -43        -51        -45        -52
2051.............................     -15,000     -69,000    -240,000     -13,000    -1,900,000         -36         -43        -52        -45        -52
2052.............................     -16,000     -70,000    -240,000     -13,000    -2,000,000         -36         -44        -53        -45        -53
2053.............................     -16,000     -71,000    -240,000     -13,000    -2,000,000         -37         -44        -54        -46        -54
2054.............................     -16,000     -71,000    -250,000     -13,000    -2,000,000         -37         -44        -54        -46        -54
2055.............................     -16,000     -71,000    -250,000     -13,000    -2,000,000         -37         -44        -55        -46        -55
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CO emission rates were not available for calculating CO inventories from EGUs or refineries.


 Table 149--OMEGA Estimated Net Criteria Emission Impacts of the Alternative 2 Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                              Vehicles, EGUs and Refineries
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                   Emission impacts relative to no action  (thousand U.S. tons)               Percent change from no action
                                  ----------------------------------------------------------------------------------------------------------------------
          Calendar year                                                                          PM2.5  (%)   NOX  (%)               SOX  (%)
                                      PM2.5        NOX        NMOG         SOX          CO                               NMOG  (%)              CO  (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.............................         -45        -360      -1,100         290       -17,000       -0.08      -0.058      -0.10       0.64      -0.16
2028.............................        -130        -910      -3,100         600       -42,000       -0.25       -0.17      -0.30        1.3      -0.42
2029.............................        -290      -2,000      -6,900       1,100       -88,000       -0.55       -0.41      -0.71        2.4       -0.9
2030.............................        -820      -3,100     -11,000       1,500      -140,000        -1.6        -0.7       -1.2        3.3       -1.6
2031.............................      -1,400      -4,900     -17,000       1,900      -200,000        -2.8        -1.3       -2.0        4.2       -2.5
2032.............................      -2,000      -7,000     -24,000       2,200      -270,000        -4.1        -2.1       -3.0        5.1       -3.7
2033.............................      -2,700      -9,600     -33,000       2,600      -360,000        -5.7        -3.2       -4.3        5.9       -5.3

[[Page 29357]]

 
2034.............................      -3,400     -12,000     -43,000       2,700      -460,000        -7.4        -4.5       -5.9        6.3       -7.2
2035.............................      -4,200     -15,000     -53,000       2,600      -560,000        -9.1        -5.9       -7.7        6.3         -9
2036.............................      -4,900     -18,000     -63,000       2,300      -640,000         -11        -7.5        -10        5.6        -11
2037.............................      -5,700     -21,000     -74,000       1,900      -730,000         -13          -9        -12        4.8        -14
2038.............................      -6,500     -24,000     -85,000       1,300      -830,000         -15         -11        -15        3.3        -17
2039.............................      -7,300     -27,000     -97,000         500      -920,000         -17         -14        -17        1.3        -20
2040.............................      -8,000     -31,000    -110,000        -430    -1,000,000         -18         -16        -20       -1.2        -23
2041.............................      -8,800     -34,000    -120,000      -1,500    -1,100,000         -20         -18        -23       -4.3        -25
2042.............................      -9,500     -37,000    -130,000      -2,700    -1,200,000         -22         -21        -26         -8        -28
2043.............................     -10,000     -40,000    -140,000      -4,000    -1,300,000         -24         -23        -29        -12        -31
2044.............................     -11,000     -43,000    -150,000      -5,300    -1,300,000         -25         -25        -31        -17        -33
2045.............................     -12,000     -45,000    -160,000      -6,700    -1,400,000         -27         -27        -33        -22        -35
2046.............................     -12,000     -48,000    -170,000      -8,300    -1,400,000         -28         -29        -36        -29        -37
2047.............................     -13,000     -51,000    -170,000      -9,700    -1,500,000         -30         -31        -38        -35        -39
2048.............................     -13,000     -54,000    -180,000     -10,000    -1,500,000         -31         -33        -39        -36        -40
2049.............................     -14,000     -56,000    -190,000     -10,000    -1,600,000         -32         -35        -41        -37        -42
2050.............................     -14,000     -59,000    -190,000     -10,000    -1,600,000         -33         -37        -42        -37        -43
2051.............................     -14,000     -59,000    -200,000     -10,000    -1,600,000         -34         -37        -43        -37        -43
2052.............................     -14,000     -60,000    -200,000     -10,000    -1,600,000         -34         -37        -44        -38        -44
2053.............................     -15,000     -60,000    -200,000     -11,000    -1,600,000         -34         -38        -44        -38        -44
2054.............................     -15,000     -61,000    -200,000     -11,000    -1,600,000         -34         -38        -45        -38        -45
2055.............................     -15,000     -61,000    -200,000     -11,000    -1,600,000         -34         -38        -45        -38        -45
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CO emission rates were not available for calculating CO inventories from EGUs or refineries.


 Table 150--OMEGA Estimated Net Criteria Emission Impacts of the Alternative 3 Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                              Vehicles, EGUs and Refineries
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                   Emission impacts relative to no action  (thousand U.S. tons)               Percent change from no action
                                  ----------------------------------------------------------------------------------------------------------------------
          Calendar year                                                                          PM2.5  (%)   NOX  (%)               SOX  (%)
                                      PM2.5        NOX        NMOG         SOX          CO                               NMOG  (%)              CO  (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.............................         -37        -360      -1,000         250       -15,000       -0.07      -0.058      -0.09       0.55      -0.14
2028.............................        -110        -870      -2,900         530       -39,000       -0.21       -0.16      -0.28        1.2      -0.39
2029.............................        -220      -1,600      -5,500         830       -68,000       -0.42       -0.34      -0.56        1.8       -0.7
2030.............................        -740      -2,700      -9,400       1,200      -110,000        -1.4        -0.6       -1.0        2.7       -1.3
2031.............................      -1,300      -4,500     -15,000       1,700      -180,000        -2.6        -1.2       -1.7        3.9       -2.2
2032.............................      -1,900      -6,800     -23,000       2,300      -260,000        -4.0        -2.0       -2.8        5.1       -3.6
2033.............................      -2,600      -9,500     -31,000       2,600      -360,000        -5.5        -3.1       -4.1        6.0       -5.2
2034.............................      -3,400     -13,000     -41,000       2,800      -470,000        -7.2        -4.5       -5.7        6.5       -7.3
2035.............................      -4,200     -16,000     -52,000       2,700      -570,000        -9.0        -6.1       -7.7        6.5        -10
2036.............................      -4,900     -19,000     -63,000       2,400      -660,000         -11        -7.8        -10        5.9        -12
2037.............................      -5,700     -22,000     -75,000       1,900      -770,000         -13         -10        -12        4.9        -15
2038.............................      -6,500     -25,000     -88,000       1,300      -870,000         -15         -12        -15        3.3        -18
2039.............................      -7,300     -29,000    -100,000         440      -980,000         -17         -14        -18        1.2        -21
2040.............................      -8,200     -32,000    -110,000        -550    -1,100,000         -19         -17        -21       -1.5        -24
2041.............................      -9,000     -36,000    -130,000      -1,700    -1,200,000         -21         -19        -24       -4.9        -27
2042.............................      -9,700     -39,000    -140,000      -3,000    -1,300,000         -23         -22        -27         -9        -30
2043.............................     -11,000     -43,000    -150,000      -4,400    -1,400,000         -24         -24        -31        -13        -33
2044.............................     -11,000     -46,000    -160,000      -5,800    -1,400,000         -26         -27        -33        -19        -36
2045.............................     -12,000     -49,000    -170,000      -7,400    -1,500,000         -28         -29        -36        -25        -38
2046.............................     -13,000     -52,000    -180,000      -9,100    -1,600,000         -29         -31        -39        -31        -41
2047.............................     -13,000     -55,000    -190,000     -11,000    -1,600,000         -31         -33        -41        -39        -42
2048.............................     -14,000     -58,000    -200,000     -11,000    -1,700,000         -32         -36        -43        -40        -44
2049.............................     -14,000     -60,000    -210,000     -11,000    -1,700,000         -33         -38        -45        -40        -45
2050.............................     -15,000     -63,000    -210,000     -11,000    -1,700,000         -34         -40        -46        -41        -47
2051.............................     -15,000     -64,000    -210,000     -11,000    -1,800,000         -35         -40        -47        -41        -47
2052.............................     -15,000     -65,000    -220,000     -12,000    -1,800,000         -35         -40        -48        -41        -48
2053.............................     -15,000     -65,000    -220,000     -12,000    -1,800,000         -35         -41        -49        -42        -49
2054.............................     -15,000     -66,000    -220,000     -12,000    -1,800,000         -35         -41        -49        -42        -49
2055.............................     -15,000     -66,000    -220,000     -12,000    -1,800,000         -35         -41        -50        -42        -50
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CO emission rates were not available for calculating CO inventories from EGUs or refineries.


[[Page 29358]]

    The estimated refinery emission impacts include consideration of 
the impact on reduced liquid fuel demand on domestic refining. Our 
central analysis estimates that impact at 93 percent. In other words, 
93 percent of the reduced liquid fuel demand results in reduced 
domestic refining. There is the possibility that reduced domestic 
demand for liquid fuel would have no impact on domestic refining. In 
other words, excess domestic refined liquid fuel would be exported for 
use elsewhere. In that event, there would be no decrease in domestic 
refinery emissions and the net criteria air pollutant impacts for the 
proposed standards would be as shown in Table 151. We request comment 
on the correct portion of reduced liquid fuel demand that would result 
in reduced domestic refining.

    Table 151--OMEGA Estimated Net Criteria Emission Impacts of the Proposed Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                    Vehicles and EGUs and No Impacts From Refineries
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    Emission impacts relative to no action (thousand U.S. tons)               Percent change from no action
                                  ----------------------------------------------------------------------------------------------------------------------
          Calendar year                                                                          PM2.5  (%)   NOX  (%)               SOX  (%)
                                      PM2.5        NOX        NMOG         SOX          CO                               NMOG  (%)              CO  (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.............................          70          79      -1,000         610       -24,000        0.20       0.015       -0.1        4.5      -0.22
2028.............................         150         100      -3,300       1,400       -61,000        0.43        0.02      -0.34        9.3       -0.6
2029.............................         230         -61      -6,900       2,300      -110,000        0.70       -0.02      -0.76         15       -1.2
2030.............................          -8        -320     -12,000       3,300      -180,000         0.0        -0.1       -1.3         19         -2
2031.............................        -230        -900     -17,000       4,300      -250,000        -0.7        -0.3       -2.1         24       -3.1
2032.............................        -430      -1,700     -24,000       5,300      -330,000        -1.4        -0.6       -3.2         29       -4.5
2033.............................        -680      -2,600     -32,000       6,300      -430,000        -2.2        -1.1       -4.5         34       -6.2
2034.............................        -960      -3,800     -41,000       7,100      -530,000        -3.1        -1.7       -6.1         39       -8.3
2035.............................      -1,300      -5,200     -51,000       7,600      -640,000        -4.2        -2.6       -8.1         42        -11
2036.............................      -1,700      -6,900     -61,000       7,700      -720,000          -6        -3.8        -10         43        -13
2037.............................      -2,100      -8,700     -72,000       7,800      -820,000          -7          -5        -13         45        -16
2038.............................      -2,500     -11,000     -83,000       7,700      -930,000          -9          -7        -16         47        -19
2039.............................      -3,000     -13,000     -95,000       7,300    -1,000,000         -10          -9        -19         47        -22
2040.............................      -3,500     -15,000    -110,000       6,800    -1,100,000         -12         -11        -22         47        -25
2041.............................      -4,000     -17,000    -120,000       6,100    -1,200,000         -13         -13        -25         45        -28
2042.............................      -4,400     -20,000    -130,000       5,200    -1,300,000         -15         -15        -28         42        -31
2043.............................      -4,900     -22,000    -140,000       4,200    -1,400,000         -17         -18        -31         37        -34
2044.............................      -5,400     -24,000    -150,000       3,000    -1,400,000         -19         -20        -34         30        -37
2045.............................      -5,900     -27,000    -160,000       1,800    -1,500,000         -20         -23        -37         19        -39
2046.............................      -6,400     -29,000    -170,000         410    -1,600,000         -22         -25        -39          5        -41
2047.............................      -6,800     -31,000    -170,000      -1,000    -1,600,000         -23         -28        -41        -16        -43
2048.............................      -7,200     -34,000    -180,000      -1,000    -1,700,000         -25         -30        -43        -16        -44
2049.............................      -7,600     -36,000    -190,000      -1,100    -1,700,000         -26         -33        -45        -16        -46
2050.............................      -8,000     -39,000    -190,000      -1,100    -1,700,000         -28         -35        -46        -16        -47
2051.............................      -8,000     -39,000    -200,000      -1,100    -1,800,000         -28         -36        -47        -16        -47
2052.............................      -8,100     -40,000    -200,000      -1,100    -1,800,000         -28         -36        -48        -17        -48
2053.............................      -8,200     -41,000    -200,000      -1,100    -1,800,000         -28         -37        -49        -17        -49
2054.............................      -8,200     -41,000    -200,000      -1,100    -1,800,000         -29         -37        -49        -17        -49
2055.............................      -8,300     -41,000    -200,000      -1,100    -1,800,000         -29         -37        -50        -17        -49
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table 152 through Table 155 show reductions in vehicle emissions of 
air toxics. We expect this proposal would reduce emissions of air 
toxics from light- and medium-duty vehicles in three ways: The GPF 
technology that we project manufacturers would choose to use in meeting 
the proposed PM standards would decrease particle-phase pollutants, the 
NMOG+NOX standards would decrease gas-phase toxics, and the 
projected increase in BEVs we project manufacturers would choose to 
produce in complying with the GHG standards would result in lower air 
toxic emissions overall from the light- and medium-duty fleet.
    For most air toxic emissions, we rely on estimates from EPA's MOVES 
emissions model. In MOVES, emissions of most gaseous toxic compounds 
are estimated as fractions of the emissions of VOC. Toxic species in 
the particulate phase (e.g., polycyclic aromatic hydrocarbons (PAHs)) 
are estimated as fractions of total organic carbon smaller than 2.5 
[mu]m (OC2.5). Thus, reductions in air toxic emissions are proportional 
to modelled reductions in total VOCs and/or OC2.5.\768\ Emission 
measurements of PAHs in EPA's recent GPF test program (see Section 
III.C.2 and DRIA Chapter 3.2.2) suggest this is a conservative estimate 
indicate reduction in emissions of particle-phase PAH compounds of over 
99 percent, compared to about 95 percent for total PM.
---------------------------------------------------------------------------

    \768\ U.S. EPA (2020) Air Toxic Emissions from Onroad Vehicles 
in MOVES3. Assessment and Standards Division, Office of 
Transportation and Air Quality. Report No. EPA-420-R-20-022. 
November 2020. https://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1010TJM.pdf.

[[Page 29359]]



 Table 152--OMEGA Estimated Vehicle Air Toxic Emission Impacts of the Proposed Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Calendar year               Acetaldehyde    Acrolein   Benzene    Ethylbenzene    Formaldehyde     Naphthalene    1,3 Butadiene     15 PAH
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.................................             -16         -1        -44             -17            -9.1            -1.9             -6.5      -0.044
2028.................................             -38       -2.4       -110             -53             -22            -4.7              -16       -0.11
2029.................................             -69       -4.4       -200            -110             -40            -8.5              -29       -0.21
2030.................................            -100       -6.6       -310            -190             -60             -13              -43       -0.43
2031.................................            -140       -9.2       -430            -290             -83             -18              -59       -0.66
2032.................................            -190        -12       -570            -400            -110             -23              -78        -0.9
2033.................................            -240        -15       -730            -530            -140             -29              -98        -1.2
2034.................................            -290        -19       -900            -680            -170             -36             -120        -1.4
2035.................................            -350        -22      -1100            -850            -200             -42             -140        -1.7
2036.................................            -390        -25      -1200           -1000            -230             -47             -160        -1.9
2037.................................            -430        -28      -1400           -1200            -250             -53             -180        -2.2
2038.................................            -480        -31      -1500           -1400            -280             -59             -200        -2.5
2039.................................            -520        -34      -1700           -1600            -310             -64             -210        -2.7
2040.................................            -560        -37      -1800           -1800            -330             -69             -230        -2.9
2041.................................            -610        -39      -2000           -2000            -360             -74             -250        -3.2
2042.................................            -640        -41      -2100           -2200            -380             -78             -260        -3.4
2043.................................            -670        -44      -2200           -2300            -400             -82             -270        -3.6
2044.................................            -700        -45      -2300           -2500            -410             -85             -280        -3.7
2045.................................            -720        -47      -2400           -2600            -430             -88             -290        -3.9
2046.................................            -750        -48      -2500           -2800            -440             -91             -300        -4.1
2047.................................            -760        -49      -2600           -2900            -450             -93             -310        -4.2
2048.................................            -780        -51      -2600           -3000            -470             -96             -310        -4.3
2049.................................            -800        -52      -2700           -3100            -480             -98             -320        -4.4
2050.................................            -810        -53      -2800           -3200            -490            -100             -330        -4.5
2051.................................            -820        -54      -2800           -3300            -490            -100             -330        -4.5
2052.................................            -830        -54      -2800           -3300            -500            -100             -330        -4.6
2053.................................            -840        -55      -2900           -3300            -500            -100             -330        -4.6
2054.................................            -840        -55      -2900           -3400            -510            -100             -340        -4.7
2055.................................            -840        -55      -2900           -3400            -510            -100             -340        -4.7
--------------------------------------------------------------------------------------------------------------------------------------------------------


  Table 153--Estimated Vehicle Air Toxic Emission Impacts of the Alternative 1 Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Calendar year               Acetaldehyde    Acrolein   Benzene    Ethylbenzene    Formaldehyde     Naphthalene    1,3 Butadiene     15 PAH
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.................................             -17       -1.1        -46             -18            -9.5              -2             -6.8      -0.046
2028.................................             -41       -2.6       -120             -56             -23              -5              -17       -0.12
2029.................................             -70       -4.5       -210            -110             -41            -8.6              -29       -0.21
2030.................................            -110         -7       -330            -200             -63             -13              -45       -0.44
2031.................................            -150       -9.7       -450            -300             -87             -18              -62       -0.67
2032.................................            -200        -13       -600            -420            -110             -24              -81       -0.91
2033.................................            -260        -16       -780            -570            -150             -31             -100        -1.2
2034.................................            -310        -20       -970            -740            -180             -38             -130        -1.5
2035.................................            -370        -24      -1100            -930            -210             -45             -150        -1.7
2036.................................            -410        -27      -1300           -1100            -240             -51             -170          -2
2037.................................            -470        -30      -1500           -1300            -270             -57             -190        -2.3
2038.................................            -520        -34      -1700           -1500            -300             -64             -210        -2.5
2039.................................            -570        -37      -1800           -1800            -330             -69             -230        -2.8
2040.................................            -610        -40      -2000           -2000            -360             -75             -250          -3
2041.................................            -660        -42      -2200           -2200            -390             -81             -270        -3.2
2042.................................            -690        -45      -2300           -2400            -410             -85             -280        -3.5
2043.................................            -730        -47      -2400           -2600            -430             -90             -300        -3.7
2044.................................            -760        -49      -2500           -2800            -450             -93             -310        -3.8
2045.................................            -790        -51      -2600           -2900            -470             -97             -320          -4
2046.................................            -810        -53      -2800           -3100            -480            -100             -330        -4.2
2047.................................            -830        -54      -2800           -3200            -490            -100             -340        -4.3
2048.................................            -850        -56      -2900           -3300            -510            -110             -350        -4.4
2049.................................            -870        -57      -3000           -3400            -520            -110             -350        -4.5
2050.................................            -890        -58      -3000           -3500            -530            -110             -360        -4.6
2051.................................            -900        -59      -3100           -3600            -540            -110             -360        -4.7
2052.................................            -910        -59      -3100           -3600            -540            -110             -370        -4.7
2053.................................            -910        -60      -3100           -3700            -550            -110             -370        -4.8
2054.................................            -920        -60      -3100           -3700            -550            -110             -370        -4.8
2055.................................            -920        -60      -3200           -3700            -550            -110             -370        -4.8
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 29360]]


  Table 154--Estimated Vehicle Air Toxic Emission Impacts of the Alternative 2 Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Calendar year               Acetaldehyde    Acrolein   Benzene    Ethylbenzene    Formaldehyde     Naphthalene    1,3 Butadiene     15 PAH
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.................................             -12      -0.76        -32             -12            -6.7            -1.4             -4.7      -0.032
2028.................................             -27       -1.8        -78             -38             -16            -3.3              -11       -0.08
2029.................................             -55       -3.5       -160             -88             -32            -6.7              -22       -0.16
2030.................................             -82       -5.3       -240            -150             -48             -10              -34       -0.38
2031.................................            -120       -7.6       -350            -230             -68             -14              -48        -0.6
2032.................................            -160        -10       -480            -320             -93             -19              -64       -0.83
2033.................................            -210        -14       -630            -440            -120             -25              -85        -1.1
2034.................................            -260        -17       -790            -580            -150             -32             -110        -1.4
2035.................................            -310        -20       -940            -730            -180             -37             -120        -1.6
2036.................................            -340        -22      -1100            -880            -200             -42             -140        -1.9
2037.................................            -390        -25      -1200           -1000            -230             -48             -160        -2.1
2038.................................            -440        -28      -1400           -1200            -260             -53             -180        -2.4
2039.................................            -480        -31      -1500           -1400            -280             -58             -190        -2.6
2040.................................            -520        -34      -1700           -1600            -310             -63             -210        -2.9
2041.................................            -550        -36      -1800           -1700            -330             -68             -220        -3.1
2042.................................            -590        -38      -1900           -1900            -350             -72             -240        -3.3
2043.................................            -620        -40      -2000           -2100            -370             -76             -250        -3.5
2044.................................            -640        -42      -2100           -2200            -380             -79             -260        -3.7
2045.................................            -660        -43      -2200           -2400            -400             -81             -270        -3.8
2046.................................            -690        -45      -2300           -2500            -410             -84             -280          -4
2047.................................            -700        -46      -2400           -2600            -420             -86             -280        -4.1
2048.................................            -720        -47      -2400           -2700            -430             -88             -290        -4.2
2049.................................            -740        -48      -2500           -2800            -440             -90             -300        -4.3
2050.................................            -750        -49      -2500           -2900            -450             -92             -300        -4.4
2051.................................            -760        -50      -2600           -2900            -460             -93             -300        -4.5
2052.................................            -770        -50      -2600           -3000            -460             -94             -310        -4.5
2053.................................            -770        -51      -2600           -3000            -460             -94             -310        -4.5
2054.................................            -780        -51      -2600           -3100            -470             -95             -310        -4.6
2055.................................            -780        -51      -2600           -3100            -470             -95             -310        -4.6
--------------------------------------------------------------------------------------------------------------------------------------------------------


  Table 155--Estimated Vehicle Air Toxic Emission Impacts of the Alternative 3 Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
                                                                  [U.S. tons per year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Calendar year               Acetaldehyde    Acrolein   Benzene    Ethylbenzene    Formaldehyde     Naphthalene    1,3 Butadiene     15 PAH
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.................................             -10      -0.67        -28             -12              -6            -1.2             -4.1      -0.028
2028.................................             -25       -1.6        -71             -36             -14              -3              -10      -0.073
2029.................................             -42       -2.7       -120             -71             -25            -5.2              -17       -0.13
2030.................................             -68       -4.4       -200            -120             -40            -8.3              -28       -0.34
2031.................................            -110       -6.9       -320            -200             -63             -13              -43       -0.57
2032.................................            -150        -10       -460            -300             -90             -19              -63       -0.81
2033.................................            -210        -13       -620            -410            -120             -25              -84        -1.1
2034.................................            -260        -17       -800            -560            -150             -32             -110        -1.3
2035.................................            -320        -20       -970            -710            -180             -39             -130        -1.6
2036.................................            -360        -23      -1100            -880            -210             -44             -150        -1.9
2037.................................            -410        -27      -1300           -1100            -240             -50             -170        -2.1
2038.................................            -460        -30      -1400           -1200            -270             -56             -190        -2.4
2039.................................            -510        -33      -1600           -1400            -300             -62             -210        -2.6
2040.................................            -550        -36      -1800           -1600            -320             -67             -220        -2.9
2041.................................            -590        -38      -1900           -1800            -350             -72             -240        -3.1
2042.................................            -630        -41      -2000           -2000            -370             -77             -250        -3.3
2043.................................            -660        -43      -2200           -2200            -390             -81             -270        -3.5
2044.................................            -690        -45      -2300           -2400            -410             -84             -280        -3.7
2045.................................            -710        -46      -2400           -2600            -420             -88             -290        -3.9
2046.................................            -740        -48      -2500           -2700            -440             -91             -300          -4
2047.................................            -760        -49      -2600           -2800            -450             -93             -310        -4.2
2048.................................            -780        -51      -2600           -3000            -470             -96             -310        -4.3
2049.................................            -800        -52      -2700           -3100            -480             -98             -320        -4.4
2050.................................            -810        -53      -2800           -3200            -490            -100             -330        -4.5
2051.................................            -820        -54      -2800           -3200            -490            -100             -330        -4.5
2052.................................            -830        -54      -2800           -3300            -500            -100             -330        -4.6
2053.................................            -840        -55      -2900           -3300            -500            -100             -340        -4.6
2054.................................            -840        -55      -2900           -3400            -510            -100             -340        -4.7
2055.................................            -850        -55      -2900           -3400            -510            -100             -340        -4.7
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 29361]]

B. How would the proposal affect air quality?

    In the very localized area in close proximity to roadways (i.e., 
within 300-600 meters of the roadway), the decreases in vehicle 
emissions resulting from the proposal would decrease ambient levels of 
PM2.5, NO2, and other traffic-related pollutants 
described in Section II.C.8.
    The changes in emissions that are presented in Section VII.A would 
also impact ambient levels of ozone, PM2.5, NO2, 
SO2, CO, and air toxics over a larger geographic scale. 
Photochemical air quality modeling is necessary to predict these air 
quality impacts of the proposal's emissions changes, because many of 
these pollutants form in the atmosphere and their concentrations depend 
on many complex factors (including the spatial and temporal 
distribution of the emissions changes, atmospheric chemistry, and 
meteorology). EPA conducted an illustrative air quality modeling 
analysis of a regulatory scenario involving light- and medium-duty 
vehicle emission reductions and corresponding changes in ``upstream'' 
emission sources like EGU (electric generating unit) emissions and 
refinery emissions. Decisions about the emissions and other elements 
used in the air quality modeling were made early in the analytical 
process for the proposed rulemaking. Accordingly, the air quality 
analysis does not represent the proposal's regulatory scenario, nor 
does it reflect the expected impacts of the Inflation Reduction Act 
(IRA). Based on updated power sector modeling that incorporated 
expected generation mix impacts of the IRA, we are projecting the IRA 
will lead to a significantly cleaner power grid; nevertheless, the 
analysis provides some insights into potential air quality impacts 
associated with emissions increases and decreases from these multiple 
sectors. Chapter 8 of the DRIA provides details on the methodology, 
emissions inputs, and results of this illustrative air quality 
modeling.
    On the basis of the exploratory air quality modeling, we conclude 
that in 2055 the proposal would result in widespread decreases in 
ozone, PM2.5, NO2, CO, and some air toxics, even 
when accounting for the impacts of increased electricity generation. 
While the results of the illustrative analysis include some increases 
in ambient pollutant concentrations, as the power sector becomes 
cleaner over time as a result of the IRA and future policies, these 
impacts would decrease. Although the specific locations of increased 
air pollution are uncertain, we expect them to be in more limited 
geographic areas, compared to the widespread decreases that we predict 
to result from the reductions in vehicle emissions.

VIII. Estimated Costs and Benefits and Associated Considerations

    This section presents a summary of costs, benefits, and net 
benefits plus additional considerations associated with these costs and 
benefits. We begin with a high-level summary in Section VIII.A. of this 
preamble, followed by more detailed content and discussion in 
subsequent subsections.

A. Summary of Costs and Benefits

    This section presents a high-level summary of monetized costs, 
benefits, and net benefits of the standards. Using the 3 percent 
average SC-GHG value for climate benefits, the net benefits for the 
proposal are $200 billion to $220 billion for calendar year (CY) 2055. 
The present value (PV) of net benefits for calendar years 2027 through 
2055, with discounting to 2027, is $1.6 trillion using a 3 percent 
discount rate and $850 billion using a 7 percent discount rate. The 
equivalent annualized values (EAV) of those present values are $85 
billion and $60 billion, respectively.\769\
---------------------------------------------------------------------------

    \769\ The equivalent annualized value (EAV) of benefits, costs, 
and net benefits represent a flow of constant annual values that, 
had they occurred in each year from 2027 to 2055, would yield an 
equivalent present value to those in each of the summary tables 
(using either a 3 percent or 7 percent discount rate).
---------------------------------------------------------------------------

    Costs and benefits are categorized into non-emission costs, fueling 
impacts, non-emissions benefits, climate benefits, and criteria air 
pollutant benefits. Table 156 breaks down net benefits into costs and 
benefits for CY 2055, as well as present values (PV) and equivalent 
annualized values (EAV) using both 3 percent and 7 percent discount 
rates for all costs and benefits except for climate benefits. Table 156 
shows the climate benefits using the central SC-GHG values at 5, 3 and 
2.5 percent discount rate, as well as the 95th percentile values at 3 
percent discount rate, and the associated net benefits.\770\ The same 
discount rate used to discount the value of SC-GHGs (at 5, 3, and 2.5 
percent) is used to calculate the present and equivalent annualized 
values of SC-GHGs for internal consistency, we discuss each of these 
categories in more depth in the following sections. We seek comment on 
the benefit-cost analysis.
---------------------------------------------------------------------------

    \770\ The 3 percent 95th percentile estimates are included to 
provide information on potentially higher-than-expected economic 
impacts from climate change, conditional on the 3 percent estimate 
of the discount rate.
---------------------------------------------------------------------------

    Note that some non-emission costs are shown as negative values in 
Table 156. Those entries represent savings but are included as costs 
because, traditionally, things like repair and maintenance have been 
viewed as costs of vehicle operation. Where negative values are shown, 
we are estimating that those costs are lower in the proposal than in 
the no-action case. Congestion and noise costs are attributable to 
increased congestion and roadway noise resulting from our assumption 
that drivers may choose to drive more under the proposal versus the no 
action case. Those increased miles are known as rebound miles and are 
discussed in Section VIII.F.1 and Chapter 4 of the DRIA.
    Similarly, some of the traditional benefits of rulemakings that 
result in lower fuel consumption by the transportation fleet, i.e., the 
non-emission benefits, are shown as negative values. Our past GHG rules 
have estimated that time spent refueling vehicles would be reduced due 
to the lower fuel consumption of new vehicles; hence, a benefit. 
However, in this analysis, we are estimating that refueling time would 
increase somewhat due to our assumptions for mid-trip recharging events 
for electric vehicles. Therefore, the increased refueling time 
represents a disbenefit (a negative benefit) as shown. As noted in 
Section VIII.B.2, we consider our refueling time estimate to be dated 
considering the rapid changes taking place in electric vehicle charging 
infrastructure driven in no small part by the Inflation Reduction Act, 
and we request comment and data on how our estimates could be improved.
    Table 157 through Table 159 show the same summary of benefits and 
costs for each of the three alternatives.

[[Page 29362]]



       Table 156--Summary of Costs, Fuel Savings and Benefits of the Proposal, Light-Duty and Medium-Duty
                                     [Billions of 2020 dollars] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
                                                   CY 2055       PV, 3%       PV, 7%      EAV, 3%      EAV, 7%
----------------------------------------------------------------------------------------------------------------
                                               Non-Emission Costs
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs.......................           10          280          180           15           15
Repair Costs...................................          -24         -170          -79         -8.9         -6.5
Maintenance Costs..............................          -51         -410         -200          -21          -16
Congestion Costs...............................         0.16          2.3          1.3         0.12         0.11
Noise Costs....................................       0.0025        0.037        0.021       0.0019       0.0017
Sum of Non-Emission Costs......................          -65         -290          -96          -15         -7.8
----------------------------------------------------------------------------------------------------------------
                                                 Fueling Impacts
----------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings...........................           93          890          450           46           37
EVSE Port Costs................................          7.1          120           68          6.2          5.6
Sum of Fuel Savings less EVSE Port Costs.......           86          770          380           40           31
----------------------------------------------------------------------------------------------------------------
                                              Non-Emission Benefits
----------------------------------------------------------------------------------------------------------------
Drive Value Benefits...........................         0.31          4.8          2.7         0.25         0.22
Refueling Time Benefits........................         -8.2          -85          -45         -4.4         -3.6
Energy Security Benefits.......................          4.4           41           21          2.2          1.7
Sum of Non-Emission Benefits...................         -3.6          -39          -21           -2         -1.7
----------------------------------------------------------------------------------------------------------------
                                                Climate Benefits
----------------------------------------------------------------------------------------------------------------
5% Average.....................................           15           82           82          5.4          5.4
3% Average.....................................           38          330          330           17           17
2.5% Average...................................           52          500          500           25           25
3% 95th Percentile.............................          110        1,000        1,000           52           52
----------------------------------------------------------------------------------------------------------------
                                         Criteria Air Pollutant Benefits
----------------------------------------------------------------------------------------------------------------
PM2.5 Health Benefits--Wu et al., 2020.........        16-18          140           63          7.5          5.1
PM2.5 Health Benefits--Pope III et al., 2019...        31-34          280          130           15           10
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
With Climate 5% Average........................      180-200        1,400          610           74           48
With Climate 3% Average........................      200-220        1,600          850           85           60
With Climate 2.5% Average......................      210-230        1,800        1,000           93           67
With Climate 3% 95th Percentile................      280-290        2,300        1,500          120           95
----------------------------------------------------------------------------------------------------------------
\a\ The same discount rate used to discount the value of damages from future emissions (SC-GHG at 5, 3, 2.5
  percent) is used to calculate present and equivalent annualized values of SC-GHGs for internal consistency,
  while all other costs and benefits are discounted at either 3 percent or 7 percent.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
  risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
  The criteria pollutant benefits associated with the standards presented here do not include the full
  complement of health and environmental benefits that, if quantified and monetized, would increase the total
  monetized benefits.
\c\ For net benefits, the range in 2055 uses the low end of the Wu et al. (2020) range and the high end of the
  Pope III et al. (2019) range. The present and equivalent annualized value of net benefits for a 3 percent
  discount rate reflect benefits based on the Pope III et al. (2019) study while the present and equivalent
  annualized values of net benefits for a 7 percent discount rate reflect benefits based on the Wu et al. (2020)
  study.


     Table 157--Summary of Costs, Fuel Savings and Benefits of the Alternative 1, Light-Duty and Medium-Duty
                                     [Billions of 2020 dollars] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
                                                   CY 2055       PV, 3%       PV, 7%      EAV, 3%      EAV, 7%
----------------------------------------------------------------------------------------------------------------
                                               Non-Emission Costs
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs.......................           11          330          220           17           18
Repair Costs...................................          -26         -180          -82         -9.3         -6.7
Maintenance Costs..............................          -57         -450         -220          -24          -18
Congestion Costs...............................         0.11          3.5          2.2         0.18         0.18
Noise Costs....................................       0.0017        0.055        0.034       0.0028       0.0027
Sum of Non-Emission Costs......................          -71         -300          -82          -15         -6.7
----------------------------------------------------------------------------------------------------------------
                                                 Fueling Impacts
----------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings...........................          100          990          510           51           41
EVSE Port Costs................................          7.1          120           68          6.2          5.6
Sum of Fuel Savings less EVSE Port Costs.......           95          870          440           45           36
----------------------------------------------------------------------------------------------------------------
                                              Non-Emission Benefits
----------------------------------------------------------------------------------------------------------------
Drive Value Benefits...........................         0.22          6.5          3.9         0.34         0.32
Refueling Time Benefits........................         -8.8          -90          -47         -4.7         -3.8
Energy Security Benefits.......................          4.8           46           23          2.4          1.9
Sum of Non-Emission Benefits...................         -3.8          -38          -20           -2         -1.6
----------------------------------------------------------------------------------------------------------------
                                                Climate Benefits
----------------------------------------------------------------------------------------------------------------
5% Average.....................................           16           91           91            6            6
3% Average.....................................           41          360          360           19           19

[[Page 29363]]

 
2.5% Average...................................           57          560          560           27           27
3% 95th Percentile.............................          120        1,100        1,100           58           58
----------------------------------------------------------------------------------------------------------------
                                         Criteria Air Pollutant Benefits
----------------------------------------------------------------------------------------------------------------
PM2.5 Health Benefits--Wu et al., 2020.........        16-18          150           66          7.7          5.3
PM2.5 Health Benefits--Pope III et al., 2019...        32-35          290          130           15           11
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
With Climate 5% Average........................      200-210        1,500          660           80           52
With Climate 3% Average........................      220-240        1,800          930           93           65
With Climate 2.5% Average......................      240-260        2,000        1,100          100           73
With Climate 3% 95th Percentile................      300-320        2,500        1,700          130          100
----------------------------------------------------------------------------------------------------------------
\a\ The same discount rate used to discount the value of damages from future emissions (SC-GHG at 5, 3, 2.5
  percent) is used to calculate present and equivalent annualized values of SC-GHGs for internal consistency,
  while all other costs and benefits are discounted at either 3 percent or 7 percent.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
  risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
  The criteria pollutant benefits associated with the standards presented here do not include the full
  complement of health and environmental benefits that, if quantified and monetized, would increase the total
  monetized benefits.
\c\ For net benefits, the range in 2055 uses the low end of the Wu et al. (2020) range and the high end of the
  Pope III et al. (2019) range. The present and equivalent annualized value of net benefits for a 3 percent
  discount rate reflect benefits based on the Pope III et al. (2019) study while the present and equivalent
  annualized values of net benefits for a 7 percent discount rate reflect benefits based on the Wu et al. (2020)
  study.


     Table 158--Summary of Costs, Fuel Savings and Benefits of the Alternative 2, Light-Duty and Medium-Duty
                                     [Billions of 2020 dollars] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
                                                   CY 2055       PV, 3%       PV, 7%      EAV, 3%      EAV, 7%
----------------------------------------------------------------------------------------------------------------
                                               Non-Emission Costs
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs.......................          8.8          230          140           12           12
Repair Costs...................................          -22         -160          -74         -8.3           -6
Maintenance Costs..............................          -47         -370         -180          -19          -14
Congestion Costs...............................        0.064         0.74         0.48        0.039        0.039
Noise Costs....................................        0.001        0.012       0.0078      0.00064      0.00064
Sum of Non-Emission Costs......................          -60         -300         -110          -16         -8.7
----------------------------------------------------------------------------------------------------------------
                                                 Fueling Impacts
----------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings...........................           84          790          400           41           33
EVSE Port Costs................................          7.1          120           68          6.2          5.6
Sum of Fuel Savings less EVSE Port Costs.......           77          680          330           35           27
----------------------------------------------------------------------------------------------------------------
                                              Non-Emission Benefits
----------------------------------------------------------------------------------------------------------------
Drive Value Benefits...........................         0.17          2.4          1.5         0.12         0.12
Refueling Time Benefits........................         -7.6          -79          -41         -4.1         -3.3
Energy Security Benefits.......................          3.9           37           19          1.9          1.5
Sum of Non-Emission Benefits...................         -3.5          -39          -21           -2         -1.7
----------------------------------------------------------------------------------------------------------------
                                                Climate Benefits
----------------------------------------------------------------------------------------------------------------
5% Average.....................................           13           74           74          4.9          4.9
3% Average.....................................           34          290          290           15           15
2.5% Average...................................           47          450          450           22           22
3% 95th Percentile.............................          100          900          900           47           47
----------------------------------------------------------------------------------------------------------------
                                         Criteria Air Pollutant Benefits
----------------------------------------------------------------------------------------------------------------
PM2.5 Health Benefits--Wu et al., 2020.........        15-17          140           61          7.2          4.9
PM2.5 Health Benefits--Pope III et al., 2019...        30-33          270          120           14           10
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
With Climate 5% Average........................      160-180        1,300          550           68           44
With Climate 3% Average........................      180-200        1,500          780           78           54
With Climate 2.5% Average......................      200-210        1,700          930           85           61
With Climate 3% 95th Percentile................      250-270        2,100        1,400          110           86
----------------------------------------------------------------------------------------------------------------
\a\ The same discount rate used to discount the value of damages from future emissions (SC-GHG at 5, 3, 2.5
  percent) is used to calculate present and equivalent annualized values of SC-GHGs for internal consistency,
  while all other costs and benefits are discounted at either 3 percent or 7 percent.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
  risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
  The criteria pollutant benefits associated with the standards presented here do not include the full
  complement of health and environmental benefits that, if quantified and monetized, would increase the total
  monetized benefits.
\c\ For net benefits, the range in 2055 uses the low end of the Wu et al. (2020) range and the high end of the
  Pope III et al. (2019) range. The present and equivalent annualized value of net benefits for a 3 percent
  discount rate reflect benefits based on the Pope III et al. (2019) study while the present and equivalent
  annualized values of net benefits for a 7 percent discount rate reflect benefits based on the Wu et al. (2020)
  study.


[[Page 29364]]


     Table 159--Summary of Costs, Fuel Savings and Benefits of the Alternative 3, Light-Duty and Medium-Duty
                                     [Billions of 2020 dollars] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
                                                   CY 2055       PV, 3%       PV, 7%      EAV, 3%      EAV, 7%
----------------------------------------------------------------------------------------------------------------
                                               Non-Emission Costs
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs.......................           11          270          170           14           14
Repair Costs...................................          -24         -170          -77         -8.6         -6.3
Maintenance Costs..............................          -51         -390         -190          -20          -15
Congestion Costs...............................         0.11          1.5         0.82        0.078        0.066
Noise Costs....................................       0.0016        0.024        0.013       0.0012       0.0011
Sum of Non-Emission Costs......................          -64         -290          -95          -15         -7.8
----------------------------------------------------------------------------------------------------------------
                                                 Fueling Impacts
----------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings...........................           93          850          430           45           35
EVSE Port Costs................................          7.1          120           68          6.2          5.6
Sum of Fuel Savings less EVSE Port Costs.......           86          740          360           38           29
----------------------------------------------------------------------------------------------------------------
                                              Non-Emission Benefits
----------------------------------------------------------------------------------------------------------------
Drive Value Benefits...........................         0.21          3.2          1.8         0.17         0.15
Refueling Time Benefits........................         -8.2          -83          -43         -4.3         -3.5
Energy Security Benefits.......................          4.4           40           20          2.1          1.6
Sum of Non-Emission Benefits...................         -3.6          -39          -21         -2.1         -1.7
----------------------------------------------------------------------------------------------------------------
                                                Climate Benefits
----------------------------------------------------------------------------------------------------------------
5% Average.....................................           15           80           80          5.3          5.3
3% Average.....................................           38          320          320           17           17
2.5% Average...................................           52          490          490           24           24
3% 95th Percentile.............................          110          970          970           51           51
----------------------------------------------------------------------------------------------------------------
                                         Criteria Air Pollutant Benefits
----------------------------------------------------------------------------------------------------------------
PM2.5 Health Benefits--Wu et al., 2020.........        16-18          140           62          7.3          5.0
PM2.5 Health Benefits--Pope III et al., 2019...        31-34          280          120           14           10
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
With Climate 5% Average........................      180-190        1,300          580           71           46
With Climate 3% Average........................      200-220        1,600          820           82           57
With Climate 2.5% Average......................      210-230        1,800          990           90           64
With Climate 3% 95th Percentile................      270-290        2,200        1,500          120           91
----------------------------------------------------------------------------------------------------------------
\a\ The same discount rate used to discount the value of damages from future emissions (SC-GHG at 5, 3, 2.5
  percent) is used to calculate present and equivalent annualized values of SC-GHGs for internal consistency,
  while all other costs and benefits are discounted at either 3 percent or 7 percent.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
  risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
  The criteria pollutant benefits associated with the standards presented here do not include the full
  complement of health and environmental benefits that, if quantified and monetized, would increase the total
  monetized benefits.
\c\ For net benefits, the range in 2055 uses the low end of the Wu et al. (2020) range and the high end of the
  Pope III et al. (2019) range. The present and equivalent annualized value of net benefits for a 3 percent
  discount rate reflect benefits based on the Pope III et al. (2019) study while the present and equivalent
  annualized values of net benefits for a 7 percent discount rate reflect benefits based on the Wu et al. (2020)
  study.

B. Vehicle Cost and Fueling Impacts

1. Vehicle Technology and Purchase Price Impacts
    Table 160 shows the estimated annual vehicle technology costs of 
the program for the indicated calendar years (CY). The table also shows 
the present-values (PV) of those costs and the equivalent annualized 
values (EAV) for the calendar years 2027-2055 using both 3 percent and 
7 percent discount rates.\771\
---------------------------------------------------------------------------

    \771\ For the estimation of the stream of costs and benefits, we 
assume that after implementation of the MY 2027 and later standards, 
the MY 2032 standards apply to each year thereafter.
---------------------------------------------------------------------------

    We expect the technology costs of the program will result in a rise 
in the average purchase price for consumers, for both new and used 
vehicles. While we expect that vehicle manufacturers will strategically 
price vehicles (e.g., subsidizing a lower price for some vehicles with 
a higher price for others), we assume in our modeling that increased 
vehicle technology costs will fully impact purchase prices paid by 
consumers. These projected vehicle technology costs represent the 
incremental costs to manufacturers. For consumers, projected vehicle 
technology costs are offset by savings in reduced operating costs, 
including fuel savings and reduced maintenance and repair costs, as 
discussed in Section VIII.B.3 and in Chapter 4 of the DRIA. 
Additionally, consumers may also benefit from IRA purchase incentives 
for PEVs.

  Table 160--Vehicle Technology Costs Associated With the Proposal and Each Alternative, Light-Duty and Medium-
                                                      Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                    Vehicle technology   Vehicle technology   Vehicle technology
        Calendar year          Vehicle technology   costs, alternative   costs, alternative   costs, alternative
                                costs, proposal             1                    2                    3
----------------------------------------------------------------------------------------------------------------
2027........................                  7.5                  7.9                  5.5                  2.6

[[Page 29365]]

 
2028........................                  6.8                   10                    5                  2.3
2029........................                  6.6                   14                  5.8                  1.8
2030........................                  8.7                   17                  6.1                  4.9
2031........................                   13                   20                   11                   12
2032........................                   17                   23                   15                   18
2035........................                   22                   24                   17                   24
2040........................                   19                   20                   15                   18
2045........................                   13                   13                   10                   13
2050........................                   12                   13                   10                   12
2055........................                   10                   11                  8.8                   11
PV3.........................                  280                  330                  230                  270
PV7.........................                  180                  220                  140                  170
EAV3........................                   15                   17                   12                   14
EAV7........................                   15                   18                   12                   14
----------------------------------------------------------------------------------------------------------------

2. Fueling Impacts
i. Fuel Savings
    The proposed standards are projected to reduce liquid fuel 
consumption (gasoline and diesel) while simultaneously increasing 
electricity consumption. The net effect of these changes in consumption 
for consumers is decreased fuel expenditures or fuel savings. Electric 
Vehicle Supply Equipment (EVSE) port costs, which reflect capital costs 
for procuring and installing PEV charging infrastructure, are also 
shown. For more information regarding fuel consumption, including other 
considerations like rebound driving, see DRIA Chapter 4. See Section IV 
of this Preamble and Chapter 5 of the DRIA for more detail on EVSE port 
costs.
    Fuel savings arise from reduced expenditures on liquid-fuel due to 
reduced consumption of those fuels. Electricity consumption is expected 
to increase, with a corresponding increase in expenditures, due to 
electric vehicles replacing liquid-fueled vehicles. We describe how we 
calculate reduced fuel consumption and increased electricity 
consumption in Chapter 9 of the DRIA. Table 161 presents liquid-fuel 
consumption impacts and Table 162 presents electricity consumption 
impacts.

Table 161--Liquid-Fuel Consumption Impacts Associated With the Proposal and Each of the Alternatives, Light-Duty
                                                 and Medium-Duty
                                      [Billions of gallons of liquid fuel]
----------------------------------------------------------------------------------------------------------------
                                                       Liquid-fuel          Liquid-fuel          Liquid-Fuel
        Calendar year             Liquid-fuel            impacts,             impacts,             impacts,
                               impacts, proposal      alternative 1        alternative 2        alternative 3
----------------------------------------------------------------------------------------------------------------
2027........................                -0.89                -0.93                -0.65                -0.53
2028........................                 -2.2                 -2.5                 -1.6                 -1.3
2029........................                   -4                 -4.4                 -3.2                 -2.3
2030........................                 -6.1                   -7                 -4.9                 -3.9
2031........................                 -8.6                 -9.8                   -7                 -6.3
2032........................                  -12                  -13                 -9.6                 -9.3
2035........................                  -21                  -23                  -19                  -19
2040........................                  -34                  -38                  -31                  -33
2045........................                  -42                  -47                  -38                  -42
2050........................                  -48                  -52                  -43                  -48
2055........................                  -49                  -54                  -44                  -49
sum.........................                 -900               -1,000                 -810                 -870
----------------------------------------------------------------------------------------------------------------


Table 162--Electricity Consumption Impacts Associated With the Proposal and Each of the Alternatives, Light-Duty
                                                 and Medium-Duty
                                                [Terawatt hours]
----------------------------------------------------------------------------------------------------------------
                                                       Electricity          Electricity          Electricity
        Calendar year             Electricity            impacts,             impacts,             impacts,
                               impacts, proposal      alternative 1        alternative 2        alternative 3
----------------------------------------------------------------------------------------------------------------
2027........................                  8.9                  9.3                  6.4                  5.4
2028........................                   21                   23                   15                   13
2029........................                   38                   39                   29                   22
2030........................                   56                   61                   44                   36
2031........................                   78                   84                   64                   58
2032........................                  100                  110                   86                   85
2035........................                  190                  200                  170                  170

[[Page 29366]]

 
2040........................                  300                  330                  280                  290
2045........................                  380                  420                  350                  380
2050........................                  430                  470                  390                  430
2055........................                  440                  490                  400                  440
sum.........................                8,100                8,900                7,400                7,900
----------------------------------------------------------------------------------------------------------------

    Table 163 presents the retail fuel savings, net of savings in 
liquid fuel expenditures and increases in electricity expenditures. 
These represent savings that consumers would realize. Table 164 
presents the pretax fuel savings, net of savings in liquid fuel 
expenditures and increases in electricity expenditures. These represent 
the savings included in the net benefit calculation since fuel taxes do 
not contribute to the value of the fuel. We present fuel tax impacts 
along with other transfers in Section VIII.B.4. The net benefits 
calculation also includes the EVSE costs presented in Table 165.
    The estimated present value pre-tax fuel savings associated with 
the proposed standards are $450 billion and $890 billion using 7 and 3 
percent discount rates, respectively. Table 163 and Table 164 also show 
the undiscounted annual monetized fuel savings and the present value 
(PV) of those costs and equivalent annualized value (EAV) for the 
calendar years 2027-2055 using both 3 percent and 7 percent discount 
rates.

  Table 163--Retail Fuel Savings Associated With the Proposal and Each Alternative, Light-Duty and Medium-Duty
                                          [Billions of 2020 dollars] *
----------------------------------------------------------------------------------------------------------------
                                                       Retail fuel          Retail fuel          Retail fuel
        Calendar year             Retail fuel            savings,             savings,             savings,
                               savings, proposal      alternative 1        alternative 2        alternative 3
----------------------------------------------------------------------------------------------------------------
2027........................                  1.2                  1.3                  0.9                  0.7
2028........................                  3.2                  3.7                  2.4                  1.9
2029........................                    6                    7                  4.8                  3.5
2030........................                   10                   12                  8.1                  6.5
2031........................                   14                   17                   12                   11
2032........................                   20                   23                   17                   16
2035........................                   39                   44                   34                   35
2040........................                   69                   77                   61                   66
2045........................                   89                   98                   80                   87
2050........................                  100                  110                   93                  100
2055........................                  110                  120                   98                  110
PV3.........................                1,100                1,200                  950                1,000
PV7.........................                  550                  610                  490                  520
EAV3........................                   56                   62                   50                   54
EAV7........................                   45                   50                   40                   42
----------------------------------------------------------------------------------------------------------------
* Positive values represent monetary savings.


  Table 164--Pretax Fuel Savings Associated With the Proposal and Each Alternative, Light-Duty and Medium-Duty
                                          [Billions of 2020 dollars] *
----------------------------------------------------------------------------------------------------------------
                                                       Pretax fuel          Pretax fuel          Pretax fuel
        Calendar year             Pretax fuel            savings,             savings,             savings,
                               savings, proposal      alternative 1        alternative 2        alternative 3
----------------------------------------------------------------------------------------------------------------
2027........................                  0.9                  0.9                  0.7                  0.5
2028........................                  2.4                  2.8                  1.8                  1.5
2029........................                  4.7                  5.4                  3.7                  2.7
2030........................                  7.7                  9.2                  6.2                    5
2031........................                   11                   13                  9.2                  8.2
2032........................                   16                   18                   13                   13
2035........................                   31                   35                   27                   28
2040........................                   56                   63                   50                   54
2045........................                   74                   82                   66                   73
2050........................                   88                   97                   79                   87
2055........................                   93                  100                   84                   93
PV3.........................                  890                  990                  790                  850
PV7.........................                  450                  510                  400                  430
EAV3........................                   46                   51                   41                   45

[[Page 29367]]

 
EAV7........................                   37                   41                   33                   35
----------------------------------------------------------------------------------------------------------------
* Positive values represent monetary savings.


Table 165--EVSE Costs Associated With the Proposal and Each Alternative,
                       Light-Duty and Medium-Duty
                      [Billions of 2020 dollars] *
------------------------------------------------------------------------
                                                          EVSE costs,
                    Calendar year                      proposal and each
                                                          alternative
------------------------------------------------------------------------
2027................................................                 1.3
2028................................................                0.66
2029................................................                 1.1
2030................................................                 1.1
2031................................................                 8.3
2032................................................                 8.3
2035................................................                 6.7
2040................................................                 7.1
2045................................................                 7.3
2050................................................                 7.1
2055................................................                 7.1
PV3.................................................                 120
PV7.................................................                  68
EAV3................................................                 6.2
EAV7................................................                 5.6
------------------------------------------------------------------------
* Positive values represent costs.

ii. Refueling Time
    In our analyses, we take into account refueling differences among 
liquid fuel vehicles, BEVs, and PHEVs. Stringent GHG standards have 
traditionally resulted in lower fuel consumption by liquid fueled 
vehicles. Provided fuel tanks on liquid fueled vehicles retain their 
capacity, lower fuel consumption is expected to reduce the frequency of 
refueling events and therefore reduce the time spent refueling 
resulting from less time spent seeking a refueling opportunity. OEMs 
may also elect to package smaller fuel tanks, leveraging lower fuel 
consumption to meet vehicle range, which would also lower the time 
spent refueling resulting from less time spent at the fuel pump. 
Consistent with past analyses, we have estimated the former of these 
possibilities with respect to liquid fueled vehicles.
    Electric vehicles are fueled via charging events. Many charging 
events are expected to occur at an owner's residence via a personally 
owned charge point or during work hours using an employer owned charge 
point, both of which impose very little time burden on the driver. 
However, charging events will also occur in public places where the 
burden on the driver's time may be relatively long (e.g., when drivers 
are in the midst of an extended road trip). Thus, liquid fueling events 
and mid-trip charging events are the focus of our refueling time 
analysis. See DRIA Chapter 4 for a more detailed discussion of this 
analysis. We request comment on our approach, specifically regarding 
the charging time for PEVs.
    Note that the benefits associated with reduced refueling time are 
shown in Table 166 as negative values. In other words, we have 
estimated disbenefits associated with refueling time. The disbenefit 
arises from the time associated with BEV mid-trip refueling, which is 
estimated to result in more time spent refueling relative to our no-
action scenario. As noted, we request comment on our approach which, in 
its current form is taken from the 2021 rule and given the pace of 
change in the BEV charging infrastructure and the presence of the IRA, 
can already be considered somewhat dated.

               Table 166--Refueling Benefits From Time Saved Associated With the Proposal and Each Alternative, Light-Duty and Medium-Duty
                                                              [Billions of 2020 dollars] *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Benefits associated    Benefits associated    Benefits associated    Benefits associated
                                                                   with reduced           with reduced           with reduced           with reduced
                        Calendar year                            refueling time,        refueling time,        refueling time,        refueling time,
                                                                     proposal            alternative 1          alternative 2          alternative 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027........................................................                   -0.1                   -0.2                   -0.1                   -0.1
2028........................................................                  -0.36                  -0.38                  -0.27                  -0.25
2029........................................................                  -0.67                  -0.67                  -0.55                  -0.47
2030........................................................                     -1                   -1.1                  -0.88                  -0.78
2031........................................................                   -1.5                   -1.5                   -1.2                   -1.2
2032........................................................                   -1.9                   -1.9                   -1.6                   -1.6

[[Page 29368]]

 
2035........................................................                   -3.4                   -3.5                   -3.1                   -3.2
2040........................................................                   -5.5                   -5.8                   -5.1                   -5.4
2045........................................................                   -6.9                   -7.4                   -6.5                   -6.9
2050........................................................                   -7.9                   -8.4                   -7.3                   -7.8
2055........................................................                   -8.2                   -8.8                   -7.6                   -8.2
PV3.........................................................                    -85                    -90                    -79                    -83
PV7.........................................................                    -45                    -47                    -41                    -43
EAV3........................................................                   -4.4                   -4.7                   -4.1                   -4.3
EAV7........................................................                   -3.6                   -3.8                   -3.3                   -3.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative values represent disbenefits.

3. Other Purchase Price and Fueling Considerations Affecting Consumers
    The analysis monetizes vehicle technology costs and fueling impacts 
and informs net benefits associated with the standards. It also 
reflects impacts on consumers. In addition to the effects that we 
monetize, we look more closely into, but do not monetize, the effects 
of the standards on low-income households and on consumers of low-
priced new vehicles and used vehicles. These effects depend, in large 
part, on two elements of vehicle ownership, namely (a) the purchase 
prices of vehicles and (b) fueling expenditures. Typically, the 
introduction of more stringent standards leads to higher purchase 
prices and lower fuel expenditures. The net effect varies across 
households. However, the reduction in fuel expenditures may be 
especially relevant for low-income households and consumers in the used 
and low-priced new vehicle markets. First, fuel expenditures are a 
larger portion of expenses for low-income households compared to higher 
income households. Second, lower-priced new vehicles have historically 
been more fuel efficient. Third, fuel economy and therefore fuel 
savings do not decline as vehicles age even though the price paid for 
vehicles typically declines as vehicles age and are resold. Fourth, 
low-income households are more likely to purchase lower-priced new 
vehicles and used vehicles (Hutchens et al. 2021), capturing their 
associated fuel savings.
    Furthermore, for many vehicle consumers, access to credit for 
vehicle purchases is essential and may be of particular concern for 
low-income households. The effects of the standards on access to credit 
is influenced by the potentially countervailing forces of vehicle 
purchase costs and fuel costs. However, the degree of influence and the 
net effect is not clear (see Chapter 8.4.3 of the 2021 rule). Increased 
purchase prices and presumably higher loan principal may, in some 
cases, discourage lending, while reduced fuel expenditures may, in some 
cases, improve lenders' perceptions of borrowers' repayment 
reliability.
    Finally, while access to conventional fuels can be assumed for the 
most part, the number and density of charging stations varies 
considerably.\772\ Public and private charging infrastructure has been 
expanding alongside PEV adoption and is generally expected to continue 
to grow, particularly in light of public and private investments and 
consistent with local level priorities.773 774 This includes 
home charging events, which are likely to continue to grow with PEV 
adoption but are also expected to represent a declining proportion of 
charging events as PEV share increases and more drivers without easy 
access to home charging adopt PEVs and therefore use public 
charging.\775\ Thus, publicly accessible charging is an important 
consideration, especially among renters and residents of multi-family 
housing and persons who charge away from home.\776\ Households without 
access to charging at home or the workplace may incur additional 
charging costs, though there is ongoing interest in and development of 
alternative charging solutions (e.g., curbside charging or use of 
mobile charging units) and business models (e.g., providing charging as 
an amenity or as a subscription service for multi-family housing).\777\ 
Though, especially among consumers who rely upon public charging, the 
higher price of public charging is important, improvements in access 
and availability to both public and private charging are expected, 
bolstered by private and public investment in charging infrastructure, 
including the recent Federal investments provided by the CHIPS Act, the 
BIL and the IRA, which will allow for increased investment along the 
vehicle supply chain, including charging infrastructure.\778\ Please 
see Section IV.C.4 and Chapter 5 of the DRIA for a more detailed 
discussion of public and private investments in charging 
infrastructure, and our assessment of infrastructure needs and costs 
under this proposal.
---------------------------------------------------------------------------

    \772\ https://afdc.energy.gov/fuels/electricity_locations.html, 
accessed 3/8/2022.
    \773\ Bui, Anh, Peter Slowik, and Nic Lutsey. 2020. Update on 
electric vehicle adoption across U.S. cities. International Council 
on Clean Transportation. https://theicct.org/wp-content/uploads/2021/06/EV-cities-update-aug2020.pdf.
    \774\ Greschak, Tressa, Matilda Kreider, and Nathan Legault. 
2022. ``Consumer Adoption of Electric Vehicles: An Evaluation of 
Local Programs in the United States.'' School for Environment and 
Sustainability, University of Michigan, Ann Arbor, MI. https://deepblue.lib.umich.edu/handle/2027.42/172221.
    \775\ Ge, Yanbo, Christina Simeone, Andrew Duvall, and Andrew 
Wood. 2021. There's No Place Like Home: Residential Parking, 
Electrical Access, and Implications for the Future of Electric 
Vehicle Charging Infrastructure. NREL/TP-5400-81065, Golden, CO: 
National Renewable Energy Laboratory. https://www.nrel.gov/docs/fy22osti/81065.pdf.
    \776\ https://advocacy.consumerreports.org/wp-content/uploads/2022/09/EV-Demographic-Survey-English-final.pdf.
    \777\ Matt Alexander, Noel Crisostomo, Wendell Krell, Jeffrey 
Lu, Raja Ramesh, ``Assembly Bill 2127: Electric Vehicle Charging 
Infrastructure Assessment,'' July 2021, California Energy 
Commission. Accessed March 9, 2023, at https://www.energy.ca.gov/programs-and-topics/programs/electric-vehicle-charging-infrastructure-assessment-ab-2127.
    \778\ More information on these three acts can be found in the 
January, 2023 White House publication ``Building a Clean Energy 
Economy: A Guidebook to the Inflation Reduction Act's Investments in 
Clean Energy and Climate Action.'' found online at https://www.whitehouse.gov/wp-content/uploads/2022/12/Inflation-Reduction-Act-Guidebook.pdf.

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

[[Page 29369]]

4. Transfers
    There are three types of transfers included in our analysis. Two of 
these transfers come in the form of tax credits arising from the 
Inflation Reduction Act to encourage investment in battery technology 
and the purchase of electrified vehicles. These are transfers from the 
government to producers of vehicles (the battery tax credit) or 
purchasers of vehicles (the vehicle purchase tax credit). The third is 
fuel taxes which are transfers from purchasers of fuel to the 
government. The proposal results in less liquid-fuel consumed and, 
therefore, less money transferred from purchasers of fuel to the 
government.

  Table 167--Battery Tax Credits Associated With the Proposal and Each Alternative, Light-Duty and Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                Battery tax      Battery tax      Battery tax      Battery tax
                Calendar year                     credits,         credits,         credits,         credits,
                                                  proposal      alternative 1    alternative 2    alternative 3
----------------------------------------------------------------------------------------------------------------
2027........................................             6.8              7.1              4.8              4.1
2028........................................             9.2               11              6.3              5.6
2029........................................              13               13               11              6.9
2030........................................              11               13              8.7              7.9
2031........................................               9              9.3              7.6              8.4
2032........................................             5.3              5.5              4.6              5.4
2035........................................               0                0                0                0
2040........................................               0                0                0                0
2045........................................               0                0                0                0
2050........................................               0                0                0                0
2055........................................               0                0                0                0
PV3.........................................              49               52               39               34
PV7.........................................              43               46               34               30
EAV3........................................             2.6              2.7                2              1.8
EAV7........................................             3.5              3.8              2.8              2.4
----------------------------------------------------------------------------------------------------------------


Table 168--Vehicle Purchase Tax Credits Associated With the Proposal and Each Alternative, Light-Duty and Medium-
                                                      Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                Purchase tax     Purchase tax     Purchase tax     Purchase tax
                Calendar year                     credits,         credits,         credits,         credits,
                                                  proposal      alternative 1    alternative 2    alternative 3
----------------------------------------------------------------------------------------------------------------
2027........................................             6.7                7              4.8                4
2028........................................             9.9               11              6.7              6.1
2029........................................              14               14               13              7.7
2030........................................              18               20               14               13
2031........................................              22               23               19               21
2032........................................              27               29               24               27
2035........................................               0                0                0                0
2040........................................               0                0                0                0
2045........................................               0                0                0                0
2050........................................               0                0                0                0
2055........................................               0                0                0                0
PV3.........................................              86               92               71               68
PV7.........................................              74               79               60               58
EAV3........................................             4.5              4.8              3.7              3.6
EAV7........................................               6              6.4              4.9              4.7
----------------------------------------------------------------------------------------------------------------


   Table 169--Fuel Tax Transfers Associated With the Proposal and Each Alternative, Light-Duty and Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                Fuel taxes,      Fuel taxes,      Fuel taxes,      Fuel taxes,
                Calendar year                     proposal      alternative 1    alternative 2    alternative 3
----------------------------------------------------------------------------------------------------------------
2027........................................            0.31             0.32             0.22             0.18
2028........................................            0.77             0.88             0.57             0.46
2029........................................             1.4              1.6              1.1             0.81
2030........................................             2.4              2.8              1.9              1.5
2031........................................             3.3              3.9              2.7              2.4
2032........................................             4.5              5.2              3.8              3.6
2035........................................               8                9                7              7.3
2040........................................              12               14               11               12
2045........................................              15               16               13               14
2050........................................              16               17               14               16

[[Page 29370]]

 
2055........................................              15               17               14               15
PV3.........................................             180              200              160              170
PV7.........................................              97              110               85               91
EAV3........................................             9.5               11              8.4                9
EAV7........................................             7.9              8.8                7              7.4
----------------------------------------------------------------------------------------------------------------

C. U.S. Vehicle Sales Impacts

1. Light-Duty Vehicle Sales Impacts
    As discussed in Section IV.A of this Preamble, EPA used the OMEGA 
model to analyze impacts of this proposal, including impacts on vehicle 
sales. The OMEGA model accounts for interactions in producer and 
consumer decisions in total sales and in the share of ICE and BEV 
vehicles in the market. As in previous rulemakings, the sales impacts 
are based on a set of assumptions and inputs, including assumptions 
about the role of fuel consumption in vehicle purchase decisions, and 
assumptions on consumers' demand elasticity.\779\
---------------------------------------------------------------------------

    \779\ The demand elasticity is the percent change in quantity 
associated with percent increase in price. For price, we use net 
price, where net price is the difference in technology costs less an 
estimate of the change in fuel costs over the number of years we 
assume fuel costs are taken into account. BEV purchase incentives 
from the IRA are also accounted for in the net consumer prices used 
in OMEGA. See DRIA Chapter 2.6.8 for more information.
---------------------------------------------------------------------------

    In OMEGA, the amount of fuel savings considered in the purchase 
decisions is directly incorporated in the producer assumptions of how 
many years of fuel savings consumers consider in their purchase 
decision. In the 2021 rule, as well as in this proposed rule, EPA 
assumed that LD vehicle buyers account for about 2.5 years of fuel 
consumption in their purchase decision. However, as discussed in detail 
in the 2021 rule,\780\ there is not a consensus around the role of fuel 
consumption in vehicle purchase decisions. Greene et al. (2018) 
provides a reference value of $1,150 for the value of reducing fuel 
costs by $0.01/mile over the lifetime of an average vehicle; for 
comparison, 2.5 years of fuel savings is only about 30 percent of that 
value, or about $334. This $334 is within the large standard deviation 
in Greene et al. (2018) for the willingness to pay to reduce fuel 
costs, but it is far lower than both the mean of $1,880 (160 percent of 
the reference value) and the median of $990 (85 percent of the 
reference value) per one cent per mile in the paper. On the other hand, 
the 2021 NAS report,\781\ citing the 2015 NAS report, observed that 
automakers ``perceive that typical consumers would pay upfront for only 
one to four years of fuel savings'' (pp. 9-10), which is within the 
range of values identified in Greene et al. (2018) for consumer 
response, but well below the median or mean. In other words, though 
automakers seem to operate under a perception of consumer willingness 
to pay for additional fuel economy that is not inconsistent with 
estimates in the literature of how consumers actually behave, it does 
appear possible that automakers do not fully account for how those 
consumers actually behave. In comments on the 2021 rule, some 
commenters suggested that new vehicle buyers care more about fuel 
consumption than the use of 2.5 years suggests, and that EPA should 
model automaker adoption of fuel-saving technologies based on 
historical actions. As discussed in Section VIII.J and DRIA Chapter 
4.4, we note that, historically, automakers did not provide fuel saving 
technology to customers, even though it was proven to pay for itself in 
short periods of time. However, EPA notes that the data, methods and 
ideas discussed here are based on historical data and focus on ICE 
vehicle sales. Automaker adoption of fuel-saving technologies and 
consumer response to fuel savings, and the amount of fuel savings 
considered in the purchase decision, may be different with electric 
vehicles and in an era of high BEV sales. We request comment on data, 
methods and perspectives on the role of fuel consumption in the vehicle 
purchase decision.
---------------------------------------------------------------------------

    \780\ 86 FR 74434, December 30, 2021, ``Revised 2023 and Later 
Model Year Light-Duty Vehicle Greenhouse Gas Emissions Standards.''
    \781\ National Academies of Sciences, Engineering, and Medicine. 
2021. Assessment of Technologies for Improving Light-Duty Vehicle 
Fuel Economy--2025-2035. Washington, DC: The National Academies 
Press. https://doi.org/10.17226/26092.
---------------------------------------------------------------------------

    Continuing the approach used in the final 2021 rule, EPA will be 
using a demand elasticity for new LD vehicles of -0.4 based on a 2021 
EPA peer reviewed report, which included a literature review on and 
estimates of the effects of new vehicle price changes on the new 
vehicle market.\782\ However, as noted in EPA's report and by public 
commenters on the proposed 2021 rule, -0.4 appears to be the largest 
estimate (in absolute value) for a long-run new vehicle demand 
elasticity in recent studies. Further, EPA's report examining the 
relationship between new and used vehicle markets shows that, for 
plausible values reflecting that interaction, the new vehicle demand 
elasticity varies from -0.15 to -0.4. A smaller elasticity does not 
change the direction of sales effects, but it does reduce the magnitude 
of the effects. We chose the larger value of this range for our 
analysis because it will lead to more conservative estimates that are 
still within the range estimated within the report.
---------------------------------------------------------------------------

    \782\ U.S. EPA. 2021. The Effects of New-Vehicle Price Changes 
on New- and Used-Vehicle Markets and Scrappage. EPA-420-R-21-019. 
https://cfpub.epa.gov/si/si_public_record_Report.cfm?dirEntryId=352754&Lab=OTAQ.
---------------------------------------------------------------------------

    For this proposed rule, EPA is maintaining the previous assumptions 
of 2.5 years of fuel savings and a new vehicle demand elasticity of -
0.4 for its modeling of LD sales impacts. These assumptions are applied 
to the Proposal, as well as the more stringent (Alternative 1(-10)) and 
less stringent (Alternative 2 (+10)) and Alternative 3 (linear phase-
in)) options as described in Section III.E.
    Under the Proposed scenario, there is a small change projected in 
total new LD vehicle sales compared to sales under the No Action 
scenario.\783\ See Table 170 for total new vehicle sales impacts under 
the Proposed scenario. The table shows that sales decrease for two 
years, increase for the next two years, and then decrease again. Though 
the increase in the middle years may seem unexpected at first, as 
technology costs are increasing, the reduction in average per vehicle 
cost due to the 2.5 years of fuel cost savings incorporated

[[Page 29371]]

into the sales impact estimates offset the increase in the LD vehicle 
technology costs.
---------------------------------------------------------------------------

    \783\ The No Action scenario consists of the 2021 rule standards 
and IRA provisions as explained in Section IV.B.

                         Table 170--Total New LD Sales Impacts in the Proposed Scenario
----------------------------------------------------------------------------------------------------------------
                                                                  No action               Proposed rule
                                                              --------------------------------------------------
                             Year                                                                 Change from no
                                                                 Total sales      Total sales      action  (%)
----------------------------------------------------------------------------------------------------------------
2027.........................................................      15,487,827       15,432,908       -54,919 (-
                                                                                                         0.35%)
2028.........................................................      15,637,207       15,616,676       -20,531 (-
                                                                                                         0.13%)
2029.........................................................      15,770,260       15,781,094   10,834 (0.07%)
2030.........................................................      15,807,049       15,814,296    7,247 (0.05%)
2031.........................................................      15,884,729       15,860,358       -24,370 (-
                                                                                                         0.15%)
2032.........................................................      15,880,160       15,834,010       -46,150 (-
                                                                                                         0.29%)
----------------------------------------------------------------------------------------------------------------

    Table 171 shows the total new vehicle sales impacts under the three 
alternative scenarios. All three alternatives also show a very small 
change in sales compared to the No Action scenario. The change is 
largest in magnitude under the most stringent alternative (Alternative 
1), with the largest results projected to be a decrease of less than 
0.8 percent in 2032. Alternative 3 projects the smallest, in magnitude, 
results in the first two years, with Alternative 2 projecting the 
smallest, in magnitude, results in the last two years.

                                 Table 171--Total New LD Sales Impacts in Alternative 1, Alternative 2 and Alternative 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Alternative 1 (-10)               Alternative 2 (+10)             Alternative 3 (linear)
                                                   -----------------------------------------------------------------------------------------------------
                       Year                                         Change from no                    Change from no                    Change from no
                                                    Total sales       action (%)      Total sales       action (%)      Total sales       action (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027..............................................   15,429,939     -57,889 (-0.37%)   15,447,829     -39,998 (-0.26%)   15,476,391     -11,436 (-0.07%)
2028..............................................   15,582,224     -54,983 (-0.35%)   15,624,158     -13,048 (-0.08%)   15,643,941        6,734 (0.04%)
2029..............................................   15,690,100     -80,160 (-0.51%)   15,778,412        8,153 (0.05%)   15,795,393       25,133 (0.16%)
2030..............................................   15,732,702     -74,347 (-0.47%)   15,821,919       14,871 (0.09%)   15,823,563       16,514 (0.10%)
2031..............................................   15,774,869    -109,860 (-0.69%)   15,864,090     -20,639 (-0.13%)   15,857,727     -27,001 (-0.17%)
2032..............................................   15,758,885    -121,275 (-0.76%)   15,834,633     -45,527 (-0.29%)   15,818,292     -61,868 (-0.39%)
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Medium-Duty Sales Impacts
    The cited literature is focused on light-duty vehicles, which are 
primarily purchased and used as personal vehicles by individuals and 
households. The medium-duty vehicle market, in contrast, largely serves 
commercial applications. The assumptions in our analysis of the LD 
sales response are specific to that market, and do not necessarily 
carry over to the MD vehicle market. Commercial vehicle owners purchase 
vehicles based on the needs for their business, and we believe they are 
less sensitive to changes in vehicle price than personal vehicle 
owners.\784\ The elasticity of demand affects the sensitivity of 
vehicle buyers to a change in the price of vehicles: The smaller the 
elasticity, in absolute value, the smaller the estimated change in 
sales due to a change in vehicle price. Therefore, as explained in 
Chapter 4.4 of the DRIA, the estimates of a change in sales due to this 
rule depend on the elasticity of demand assumptions. For this proposal, 
we are assuming an elasticity of 0 for the MD vehicle sales impacts 
estimates, and we are not projecting any differences in the number of 
MD vehicles sold between the No Action and the Proposal. This 
implicitly assumes that the buyers of MD vehicles are not going to 
change purchase decisions if the price of the vehicle changes, all else 
equal. In other words, as long as the characteristics of the vehicle do 
not change, commercial buyers will still purchase the vehicle that fits 
their needs.
---------------------------------------------------------------------------

    \784\ See DRIA Chapter 4.1.1 for more information.
---------------------------------------------------------------------------

    We seek comment on our assumptions for both LD and MD vehicle sales 
impacts.

D. Greenhouse Gas Emission Reduction Benefits

    EPA estimated the climate benefits for the final standards using 
measures of the social cost of three GHGs: Carbon, methane, and nitrous 
oxide. The social cost of each gas (i.e., the social cost of carbon 
(SC-CO2), methane (SC-CH4), and nitrous oxide 
(SC-N2O)) is the monetary value of the net harm to society 
associated with a marginal increase in emissions in a given year, or 
the benefit of avoiding that increase. Collectively, these values are 
referenced as the ``social cost of greenhouse gases'' (SC-GHG). In 
principle, SC-GHG includes the value of all climate change impacts, 
including (but not limited to) changes in net agricultural 
productivity, human health effects, property damage from increased 
flood risk and natural disasters, disruption of energy systems, risk of 
conflict, environmental migration, and the value of ecosystem services. 
The SC-GHG therefore, reflects the societal value of reducing emissions 
of the gas in question by one metric ton. EPA and other Federal 
agencies began regularly incorporating SC-GHG estimates in their 
benefit-cost analyses conducted under Executive Order (E.O.)

[[Page 29372]]

12866 \785\ since 2008, following a Ninth Circuit Court of Appeals 
remand of a rule for failing to monetize the benefits of reducing 
CO2 emissions in a rulemaking process.
---------------------------------------------------------------------------

    \785\ Benefit-cost analyses have been an integral part of 
executive branch rulemaking for decades. Presidents since the 1970s 
have issued executive orders requiring agencies to conduct analysis 
of the economic consequences of regulations as part of the 
rulemaking development process. E.O. 12866, released in 1993 and 
still in effect today, requires that for all regulatory actions that 
are significant under 3(f)(1), an agency provide an assessment of 
the potential costs and benefits of the regulatory action, and that 
this assessment include a quantification of benefits and costs to 
the extent feasible.
---------------------------------------------------------------------------

    We estimate the global social benefits of CO2, 
CH4, and N2O emission reductions expected from 
the proposed rule using the SC-GHG estimates presented in the February 
2021 Technical Support Document (TSD): Social Cost of Carbon, Methane, 
and Nitrous Oxide Interim Estimates under E.O. 13990 (IWG 2021). These 
SC-GHG estimates are interim values developed under E.O. 13990 for use 
in benefit-cost analyses until updated estimates of the impacts of 
climate change can be developed based on the best available climate 
science and economics. We have evaluated the SC-GHG estimates in the 
TSD and have determined that these estimates are appropriate for use in 
estimating the global social benefits of CO2, 
CH4, and N2O emission reductions expected from 
this proposed rule. After considering the TSD, and the issues and 
studies discussed therein, EPA finds that these estimates, while likely 
an underestimate, are the best currently available SC-GHG estimates. 
These SC-GHG estimates were developed over many years, using a 
transparent process, peer-reviewed methodologies, the best science 
available at the time of that process, and with input from the public. 
As discussed in Chapter 10 of the DRIA, these interim SC-GHG estimates 
have a number of limitations, including that the models used to produce 
them do not include all of the important physical, ecological, and 
economic impacts of climate change recognized in the climate-change 
literature and that several modeling input assumptions are outdated. As 
discussed in the February 2021 TSD, the Interagency Working Group on 
the Social Cost of Greenhouse Gases (IWG) finds that, taken together, 
the limitations suggest that these SC-GHG estimates likely 
underestimate the damages from GHG emissions. The IWG is currently 
working on a comprehensive update of the SC-GHG estimates (under E.O. 
13990) taking into consideration recommendations from the National 
Academies of Sciences, Engineering and Medicine, recent scientific 
literature, public comments received on the February 2021 TSD and other 
input from experts and diverse stakeholder groups. EPA is participating 
in the IWG's work. In addition, while that process continues, EPA is 
continuously reviewing developments in the scientific literature on the 
SC-GHG, including more robust methodologies for estimating damages from 
emissions, and looking for opportunities to further improve SC-GHG 
estimation going forward. Most recently, EPA has developed a draft 
updated SC-GHG methodology within a sensitivity analysis in the 
regulatory impact analysis of EPA's November 2022 supplemental proposal 
for oil and gas standards that is currently undergoing external peer 
review and a public comment process. See Chapter 10 of the DRIA for 
more discussion of this effort.
    We monetize benefits of the proposed standards and evaluate other 
costs in part to enable a comparison of costs and benefits pursuant to 
E.O. 12866, but we recognize there are benefits that we are currently 
unable to fully quantify. EPA's practice has been to set standards to 
achieve improved air quality consistent with CAA section 202, and not 
to rely on cost-benefit calculations, with their uncertainties and 
limitations, as identifying the appropriate standards. In setting 
standards, we place weight on the emissions reductions the standards 
are projected to achieve, and we present the monetized benefits here 
and elsewhere as illustrative, taking into consideration their 
substantial uncertainties and limitations.
    Table 172 through Table 175 show the benefits of reduced 
CO2, CH4, N2O and GHG emissions, 
respectively, and consequently the annual quantified benefits (i.e., 
total GHG benefits), for each of the four interim social cost of GHG 
(SC-GHG) values estimated by the interagency working group. Table 176 
through Table 179 show the same information for Alternative 1. Table 
180 through Table 183 show the same information for Alternative 2, and 
Table 184 through Table 187 show this information for Alternative 3. 
See Chapter 10.4 of the DRIA for more on the application of SC-GHG 
estimates.

Table 172--Climate Benefits From Reductions in CO2 Emissions Associated With the Proposal, Light-Duty and Medium-
                                                      Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                 Calendar  year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................          0.1         0.34             0.5                     1
2028............................................         0.27         0.88             1.3                   2.6
2029............................................         0.51          1.6             2.4                     5
2030............................................         0.81          2.6             3.8                   7.8
2031............................................          1.2          3.8             5.5                    11
2032............................................          1.7          5.2             7.5                    16
2035............................................          3.5           10              15                    32
2040............................................          6.6           19              27                    59
2045............................................          9.9           27              38                    84
2050............................................           13           35              48                   110
2055............................................           15           37              52                   110
PV..............................................           82          330             500                  1000

[[Page 29373]]

 
EAV.............................................          5.4           17              24                    52
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


Table 173--Climate Benefits From Reductions in CH4 Emissions Associated With the Proposal, Light-Duty and Medium-
                                                      Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                 Calendar  year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................     0.000022     0.000046        0.000059               0.00012
2028............................................     0.000068      0.00014         0.00018               0.00038
2029............................................      0.00015      0.00032         0.00041               0.00085
2030............................................      0.00026      0.00054         0.00069                0.0014
2031............................................      0.00042      0.00086          0.0011                0.0023
2032............................................      0.00063       0.0013          0.0016                0.0034
2035............................................       0.0017       0.0034          0.0043                 0.009
2040............................................       0.0046        0.009           0.011                 0.024
2045............................................       0.0086        0.016            0.02                 0.044
2050............................................        0.013        0.025            0.03                 0.066
2055............................................        0.015        0.027           0.033                  0.07
PV..............................................        0.067         0.19            0.26                  0.49
EAV.............................................       0.0044       0.0097           0.012                 0.026
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


Table 174--Climate Benefits From Reductions in N2O Emissions Associated With the Proposal, Light-Duty and Medium-
                                                      Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                 Calendar  year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................      0.00094       0.0028          0.0041                0.0074
2028............................................       0.0021       0.0063          0.0091                 0.017
2029............................................       0.0039        0.012           0.017                  0.03
2030............................................       0.0061        0.018           0.026                 0.047
2031............................................       0.0091        0.026           0.038                  0.07
2032............................................        0.013        0.036           0.052                 0.096
2035............................................        0.026        0.072             0.1                  0.19
2040............................................        0.049         0.13            0.19                  0.35
2045............................................        0.073         0.19            0.26                  0.51
2050............................................        0.096         0.24            0.33                  0.64
2055............................................         0.11         0.27            0.37                  0.73
PV..............................................         0.61          2.3             3.5                   6.1
EAV.............................................         0.04         0.12            0.17                  0.32
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


[[Page 29374]]


Table 175--Climate Benefits From Reductions in GHG Emissions Associated With the Proposal, Light-Duty and Medium-
                                                      Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                 Calendar  year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................          0.1         0.34             0.5                     1
2028............................................         0.27         0.88             1.3                   2.7
2029............................................         0.52          1.7             2.4                     5
2030............................................         0.82          2.6             3.8                   7.9
2031............................................          1.2          3.8             5.5                    12
2032............................................          1.7          5.3             7.6                    16
2035............................................          3.5           11              15                    32
2040............................................          6.7           19              27                    60
2045............................................           10           28              38                    85
2050............................................           13           35              48                   110
2055............................................           15           38              52                   110
PV..............................................           82          330             500                  1000
EAV.............................................          5.4           17              25                    52
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


   Table 176--Climate Benefits From Reductions in CO2 Emissions Associated With Alternative 1, Light-Duty and
                                                   Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                 Calendar  year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................         0.11         0.36            0.52                   1.1
2028............................................         0.31            1             1.5                     3
2029............................................         0.58          1.9             2.7                   5.6
2030............................................         0.95            3             4.4                   9.2
2031............................................          1.4          4.4             6.3                    13
2032............................................          1.9          5.9             8.6                    18
2035............................................          3.9           12              17                    36
2040............................................          7.4           21              30                    66
2045............................................           11           30              42                    93
2050............................................           14           38              53                   120
2055............................................           16           41              57                   120
PV..............................................           91          360             550                  1100
EAV.............................................            6           19              27                    58
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


   Table 177--Climate Benefits From Reductions in CH4 Emissions Associated With Alternative 1, Light-Duty and
                                                   Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                 Calendar  year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................     0.000023     0.000048        0.000062               0.00013
2028............................................     0.000065      0.00014         0.00018               0.00036
2029............................................      0.00014      0.00029         0.00037               0.00077
2030............................................      0.00024       0.0005         0.00065                0.0013
2031............................................      0.00041      0.00084          0.0011                0.0022
2032............................................      0.00063       0.0013          0.0016                0.0034
2035............................................       0.0018       0.0035          0.0045                0.0094
2040............................................       0.0049       0.0096           0.012                 0.026
2045............................................       0.0094        0.018           0.022                 0.047
2050............................................        0.015        0.027           0.033                 0.072
2055............................................        0.016         0.03           0.036                 0.077
PV..............................................        0.072          0.2            0.28                  0.53

[[Page 29375]]

 
EAV.............................................       0.0047         0.01           0.013                 0.028
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


   Table 178--Climate Benefits From Reductions in N2O Emissions Associated With Alternative 1, Light-Duty and
                                                   Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                 Calendar  year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................      0.00097       0.0029          0.0042                0.0077
2028............................................       0.0023       0.0068          0.0098                 0.018
2029............................................        0.004        0.012           0.017                 0.031
2030............................................       0.0065        0.019           0.027                  0.05
2031............................................       0.0096        0.028            0.04                 0.073
2032............................................        0.013        0.038           0.054                   0.1
2035............................................        0.027        0.076            0.11                   0.2
2040............................................        0.053         0.14             0.2                  0.38
2045............................................         0.08         0.21            0.29                  0.55
2050............................................          0.1         0.26            0.36                   0.7
2055............................................         0.12          0.3             0.4                  0.79
PV..............................................         0.66          2.5             3.7                   6.5
EAV.............................................        0.044         0.13            0.18                  0.34
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


   Table 179--Climate Benefits From Reductions in GHG Emissions Associated With Alternative 1, Light-Duty and
                                                   Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                 Calendar  year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................         0.11         0.36            0.52                   1.1
2028............................................         0.31            1             1.5                     3
2029............................................         0.58          1.9             2.7                   5.6
2030............................................         0.96          3.1             4.4                   9.2
2031............................................          1.4          4.4             6.3                    13
2032............................................          1.9            6             8.6                    18
2035............................................          3.9           12              17                    36
2040............................................          7.5           22              30                    66
2045............................................           11           31              43                    94
2050............................................           14           38              53                   120
2055............................................           16           41              57                   120
PV..............................................           91          360             560                  1100
EAV.............................................            6           19              27                    58
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


[[Page 29376]]


   Table 180--Climate Benefits From Reductions in CO2 Emissions Associated With Alternative 2, Light-Duty and
                                                   Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                  Calendar year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................        0.076         0.25            0.36                  0.74
2028............................................          0.2         0.64            0.94                   1.9
2029............................................         0.41          1.3             1.9                     4
2030............................................         0.65          2.1               3                   6.3
2031............................................         0.99          3.1             4.5                   9.4
2032............................................          1.4          4.4             6.3                    13
2035............................................            3          9.2              13                    28
2040............................................            6           17              24                    53
2045............................................          8.9           25              35                    76
2050............................................           12           31              43                    96
2055............................................           13           34              47                   100
PV..............................................           73          290             450                   890
EAV.............................................          4.8           15              22                    47
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


   Table 181--Climate Benefits From Reductions in CH4 Emissions Associated With Alternative 2, Light-Duty and
                                                   Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                  Calendar year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................     0.000018     0.000038        0.000049                0.0001
2028............................................     0.000052      0.00011         0.00014               0.00029
2029............................................      0.00013      0.00027         0.00035               0.00072
2030............................................      0.00021      0.00044         0.00057                0.0012
2031............................................      0.00035      0.00072         0.00092                0.0019
2032............................................      0.00054       0.0011          0.0014                 0.003
2035............................................       0.0015        0.003          0.0038                0.0081
2040............................................       0.0042       0.0082            0.01                 0.022
2045............................................        0.008        0.015           0.019                  0.04
2050............................................        0.012        0.023           0.028                 0.061
2055............................................        0.014        0.025           0.031                 0.065
PV..............................................        0.061         0.17            0.24                  0.46
EAV.............................................        0.004       0.0089           0.011                 0.024
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


   Table 182--Climate Benefits From Reductions in N2O Emissions Associated With Alternative 2, Light-Duty and
                                                   Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                  Calendar year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................      0.00073       0.0022          0.0031                0.0057
2028............................................       0.0016       0.0047          0.0068                 0.012
2029............................................       0.0032       0.0093           0.013                 0.025
2030............................................        0.005        0.015           0.021                 0.038
2031............................................       0.0076        0.022           0.031                 0.058
2032............................................        0.011        0.031           0.044                 0.082
2035............................................        0.023        0.065           0.092                  0.17
2040............................................        0.046         0.12            0.17                  0.33
2045............................................        0.068         0.18            0.25                  0.47
2050............................................         0.09         0.22            0.31                   0.6
2055............................................         0.11         0.26            0.35                  0.68
PV..............................................         0.56          2.1             3.2                   5.6

[[Page 29377]]

 
EAV.............................................        0.037         0.11            0.16                  0.29
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


   Table 183--Climate Benefits From Reductions in GHG Emissions Associated With Alternative 2, Light-Duty and
                                                   Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                  Calendar year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................        0.076         0.25            0.36                  0.75
2028............................................          0.2         0.65            0.95                     2
2029............................................         0.41          1.3             1.9                     4
2030............................................         0.66          2.1               3                   6.3
2031............................................         0.99          3.1             4.5                   9.5
2032............................................          1.4          4.4             6.4                    13
2035............................................          3.1          9.3              13                    28
2040............................................            6           17              25                    54
2045............................................            9           25              35                    77
2050............................................           12           32              44                    97
2055............................................           13           34              47                   100
PV..............................................           74          290             450                   900
EAV.............................................          4.9           15              22                    47
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


   Table 184--Climate Benefits From Reductions in CO2 Emissions Associated With Alternative 3, Light-Duty and
                                                   Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                  Calendar year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................        0.061          0.2            0.29                   0.6
2028............................................         0.16         0.53            0.77                   1.6
2029............................................          0.3         0.97             1.4                   2.9
2030............................................         0.52          1.7             2.4                     5
2031............................................         0.88          2.8               4                   8.4
2032............................................          1.4          4.3             6.1                    13
2035............................................          3.2          9.6              14                    29
2040............................................          6.4           19              26                    57
2045............................................          9.8           27              38                    83
2050............................................           13           35              48                   110
2055............................................           15           37              52                   110
PV..............................................           79          320             480                   960
EAV.............................................          5.2           16              24                    50
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


[[Page 29378]]


   Table 185--Climate Benefits From Reductions in CH4 Emissions Associated With Alternative 3, Light-Duty and
                                                   Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                  Calendar year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................      0.00002     0.000042        0.000054               0.00011
2028............................................     0.000055      0.00012         0.00015               0.00031
2029............................................      0.00011      0.00023          0.0003               0.00061
2030............................................      0.00019      0.00039          0.0005                 0.001
2031............................................      0.00032      0.00066         0.00085                0.0018
2032............................................      0.00051       0.0011          0.0013                0.0028
2035............................................       0.0015       0.0031          0.0039                0.0082
2040............................................       0.0044       0.0087           0.011                 0.023
2045............................................       0.0085        0.016            0.02                 0.043
2050............................................        0.013        0.025            0.03                 0.066
2055............................................        0.015        0.027           0.033                  0.07
PV..............................................        0.065         0.18            0.25                  0.49
EAV.............................................       0.0043       0.0095           0.012                 0.025
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


   Table 186--Climate Benefits From Reductions in N2O Emissions Associated With Alternative 3, Light-Duty and
                                                   Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                  Calendar year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................      0.00065       0.0019          0.0028                0.0051
2028............................................       0.0014       0.0043          0.0062                 0.011
2029............................................       0.0025       0.0075           0.011                  0.02
2030............................................       0.0042        0.012           0.018                 0.033
2031............................................       0.0071         0.02           0.029                 0.054
2032............................................        0.011        0.031           0.044                 0.081
2035............................................        0.024        0.067           0.095                  0.18
2040............................................        0.048         0.13            0.18                  0.35
2045............................................        0.073         0.19            0.26                   0.5
2050............................................        0.097         0.24            0.33                  0.65
2055............................................         0.11         0.28            0.37                  0.73
PV..............................................          0.6          2.2             3.4                   5.9
EAV.............................................        0.039         0.12            0.17                  0.31
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.


   Table 187--Climate Benefits From Reductions in GHG Emissions Associated With Alternative 3, Light-Duty and
                                                   Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                  Calendar year                  ---------------------------------------------------------------
                                                   5% Average   3% Average   2.5% Average    3% 95th Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................        0.062          0.2             0.3                  0.61
2028............................................         0.17         0.54            0.78                   1.6
2029............................................          0.3         0.98             1.4                   2.9
2030............................................         0.53          1.7             2.4                   5.1
2031............................................         0.89          2.8             4.1                   8.5
2032............................................          1.4          4.3             6.2                    13
2035............................................          3.2          9.7              14                    29
2040............................................          6.5           19              26                    58
2045............................................          9.9           27              38                    84
2050............................................           13           35              48                   110
2055............................................           15           38              52                   110
PV..............................................           80          320             490                   970

[[Page 29379]]

 
EAV.............................................          5.3           17              24                    51
----------------------------------------------------------------------------------------------------------------
Notes: The present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SC-GHGs at 5, 3, 2.5 percent) is
  used to calculate the present value of SC-GHGs for internal consistency. The 95th percentile of estimates
  based on a 3 percent discount rate are included to provide information on potentially higher-than-expected
  economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. Annual
  benefits shown are undiscounted values.

E. Criteria Pollutant Health and Environmental Benefits

    The light-duty passenger cars and light trucks and medium-duty 
vehicles subject to the proposed standards are significant sources of 
mobile source air pollution, including directly-emitted 
PM2.5 as well as NOX and VOC emissions (both 
precursors to ozone formation and secondarily-formed PM2.5). 
The proposed program would reduce exhaust emissions of these pollutants 
from the regulated vehicles, which would in turn reduce ambient 
concentrations of ozone and PM2.5. Emissions from upstream 
sources would likely increase in some cases (e.g., power plants) and 
decrease in others (e.g., refineries). We project that in total, the 
proposed standards would result in substantial net reductions of 
emissions of pollutants like PM2.5, NOx and VOCs. Criteria 
and toxic pollutant emissions changes attributable to the proposed 
standards are presented in Section VII of this Preamble. Exposures to 
ambient pollutants such as PM2.5 and ozone are linked to 
adverse environmental and human health impacts, such as premature 
deaths and non-fatal illnesses (as explained in Section II.C of this 
Preamble). Reducing human exposure to these pollutants results in 
significant and measurable health benefits.
    This section discusses the economic benefits from reductions in 
adverse health and environmental impacts resulting from criteria 
pollutant emission reductions that can be expected to occur as a result 
of the proposed emission standards. When feasible, EPA conducts full-
scale photochemical air quality modeling to demonstrate how its 
national mobile source regulatory actions affect ambient concentrations 
of regional pollutants throughout the United States. The estimation of 
the human health impacts of a regulatory action requires national-scale 
photochemical air quality modeling to conduct a full-scale assessment 
of PM2.5 and ozone-related health benefits.
    EPA conducted an illustrative air quality modeling analysis of a 
regulatory scenario involving light- and medium-duty vehicle emission 
reductions and corresponding changes in ``upstream'' emission sources 
like EGU (electric generating unit) emissions and refinery emissions 
(see DRIA Chapter 8). Decisions about the emissions and other elements 
used in the air quality modeling were made early in the analytical 
process for the proposed rulemaking. Accordingly, the air quality 
analysis does not represent the proposal's regulatory scenario, nor 
does it reflect the expected impacts of the Inflation Reduction Act 
(IRA). Based on updated power sector modeling that incorporated 
expected generation mix impacts of the IRA, we are projecting the IRA 
will lead to a significantly cleaner power grid. Because the air 
quality analysis does not account for these impacts on EGU emissions, 
we instead used the OMEGA-based emissions analysis (see Preamble 
Section VII.A) and benefit-per-ton (BPT) values to estimate the 
criteria pollutant (PM2.5) health benefits of the proposed 
standards.
    The BPT approach estimates the monetized economic value of 
PM2.5-related emission reductions or increases (such as 
direct PM, NOX, and SO2) due to implementation of 
the proposed program. Similar to the SC-GHG approach for monetizing 
reductions in GHGs, the BPT approach monetizes the health benefits of 
avoiding one ton of PM2.5-related emissions from a 
particular onroad mobile or upstream source. The value of health 
benefits from reductions (or increases) in PM2.5 emissions 
associated with this proposal were estimated by multiplying 
PM2.5-related BPT values by the corresponding annual 
reduction (or increase) in tons of directly-emitted PM2.5 
and PM2.5 precursor emissions (NOx and SO2). As 
explained in Chapter 7.4 in the DRIA, the PM2.5 BPT values 
represent the monetized value of human health benefits, including 
reductions in both premature mortality and morbidity.
    The mobile sector BPT estimates used in this proposal were 
published in 2019, but were recently updated using the suite of 
premature mortality and morbidity studies in use by EPA for the 2023 
p.m. NAAQS Reconsideration Proposal.786 787 The upstream BPT 
estimates used in this proposal were also recently updated.\788\ The 
health benefits Technical Support Document (Benefits TSD) that 
accompanied the 2023 p.m. NAAQS Proposal details the approach used to 
estimate the PM2.5-related benefits reflected in these 
BPTs.\789\ For more detailed information about the benefits analysis 
conducted for this proposal, including the BPT unit values used in this 
analysis, please refer to Chapter 7.4 of the DRIA.
---------------------------------------------------------------------------

    \786\ Wolfe, P.; Davidson, K.; Fulcher, C.; Fann, N.; Zawacki, 
M.; Baker, K. R. 2019. Monetized Health Benefits Attributable to 
Mobile Source Emission Reductions across the United States in 2025. 
Sci. Total Environ. 650, 2490-2498. Available at: https://doi.org/10.1016/J.SCITOTENV.2018.09.273.
    \787\ U.S. Environmental Protection Agency (U.S. EPA). 2022. PM 
NAAQS Reconsideration Proposal RIA. EPA-HQ-OAR-2019-0587. December.
    \788\ U.S. Environmental Protection Agency (U.S. EPA). 2023. 
Technical Support Document: Estimating the Benefit per Ton of 
Reducing Directly-Emitted PM2.5, PM2.5 
Precursors and Ozone Precursors from 21 Sectors. January.
    \789\ U.S. Environmental Protection Agency (U.S. EPA). 2023. 
Estimating PM2.5- and Ozone-Attributable Health Benefits. 
Technical Support Document (TSD) for the PM NAAQS Reconsideration 
Proposal RIA. EPA-HQ-OAR-2019-0587. January.
---------------------------------------------------------------------------

    A chief limitation to using PM2.5-related BPT values is 
that they do not reflect benefits associated with reducing ambient 
concentrations of ozone. The PM2.5-related BPT values also 
do not capture the benefits associated with reductions in direct 
exposure to NO2 and mobile source air toxics, nor do they 
account for improved ecosystem effects or visibility. The estimated 
benefits of this proposal would be larger if we were able to monetize 
these unquantified benefits at this time.
    Table 188 presents the annual, undiscounted PM2.5-
related health

[[Page 29380]]

benefits estimated for the stream of years beginning with the first 
year of rule implementation, 2027, through 2055 for the proposed 
standards. Benefits are presented by source (onroad and upstream) and 
are estimated using either a 3 percent or 7 percent discount rate to 
account for avoided health outcomes that are expected to accrue over 
more than a single year (the ``cessation'' lag between the change in PM 
exposures and the total realization of changes in health effects). 
Because premature mortality typically constitutes the vast majority of 
monetized benefits in a PM2.5 benefits assessment, we 
present benefits based on risk estimates reported from two different 
long-term exposure studies using different cohorts to account for 
uncertainty in the benefits associated with avoiding PM-related 
premature deaths.790 ,791
---------------------------------------------------------------------------

    \790\ Wu, X, Braun, D, Schwartz, J, Kioumourtzoglou, M and 
Dominici, F (2020). Evaluating the impact of long-term exposure to 
fine particulate matter on mortality among the elderly. Science 
advances 6(29): eaba5692.
    \791\ Pope III, CA, Lefler, JS, Ezzati, M, Higbee, JD, Marshall, 
JD, Kim, S-Y, Bechle, M, Gilliat, KS, Vernon, SE and Robinson, AL 
(2019). Mortality risk and fine particulate air pollution in a 
large, representative cohort of US adults. Environmental health 
perspectives 127(7): 077007.
---------------------------------------------------------------------------

    The total present value of PM2.5-related benefits for 
the proposed program between 2027 and 2055 (discounted back to 2027) is 
$140 to $280 billion at a 3 percent discount rate and $63 to $130 
billion at a 7 percent discount rate (2020 dollars).

   Table 188--Monetized PM2.5 Health Benefits of Onroad and Upstream Emissions Reductions Associated With the
                                      Proposal, Light-Duty and Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                        Onroad                     Upstream                 Total benefits
                             -----------------------------------------------------------------------------------
                               3% Discount   7% Discount   3% Discount   7% Discount   3% Discount   7% Discount
                                  rate          rate          rate          rate          rate          rate
----------------------------------------------------------------------------------------------------------------
2027........................    0.053-0.11     0.048-0.1   0.011-0.026    0.01-0.023    0.064-0.14    0.058-0.13
2028........................     0.13-0.28     0.12-0.25   0.039-0.088    0.035-0.08     0.17-0.37     0.15-0.33
2029........................     0.24-0.52     0.22-0.47    0.083-0.19    0.075-0.17     0.33-0.71     0.29-0.63
2030........................      0.65-1.3      0.58-1.2     0.15-0.33     0.14-0.29       0.8-1.7      0.72-1.5
2031........................         1-2.1      0.93-1.9     0.24-0.52     0.22-0.47       1.3-2.7       1.2-2.4
2032........................         1.4-3       1.3-2.7     0.36-0.77     0.33-0.69       1.8-3.7       1.6-3.4
2033........................       1.9-3.9       1.7-3.5      0.51-1.1     0.45-0.96       2.4-4.9       2.1-4.4
2034........................       2.3-4.8       2.1-4.3      0.67-1.4       0.6-1.3         3-6.2       2.7-5.6
2035........................       3.2-6.4       2.9-5.8        0.98-2      0.88-1.8       4.2-8.4       3.7-7.6
2036........................       3.7-7.4       3.3-6.6       1.2-2.4         1-2.2       4.8-9.8       4.3-8.8
2037........................       4.2-8.4       3.7-7.5       1.4-2.8       1.2-2.6        5.6-11          5-10
2038........................       4.7-9.4       4.2-8.5       1.6-3.3         1.5-3        6.3-13        5.6-11
2039........................        5.1-10       4.6-9.3       1.9-3.8       1.7-3.4          7-14        6.3-13
2040........................        6.3-13        5.7-11       2.4-4.8       2.1-4.3        8.7-17        7.8-16
2041........................        6.8-14        6.1-12       2.7-5.3       2.4-4.8        9.5-19        8.5-17
2042........................        7.3-14        6.6-13       2.9-5.8       2.6-5.2         10-20        9.2-18
2043........................        7.8-15          7-14       3.2-6.4       2.9-5.8         11-22        9.8-20
2044........................        8.1-16        7.3-14       3.4-6.9       3.1-6.2         12-23         10-21
2045........................        9.3-18        8.4-16       3.7-7.4       3.3-6.6         13-26         12-23
2046........................        9.7-19        8.7-17         4-7.9       3.6-7.1         14-27         12-24
2047........................         10-20          9-18       4.2-8.3       3.8-7.5         14-28         13-25
2048........................         10-20        9.2-18       4.3-8.6       3.9-7.7         15-29         13-26
2049........................         11-21        9.4-18       4.4-8.9           4-8         15-29         13-26
2050........................         12-22         10-20       4.6-9.1       4.1-8.2         16-31         14-28
2051........................         12-23         11-20       4.6-9.2       4.1-8.2         16-32         15-29
2052........................         12-23         11-21       4.6-9.2       4.1-8.3         16-32         15-29
2053........................         12-23         11-21       4.6-9.3       4.2-8.3         17-32         15-29
2054........................         12-23         11-21       4.6-9.3       4.2-8.3         17-32         15-29
2055........................         13-25         12-22       4.6-9.3       4.2-8.3         18-34         16-31
Present Value...............       100-200         46-91         39-79         17-35       140-280        63-130
Equivalent Annualized Value.        5.4-11       3.7-7.4       2.1-4.1       1.4-2.8        7.5-15        5.1-10
----------------------------------------------------------------------------------------------------------------
Notes: The range of benefits in this table reflect the range of premature mortality estimates derived from the
  Medicare study (Wu et al., 2020) and the NHIS study (Pope III et al., 2019). All benefits estimates are
  rounded to two significant figures. Annual benefit values presented here are not discounted. The present value
  of benefits is the total aggregated value of the series of discounted annual benefits that occur between 2027-
  2055 (in 2020 dollars) using either a 3 percent or 7 percent discount rate. The benefits associated with the
  standards presented here do not include the full complement of health and environmental benefits that, if
  quantified and monetized, would increase the total monetized benefits.


     Table 189--Monetized PM2.5 Health Benefits of Onroad and Upstream Emissions Reductions Associated With
                                    Alternative 1, Light-Duty and Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                        Onroad                     Upstream                 Total benefits
                             -----------------------------------------------------------------------------------
                               3% Discount   7% Discount   3% Discount   7% Discount   3% Discount   7% Discount
                                  rate          rate          rate          rate          rate          rate
----------------------------------------------------------------------------------------------------------------
2027........................    0.055-0.12     0.05-0.11   0.012-0.027   0.011-0.025    0.067-0.15     0.06-0.13
2028........................      0.14-0.3     0.13-0.27    0.048-0.11   0.044-0.098     0.19-0.41     0.17-0.37
2029........................     0.25-0.53     0.22-0.48     0.11-0.23    0.095-0.21     0.35-0.76     0.32-0.69

[[Page 29381]]

 
2030........................      0.66-1.4      0.59-1.2      0.2-0.42     0.18-0.38      0.85-1.8      0.77-1.6
2031........................         1-2.2      0.93-1.9     0.31-0.65     0.28-0.59       1.3-2.8       1.2-2.5
2032........................         1.4-3       1.3-2.7     0.44-0.94      0.4-0.84       1.9-3.9       1.7-3.5
2033........................       1.9-3.9       1.7-3.5      0.61-1.3      0.55-1.2       2.5-5.2       2.2-4.6
2034........................       2.3-4.8       2.1-4.3      0.78-1.7      0.71-1.5       3.1-6.5       2.8-5.8
2035........................       3.2-6.5       2.9-5.8       1.1-2.3         1-2.1       4.3-8.8       3.9-7.9
2036........................       3.7-7.4       3.3-6.7       1.3-2.7       1.2-2.5          5-10       4.5-9.1
2037........................       4.2-8.5       3.8-7.6       1.6-3.2       1.4-2.9        5.8-12        5.2-11
2038........................       4.7-9.5       4.2-8.6       1.8-3.7       1.6-3.4        6.5-13        5.9-12
2039........................        5.2-10       4.7-9.4       2.1-4.2       1.9-3.8        7.3-15        6.5-13
2040........................        6.4-13        5.7-11       2.7-5.3       2.4-4.8        9.1-18        8.1-16
2041........................        6.9-14        6.2-12         3-5.9       2.7-5.3        9.9-20        8.9-18
2042........................        7.4-15        6.6-13       3.2-6.5       2.9-5.8         11-21        9.5-19
2043........................        7.8-15          7-14       3.5-7.1       3.2-6.4         11-23         10-20
2044........................        8.2-16        7.4-15       3.8-7.6       3.4-6.8         12-24         11-21
2045........................        9.4-18        8.5-17       4.1-8.2       3.7-7.3         14-27         12-24
2046........................        9.8-19        8.8-17       4.4-8.8       3.9-7.9         14-28         13-25
2047........................         10-20        9.1-18       4.6-9.2       4.1-8.3         15-29         13-26
2048........................         10-20        9.3-18       4.8-9.5       4.3-8.6         15-30         14-27
2049........................         11-21        9.5-19       4.9-9.8       4.4-8.8         16-31         14-27
2050........................         12-23         11-20          5-10         4.5-9         17-33         15-29
2051........................         12-23         11-21          5-10       4.5-9.1         17-33         15-30
2052........................         12-23         11-21        5.1-10       4.6-9.1         17-33         15-30
2053........................         12-23         11-21        5.1-10       4.6-9.1         17-33         15-30
2054........................         12-23         11-21        5.1-10       4.6-9.1         17-34         15-30
2055........................         13-25         12-23        5.1-10       4.6-9.1         18-35         16-32
Present Value...............       100-210         46-92         44-88         19-39       150-290        66-130
Equivalent Annualized Value.        5.4-11       3.8-7.5       2.3-4.6       1.6-3.2        7.7-15        5.3-11
----------------------------------------------------------------------------------------------------------------
Notes: The range of benefits in this table reflect the range of premature mortality estimates derived from the
  Medicare study (Wu et al., 2020) and the NHIS study (Pope III et al., 2019). All benefits estimates are
  rounded to two significant figures. Annual benefit values presented here are not discounted. The present value
  of benefits is the total aggregated value of the series of discounted annual benefits that occur between 2027-
  2055 (in 2020 dollars) using either a 3 percent or 7 percent discount rate. The benefits associated with the
  standards presented here do not include the full complement of health and environmental benefits that, if
  quantified and monetized, would increase the total monetized benefits.


     Table 190--Monetized PM2.5 Health Benefits of Onroad and Upstream Emissions Reductions Associated With
                                    Alternative 2, Light-Duty and Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                        Onroad                     Upstream                 Total benefits
                             -----------------------------------------------------------------------------------
                               3% Discount   7% Discount   3% Discount   7% Discount   3% Discount   7% Discount
                                  rate          rate          rate          rate          rate          rate
----------------------------------------------------------------------------------------------------------------
2027........................   0.039-0.083   0.035-0.075  0.0083-0.019  0.0075-0.017     0.047-0.1   0.042-0.092
2028........................     0.094-0.2    0.084-0.18    0.031-0.07   0.028-0.063     0.13-0.27     0.11-0.24
2029........................     0.19-0.41     0.17-0.37    0.069-0.15    0.062-0.14     0.26-0.56     0.23-0.51
2030........................      0.59-1.2      0.53-1.1     0.12-0.27     0.11-0.24      0.71-1.5      0.64-1.3
2031........................        0.97-2      0.87-1.8      0.2-0.43     0.18-0.39       1.2-2.4       1.1-2.2
2032........................       1.4-2.8       1.2-2.5     0.31-0.65     0.28-0.59       1.7-3.5       1.5-3.1
2033........................       1.8-3.7       1.6-3.3     0.44-0.94      0.4-0.85       2.2-4.6         2-4.2
2034........................       2.2-4.6         2-4.2      0.59-1.2      0.53-1.1       2.8-5.9       2.5-5.3
2035........................       3.1-6.2       2.8-5.6      0.87-1.8      0.78-1.6           4-8       3.6-7.2
2036........................       3.6-7.2       3.2-6.5         1-2.1      0.92-1.9       4.6-9.3       4.1-8.4
2037........................       4.1-8.2       3.7-7.4       1.2-2.5       1.1-2.3        5.3-11       4.8-9.6
2038........................       4.6-9.2       4.1-8.3       1.4-2.9       1.3-2.6          6-12        5.4-11
2039........................        5.1-10       4.5-9.2       1.6-3.4         1.5-3        6.7-14          6-12
2040........................        6.2-12        5.6-11       2.1-4.3       1.9-3.8        8.4-17        7.5-15
2041........................        6.7-13        6.1-12       2.4-4.8       2.1-4.3        9.1-18        8.2-16
2042........................        7.2-14        6.5-13       2.6-5.2       2.4-4.7        9.8-19        8.8-18
2043........................        7.7-15        6.9-14       2.9-5.8       2.6-5.2         11-21        9.5-19
2044........................          8-16        7.2-14       3.1-6.2       2.8-5.6         11-22         10-20
2045........................        9.2-18        8.3-16       3.3-6.6           3-6         13-25         11-22
2046........................        9.6-19        8.6-17       3.6-7.1       3.2-6.4         13-26         12-23
2047........................        9.9-19        8.9-17       3.8-7.5       3.4-6.8         14-27         12-24
2048........................         10-20        9.1-18       3.9-7.8         3.5-7         14-28         13-25
2049........................         10-20        9.4-18           4-8       3.6-7.2         14-28         13-26

[[Page 29382]]

 
2050........................         11-22         10-20       4.1-8.3       3.7-7.4         16-30         14-27
2051........................         12-22         10-20       4.2-8.3       3.7-7.5         16-31         14-28
2052........................         12-23         11-20       4.2-8.3       3.8-7.5         16-31         14-28
2053........................         12-23         11-20       4.2-8.4       3.8-7.5         16-31         14-28
2054........................         12-23         11-21       4.2-8.4       3.8-7.5         16-31         14-28
2055........................         13-25         12-22       4.2-8.4       3.8-7.5         17-33         15-30
Present Value...............       100-200         45-89         35-71         15-31       140-270        61-120
Equivalent Annualized Value.        5.3-10       3.7-7.3       1.8-3.7       1.3-2.5        7.2-14       4.9-9.8
----------------------------------------------------------------------------------------------------------------
Notes: The range of benefits in this table reflect the range of premature mortality estimates derived from the
  Medicare study (Wu et al., 2020) and the NHIS study (Pope III et al., 2019). All benefits estimates are
  rounded to two significant figures. Annual benefit values presented here are not discounted. The present value
  of benefits is the total aggregated value of the series of discounted annual benefits that occur between 2027-
  2055 (in 2020 dollars) using either a 3 percent or 7 percent discount rate. The benefits associated with the
  standards presented here do not include the full complement of health and environmental benefits that, if
  quantified and monetized, would increase the total monetized benefits.


     Table 191--Monetized PM2.5 Health Benefits of Onroad and Upstream Emissions Reductions Associated With
                                    Alternative 3, Light-Duty and Medium-Duty
                                           [Billions of 2020 dollars]
----------------------------------------------------------------------------------------------------------------
                                        Onroad                     Upstream                 Total Benefits
                             -----------------------------------------------------------------------------------
                               3% Discount   7% Discount   3% Discount   7% Discount   3% Discount   7% Discount
                                  rate          rate          rate          rate          rate          rate
----------------------------------------------------------------------------------------------------------------
2027........................   0.034-0.073   0.031-0.066  0.0057-0.013  0.0051-0.012    0.04-0.086   0.036-0.078
2028........................    0.085-0.18    0.076-0.16   0.023-0.052   0.021-0.047     0.11-0.23    0.097-0.21
2029........................     0.15-0.32     0.14-0.29    0.049-0.11   0.044-0.098      0.2-0.43     0.18-0.39
2030........................      0.54-1.1        0.48-1    0.098-0.21    0.088-0.19      0.63-1.3      0.57-1.2
2031........................      0.92-1.9      0.83-1.7     0.18-0.38     0.16-0.34       1.1-2.3      0.99-2.1
2032........................       1.3-2.7       1.2-2.4     0.29-0.62     0.26-0.56       1.6-3.3         1.4-3
2033........................       1.7-3.6       1.6-3.3     0.43-0.92     0.39-0.83       2.2-4.5         2-4.1
2034........................       2.2-4.6         2-4.1       0.6-1.3      0.54-1.1       2.8-5.8       2.5-5.2
2035........................         3-6.1       2.7-5.5       0.9-1.8      0.81-1.7         3.9-8       3.5-7.2
2036........................       3.5-7.1       3.2-6.4       1.1-2.2        0.97-2       4.6-9.3       4.1-8.4
2037........................         4-8.1       3.6-7.3       1.3-2.7       1.2-2.4        5.3-11       4.8-9.7
2038........................       4.6-9.2       4.1-8.3       1.5-3.1       1.4-2.8        6.1-12        5.5-11
2039........................          5-10       4.5-9.1       1.8-3.6       1.6-3.3        6.8-14        6.1-12
2040........................        6.2-12        5.6-11       2.3-4.6       2.1-4.1        8.5-17        7.7-15
2041........................        6.7-13          6-12       2.6-5.2       2.3-4.6        9.3-18        8.4-17
2042........................        7.2-14        6.5-13       2.8-5.7       2.6-5.1         10-20          9-18
2043........................        7.7-15        6.9-14       3.1-6.3       2.8-5.6         11-21        9.7-19
2044........................          8-16        7.2-14       3.4-6.8         3-6.1         11-23         10-20
2045........................        9.3-18        8.3-16       3.6-7.3       3.3-6.5         13-25         12-23
2046........................        9.7-19        8.7-17       3.9-7.8         3.5-7         14-27         12-24
2047........................        9.9-19        8.9-17       4.1-8.3       3.7-7.4         14-28         13-25
2048........................         10-20        9.2-18       4.3-8.6       3.9-7.7         15-29         13-26
2049........................         10-20        9.4-18       4.4-8.9           4-8         15-29         13-26
2050........................         12-22         10-20       4.6-9.1       4.1-8.2         16-31         14-28
2051........................         12-23         10-20       4.6-9.2       4.1-8.2         16-32         15-29
2052........................         12-23         11-21       4.6-9.2       4.1-8.3         16-32         15-29
2053........................         12-23         11-21       4.6-9.2       4.2-8.3         16-32         15-29
2054........................         12-23         11-21       4.6-9.3       4.2-8.3         17-32         15-29
2055........................         13-25         12-22       4.6-9.3       4.2-8.3         18-34         16-31
Present Value...............       100-200         45-89         38-77         17-33       140-280        62-120
Equivalent Annualized Value.        5.3-10       3.7-7.3           2-4       1.4-2.7        7.3-14          5-10
----------------------------------------------------------------------------------------------------------------
Notes: The range of benefits in this table reflect the range of premature mortality estimates derived from the
  Medicare study (Wu et al., 2020) and the NHIS study (Pope III et al., 2019). All benefits estimates are
  rounded to two significant figures. Annual benefit values presented here are not discounted. The present value
  of benefits is the total aggregated value of the series of discounted annual benefits that occur between 2027-
  2055 (in 2020 dollars) using either a 3 percent or 7 percent discount rate. The benefits associated with the
  standards presented here do not include the full complement of health and environmental benefits that, if
  quantified and monetized, would increase the total monetized benefits.

    This analysis includes many data sources that are each subject to 
uncertainty, including projected emission inventories, air quality data 
from models, population data, population estimates, health effect 
estimates from epidemiology studies, economic data, and assumptions 
regarding the future state of the world (i.e., regulations, technology, 
and human behavior). When compounded, even small uncertainties can 
greatly

[[Page 29383]]

influence the size of the total quantified benefits. There are also 
inherent limitations associated with using the BPT approach. Despite 
these uncertainties, we believe the criteria pollutant benefits 
presented here are our best estimate of benefits absent air quality 
modeling and we have confidence in the BPT approach and the 
appropriateness of relying on BPT health estimates for this rulemaking. 
Please refer to DRIA Chapter 7 for more information on the uncertainty 
associated with the benefits presented here.

F. Other Impacts Including Maintenance and Repair

    We present here the estimated impacts associated with rebound 
driving (drive value, congestion, noise) and the impacts on maintenance 
and repair costs. Lastly, we briefly discuss the safety-related 
impacts. More information on each of these topics is presented in 
Chapter 4 and Chapter 9 of the DRIA.
1. Impacts Associated With Rebound Driving
    The rebound effect might occur when an increase in vehicle fuel 
efficiency makes it possible for people to choose to drive more without 
spending more because of the lower cost per mile of driving. Additional 
driving can lead to costs and benefits that can be monetized. Note that 
we do not estimate or further discuss the size of the rebound effect in 
this Preamble. See DRIA Chapter 4 for that discussion. We request 
comment on the assumptions described there. In this section, we take 
the size of the rebound effect determined in the DRIA and highlight the 
costs and benefits associated with additional driving.
i. Drive Value
    The increase in travel associated with the rebound effect produces 
social and economic opportunities that become accessible with 
additional travel. We estimate the economic benefits from increased 
rebound-effect driving as the sum of the fuel costs paid to drive those 
miles and the owner/operator surplus from the additional accessibility 
that driving provides. These benefits are known as the drive value and 
appear in Table 192.
    The fuel costs of the rebound miles driven are simply the number of 
rebound miles multiplied by the cost per mile of driving them. The 
economic value of the increased owner/operator surplus provided by 
added driving is estimated as one half of the product of the fuel 
savings per mile and rebound miles. Because fuel savings differ among 
vehicles in response to standards, the value of benefits from increased 
vehicle use differs by model year and varies across alternative 
standards.

                      Table 192--Drive Value Benefits Associated With the Proposal and Each Alternative, Light-Duty and Medium-Duty
                                                              [Billions of 2020 dollars] *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Drive value benefits,    Drive value benefits,    Drive value benefits,    Drive value benefits,
                    Calendar year                             proposal              alternative 1            alternative 2            alternative 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027................................................                   0.0011                   0.0019                   0.0026                  -0.0036
2028................................................                    0.024                    0.045                    0.028                   0.0068
2029................................................                    0.049                     0.12                    0.049                     0.02
2030................................................                    0.086                      0.2                    0.077                    0.041
2031................................................                     0.12                     0.28                     0.11                    0.063
2032................................................                     0.16                     0.37                     0.16                      0.1
2035................................................                     0.26                      0.5                     0.22                     0.21
2040................................................                     0.37                     0.51                     0.15                     0.26
2045................................................                     0.34                     0.37                    0.087                     0.22
2050................................................                     0.34                     0.29                     0.11                     0.21
2055................................................                     0.31                     0.22                     0.17                     0.21
PV3.................................................                      4.8                      6.5                      2.4                      3.2
PV7.................................................                      2.7                      3.9                      1.5                      1.8
EAV3................................................                     0.25                     0.34                     0.12                     0.17
EAV7................................................                     0.22                     0.32                     0.12                     0.15
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Positive values represent benefits.

ii. Congestion and Noise
    In contrast to the benefits of additional driving are the costs 
associated with that driving. Increased vehicle use associated with a 
positive rebound effect also contributes to increased traffic 
congestion and highway noise. Delays associated with congestion impose 
higher costs on road users in the form of increased travel time and 
operating expenses. Likewise, vehicles driving more miles on roadways 
leads to more road noise from tires, wind, engines, and motors.
    As in past rulemakings (i.e., GHG 2010, 2012, and 2021), EPA relies 
on estimates of congestion and noise costs developed by the Federal 
Highway Administration's (FHWA's), specifically the ``Middle'' 
estimates for marginal congestion and noise costs, to estimate the 
increased external costs caused by added driving due to the rebound 
effect. FHWA's congestion and noise cost estimates focus on freeways. 
EPA, however, applies the congestion cost to all vehicle miles, freeway 
and non-freeway and including rebound miles to ensure that these costs 
are not underestimated. Table 193 shows the values used as inputs to 
OMEGA and adjusted within the model to the dollar basis used in the 
analysis.
    Table 194 presents the congestion costs associated with the 
proposal and each of the alternatives, while Table 195 shows the same 
information for noise costs.

[[Page 29384]]



                              Table 193--Costs Associated With Congestion and Noise
                                         [2018 Dollars per vehicle mile]
----------------------------------------------------------------------------------------------------------------
                                                                    Sedans/wagons     CUVs/SUVs/vans    Pickups
----------------------------------------------------------------------------------------------------------------
Congestion.......................................................           0.0634             0.0634     0.0566
Noise............................................................           0.0009             0.0009     0.0009
----------------------------------------------------------------------------------------------------------------


                        Table 194--Congestion Costs Associated With the Proposal and Each Alternative, Light-Duty and Medium-Duty
                                                              [Billions of 2020 dollars] *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Congestion costs,        Congestion costs,        Congestion costs,        Congestion costs,
                    Calendar year                             proposal              alternative 1            alternative 2            alternative 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027................................................                 -0.00023                  0.00063                  0.00072                  -0.0039
2028................................................                     0.01                    0.025                    0.012                 -0.00089
2029................................................                    0.022                    0.071                     0.02                   0.0042
2030................................................                    0.038                     0.11                     0.03                    0.012
2031................................................                    0.055                     0.17                    0.046                    0.023
2032................................................                    0.074                     0.21                    0.065                    0.039
2035................................................                     0.12                     0.28                    0.082                    0.088
2040................................................                     0.19                     0.27                    0.037                     0.12
2045................................................                     0.17                      0.2                   0.0096                     0.11
2050................................................                     0.17                     0.14                    0.028                     0.11
2055................................................                     0.16                     0.11                    0.064                     0.11
PV3.................................................                      2.3                      3.5                     0.74                      1.5
PV7.................................................                      1.3                      2.2                     0.48                     0.82
EAV3................................................                     0.12                     0.18                    0.039                    0.078
EAV7................................................                     0.11                     0.18                    0.039                    0.066
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Positive values represent costs.


                          Table 195--Noise Costs Associated With the Proposal and Each Alternative, Light-Duty and Medium-Duty
                                                              [Billions of 2020 dollars] *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Noise costs,             Noise costs,             Noise costs,
                    Calendar year                      Noise costs,  proposal       alternative 1            alternative 2            alternative 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027................................................                -0.000014               -0.0000017                0.0000041                -0.000059
2028................................................                  0.00014                  0.00037                  0.00018                -0.000006
2029................................................                  0.00033                   0.0011                  0.00031                 0.000076
2030................................................                  0.00059                   0.0018                  0.00047                   0.0002
2031................................................                  0.00087                   0.0026                  0.00073                  0.00038
2032................................................                   0.0012                   0.0033                    0.001                  0.00064
2035................................................                   0.0019                   0.0043                   0.0013                   0.0015
2040................................................                   0.0029                   0.0043                  0.00064                    0.002
2045................................................                   0.0027                   0.0031                  0.00021                   0.0017
2050................................................                   0.0027                   0.0022                  0.00048                   0.0017
2055................................................                   0.0025                   0.0017                    0.001                   0.0016
PV3.................................................                    0.037                    0.055                    0.012                    0.024
PV7.................................................                    0.021                    0.034                   0.0078                    0.013
EAV3................................................                   0.0019                   0.0028                  0.00064                   0.0012
EAV7................................................                   0.0017                   0.0027                  0.00064                   0.0011
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Positive values represent costs.

2. Maintenance and Repair Costs
    Maintenance and repair (M&R) are large components of vehicle cost 
of ownership for any vehicle. According to Edmunds, maintenance costs 
consist of two types of maintenance: Scheduled and unscheduled. 
Scheduled maintenance is the performance of factory-recommended items 
at periodic mileage or calendar intervals. Unscheduled maintenance 
includes wheel alignment and the replacement of items such as the 
battery, brakes, headlights, hoses, exhaust system parts, taillight/
turn signal bulbs, tires, and wiper blades/inserts.\792\ Repairs, in 
contrast, are done to fix malfunctioning parts that inhibit the use of 
the vehicle. The differentiation between the items that are included in 
unscheduled maintenance versus repairs is likely arbitrary, but the 
items considered repairs seem to follow the systems that are covered in 
vehicle comprehensive (i.e., ``bumper-to-bumper'') warranties offered 
by automakers, which exclude common ``wear'' items like tires, brakes, 
and starter batteries.\793\
---------------------------------------------------------------------------

    \792\ Edmunds, ``Edmunds.com/tco.html,'' Edmunds, [Online]. 
Available: Edmunds.com/tco.html. [Accessed 24 February 2022].
    \793\ D. Muller, ``Warranties Defined: The Truth behind the 
Promises,'' Car and Driver, 29 May 2017.
---------------------------------------------------------------------------

    To estimate maintenance and repair costs, we have used the data 
gathered and summarized by Argonne National Laboratory (ANL) in their 
evaluation of the total cost of ownership for vehicles of various sizes 
and powertrains.\794\
---------------------------------------------------------------------------

    \794\ ``Comprehensive Total Cost of Ownership Quantification for 
Vehicles with Different Size Classes and Powertrains, ANL/ESD-21/
4,'' Argonne National Laboratory, Energy Systems Division, April 
2021.

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

[[Page 29385]]

i. Maintenance Costs
    Maintenance costs are an important consideration in the full 
accounting of social benefits and costs and in a consumer's purchase 
decision process. In their study, ANL developed a generic maintenance 
service schedule for various powertrain types using owner's manuals 
from various vehicle makes and models, assuming that drivers would 
follow the recommended service intervals. After developing the 
maintenance schedules, the authors collected national average costs for 
each of the preventative and unscheduled services, noting several 
instances where differences in consumer characteristics and in vehicle 
attributes were likely important but not quantified/quantifiable.
    Using the schedules and costs developed by the authors and 
presented in the DRIA, OMEGA calculates the cumulative maintenance 
costs from mile zero through mile 225,000. Because maintenance costs 
typically increase over the life of the vehicle, we estimate 
maintenance and repair costs per mile at a constant slope with an 
intercept set to $0 per mile such that the cumulative costs per the 
maintenance schedule are reached at 225,000 miles. Following this 
approach, the maintenance cost per mile curves calculated within OMEGA 
are as shown in Figure 38.
[GRAPHIC] [TIFF OMITTED] TP05MY23.042

    Using these maintenance cost per mile curves, OMEGA then calculates 
the estimated maintenance costs in any given year of a vehicle's life 
based on the miles traveled in that year. Table 196 presents the 
maintenance costs (savings) associated with the proposal and each 
alternative. For a more detailed discussion of maintenance costs, see 
DRIA Chapter 4.

                   Table 196--Maintenance Costs Associated With the Proposal and Each of the Alternatives, Light-Duty and Medium-Duty
                                                              [Billions of 2020 dollars] *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Maintenance costs,       Maintenance costs,       Maintenance costs,       Maintenance costs,
                    Calendar year                             proposal              alternative 1            alternative 2            alternative 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027................................................                   -0.048                   -0.048                   -0.032                   -0.044
2028................................................                    -0.34                    -0.32                    -0.24                    -0.22
2029................................................                    -0.91                     -0.8                    -0.68                    -0.54
2030................................................                     -1.7                     -1.6                     -1.3                       -1
2031................................................                     -2.7                     -2.7                     -2.1                     -1.7
2032................................................                       -4                     -4.1                     -3.2                     -2.7
2035................................................                     -9.7                      -10                     -8.2                     -7.7
2040................................................                      -23                      -26                      -21                      -21
2045................................................                      -37                      -42                      -34                      -36
2050................................................                      -47                      -52                      -43                      -47

[[Page 29386]]

 
2055................................................                      -51                      -57                      -47                      -51
PV3.................................................                     -410                     -450                     -370                     -390
PV7.................................................                     -200                     -220                     -180                     -190
EAV3................................................                      -21                      -24                      -19                      -20
EAV7................................................                      -16                      -18                      -14                      -15
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative values denote negative costs, i.e., savings.

ii. Repair Costs
    Repairs are done to fix malfunctioning parts that inhibit the use 
of the vehicle and are generally considered to address problems 
associated with parts or systems that are covered under typical 
manufacturer bumper-to-bumper type warranties. In the ANL study, the 
authors were able to develop a repair cost curve for a gasoline car and 
a series of scalers that could be applied to that curve to estimate 
repair costs for other powertrains and vehicle types.
    OMEGA makes use of ANL's cost curve and multipliers to estimate 
repair costs per mile at any age in a vehicle's life. Figure 39 
provides repair cost per mile for a $35,000 car, van/SUV, and pickup.
[GRAPHIC] [TIFF OMITTED] TP05MY23.043

    Table 197 presents the repair costs associated with the proposal 
and each of the alternatives. A more detailed discussion of repair 
costs appears in DRIA Chapter 4.

                      Table 197--Repair Costs Associated With the Proposal and Each of the Alternatives, Light-Duty and Medium-Duty
                                                               [Billions of 2020 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Repair costs,            Repair costs,            Repair costs,
                    Calendar year                     Repair costs,  proposal       alternative 1            alternative 2            alternative 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027................................................                    0.057                     0.06                    0.043                    0.016
2028................................................                    0.078                     0.11                    0.058                    0.012
2029................................................                    0.017                     0.13                   0.0065                   -0.049
2030................................................                    -0.15                    0.032                    -0.13                    -0.19
2031................................................                    -0.43                    -0.17                    -0.36                    -0.39
2032................................................                    -0.84                    -0.51                     -0.7                    -0.66
2035................................................                     -2.8                     -2.4                     -2.5                     -2.3
2040................................................                       -9                       -9                     -8.4                     -8.5
2045................................................                      -16                      -17                      -15                      -16
2050................................................                      -21                      -23                      -20                      -21
2055................................................                      -24                      -26                      -22                      -24
PV3.................................................                     -170                     -180                     -160                     -170
PV7.................................................                      -79                      -82                      -74                      -77
EAV3................................................                     -8.9                     -9.3                     -8.3                     -8.6

[[Page 29387]]

 
EAV7................................................                     -6.5                     -6.7                       -6                     -6.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Negative values denote negative costs, i.e., savings.

3. Safety Impacts
    EPA has long considered the safety implications of its emission 
standards. Section 202(a)(4) of the CAA specifically prohibits the use 
of an emission control device, system or element of design that will 
cause or contribute to an unreasonable risk to public health, welfare, 
or safety. With respect to its light-duty greenhouse gas emission 
regulations, EPA has historically considered the potential impacts of 
GHG standards on safety in its light-duty GHG rulemakings.
    The potential relationship between GHG emissions standards and 
safety is multi-faceted, and can be influenced not only by control 
technologies, but also by consumer decisions about vehicle ownership 
and use. EPA has estimated the impacts of this rule on safety by 
accounting for changes in new vehicle purchase, fleet turnover and VMT, 
and changes in vehicle weight that occur either as an emissions control 
strategy or as a result of the adoption of emissions control 
technologies such as vehicle electrification. Safety impacts related to 
changes in the use of vehicles in the fleet, relative mass changes, and 
the turnover of fleet to newer and safer vehicles have been estimated 
and considered in the standard setting process.
    The GHG emissions standards are attribute-based standards, using 
vehicle footprint as the attribute. Footprint is defined as a vehicle's 
wheelbase multiplied by its average track width--in other words, the 
area enclosed by the points at which the wheels meet the ground. The 
standards are therefore generally based on a vehicle's size: Larger 
vehicles have numerically higher GHG emissions targets and smaller 
vehicles have numerically lower GHG emissions targets. Footprint-based 
standards help to distribute the burden of compliance across all 
vehicle footprints and across all manufacturers. Manufacturers are not 
compelled to build vehicles of any particular size or type, and each 
manufacturer has its own fleetwide standard for its car and truck 
fleets in each year that reflects the light-duty vehicles it chooses to 
produce. EPA has evaluated the relationship between vehicle footprint 
and GHG emissions targets and is proposing GHG standards that are 
intended to minimize incentives to change footprint as a compliance 
strategy. EPA is not projecting any changes in vehicle safety due to 
changes in footprint as a result of this proposed rule.
    While EPA has not conducted new studies on the safety implications 
of electrified vehicles, there is strong reason to believe that BEVs 
are at least as safe as conventional vehicles,\795\ if not more so. For 
example, the BEV architecture often lends itself to the addition of a 
``frunk'' or front trunk. The frunk can provide additional crush space 
and occupant protection in frontal or front offset impacts. In 
addition, high voltage, large capacity batteries are often packaged 
under the vehicle and are integral to the vehicle construction. The 
increase in mass low in the vehicle provides additional vehicle 
stability and could reduce the propensity for vehicle rollover, 
especially in vehicles with a higher ride height, such as SUVs. In 
addition, the battery is typically an integral part of the body design 
and can provide additional side impact protection. For each of these 
reasons EPA believes that applying the historical relationship between 
mass and safety is appropriate for this rulemaking and may be 
conservative given the potential safety improvements provided by 
vehicle electrification.
---------------------------------------------------------------------------

    \795\ https://www.iihs.org/news/detail/with-more-electric-vehicles-comes-more-proof-of-safety.
---------------------------------------------------------------------------

    Consistent with previous light-duty GHG analyses, EPA conducted a 
quantitative assessment of the potential of the proposed standards to 
affect vehicle safety. EPA applied the same historical relationships 
between mass, size, and fatality risk that were established and 
documented in the 2021 rulemaking. These relationships are based on the 
statistical analysis of historical crash data, which included an 
analysis performed by using the most recently available crash studies 
based on data for model years 2007 to 2011. EPA used these findings to 
estimate safety impacts of the modeled adoption of mass reduction as 
technology to reduce emissions, and the adoption of BEVs that result in 
some vehicle weights that are higher than comparable ICE vehicles due 
to the addition of the battery. Based on the findings of our safety 
analysis, we concluded there are no changes to the vehicles themselves, 
nor the combined effects of fleet composition and vehicle design, that 
will have a statistically significant impact on safety.\796\ The only 
fatality projections presented here that are statistically significant 
are due to changes in use (VMT) rather than changes to the vehicles 
themselves. When including non-significant effects, EPA estimates that 
the proposed standards would result in an average 0.2 percent increase 
in the annual fatalities per billion miles driven in the 27-year period 
from 2027 through 2055 (increasing from 5.053 fatalities per billion 
miles under the proposal compared to 5.040 fatalities per billion miles 
under the no-action case.)
---------------------------------------------------------------------------

    \796\ None of the mass-safety coefficients that were developed 
for the 2020 and 2021 Rulemakings are statistically significant at 
the 95th percentile confidence level. EPA is including the 
presentation of non-significant changes in fatality rate here for 
the purpose of comparison with previous rulemaking assessments.
---------------------------------------------------------------------------

    EPA has also estimated, over the same 27-year period, that total 
fatalities will increase by 1,595, with 330 deaths attributed to 
increased driving and 1,265 deaths attributed to the non-statistically 
significant increase in fatality risk. Our analysis projects that there 
will be an increase in vehicle miles traveled (VMT) under the revised 
standards of 65 billion miles compared to the No Action case in 2027 
through 2055 (an increase of about 0.06 percent). As noted, the only 
statistically significant changes in the fatalities projected are the 
result from the projected increased driving--i.e., people choosing to 
drive more due to the lower operating costs of more efficient vehicles. 
Our cost-benefit analysis accounts for the value of this additional 
driving, which we assume is an important consideration in the decision 
to drive.
    On the whole, EPA considers safety impacts in the context of all 
projected health impacts from the rule including public health benefits 
from the

[[Page 29388]]

projected reductions in air pollution. Considering these estimates in 
the context of public health benefits anticipated from the proposed 
standards, EPA notes that the estimated present value of monetized 
benefits of reduced PM2.5 through 2055 is between $63 
billion and $280 billion (depending on study and discount rate), and 
that the illustrative air quality modeling which, as discussed further 
in Chapter 8 of the DRIA, assesses a regulatory scenario with lower 
rates of PEV penetration than EPA is projecting for the proposal, 
estimates that in 2055 such a scenario would prevent between 730 and 
1,400 premature deaths associated with exposure to PM2.5 and 
prevent between 15 and 330 premature deaths associated with exposure to 
ozone. We expect that the cumulative number of premature deaths avoided 
that would occur during the entire period from 2027 to 2055 would be 
much larger than the estimate of deaths avoided projected to occur in 
2055.

G. Energy Security Impacts

    In this section, we evaluate the energy security impacts of the 
proposed standards. Energy security is broadly defined as the 
uninterrupted availability of energy sources at affordable prices.\797\ 
Energy independence and energy security are distinct but related 
concepts, and an analysis of energy independence informs our assessment 
of energy security. The goal of U.S. energy independence is the 
elimination of all U.S. imports of petroleum and other foreign sources 
of energy, but more broadly, it is the elimination of U.S. sensitivity 
to variations in the price and supply of foreign sources of 
energy.\798\ See Chapter 11 of the DRIA for a more detailed assessment 
of energy security and energy independence impacts of this proposed 
rule. See Preamble Section IV.C.6 and Chapter 3.1.3 of the DRIA for a 
discussion of critical materials and PEV supply chains.
---------------------------------------------------------------------------

    \797\ IEA, Energy Security: ensuring the uninterrupted 
availability of energy sources at an affordable price. 2019. 
December.
    \798\ Greene, D. 2010. Measuring energy security: Can the United 
States achieve oil independence? Energy Policy. 38. pp. 1614-1621.
---------------------------------------------------------------------------

    The U.S.'s oil consumption had been gradually increasing in recent 
years (2015-2019) before the COVID-19 pandemic in 2020 dramatically 
decreased U.S. and global oil consumption.\799\ By July 2021, U.S. oil 
consumption had returned to pre-pandemic levels and has remained fairly 
stable since then.\800\ The U.S. has increased its production of oil, 
particularly ``tight'' (i.e., shale) oil, over the last decade.\801\ As 
a result of the recent increase in U.S. oil production, the U.S. became 
a net exporter of crude oil and refined petroleum products in 2020 and 
is projected to be a net exporter of crude oil and refined petroleum 
products for the foreseeable future.\802\ This is a significant 
reversal of the U.S.'s net export position since the U.S. has been a 
substantial net importer of crude oil and refined petroleum products 
starting in the early 1950s.\803\
---------------------------------------------------------------------------

    \799\ EIA. Monthly Energy Review. Table 3.1. Petroleum Overview. 
December 2022.
    \800\ Ibid.
    \801\ Ibid.
    \802\ EIA. Annual Energy Outlook 2022. Table A11: Petroleum and 
Other Liquid Supply and Disposition (Reference Case). 2022.
    \803\ U.S. EIA. Oil and Petroleum Products Explained. November 
2nd, 2022.
---------------------------------------------------------------------------

    Oil is a commodity that is globally traded and, as a result, an oil 
price shock is transmitted globally. Given that the U.S. is projected 
to be a modest net exporter of crude oil and refined petroleum products 
for the time frame of this analysis (2027-2055), one could reason that 
the U.S. no longer has a significant energy security problem. However, 
U.S. refineries still rely on significant imports of heavy crude oil 
which could be subject to supply disruptions. Also, oil exporters with 
a large share of global production have the ability to raise or lower 
the price of oil by exerting the market power associated with the 
Organization of Petroleum Exporting Countries (OPEC) to alter oil 
supply relative to demand. These factors contribute to the 
vulnerability of the U.S. economy to episodic oil supply shocks and 
price spikes, even when the U.S. is projected to be an overall net 
exporter of crude oil and refined products.
    We anticipate that U.S. consumption and net imports of petroleum 
will be reduced as a result of this proposed rule, both from an 
increase in fuel efficiency of LMDVs using petroleum-based fuels and 
from the greater use of PEVs which are fueled with electricity. A 
reduction of U.S. net petroleum imports reduces both financial and 
strategic risks caused by potential sudden disruptions in the supply of 
petroleum to the U.S. and global market, thus increasing U.S. energy 
security. Table 198 presents the impacts on imported oil.

                   TABLE 198--Oil Import Impacts Associated With the Proposal and Each of the Alternatives, Light-Duty and Medium-Duty
                                               [Million barrels of imported oil per day in the given year]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Oil import impacts,      Oil import impacts,      Oil import impacts,      Oil import impacts,
                   Calendar  year                             proposal              alternative 1            alternative 2            alternative 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027................................................                   -0.042                   -0.044                   -0.031                   -0.025
2028................................................                     -0.1                    -0.12                   -0.076                   -0.063
2029................................................                    -0.19                    -0.21                    -0.15                    -0.11
2030................................................                    -0.29                    -0.33                    -0.23                    -0.18
2031................................................                    -0.41                    -0.46                    -0.33                     -0.3
2032................................................                    -0.54                    -0.61                    -0.45                    -0.44
2035................................................                    -0.99                     -1.1                    -0.88                    -0.91
2040................................................                     -1.6                     -1.8                     -1.4                     -1.6
2045................................................                       -2                     -2.2                     -1.8                       -2
2050................................................                     -2.3                     -2.5                       -2                     -2.2
2055................................................                     -2.3                     -2.5                     -2.1                     -2.3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    It is anticipated that manufacturers will choose to comply with the 
proposed standards with an increased penetration of PEVs. Compared to 
the use of petroleum-based fuels to power vehicles, electricity used in 
PEVs is anticipated to be generally more affordable and more stable in 
its price, i.e., have less price volatility. See

[[Page 29389]]

Chapter 11.3 of the DRIA for an analysis of PEV affordability and 
electricity price stability compared to gasoline prices. Thus, the 
greater use of electricity for PEVs is anticipated to improve the 
U.S.'s overall energy security position. Also, since the electricity to 
power PEVs will likely be almost exclusively produced in the U.S., this 
proposal will move the U.S. towards the goal of energy independence. 
See Chapter 11.3 of the DRIA for more discussion of how the proposed 
rule moves the U.S. to the goal of energy independence.
    In order to understand the energy security implications of reducing 
U.S. oil imports, EPA has worked with Oak Ridge National Laboratory 
(ORNL), which has developed approaches for evaluating the social costs 
and energy security implications of oil use. When conducting this 
analysis, ORNL estimates the risk of reductions in U.S. economic output 
and disruption to the U.S. economy caused by sudden disruptions in 
world oil supply and associated price shocks (i.e., labeled the avoided 
macroeconomic disruption/adjustment costs). These risks are quantified 
as ``macroeconomic oil security premiums'', i.e., the extra costs of 
using oil besides its market price, associated with oil use.
    For this proposed rule, EPA is using macroeconomic oil security 
premiums estimated using ORNL's methodology, which incorporates updated 
oil price projections and energy market and economic trends from the 
U.S. Department of Energy's Energy Information Administration's (EIA) 
Annual Energy Outlook (AEO) 2021. EPA and ORNL have worked together to 
revise the macroeconomic oil security premiums based upon recent energy 
security literature. We do not consider military cost impacts as a 
result of reductions in U.S. oil imports from this proposed rule due to 
methodological issues in quantifying these impacts. If military cost 
impacts could be quantified and monetized, the estimated benefits of 
this proposed rule would be larger.
    To calculate the oil security benefits of this proposed rule, EPA 
is using the ORNL macroeconomic oil security premium methodology with: 
(1) Estimated oil savings calculated by EPA, and (2) an oil import 
reduction factor of 90.7 percent, which reflects our estimate of how 
much U.S. oil imports are reduced from changes in U.S. oil consumption. 
Below EPA presents the macroeconomic oil security premiums used for the 
proposed standards for selected years from 2027-2055 in Table 199. The 
energy security benefits of this proposed rule are presented in Table 
200.

 Table 199--Macroeconomic Oil Security Premiums for Selected Years From
                                2027-2055
                            [2020$/Barrel] *
------------------------------------------------------------------------
                                                    Macroeconomic oil
                 Calendar year                      security premiums
                                                         (range)
------------------------------------------------------------------------
2027...........................................      $3.41 ($0.74-$6.36)
2030...........................................         3.55 (0.65-6.68)
2032...........................................         3.70 (0.68-6.94)
2035...........................................         3.91 (0.73-7.34)
2040...........................................         4.39 (1.08-8.09)
2050...........................................         5.15 (1.52-9.28)
2055...........................................         5.15 (1.52-9.28)
------------------------------------------------------------------------
* Top values in each cell are the mid-points, the values in parentheses
  are the 90 percent confidence intervals.


                Table 200--Energy Security Benefits Associated With the Proposal and Each of the Alternatives, Light-Duty and Medium-Duty
                                                              [In billions of 2020 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Energy security           Energy security           Energy security           Energy security
                  Calendar year                       benefits, proposal     benefits, alternative 1   benefits, alternative 2   benefits, alternative 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.............................................                    0.052                     0.055                     0.038                     0.031
2028.............................................                     0.13                      0.15                     0.095                      0.08
2029.............................................                     0.24                      0.27                      0.19                      0.14
2030.............................................                     0.37                      0.43                       0.3                      0.24
2031.............................................                     0.54                      0.61                      0.44                       0.4
2032.............................................                     0.73                      0.82                      0.61                       0.6
2035.............................................                      1.4                       1.6                       1.3                       1.3
2040.............................................                      2.6                       2.9                       2.3                       2.5
2045.............................................                      3.5                       3.8                       3.1                       3.4
2050.............................................                      4.2                       4.7                       3.8                       4.2
2055.............................................                      4.4                       4.8                       3.9                       4.4
PV3..............................................                       41                        46                        37                        40
PV7..............................................                       21                        23                        19                        20
EAV3.............................................                      2.2                       2.4                       1.9                       2.1
EAV7.............................................                      1.7                       1.9                       1.5                       1.6
--------------------------------------------------------------------------------------------------------------------------------------------------------

H. Employment Impacts

    If the U.S. economy is at full employment, even a large-scale 
environmental regulation is unlikely to have a noticeable impact on 
aggregate net employment. Instead, labor would primarily be reallocated 
from one productive use to another, and net national employment effects 
from environmental regulation would be small and transitory (e.g., as 
workers move from one job to another). Affected sectors may 
nevertheless experience transitory effects as workers change jobs. Some 
workers may retrain or

[[Page 29390]]

relocate in anticipation of new requirements or require time to search 
for new jobs, while shortages in some sectors or regions could bid up 
wages to attract workers. These adjustment costs can lead to local 
labor disruptions. Even if the net change in the national workforce is 
small, localized reductions in employment may adversely impact 
individuals and communities just as localized increases may have 
positive impacts. If the economy is operating at less than full 
employment, economic theory does not clearly indicate the direction or 
magnitude of the net impact of environmental regulation on employment; 
it could cause either a short-run net increase or short-run net 
decrease.
    Economic theory of labor demand indicates that employers affected 
by environmental regulation may change their demand for different types 
of labor in different ways. They may increase their demand for some 
types, decrease demand for other types, or maintain demand for still 
other types. The uncertain direction of labor impacts is due to the 
different channels by which regulations affect labor demand. A variety 
of conditions can affect employment impacts of environmental 
regulation, including baseline labor market conditions, employer and 
worker characteristics, industry, and region. In general, the 
employment effects of environmental regulation are difficult to 
disentangle from other economic changes (especially the state of the 
macroeconomy) and business decisions that affect employment, both over 
time and across regions and industries. In light of these difficulties, 
we look to economic theory to provide a constructive framework for 
approaching these assessments and for better understanding the inherent 
complexities in such assessments.
1. Background on Employment Effects
    In addition to the employment effects, we have discussed in 
previous rules (for example the 2021 rule), where we estimated a 
partial employment effect on LD ICE vehicle manufacturing due to the 
increase in technical costs of the rule, the increasing penetration of 
electric vehicles in the market is likely to affect both the number and 
the nature of employment in the auto and parts sectors and related 
sectors, such as providers of charging infrastructure. Over time, as 
BEVs become a greater portion of the new vehicle fleet, the kinds of 
jobs in auto manufacturing are expected to change. For instance, there 
will be no need for engine and exhaust system assembly for BEVs, while 
many assembly tasks will involve electrical rather than mechanical 
fitting. In addition, batteries represent a significant portion of the 
manufacturing content of an electrified vehicle, and some automakers 
are likely to purchase the cells, if not pre-assembled modules or 
packs, from suppliers. Employment in building and maintaining charging 
infrastructure needed to support the ever-increasing number of BEVs on 
the road is also expected to affect the nature of employment in 
automotive and related sectors. For much of these effects, there is 
considerable uncertainty in the data to quantitatively assess how 
employment might change as a function of the increased electrification 
expected to result under the proposed standards.
    Results from California's ACC II program analysis suggest that 
there may be a small decrease, not exceeding 0.3 percent of baseline 
California employment in any year, in total employment across all 
industries in CA through 2040.\804\ A report by the Economic Policy 
Institute suggests that U.S. employment in the auto sector could 
increase if the share of vehicles, or powertrains, sold in the United 
States that are produced in the United States increases.\805\ The 
BlueGreen Alliance also states that though BEVs have fewer parts than 
their ICE counterparts, there is potential for job growth in electric 
vehicle component manufacturing, including batteries, electric motors, 
regenerative braking systems and semiconductors, and manufacturing 
those components in the United States can lead to an increase in 
jobs.\806\ They go on to state that if the United States does not 
become a major producer for these components, there is risk of job 
loss.
---------------------------------------------------------------------------

    \804\ https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2022/accii/isor.pdf.
    \805\ https://www.epi.org/publication/ev-policy-workers/.
    \806\ https://www.bluegreenalliance.org/wp-content/uploads/2021/04/Backgrounder-EVs-Are-Coming.-Will-They-Be-Made-in-the-USA-vFINAL.pdf.
---------------------------------------------------------------------------

    The UAW states that re-training programs will be needed to support 
auto workers in a market with an increasing share of electric vehicles 
in order to prepare workers that might be displaced by the shift to the 
new technology.\807\ Volkswagen states that labor requirements for ICE 
vehicles are about 70 percent higher than their electric counterpart, 
but these changes in employment intensities in the manufacturing of the 
vehicles can be offset by shifting to the production of new components, 
for example batteries or battery cells.\808\ Research from the Seattle 
Jobs Initiative indicates that employment in a collection of sectors 
related to both BEV and ICE vehicle manufacturing is expected to grow 
slightly through 2029.\809\ Climate Nexus also indicates that the 
increasing penetration of electric vehicles will lead to a net increase 
in jobs, a claim that is partially supported by the rising investment 
in batteries, vehicle manufacturing and charging stations.\810\ This 
expected private investment is also supported by recent Federal 
investment which will encourage increased investment along the vehicle 
supply chain, including domestic battery manufacturing, charging 
infrastructure, and vehicle manufacturing. The BIL was signed in 
November 2021 and provides over $24 billion in investment in electric 
vehicle chargers, critical minerals, and components needed by domestic 
manufacturers of EV batteries and for clean transit and school 
buses.\811\ The CHIPS and Science Act, signed in August, 2022, invests 
in expanding America's manufacturing capacity for the semiconductors 
used in electric vehicles and chargers. \812\ The IRA provides 
incentives for producers to expand domestic manufacturing of BEVs and 
domestic sourcing of components and critical minerals needed to produce 
them. The act also provides incentives for consumers to purchase both 
new and used BEVs. These pieces of legislation are expected to create 
domestic employment opportunities along the full automotive sector 
supply chain, from components and equipment manufacturing and 
processing to final assembly, as well as incentivize the development of 
reliable EV battery supply chains.\813\ The BlueGreen Alliance and the 
Political

[[Page 29391]]

Economy Research Institute estimate that IRA will create over 9 million 
jobs over the next decade, with about 400,000 of those jobs being 
attributed directly to the battery and fuel cell vehicle provisions in 
the act.\814\ In addition, the IRA is expected to lead to increased 
demand for BEVs through tax credits for purchasers of BEVs.
---------------------------------------------------------------------------

    \807\ https://uaw.org/wp-content/uploads/2019/07/190416-EV-White-Paper-REVISED-January-2020-Final.pdf.
    \808\ https://www.volkswagenag.com/presence/stories/2020/12/frauenhofer-studie/6095_EMDI_VW_Summary_um.pdf.
    \809\ https://www.seattle.gov/Documents/Departments/OSE/ClimateDocs/TE/EV%20Field%20in%20OR%20and%20WA_February20.pdf.
    \810\ https://climatenexus.org/climate-issues/energy/ev-job-impacts/.
    \811\ The Bipartisan Infrastructure Law is officially titled the 
Infrastructure Investment and Jobs Act. More information can be 
found at https://www.fhwa.dot.gov/bipartisan-infrastructure-law/.
    \812\ The CHIPS and Science Act was signed by President Biden in 
August, 2022 to boost investment in, and manufacturing of, 
semiconductors in the U.S. The fact sheet can be found at https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/09/fact-sheet-chips-and-science-act-will-lower-costs-create-jobs-strengthen-supply-chains-and-counter-china/.
    \813\ ``Building a Clean Energy Economy: A Guidebook to the 
Inflation Reduction Act's Investments in Clean Energy and Climate 
Action.'' January 2023. Whitehouse.gov. https://www.whitehouse.gov/wp-content/uploads/2022/12/Inflation-Reduction-Act-Guidebook.pdf.
    \814\ Political Economy Research Institute. (2022). Job Creation 
Estimates Through Proposed Inflation Reduction Act. University of 
Massachusetts Amherst. Retrieved from https://www.bluegreenalliance.org/site/9-million-good-jobs-from-climate-action-the-inflation-reduction-act/.
---------------------------------------------------------------------------

2. Demand, Cost and Factor Shift Effect on Employment
    In DRIA Chapter 4.96, we describe three ways employment at the firm 
level might be affected by changes in a firm's production costs due to 
environmental regulation: A demand effect, caused by higher production 
costs increasing market prices and decreasing demand; a cost effect, 
caused by additional environmental protection costs leading regulated 
firms to increase their use of inputs; and a factor- shift effect, in 
which post-regulation production technologies may have different labor 
intensities than their pre-regulation counterparts.815 816 
Due to data limitations, EPA is not quantifying the impacts of the 
final regulation on firm-level employment for affected companies, 
although we acknowledge these potential impacts. Instead, we discuss 
factor- shift, demand, and cost employment effects for the regulated 
sector at the industry level.
---------------------------------------------------------------------------

    \815\ Morgenstern, Richard D., William A. Pizer, and Jhih-Shyang 
Shih (2002). ``Jobs Versus the Environment: An Industry-Level 
Perspective.'' Journal of Environmental Economics and Management 43: 
412-436.
    \816\ Berman and Bui have a similar framework in which they 
consider output and substitution effects that are similar to 
Morgenstern et al.'s three effect (Berman, E. and L. T. M. Bui 
(2001). ``Environmental Regulation and Labor Demand: Evidence from 
the South Coast Air Basin.'' Journal of Public Economics 79(2): 265-
295).
---------------------------------------------------------------------------

    Factor- shift effects are due to changes in labor intensity of 
production due to the standards. We do not have data on how the 
regulation might affect labor intensity of production within ICE 
vehicle production. There is ongoing research on the different labor 
intensity of production between BEV and ICE vehicle production, with 
inconsistent results. Some research indicates that the labor hours 
needed to produce a BEV are fewer than those needed to produce an ICE 
vehicle, while other research indicates there are no real differences. 
EPA worked with a research group to produce a peer-reviewed tear-down 
study of a BEV to its comparable ICE vehicle counterpart.\817\ Study 
results were delivered in January 2023, and a peer review of the study 
is planned. Included in this study are estimates of labor intensity 
needed to produce each vehicle. We hope to use this information in 
additional analytical discussions in the final rule. Given the current 
lack of data and inconsistency in the existing literature, we are 
unable to estimate a factor-shift effect of increasing relative BEV 
production as a function of this rule.
---------------------------------------------------------------------------

    \817\ See DRIA Chapter 2.5.2.2.3 for more information.
---------------------------------------------------------------------------

    The factor shift effect would occur where a BEV is replacing an ICE 
vehicle and does not account for a change in the total number of 
vehicles sold. Demand effects on employment are due to changes in labor 
due to changes in demand. In general, if the regulation causes total 
sales of new vehicles to increase, as we are estimating due to this 
proposed rule, more workers will be needed to assemble vehicles and 
manufacture their components. If BEVs and ICE vehicles have different 
labor intensities of production, the relative change in BEV and ICE 
vehicles sales will impact the demand effect on employment. Assume that 
sales of both BEV and ICE vehicles increase. This would mean that the 
change in employment due to an increase demand will depend on the labor 
intensity of BEV production and the increase in BEV sales, as well as 
in the labor intensity of ICE vehicle production and the increase in 
ICE sales. Now assume that BEV sales increased while ICE vehicle sales 
decreased. If total sales increased, that would indicate that BEVs 
replaced ICE vehicles, but there was new sales demand as well. The 
change in employment under this scenario would depend on the factor 
shift effect (the relative BEV and ICE vehicle labor intensity) for the 
replaced ICE vehicles, and the demand effect (labor intensity of BEVs) 
for the new sales demand. For the same reason we cannot estimate a 
factor- shift effect, namely that we do not know the labor intensity of 
BEV vs ICE vehicle production, we are not currently able to estimate a 
demand-shift effect on employment. However, because we are estimating 
increased new vehicle sales due to this rule, we would expect to see an 
increase in employment due to the demand effect.
    The cost effects on employment are due to changes in labor 
associated with increases in costs of production.
    BEVs and ICE vehicles require different inputs and have different 
costs of production, though there are interchangeable, common, parts as 
well. In previous LD and HD rules, we have estimated a partial 
employment effect due to the change in costs of production. We 
estimated the cost effect using the historic share of labor in the cost 
of production to extrapolate future estimates of impacts on labor due 
to new compliance activities in response to the regulations. 
Specifically, we multiplied the share of labor in production costs by 
the production cost increase estimated as an impact of the rule. This 
provided a sense of the magnitude of potential impacts on employment.
    As described in Chapter 4.6 of the DRIA, we used historical data on 
the number of employees per $1 million in expenditures from the 
Employment Requirements Matrix (ERM) provided by the U.S. Bureau of 
Labor Statistics (BLS) to examine labor needs of five manufacturing 
sectors related to ICE and BEV vehicle production to determine trends 
over time. Two of these sectors (electrical equipment and manufacturing 
and other electrical equipment and component manufacturing) are more 
closely related to BEV production, while the other three (motor vehicle 
manufacturing, motor vehicle body and trailer manufacturing, and motor 
vehicle parts manufacturing) are sectors that are more generally 
related to both BEV and ICE vehicle production.
    Over time, the amount of labor needed in the motor vehicle industry 
has changed: Automation and improved methods have led to significant 
productivity increases, which is reflected in the estimates from the 
BLS ERM. For example, in 1997 about 1.2 workers in the Motor Vehicle 
Manufacturing sector were needed per $1 million, but only 0.5 workers 
by 2021 (in 2020$).\818\ Though the two sectors mainly associated with 
BEV manufacturing, electrical equipment manufacturing, and other 
electrical equipment and component manufacturing, show an increase in 
recent years.
---------------------------------------------------------------------------

    \818\ http://www.bls.gov/emp/ep_data_emp_requirements.htm; this 
analysis used data for sectors electrical equipment and 
manufacturing, other electrical equipment and component 
manufacturing, motor vehicle manufacturing, motor vehicle body and 
trailer manufacturing, and motor vehicle parts manufacturing from 
``Chain-weighted (2012 dollars) real domestic employment 
requirements tables;'' see ``Cost Effect Employment Impacts 
calculation'' in the docket.
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3. Partial Employment Effect
    We attempt to estimate partial employment effects of this proposed 
rule by separating out costs for BEVs and ICE vehicles, as well as the 
costs that are common between them,

[[Page 29392]]

applying the BEV cost changes to data from sectors primarily focused on 
BEV production, ICE vehicle costs to sectors primarily focused on ICE 
vehicle production, and costs common for BEV and ICE vehicles to 
sectors that are common to BEV and ICE vehicle production.\819\ For 
more information on how we estimated this partial employment effect, 
see DRIA Chapter 4.5.4.
---------------------------------------------------------------------------

    \819\ A recent report from the Seattle Jobs Initiative examined 
how electrification in the automotive industry might advance 
workforce development in Oregon and Washington. As part of that 
study, the authors identified the sectors classified by the North 
American Industry Classification System (NAICS) codes most strongly 
associated with automotive production in general, those exclusive to 
ICE vehicles, and those primarily associated with BEV production. 
The report can be found at: https://www.seattle.gov/Documents/Departments/OSE/ClimateDocs/TE/EV%20Field%20in%20OR%20and%20WA_February20.pdf.
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    In previous rules, we have estimated the cost effect, which is done 
while keeping sales constant. However, OMEGA estimates costs and 
changes in sales concurrently. Therefore, the partial employment effect 
we are estimating here is not a straight cost effect, nor is it a 
demand effect, as the demand effect is due to a change in sales, 
keeping costs and factor intensities constant. This estimate we provide 
here is a combined cost and demand effect, and is meant to give a sense 
of possible partial employment effects, including directionality and 
relative magnitude. These estimates include effects due to both LD and 
MD cost changes, as the costs used in the analysis were the combined 
estimated costs for the light- and medium-duty sectors, as well as the 
change in new vehicle sales in the LD market.\820\ It does not include 
economy-wide labor effects, possible factor intensity effects, or 
effects from possible changes to domestic production.
---------------------------------------------------------------------------

    \820\ We do not estimate a change in new MD vehicle sales. See 
Section VIII.C above, or DRIA Chapter 4.4.2 for more information on 
the change in sales estimated due to this proposed rule.
---------------------------------------------------------------------------

    Results are provided in job-years, where a job-year is, for 
example, one year of full-time work for one person, or one year of 
half-time work for two people. Table 201 shows our partial employment 
results for the Proposal scenario. See Chapter 4.5.4 of the DRIA for 
more information on the employment analysis, as well as the partial 
employment effects for the three alternative scenarios.

  Table 201--Estimated Partial Employment Effects in Job-Years for BEV and ICE Vehicle Sectors, Sectors Common to BEV and ICE, and the Net Minimum and
                                                               Maximum Across All Sectors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Common                  BEV                ICE vehicle                Net
                             Year                             ------------------------------------------------------------------------------------------
                                                                  Min         Max        Min         Max        Min         Max        Min        Max
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.........................................................      7,620     54,000      -9,800    -11,700     -10,200    -11,500     -12,380     30,800
2028.........................................................      8,600     61,600      -9,100    -11,600     -13,900    -15,700     -14,400     34,300
2029.........................................................     10,300     75,200      -9,000    -12,100     -19,200    -21,600     -17,900     41,500
2030.........................................................     11,700     86,900      -9,100    -12,800     -21,600    -24,300     -19,000     49,800
2031.........................................................     14,600    109,900     -10,100    -15,100     -26,100    -29,300     -21,600     65,500
2032.........................................................     17,500    133,300     -11,100    -17,500     -30,500    -34,300     -24,100     81,500
--------------------------------------------------------------------------------------------------------------------------------------------------------

    These results show negative employment effects in the ICE and BEV 
focused sectors, while there are positive effects in the common 
sectors. These results also suggest that there could be either an 
increase or decrease in net employment in the automotive manufacturing 
industries examined as part of this analysis.
    EPA contracted with FEV to perform a detailed tear-down study 
comparing two similar vehicles, one a BEV (the 2021 Volkswagen ID.4) 
and the other an ICE vehicle (the 2021 Volkswagen Tiguan (see DRIA 
Chapter 2.5.2.2.3 for more details on this study). In the process of 
compiling the detailed information, FEV estimated the number of labor 
hours it takes to build each of the two vehicles. Under a realistic 
scenario of assembly based on what OEMs are currently doing, their 
results suggest that the labor hours needed to assemble the BEV and ICE 
vehicles are very similar.\821\ This indicates that changes in 
employment in the auto manufacturing sectors from increasing 
electrification will not come from the assembling of the vehicles at 
the auto manufacturer, but from changing sales.
---------------------------------------------------------------------------

    \821\ In the realistic scenario, FEV assumes that the automakers 
purchase EV battery modules and assembles the pack. Under 
assumptions that the auto manufacturers provide the least amount of 
added value in assemble, the Tiguan (ICE vehicle) is estimated to 
more man hours to assemble than the ID.4 (BEV). Under assumptions 
that the auto manufacturers perform most of the sub system 
manufacturing and assembly, including the engine, transmission and 
battery pack modules, the ID.4 (BEV) takes more man hours per 
vehicle than the Tiguan (ICE vehicle).
---------------------------------------------------------------------------

4. Employment in Related Sectors
    With respect to possible employment effects in other sectors, 
economy-wide impacts on employment are generally driven by broad 
macroeconomic effects. However, employment impacts, both positive and 
negative, in sectors upstream and downstream from the regulated sector, 
or in sectors producing substitute or complementary products, may also 
occur as a result of this rule. For example, changes in electricity 
generation may have consequences for labor demand in those upstream 
industries. Lower per-mile fuel costs could lead to labor effects in 
ride-sharing or ride-hailing services through an increase in demand for 
those services. Reduced demand for gasoline may lead to impacts on 
demand for labor in the gas station sector, although the fact that many 
gas stations provide other goods, such as food and car washes, will 
moderate possible losses in this sector. There may also be an increase 
in demand for labor in sectors that build and maintain charging 
stations. The magnitude of all of these impacts depends on a variety of 
factors including the labor intensities of the related sectors, as well 
as the nature of the linkages (which can be reflected in measures of 
elasticity) between them and the regulated firms.
    Electrification of the vehicle fleet is likely to affect both the 
number and the nature of employment in the auto and parts sectors and 
related sectors, such as providers of charging infrastructure. In 
addition, the type and number of jobs related to vehicle maintenance 
are expected to change as well, though we expect this to happen over a 
longer time span due to the nature of fleet turnover. Given the 
timeline, we expect opportunities for workers to retrain from ICE 
vehicle maintenance to other positions, for example within BEV 
maintenance, charging station infrastructure, or elsewhere in the 
economy.
    Reduced consumption of petroleum fuel represents fuel savings for

[[Page 29393]]

purchasers of fuel, as well as a potential loss in value of output for 
the petroleum refining industry, fuel distributors, and gasoline 
stations, which may result in reduced employment in these sectors. 
However, because the fuel production sector is material-intensive, the 
employment effect is not expected to be large. In addition, it may be 
difficult to distinguish these effects from other trends, such as 
increases in petroleum sector labor productivity that may also lower 
labor demand.
    As discussed in Preamble Section I, there have been several 
legislative and administrative efforts enacted since 2021 aimed at 
improving the domestic supply chain for electric vehicles, including 
electric vehicle chargers, critical minerals, and components needed by 
domestic manufacturers of EV batteries. These actions are also expected 
to provide opportunities for domestic employment in these associated 
sectors.
    The standards may affect employment for auto dealers through a 
change in vehicles sold, with increasing sales being associated with an 
increase in labor demand. However, vehicle sales are also affected by 
macroeconomic effects, and it is difficult to separate out the effects 
of the standards on sales from effects due to macroeconomic conditions. 
In addition, auto dealers may also be affected by changes in 
maintenance and service costs, as well as through changes in the 
maintenance needs of the vehicles sold. For example, reduced 
maintenance needs of BEVs would lead to reduced demand for maintenance 
labor.

I. Environmental Justice

1. Overview
    People of color and people of low socioeconomic status face 
cumulative impacts associated with environmental exposures of multiple 
types, as well as non-chemical stressors. Numerous studies have found 
that environmental hazards such as air pollution are more prevalent in 
areas where people of color and low-income populations represent a 
higher fraction of the population compared with the general 
population.822 823 In addition, compared to non-Hispanic 
Whites, some other racial groups experience greater levels of health 
problems during some life stages. For example, in 2018-2020, about 12 
percent of non-Hispanic Black; 9 percent of non-Hispanic American 
Indian/Alaska Native; and 7 percent of Hispanic children were estimated 
to currently have asthma, compared with 6 percent of non-Hispanic White 
children.\824\ Nationally, on average, non-Hispanic Black and Non-
Hispanic American Indian or Alaska Native people also have lower than 
average life expectancy based on 2019 data, the latest year for which 
CDC estimates are available.\825\
---------------------------------------------------------------------------

    \822\ Rowangould, G.M. (2013) A census of the near-roadway 
population: public health and environmental justice considerations. 
Trans Res D 25: 59-67. http://dx.doi.org/10.1016/j.trd.2013.08.003.
    \823\ Marshall, J.D. (2000) Environmental inequality: Air 
pollution exposures in California's South Coast Air Basin. Atmos 
Environ 21: 5499- 5503. https://doi.org/10.1016/j.atmosenv.2008.02.005.
    \824\ Current Asthma Prevalence by Race and Ethnicity (2018-
2020). [Online at https://www.cdc.gov/asthma/most_recent_national_asthma_data.htm.]
    \825\ Arias, E. Xu, J. (2022) United States Life Tables, 2019. 
National Vital Statistics Report, Volume 70, Number 19. [Online at 
https://www.cdc.gov/nchs/data/nvsr/nvsr70/nvsr70-19.pdf.]
---------------------------------------------------------------------------

    EPA's 2016 ``Technical Guidance for Assessing Environmental Justice 
in Regulatory Analysis'' provides recommendations on conducting the 
highest quality analysis feasible, though not prescriptive, recognizing 
that data limitations, time and resource constraints, and analytic 
challenges will vary by media and regulatory context.\826\ Where 
applicable and practicable, the Agency endeavors to conduct such an 
analysis. There is evidence that communities with EJ concerns are 
disproportionately impacted by vehicle emissions associated with this 
proposed rule.\827\ EPA did not consider any potential disproportionate 
impacts of vehicle emissions in selecting the proposed standards, but 
we view mitigation of disproportionate impacts of vehicle emissions as 
one element of protecting public health consistent with CAA section 
202. In general, we expect reduced tailpipe emissions of GHGs, criteria 
pollutants, and air toxics as described in Sections VI and VII of this 
Preamble.
---------------------------------------------------------------------------

    \826\ ``Technical Guidance for Assessing Environmental Justice 
in Regulatory Analysis.'' Epa.gov, Environmental Protection Agency, 
https://www.epa.gov/sites/production/files/2016-06/documents/ejtg_5_6_16_v5.1.pdf. (June 2016).
    \827\ Mohai, P.; Pellow, D.; Roberts Timmons, J. (2009) 
Environmental justice. Annual Reviews 34: 405-430. https://doi.org/10.1146/annurev-environ082508-094348.
---------------------------------------------------------------------------

    A key consideration in EPA's Technical Guidance is consistency with 
the assumptions underlying other parts of the regulatory analysis when 
evaluating the baseline and regulatory options. When assessing the 
potential for disproportionately high and adverse health or 
environmental impacts of regulatory actions on populations with 
potential EJ concerns, EPA strives to answer three broad questions: (1) 
Is there evidence of potential EJ concerns in the baseline (the state 
of the world absent the regulatory action)? Assessing the baseline will 
allow EPA to determine whether pre-existing disparities are associated 
with the pollutant(s) under consideration (e.g., if the effects of the 
pollutant(s) are more concentrated in some population groups). (2) Is 
there evidence of potential EJ concerns for the regulatory option(s) 
under consideration? Specifically, how are the pollutant(s) and its 
effects distributed for the regulatory options under consideration? 
And, (3) do the regulatory option(s) under consideration exacerbate or 
mitigate EJ concerns relative to the baseline?
    In this section, we discuss the environmental justice impacts of 
this proposal from the reduction of GHGs, criteria pollutants and air 
toxics tailpipe emissions. This section also discusses EJ impacts from 
upstream sources and the underlying uncertainty in our EJ analysis.
2. GHG Impacts
    In 2009, under the Endangerment and Cause or Contribute Findings 
for Greenhouse Gases Under section 202(a) of the CAA (``Endangerment 
Finding''), the Administrator considered how climate change threatens 
the health and welfare of the U.S. population. As part of that 
consideration, she also considered risks to people of color and low-
income individuals and communities, finding that certain parts of the 
U.S. population may be especially vulnerable based on their 
characteristics or circumstances. These groups include economically and 
socially vulnerable communities; individuals at vulnerable life stages, 
such as the elderly, the very young, and pregnant or nursing women; 
those already in poor health or with comorbidities; the disabled; those 
experiencing homelessness, mental illness, or substance abuse; and/or 
Indigenous or minority populations dependent on one or limited 
resources for subsistence due to factors including but not limited to 
geography, access, and mobility.
    Scientific assessment reports produced over the past decade by the 
U.S. Global Change Research Program (USGCRP),828 829 the 
Intergovernmental

[[Page 29394]]

Panel on Climate Change IPCC),830 831 832 833 and the 
National Academies of Science, Engineering, and Medicine 
834 835 add more evidence that the impacts of climate change 
raise potential environmental justice concerns. These reports conclude 
that poorer or predominantly non-White communities can be especially 
vulnerable to climate change impacts because they tend to have limited 
adaptive capacities and are more dependent on climate-sensitive 
resources such as local water and food supplies or have less access to 
social and information resources. Some communities of color, 
specifically populations defined jointly by ethnic/racial 
characteristics and geographic location, may be uniquely vulnerable to 
climate change health impacts in the U.S. In particular, the 2016 
scientific assessment on the Impacts of Climate Change on Human Health 
\836\ found with high confidence that vulnerabilities are place- and 
time-specific, life stages and ages are linked to immediate and future 
health impacts, and social determinants of health are linked to a 
greater extent and severity of climate change-related health impacts. 
The GHG emission reductions from this proposal would contribute to 
efforts to reduce the probability of severe impacts related to climate 
change.
---------------------------------------------------------------------------

    \828\ USGCRP, 2018: Impacts, Risks, and Adaptation in the United 
States: Fourth National Climate Assessment, Volume II [Reidmiller, 
D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K. 
Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research 
Program, Washington, DC, USA, 1515 pp. doi: 10.7930/NCA4.2018.
    \829\ USGCRP, 2016: The Impacts of Climate Change on Human 
Health in the United States: A Scientific Assessment. Crimmins, A., 
J. Balbus, J.L. Gamble, C.B. Beard, J.E. Bell, D. Dodgen, R.J. 
Eisen, N. Fann, M.D. Hawkins, S.C. Herring, L. Jantarasami, D.M. 
Mills, S. Saha, M.C. Sarofim, J. Trtanj, and L. Ziska, Eds. U.S. 
Global Change Research Program, Washington, DC, 312 pp. http://dx.doi.org/10.7930/J0R49NQX.
    \830\ Oppenheimer, M., M. Campos, R.Warren, J. Birkmann, G. 
Luber, B. O'Neill, and K. Takahashi, 2014: Emergent risks and key 
vulnerabilities. In: Climate Change 2014: Impacts, Adaptation, and 
Vulnerability. Part A: Global and Sectoral Aspects. Contribution of 
Working Group II to the Fifth Assessment Report of the 
Intergovernmental Panel on Climate Change [Field, C.B., V.R. Barros, 
D.J. Dokken, K.J. Mach, M.D. Mastrandrea, T.E. Bilir, M. Chatterjee, 
K.L. Ebi, Y.O. Estrada, R.C. Genova, B. Girma, E.S. Kissel, A.N. 
Levy, S. MacCracken, P.R. Mastrandrea, and L.L.White (eds.)]. 
Cambridge University Press, Cambridge, United Kingdom and New York, 
NY, USA, pp. 1039-1099.
    \831\ Porter, J.R., L. Xie, A.J. Challinor, K. Cochrane, S.M. 
Howden, M.M. Iqbal, D.B. Lobell, and M.I. Travasso, 2014: Food 
security and food production systems. In: Climate Change 2014: 
Impacts, Adaptation, and Vulnerability. Part A: Global and Sectoral 
Aspects. Contribution of Working Group II to the Fifth Assessment 
Report of the Intergovernmental Panel on Climate Change [Field, 
C.B., V.R. Barros, D.J. Dokken, K.J. Mach, M.D. Mastrandrea, T.E. 
Bilir, M. Chatterjee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. Girma, 
E.S. Kissel, A.N. Levy, S. MacCracken, P.R. Mastrandrea, and 
L.L.White (eds.)]. Cambridge University Press, Cambridge, United 
Kingdom and New York, NY, USA, pp. 485-533.
    \832\ Smith, K.R., A.Woodward, D. Campbell-Lendrum, D.D. Chadee, 
Y. Honda, Q. Liu, J.M. Olwoch, B. Revich, and R. Sauerborn, 2014: 
Human health: impacts, adaptation, and co-benefits. In: Climate 
Change 2014: Impacts, Adaptation, and Vulnerability. Part A: Global 
and Sectoral Aspects. Contribution of Working Group II to the Fifth 
Assessment Report of the Intergovernmental Panel on Climate Change 
[Field, C.B., V.R. Barros, D.J. Dokken, K.J. Mach, M.D. Mastrandrea, 
T.E. Bilir, M. Chatterjee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. 
Girma, E.S. Kissel,A.N. Levy, S. MacCracken, P.R. Mastrandrea, and 
L.L.White (eds.)]. Cambridge University Press, Cambridge, United 
Kingdom and New York, NY, USA, pp. 709-754.
    \833\ IPCC, 2018: Global Warming of 1.5 [deg]C.An IPCC Special 
Report on the impacts of global warming of 1.5 [deg]C above pre-
industrial levels and related global greenhouse gas emission 
pathways, in the context of strengthening the global response to the 
threat of climate change, sustainable development, and efforts to 
eradicate poverty [Masson-Delmotte, V., P. Zhai, H.-O. P[ouml]rtner, 
D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. 
P[eacute]an, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. 
Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T. 
Waterfield (eds.)]. In Press.
    \834\ National Research Council. 2011. America's Climate 
Choices. Washington, DC: The National Academies Press. https://doi.org/10.17226/12781.
    \835\ National Academies of Sciences, Engineering, and Medicine. 
2017. Communities in Action: Pathways to Health Equity. Washington, 
DC: The National Academies Press. https://doi.org/10.17226/24624.
    \836\ USGCRP, 2016: The Impacts of Climate Change on Human 
Health in the United States: A Scientific Assessment
---------------------------------------------------------------------------

i. Effects on Specific Populations of Concern
    Individuals living in socially and economically vulnerable 
communities, such as those living at or below the poverty line or who 
are experiencing homelessness or social isolation, are at greater risk 
of health effects from climate change. This is also true with respect 
to people at vulnerable life stages, specifically women who are pre- 
and perinatal, or are nursing; in utero fetuses; children at all stages 
of development; and the elderly. Per the Fourth National Climate 
Assessment (NCA4), ``Climate change affects human health by altering 
exposures to heat waves, floods, droughts, and other extreme events; 
vector-, food- and waterborne infectious diseases; changes in the 
quality and safety of air, food, and water; and stresses to mental 
health and well-being.'' \837\ Many health conditions such as 
cardiopulmonary or respiratory illness and other health impacts are 
associated with and exacerbated by an increase in GHGs and climate 
change outcomes, which is problematic as these diseases occur at higher 
rates within vulnerable communities. Importantly, negative public 
health outcomes include those that are physical in nature, as well as 
mental, emotional, social, and economic.
---------------------------------------------------------------------------

    \837\ Ebi, K.L., J.M. Balbus, G. Luber, A. Bole, A. Crimmins, G. 
Glass, S. Saha, M.M. Shimamoto, J. Trtanj, and J.L. White-Newsome, 
2018: Human Health. In Impacts, Risks, and Adaptation in the United 
States: Fourth National Climate Assessment, Volume II [Reidmiller, 
D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K. 
Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research 
Program, Washington, DC, USA, pp. 539-571. doi: 10.7930/
NCA4.2018.CH14.
---------------------------------------------------------------------------

    To this end, the scientific assessment literature, including the 
aforementioned reports, demonstrates that there are myriad ways in 
which these populations may be affected at the individual and community 
levels. Individuals face differential exposure to criteria pollutants, 
in part due to the proximities of highways, trains, factories, and 
other major sources of pollutant-emitting sources to less-affluent 
residential areas. Outdoor workers, such as construction or utility 
crews and agricultural laborers, who frequently are comprised of 
already at-risk groups, are exposed to poor air quality and extreme 
temperatures without relief. Furthermore, individuals within EJ 
populations of concern face greater housing, clean water, and food 
insecurity and bear disproportionate economic impacts and health 
burdens associated with climate change effects. They have less or 
limited access to healthcare and affordable, adequate health or 
homeowner insurance. Finally, resiliency and adaptation are more 
difficult for economically vulnerable communities: They have less 
liquidity, individually and collectively, to move or to make the types 
of infrastructure or policy changes to limit or reduce the hazards they 
face. They frequently are less able to self-advocate for resources that 
would otherwise aid in building resilience and hazard reduction and 
mitigation.
    The assessment literature cited in EPA's 2009 and 2016 Endangerment 
and Cause or Contribute Findings, as well as Impacts of Climate Change 
on Human Health, also concluded that certain populations and life 
stages, including children, are most vulnerable to climate-related 
health effects.\838\ The assessment literature produced from 2016 to 
the present strengthens these conclusions by providing more detailed 
findings regarding related vulnerabilities and the projected impacts 
youth may experience. These assessments--including the NCA4 and The 
Impacts of Climate Change on Human Health in the United States (2016)--
describe how children's unique physiological and developmental factors 
contribute to making them particularly vulnerable to climate change. 
Impacts to children are expected from heat waves, air pollution, 
infectious and waterborne illnesses, and mental health effects 
resulting from extreme weather events. In addition, children are among 
those especially

[[Page 29395]]

susceptible to allergens, as well as health effects associated with 
heat waves, storms, and floods. Additional health concerns may arise in 
low-income households, especially those with children, if climate 
change reduces food availability and increases prices, leading to food 
insecurity within households.
---------------------------------------------------------------------------

    \838\ 74 FR 66496, December 15, 2009; 81 FR 54422, August 15, 
2016.
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    The Impacts of Climate Change on Human Health \837\ also found that 
some communities of color, low-income groups, people with limited 
English proficiency, and certain immigrant groups (especially those who 
are undocumented) live with many of the factors that contribute to 
their vulnerability to the health impacts of climate change. While 
difficult to isolate from related socioeconomic factors, race appears 
to be an important factor in vulnerability to climate-related stress, 
with elevated risks for mortality from high temperatures reported for 
Black or African American individuals compared to White individuals 
after controlling for factors such as air conditioning use. Moreover, 
people of color are disproportionately exposed to air pollution based 
on where they live, and disproportionately vulnerable due to higher 
baseline prevalence of underlying diseases such as asthma, so climate 
exacerbations of air pollution are expected to have disproportionate 
effects on these communities.
    Native American Tribal communities possess unique vulnerabilities 
to climate change, particularly those impacted by degradation of 
natural and cultural resources within established reservation 
boundaries and threats to traditional subsistence lifestyles. Tribal 
communities whose health, economic well-being, and cultural traditions 
depend upon the natural environment will likely be affected by the 
degradation of ecosystem goods and services associated with climate 
change. The IPCC indicates that losses of customs and historical 
knowledge may cause communities to be less resilient or adaptable.\839\ 
The NCA4 noted that while Indigenous peoples are diverse and will be 
impacted by the climate changes universal to all Americans, there are 
several ways in which climate change uniquely threatens Indigenous 
peoples' livelihoods and economies.\840\ In addition, there can 
institutional barriers to their management of water, land, and other 
natural resources that could impede adaptive measures.
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    \839\ Porter et al., 2014: Food security and food production 
systems.
    \840\ Jantarasami, L.C., R. Novak, R. Delgado, E. Marino, S. 
McNeeley, C. Narducci, J. Raymond-Yakoubian, L. Singletary, and K. 
Powys Whyte, 2018: Tribes and Indigenous Peoples. In Impacts, Risks, 
and Adaptation in the United States: Fourth National Climate 
Assessment, Volume II [Reidmiller, D.R., C.W. Avery, D.R. 
Easterling, K.E. Kunkel, K.L.M. Lewis, T.K. Maycock, and B.C. 
Stewart (eds.)]. U.S. Global Change Research Program, Washington, 
DC, USA, pp. 572-603. doi: 10.7930/NCA4.2018.CH15.
---------------------------------------------------------------------------

    For example, Indigenous agriculture in the Southwest is already 
being adversely affected by changing patterns of flooding, drought, 
dust storms, and rising temperatures leading to increased soil erosion, 
irrigation water demand, and decreased crop quality and herd sizes. The 
Confederated Tribes of the Umatilla Indian Reservation in the Northwest 
have identified climate risks to salmon, elk, deer, roots, and 
huckleberry habitat. Housing and sanitary water supply infrastructure 
are vulnerable to disruption from extreme precipitation events.
    NCA4 noted that Indigenous peoples often have disproportionately 
higher rates of asthma, cardiovascular disease, Alzheimer's, diabetes, 
and obesity, which can all contribute to increased vulnerability to 
climate-driven extreme heat and air pollution events. These factors 
also may be exacerbated by stressful situations, such as extreme 
weather events, wildfires, and other circumstances.
    NCA4 and IPCC Fifth Assessment Report also highlighted several 
impacts specific to Alaskan Indigenous Peoples. Coastal erosion and 
permafrost thaw will lead to more coastal erosion, exacerbated risks of 
winter travel, and damage to buildings, roads, and other 
infrastructure--these impacts on archaeological sites, structures, and 
objects that will lead to a loss of cultural heritage for Alaska's 
Indigenous people. In terms of food security, the NCA4 discussed 
reductions in suitable ice conditions for hunting, warmer temperatures 
impairing the use of traditional ice cellars for food storage, and 
declining shellfish populations due to warming and acidification. While 
the NCA also noted that climate change provided more opportunity to 
hunt from boats later in the fall season or earlier in the spring, the 
assessment found that the net impact was an overall decrease in food 
security.
    In addition, the U.S. Pacific Islands and the indigenous 
communities that live there are also uniquely vulnerable to the effects 
of climate change due to their remote location and geographic 
isolation. They rely on the land, ocean, and natural resources for 
their livelihoods, but face challenges in obtaining energy and food 
supplies that need to be shipped in at high costs. As a result, they 
face higher energy costs than the rest of the nation and depend on 
imported fossil fuels for electricity generation and diesel. These 
challenges exacerbate the climate impacts that the Pacific Islands are 
experiencing. NCA4 notes that Indigenous peoples of the Pacific are 
threatened by rising sea levels, diminishing freshwater availability, 
and negative effects to ecosystem services that threaten these 
individuals' health and well-being.
3. Criteria Pollutant and Air Toxics Impacts
    In addition to climate change benefits, this proposed rule would 
also impact emissions of criteria and air toxic pollutants from 
vehicles and from upstream sources (e.g., EGUs and refineries), as 
described in Section VII.A. We discuss near-roadway issues in Section 
VIII.I.3.i and upstream sources in Section VIII.I.3.ii.
i. Near-Roadway Analysis
    In this section, we review existing scholarly literature examining 
the potential for disproportionate exposure among people of color and 
people with low socioeconomic status (SES) living near or attending 
school near major roads. In addition, we provide three analyses: People 
living near roadways using the U.S. Census Bureau's American Housing 
Survey for calendar year 2009, children attending school near roadways 
using the U.S. Department of Education's database of school locations, 
and the analysis of people who live in close proximity to major truck 
routes which also carry light- and medium-duty vehicles, using data 
from the 2010 Decennial Census, the 2012 five-year American Community 
Survey, EPA's population analysis, and U.S. Department of 
Transportation Freight Analysis Framework, version 4.

[[Page 29396]]

    As discussed in Section II.C.7 of this document, concentrations of 
many air pollutants are elevated near high-traffic roadways. Several 
publications report nationwide analyses that compare the 
sociodemographic patterns of people who do or do not live near major 
roadways. Three of these studies found that people living near major 
roadways are more likely to be minorities or low in 
SES.841 842 843 They also found that the outcomes of their 
analyses varied between regions within the U.S. However, only one such 
study looked at whether such conclusions were confounded by living in a 
location with higher population density and how demographics differ 
between locations nationwide.\843\ In general, it found that higher 
density areas have higher proportions of low-income residents and 
people of color. In other publications based on a city, county, or 
state, the results are similar.
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    \841\ Tian, N.; Xue, J.; Barzyk. T.M. (2013) Evaluating 
socioeconomic and racial differences in traffic-related metrics in 
the United States using a GIS approach. J Exposure Sci Environ 
Epidemiol 23: 215-222.
    \842\ Rowangould, G.M. (2013) A census of the U.S. near-roadway 
population: public health and environmental justice considerations. 
Transportation Research Part D; 59-67.
    \843\ CDC (2013) Residential proximity to major highways--United 
States, 2010. Morbidity and Mortality Weekly Report 62(3): 46-50.
---------------------------------------------------------------------------

    Locations in these studies include Los Angeles, CA; Seattle, WA; 
Wayne County, MI; Orange County, FL; and the State of 
California.844 845 846 847 848 849 850 Such disparities may 
be due to multiple factors.851 852 853 854 855
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    \844\ Marshall, J.D. (2008) Environmental inequality: air 
pollution exposures in California's South Coast Air Basin.
    \845\ Su, J.G.; Larson, T.; Gould, T.; Cohen, M.; Buzzelli, M. 
(2010) Transboundary air pollution and environmental justice: 
Vancouver and Seattle compared. GeoJournal 57: 595-608. doi:10.1007/
s10708-009-9269-6.
    \846\ Chakraborty, J.; Zandbergen, P.A. (2007) Children at risk: 
measuring racial/ethnic disparities in potential exposure to air 
pollution at school and home. J Epidemiol Community Health 61: 1074-
1079. doi:10.1136/jech.2006.054130.
    \847\ Green, R.S.; Smorodinsky, S.; Kim, J.J.; McLaughlin, R.; 
Ostro, B. (2004) Proximity of California public schools to busy 
roads. Environ Health Perspect 112: 61-66. Doi:10.1289/ehp.6566.
    \848\ Wu, Y.; Batterman, S.A. (2006) Proximity of schools in 
Detroit, Michigan to automobile and truck traffic. J Exposure Sci & 
Environ Epidemiol. doi:10.1038/sj.jes.7500484.
    \849\ Su, J.G.; Jerrett, M.; de Nazelle, A.; Wolch, J. (2011) 
Does exposure to air pollution in urban parks have socioeconomic, 
racial, or ethnic gradients? Environ Res 111: 319-328.
    \850\ Jones, M.R.; Diez-Roux, A.; Hajat, A.; et al. (2014) Race/
ethnicity, residential segregation, and exposure to ambient air 
pollution: The Multi-Ethnic Study of Atherosclerosis (MESA). Am J 
Public Health 104: 2130-2137. [Online at: https://doi.org/10.2105/AJPH.2014.302135].
    \851\ Depro, B.; Timmins, C. (2008) Mobility and environmental 
equity: do housing choices determine exposure to air pollution? Duke 
University Working Paper.
    \852\ Rothstein, R. The Color of Law: A Forgotten History of How 
Our Government Segregated America. New York: Liveright, 2018.
    \853\ Lane, H.J.; Morello-Frosch, R.; Marshall, J.D.; Apte, J.S. 
(2022) Historical redlining is associated with present-day air 
pollution disparities in US Cities. Environ Sci & Technol Letters 9: 
345-350. DOI: [Online at: https://doi.org/10.1021/acs.estlett.1c01012].
    \854\ Ware, L. (2021) Plessy's legacy: the government's role in 
the development and perpetuation of segregated neighborhoods. RSF: 
The Russel Sage Foundation Journal of the Social Sciences, 7:92-109. 
DOI: DOI: 10.7758/RSF.2021.7.1.06.
    \855\ Archer, D.N. (2020) ``White Men's Roads through Black 
Men's Homes'': advancing racial equity through highway 
reconstruction. Vanderbilt Law Rev 73: 1259.
---------------------------------------------------------------------------

    People with low SES often live in neighborhoods with multiple 
stressors and health risk factors, including reduced health insurance 
coverage rates, higher smoking and drug use rates, limited access to 
fresh food, visible neighborhood violence, and elevated rates of 
obesity and some diseases such as asthma, diabetes, and ischemic heart 
disease. Although questions remain, several studies find stronger 
associations between traffic-related air pollution and health in 
locations with such chronic neighborhood stress, suggesting that 
populations in these areas may be more susceptible to the effects of 
air pollution.856 857 858 859
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    \856\ Clougherty, J.E.; Kubzansky, L.D. (2009) A framework for 
examining social stress and susceptibility to air pollution in 
respiratory health. Environ Health Perspect 117: 1351-1358. 
Doi:10.1289/ehp.0900612.
    \857\ Clougherty, J.E.; Levy, J.I.; Kubzansky, L.D.; Ryan, P.B.; 
Franco Suglia, S.; Jacobson Canner, M.; Wright, R.J. (2007) 
Synergistic effects of traffic-related air pollution and exposure to 
violence on urban asthma etiology. Environ Health Perspect 115: 
1140-1146. doi:10.1289/ehp.9863.
    \858\ Finkelstein, M.M.; Jerrett, M.; DeLuca, P.; Finkelstein, 
N.; Verma, D.K.; Chapman, K.; Sears, M.R. (2003) Relation between 
income, air pollution and mortality: a cohort study. Canadian Med 
Assn J 169: 397-402.
    \859\ Shankardass, K.; McConnell, R.; Jerrett, M.; Milam, J.; 
Richardson, J.; Berhane, K. (2009) Parental stress increases the 
effect of traffic-related air pollution on childhood asthma 
incidence. Proc Natl Acad Sci 106: 12406-12411. doi:10.1073/
pnas.0812910106.
---------------------------------------------------------------------------

    We analyzed several national databases that allowed us to evaluate 
whether homes and schools were located near a major road and whether 
disparities in exposure may be occurring in these environments. The 
American Housing Survey (AHS) includes descriptive statistics of over 
70,000 housing units across the nation. The survey is conducted every 
two years by the U.S. Census Bureau with road locations from the U.S. 
Census Bureau's TIGER database. The second database we analyzed was the 
U.S. Department of Education's Common Core of Data, which includes 
school location, enrollment by race, and the number of students 
eligible for free- and reduced-price school lunch for all public 
elementary and secondary schools and school districts nationwide. The 
third analysis uses data from USDOT's Freight Analysis Framework 4 
(FAF4), in addition to the 2010 Decennial Census and EPA's population 
analysis for the conterminous United States (CONUS).
    In analyzing the 2009 AHS, we focused on whether a housing unit was 
located within 300 feet, the distance provided in the AHS data, of a 
``4-or-more lane highway, railroad, or airport.'' We analyzed whether 
there were differences between households in such locations compared 
with those in locations farther from these transportation facilities. 
We included other variables, such as land use category, region of 
country, and housing type. We found that homes with a non-White 
householder were 22-34 percent more likely to be located within 300 
feet of these large transportation facilities than homes with White 
householders. Homes with a Hispanic householder were 17-33 percent more 
likely to be located within 300 feet of these large transportation 
facilities than homes with non-Hispanic householders. Households near 
large transportation facilities were, on average, lower in income and 
educational attainment and more likely to be a rental property and 
located in an urban area compared with households more distant from 
transportation facilities.
    We examined the Common Core of Data from the U.S. Department of 
Education, to evaluate whether children who attend school in proximity 
to major roads are disproportionately represented by students of color 
or low SES students. To determine school proximities to major roadways, 
we used a geographic information system (GIS) to map each school and 
roadways based on the U.S. Census's TIGER roadway file. We found that 
students of color were overrepresented at schools within 200 meters of 
the largest roadways, and schools within 200 meters of the largest 
roadways had higher than expected numbers of students eligible for free 
or reduced-price lunches. For example, Black students represent 22 
percent of students at schools located within 200 meters of a primary 
road, compared to 17 percent of students in all U.S. schools. Hispanic 
students represent 30 percent of students at schools located within 200 
meters of a primary road, compared to 22 percent of students in all 
U.S. schools. In extended analyses of this data set, we found that 
students of

[[Page 29397]]

color from nearly every race are more likely to attend school within 
200 meters of the largest roads as compared with White students.\860\ 
For example, American Indian/Alaska Native, Asian/Pacific Islander, 
Black, Hispanic, and multiracial students are at least 75 percent more 
likely than White students to attend school near primary roads, such as 
limited-access highways.\861\ Students eligible for free or reduced-
price lunches are also more likely to attend schools near major roads. 
The schools where we observed disparities of race and SES were mostly 
found in cities and large suburbs.
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    \860\ U.S. EPA (2023) Extended Analyses of Students Attending 
Schools within 200 Meters of U.S. Primary and Secondary Roads. 
Memorandum to docket.
    \861\ These racial groups are those reported in reference 860.
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    As described in Section II.C.8 of this Preamble, we recently 
conducted an analysis of the populations within the CONUS living in 
close proximity to FAF4 roads, which include many large highways and 
other routes where light- and medium-duty vehicles operate. Relative to 
the rest of the population, people living near these FAF4 roads are 
more likely to be people of color and have lower incomes than the 
general population. People living near FAF4 roads are also more likely 
to live in metropolitan areas. Even controlling for region of the 
country, county characteristics, population density, and household 
structure, race, ethnicity, and income are significant determinants of 
whether someone lives near a FAF4 road. Overall, there is substantial 
evidence that people who live or attend school near major roadways are 
more likely to be of a non-White race, Hispanic, and/or have a low SES. 
We expect communities near roads will benefit from the reduced tailpipe 
emissions of PM, NOX, SO2, NMOG, CO, and mobile 
source air toxics from light- and medium-duty vehicles in this 
proposal. EPA is considering how to better estimate the near-roadway 
air quality impacts of its regulatory actions and how those impacts are 
distributed across populations. EPA requests comment on the EJ analysis 
presented in this proposal.
ii. Upstream Source Impacts
    In general, we expect that increases in emissions from EGUs and 
decreases in petroleum-sector emissions would lead to changes in 
exposure to criteria pollutants for people living in the communities 
near these facilities. Analyses of communities in close proximity to 
EGUs have found that a higher percentage of communities of color and 
low-income communities live near these sources when compared to 
national averages.\862\ Analysis of populations near refineries also 
indicates there may be potential disparities in pollution-related 
health risk from that source.\863\
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    \862\ See 80 FR 64662, 64915-64916 (October 23, 2015).
    \863\ U.S. EPA (2014). Risk and Technology Review--Analysis of 
Socio-Economic Factors for Populations Living Near Petroleum 
Refineries. Office of Air Quality Planning and Standards, Research 
Triangle Park, North Carolina. January.
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J. Additional Non-Monetized Considerations Associated With Benefits and 
Costs: Energy Efficiency Gap

    The topic of the ``energy paradox'' or ``energy efficiency gap'' 
has been extensively discussed in many previous vehicle GHG standards' 
analyses.\864\ The idea of the energy efficiency gap is that existing 
technologies that reduce fuel consumption enough to pay for themselves 
in short periods were not widely adopted, even though conventional 
economic principles suggest that because the benefits to vehicle buyers 
would outweigh the costs to those buyers of the new technologies, 
automakers would provide them and people would buy them. However, as 
described in previous EPA GHG vehicle rules (most recently in the 2021 
rule) engineering analyses identified technologies, such as downsized-
turbocharged engines, gasoline direct injection, and improved 
aerodynamics, where the additional cost of the technology is quickly 
covered by the fuel savings it provides, but they were not widely 
adopted until after the issuance of EPA vehicle standards. As explained 
in detail in previous rulemakings, research suggests the presence of 
fuel-saving technologies does not lead to adverse effects on other 
vehicle attributes, such as performance and noise. Additionally, 
research shows that there are technologies that exist that provide 
improvements in both performance and fuel economy, or at least in 
improved fuel economy without hindering performance.
---------------------------------------------------------------------------

    \864\ For two of the most recent examples, see 86 FR 74434, 
December 30, 2021, ``Revised 2023 and Later Model Year Light-Duty 
Vehicle Greenhouse Gas Emissions Standards'' and 85 FR 24174, April 
30, 2020, ``The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule 
for Model Years 2021-2026 Passenger Cars and Light Trucks.''
---------------------------------------------------------------------------

    There are a number of hypotheses in the literature that attempt to 
explain the existence of the energy efficiency gap, including both 
consumer and producer side reasons.\865\ For example, some researchers 
posit that consumers take up-front costs into account in purchase 
decisions more than future fuel savings, consumers may not fully 
understand potential cost savings, or they may not prioritize fuel 
consumption in their set of important attributes when starting the 
vehicle purchase process. On the producer side, explanations include 
the reasons related to large, fixed costs in switching to new 
technologies, or the uncertainty involved in technological innovation 
and adoption.
---------------------------------------------------------------------------

    \865\ Note that the literature surrounding the energy efficiency 
gap in LD vehicles is based on historical data, which is focused on 
ICE vehicles.
---------------------------------------------------------------------------

    Part of the uncertainty surrounding the existence or reason behind 
the energy efficiency gap is that most of the technology applied to 
existing ICE vehicles that may have created possible unaccounted for 
effects was ``invisible.'' This is for a few reasons, including that 
the technology itself was not something the mainstream consumer would 
know about, or because it was applied to a vehicle at the same time as 
multiple other changes, therefore making it unclear to the consumer 
what changes in vehicle attributes, if any, could be attributed to a 
specific technology. Though there may still exist a slight gap in ICE 
vehicle purchases due to this uncertainty, it becomes less and less of 
an issue with the growing share of electric vehicles in the market, and 
changes in vehicle attributes due to the new technology are clearer. 
For more information, see DRIA Chapter 4.4.

IX. Consideration of Potential Fuels Controls for a Future Rulemaking

    The emissions standards for new vehicles (MY 2027 and later) 
proposed in this rule would achieve significant air quality benefits. 
However, there is an opportunity to further address PM emissions from 
the existing vehicle fleet, the millions of vehicles produced during 
the phase-in period, as well as nonroad engines, through changes in 
market fuel composition. Given the current population of vehicles and 
nonroad equipment, we expect that tens of millions of gasoline-powered 
sources will remain in use well into the 2030s.866 867 
Although EPA has not undertaken sufficient analysis to propose changes 
to fuel requirements under CAA section 211(c) in this rulemaking, and 
considers such changes beyond the scope of this rulemaking, EPA has 
begun to consider the possibility of such changes and in this section, 
EPA requests comments on aspects of a possible future rulemaking aimed 
at further PM emission

[[Page 29398]]

reductions from these sources via gasoline fuel property standards. 
Such future fuel standards could be an important complement to EPA's 
proposed vehicle PM standards.
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    \866\ USEPA, ``Population and Activity of Onroad Vehicles,'' 
November 2020. Document EPA-420-R-20-023.
    \867\ USEPA, ``Nonroad Engine Population Growth Estimated in 
MOVES2014b,'' July 2018. Document EPA-420-R-18-010.
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A. Impacts of High-Boiling Components on Emissions

    Numerous emission studies have associated high-boiling compounds in 
gasoline with increased tailpipe PM emissions.868 869 In 
addition, analysis of a large number of market fuel samples has shown 
that the high-boiling tail of gasoline contains a high proportion of 
aromatics, and that the heaviest few percent of this material has very 
high leverage on PM emissions.870 871 872 873 The 
combination of these facts underlies the rest of our discussion, 
specifically the ability to use high boiling point as a surrogate for 
heavy aromatic content and the high leverage such compounds have on PM 
emissions from gasoline vehicles and equipment.
---------------------------------------------------------------------------

    \868\ Coordinating Research Council, ``Evaluation and 
Investigation of Fuel Effects on Gaseous and Particulate Emissions 
on SIDI In-Use Vehicles,'' Report No. E-94-2, March 2016.
    \869\ USEPA ``Assessing the Effect of Five Gasoline Properties 
on Exhaust Emissions from Light-Duty Vehicles Certified to Tier 2 
Standards: Analysis of Data from EPAct Phase 3 (EPAct/V2/E-89),'' 
April 2013. Document EPA-420-R-13-002.
    \870\ Chapman E., Winston-Galant M., Geng P., Latigo R., Boehman 
A., ``Alternative Fuel Property Correlations to the Honda 
Particulate Matter Index (PMI),'' SAE Technical Paper 2016-01-2550, 
2016.
    \871\ Ben Amara A., Tahtouh T., Ubrich E., Starck L., Moriya H., 
Iida J., Koji N., ``Critical Analysis of PM Index and Other Fuel 
Indices: Impact of Gasoline Fuel Volatility and Chemical 
Composition,'' SAE Technical Paper 2018-01-1741, 2018.
    \872\ Sobotowski R.A., Butler A.D., Guerra Z., ``A Pilot Study 
of Fuel Impacts on PM Emissions from Light-duty Gasoline Vehicles,'' 
SAE Int. J. Fuels Lubr. 8(1):2015.
    \873\ Aikawa, K., Sakurai K., Jetter J.J., ``Development of a 
Predictive Model for Gasoline Vehicle Particulate Matter 
Emissions,'' SAE Technical Paper 2010-01-2115, 2010.
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1. Predictive Fuel Parameters
    Historically, PM emission predictors have been focused on total 
aromatics (e.g., from ASTM method D1319) and heavy-end distillation 
parameters from ASTM D86, such as T90.874 875 The T90 
parameter refers to the temperature at which 90 volume percent of the 
gasoline sample has been distilled. It has been used for decades as a 
simple measure of the boiling range of the heaviest 10 percent of the 
fuel, or essentially how much high-boiling material is present. For 
example, in the EPAct study results published by EPA in 2013, aromatics 
content and T90 were found to be statistically significant predictors 
of PM emissions across a large set of fuels and vehicles.\876\
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    \874\ Reference to ASTM D86, D1319, etc.
    \875\ Coordinating Research Council, ``An Improved Index for 
Particulate Matter Emissions (PME),'' Report No. RW-107-2, March 
2021.
    \876\ USEPA ``Assessing the Effect of Five Gasoline Properties 
on Exhaust Emissions from Light-Duty Vehicles Certified to Tier 2 
Standards: Analysis of Data from EPAct Phase 3 (EPAct/V2/E-89),'' 
April 2013. Document EPA-420-R-13-002.
---------------------------------------------------------------------------

    The PM Index (PMI) parameter, first described in a 2010 
publication, combines detailed fuel composition data (from ASTM D6730) 
with volatility and structural characteristics for all compounds 
identified in the fuel to predict its relative propensity to form 
PM.\877\ The PMI and its variants have been shown to be the most robust 
type of fuel-based PM predictor to date, and illustrate that a small 
proportion of low-volatility aromatics in gasoline are responsible for 
a large share of PM emissions.\878\ PMI has been used in several 
emission studies and modeling analyses correlating fuel parameters to 
PM,879 880 and our assessment of potential impacts of fuel 
formulation changes on PM emission inventories, presented in Section 
IX.7, rely heavily on PMI. However, the detailed fuel hydrocarbon 
analysis required to calculate PMI is costly and time-consuming. 
Therefore, it would be impractical to set PMI standards for market 
gasoline. We discuss alternative fuel parameters that could serve as an 
effective surrogate for PMI in Section IX.E.
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    \877\ Aikawa, K., Sakurai K., Jetter J.J., ``Development of a 
Predictive Model for Gasoline Vehicle Particulate Matter 
Emissions,'' SAE Technical Paper 2010-01-2115, 2010.
    \878\ Coordinating Research Council, ``An Improved Index for 
Particulate Matter Emissions (PME),'' Report No. RW-107-2, March 
2021.
    \879\ Butler A.D., Sobotowski R.A., Hoffman G.J., and Machiele, 
P., ``Influence of Fuel PM Index and Ethanol Content on Particulate 
Emissions from Light-Duty Gasoline Vehicles,'' SAE Technical Paper 
2015-01-1072, 2015.
    \880\ Coordinating Research Council, ``Alternative Oxygenate 
Effects on Emissions,'' Report No. E-129-2, October 2022.
---------------------------------------------------------------------------

2. Onroad Emissions Impacts
    We considered three large studies spanning a range of vehicle 
technologies to provide a quantitative estimate of the impact of PMI on 
PM emissions. The first is the EPAct/V2/E-89 study designed by EPA, 
CRC, and DOE/NREL and published in 2013, where 27 gasoline blends were 
tested in 15 vehicles from the 2008 model year.\881\ These results 
reflect the performance of port-fuel-injected vehicles meeting the 
light duty Tier 2 emissions standards. While PMI was not originally a 
design parameter of the study, ASTM D6729 data was generated after test 
fuel production, which allowed the PMI analysis to be done later. 
During test fuel development, the distribution of C7/C8/C9/C10+ 
aromatics was controlled across the test fuels to uniform ratios 
approximating what is found in market fuel surveys. The test fuels 
spanned a PMI range of 0.7 to 2.2, and the study results indicate a 
change in PMI of 1 percent produces a PM emissions change of 
approximately 1 percent. PMI ranges for market fuels are shown in 
Section IX.B.2.
---------------------------------------------------------------------------

    \881\ USEPA ``Assessing the Effect of Five Gasoline Properties 
on Exhaust Emissions from Light-Duty Vehicles Certified to Tier 2 
Standards: Analysis of Data from EPAct Phase 3 (EPAct/V2/E-89),'' 
April 2013. Document EPA-420-R-13-002.
---------------------------------------------------------------------------

    A second study providing relevant PM vs PMI data is CRC E-94-2, 
published in 2018.\882\ Researchers tested 16 light duty vehicles 
spanning model years 2013-2017 and a range of engine technologies using 
eight fuels varying in PMI, ethanol, and anti-knock index (AKI, also 
called octane) level. These results showed a change in PM emissions of 
approximately 2 percent per 1 percent PMI over the range of 1.4 to 2.4 
PMI.
---------------------------------------------------------------------------

    \882\ Coordinating Research Council, ``Evaluation and 
Investigation of Fuel Effects on Gaseous and Particulate Emissions 
on SIDI In-Use Vehicles,'' Report No. E-94-2, March 2016.
---------------------------------------------------------------------------

    A third and more recent study was jointly conducted by EPA, 
Environment and Climate Change Canada, and several automakers.\883\ Ten 
high-sales vehicles of model years 2015-2022 were tested in the 
participants' labs using five test fuels spanning a PMI range of 1.5 to 
2.4. This study was designed to assess the emissions impact of 
replacing a small portion of heavy aromatics in a high-PMI gasoline 
with alternative high-octane blendstocks (light aromatics, 
isoparaffins, and ethanol), which are the types of changes we would 
expect to occur if fuel producers need to comply with a new PMI limit. 
Aromatics profiles and other key parameters were carefully designed to 
represent market fuels. Results showed a change in PM emissions of 
approximately 1.5 percent for each 1 percent change in PMI over the 
full span of the study fuels, which falls between the results of the 
two earlier studies described here. Taken together these three studies 
suggest a range of 1-2 percent PM emissions increase for each percent 
PMI increase.
---------------------------------------------------------------------------

    \883\ USEPA, ``Exhaust Emission Impacts of Replacing Heavy 
Aromatic Hydrocarbons in Gasoline with Alternate Octane Sources,'' 
April 2023. Document EPA-420-R-23-008.
---------------------------------------------------------------------------

3. Nonroad Emissions Impacts
    A literature review for fuel impacts on nonroad gasoline engine 
(NRGE) emissions finds relatively few studies, and we are not aware of 
any that have specifically assessed effects of heavy

[[Page 29399]]

aromatics or high-boiling compounds on PM emissions. Work published in 
2005 and 2006 examined small NRGE emissions on two fuels, one being a 
gasoline with T90, aromatics, and oxygen content typical of market fuel 
at that time, and the other an alkylate test fuel with no aromatics and 
significantly lower T90.884, 885 For a 4-stroke engine, the 
results showed the alkylate fuel reduced PM by 28 percent to 59 
percent, depending on the output power level. This type of engine is 
commonly found in larger portable equipment like lawnmowers, gensets, 
and plate compactors. The study also tested a 2-stroke engine, a design 
that has historically powered handheld devices like chainsaws and 
string trimmers. These are fueled by gasoline mixed with a small amount 
of lubricating oil, and as a result, have much higher emissions of PM 
and unburned hydrocarbons than 4-stroke engines (where oil is not 
involved in combustion). In the 2-stroke engine, the alkylate fuel 
reduced PM by 10 percent at a single, high-load test point. Overall, 
this engine had PM emissions roughly 100 times higher than the 4-
stroke.
---------------------------------------------------------------------------

    \884\ Timo [Aring]lander, Eero Antikainen, Taisto Raunemaa, Esa 
Elonen, Aimo Rautiola & Keijo Torkkell (2005) Particle Emissions 
from a Small Two-Stroke Engine: Effects of Fuel, Lubricating Oil, 
and Exhaust Aftertreatment on Particle Characteristics, Aerosol 
Science and Technology, 39:2, 151-161.
    \885\ Timo [Aring]lander. Carbon Composition and Volatility 
Characteristics of the Aerosol Particles Formed in Internal 
Combustion Engines. Kuopio Univ. Publ. C. Nat. and Environ. Sci. 
192: 1-54 (2006).
---------------------------------------------------------------------------

    Sensitivity of PM emissions in NRGEs to fuel properties like 
aromatics content and T90 suggests that the fundamental mechanisms of 
particle formation described in the literature (e.g., nucleation and 
growth arising from diffusion flames) is universal to gasoline 
combustion.886 887 Thus, we expect the effects of PMI 
observed in onroad vehicle studies to be broadly applicable to 4-stroke 
NRGEs. In addition, most nonroad engines rely on carburetors for fuel 
metering and in the absence of air-fuel-ratio feedback control tend to 
be calibrated to run with slightly over-fueled combustion to optimize 
power output and limit exhaust temperatures. This type of operation 
produces higher emissions related to incomplete combustion, including 
PM, and thus we might expect a significant impact of PMI. It is less 
clear how a reduction in PMI will affect emissions from 2-stroke 
gasoline engines, given their use of a fuel-oil mixture. We will be 
collecting additional data on the effects of PMI on NRGEs, and request 
comment on other data sources that may be relevant.
---------------------------------------------------------------------------

    \886\ Das D.D., St. John P.C., McEnally C.S., Kim S., Pfefferle 
L.D., ``Measuring and Predicting Sooting Tendencies of Oxygenates, 
Alkanes, Alkenes, Cycloalkenes, and Aromatics on a Unified Scale,'' 
Combustion and Flame 190 (2018) 349-364.
    \887\ Calcote, H.F., Manos D.M., ``Effect of Molecular Structure 
on Incipient Soot Formation,'' Combust. Flame 49: 289-304 (1983).
---------------------------------------------------------------------------

B. Survey of High-Boiling Materials in Market Gasoline

    Data on high-boiling materials (e.g., in compliance data and other 
surveys) has historically been reported in terms of T90 from ASTM D86. 
This section discusses our assessment of the trends of T90 data over 
the past two decades, followed by a summary of available data for PMI.
1. T90 Levels
    Figure 40 shows T90 trends by season over the past two decades. On 
an annual-average basis, the T90 of U.S. gasoline declined from around 
325 [deg]F prior to 2010 to around 315 [deg]F after 2010.
[GRAPHIC] [TIFF OMITTED] TP05MY23.044

    In any given year, there is significant variation in T90 levels 
across refineries, as well as between batches within each refinery. 
Thus, while the volume-weighted average T90 of U.S. gasoline was 313 
[deg]F in 2019, Figure 41 shows that the ranges for individual 
refineries ranged from 280 [deg]F to 340 [deg]F in 2019, and that 
individual gasoline batches could have much higher T90.

[[Page 29400]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.045

    A common thread across the market shifts in T90 has been a 
decreasing gasoline-to-distillate ratio (GDR) in the product slates 
produced by refineries. Changes in demand for gasoline relative to 
distillate products changes how refiners blend up their refinery 
streams. To accommodate a downward shift in GDR, the simplest process 
adjustment refiners can make is to undercut some heavy material from 
the gasoline blendstocks into diesel products. This has the effect of 
reducing the T90 of gasoline, consistent with the historical trends 
over the past two decades. Perhaps the most important factor affecting 
GDR was the influx of ethanol into gasoline. The increasing ethanol 
volume displaced a portion of petroleum, which caused refiners to move 
more of the midrange gasoline cut into the distillate pool. Ethanol's 
octane also allowed refiners to back out aromatic content. A second 
factor causing lower T90 values was the Tier 2 program, which reduced 
gasoline sulfur levels. Because some of the heavy gasoline blendstocks 
are high in sulfur, moving them into the distillate pool helped 
refiners comply with the gasoline sulfur standards and reduced T90 
values at the same time. A third factor may have been the changes in 
U.S. crude slates as fracked oil came online after 2010. Fracked crudes 
tend to have lower density and less heavy material, which results in a 
lighter gasoline.
    Figure 40 also shows seasonal variation, with winter T90 values 
around 8 degrees lower on average than summer. GDR is lower in the 
winter due to lower demand for gasoline and an increase in heating oil 
product demand. Another factor is higher gasoline volatility limits 
(i.e., RVP) in the winter allowing refiners to blend more butanes and 
pentanes into gasoline, which displaces heavier blendstocks 
proportionally.
    Any potential future gasoline standard that might place limits on 
high-boiling and/or heavy aromatic content of gasoline should then be 
placed in the context of future changes in gasoline production and the 
GDR. Looking at domestic petroleum consumption projections in EIA's 
2022 Annual Energy Outlook, we would expect the GDR to decline by 
roughly 10 percent over the next two decades. This is not surprising, 
given that the decline in gasoline demand with electrification of 
light-duty and medium-duty vehicles and consumer nonroad equipment is 
expected to be faster than the decline in diesel demand for heavy duty 
trucks and equipment.\888\ To the extent that U.S. refinery production 
shifts along with U.S. market demand, then the T90 level of gasoline 
would be expected to continue to decline in the future as well. 
However, fuel production is also significantly affected by imports and 
exports. We can assume refiners will continue to try to maintain or 
expand export markets as much as possible. For these reasons, we would 
not expect significant reductions below the current production GDR of 
1.4 for a decade or more, and thus despite significant reductions in 
T90 levels over the last decade, the GDR would be expected to remain 
fairly constant in the future.
---------------------------------------------------------------------------

    \888\ Root, T. (2021, June 30). ``Lawn care is going electric. 
And the revolution is here to stay.'' The Washington Post. Retrieved 
from https://www.washingtonpost.com/climate-solutions/2021/06/30/electric-lawn-care/ on 12/15/2022.
---------------------------------------------------------------------------

2. PMI Profile of Market Gasoline
    Figure 42 shows the distribution of PMI now and roughly a decade 
ago. Given our assessment of T90 levels over time, it is not surprising 
to see a reduction in the median PMI of market gasoline. Regardless of 
this downward shift, the median PMI of market gasoline is nearly 1.6, 
and roughly 10 percent of gasoline remains above a PMI of 2.0. Thus, 
there remains considerable opportunity to reduce PM emissions by 
bringing PMI levels down, particularly in areas with the highest PMIs.

[[Page 29401]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.046

    The specification for Tier 3 certification test gasoline includes a 
range for heavy (C10+) aromatics, which, along with the other 
specifications, results in a PMI value in the range of 1.6-1.7. This 
mirrors the median level in recent market surveys, though market fuels 
contain a wider range of compounds. Depending on the level of a 
potential limit on heavy material or PMI, the specifications for 
certification gasoline may nor may not need to be adjusted.

C. Sources of High-Boiling Compounds in Gasoline Production and How 
Reductions Might Occur

1. Refinery Units and Processes
    There are primarily three refinery units that contribute high-
boiling material to gasoline: The fluidized catalytic cracker (FCC), 
reformer, and coker. The FCC unit breaks down heavy crude fractions 
into lighter material spanning a wide boiling range, after which it is 
separated by distillation into the gasoline, diesel, and fuel oil 
product pools. The FCC produces the largest share of gasoline volume in 
most refineries, and for those processing highly aromatic crudes, the 
FCC can be a significant source of heavy aromatics. Lowering the 
boiling range of FCC output going into gasoline is likely to be the 
simplest way to reduce high-boiling material. Refiners commonly shift 
mid-boiling FCC output between gasoline and diesel seasonally to match 
product volume demands (see Section IX.C).
    The reformer is typically the primary source of aromatics in a 
refinery's gasoline, including high-boiling aromatic material. This 
unit's purpose is to increase the octane of naphtha streams by 
converting paraffinic material into aromatics. The reformer output 
(reformate) may contain several percent of high-boiling alkylbenzenes 
and bi-cyclic compounds, depending on its operating conditions and the 
boiling range of the feed naphtha. Except for possible removal of light 
reformate to control gasoline benzene levels, all reformer output is 
typically routed to the gasoline pool. Thus, the simplest ways to 
reduce heavy aromatics in reformate are likely to be lowering the 
boiling range of the feed naphtha and/or reducing the severity (i.e., 
target octane) of the output.
    Refineries that process heavy crudes often have coker units, which 
are a type of cracking unit used to break down very heavy distillation 
residues. The coker output is typically hydrotreated to produce a 
stable naphtha. Depending on its boiling range and octane level, this 
material may be blended into gasoline, diesel, or sent to the reformer. 
Thus, the aromatic content and boiling range of the coker naphtha may 
also be a consideration for a refiner trying to reduce heavy aromatics 
in gasoline.
    We reviewed gasoline aromatics and T90 values from refinery batch 
data, as well as public information on which types of chemical 
processing units are present in those refineries. This analysis 
suggested two refinery configurations that are likely to result in more 
heavy aromatics in gasoline. Refineries with coker units tend to have 
higher T90 levels, and because the coker cracks heavy aromatic material 
into the gasoline boiling range, we expect these refineries to produce 
higher-PMI gasoline. Second, are refineries with aromatic extraction 
units, which are used to produce benzene, toluene, and xylenes for sale 
as petrochemicals. These refineries are expected to run their reformers 
at increased severity to produce more aromatics overall. After 
extraction of the valuable light aromatics, we expect a higher 
proportion of heavy aromatics will remain to meet octane requirements 
of their gasoline output.
2. Value of Aromatics for Octane Requirements
    Reducing the content of high-boiling compounds in gasoline is made 
more complicated by the need to meet market octane requirements since 
these are generally aromatic-rich streams. Because of their high octane 
(>110 AKI), aromatics are among the most valuable compounds produced in 
refineries. If heavy aromatics were to be removed from gasoline, then 
not only their volume, but their octane would have to be replaced. One 
source for additional octane is via increased reformer severity or 
throughput to generate additional light aromatics. This action may 
require other adjustments to maintain compliance with gasoline benzene 
standards or rebalance naphtha streams. A refinery may also be able to 
increase high-octane isoparaffin production through additional 
alkylation and/or isomerization operations. Finally, a

[[Page 29402]]

refinery may opt to further increase reliance on ethanol as a source of 
octane. We seek comment and data on how refinery operations might 
change with a limit on heavy aromatics and/or other high boiling 
gasoline components.

D. Methods of Compliance Determination

    Distillation by ASTM D86 has been part of EPA's gasoline compliance 
methods since the 1990s. As such, the equipment and expertise to run 
the method are widespread. An assessment of the correlation between PMI 
and four D86 distillation parameters (T70-T95) shows that T90 has the 
best correlation with PMI, but with only a modest correlation 
coefficient.\889\ The results also indicate that a T90 limit of 330 
[deg]F, for example, would permit fuels with PMI over 2.3 in the market 
while prohibiting some others with PMI less than 2. A comparison of D86 
results with those of DHA (such as ASTM D6730) illustrate that ASTM D86 
does a relatively poor job of separating compounds by volatility and 
underestimates the final boiling point of the heavy tail.\890\ These 
analyses indicate that ASTM D86 may lack the needed precision for PMI 
control.
---------------------------------------------------------------------------

    \889\ See Docket Memo from Aron Butler, ``Supplemental 
Information Related to Potential Fuels Controls for Gasoline PM'', 
docket ID #EPA-HQ-OAR-2022-0829.
    \890\ Sobotowski, R., Butler, A., Loftis, K., and Wyborny, L., 
``A Method of Assessing and Reducing the Impact of Heavy Gasoline 
Fractions on Particulate Matter Emissions from Light-Duty 
Vehicles,'' SAE Int. J. Fuels Lubr. 15(3):2022. See Figure 4b.
---------------------------------------------------------------------------

    Setting a standard for PMI itself would be ideal but quantifying 
the PMI of a fuel requires results from a DHA method such as ASTM 
D6730. This method runs for 2-3 hours and produces a chromatograph that 
must be interpreted by an experienced analyst, making it difficult to 
standardize and automate. There are a few alternative ASTM 
chromatography methods that are simpler and faster to run than DHA, 
which we believe may be better candidates for a PMI surrogate. ASTM 
D8071 uses a vacuum-UV (VUV) light source detector to produce results 
by molecular type and carbon number in about 35 minutes. It doesn't 
quantify individual species but is still useful for producing a good 
estimate of PMI without requiring the same analytical experience from 
the operator as ASTM D6730. However, it is relatively new and 
unfamiliar to many petroleum labs, and there isn't much VUV data on 
market fuels for use in correlating to PMI. Another method is ASTM 
D5769, which gives results for a range of aromatics species, but does 
not quantify other heavy material in the tail.
    The most promising alternative is simulated distillation (SimDis) 
by ASTM D7096. Unlike ASTM D6730 or D8071, this method does not 
separate the constituents by molecular type but produces a profile of 
mass by boiling point that is sufficiently precise to quantify the 
heavy tail of a fuel sample. Given the data showing that the heavy tail 
of market gasoline is highly aromatic, this method can act as a 
promising surrogate for PMI. SimDis was developed in the 1980s to 
quickly assess the boiling point range of petroleum samples and has 
been in use in refinery process control for many years. In a lab 
setting, ASTM D7096 runs in about 15 minutes and can easily be 
incorporated into an automated workflow. Collaborative work between 
EPA, national lab, and auto industry partners over the past year has 
produced data evaluating the reproducibility ASTM D7096.\891\ We 
believe those results support the potential use of this method for 
demonstrating compliance with a limit on high-boiling point compounds. 
We request comment on the suitability of these methods for compliance 
determination.
---------------------------------------------------------------------------

    \891\ USEPA, ``Assessment and Optimization of ASTM D7096 
Simulated Distillation for Quantifying Heavy Hydrocarbons in 
Gasoline,'' April 2023. Document EPA-420-R-23-009.
---------------------------------------------------------------------------

E. Structure and Costs of Standards

1. Statutory Authority
    Section 211(c)(1)(A) of the CAA provides EPA broad authority to 
issue or revise regulations controlling fuel or fuel additives that 
cause or contribute to air pollution. This authority could be used to 
limit high-boiling aromatics on the basis that they contribute to PM 
emissions that endanger public health. It is worth noting that CAA 
section 211(c)(1)(A) requires the Administrator to consider other 
technologically or economically feasible means of achieving emissions 
standards under section 202. While the vehicle standards proposed in 
this notice under CAA section 202 authority would be very effective at 
controlling particular emissions from new vehicles, they would not 
address or be capable of addressing the in-use fleet. Other than 
potential controls on the heavy aromatic content of gasoline, EPA is 
not aware of any other practical means of significantly reducing PM 
emissions from the existing fleet. Past gasoline and diesel sulfur 
standards were put in place in part using CAA 211(c)(1)(A) authority to 
address the in-use fleet.892 893 We request comment on the 
appropriateness of EPA exercising these authorities to set limits on 
heavy aromatics and other high-boiling material in gasoline.
---------------------------------------------------------------------------

    \892\ 72 FR 8428 (Feb. 26, 2007), ``Final Rule for Control of 
Hazardous Air Pollutants from Mobile Sources''.
    \893\ The gasoline and diesel standards were also put in place 
using 211(c)(1)(B) authority to enable vehicle emission control 
systems.
---------------------------------------------------------------------------

2. Structure and Level of the Standard
    We believe significant air quality improvements would be achieved 
through a fuel standard that would eliminate market gasoline with high 
PMI levels (e.g., >2) and reduce the amount of heavy aromatics in 
gasoline overall. Such a regulatory program could be structured in a 
number of ways. Options include a per-gallon cap, a national annual 
average standard implemented along with an averaging, banking, and 
trading program (ABT), a facility maximum annual average standard, or 
some combination of these. A per-gallon cap would be the simplest form 
of control and the easiest to enforce. It would also guarantee that the 
benefits of the program are achieved in all areas of the country at all 
times and that gasoline is more uniform in quality. However, a per-
gallon cap could also reduce flexibility for issues that arise in the 
course of gasoline production and thus carries greater potential for 
causing supply disruptions.
    A national annual average standard would provide maximum 
flexibility for refiners, avoiding compliance issues during facility 
start-up/shutdown and maintenance periods that might disrupt gasoline 
supply. However, a national average standard could also increase 
regulatory burden associated with testing, recordkeeping, and 
reporting, because compliance determination requires tracking 
historical fuel batch data as well as credit balances. It may also fail 
to provide benefits in high-PMI areas where ongoing credit use is a 
long-term compliance strategy.
    The gasoline benzene standard is an example of a hybrid 
approach.\894\ It has a national average standard (0.62 volume percent) 
with ABT plus a maximum annual average for each production facility 
(1.3 volume percent without use of credits). It resulted in large 
reductions in average benzene levels across the country, while limiting 
the potential for locally-elevated exposures of people living in areas 
where high-benzene gasoline from a particular production facility would

[[Page 29403]]

regularly be sold. Some type of a per-gallon cap or maximum facility 
average in addition to a national average may be similarly appropriate 
for PMI control.
---------------------------------------------------------------------------

    \894\ 72 FR 8428 (Feb. 26, 2007), ``Final Rule for Control of 
Hazardous Air Pollutants from Mobile Sources''.
---------------------------------------------------------------------------

    Another reason to consider a more stringent upper limit on PMI is 
related to low-speed pre-ignition (LSPI), a type of abnormal combustion 
that causes a spike in cylinder pressure (known as knock) that can 
damage the engine over time. As vehicle manufacturers have moved toward 
turbocharged, downsized engines for increased fuel economy and reduced 
GHG emissions, LSPI has become a significant design limitation and 
there is evidence that higher-PMI fuels increase the likelihood of LSPI 
events.\895\ We request comment on the impact of PMI on engine design 
and efficiency.
---------------------------------------------------------------------------

    \895\ Swarts, A., and Kalaskar, V., ``Market Fuel Effects on Low 
Speed Preignition,'' SAE Int J Adv & Curr Prac in Mobility 
3(5):2473-2483, 2021.
---------------------------------------------------------------------------

    Of course, we understand that it may be difficult to comment on the 
various structures for a standard without having some idea of what the 
stringency of the standard might be. Their viability is in large part a 
function of the level of the standard. We do not have specific 
proposals at this time for the level of stringency associated with the 
various structures, but we offer the following as an example to help 
elucidate EPA's early thinking, which we hope will facilitate public 
comment. Were we to establish a facility maximum annual average SimDis 
T99 limit, 450 [deg]F might be appropriate for preventing locally 
elevated PMI, while a national annual average T99 limit of 425 [deg]F 
would provide PMI reductions in many areas and protection from 
potential PMI increases if crude or product slates change in the 
future. These T99 standards would allow 1 volume percent of a gasoline 
sample to exceed the specified temperature. We discuss this analysis in 
more detail in the cost and PM impacts discussion in the following 
section. A standard could also be set in terms of T98 or T97, which 
would allow 2 or 3 volume percent above the specified temperature, 
though reducing the T-number of the standard would introduce more 
uncertainty about how much high-PMI material remains in a complying 
batch.
    In addition, we may consider setting seasonal standards for a 
couple of reasons. One is that gasoline has lower T90 and PMI in 
winter, so a refiner may produce relatively high PMI gasoline in summer 
but still comply with an annual average standard via a large shift in 
winter to undercutting heavy material into distillate products. Another 
reason is that PM emissions from gasoline vehicles are higher at cold 
temperatures.\896\ We are collecting additional data on the effect of 
PMI on emissions at cold temperatures to assess the potential 
effectiveness of reducing wintertime PM emissions through a fuel 
control. We seek comment on the most appropriate structure and level of 
the standard, including annual averaging, caps, and the need for 
seasonal limits.
---------------------------------------------------------------------------

    \896\ Edward Nam, Sandeep Kishan, Richard W. Baldauf, Carl R. 
Fulper, Michael Sabisch, and James Warila. ``Temperature Effects on 
Particulate Matter Emissions from Light-Duty, Gasoline-Powered Motor 
Vehicles.'' Environmental Science & Technology 2010 44 (12), 4672-
4677.
---------------------------------------------------------------------------

3. Cost and Impacts on Refining
    Much of the material that comprises the heavy tail of gasoline, 
including aromatics that increase PMI, comes from a midrange ``swing 
cut'' of FCC naphtha that can be blended either into the heavy part of 
gasoline or the light part of diesel or other distillate products. 
Refiners routinely move this swing cut between products to balance 
their GDR to match market demands. If, however, refiners are required 
to limit the heavy aromatic content of their gasoline, we expect more 
swing cut material to move out of gasoline and into the distillate 
pool. Such a change requires refiners to make up for the loss of volume 
and octane-rich aromatics.
    As outlined in Section IX.E, we believe the most efficient way to 
assess and potentially control PMI and/or heavy aromatics is via a 
chromatography method like SimDis. However, the refinery modeling tools 
that are available to assess costs and broad impacts of changes to 
gasoline specifications are built around D86 volatility parameters. 
Thus, our current cost assessment uses T90 as a proxy for a SimDis 
standard.
    We used the Haverly LP refinery model to reduce the average T90 of 
U.S. gasoline by 15 [deg]F in 5 [deg]F steps.\897\ Using a T90 versus 
PMI correlation developed from market fuel data, this T90 reduction 
span of 15 [deg]F would correspond to a PMI change of about 0.5. To 
accomplish this, the model moved heavy gasoline blendstocks from the 
gasoline pool to the distillate pool. To make up for the lost gasoline 
volume and octane, the model increased the reformer severity, purchased 
and isomerized natural gas liquids, and produced more alkylate. The 
estimated costs for the 5 [deg]F, 10 [deg]F, and 15 [deg]F reductions 
in T90 were 0.5, 2.2, and 3.0 cents per gallon, respectively. This 
includes the refining cost as well as fuel economy and distribution 
costs associated with a slight reduction in energy density of gasoline. 
We request comment on the suitability of the Haverly model for this 
work as well as the cost estimates themselves.
---------------------------------------------------------------------------

    \897\ See Docket Memo from Aron Butler, ``Supplemental 
Information Related to Potential Fuels Controls for Gasoline PM'', 
docket ID #EPA-HQ-OAR-2022-0829.
---------------------------------------------------------------------------

F. Estimated Emissions and Air Quality Impacts

    Changes in fuel composition resulting from new limits on PMI or 
other high-boiling components are expected to reduce tailpipe PM and 
may also impact secondary pollutants formed in the atmosphere. We can 
assess the magnitude of tailpipe PM reductions by applying the emission 
impacts observed in the vehicle studies discussed in Section VIII.A.2 
to the PMI changes associated with the new standards. If a new standard 
achieved the 0.5 PMI reduction described in the refinery modeling 
scenarios, the vehicle studies indicate we would expect a per-vehicle 
tailpipe PM reduction of about 30 percent for typical in-use vehicles. 
We think a similar reduction may also occur for 4-stroke nonroad 
gasoline engines, as described in Section VIII.A.3. The impacts may be 
smaller for ``high-emitter'' vehicles (those with failing or 
malfunctioning emission controls) and 2-stroke nonroad engines, which 
would reduce the overall inventory impact. We request comment on 
potential emissions impacts for onroad and nonroad sources.
    Mobile sources are an important contributor to secondary aerosols 
formed from nitrate, sulfate, and organic precursors.898 899 
Studies have shown that secondary organic aerosol (SOA) formation from 
gasoline vehicle exhaust can exceed directly-emitted (tailpipe) PM 
emissions, and that changes to gasoline formulation can have impacts on 
SOA that are larger than the associated shifts in direct PM 
emissions.900 901 902 903 An analysis of

[[Page 29404]]

SOA yields for a range of hydrocarbon types and molecular weights 
indicates that the compounds with the highest potential for SOA 
formation in the exhaust, share components with the heavy tail in 
gasoline.\904\ Changes to aromatic content may also affect 
NOX emissions, which can affect nitrate particle formation. 
EPA is conducting research to understand potential changes in emissions 
that may influence the formation of secondary PM. We request comment on 
the most appropriate data sources and methods to assess impacts on SOA 
and other secondary pollutants of gasoline PMI changes.
---------------------------------------------------------------------------

    \898\ Davidson, K., Fann, N., Zawacki, M., Fulcher, C., Baker, 
K. ``The recent and future health burden of the U.S. mobile sector 
apportioned by source,'' Environ. Res. Lett. 15. 2020.
    \899\ Zawacki, M., Baker, K., Phillips, S., Davidson, K., Wolfe, 
P. ``Mobile source contributions to ambient ozone and particulate 
matter in 2025'', Atmospheric Environment, Volume 188, 2018, Pages 
129-141.
    \900\ Zhao Y., Lambe A.T., Saleh R., Saliba G., Robinson A.L., 
``Secondary Organic Aerosol Production from Gasoline Vehicle 
Exhaust: Effects of Engine Technology, Cold Start, and Emission 
Certification Standard,'' Environ. Sci. Technol. 2018, 52, 1253-
1261.
    \901\ Gentner D.R., Jathar S.H., Gordon T.D., Bahraini R., Day 
D.A., El Haddad I., Hayes P.L., Pieber S.M., Platt S.M., de Gouw J., 
Goldstein A.H., Harley R.A., Jimenez J.L., Prevot A.S.H., Robinson 
A.L., ``Review of Urban Secondary Aerosol Formation from Gasoline 
and Diesel Motor Vehicle Emissions,'' Environ. Sci. Technol. 2017, 
51, 1074-1093.
    \902\ Gordon, T.D., Presto, A.A., May, A.A., Nguyen, N.T., 
Lipsky, E.M., Donahue, N.M., Gutierrez, A., Zhang, M., Maddox, C., 
Rieger, P., Chattopadhyay, S., Maldonado, H., Maricq, M.M., and 
Robinson, A.L., ``Secondary organic aerosol formation exceeds 
primary particulate matter emissions for light-duty gasoline 
vehicles,'' Atmos. Chem. Phys., 14, 4661-4678.
    \903\ Peng J., Hu M., Du Z., Wang Y., Zheng J., Zhang W., Yang 
Y., Qin Y., Zheng R., Xiao Y., Wu Y., Lu S., Wu Z., Guo S., Mao H., 
Shuai S., ``Gasoline Aromatics: A Critical Determinant of Urban 
Secondary Organic Aerosol Formation,'' Atmos. Chem. Phys., 17, 
10743-10752, 2017.
    \904\ Gentner D.R., et al., ``Elucidating secondary organic 
aerosol from diesel and gasoline vehicles through detailed 
characterization of organic carbon emissions,'' PNAS 109 (2018) 
18318-18323.
---------------------------------------------------------------------------

    A reduction in gasoline PMI would be expected to reduce exposure to 
directly-emitted PM for those exposed to vehicle exhaust in close 
proximity to roadways. As described in Section II.C.8 of this Preamble, 
there is substantial evidence that people who live or attend school 
near major roadways are more likely to be people of color, and/or have 
a low socioeconomic status (SES). In addition, lower-SES neighborhoods 
are likely to have higher populations of vehicles with higher emissions 
than those in higher-SES neighborhoods.905 906
---------------------------------------------------------------------------

    \905\ Park, S.S.; Bijayan, A.; Mara, S.L.; Herner, J.D. (2016) 
``Investigating the real-world emission characteristics of light-
duty gasoline vehicles and their relationship to local socioeconomic 
conditions in three communities in Los Angeles, California.'' J Air 
& Waste Management Assoc 66: 1031-1044.
    \906\ Est, S. (2005) ``Equity implications of vehicle emission 
taxes.'' J Transport Econ & Policy 39: 1-24.
---------------------------------------------------------------------------

X. Statutory and Executive Order Reviews

A. Executive Order 12866: ``Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review''

    This action is a significant regulatory action within the scope of 
section 3(f)(1) of E.O. 12866 that was submitted to OMB for review. Any 
changes made in response to Executive Order 12866 review have been 
documented in the docket. EPA prepared an analysis of the potential 
costs and benefits associated with this action. This analysis is in the 
Regulatory Impact Analysis, which can be found in the docket for this 
rule and is briefly summarized in Section VIII of this Preamble.

B. Paperwork Reduction Act

    The information collection activities in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the PRA. The Information Collection Request (ICR) document 
that the EPA prepared has been assigned EPA ICR number 2750.01. You can 
find a copy of the ICR in the docket for this rule, and it is briefly 
summarized here.
    The Agency is proposing requirements for manufacturers to submit 
information to ensure compliance with the provisions in this proposed 
rule. This includes a variety of requirements for vehicle 
manufacturers. Section 208(a) of the CAA requires that vehicle 
manufacturers provide information the Administrator may reasonably 
require to determine compliance with the regulations; submission of the 
information is therefore mandatory. We will consider confidential all 
information meeting the requirements of section 208(c) of the CAA.
    Many of the information activities associated with the proposed 
rule are covered by existing emission certification and reporting 
requirements for EPA's light-duty and medium-duty vehicle emission 
control program. Therefore, this ICR only covers the incremental burden 
associated with the updated regulatory requirements as described in 
this proposal.
    The total annual reporting burden associated with this rule is 
about 44,947 hours and $26.240 million, based on a projection of 35 
respondents. The estimated burden for vehicle manufacturers is a total 
estimate for new reporting requirements incremental to the current 
program. Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; modify existing technology and systems 
for the purposes of collecting, validating, and verifying newly 
required information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    Respondents/affected entities: Light and medium-duty vehicle 
manufacturers, alternative fuel converters, and independent commercial 
importers.
    Respondent's obligation to respond: Manufacturers must respond as 
part of their annual model year vehicle certification under section 
208(a) of the CAA which is required prior to enter vehicles into 
commerce. Participation in some programs is voluntary; but once a 
manufacturer has elected to participate, it must submit the required 
information.
    Estimated number of respondents: 35.
    Frequency of response: Annually or on occasion, depending on the 
type of response.
    Total estimated burden: 44,947 hours (per year). Burden is defined 
at 5 CFR 1320.3(b).
    Total estimated cost: $26,239,629 per year, includes an estimated 
$25,611,681 annualized capital or operation & maintenance costs.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for the 
EPA's regulations are listed in 40 CFR part 9.
    Submit your comments on the Agency's need for this information, the 
accuracy of the provided burden estimates and any suggested methods for 
minimizing respondent burden to the EPA using the docket identified at 
the beginning of this rule. You may also send your ICR-related comments 
to OMB's Office of Information and Regulatory Affairs using the 
interface at www.reginfo.gov/public/do/PRAMain. Find this particular 
information collection by selecting ``Currently under Review--Open''. 
Since OMB is required to make a decision concerning the ICR between 30 
and 60 days after receipt, OMB must receive comments no later than July 
5, 2023. The EPA will respond to any ICR-related comments in the final 
rule.

C. Regulatory Flexibility Act

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA.
    EPA has focused its assessment of potential small business impacts 
on three key aspects of the proposed standards, including GHG emissions 
standards, criteria pollutant standards (including NMOG+NOX 
fleet-average standards and PM emissions standards),

[[Page 29405]]

and EV battery warranty and durability. Details of EPA's No SISNOSE 
assessment are included in DRIA Chapter 12.
    There are three types of small entities that could potentially be 
impacted by the proposed GHG standards: (1) Small entity vehicle 
manufacturers; (2) alternative fuel converters, which are companies 
that take a vehicle for which an OEM has already accounted for GHG 
compliance and convert it to operate on a cleaner fuel such as natural 
gas or propone; and (3) independent commercial importers (ICIs), which 
are firms that import vehicles from other countries for individual 
vehicle purchasers.
    Under the current light-duty GHG program, small entities are exempt 
from the GHG standards. EPA is proposing to continue the current 
exemption for all three types of small entities, including small entity 
manufacturers, alternate fuel convertors, and ICIs. However, EPA is 
proposing to add some environmental protections for imported vehicles. 
EPA is also proposing to continue the current provision allowing small 
entity manufacturers to opt into the GHG program to earn credits to 
sell in the credit market. The small entity vehicle manufacturers in 
the market at this time produce only electric vehicles. EPA is 
requesting comment on the potential need for small entity light-duty 
and medium-duty manufacturers to have an annual production cap (e.g., 
200-500 vehicles per year) on vehicles eligible for the exemption. EPA 
believes that capping the number of vehicles exempted could be an 
appropriate protection for GHG emissions, while still allowing small 
entities to produce vehicles consistent with typical past annual sales.
    Under existing EPA regulations, each ICI is currently limited to 
importing 50 vehicles per year. EPA is proposing to reduce the limit to 
25 non-ZEV vehicles per year, which is well above historical sales, as 
a means of limiting the potential environmental impact of importing 
vehicles with potentially high GHG emissions. Importing of ZEVs would 
not count against the 25 vehicles limit. EPA believes this lower 
vehicle limit is important for capping the potential for high-emitting 
imported vehicles, because, unlike with criteria pollutant emissions, 
there are very limited add-on emissions control options for reducing 
the GHG emissions of an imported vehicle. EPA is proposing to ease the 
burden required for ICIs to certify EVs by removing the requirement to 
have a fuel economy label. Production EVs don't normally have their 
high voltage wiring accessible so it is not practical for ICIs to 
measure the energy in and out of the battery which is necessary when 
measuring energy for the fuel economy label.
    EPA also has evaluated the potential impacts on small businesses 
for the proposed criteria pollutant emissions standards, including both 
the NMOG+ NOX standard and the PM standard. EPA's proposed 
NMOG+NOX standards should have no impact on the existing 
small entity manufacturers, which currently produce only electric 
vehicles. The proposed standards are expected to have minimal impact on 
both the alternate fuel converters and ICIs, as discussed in DRIA 
Chapter 12. EPA estimates that the proposed PM standard will have no 
significant financial impact on any of the three types of small 
entities. Existing small entity manufacturers all produce only EVs, 
which have no tailpipe emissions and therefore would be able to comply 
with the PM standard without any additional burden. Alternative fuel 
vehicles are exempted from doing any cold temperature testing under 
existing EPA regulations, and EPA is proposing to continue this 
exemption such that there would be no impact on alternative fuel 
converters. To minimize the testing burden on ICIs, EPA is proposing to 
exempt ICI from measuring PM during cold testing; ICIs would only need 
to comply with the new PM levels on the FTP75 and US06 tests.
    The final aspect of the NPRM that could have potential impacts on 
small entities is battery durability (Section III.F.2). The current 
small entity manufacturers all have warranties that meet or exceed our 
proposed requirements for battery durability. EPA is proposing to 
exempt small entities from meeting the proposed battery durability 
requirements since the testing and reporting requirements would be an 
added financial burden that is not necessary given their current 
warranties.

D. Unfunded Mandates Reform Act

    This action contains no unfunded Federal mandate for State, local, 
or Tribal governments as described in UMRA, 2 U.S.C. 1531-1538, and 
does not significantly or uniquely affect small governments. This 
action imposes no enforceable duty on any State, local or Tribal 
government. This action contains Federal mandates under UMRA that may 
result in expenditures of $100 million or more for state, local, and 
Tribal governments, in the aggregate, or the private sector in any one 
year. Accordingly, the EPA has prepared a written statement of the 
costs and benefits associated with action as required under section 202 
of UMRA. This is discussed Section VIII of this Preamble and Chapter 10 
of the DRIA. This action is not subject to the requirement of section 
203 of UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments.

E. Executive Order 13132: ``Federalism''

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

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

    This action does not have Tribal implications as specified in 
Executive Order 13175. Thus, Executive Order 13175 does not apply to 
this action. However, EPA has engaged with our Tribal stakeholders in 
the development of this rulemaking by offering a Tribal workshop and 
offering government-to-government consultation upon request.

G. Executive Order 13045: ``Protection of Children From Environmental 
Health Risks and Safety Risks''

    This action is subject to Executive Order 13045 because it is a 
significant regulatory action under section 3(f)(1) of Executive Order 
12866, and EPA believes that the environmental health risks or safety 
risks of the pollutants addressed by this action may have a 
disproportionate effect on children. The 2021 Policy on Children's 
Health also applies to this action.\907\ Accordingly, we have evaluated 
the environmental health or safety effects of air pollutants affected 
by this program on children. The results of this evaluation are 
described in Section II. The protection offered by these standards may 
be especially important for children because childhood represents a 
life stage associated with increased susceptibility to air pollutant-
related health effects.
---------------------------------------------------------------------------

    \907\ U.S. Environmental Protection Agency (2021). 2021 Policy 
on Children's Health. Washington, DC. https://www.epa.gov/system/files/documents/2021-10/2021-policy-on-childrens-health.pdf.
---------------------------------------------------------------------------

    Children make up a substantial fraction of the U.S. population, and 
often have unique factors that contribute to their increased risk of 
experiencing a health effect from exposures to ambient air pollutants 
because of their continuous growth and development. Children are more 
susceptible than adults to many air pollutants because they have (1) a 
developing respiratory

[[Page 29406]]

system, (2) increased ventilation rates relative to body mass compared 
with adults, (3) an increased proportion of oral breathing, 
particularly in boys, relative to adults, and (4) behaviors that 
increase chances for exposure. Even before birth, the developing fetus 
may be exposed to air pollutants through the mother that affect 
development and permanently harm the individual when the mother is 
exposed.
    Certain motor vehicle emissions present greater risks to children 
as well. Early lifestages (e.g., children) are thought to be more 
susceptible to tumor development than adults when exposed to 
carcinogenic chemicals that act through a mutagenic mode of 
action.\908\ Exposure at a young age to these carcinogens could lead to 
a higher risk of developing cancer later in life. Section II.C.8 
describes a systematic review and meta-analysis conducted by the U.S. 
Centers for Disease Control and Prevention that reported a positive 
association between proximity to traffic and the risk of leukemia in 
children.
---------------------------------------------------------------------------

    \908\ U.S. Environmental Protection Agency (2005). Supplemental 
guidance for assessing susceptibility from early-life exposure to 
carcinogens. Washington, DC: Risk Assessment Forum. EPA/630/R-03/
003F. https://www3.epa.gov/airtoxics/childrens_supplement_final.pdf.
---------------------------------------------------------------------------

    The adverse effects of individual air pollutants may be more severe 
for children, particularly the youngest age groups, than adults. As 
described in Section II, the Integrated Science Assessments for a 
number of pollutants affected by this rule, including those for 
SO2, NO2, PM, ozone and CO, describe children as 
a group with greater susceptibility. Section II.C.8 discusses a number 
of childhood health outcomes associated with proximity to roadways, 
including evidence for exacerbation of asthma symptoms and suggestive 
evidence for new onset asthma.
    There is substantial evidence that people who live or attend school 
near major roadways are more likely to be people of color, Hispanic 
ethnicity, and/or low socioeconomic status. Within these highly exposed 
groups, children's exposure and susceptibility to health effects is 
greater than adults due to school-related and seasonal activities, 
behavior, and physiological factors.
    Section VII of this Preamble presents the estimated emission 
reductions from this proposed rule, including substantial reductions in 
criteria air pollutants and mobile source air toxics which would reduce 
exposures for children, significantly reducing air pollution in close 
proximity to major roadways where ten million children attend school.
    GHG emissions contribute to climate change and the GHG emissions 
reductions described in Section VI resulting from implementation of 
this proposed rule would further improve children's health. The 
assessment literature cited in EPA's 2009 and 2016 Endangerment 
Findings concluded that certain populations and life stages, including 
children, the elderly, and the poor, are most vulnerable to climate-
related health effects. The assessment literature since 2016 
strengthens these conclusions by providing more detailed findings 
regarding these groups' vulnerabilities and the projected impacts they 
may experience. These assessments describe how children's unique 
physiological and developmental factors contribute to making them 
particularly vulnerable to climate change. Impacts to children are 
expected from heat waves, air pollution, infectious and waterborne 
illnesses, and mental health effects resulting from extreme weather 
events. In addition, children are among those especially susceptible to 
most allergic diseases, as well as health effects associated with heat 
waves, storms, and floods. Additional health concerns may arise in low-
income households, especially those with children, if climate change 
reduces food availability and increases prices, leading to food 
insecurity within households. More detailed information on the impacts 
of climate change to human health and welfare is provided in Section II 
of this Preamble.
    Children are not expected to experience greater ambient 
concentrations of air pollutants than the general population. However, 
because of their greater susceptibility to air pollution, including the 
impacts of a changing climate, and their increased time spent outdoors, 
it is likely that these standards will have particular benefits for 
children's health.

H. Executive Order 13211: ``Energy Effects''

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy. EPA has outlined the energy effects in 
Table 9-7 of the Draft Regulatory Impact Analysis (DRIA), which is 
available in the docket for this action and is briefly summarized here.
    This action reduces CO2 for light-duty and medium-duty 
vehicles under revised GHG standards, which will result in significant 
reductions of the consumption of petroleum, will achieve energy 
security benefits, and have no adverse energy effects. Because the GHG 
emission standards result in significant fuel savings, this rule 
encourages more efficient use of fuels. Table 9-7 in the DRIA shows 
over 950 billion gallons of retail gasoline (about 18 billion barrels 
of oil) reduced through 2055.

I. National Technology Transfer and Advancement Act (NTTAA) and 1 CFR 
Part 51

    This rulemaking involves technical standards. Except for the 
standards discussed in this section, the standards included in the 
regulatory text as incorporated by reference were all previously 
approved for IBR and no change is included in this action.
    In accordance with the requirements of 1 CFR 51.5, we are proposing 
to incorporate by reference the use of standards and test methods from 
the California Air Resources Board (CARB). The referenced standards and 
test methods may be obtained through the CARB website (www.arb.ca.gov) 
or by calling (916) 322-2884. We are incorporating by reference the 
following CARB documents:

------------------------------------------------------------------------
     Standard or test method          Regulation            Summary
------------------------------------------------------------------------
CARB's 2022 OBD regulation--13    40 CFR 86.1 and     The CARB standards
 CCR 1968.2, Malfunction and       86.1806-27.         establish updated
 Diagnostic System Requirements--                      requirements for
 2004 and Subsequent Model-Year                        manufacturers to
 Passenger Cars, Light-Duty                            design their
 Trucks, and Medium-Duty                               light-duty and
 Vehicles and Engines; operative                       medium-duty
 November 22, 2022.                                    vehicles with
                                                       onboard
                                                       diagnostic
                                                       systems that
                                                       detect
                                                       malfunctions in
                                                       emission
                                                       controls. These
                                                       are newly
                                                       referenced
                                                       standards.

[[Page 29407]]

 
California 2026 and Subsequent    40 CFR 1066.801     The CARB
 Model Year Criteria Pollutant     and 1066.1010.      regulation
 Exhaust Emission Standards and                        establishes test
 Test Procedures for Passenger                         procedures for
 Cars, Light-Duty Trucks, And                          measuring
 Medium-Duty Vehicles (``CARB's                        emissions from
 LMDV Test Procedures'');                              light-duty and
 adopted August 25, 2022.                              medium-duty
                                                       vehicles that are
                                                       not plug-in
                                                       hybrid electric
                                                       vehicles. These
                                                       are newly
                                                       referenced
                                                       standards.
California Test Procedures for    40 CFR 1066.801     The CARB
 2026 and Subsequent Model Year    and 1066.1010.      regulation
 Zero-Emission Vehicles and Plug-                      establishes test
 In Hybrid Electric Vehicles, in                       procedures for
 the Passenger Car, Light-Duty                         measuring
 Truck and Medium-Duty Vehicle                         emissions from
 Classes (``CARB's PHEV Test                           plug-in hybrid
 Procedures''); adopted August                         electric
 25, 2022.                                             vehicles. These
                                                       are newly
                                                       referenced
                                                       standards.
------------------------------------------------------------------------

    In accordance with the requirements of 1 CFR 51.5, we are proposing 
to incorporate by reference the use of standards and test methods from 
the United Nations. The referenced standards and test methods may be 
obtained from the UN Economic Commission for Europe, Information 
Service at Palais des Nations, CH-1211 Geneva 10, Switzerland; 
[email protected]; www.unece.org. We are incorporating by reference the 
following UN Economic Commission for Europe document:

------------------------------------------------------------------------
     Standard or test method          Regulation            Summary
------------------------------------------------------------------------
Addendum 22: United Nations       40 CFR 86.1 and     GTR 22 establishes
 Global Technical Regulation No.   86.1815.            design protocols
 22, United Nations Global                             and procedures
 Technical Regulation on In-                           for measuring
 vehicle Battery Durability for                        durability and
 Electrified Vehicles, Adopted                         performance for
 April 14, 2022.                                       batteries used
                                                       with electric
                                                       vehicles and plug-
                                                       in hybrid-
                                                       electric
                                                       vehicles.
------------------------------------------------------------------------

J. Executive Order 12898: ``Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations''

    Executive Order 12898 (59 FR 7629, February 16, 1994) directs 
Federal agencies, to the greatest extent practicable and permitted by 
law, to make environmental justice part of their mission by identifying 
and addressing, as appropriate, disproportionately high and adverse 
human health or environmental effects of their programs, policies, and 
activities on minority populations (people of color and/or indigenous 
peoples) and low-income populations.
    EPA believes that the human health or environmental conditions that 
exist prior to this action result in or have the potential to result in 
disproportionate and adverse human health or environmental effects on 
people of color, low-income populations and/or indigenous peoples. EPA 
provides a summary of the evidence for potentially disproportionate and 
adverse effects among people of color and low-income populations in 
Sections II.C.8 and VIII.I of the Preamble for this rule.
    EPA believes that this action is likely to reduce existing 
disproportionate and adverse effects on people of color, low-income 
populations and/or indigenous peoples. The air pollutant emission 
reductions proposed in this rule would improve air quality for the 
people who reside in close proximity to major roadways and who are 
disproportionately represented by people of color and people with low 
income, as described in Section II.C.8 and Section VIII.I of this 
Preamble. We expect that increases in criteria and toxic pollutant 
emissions from EGUs and reductions in petroleum-sector emissions could 
lead to changes in exposure to these pollutants for people living in 
the communities near these facilities. Analyses of communities in close 
proximity to these sources (such as EGUs and refineries) have found 
that a higher percentage of communities of color and low-income 
communities live near these sources when compared to national averages.
    Section VIII.I.2 discusses the environmental justice issues 
associated with climate change. People of color, low-income populations 
and/or indigenous peoples may be especially vulnerable to the impacts 
of climate change. The GHG emission reductions from this proposal would 
contribute to efforts to reduce the probability of severe impacts 
related to climate change.
    EPA is additionally identifying and addressing environmental 
justice concerns by providing fair treatment and meaningful involvement 
with Environment Justice groups in developing this proposed action and 
soliciting input for this notice of proposed rulemaking.
    The information supporting this Executive Order review is contained 
in Sections II.C.8 and VIII.I of the Preamble for this rule, and all 
supporting documents have been placed in the public docket for this 
action.

XI. Statutory Provisions and Legal Authority

    Statutory authority for this proposed rule is found at 42 U.S.C. 
7401-7675 and 49 U.S.C. 32901-23919q.

List of Subjects

40 CFR Part 85

    Environmental protection, Confidential business information, 
Greenhouse gases, Imports, Labeling, Motor vehicle pollution, Reporting 
and recordkeeping requirements, Research, Warranties.

40 CFR Part 86

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Incorporation by reference, 
Labeling, Motor vehicle pollution, Reporting and recordkeeping 
requirements.

40 CFR Part 600

    Environmental protection, Administrative practice and procedure, 
Electric power, Fuel economy, Labeling, Reporting and recordkeeping 
requirements.

40 CFR Part 1036

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential

[[Page 29408]]

business information, Greenhouse gases, Labeling, Motor vehicle 
pollution, Reporting and recordkeeping requirements, Warranties.

40 CFR Part 1037

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Labeling, 
Motor vehicle pollution, Reporting and recordkeeping requirements, 
Warranties.

40 CFR Part 1066

    Environmental protection, Air pollution control, Incorporation by 
reference, Reporting and recordkeeping requirements.

Michael S. Regan,
Administrator.

    For the reasons set out in the preamble, we are proposing to amend 
title 40, chapter I of the Code of Federal Regulations as set forth 
below.

PART 85--CONTROL OF AIR POLLUTION FROM MOBILE SOURCES

0
1. The authority citation for part 85 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

0
2. Amend Sec.  85.505 by revising paragraph (f) to read as follows:


Sec.  85.505   Overview.

* * * * *
    (f) If you have previously used small volume conversion 
manufacturer or qualified small volume test group/engine family 
procedures and you may exceed the volume thresholds using the sum 
described in Sec.  85.535(f) to determine small volume status in 40 CFR 
86.1838-01 or 1036.150(d), as appropriate, you must satisfy the 
requirements for conversion manufacturers who do not qualify for small 
volume exemptions or your exemption from tampering is no longer valid.
* * * * *
0
3. Amend Sec.  85.510 by revising paragraphs (b)(2)(i)(A) and (B), 
(b)(2)(ii), and (b)(6) through (11) to read as follows:


Sec.  85.510   Exemption provisions for new and relatively new 
vehicles/engines.

* * * * *
    (b) * * *
    (2) * * *
    (i) * * *
    (A) If criteria for small volume manufacturer or qualified small 
volume engine families are met as defined in 40 CFR 1036.150(d), you 
may combine heavy-duty engines using good engineering judgment into 
conversion engine families if the following criteria are satisfied 
instead of those specified in 40 CFR 1036.230.
    (1) Same OEM.
    (2) Same OBD group after MY 2013.
    (3) Same service class (e.g., light heavy-duty diesel engines, 
medium heavy-duty diesel engines, heavy heavy-duty diesel engines).
    (4) Engine displacement is within 15% of largest displacement or 50 
CID, whichever is larger.
    (5) Same number of cylinders.
    (6) Same arrangement of cylinders.
    (7) Same combustion cycle.
    (8) Same method of air aspiration.
    (9) Same fuel type (e.g., diesel/gasoline).
    (10) Same fuel metering system (e.g., mechanical direct or 
electronic direct injection).
    (11) Same catalyst/filter construction (e.g., metal vs. ceramic 
substrate).
    (12) All converted engines are subject to the most stringent 
emission standards. For example, 2005 and 2007 heavy-duty diesel 
engines may be in the same family if they meet the most stringent 
(2007) standards.
    (13) Same emission control technology (e.g., internal or external 
EGR).
    (B) EPA-established scaled assigned deterioration factors for both 
exhaust and evaporative emissions may be used for engines with over 
10,000 miles if the criteria for small volume manufacturer or qualified 
small volume engine families are met as defined in 40 CFR 1036.150(d). 
This deterioration factor will be adjusted according to vehicle or 
engine miles of operation. The deterioration factor is intended to 
predict the engine's emission levels at the end of the useful life. EPA 
may adjust these scaled assigned deterioration factors if we find the 
rate of deterioration non-constant or if the rate differs by fuel type.
* * * * *
    (ii) Conversion evaporative/refueling families are identical to the 
OEM evaporative/refueling families unless the OEM evaporative emission 
system is no longer functionally necessary. You must create any new 
evaporative families according to 40 CFR 86.1821.
* * * * *
    (6) Durability testing is required unless the criteria for small 
volume manufacturer or qualified small volume test groups/engine 
families are met as defined in 40 CFR 86.1838-01 or 1036.150(d), as 
applicable.
    (7) Conversion test groups/engine families for conversions to dual-
fuel or mixed-fuel vehicles/engines cannot include vehicles/engines 
subject to different emission standards unless applicable exhaust and 
OBD demonstrations are also conducted for the original fuel(s) 
demonstrating compliance with the most stringent standard represented 
in the test group. However, for small volume conversion manufacturers 
and qualified small volume test groups/engine families the data 
generated from exhaust emission testing on the new fuel for dual-fuel 
or mixed-fuel test vehicles/engines may be carried over to vehicles/
engines which otherwise meet the test group/engine family criteria and 
for which the test vehicle/engine data demonstrate compliance with the 
application vehicle/engine standard. Clean alternative fuel conversion 
evaporative families for dual-fuel or mixed-fuel vehicles may not 
include vehicles/engines which were originally certified to different 
evaporative emissions standards unless evaporative/refueling 
demonstrations are also conducted for the original fuel(s) 
demonstrating compliance with the most stringent standard represented 
in the evaporative/refueling family.
    (8) The vehicle/engine selected for testing must qualify as a 
worst-case vehicle/engine under 40 CFR 86.1828-01 or 1036.235(a)(2), as 
applicable.
    (9) The following requirements apply for OBD systems:
    (i) The OBD system must properly detect and identify malfunctions 
in all monitored emission-related powertrain systems or components 
including any new monitoring capability necessary to identify potential 
emission problems associated with the new fuel.
    (ii) Conduct OBD testing as needed to demonstrate that the vehicle/
engine continues to comply with emission thresholds and other 
requirements that apply based on the original certification.
    (iii) Submit the applicable OBD reporting information for vehicles 
as set forth in 40 CFR 86.1806-17. Submit the applicable OBD reporting 
information for engines as set forth in 40 CFR 86.010-18 or 1036.110, 
as appropriate. Submit the following statement of compliance if the OEM 
vehicles/engines were required to be OBD-equipped:
    The test group/engine family converted to an alternative fuel has 
fully functional OBD systems and therefore meets the OBD requirements 
specified in [40 CFR part 86 or part 1036, as applicable] when 
operating on the alternative fuel.
    (10) In lieu of specific certification test data, you may submit 
the following attestations for the appropriate statements of 
compliance, if you have

[[Page 29409]]

sufficient basis to prove the statement is valid.
    (i) The test group/engine family converted to an alternative fuel 
has properly exercised the optional and applicable statements of 
compliance or waivers in the certification regulations. Attest to each 
statement or waiver in your application for certification.
    (ii) The test group/engine family converted to dual-fuel or mixed-
fuel operation retains all the OEM fuel system, engine calibration, and 
emission control system functionality when operating on the fuel with 
which the vehicle/engine was originally certified.
    (iii) The test group/engine family converted to dual fuel or mixed-
fuel operation retains all the functionality of the OEM OBD system (if 
so equipped) when operating on the fuel with which the vehicle/engine 
was originally certified.
    (iv) The test group/engine family converted to dual-fuel or mixed-
fuel operation properly purges hydrocarbon vapor from the evaporative 
emission canister when the vehicle/engine is operating on the 
alternative fuel.
    (11) Certification fees apply as described in 40 CFR part 1027.
* * * * *
0
4. Amend Sec.  85.515 by revising paragraphs (b)(4), (6), and (8), 
(b)(9)(iii), (b)(10)(i), and (b)(10)(iii)(A) to read as follows:


Sec.  85.515  Exemption provisions for intermediate age vehicles/
engines.

* * * * *
    (b) * * *
    (4) EPA-established scaled assigned deterioration factors for both 
exhaust and evaporative emissions may be used for vehicles/engines with 
over 10,000 miles if the criteria for small volume manufacturer or 
qualified small volume test groups/engine families are met as defined 
in 40 CFR 86.1838-01 or 40 CFR 1036.150(d), as appropriate. This 
deterioration factor will be adjusted according to vehicle/engine miles 
or hours of operation. The deterioration factor is intended to predict 
the vehicle/engine's emission level at the end of the useful life. EPA 
may adjust these scaled assigned deterioration factors if we find the 
rate of deterioration non-constant or if the rate differs by fuel type.
* * * * *
    (6) Durability testing is required unless the criteria for small 
volume manufacturer or qualified small volume test groups/engine 
families are met as defined in 40 CFR 86.1838-01 or 40 CFR 1036.150(d), 
as applicable. Durability procedures for large volume conversion 
manufacturers of intermediate age light-duty and heavy-duty chassis 
certified vehicles that follow provisions in 40 CFR 86.1820-01 may 
eliminate precious metal composition and catalyst grouping statistic 
when creating clean alternative fuel conversion durability groupings.
* * * * *
    (8) You must conduct all exhaust and all evaporative and refueling 
emissions testing with a worst-case vehicle/engine to show that the 
conversion test group/engine family complies with exhaust and 
evaporative/refueling emission standards, based on the certification 
procedures.
    (9) * * *
    (iii) In addition to conducting OBD testing described in this 
paragraph (b)(9), you must submit to EPA the following statement of 
compliance if the OEM vehicles/engines were required to be OBD-
equipped:
    The test group/engine family converted to an alternative fuel has 
fully functional OBD systems and therefore meets the OBD requirements 
specified in [40 CFR part 86 or part 1036, as applicable] when 
operating on the alternative fuel.
    (10) * * *
    (i) You must describe how your conversion system qualifies as a 
clean alternative fuel conversion. You must include emission test 
results from the required exhaust, evaporative emissions, and OBD 
testing, applicable exhaust and evaporative emissions standards and 
deterioration factors. You must also include a description of how the 
test vehicle/engine selected qualifies as a worst-case vehicle/engine 
under 40 CFR 86.1828-01 or 1036.235(a)(2), as applicable.
* * * * *
    (iii) * * *
    (A) The test group/engine family converted to an alternative fuel 
has properly exercised the optional and applicable statements of 
compliance or waivers in the certification regulations. Attest to each 
statement or waiver in your notification.
* * * * *
0
5. Amend Sec.  85.520 by revising paragraphs (b)(4), (b)(6)(i), and 
(b)(6)(iii)(A) to read as follows:


Sec.  85.520  Exemption provisions for outside useful life vehicles/
engines.

* * * * *
    (b) * * *
    (4) The following requirements apply for OBD systems:
    (i) The OBD system must properly detect and identify malfunctions 
in all monitored emission-related powertrain systems or components, 
including any new monitoring capability necessary to identify potential 
emission problems associated with the new fuel. These include but are 
not limited to: Fuel trim lean and rich monitors, catalyst 
deterioration monitors, engine misfire monitors, oxygen sensor 
deterioration monitors, EGR system monitors, if applicable, and 
evaporative system leak monitors, if applicable. No original OBD system 
monitor that is still applicable to the vehicle/engine may be aliased, 
removed, bypassed, or turned-off. No MILs shall be illuminated after 
the conversion. Readiness flags must be properly set for all monitors 
that identify any malfunction for all monitored components.
    (ii) Subsequent to the vehicle/engine fuel conversion, you must 
clear all OBD codes and reset all OBD monitors to not-ready status 
using an OBD scan tool appropriate for the OBD system in the vehicle/
engine in question. You must operate the vehicle/engine with the new 
fuel on representative road operation or chassis dynamometer/engine 
dynamometer testing cycles to satisfy the monitors' enabling criteria. 
When all monitors have reset to a ready status, you must submit an OBD 
scan tool report showing that with the vehicle/engine operating in the 
key-on/engine-on mode, all supported monitors have reset to a ready 
status and no emission related ``pending'' (or potential) or 
``confirmed'' (or MIL-on) diagnostic trouble codes (DTCs) have been 
stored. The MIL must not be commanded ``On'' or be illuminated. A MIL 
check must also be conducted in a key-on/engine-off mode to verify that 
the MIL is functioning properly. You must include the VIN/EIN of the 
test vehicle/engine. If necessary, the OEM evaporative emission 
readiness monitor may remain unset for dedicated gaseous fuel 
conversion systems.
    (iii) In addition to conducting OBD testing described in this 
paragraph (b)(4), you must submit to EPA the following statement of 
compliance if the OEM vehicles/engines were required to be OBD-
equipped:
    The test group/engine family converted to an alternative fuel has 
fully functional OBD systems and therefore meets the OBD requirements 
specified in [40 CFR part 86 or 40 CFR part 1036, as applicable] when 
operating on the alternative fuel.
* * * * *
    (6) * * *
    (i) You must describe how your conversion system complies with the 
good engineering judgment criteria in paragraph (b)(3) of this section 
and/or other requirements under this subpart or other applicable 
subparts such that the

[[Page 29410]]

conversion system qualifies as a clean alternative fuel conversion. The 
submission must provide a level of technical detail sufficient for EPA 
to confirm the conversion system's ability to maintain or improve on 
emission levels in a worst-case vehicle/engine. The submission of 
technical information must include a complete characterization of 
exhaust and evaporative emissions control strategies, the fuel delivery 
system, durability, and specifications related to OBD system 
functionality. You must present detailed information to confirm the 
durability of all relevant new and existing components and to explain 
why the conversion system will not harm the emission control system or 
degrade the emissions. EPA may ask you to supply additional 
information, including test data, to support the claim that the 
conversion system does not increase emissions and involves good 
engineering judgment that is being applied for purposes of conversion 
to a clean alternative fuel.
* * * * *
    (iii) * * *
    (A) The test group/engine family converted to an alternative fuel 
has properly exercised the optional and applicable statements of 
compliance or waivers in the certification regulations. Attest to each 
statement or waiver in your notification.
* * * * *


Sec.  85.524  [Removed]

0
6. Remove Sec.  85.524.
0
7. Amend Sec.  85.535 by revising paragraph (f) to read as follows:


Sec.  85.535  Liability, recordkeeping, and end of year reporting.

* * * * *
    (f) Clean alternative fuel conversion manufacturers must submit an 
end of the year sales report to EPA describing the number of clean 
alternative fuel conversions by fuel type(s) and vehicle test group/
engine family by January 31 of the following year. The number of 
conversions is the sum of the calendar year intermediate age 
conversions, outside useful life conversions, and the same conversion 
model year certified clean alternative fuel conversions. The number of 
conversions will be added to any other vehicle and engine sales 
accounted for using 40 CFR 86.1838-01 or 1036.150(d), as appropriate to 
determine small volume manufacturer or qualified small volume test 
group/engine family status.
* * * * *
0
8. Amend Sec.  85.1503 by revising paragraphs (a) and (c) to read as 
follows:


Sec.  85.1503  General requirements for importation of nonconforming 
vehicles and engines.

    (a) A nonconforming vehicle or engine offered for importation into 
the United States must be imported by an ICI who is a current holder of 
a valid certificate of conformity unless an exemption or exclusion is 
granted by the Administrator under Sec.  85.1511 or the vehicle is 
eligible for entry under Sec.  85.1512.
* * * * *
    (c) In any one certificate year (e.g., the current model year), an 
ICI may finally admit no more than the following numbers of 
nonconforming vehicles into the United States under the provisions of 
Sec. Sec.  85.1505 and 85.1509, except as allowed by paragraph (e) of 
this section:
    (1) [Reserved]
    (2) A total of 25 light-duty vehicles, light-duty trucks, and 
medium-duty passenger vehicles. This limit does not apply for electric 
vehicles.
    (3) 50 highway motorcycles.
* * * * *
0
9. Amend Sec.  85.1509 by:
0
a. Revising paragraph (a) introductory text.
0
b. Removing and reserving paragraphs (b) through (f).
0
c. Removing the paragraph heading from paragraphs (j), (k) introductory 
text, and (l).
    The revision reads as follows:


Sec.  85.1509  Final admission of modification and test vehicles.

    (a) A motor vehicle or motor vehicle engine may be imported under 
this section by a certificate holder possessing a currently valid 
certificate of conformity only if--
* * * * *
0
10. Amend Sec.  85.1510 by revising paragraphs (d)(1) and (f) to read 
as follows:


Sec.  85.1510   Maintenance instructions, warranties, emission labeling 
and fuel economy requirements.

* * * * *
    (d) * * *
    (1) The certificate holder shall affix a fuel economy label that 
complies with the requirements of 40 CFR part 600, subpart D. The 
requirement for fuel economy labels does not apply for electric 
vehicles.
* * * * *
    (f) Corporate Average Fuel Economy (CAFE). Certificate holders 
shall comply with any applicable CAFE requirements of the Energy Policy 
and Conservation Act, 15 U.S.C. 2001 et seq., and 40 CFR part 600, for 
all vehicles imported under Sec. Sec.  85.1505 and 85.1509.
0
11. Amend Sec.  85.1515 by revising paragraphs (a)(2)(i)(A) and (B), 
(c)(2)(ix) and (x), and (c)(3), (5), (6), and (8) to read as follows:


Sec.  85.1515  Emission standards and test procedures applicable to 
imported nonconforming motor vehicles and motor vehicle engines.

    (a) * * *
    (2) * * *
    (i) * * *
    (A) Cold temperature CO, NMHC, NMOG+NOx, and PM emission 
standards specified in 40 CFR 86.1811.
    (B) SFTP emission standards specified in 40 CFR 86.1811 and 86.1816 
for all pollutants, and separate emission standards that apply for US06 
and SC03 duty cycles.
* * * * *
    (c) * * *
    (2) * * *
    (ix) Nonconforming vehicles subject to the provisions of 40 CFR 
part 86, subpart S, originally manufactured in OP years 2022 through 
2029 must meet the Tier 3 exhaust emission standards in 40 CFR 86.1811-
17 and 86.1816-18, the Tier 3 evaporative emission standards in 40 CFR 
86.1813-17, and the refueling emission standards in 40 CFR 86.1813-
17(b).
    (x) Nonconforming vehicles subject to the provisions of 40 CFR part 
86, subpart S, originally manufactured in OP years 2030 and later must 
meet the Tier 4 exhaust emission standards in 40 CFR 86.1811-27, the 
Tier 3 evaporative emission standards in 86.1813-17, and the refueling 
emission standards in 40 CFR 86.1813-17(b).
    (3) The following provisions apply for Tier 2 vehicles certified to 
standards under 40 CFR 86.1811-04:
    (i) As an option to the requirements of paragraph (c)(2) of this 
section, independent commercial importers may elect to meet lower bins 
in Tables S04-1 and S04-2 of 40 CFR 86.1811-04 than specified in 
paragraph (c)(2) of this section and bank or sell NOx credits as 
permitted in 40 CFR 86.1860-04 and 40 CFR 86.1861-04. An ICI may not 
meet higher bins in Tables S04-1 and S04-2 of 40 CFR 86.1811-04 than 
specified in paragraph (c)(2) of this section unless it demonstrates to 
the Administrator at the time of certification that it has obtained 
appropriate and sufficient NOx credits from another 
manufacturer, or has generated them in a previous model year or in the 
current model year and not transferred them to another manufacturer or 
used them to address other vehicles as permitted in 40 CFR 86.1860-04 
and 40 CFR 86.1861-04.
    (ii) Where an ICI desires to obtain a certificate of conformity 
using a bin higher than specified in paragraph (c)(2) of this section 
but does not have

[[Page 29411]]

sufficient credits to cover vehicles produced under such certificate, 
the Administrator may issue such certificate if the ICI has also 
obtained a certificate of conformity for vehicles certified using a bin 
lower than that required under paragraph (c)(2) of this section. The 
ICI may then produce vehicles to the higher bin only to the extent that 
it has generated sufficient credits from vehicles certified to the 
lower bin during the same model year.
* * * * *
    (5) Except for the situation where an ICI desires to bank, sell or 
use NOx credits as described in paragraph (c)(3) of this 
section, the requirements of 40 CFR 86.1811 related to fleet average 
standards and requirements to comply with such standards do not apply 
to vehicles modified under this subpart.
    (6) ICIs using Tier 2 bins higher than those specified in paragraph 
(c)(2) of this section must monitor their production so that they do 
not produce more vehicles certified to the standards of such bins than 
their available credits can cover. ICIs must not have a credit deficit 
at the end of a model year and are not permitted to use the deficit 
carryforward provisions provided in 40 CFR 86.1860-04(e).
* * * * *
    (8) The following provisions apply for cold temperature emission 
standards:
    (i) Nonconforming LDV/LLDTs originally manufactured in OP years 
2010 and later must meet the cold temperature emission standards in 40 
CFR 86.1811. ICIs may comply with the cold temperature PM standard 
based on an engineering evaluation.
    (ii) Nonconforming HLDTs and MDPVs originally manufactured in OP 
years 2012 and later must meet the cold temperature emission standards 
in 40 CFR 86.1811. ICIs may comply with the cold temperature PM 
standard based on an engineering evaluation.
    (iii) ICIs, which qualify as small-volume manufacturers, are exempt 
from the cold temperature NMHC phase-in intermediate percentage 
requirements described in 40 CFR 86.1811-10(g)(3). See 40 CFR 86.1811-
04(k)(5)(vi) and (vii).
    (iv) The provisions of this paragraph (c)(8)(iv) apply for Tier 2 
vehicles. As an alternative to the requirements of paragraphs (c)(8)(i) 
and (ii) of this section, ICIs may elect to meet a cold temperature 
NMHC family emission level below the cold temperature NMHC fleet 
average standards specified in Table S10-1 of 40 CFR 86.1811-10 and 
bank or sell credits as permitted in 40 CFR 86.1864-10. An ICI may not 
meet a higher cold temperature NMHC family emission level than the 
fleet average standards in Table S10-1 of 40 CFR 86.1811-10 as 
specified in paragraphs (c)(8)(i) and (ii) of this section, unless it 
demonstrates to the Administrator at the time of certification that it 
has obtained appropriate and sufficient NMHC credits from another 
manufacturer, or has generated them in a previous model year or in the 
current model year and not traded them to another manufacturer or used 
them to address other vehicles as permitted in 40 CFR 86.1864-10.
* * * * *
0
12. Amend Sec.  85.1702 by revising paragraph (a)(3), adding paragraph 
(a)(6), and adding a reserved paragraph (b).
    The revision and addition read as follows:


Sec.  85.1702   Definitions.

    (a) * * *
    (3) Pre-certification vehicle means an uncertified vehicle that a 
certificate holder employs in fleets from year to year in the ordinary 
course of business for product development, production method 
assessment, and market promotion, but not involving lease or sale.
* * * * *
    (6) Certificate holder has the meaning given in 40 CFR 1068.30.
* * * * *
0
13. Revise Sec.  85.2101 to read as follows:


Sec.  85.2101   General applicability.

    (a) Sections 85.2101 through 85.2111 are applicable to all 1981 and 
later model year vehicles subject to standards under 40 CFR part 86, 
subpart S.
    (b) References in this subpart to engine families and emission 
control systems shall be deemed to apply to durability groups and test 
groups as applicable.
0
14. Amend Sec.  85.2102 by revising paragraph (a) introductory text and 
paragraphs (a)(10) and (11) to read as follows:


Sec.  85.2102   Definitions.

    (a) As used in Sec. Sec.  85.2101 through 85.2111 all terms not 
defined herein shall have the meaning given them in the Act. All terms 
additionally not defined in the Act shall have the meaning given in 40 
CFR 86.1803, 1065.1001, or 1068.30:
* * * * *
    (10) Useful life means that period established under 40 CFR 
86.1805.
    (11) Vehicle means any vehicle subject to standards under 40 CFR 
part 86, subpart S.
* * * * *
0
15. Revise Sec.  85.2103 to read as follows:


Sec.  85.2103   Emission performance warranty.

    (a) The manufacturer of each vehicle to which this subpart applies 
must provide a written commitment to meet warranty requirements as 
described in this section.
    (b) The manufacturer must remedy a nonconformity identified in 
paragraph (c) of this section throughout the warranty period specified 
in Sec.  85.2108 at no cost to the owner if such nonconformity results 
or will result in the vehicle owner having to bear any penalty or other 
sanction (including the denial of the right to use the vehicle) under 
local, State, or Federal law.
    (c) The following failures qualify as a nonconformity for purposes 
of the warranty requirements of this subpart:
    (1) A vehicle fails to conform at any time during its useful life 
to the applicable emission standards or family emission limits as 
determined by an EPA-approved emission test.
    (2) An electric vehicle or a plug-in hybrid electric vehicle fails 
to meet the Minimum Performance Requirement for useable battery energy 
under 40 CFR 86.1815 for the specified period as determined by the 
vehicle's State of Health Monitor, if applicable.
    (d) The warranty periods under this section apply based on the 
vehicle's age in years and on the vehicle's odometer reading. The 
warranty period expires based on the specified age or mileage, 
whichever comes first. The warranty period for a particular vehicle 
begins on the date the vehicle is delivered to its ultimate purchaser 
or, if the vehicle is first placed in service as a ``demonstrator'' or 
``company'' car prior to delivery, on the date it is first placed in 
service.
    (e) The following warranty periods apply for light-duty vehicles, 
light-duty trucks, and medium-duty passenger vehicles:
    (1) The following specified major emission control components have 
a warranty period of eight years or 80,000 miles:
    (i) Catalytic converters and SCR catalysts, and related components.
    (ii) Particulate filters and particulate traps, used with both 
spark-ignition and compression-ignition engines.
    (iii) Components related to exhaust gas recirculation with 
compression-ignition engines.
    (iv) Emission control module.
    (v) Batteries serving as a Renewable Energy Storage System for 
electric vehicles and plug-in hybrid electric vehicles, along with 
related powertrain components.

[[Page 29412]]

    (2) Nonconformities other than those identified in paragraph (e)(1) 
of this section have a warranty period of two years or 24,000 miles.
    (f) The following warranty periods apply for medium-duty vehicles:
    (1) The specific major emission control components identified in 
paragraph (e)(1) of this section have a warranty period of eight years 
or 80,000 miles.
    (2) Nonconformities other than those identified in paragraph (f)(1) 
of this section have a warranty period of five years or 50,000 miles.
0
16. Amend Sec.  85.2104 by revising paragraphs (d), (e), (f), (g) 
introductory text, (g)(1) and (g)(2) introductory text to read as 
follows:


Sec.  85.2104  Owners' compliance with instructions for proper 
maintenance and use.

* * * * *
    (d) the time/mileage interval for scheduled maintenance services 
shall be the service interval specified for the part in the written 
instructions for proper maintenance and use. However, in the case of 
certified parts having a maintenance or replacement interval different 
from that specified in the written instructions for proper maintenance 
and use, the time/mileage interval shall be the service interval for 
which the part was certified.
    (e) The owner may perform maintenance or have maintenance performed 
more frequently than required in the maintenance instructions.
    (f) Written instruction for proper use of electric vehicles and 
plug-in hybrid electric vehicles may identify certain behaviors or 
vehicle operating modes expected to unreasonably or artificially 
shorten battery durability. For example, exceeding a vehicle's towing 
capacity might be considered improper use. However, the manufacturer 
should not consider actions to be improper use if the vehicle can be 
designed to prevent the targeted behaviors or operating modes. Evidence 
of compliance with the requirement to properly use vehicles under this 
paragraph (f) is generally limited to onboard data logging, though 
manufacturers may also request vehicle owners to make a statement 
regarding specific behaviors or vehicle operating modes.
    (g) Except as provided in paragraph (h) of this section, a 
manufacturer may deny an emission performance warranty claim on the 
basis of noncompliance with the written instructions for proper 
maintenance and use if and only if:
    (1) An owner is not able to comply with a request by a manufacturer 
for evidence pursuant to paragraph (c) or (f) of this section; or
    (2) Notwithstanding the evidence presented pursuant to paragraph 
(c) of this section, the manufacturer is able to prove that the vehicle 
failed because:
* * * * *
0
17. Amend Sec.  85.2105 by revising paragraph (b)(3) to read as 
follows:


Sec.  85.2105  Aftermarket parts.

* * * * *
    (b) * * *
    (3) List all objective evidence as defined in Sec.  85.2102 that 
was used in the determination to deny warranty. This evidence must be 
made available to the vehicle owner or EPA upon request.
* * * * *
0
18. Amend Sec.  85.2109 by revising paragraph (a)(2) to read as 
follows:


Sec.  85.2109  Inclusion of warranty provisions in owners' manuals and 
warranty booklets.

    (a) * * *
    (2) A list of all items which are covered by the emission 
performance warranty for the full useful life of the vehicle. This list 
shall contain all specified major emission control components. All 
items listed pursuant to this subsection shall be described in the same 
manner as they are likely to be described on a service facility work 
receipt for that vehicle; and
* * * * *
0
19. Revise Sec.  85.2110 to read as follows:


Sec.  85.2110  Submission of owners' manuals and warranty statements to 
EPA.

    (a) The manufacturer of each vehicle to which this subpart applies 
must send to EPA an owner's manual and warranty booklet (if applicable) 
in electronic format for each model vehicle that completely and 
accurately represent the warranty terms for that vehicle.
    (1) The owner's manuals and warranty booklets should be received by 
EPA 60 days prior to the introduction of the vehicle for sale.
    (2) If the manuals and warranty booklets are not in their final 
format 60 days prior to the introduction of the vehicle for sale, a 
manufacturer may submit the most recent draft at that time, provided 
that the manufacturer promptly submits final versions when they are 
complete.
    (b) All materials described in paragraph (a) of this section shall 
be sent to the Designated Compliance Officer as specified at 40 CFR 
1068.30 (Attention: Warranty Booklet).

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES 
AND ENGINES

0
20. The authority citation for part 86 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

0
21. Amend Sec.  86.1 by:
0
a. Adding introductory text.
0
b. Revising paragraphs (a) and (d)(2).
0
c. Removing and reserving paragraphs (d)(3) and (4).
0
d. Revising paragraph (e)(2).
0
e. Removing and reserving paragraph (g)(4).
0
f. Revising paragraph (g)(8).
0
g. Removing and reserving paragraphs (g)(10), (11), (13), and (14).
0
h. Revising paragraphs (g)(15) through (19), (21), (22), and (25).
    The addition and revisions read as follows:


Sec.  86.1  Incorporation by reference.

    Certain material is incorporated by reference into this part with 
the approval of the Director of the Federal Register under 5 U.S.C. 
552(a) and 1 CFR part 51. To enforce any edition other than that 
specified in this section, EPA must publish a document in the Federal 
Register and the material must be available to the public. All approved 
incorporation by reference (IBR) material is available for inspection 
at EPA and at the National Archives and Records Administration (NARA). 
Contact EPA at: U.S. EPA, Air and Radiation Docket Center, WJC West 
Building, Room 3334, 1301 Constitution Ave. NW, Washington, DC 20004; 
www.epa.gov/dockets; (202) 202-1744. For information on inspecting this 
material at NARA, visit www.archives.gov/federal-register/cfr/ibr-locations.html or email [email protected]. The material may be 
obtained from the following sources:
    (a) UN Economic Commission for Europe, Information Service, Palais 
des Nations, CH-1211 Geneva 10, Switzerland; [email protected]; 
www.unece.org:
    (1) Addendum 22: United Nations Global Technical Regulation, No. 
22, United Nations Global Technical Regulation on In-vehicle Battery 
Durability for Electrified Vehicles, Adopted April 14, 2022, (``GTR No. 
22''); IBR approved for Sec.  86.1815.
    (2) [Reserved]
* * * * *
    (d) * * *
    (2) California Regulatory Requirements known as Onboard Diagnostics 
II (OBD-II), Title 13, Motor Vehicles, Division 3, Air Resources

[[Page 29413]]

Board, Chapter 1, Motor Vehicle Pollution Control Devices, Article 2, 
Approval of Motor Vehicle Pollution Control Devices (New Vehicles), 
Sec.  1968.2 Malfunction and Diagnostic System Requirements--2004 and 
Subsequent Model-Year Passenger Cars, Light-Duty Trucks, and Medium-
Duty Vehicles and Engines; operative November 22, 2022; IBR approved 
for Sec.  86.1806-27(a).
* * * * *
    (e) * * *
    (2) ISO 15765-4:2005(E), Road Vehicles--Diagnostics on Controller 
Area Networks (CAN)--Part 4: Requirements for emissions-related 
systems, January 15, 2005, IBR approved for Sec.  86.010-18(k).
* * * * *
    (g) * * *
    (8) SAE J1930, Electrical/Electronic Systems Diagnostic Terms, 
Definitions, Abbreviations, and Acronyms--Equivalent to ISO/TR 15031-2: 
April 30, 2002, Revised April 2002, IBR approved for Sec.  86.010-
18(k).
* * * * *
    (15) SAE J1939-71, Vehicle Application Layer (Through February 
2007), Revised January 2008, IBR approved for Sec.  86.010-38(j).
    (16) SAE J1939-73, Application Layer--Diagnostics, Revised 
September 2006, IBR approved for Sec. Sec.  86.010-18(k); 86.010-38(j).
    (17) SAE J1939-81, Network Management, Revised May 2003, IBR 
approved for Sec.  86.010-38(j).
    (18) SAE J1962, Diagnostic Connector Equivalent to ISO/DIS 15031-3; 
December 14, 2001, Revised April 2002, IBR approved for Sec.  86.010-
18(k).
    (19) SAE J1978, OBD II Scan Tool--Equivalent to ISO/DIS 15031-4; 
December 14, 2001, Revised April 2002, IBR approved for Sec.  86.010-
18(k).
* * * * *
    (21) SAE J1979, (R) E/E Diagnostic Test Modes, Revised May 2007, 
IBR approved for Sec.  86.010-18(k).
    (22) SAE J2012, (R) Diagnostic Trouble Code Definitions Equivalent 
to ISO/DIS 15031-6: April 30, 2002, Revised April 2002, IBR approved 
for Sec.  86.010-18(k).
* * * * *
    (25) SAE J2403, Medium/Heavy-Duty E/E Systems Diagnosis 
Nomenclature--Truck and Bus, Revised August 2007, IBR approved for 
Sec. Sec.  86.010-18(k); 86.010-38(j).
* * * * *


Sec.  86.113-04   [Amended]

0
22. Amend Sec.  86.113-04 by removing and reserving paragraph 
(a)(2)(i).
0
23. Add Sec.  86.113-27 to read as follows:


Sec.  86.113-27   Fuel specifications.

    Use the fuels specified in 40 CFR part 1065 to perform valid tests, 
as follows:
    (a) For service accumulation, use the test fuel or any commercially 
available fuel that is representative of the fuel that in-use vehicles 
will use.
    (b) For diesel-fueled engines, use the ultra low-sulfur diesel fuel 
specified in 40 CFR part 1065.703 for emission testing.
    (c) The following fuel requirements apply for gasoline-fueled 
engines:
    (1) Use the appropriate E10 fuel specified in 40 CFR part 
1065.710(b) to demonstrate compliance with all exhaust, evaporative, 
and refueling emission standards under subpart S of this part.
    (2) For vehicles certified for 50-state sale, you may instead use 
California Phase 3 gasoline (E10) as adopted in California's LEV III 
program as follows:
    (i) You may use California Phase 3 gasoline (E10) as adopted in 
California's LEV III program for exhaust emission testing.
    (ii) If you certify vehicles to LEV III evaporative emission 
standards with California Phase 3 gasoline (E10), you may use that 
collection of data to certify to evaporative emission standards. For 
evaporative emission testing with California test fuels, perform tests 
based on the test temperatures specified by the California Air 
Resources Board. Note that this paragraph (c)(2)(ii) does not apply for 
refueling, spitback, high-altitude, or leak testing.
    (iii) If you certify using fuel meeting California's 
specifications, we may perform testing with E10 test fuel meeting 
either California or EPA specifications.
    (d) Interim test fuel specifications apply for model years 2027 
through 2029 as described in 40 CFR 600.117.
    (e) Additional test fuel specifications apply as specified in 
subpart S of this part.
0
24. Amend Sec.  86.132-96 by revising paragraphs (a), (b), (f), (g), 
(h) introductory text, and (j) introductory text to read as follows:


Sec.  86.132-96   Vehicle preconditioning.

    (a) Prepare the vehicle for testing as described in this section. 
Store the vehicle before testing in a way that prevents fuel 
contamination and preserves the integrity of the fuel system. The 
vehicle shall be moved into the test area and the following operations 
performed.
    (b)(1) Gasoline- and Methanol-Fueled Vehicles. Drain the fuel 
tank(s) and fill with test fuel, as specified in Sec.  86.113, to the 
``tank fuel volume'' defined in Sec.  86.082-2. Install the fuel cap(s) 
within one minute after refueling.
    (2) Gaseous-Fueled Vehicles. Fill fuel tanks with fuel that meets 
the specifications in Sec.  86.113. Fill the fuel tanks to a minimum of 
85 percent of service pressure for natural gas-fueled vehicles or a 
minimum of 85 percent of available fill volume for liquefied petroleum 
gas-fueled vehicles. Prior draining of the fuel tanks is not required 
if the fuel in the tanks already meets the specifications in Sec.  
86.113.
* * * * *
    (f) Drain and then fill the vehicle's fuel tank(s) with test fuel, 
as specified in Sec.  86.113, to the ``tank fuel volume'' defined in 
Sec.  86.082-2. Refuel the vehicle within 1 hour after completing the 
preconditioning drive. Install fuel cap(s) within 1 minute after 
refueling. Park the vehicle within five minutes after refueling. 
However, for the following vehicles omit this refueling event and 
instead drive the vehicle off the dynamometer and park it within five 
minutes after the preconditioning drive:
    (1) Diesel-fueled vehicles.
    (2) Gaseous-fueled vehicles.
    (3) Fuel economy data vehicles.
    (4) In-use vehicles subject to testing under Sec.  86.1845.
    (g) The vehicle shall be soaked for not less than 12 hours nor more 
than 36 hours before the cold start exhaust emission test. The soak 
period starts at the end of the refueling event, or at the end of the 
previous drive if there is no refueling.
    (h) During the soak period for the three-diurnal test sequence 
described in Sec.  86.130-96, precondition any evaporative canisters as 
described in this paragraph (h); however, canister preconditioning is 
not required for fuel economy data vehicles. For vehicles with multiple 
canisters in a series configuration, the set of canisters must be 
preconditioned as a unit. For vehicles with multiple canisters in a 
parallel configuration, each canister must be preconditioned 
separately. If production evaporative canisters are equipped with a 
functional service port designed for vapor load or purge steps, the 
service port shall be used during testing to precondition the canister. 
In addition, for model year 1998 and later vehicles equipped with 
refueling canisters, these canisters shall be preconditioned for the 
three-diurnal test sequence according to the procedure in paragraph 
(j)(1) of this section. If a vehicle is designed to actively control 
evaporative or refueling emissions without a canister, the manufacturer

[[Page 29414]]

shall devise an appropriate preconditioning procedure, subject to the 
approval of the Administrator.
* * * * *
    (j) During the soak period for the supplemental two-diurnal test 
sequence described in Sec.  86.130-96, precondition any evaporative 
canisters using one of the methods described in this paragraph (j); 
however, canister preconditioning is not required for fuel economy data 
vehicles. For vehicles with multiple canisters in a series 
configuration, the set of canisters must be preconditioned as a unit. 
For vehicles with multiple canisters in a parallel configuration, each 
canister must be preconditioned separately. In addition, for model year 
1998 and later vehicles equipped with refueling canisters, these 
canisters shall be preconditioned for the supplemental two-diurnal test 
sequence according to the procedure in paragraph (j)(1) of this 
section. Canister emissions are measured to determine breakthrough. 
Breakthrough is here defined as the point at which the cumulative 
quantity of hydrocarbons emitted is equal to 2 grams.
* * * * *


Sec. Sec.  86.165-12 and 86.1801-01  [Removed]

0
25. Remove Sec. Sec.  86.165-12 and 86.1801-01.
0
26. Amend Sec.  86.1801-12 by revising paragraphs (a)(2)(ii), (a)(3)(i) 
and (ii), (h), (i), (j)(1) introductory text, and (k) and adding 
paragraph (l) to read as follows:


Sec.  86.1801-12   Applicability.

    (a) * * *
    (2) * * *
    (ii) Starting in model year 2030, the provisions of this subpart do 
not apply for vehicles above 22,000 pounds GCWR. The provisions of this 
subpart are optional for those vehicles in model years 2027 through 
2029 as described in paragraph (l) of this section.
* * * * *
    (3) * * *
    (i) Heavy duty vehicles above 14,000 pounds GVWR may be optionally 
certified to the exhaust emission standards in this subpart, including 
the greenhouse gas emission standards, if they are properly included in 
a test group with similar vehicles at or below 14,000 pounds GVWR. 
Emission standards apply to these vehicles as if they were Class 3 
heavy-duty vehicles. The work factor for these vehicles may not be 
greater than the largest work factor that applies for vehicles in the 
test group that are at or below 14,000 pounds GVWR (see Sec.  86.1819-
14). Starting in model year 2030, this option no longer applies for 
vehicles above 22,000 pounds GCWR.
    (ii) Incomplete heavy-duty vehicles at or below 14,000 pounds GVWR 
may be optionally certified to the exhaust emission standards in this 
subpart that apply for heavy-duty vehicles. Starting in model year 
2030, this option no longer applies for vehicles above 22,000 pounds 
GCWR.
* * * * *
    (h) Applicability of provisions of this subpart to light-duty 
vehicles, light-duty trucks, medium-duty passenger vehicles, and heavy-
duty vehicles. Numerous sections in this subpart provide requirements 
or procedures applicable to a ``vehicle'' or ``vehicles.'' Unless 
otherwise specified or otherwise determined by the Administrator, the 
term ``vehicle'' or ``vehicles'' in those provisions apply equally to 
light-duty vehicles (LDVs), light-duty trucks (LDTs), medium-duty 
passenger vehicles (MDPVs), and heavy-duty vehicles (HDVs), as those 
terms are defined in Sec.  86.1803-01. Note that this subpart also 
identifies heavy-duty vehicles at or below 14,000 pounds GVWR that are 
not medium-duty passenger vehicles as medium-duty vehicles.
    (i) Types of pollutants. Emission standards and related 
requirements apply for different types of pollutants as follows:
    (1) Criteria pollutants. Criteria pollutant standards apply for 
NOX, HC, PM, and CO, including exhaust, evaporative, and 
refueling emission standards. These pollutants are sometimes described 
collectively as ``criteria pollutants'' because they are either 
criteria pollutants under the Clean Air Act or precursors to the 
criteria pollutants ozone and PM.
    (2) Greenhouse gas emissions. This subpart contains standards and 
other regulations applicable to the emission of the air pollutant 
defined as the aggregate group of six greenhouse gases: carbon dioxide, 
nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and 
sulfur hexafluoride.
    (3) Nomenclature. Numerous sections in this subpart refer to 
requirements relating to ``exhaust emissions.'' Unless otherwise 
specified or otherwise determined by the Administrator, the term 
``exhaust emissions'' refers at a minimum to emissions of all 
pollutants described by emission standards in this subpart, including 
carbon dioxide (CO2), nitrous oxide (N2O), and 
methane (CH4).
    (j) * * *
    (1) Manufacturers that qualify as a small business under the Small 
Business Administration regulations in 13 CFR part 121 are exempt from 
certain standards and associated provisions as specified in Sec. Sec.  
86.1815, 86.1818, and 86.1819 and in 40 CFR part 600. This exemption 
applies to both U.S.-based and non-U.S.-based businesses. The following 
categories of businesses (with their associated NAICS codes) may be 
eligible for exemption based on the Small Business Administration size 
standards in 13 CFR 121.201:
* * * * *
    (k) Conditional exemption from greenhouse gas emission standards. 
Manufacturers may request a conditional exemption from compliance with 
the emission standards described in Sec.  86.1818-12(c) through (e) and 
associated provisions in this part and in part 600 of this chapter for 
model years 2012 through 2016. For the purpose of determining 
eligibility the sales of related companies shall be aggregated 
according to the provisions of Sec.  86.1838-01(b)(3) or, if a 
manufacturer has been granted operational independence status under 
Sec.  86.1838-01(d), eligibility shall be based on that manufacturer's 
vehicle production.
    (1) [Reserved]
    (2) Maintaining eligibility for exemption from greenhouse gas 
emission standards. To remain eligible for exemption under this 
paragraph (k) the manufacturer's average sales for the three most 
recent consecutive model years must remain below 5,000. If a 
manufacturer's average sales for the three most recent consecutive 
model years exceeds 4,999, the manufacturer will no longer be eligible 
for exemption and must meet applicable emission standards according to 
the provisions in this paragraph (k)(2).
    (i) If a manufacturer's average sales for three consecutive model 
years exceeds 4,999, and if the increase in sales is the result of 
corporate acquisitions, mergers, or purchase by another manufacturer, 
the manufacturer shall comply with the emission standards described in 
Sec.  86.1818-12(c) through (e), as applicable, beginning with the 
first model year after the last year of the three consecutive model 
years.
    (ii) If a manufacturer's average sales for three consecutive model 
years exceeds 4,999 and is less than 50,000, and if the increase in 
sales is solely the result of the manufacturer's expansion in vehicle 
production, the manufacturer shall comply with the emission standards 
described in Sec.  86.1818-12(c) through (e), as applicable, beginning 
with the second model year after the last year of the three consecutive 
model years.
    (iii) If a manufacturer's average sales for three consecutive model 
years

[[Page 29415]]

exceeds 49,999, the manufacturer shall comply with the emission 
standards described in Sec.  86.1818-12 (c) through (e), as applicable, 
beginning with the first model year after the last year of the three 
consecutive model years.
    (l) Transition to GHG standards for high-GCWR vehicles. If 
manufacturers certify all their engines installed in model year 2027 
vehicles with GCWR above 22,000 pounds under 40 CFR part 1036, instead 
of waiting until model year 2030, the vehicles in which those engines 
are installed may demonstrate compliance with the appropriate 
CO2 target values specified for model year 2026 in Sec.  
86.1819-14(k)(4)(i). See 40 CFR 1036.635.
0
27. Amend Sec.  86.1803-01 by:
0
a. Revising the definition of ``Banking''.
0
b. Removing the definitions of ``Durability useful life'', ``Fleet 
average cold temperature NMHC standard'', and ``Fleet average 
NOX standard''.
0
c. Adding definitions of ``Incomplete vehicle'' and ``Light-duty 
program vehicle'' in alphabetical order.
0
d. Revising the definitions of ``Light-duty truck'' and ``Medium-duty 
passenger vehicle (MDPV)''.
0
e. Adding definitions of ``Normal operation'' and ``Rechargeable Energy 
Storage System (RESS)'', and ``Revoke'' in alphabetical order.
0
f. Revising the definition of ``Supplemental FTP (SFTP)''.
0
g. Adding definitions of ``Suspend'', ``Tier 4'', and ``United States'' 
in alphabetical order.
0
h. Removing the definition of ``Useful life''.
0
i. Adding a definition of ``void'' in alphabetical order.
    The revisions and additions read as follows:


Sec.  86.1803-01  Definitions.

* * * * *
    Banking means the retention of emission credits by the manufacturer 
generating the emission credits, for use in future model year 
certification programs as permitted by regulation.
* * * * *
    Incomplete vehicle has the meaning given in 40 CFR 1037.801.
* * * * *
    Light-duty program vehicle means any medium-duty passenger vehicle 
and any vehicle subject to standards under this subpart that is not a 
heavy-duty vehicle. This definition generally applies only for model 
year 2027 and later vehicles.
    Light-duty truck has one of the following meanings:
    (1) Except as specified in paragraph (2) of this definition, Light-
duty truck means any motor vehicle that is not a heavy-duty vehicle, 
but is:
    (i) Designed primarily for purposes of transportation of property 
or is a derivation of such a vehicle; or
    (ii) Designed primarily for transportation of persons and has a 
capacity of more than 12 persons; or
    (iii) Available with special features enabling off-street or off-
highway operation and use.
    (2) For vehicles subject to Tier 4 standards, Light-duty truck has 
the meaning given for ``Light truck'' in 40 CFR 600.002.
* * * * *
    Medium-duty passenger vehicle (MDPV) has one of the following 
meanings:
    (1) Except as specified in paragraph (2) of this definition, 
Medium-duty passenger vehicle means any heavy-duty vehicle (as defined 
in this subpart) with a gross vehicle weight rating (GVWR) of less than 
10,000 pounds that is designed primarily for the transportation of 
persons. The MDPV definition does not include any vehicle which:
    (i) Is an ``incomplete truck'' as defined in this subpart; or
    (ii) Has a seating capacity of more than 12 persons; or
    (iii) Is designed for more than 9 persons in seating rearward of 
the driver's seat; or
    (iv) Is equipped with an open cargo area (for example, a pick-up 
truck box or bed) of 72.0 inches in interior length or more. A covered 
box not readily accessible from the passenger compartment will be 
considered an open cargo area for purposes of this definition.
    (2) Starting with model year 2027, or earlier at the manufacturer's 
discretion, Medium-duty passenger vehicle means any heavy-duty vehicle 
subject to standards under this subpart that is designed primarily for 
the transportation of persons, with seating rearward of the driver, 
except that the MDPV definition does not include any vehicle that
    (i) Is an ``incomplete truck'' as defined in this subpart; or
    (ii) Has a seating capacity of more than 12 persons; or
    (iii) Is designed for more than 9 persons in seating rearward of 
the driver's seat; or
    (iv) Is equipped with an open cargo area (for example, a pick-up 
truck box or bed) with an interior length of 72.0 inches or more for 
vehicles above 9,899 pounds GVWR with a work factor above 5,000 pounds. 
A covered box not readily accessible from the passenger compartment 
will be considered an open cargo area for purposes of this definition.
    (v) Is equipped with an open cargo area of 94.0 inches in interior 
length or more for vehicles at or below 9,899 pounds GVWR and for 
vehicles with a work factor at or below 5,000 pounds.
    Medium-duty vehicle means any heavy-duty vehicle subject to 
standards under this subpart, excluding medium-duty passenger vehicles. 
This definition generally applies only for model year 2027 and later 
vehicles.
* * * * *
    Normal operation means any vehicle operating modes meeting all the 
following conditions:
    (1) Any engine and vehicle settings that are within the physically 
adjustable range for any adjustable parameters.
    (2) Any operator demand that is allowable for engine and vehicle 
calibrations that are available to the operator for vehicle operation 
within the manufacturer's specifications fuel and load (GVWR and GCWR).
    (3) Any ambient conditions during any season for operation on 
public roads in the United States.
* * * * *
    Rechargeable Energy Storage System (RESS) has the meaning given in 
40 CFR 1065.1001. For electric vehicles and hybrid electric vehicles, 
this may also be referred to as a Rechargeable Electrical Energy 
Storage System.
* * * * *
    Revoke has the meaning given in 40 CFR 1068.30.
* * * * *
    Supplemental FTP (SFTP) means the test procedures designed to 
measure emissions during aggressive and microtransient driving over the 
US06 cycle and during driving while the vehicle's air conditioning 
system is operating over the SC03 cycle as described in Sec.  86.1811-
17.
    Suspend has the meaning given in 40 CFR 1068.30.
* * * * *
    Tier 4 means relating to the Tier 4 emission standards described in 
Sec. Sec.  86.1811-27. Note that a Tier 4 vehicle continues to be 
subject to Tier 3 evaporative emission standards.
* * * * *
    United States has the meaning given in 40 CFR 1068.30.
* * * * *
    Void has the meaning given in 40 CFR 1068.30.
* * * * *


Sec. Sec.  86.1805-04 and 86.1805-12  [Removed]

0
28. Remove Sec. Sec.  86.1805-04 and 86.1805-12.

[[Page 29416]]

0
29. Amend Sec.  86.1805-17 by revising paragraphs (c) and (d) and 
removing paragraph (f). The revisions read as follows:


Sec.  86.1805-17  Useful life.

* * * * *
    (c) Cold temperature emission standards. The cold temperature NMHC 
emission standards in Sec.  86.1811-17 apply for a useful life of 10 
years or 120,000 miles for LDV and LLDT, and 11 years or 120,000 miles 
for HLDT and HDV. The cold temperature CO emission standards in Sec.  
86.1811 apply for a useful life of 5 years or 50,000 miles.
    (d) Criteria pollutants. The useful life provisions of this 
paragraph (d) apply for all emission standards not covered by paragraph 
(b) or (c) of this section. This paragraph (d) applies for the cold 
temperature emission standards in Sec.  86.1811-27(c). Except as 
specified in paragraph (f) of this section and in Sec. Sec.  86.1811, 
86.1813, and 86.1816, the useful life for LDT2, HLDT, MDPV, and HDV is 
15 years or 150,000 miles. The useful life for LDV and LDT1 is 10 years 
or 120,000 miles. Manufacturers may optionally certify LDV and LDT1 to 
a useful life of 15 years or 150,000 miles, in which case the longer 
useful life would apply for all the standards and requirements covered 
by this paragraph (d).
* * * * *


Sec.  86.1806-05  [Removed]

0
30. Remove Sec.  86.1806-05.
0
31. Amend Sec.  86.1806-17 by revising paragraphs (b)(4)(ii) and (e) to 
read as follows:


Sec.  86.1806-17  Onboard diagnostics.

* * * * *
    (b) * * *
    (4) * * *
    (ii) Design your vehicles to display information related to engine 
derating and other inducements in the cab as specified in 40 CFR 
1036.110(c)(1).
* * * * *
    (e) Onboard diagnostic requirements apply for alternative-fuel 
conversions as described in 40 CFR part 85, subpart F.
* * * * *
0
32. Add Sec.  86.1806-27 to read as follows:


Sec.  86.1806-27  Onboard diagnostics.

    Model year 2027 and later vehicles must have onboard diagnostic 
(OBD) systems as described in this section. OBD systems must generally 
detect malfunctions in the emission control system, store trouble codes 
corresponding to detected malfunctions, and alert operators 
appropriately. Vehicles may optionally comply with the requirements of 
this section instead of the requirements of Sec.  86.1806-17 before 
model year 2027.
    (a) Vehicles must comply with the 2022 OBD requirements adopted for 
California as described in this paragraph (a). California's 2022 OBD-II 
requirements are part of Title 13, section 1968.2 of the California 
Code of Regulations, approved on November 22, 2022 (incorporated by 
reference, see Sec.  86.1). We may approve your request to certify an 
OBD system meeting a later version of California's OBD requirements if 
you demonstrate that it complies with the intent of this section. The 
following clarifications and exceptions apply for vehicles certified 
under this subpart:
    (1) For vehicles not certified in California, references to 
vehicles meeting certain California Air Resources Board emission 
standards are understood to refer to the corresponding EPA emission 
standards for a given family, where applicable. Use good engineering 
judgment to correlate the specified standards with the bin standards 
that apply under this subpart.
    (2) Vehicles must comply with OBD requirements throughout the 
useful life as specified in Sec.  86.1805. If the specified useful life 
is different for evaporative and exhaust emissions, the useful life 
specified for evaporative emissions applies for monitoring related to 
fuel-system leaks and the useful life specified for exhaust emissions 
applies for all other parameters.
    (3) The purpose and applicability statements in 13 CCR 1968.2(a) 
and (b) do not apply.
    (4) The anti-tampering provisions in 13 CCR 1968.2(d)(1.4) do not 
apply.
    (5) The requirement to verify proper alignment between the camshaft 
and crankshaft described in 13 CCR 1968.2(e)(15.2.1)(C) applies only 
for vehicles equipped with variable valve timing.
    (6) The deficiency provisions described in paragraph (c) of this 
section apply instead of 13 CCR 1968.2(k).
    (7) [Reserved]
    (8) Apply thresholds for exhaust emission malfunctions from Tier 4 
vehicles based on the thresholds calculated for the corresponding bin 
standards in the California LEV III program as prescribed for the 
latest model year in 13 CCR 1968.2(d). For example, for Tier 4 Bin 10 
standards, apply the threshold that applies for the LEV standards. For 
cases involving Tier 4 standards that have no corresponding bin 
standards from the California LEV III program, use the next highest LEV 
III bin. For example, for Tier 4 Bin 50 standards, apply the threshold 
that applies for the ULEV standards. You may apply thresholds that are 
more stringent than we require under this paragraph (a)(8).
    (9) Apply thresholds as specified in 40 CFR 1036.110(b)(5) for 
engines certified to emission standards under 40 CFR part 1036.
    (b) For vehicles with installed compression-ignition engines that 
are subject to standards and related requirements under 40 CFR 1036.104 
and 1036.111, you must comply with the following additional 
requirements:
    (1) Make parameters related to engine derating and other 
inducements available for reading with a generic scan tool as specified 
in 40 CFR 110(b)(9)(vi).
    (2) Design your vehicles to display information related to engine 
derating and other inducements in the cab as specified in 40 CFR 
1036.110(c)(1).
    (c) You may ask us to accept as compliant a vehicle that does not 
fully meet specific requirements under this section. Such deficiencies 
are intended to allow for minor deviations from OBD standards under 
limited conditions. We expect vehicles to have functioning OBD systems 
that meet the objectives stated in this section. The following 
provisions apply regarding OBD system deficiencies:
    (1) Except as specified in paragraph (d) of this section, we will 
not approve a deficiency that involves the complete lack of a major 
diagnostic monitor, such as monitors related to exhaust aftertreatment 
devices, oxygen sensors, air-fuel ratio sensors, NOX 
sensors, engine misfire, evaporative leaks, and diesel EGR (if 
applicable).
    (2) We will approve a deficiency only if you show us that full 
compliance is infeasible or unreasonable considering any relevant 
factors, such as the technical feasibility of a given monitor, or the 
lead time and production cycles of vehicle designs and programmed 
computing upgrades.
    (3) Our approval for a given deficiency applies only for a single 
model year, though you may continue to ask us to extend a deficiency 
approval in renewable one-year increments. We may approve an extension 
if you demonstrate an acceptable level of effort toward compliance and 
show that the necessary hardware or software modifications would pose 
an unreasonable burden.
    (d) For alternative-fuel vehicles, manufacturers may request a 
waiver from specific requirements for which monitoring may not be 
reliable for operation with the alternative fuel. However, we will not 
waive

[[Page 29417]]

requirements that we judge to be feasible for a particular manufacturer 
or vehicle model.
    (e) OBD-related requirements for alternative-fuel conversions apply 
as described in 40 CFR part 85, subpart F.
    (f) You may ask us to waive certain requirements in this section 
for emergency vehicles. We will approve your request for an appropriate 
duration if we determine that the OBD requirement in question could 
harm system performance in a way that would impair a vehicle's ability 
to perform its emergency functions.
    (g) The following interim provisions describe an alternate 
implementation schedule for the requirements of this section in certain 
circumstances:
    (1) Manufacturers may delay complying with all the requirements of 
this section, and instead meet all the requirements that apply under 
Sec.  86.1806-17 for any vehicles above 6,000 pounds GVWR that are not 
yet subject to all the Tier 4 standards in Sec.  86.1811.
    (2) Except as specified in this paragraph (g)(2), small-volume 
manufacturers may delay complying with all the requirements of this 
section until model year 2030, and instead meet all the requirements 
that apply under Sec.  86.1806-17 during those years.
    (3) Manufacturers may disregard the requirements of this section 
that apply above 8,500 pounds GVWR before model year 2019 and instead 
meet all the requirements that apply under Sec.  86.1806-05. This also 
applies for model year 2019 vehicles from a test group with vehicles 
that have a Job 1 date on or before March 3, 2018 (see 40 CFR 85.2304).
    (h) Manufacturers must meet the following requirements to monitor 
PM filters installed on vehicles with spark-ignition engines:
    (1) For vehicles that have hardware dedicated to active 
regeneration strategies, such as secondary air or fuel injection or 
burners in the exhaust stream, monitor those systems for proper 
performance. Meet requirements for comprehensive monitoring in 13 CCR 
1968.2(e)(15) for injectors, valves, sensors, pumps, and other 
individual components associated with such active regeneration systems.
    (2) Systems must detect malfunctions as follows:
    (i) The system must detect a malfunction before filtering decreases 
to the point that PM emissions exceed 10 mg/mile over the FTP. If there 
is no failure or deterioration of the PM filter that could cause a 
vehicle to exceed the specified PM emission level, the system must 
detect a malfunction if the PM filter allows free flow of exhaust 
through the PM filter assembly where 30 percent or less of the normal 
filtration is occurring; this may occur if someone tampers with the PM 
filter assembly by damaging it or replacing it with a straight pipe or 
if the PM filter substrate degrades to allow exhaust gases to bypass 
the filter.
    (ii) The system must detect a malfunction before PM filter 
regeneration frequency increases to the point that HC, CO, or 
NOX emissions exceed 1.5 times the applicable FTP standard. 
If there is no failure or deterioration that could cause a vehicle to 
exceed the specified emission level, the system must detect a 
malfunction when PM filter regeneration frequency exceeds the 
manufacturer's specified design limits for allowable regeneration 
frequency.
    (iii) The system must detect a malfunction if regeneration does not 
properly restore the PM filter when regeneration is designed to occur 
based on the manufacturer's specified conditions.
    (3) Manufacturers must define monitoring conditions for 
malfunctions under paragraph (h)(2) of this section in accordance with 
13 CCR 1968.2(d)(3.1) and (d)(3.2), except that monitoring of 
malfunctions under paragraph (h)(2)(i) and (ii) of this section must 
occur every time the monitoring conditions are met during the driving 
cycle. The required minimum ratio for gasoline particulate filters is 
0.150. Manufacturers must track and report the in-use performance of PM 
filter monitors in accordance with 13 CCR 1968.2(d)(3.2.2). Separately 
track all monitors detecting malfunctions and report malfunctions as a 
single set of values as specified in 13 CCR 1968.2(d)(5.2.1)(B), except 
that manufacturers may need to report malfunctions separately for 
vehicles using SAE J1979-2 as specified in 13 CCR 1968.2(d)(5.1.3) and 
(5.2.2).
    (4) Manufacturers must meet general requirements for MIL 
illumination and fault code storage for all the malfunctions in 
paragraph (h)(2) of this section in accordance with 13 CCR 
1968.2(d)(2).


Sec.  86.1807-01   [Amended]

0
33. Amend Sec.  86.1807-01 by removing and reserving paragraph (d).


Sec.  86.1808-01   [Amended]

0
34. Amend Sec.  86.1808-01 by removing and reserving paragraph (e).


Sec.  86.1809-01 and 86.1809-10   [Removed]

0
35. Remove Sec. Sec.  86.1809-01 and 86.1809-10.
0
36. Revise Sec.  86.1809-12 to read as follows:


Sec.  86.1809-12   Prohibition of defeat devices.

    (a) No new vehicle shall be equipped with a defeat device.
    (b) EPA may test or require testing on any vehicle at a designated 
location, using driving cycles and conditions that may reasonably be 
expected to be encountered in normal operation and use, for the 
purposes of investigating a potential defeat device.
    (c) For cold temperature CO, NMHC, and NMOG+NOX emission 
control, EPA will use a guideline to determine the appropriateness of 
the CO emission control and the NMHC or NMOG+NOX emission 
control at ambient temperatures between 25 [deg]F (the upper bound of 
the range for cold temperature testing) and 68 [deg]F (the lower bound 
of the FTP test temperature range). The guideline for CO and 
NMOG+NOX emission congruity across the intermediate 
temperature range is the linear interpolation between the CO or 
NMOG+NOX standard applicable at 25 [deg]F and the 
corresponding standard applicable at 68 [deg]F. The guideline for NMHC 
emission congruity across the intermediate temperature range is the 
linear interpolation between the NMHC FEL pass limit (e.g., 0.3499 g/mi 
for a 0.3 g/mi FEL) applicable at 20 [deg]F and the Tier 2 NMOG 
standard or the Tier 3 or Tier 4 NMOG+NOX bin standard to 
which the vehicle was certified at 68 [deg]F, where the intermediate 
temperature NMHC level is rounded to the nearest 0.01 g/mile for 
comparison to the interpolated line. The following provisions apply for 
vehicles that exceed the specified emission guideline during 
intermediate temperature testing:
    (1) If the CO emission level is greater than the 20 [deg]F emission 
standard, the vehicle will automatically be considered to be equipped 
with a defeat device without further investigation. If the intermediate 
temperature NMHC or NMOG+NOX emission level, rounded to the 
nearest 0.01 g/mile or the nearest 10 mg/mile, is greater than the 20 
[deg]F FEL pass limit, the vehicle will be presumed to have a defeat 
device unless the manufacturer provides evidence to EPA's satisfaction 
that the cause of the test result in question is not due to a defeat 
device.
    (2) If the conditions in paragraph (c)(1) of this section do not 
apply, EPA may investigate the vehicle design for the presence of a 
defeat device under paragraph (d) of this section.
    (d) The following provisions apply for vehicle designs EPA 
designates for investigation as possible defeat devices:
    (1) The manufacturer must show to EPA's satisfaction that the 
vehicle design does not incorporate strategies that unnecessarily 
reduce emission

[[Page 29418]]

control effectiveness exhibited during the certification test 
procedures specified in this subpart, the fuel economy test procedures 
in 40 CFR part 600, or the air conditioning efficiency test in 40 CFR 
1066.845, when the vehicle is operated under conditions that may 
reasonably be expected to be encountered in normal operation and use.
    (2) EPA has determined that it is not necessary for spark-ignition 
engines that control air-fuel ratios at or near stoichiometry to use 
commanded enrichment to maintain power or to protect the engine or its 
aftertreatment components from damage. This determination is effective 
for all vehicles certified to Tier 4 standards. This paragraph (d)(2) 
does not apply for the following examples of commanded enrichment:
    (i) Engine starting.
    (ii) Catalyst rewetting after deceleration fuel cutoff.
    (iii) Limp-home operation when the check engine light is on.
    (iv) Intrusive OBD monitoring.
    (3) The following information requirements apply:
    (i) Upon request by EPA, the manufacturer must provide an 
explanation containing detailed information regarding test programs, 
engineering evaluations, design specifications, calibrations, on-board 
computer algorithms, and design strategies incorporated for operation 
both during and outside of the Federal emission test procedures.
    (ii) For purposes of investigation of possible cold temperature CO, 
NMHC, or NMOG+NOX defeat devices under this paragraph (d), 
the manufacturer must provide an explanation to show to EPA's 
satisfaction that CO emissions and NMHC or NMOG+NOX 
emissions are reasonably controlled in reference to the linear 
guideline across the intermediate temperature range.
    (e) For each test group the manufacturer must submit an engineering 
evaluation with the Part II certification application demonstrating to 
EPA's satisfaction that a discontinuity in emissions of non-methane 
organic gases, particulate matter, carbon monoxide, carbon dioxide, 
oxides of nitrogen, nitrous oxide, methane, and formaldehyde measured 
on the Federal Test Procedure (40 CFR 1066.801(c)(1)) and on the 
Highway Fuel Economy Test Procedure (40 CFR 1066.801(c)(5)) does not 
occur in the temperature range of 20 to 86 [deg]F.
0
37. Amend Sec.  86.1810-17 by revising paragraphs (g) and (h)(1) to 
read as follows:


Sec.  86.1810-17   General requirements.

* * * * *
    (g) The cold temperature standards in this subpart refer to test 
procedures set forth in subpart C of this part and 40 CFR part 1066, 
subpart H. All other emission standards in this subpart rely on test 
procedures set forth in subpart B of this part and 40 CFR part 1066, 
subpart H. These procedures rely on the test specifications in 40 CFR 
parts 1065 and 1066 as described in subparts B and C of this part.
    (h) * * *
    (1) For criteria exhaust emissions, we may identify the worst-case 
fuel blend for testing in addition to what is required for gasoline-
fueled vehicles. The worst-case fuel blend may be the fuel specified in 
40 CFR 1065.725, or it may consist of a combination of the fuels 
specified in 40 CFR 1065.710(b) and 1065.725. We may waive testing with 
the worst-case blended fuel for US06 and/or SC03 duty cycles; if we 
waive only SC03 testing for Tier 3 vehicles, substitute the SC03 
emission result using the standard test fuel for gasoline-fueled 
vehicles to calculate composite SFTP emissions.
* * * * *
0
38. Amend Sec.  86.1811-17 by revising paragraphs (b)(8)(iii)(B), (d) 
introductory text, and (g)(2)(ii) to read as follows:


Sec.  86.1811-17   Exhaust emission standards for light-duty vehicles, 
light-duty trucks and medium-duty passenger vehicles.

* * * * *
    (b) * * *
    (8) * * *
    (iii) * * *
    (B) You may continue to use the E0 test fuel specified in Sec.  
86.113 as described in 40 CFR 600.117.
* * * * *
    (d) Special provisions for Otto-cycle engines. The following 
special provisions apply for vehicles with Otto-cycle engines:
* * * * *
    (g) * * *
    (2) * * *
    (ii) The manufacturer must calculate its fleet average cold 
temperature NMHC emission level(s) as described in Sec.  86.1864-10(b).
* * * * *
0
39. Add Sec.  86.1811-27 to read as follows:


Sec.  86.1811-27   Criteria exhaust emission standards.

    (a) Applicability and general provisions. This section describes 
criteria exhaust emission standards that apply for model year 2027 and 
later vehicles.
    (1) A vehicle meeting all the requirements of this section is 
considered a Tier 4 vehicle meeting the Tier 4 standards.
    (2) See Sec.  86.1813 for evaporative and refueling emission 
standards.
    (3) See Sec.  86.1818 for greenhouse gas emission standards.
    (b) Exhaust emission standards over bin driving cycles. Exhaust 
emissions may not exceed standards over bin driving cycles, as follows:
    (1) Measure emissions using the chassis dynamometer procedures of 
40 CFR part 1066, as follows:
    (i) Establish appropriate load settings based on loaded vehicle 
weight for light-duty program vehicles and adjusted loaded vehicle 
weight for medium-duty vehicles (see Sec.  86.1803).
    (ii) Emission standards under this paragraph (b) apply for all the 
following driving cycles unless otherwise specified:

------------------------------------------------------------------------
        The driving cycle . . .               is identified in . . .
------------------------------------------------------------------------
(A) FTP................................  40 CFR 1066.801(c)(1).
(B) US06...............................  40 CFR 1066.801(c)(2).
(C) SC03...............................  40 CFR 1066.801(c)(3).
(D) HFET...............................  40 CFR 1066.801(c)(5).
(E) ACC II--Mid-temperature              40 CFR 1066.801(c)(8).
 intermediate soak.
(F) ACC II--Early driveaway............  40 CFR 1066.801(c)(9).
(G) ACC II High-load PHEV engine starts  40 CFR 1066.801(c)(10).
------------------------------------------------------------------------

    (iii) Hydrocarbon emission standards are expressed as NMOG; 
however, for certain vehicles you may measure exhaust emissions based 
on nonmethane hydrocarbon instead of NMOG as described in 40 CFR 
1066.635.

[[Page 29419]]

    (iv) Measure emissions from hybrid electric vehicles (including 
plug-in hybrid electric vehicles) as described in 40 CFR part 1066, 
subpart F, except that these procedures do not apply for plug-in hybrid 
electric vehicles during charge-depleting operation.
    (2) Fully phased-in standards apply as specified in the following 
table:

             Table 1 to Paragraph (b)(2)--Fully Phased-In Tier 4 Criteria Exhaust Emission Standards
----------------------------------------------------------------------------------------------------------------
                                                   NMOG+NOX (mg/   PM (mg/mile)     CO (g/mile)    Formaldehyde
                                                     mile) \a\          \b\             \c\        (mg/mile) \d\
----------------------------------------------------------------------------------------------------------------
Light-duty program vehicles.....................              12             0.5             1.7               4
Medium-duty vehicles............................              60             0.5             3.2               6
----------------------------------------------------------------------------------------------------------------
\a\ The NMOG+NOX standards apply on a fleet-average basis using discrete bin standards as described in
  paragraphs (b)(4) and (6) of this section. The specified fleet-average standards apply for model year 2032 and
  later vehicles; see paragraph (b)(6) of this section for fleet-average NMOG+NOX standards that apply for model
  years 2027 through 2031.
\b\ PM standards under this paragraph (b) apply only for the FTP and US06 driving cycles.
\c\ CO standards do not apply for the ACC II driving cycles specified in paragraph (b)(1)(ii)(E) through (G) of
  this section.
\d\ Formaldehyde standards apply only for the FTP driving cycle.

    (3) The FTP standards specified in this paragraph (b) apply equally 
for testing at low-altitude conditions and high-altitude conditions. 
The US06, SC03, and HFET standards apply only for testing at low-
altitude conditions.
    (4) The NMOG + NOX emission standard is based on a fleet 
average for a given model year.
    (i) You must specify a family emission limit (FEL) for each test 
group based on the FTP emission standard corresponding to each named 
bin. The FEL serves as the emission standard for the test group with 
respect to all specified driving cycles. Calculate your fleet-average 
emission level as described in Sec.  86.1860 to show that you meet the 
specified fleet-average standard. For multi-fueled vehicles, calculate 
fleet-average emission levels based only on emission levels for testing 
with gasoline or diesel fuel. You may generate emission credits for 
banking and trading, and you may use banked or traded credits as 
described in Sec.  86.1861 for demonstrating compliance with the NMOG + 
NOX fleet-average emission standard. You comply with the 
fleet-average emission standard for a given model year if you have 
enough credits to show that your fleet-average emission level is at or 
below the applicable standard.
    (ii) Select one of the identified values from table 2 of this 
section for demonstrating that your fleet-average emission level 
complies with the NMOG+NOX fleet-average emission standard. 
These FEL values define emission bins that also determine corresponding 
emission standards for NMOG+NOX emission standards for ACC 
II driving cycles, as follows:

                                             Table 2 to Paragraph (b)(4)(ii)--Tier 4 NMOG+NOX Bin Standards
                                                                        [mg/mile]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           ACC II--Mid-    ACC II--Mid-    ACC II--Mid-
                                                                            temperature     temperature     temperature                    ACC II--High-
                        FEL name                            FTP, US06,     intermediate    intermediate    intermediate    ACC II--Early    power PHEV
                                                            SC03, HFET      soak (3-12       soak (40        soak (10      driveaway \b\   engine starts
                                                                              hours)       minutes) \a\      minutes)                         \b\ \c\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Bin 160 \d\.............................................             160  ..............  ..............  ..............  ..............  ..............
Bin 125 \d\.............................................             125  ..............  ..............  ..............  ..............  ..............
Bin 70..................................................              70              70              54              35              82             200
Bin 60..................................................              60              60              46              30              72             175
Bin 50..................................................              50              50              38              25              62             150
Bin 40..................................................              40              40              31              20              52             125
Bin 30..................................................              30              30              23              15              42             100
Bin 20..................................................              20              20              15              10              32              67
Bin 10..................................................              10              10               8               5              22              34
Bin 0...................................................               0               0               0               0               0  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Calculate the bin standard for a soak time between 10 and 40 minutes based on a linear interpolation between the corresponding bin values for a 10-
  minute soak and a 40-minute soak. Similarly, calculate the bin standard for a soak time between 40 minutes and 3 hours based on a linear interpolation
  between the corresponding bin values for a 40-minute soak and a 3-hour soak.
\b\ Qualifying vehicles are exempt from standards for early driveaway and high-power PHEV engine starts as described in paragraph (b)(5) of this
  section.
\c\ Alternative standards apply for high-power PHEV engine starts for model years 2027 and 2028 as described in paragraph (b)(6)(v) of this section.
\d\ Bin 160 and Bin 125 apply only for medium-duty vehicles.

    (5) Qualifying vehicles are exempt from certain ACC II bin 
standards as follows:
    (i) Vehicles are exempt from the ACC II bin standards for early 
driveaway if the vehicle prevents engine starting during the first 20 
seconds of a cold-start FTP test interval and the vehicle does not use 
an electrically heated catalyst or other technology to precondition the 
engine or emission controls such that NMOG+NOX emissions 
would be higher during the first 505 seconds of the early driveaway 
driving cycle compared to the first 505 seconds of the conventional FTP 
driving cycle.
    (ii) Vehicles are exempt from the ACC II bin standards for high-
power PHEV engine starts if their all-electric range on the cold-start 
US06 driving cycles is at or above 10 miles for model years 2027

[[Page 29420]]

and 2028, and at or above 40 miles for model year 2029 and later.
    (6) The Tier 4 standards phase in over several years, as follows:
    (i) NMOG+NOX fleet average standards for light-duty program 
vehicles. Include all light-duty program vehicles at or below 6,000 
pounds GVWR in the calculation to comply with the Tier 4 fleet average 
NMOG+NOX standard. You must meet all the other Tier 4 
requirements with 40 and 80 percent of your projected nationwide sales 
in model years 2027 and 2028, respectively. A vehicle counts toward 
meeting the phase-in percentage only if it meets all the requirements 
of this section. NMOG+NOX fleet average standards apply as 
follows for model year 2027 through 2031 light-duty program vehicles:

    Table 3 to Paragraph (b)(6)(i)--Declining Fleet Average NMOG+NOX
                Standards for Light-Duty Program Vehicles
------------------------------------------------------------------------
                                                           Fleet average
                                                             NMOG+NOX
                       Model year                          standard (mg/
                                                               mile)
------------------------------------------------------------------------
2027....................................................              22
2028....................................................              20
2029....................................................              18
2030....................................................              16
2031....................................................              14
------------------------------------------------------------------------

    (ii) Default phase-in for vehicles above 6,000 pounds GVWR. The 
default approach for phasing in the Tier 4 standards for vehicle above 
6,000 pounds GVWR is for all those vehicles to meet the Tier 4 
standards of this section starting in model year 2030. Manufacturers 
using this default phase-in for medium-duty vehicles may not use 
credits generated from Tier 3 medium-duty vehicles for demonstrating 
compliance with the Tier 4 NMOG+NOX standards under this 
paragraph (b).
    (iii) Alternative early phase-in for vehicles above 6,000 pounds 
GVWR. Manufacturers may use the following alternative early phase-in 
provisions to transition to the Tier 4 exhaust emission standards on an 
earlier schedule for vehicles above 6,000 pounds GVWR.
    (A) If you select the alternative early phase-in for light-duty 
program vehicles above 6,000 pounds GVWR, you must demonstrate that you 
meet the phase-in requirements in paragraph (b)(6)(i) of this section 
based on all your light-duty program vehicles.
    (B) If you select the alternative early phase-in for medium-duty 
vehicles, include all medium-duty vehicles at or below 22,000 pounds 
GCWR in the calculation to comply with the Tier 4 fleet average 
NMOG+NOX standard. You must meet all the other Tier 4 
requirements with 40 and 80 percent of a manufacturer's projected 
nationwide sales in model years 2027 and 2028, respectively. A vehicle 
counts toward meeting the phase-in percentage only if it meets all the 
requirements of this section. Medium-duty vehicles complying with the 
alternative early phase-in are subject to the following 
NMOG+NOX fleet-average standards for model years 2027 
through 2031:

  Table 4 to Paragraph (b)(6)(iii)(B)--Declining Fleet Average NMOG+NOX
                   Standards for Medium-Duty Vehicles
------------------------------------------------------------------------
                                                           Fleet average
                                                             NMOG+NOX
                       Model year                          standard (mg/
                                                               mile)
------------------------------------------------------------------------
2027....................................................             160
2028....................................................             140
2029....................................................             120
2030....................................................             100
2031....................................................              80
------------------------------------------------------------------------

    (iv) Interim Tier 4 vehicles. Vehicles not meeting all the 
requirements of this section during the phase-in are considered 
``interim Tier 4 vehicles''. Interim Tier 4 vehicles are subject to all 
the requirements of this subpart that apply for Tier 3 vehicles except 
for the fleet average NMOG+NOX standards in Sec. Sec.  
86.1811-17 and 86.1816-18. Interim Tier 4 vehicles may certify using 
all available NMOG+NOX bins under Sec. Sec.  86.1811-17 and 
86.1816-18. Note that manufacturers complying with the default phase-in 
specified in paragraph (b)(6)(ii) of this section for vehicles above 
6,000 pounds GVWR will need to meet a Tier 3 fleet average 
NMOG+NOX standard in model years 2027 through 2029, in 
addition to the Tier 4 fleet average for vehicles at or below 6,000 
pounds GVWR in those same years.
    (v) Phase-in for high-power PHEV engine starts. The following bin 
standards apply for high-power PHEV engine starts in model years 2027 
and 2028 instead of the analogous standards specified in paragraph 
(b)(4)(ii) of this section:

 Table 5 to Paragraph (b)(6)(v)--Model Year 2027 and 2028 Bin Standards
                    for High-Power PHEV Engine Starts
------------------------------------------------------------------------
                                                          ACC II-- High-
                                                            power PHEV
                        FEL name                           engine starts
                                                             (mg/mile)
------------------------------------------------------------------------
Bin 70..................................................             320
Bin 60..................................................             280
Bin 50..................................................             240
Bin 40..................................................             200
Bin 30..................................................             150
Bin 20..................................................             100
Bin 10..................................................              50
------------------------------------------------------------------------

    (vi) MDPV. Any vehicle that becomes an MDPV as a result of the 
revised definition in Sec.  86.1803 starting in model 2027 remains 
subject to the heavy-duty Tier 3 standards in Sec.  86.1816-18 under 
the default phase-in specified in paragraph (b)(6)(ii) of this section 
for model years 2027 through 2029.
    (vii) Keep records as needed to show that you meet the requirements 
specified in this paragraph (b) for phasing in standards and for 
complying with declining fleet-average average standards.
    (c) Exhaust emission standards for cold temperature testing. 
Exhaust emissions may not exceed standards for cold temperature 
testing, as follows:
    (1) Measure emissions as described in paragraph (b)(1) of this 
section, but use the driving cycle identified in 40 CFR 1066.801(c)(5).
    (2) The standards apply to gasoline-fueled and diesel-fueled 
vehicles, except as specified. Multi-fuel, bi-fuel or dual-fuel 
vehicles must comply with requirements using only gasoline and diesel 
fuel, as applicable. Testing with other fuels such as a high-level 
ethanol-gasoline blend is not required.
    (3) Vehicles must meet the following standards:
    (i) The NMOG+NOX fleet-average standard is a 300 mg/
mile. Calculate fleet-average emission levels as described in Sec.  
86.1864.
    (ii) The PM standard is 0.5 mg/mile.
    (iii) The CO standard is 10.0 g/mile.
    (4) The CO standard applies at both low-altitude and high-altitude 
conditions. The NMOG+NOX and PM standards apply only at low-
altitude conditions. However, manufacturers must submit an engineering 
evaluation indicating that common calibration approaches are utilized 
at high altitudes. Any deviation from low altitude emission control 
practices must be included in the auxiliary emission control device 
(AECD) descriptions submitted at certification. Any AECD

[[Page 29421]]

specific to high altitude must require engineering emission data for 
EPA evaluation to quantify any emission impact and validity of the 
AECD.
    (d) Special provisions for spark-ignition engines. The following A/
C-on specific calibration provisions apply for vehicles with spark-
ignition engines:
    (1) A/C-on specific calibrations (e.g., air-fuel ratio, spark 
timing, and exhaust gas recirculation) that differ from A/C-off 
calibrations may be used for a given set of engine operating conditions 
(e.g., engine speed, manifold pressure, coolant temperature, air charge 
temperature, and any other parameters). Such calibrations must not 
unnecessarily reduce emission control effectiveness during A/C-on 
operation when the vehicle is operated under conditions that may 
reasonably be expected during normal operation and use. If emission 
control effectiveness decreases as a result of such calibrations, the 
manufacturer must describe in the Application for Certification the 
circumstances under which this occurs and the reason for using these 
calibrations.
    (2) For AECDs involving commanded enrichment, these AECDs must not 
operate differently for A/C-on operation than for A/C-off operation. 
This includes both the sensor inputs for triggering enrichment and the 
degree of enrichment employed.
0
40. Amend Sec.  86.1813-17 by revising paragraphs (a)(2)(i) 
introductory text, (b)(1)(i), and (g)(2)(ii)(B) to read as follows:


Sec.  86.1813-17  Evaporative and refueling emission standards.

* * * * *
    (a) * * *
    (2) * * *
    (i) The emission standard for the sum of diurnal and hot soak 
measurements from the two-diurnal test sequence and the three-diurnal 
test sequence is based on a fleet average in a given model year. You 
must specify a family emission limit (FEL) for each evaporative family. 
The FEL serves as the emission standard for the evaporative family with 
respect to all required diurnal and hot soak testing. Calculate your 
fleet-average emission level as described in Sec.  86.1860 based on the 
FEL that applies for low-altitude testing to show that you meet the 
specified standard. For multi-fueled vehicles, calculate fleet-average 
emission levels based only on emission levels for testing with 
gasoline. You may generate emission credits for banking and trading, 
and you may use banked or traded credits for demonstrating compliance 
with the diurnal plus hot soak emission standard for vehicles required 
to meet the Tier 3 standards, other than gaseous-fueled or electric 
vehicles, as described in Sec.  86.1861 starting in model year 2017. 
You comply with the emission standard for a given model year if you 
have enough credits to show that your fleet-average emission level is 
at or below the applicable standard. You may exchange credits between 
or among evaporative families within an averaging set as described in 
Sec.  86.1861. Separate diurnal plus hot soak emission standards apply 
for each evaporative/refueling emission family as shown for high-
altitude conditions. The sum of diurnal and hot soak measurements may 
not exceed the following Tier 3 standards:
* * * * *
    (b) * * *
    (1) * * *
    (i) Refueling standards apply starting with model year 2027 for 
incomplete vehicles certified under 40 CFR part 1037 and in model year 
2030 for incomplete vehicles certified under this subpart, unless the 
manufacturer complies with the alternate phase-in specified in 
paragraph (b)(1)(iii) of this section. If you do not meet the 
alternative phase-in requirement for model year 2026, you must certify 
all your incomplete heavy-duty vehicles above 14,000 pounds GVWR to the 
refueling standard in model year 2027.
    (ii) Refueling standards are optional for incomplete heavy-duty 
vehicles at or below 14,000 pounds GVWR through model year 2029, unless 
the manufacturer uses the alternate phase-in specified in paragraph 
(b)(1)(iii) of this section to meet standards together for heavy-duty 
vehicles above and below 14,000 pounds GVWR.
* * * * *
    (g) * * *
    (2) * * *
    (ii) * * *
    (B) All the vehicles meeting the leak standard must also meet the 
Tier 3 evaporative emission standards. Through model year 2026, all 
vehicles meeting the leak standard must also meet the OBD requirements 
in Sec.  86.1806-17(b)(1).
* * * * *
0
41. Add Sec.  86.1815 to read as follows:


Sec.  86.1815  Battery-related requirements for electric vehicles and 
plug-in hybrid electric vehicles.

    Electric vehicles and plug-in hybrid electric vehicles must meet 
requirements related to batteries serving as a Rechargeable Energy 
Storage System from GTR No. 22 (incorporated by reference, see Sec.  
86.1). The requirements of this section apply starting in model year 
2027 for vehicles at or below 6,000 pounds GVWR. These requirements 
apply vehicles above 6,000 pounds GVWR if they are certified to Tier 4 
NMOG+NOX standards under Sec.  86.1811-27, not later than 
model year 2030. The following clarifications and adjustments to GTR 
No. 22 apply for vehicles subject to this section:
    (a) Manufacturers must install a customer-accessible display that 
monitors, estimates, and communicates the vehicle's State of Certified 
Energy (SOCE) and include information in the application for 
certification as described in Sec.  86.1844. Manufacturers that qualify 
as small businesses under Sec.  86.1801-12(j)(1) must meet the 
requirements of this paragraph (a) but are not subject to the 
requirements in paragraphs (c) through (g) of this section; however, 
small businesses may trade credits they generate from electric vehicles 
and plug-in hybrid electric vehicles for a given model year only if 
they meet requirements in paragraphs (c) through (g) of this section.
    (b) Requirements in GTR No. 22 related to State of Certified Range 
do not apply.
    (c) Evaluate SOCE for electric vehicles based on measured Useable 
Battery Energy (UBE) values over the Multi-Cycle Range and Energy 
Consumption Test described in 40 CFR 600.116-12(a). For medium-duty 
vehicles, perform testing with test weight set to Adjusted Loaded 
Vehicle Weight. Use good engineering judgment to evaluate SOCE for 
plug-in hybrid electric vehicles using the procedures specified in 40 
CFR 600.116-12.
    (d) In-use vehicles must display SOCE values that are accurate 
within 5 percent of measured values as calculated in GTR No. 22.
    (e) Batteries installed in light-duty program vehicles must meet a 
Minimum Performance Requirement such that measured usable battery 
energy is at least 80 percent of the vehicle's certified usable battery 
energy after 5 years or 62,000 miles, and at least 70 percent of 
certified usable battery energy at 8 years or 100,000 miles.
    (f) Manufacturers must perform testing and submit reports as 
follows:
    (1) Perform Part A testing to verify that SOCE monitors meet 
accuracy requirements as described in Sec.  86.1845. Test the number of 
vehicles and determine a pass or fail result as specified in Section 
6.3 of GTR No. 22.
    (2) Perform Part B verification for each battery durability family 
included in a monitor family subject to Part A testing to verify that 
batteries have SOCE meeting the Minimum Performance Requirement. 
Determine

[[Page 29422]]

performance by reading SOCE monitors with a physical inspection, remote 
inspection using wireless technology, or any other appropriate means.
    (i) Randomly select test vehicles from at least 10 different U.S. 
states or territories, with no more than 20 percent of selected 
vehicles coming from any one state or territory. Select vehicles to 
represent a wide range of climate conditions and operating 
characteristics.
    (ii) Select at least 500 test vehicles per year from each battery 
durability family, except that we may approve your request to select 
fewer vehicles for a given battery durability family based on limited 
production volumes. If you test fewer than 500 vehicles, you may 
exclude up to 5 percent of the tested vehicles to account for the 
limited sample size. Test vehicles may be included from year to year, 
or test vehicles may change over the course of testing for the battery 
durability family.
    (iii) A battery durability family passes if 90 percent or more of 
sampled vehicles have reported values above the Minimum Performance 
Requirement.
    (iv) Continue testing for eight years after the end of production 
for vehicles included in the battery durability family. Note that 
testing will typically require separate testing from multiple model 
years in a given calendar year.
    (3) You may request our approval to group monitors and batteries 
differently, or to adjust testing specifications. Submit your request 
with your proposed alternative specifications, along with technical 
justification. In the case of broadening the scope of a monitor family, 
include data demonstrating that differences within the proposed monitor 
family do not cause error in estimating SOCE.
    (4) Submit electronic reports to document the results of testing as 
described in Sec.  86.1847.
    (g) If vehicles do not comply with monitor accuracy requirements 
under this section, the recall provisions in 40 CFR part 85, subpart S, 
apply for each affected monitor family. If vehicles do not comply with 
battery durability requirements under this section, the manufacturer 
must adjust all credit balances to account for the nonconformity (see 
Sec.  86.1850-01).
0
42. Amend Sec.  86.1818-18 by revising paragraph (a) introductory text 
to read as follows:


Sec.  86.1816-18  Emission standards for heavy-duty vehicles.

    (a) Applicability and general provisions. This section describes 
Tier 3 exhaust emission standards for complete heavy-duty vehicles. 
These standards are optional for incomplete heavy-duty vehicles and for 
heavy-duty vehicles above 14,000 pounds GVWR as described in Sec.  
86.1801. Greenhouse gas emission standards are specified in Sec.  
86.1818 for MDPV and in Sec.  86.1819 for other HDV. See Sec.  86.1813 
for evaporative and refueling emission standards. This section starts 
to apply in model year 2018, except that the provisions may apply to 
vehicles before model year 2018 as specified in paragraph (b)(11) of 
this section. This section applies for model year 2027 and later 
vehicles only as specified in Sec.  86.1811-27. Separate requirements 
apply for MDPV as specified in Sec.  86.1811. See subpart A of this 
part for requirements that apply for incomplete heavy-duty vehicles and 
for heavy-duty engines certified independent of the chassis. The 
following general provisions apply:
* * * * *


Sec. Sec.  86.1817-05 and 86.1817-08  [Removed]

0
43. Remove Sec. Sec.  86.1817-05 and 86.1817-08.
0
44. Amend Sec.  86.1818-12 by:
0
a. Revising paragraphs (a)(1), (b) introductory text, and (c).
0
b. Removing and reserving paragraph (e).
0
c. Revising paragraphs (f) introductory text, (g) introductory text, 
(g)(1) introductory text, (g)(2) introductory text, (g)(4)(i)(B), 
(g)(4)(iv)(B), (g)(5) and (6), and (h).
    The revisions read as follows:


Sec.  86.1818-12  Greenhouse gas emission standards for light-duty 
vehicles, light-duty trucks, and medium-duty passenger vehicles.

    (a) * * *
    (1) The greenhouse gas standards and related requirements in this 
section apply to 2012 and later model year LDV, LDT, and MDPV, 
including multi-fuel vehicles, vehicles fueled with alternative fuels, 
hybrid electric vehicles, plug-in hybrid electric vehicles, electric 
vehicles, and fuel cell vehicles. Unless otherwise specified, multi-
fuel vehicles must comply with all requirements established for each 
consumed fuel. Manufacturers that qualify as a small business according 
to the requirements of Sec.  86.1801-12(j) are exempt from the emission 
standards in this section.
* * * * *
    (b) Definitions. The following definitions apply for this section:
* * * * *
    (c) Fleet average CO2 standards. Fleet average CO2 
standards apply as follows for passenger automobiles and light trucks:
    (1) Each manufacturer must comply with separate fleet average 
CO2 standards for passenger automobiles and light trucks. To 
calculate the fleet average CO2 standards for passenger 
automobiles for a given model year, multiply each CO2 target 
value by the production volume of passenger automobiles for the 
corresponding model type-footprint combination, then sum those products 
and divide the sum by the total production volume of passenger 
automobiles in that model year. Repeat this calculation using 
production volumes of light trucks to determine the separate fleet 
average CO2 standards for light trucks. Round the resulting 
fleet average CO2 emission standards to the nearest whole 
gram per mile. Averaging calculations and other compliance provisions 
apply as described in Sec.  86.1865.
    (2) A CO2 target value applies for each unique 
combination of model type and footprint. The CO2 target 
serves as the emission standard that applies throughout the useful life 
for each vehicle. Determine the CO2 target values from the 
following table, or from paragraph (h) of this section for model year 
2031 and earlier vehicles:

                         Table 1 to Paragraph (c)(2)--Footprint-Based CO2 Target Values
----------------------------------------------------------------------------------------------------------------
                                        Footprint cutpoints                CO2 target value (g/mile)
                                              (ft\2\)         --------------------------------------------------
            Vehicle type            --------------------------    Below low    Between cutpoints    Above high
                                         Low          High        cutpoint            \a\            cutpoint
----------------------------------------------------------------------------------------------------------------
Passenger automobile...............           45           56            71.8    0.35 x f + 56.2            75.6
Light truck........................           45         70.0            75.7    1.38 x f + 13.8           110.1
----------------------------------------------------------------------------------------------------------------
\a\ Calculate the CO2 target value for vehicles between the footprint cutpoints as shown, using vehicle
  footprint, f, and rounding the result to the nearest 0.1 g/mile.


[[Page 29423]]

* * * * *
    (f) Nitrous oxide (N2O) and methane (CH4) exhaust 
emission standards for passenger automobiles and light trucks. Each 
manufacturer's fleet of combined passenger automobiles and light trucks 
must comply with N2O and CH4 standards using 
either the provisions of paragraph (f)(1), (2), or (3) of this section. 
Except with prior EPA approval, a manufacturer may not use the 
provisions of both paragraphs (f)(1) and (2) of this section in a model 
year. For example, a manufacturer may not use the provisions of 
paragraph (f)(1) of this section for their passenger automobile fleet 
and the provisions of paragraph (f)(2) for their light truck fleet in 
the same model year. The manufacturer may use the provisions of both 
paragraphs (f)(1) and (3) of this section in a model year. For example, 
a manufacturer may meet the N2O standard in paragraph 
(f)(1)(i) of this section and an alternative CH4 standard 
determined under paragraph (f)(3) of this section.
* * * * *
    (g) Alternative fleet average standards for manufacturers with 
limited sales. Manufacturers meeting the criteria in this paragraph (g) 
may request alternative fleet average CO2 standards for 
model year 2031 and earlier vehicles.
    (1) Eligibility for alternative standards. Eligibility as 
determined in this paragraph (g) shall be based on the total nationwide 
sales of combined passenger automobiles and light trucks. The terms 
``sales'' and ``sold'' as used in this paragraph (g) shall mean 
vehicles produced for sale in the states and territories of the United 
States. For the purpose of determining eligibility the sales of related 
companies shall be aggregated according to the provisions of Sec.  
86.1838-01(b)(3), or, if a manufacturer has been granted operational 
independence status under Sec.  86.1838-01(d), eligibility shall be 
based on that manufacturer's vehicle sales. To be eligible for 
alternative standards established under this paragraph (g), the 
manufacturer's average sales for the three most recent consecutive 
model years must remain below 5,000. If a manufacturer's average sales 
for the three most recent consecutive model years exceeds 4999, the 
manufacturer will no longer be eligible for exemption and must meet 
applicable emission standards starting with the model year according to 
the provisions in this paragraph (g)(1).
* * * * *
    (2) Requirements for new entrants into the U.S. market. New 
entrants are those manufacturers without a prior record of automobile 
sales in the United States and without prior certification to 
greenhouse gas emission standards in Sec.  86.1818-12. In addition to 
the eligibility requirements stated in paragraph (g)(1) of this 
section, new entrants must meet the following requirements:
* * * * *
    (4) * * *
    (i) * * *
    (B) Vehicle models and projections of sales volumes for each model 
year.
* * * * *
    (iv) * * *
    (B) Information regarding ownership relationships with other 
manufacturers, including details regarding the application of the 
provisions of Sec.  86.1838-01(b)(3) regarding the aggregation of sales 
of related companies.
    (5) Alternative standards. Alternative standards apply as follows:
    (i) Where EPA has exercised its regulatory authority to 
administratively specify alternative standards, those alternative 
standards approved for model year 2021 continue to apply through model 
year 2024. Starting in model year 2025, manufacturers must certify to 
the standards in paragraph (h) of this section on a delayed schedule, 
as follows:

------------------------------------------------------------------------
                                                         Manufacturers
                                                        must  certify to
                                                         the  standards
                 In model year . . .                      that  would
                                                        otherwise  apply
                                                            in . . .
------------------------------------------------------------------------
(A) 2025.............................................               2023
(B) 2026.............................................               2023
(C) 2027.............................................               2025
(D) 2028.............................................               2025
(E) 2029.............................................               2027
(F) 2030.............................................               2028
(G) 2031.............................................               2030
------------------------------------------------------------------------

    (ii) EPA may approve a request from other manufacturers for 
alternative fleet average CO2 standards under this paragraph 
(g). The alternative standards for those manufacturers will apply by 
model year as specified in paragraph (g)(5)(i) of this section.
    (6) Restrictions on credit trading. Manufacturers subject to 
alternative standards approved by the Administrator under this 
paragraph (g) may not trade credits to another manufacturer. Transfers 
between car and truck fleets within the manufacturer are allowed, and 
the carry-forward provisions for credits and deficits apply. 
Manufacturers may generate credits in a given model year for trading to 
another manufacturer by certifying to the standards in paragraph (h) of 
this section for the current model year across the manufacturer's full 
product line. A manufacturer certifying to the standards in paragraph 
(h) of this section will no longer be eligible to certify to the 
alternative standards under this paragraph (g) in later model years.
    (7) Starting in model year 2032, all manufacturers must certify to 
the standards in paragraph (c) of this section.
    (h) Historical and interim standards. The following CO2 
target values apply for model year 2031 and earlier vehicles:
    (1) CO2 target values apply as follows for passenger 
automobiles:

         Table 2 to Paragraph (h)(1)--Historical and Interim CO2 Target Values for Passenger Automobiles
----------------------------------------------------------------------------------------------------------------
                                        Footprint cutpoints                CO2 target value (g/mile)
                                              (ft\2\)         --------------------------------------------------
             Model year             --------------------------    Below low    Between cutpoints    Above high
                                         Low          High        cutpoint            \a\            cutpoint
----------------------------------------------------------------------------------------------------------------
2012...............................           41           56           244.0    4.72 x f + 50.5           315.0
2013...............................           41           56           237.0    4.72 x f + 43.3           307.0
2014...............................           41           56           228.0    4.72 x f + 34.8           299.0
2015...............................           41           56           217.0    4.72 x f + 23.4           288.0
2016...............................           41           56           206.0    4.72 x f + 12.7           277.0
2017...............................           41           56           195.0     4.53 x f + 8.9           263.0
2018...............................           41           56           185.0     4.35 x f + 6.5           250.0
2019...............................           41           56           175.0     4.17 x f + 4.2           238.0
2020...............................           41           56           166.0     4.01 x f + 1.9           226.0
2021...............................           41           56           161.8     3.94 x f + 0.2           220.9

[[Page 29424]]

 
2022...............................           41           56           159.0       3.88 x f-0.1           217.3
2023...............................           41           56           145.6       3.56 x f-0.4           199.1
2024...............................           41           56           138.6       3.39 x f-0.4           189.5
2025...............................           41           56           130.5       3.26 x f-3.2           179.4
2026...............................           41           56           114.3      3.11 x f-13.1           160.9
2027...............................           42           56           130.9   0.64 x f + 104.0           139.8
2028...............................           43           56           114.1    0.56 x f + 90.2           121.3
2029...............................           44           56            96.9    0.47 x f + 76.3           102.5
2030...............................           45           56            89.5    0.43 x f + 70.1            94.2
2031...............................           45           56            81.2    0.39 x f + 63.6            85.5
----------------------------------------------------------------------------------------------------------------
\a\ Calculate the CO2 target value for vehicles between the footprint cutpoints as shown, using vehicle
  footprint, f, and rounding the result to the nearest 0.1 g/mile.

    (2) CO2 target values apply as follows for light trucks:

             Table 3 to Paragraph (h)(2)--Historical and Interim CO2 Target Values for Light Trucks
----------------------------------------------------------------------------------------------------------------
                                        Footprint cutpoints                CO2 target value (g/mile)
                                              (ft\2\)         --------------------------------------------------
             Model year             --------------------------    Below low    Between cutpoints    Above high
                                         Low          High        cutpoint            \a\            cutpoint
----------------------------------------------------------------------------------------------------------------
2012...............................           41         66.0           294.0   4.04 x f + 128.6           395.0
2013...............................           41         66.0           284.0   4.04 x f + 118.7           385.0
2014...............................           41         66.0           275.0   4.04 x f + 109.4           376.0
2015...............................           41         66.0           261.0    4.04 x f + 95.1           362.0
2016...............................           41         66.0           247.0    4.04 x f + 81.1           348.0
2017...............................           41         50.7           238.0    4.87 x f + 38.3  ..............
2017...............................         50.8         66.0  ..............    4.04 x f + 80.5           347.0
2018...............................           41         60.2           227.0    4.76 x f + 31.6  ..............
2018...............................         60.3         66.0  ..............    4.04 x f + 75.0           342.0
2019...............................           41         66.4           220.0    4.68 x f + 27.7           339.0
2020...............................           41         68.3           212.0    4.57 x f + 24.6           337.0
2021...............................           41         68.3           206.5    4.51 x f + 21.5           329.4
2022...............................           41         68.3           203.0    4.44 x f + 20.6           324.1
2023...............................           41         74.0           181.1    3.97 x f + 18.4           312.1
2024...............................           41         74.0           172.1    3.77 x f + 17.4           296.5
2025...............................           41         74.0           159.3    3.58 x f + 12.5           277.4
2026...............................           41         74.0           141.8     3.41 x f + 1.9           254.4
2027...............................           42         73.0           133.0    2.56 x f + 25.6           212.3
2028...............................           43         72.0           117.5    2.22 x f + 22.2           181.7
2029...............................           44         71.0           101.0    1.87 x f + 18.7           151.5
2030...............................           45         70.0            94.4    1.72 x f + 17.2           137.3
2031...............................           45         70.0            85.6    1.56 x f + 15.6           124.5
----------------------------------------------------------------------------------------------------------------
\a\ Calculate the CO2 target value for vehicles between the footprint cutpoints as shown, using vehicle
  footprint, f, and rounding the result to the nearest 0.1 g/mile.

0
45. Amend Sec.  86.1819-14 by:
0
a. Revising the introductory text and paragraphs (a)(1) and (2), 
(d)(10)(i), (d)(13), (d)(15)(viii), (d)(17) introductory text, 
(d)(17)(i), (h), (j) introductory text, and (j)(1).
0
b. Adding paragraph (j)(4).
0
c. Removing and reserving paragraphs (k)(1) through (3).
0
d. Revising paragraphs (k)(4), (5), and (7).
0
e. Removing paragraph (k)(10).
    The revisions and addition read as follows:


Sec.  86.1819-14   Greenhouse gas emission standards for heavy-duty 
vehicles.

    This section describes exhaust emission standards for 
CO2, CH4, and N2O for medium-duty 
vehicles. The standards of this section apply for model year 2014 and 
later vehicles that are chassis-certified with respect to criteria 
pollutants under this subpart S. Additional heavy-duty vehicles may be 
subject to the standards of this section as specified in paragraph (j) 
of this section. Any heavy-duty vehicles not subject to standards under 
this section are instead subject to greenhouse gas standards under 40 
CFR part 1037, and engines installed in these vehicles are subject to 
standards under 40 CFR part 1036. If you are not the engine 
manufacturer, you must notify the engine manufacturer that its engines 
are subject to 40 CFR part 1036 if you intend to use their engines in 
vehicles that are not subject to standards under this section. Vehicles 
produced by small businesses may be exempted from the standards of this 
section as described in paragraph (k)(5) of this section.

[[Page 29425]]

    (a) * * *
    (1) Calculate a work factor, WF, for each vehicle subconfiguration 
(or group of subconfigurations as allowed under paragraph (a)(4) of 
this section), rounded to the nearest pound, using the following 
equation:

WF = 0.75 x (GVWR--Curb Weight + xwd) + 0.25 x (GCWR--GVWR)

Where:

xwd = 500 pounds if the vehicle has four-wheel drive or all-wheel 
drive; xwd = 0 pounds for all other vehicles.
GCWR = the gross combination weight rating as declared by the 
manufacturer. Starting in model year 2030, set GCWR to 22,000 for 
any vehicle with GCWR above 22,000 pounds.

    (2) Using the appropriate work factor, calculate a target value for 
each vehicle subconfiguration (or group of subconfigurations as allowed 
under paragraph (a)(4) of this section) you produce using the following 
equation, or the phase-in provisions in paragraph (k)(4) of this 
section for model year 2031 and earlier vehicles, rounding to the 
nearest whole g/mile:

CO2 Target = 0.0221 x WF + 170
* * * * *
    (d) * * *
    (10) * * *
    (i) Use either the conventional-fueled CO2 emission rate 
or a weighted average of your emission results as specified in 40 CFR 
600.510-12(k) for light-duty trucks.
* * * * *
    (13) This paragraph (d)(13) applies for CO2 reductions 
resulting from technologies that were not in common use before 2010 
that are not reflected in the specified test procedures. While you are 
not required to prove that such technologies were not in common use 
with heavy-duty vehicles before model year 2010, we will not approve 
your request if we determine they do not qualify. These may be 
described as off-cycle or innovative technologies. Through model year 
2026 we may allow you to generate emission credits consistent with the 
provisions of Sec.  86.1869-12(c) and (d). The 5-cycle methodology is 
not presumed to be preferred over alternative methodologies described 
in Sec.  86.1869-12(d).
* * * * *
    (15) * * *
    (viii) Total and percent leakage rates under paragraph (h) of this 
section (through model year 2026 only).
* * * * *
    (17) You may calculate emission rates for weight increments less 
than the 500-pound increment specified for test weight. This does not 
change the applicable test weights.
    (i) Use the ADC equation in paragraph (g) of this section to adjust 
your emission rates for vehicles in increments of 50, 100, or 250 
pounds instead of the 500 pound test-weight increments. Adjust 
emissions to the midpoint of each increment. This is the equivalent 
emission weight. For example, vehicles with a test weight basis of 
11,751 to 12,250 pounds (which have an equivalent test weight of 12,000 
pounds) could be regrouped into 100-pound increments as follows:

    Table 1 to Paragraph (k)(17)(i)--Example of Test-Weight Groupings
------------------------------------------------------------------------
                                            Equivalent
            Test weight basis                emission       Equivalent
                                              weight        test weight
------------------------------------------------------------------------
11,751-11,850...........................          11,800          12,000
11,851-11,950...........................          11,900          12,000
11,951-12,050...........................          12,000          12,000
12,051-12,150...........................          12,100          12,000
12,151-12,250...........................          12,200          12,000
------------------------------------------------------------------------

* * * * *
    (h) Air conditioning leakage. Loss of refrigerant from your air 
conditioning systems may not exceed a total leakage rate of 11.0 grams 
per year or a percent leakage rate of 1.50 percent per year, whichever 
is greater. This applies for all refrigerants. Calculate the total 
leakage rate in g/year as specified in Sec.  86.1867-12(a). Calculate 
the percent leakage rate as: [total leakage rate (g/yr)] / [total 
refrigerant capacity (g)] x 100. Round your percent leakage rate to the 
nearest one-hundredth of a percent. For purpose of this requirement, 
``refrigerant capacity'' is the total mass of refrigerant recommended 
by the vehicle manufacturer as representing a full charge. Where full 
charge is specified as a pressure, use good engineering judgment to 
convert the pressure and system volume to a mass. The leakage standard 
in this paragraph (h) no longer applies starting with model year 2027.
* * * * *
    (j) GHG certification of additional vehicles under this subpart. 
You may certify certain complete or cab-complete vehicles to the GHG 
standards of this section. Starting in model year 2027, certain high-
GCWR vehicles may also be subject to the GHG standards of this section. 
All vehicles optionally certified under this paragraph (j) are deemed 
to be subject to the GHG standards of this section. Note that for 
vehicles above 14,000 pounds GVWR and at or below 26,000 pounds GVWR, 
GHG certification under this paragraph (j) does not affect how you may 
or may not certify with respect to criteria pollutants.
    (1) For GHG compliance, you may certify any complete or cab-
complete spark-ignition vehicles above 14,000 pounds GVWR and at or 
below 26,000 pounds GVWR to the GHG standards of this section even 
though this section otherwise specifies that you may certify vehicles 
to the GHG standards of this section only if they are chassis-certified 
for criteria pollutants. Starting in model year 2027, this paragraph 
(j)(1) also applies for vehicles at or below 14,000 pounds GVWR with 
GCWR above 22,000 pounds with installed engines that have been 
certified under 40 CFR part 1036 as described in 40 CFR 1036.635.
* * * * *
    (4) Vehicles above 22,000 pounds GCWR may be subject to the GHG 
standards of this section as described in 40 CFR 1036.635.
    (k) * * *
    (4) Historical and interim standards. The following CO2 
target values apply for model year 2031 and earlier vehicles:
    (i) CO2 target values apply as follows for model years 
2014 through 2026, except as specified in paragraph (k)(4)(ii) of this 
section:

[[Page 29426]]



               Table 2 to Paragraph (k)(4)(i)--CO2 Target Values for Model Years 2014 Through 2026
----------------------------------------------------------------------------------------------------------------
                                                                               CO2 target (g/mile)
                          Model year                           -------------------------------------------------
                                                                     Spark-ignition       Compression- ignition
----------------------------------------------------------------------------------------------------------------
2014..........................................................        0.0482 x WF + 371        0.0478 x WF + 368
2015..........................................................        0.0479 x WF + 369        0.0474 x WF + 366
2016..........................................................        0.0469 x WF + 362        0.0460 x WF + 354
2017..........................................................        0.0460 x WF + 354        0.0445 x WF + 343
2018-2020.....................................................        0.0440 x WF + 339        0.0416 x WF + 320
2021..........................................................        0.0429 x WF + 331        0.0406 x WF + 312
2022..........................................................        0.0418 x WF + 322        0.0395 x WF + 304
2023..........................................................        0.0408 x WF + 314        0.0386 x WF + 297
2024..........................................................        0.0398 x WF + 306        0.0376 x WF + 289
2025..........................................................        0.0388 x WF + 299        0.0367 x WF + 282
2026..........................................................        0.0378 x WF + 291        0.0357 x WF + 275
----------------------------------------------------------------------------------------------------------------

    (ii) The following optional alternative CO2 target 
values apply for model years 2014 through 2020:

        Table 3 to Paragraph (k)(4)(ii)--Alternative CO2 Target Values for Model Years 2014 Through 2020
----------------------------------------------------------------------------------------------------------------
                                                                               CO2 target (g/mile)
                          Model year                           -------------------------------------------------
                                                                     Spark-ignition        Compression-ignition
----------------------------------------------------------------------------------------------------------------
2014..........................................................        0.0482 x WF + 371        0.0478 x WF + 368
2015..........................................................        0.0479 x WF + 369        0.0474 x WF + 366
2016-2018.....................................................        0.0456 x WF + 352        0.0440 x WF + 339
2019-2020.....................................................        0.0440 x WF + 339        0.0416 x WF + 320
----------------------------------------------------------------------------------------------------------------

    (iii) CO2 target values apply as follows for all engine 
types for model years 2027 through 2031:

Table 4 to Paragraph (k)(4)(iii)--CO2 Target Values for Model Years 2027
                              Through 2031
------------------------------------------------------------------------
            Model year                       CO2 target (g/mile)
------------------------------------------------------------------------
2027..............................  0.0348 x WF + 268
2028..............................  0.0339 x WF + 261
2029..............................  0.0310 x WF + 239
2030..............................  0.0280 x WF + 216
2031..............................  0.0251 x WF + 193
------------------------------------------------------------------------

    (5) Provisions for small manufacturers. Standards apply on a 
delayed schedule for manufacturers meeting the small business criteria 
specified in 13 CFR 121.201 (NAICS code 336111); the employee and 
revenue limits apply to the total number employees and total revenue 
together for affiliated companies. Qualifying small manufacturers are 
not subject to the greenhouse gas standards of this section for 
vehicles with a date of manufacture before January 1, 2022, as 
specified in 40 CFR 1037.150(c). In addition, small manufacturers 
producing vehicles that run on any fuel other than gasoline, E85, or 
diesel fuel may delay complying with every later standard under this 
part by one model year through model year 2026. For model year 2027 and 
later, qualifying small manufacturers remain subject to the model year 
2026 greenhouse gas standards; however, small manufacturers may trade 
emission credits generated in a given model year only by certifying to 
standards that apply for that model year.
* * * * *
    (7) Advanced-technology credits. Provisions for advanced-technology 
credits apply as described in 40 CFR 1037.615. If you generate credits 
from Phase 1 vehicles certified with advanced technology (in model 
years 2014 through 2020), you may multiply these credits by 1.50. If 
you generate credits from model year 2021 through 2026 vehicles 
certified with advanced technology, you may multiply these credits by 
3.5 for plug-in hybrid electric vehicles, 4.5 for electric vehicles, 
and 5.5 for fuel cell vehicles. Advanced-technology credits from Phase 
1 vehicles may be used to show compliance with any standards of this 
part or 40 CFR part 1036 or part 1037, subject to the restrictions in 
40 CFR 1037.740. Similarly, you may use up to 60,000 Mg per year of 
advanced-technology credits generated under 40 CFR 1036.615 or 1037.615 
(from Phase 1 vehicles) to demonstrate compliance with the 
CO2 standards in this section. Include vehicles generating 
credits in separate fleet-average calculations (and exclude them from 
your conventional fleet-average calculation). You must first apply 
these advanced-technology vehicle credits to any deficits for other

[[Page 29427]]

vehicles in the averaging set before applying them to other averaging 
sets.
* * * * *
0
46. Amend Sec.  86.1820-01 by revising paragraphs (b) introductory text 
and (b)(7) and adding paragraph (b)(8) to read as follows:


Sec.  86.1820-01   Durability group determination.

* * * * *
    (b) To be included in the same durability group, vehicles must be 
identical in all the respects listed in paragraphs (b)(1) through (7) 
of this section and meet one of the criteria specified in paragraph 
(b)(8) of this section:
* * * * *
    (7) Type of particulate filter (none, catalyzed, noncatalyzed).
    (8) The manufacturer must choose one of the following two criteria:
    (i) Grouping statistic:
    (A) Vehicles are grouped based upon the value of the grouping 
statistic determined using the following equation:

GS = [(Cat Vol)/(Disp)] x Loading Rate

Where:

GS = Grouping Statistic used to evaluate the range of precious metal 
loading rates and relative sizing of the catalysts compared to the 
engine displacement that are allowable within a durability group. 
The grouping statistic shall be rounded to a tenth of a gram/liter.
Cat Vol = Total volume of the catalyst(s) in liters. Include the 
volume of any catalyzed particulate filters.
Disp = Displacement of the engine in liters.
Loading rate = The mass of total precious metal(s) in the catalyst 
(or the total mass of all precious metal(s) of all the catalysts if 
the vehicle is equipped with multiple catalysts) in grams divided by 
the total volume of the catalyst(s) in liters. Include the mass of 
precious metals in any catalyzed particulate filters.

    (B) Engine-emission control system combinations which have a 
grouping statistic which is either less than 25 percent of the largest 
grouping statistic value, or less than 0.2 g/liter (whichever allows 
the greater coverage of the durability group) shall be grouped into the 
same durability group.
    (ii) The manufacturer may elect to use another procedure which 
results in at least as many durability groups as required using 
criteria in paragraph (b)(8)(i) of this section providing that only 
vehicles with similar emission deterioration or durability are combined 
into a single durability group.
* * * * *


Sec.  86.1823-01   [Removed]

0
47. Remove Sec.  86.1823-01.
0
48. Amend Sec.  86.1823-08 by revising paragraph (f)(1)(iii), adding 
paragraph (f)(1)(iv), and revising paragraph (n) to read as follows:


Sec.  86.1823-08   Durability demonstration procedures for exhaust 
emissions.

* * * * *
    (f) * * *
    (1) * * *
    (iii) For Tier 3 vehicles, the DF calculated by these procedures 
will be used for determining full and intermediate useful life 
compliance with FTP exhaust emission standards, SFTP exhaust emission 
standards, and cold CO emission standards. At the manufacturer's option 
and using procedures approved by the Administrator, a separate DF may 
be calculated exclusively using cold CO test data to determine 
compliance with cold CO emission standards. Also, at the manufacturer's 
option and using procedures approved by the Administrator, a separate 
DF may be calculated exclusively using US06 and/or air conditioning 
(SC03) test data to determine compliance with the SFTP emission 
standards.
    (iv) For Tier 4 vehicles, the DF calculated by these procedures may 
be used for determining compliance with all the standards identified in 
Sec.  86.1811-27. At the manufacturer's option and using procedures 
approved by the Administrator, manufacturers may calculate a separate 
DF for the following standards and driving schedules:
    (A) Testing to determine compliance with cold temperature emission 
standards.
    (B) US06 testing.
    (C) SC03 testing.
    (D) HFET.
    (E) Mid-temperature intermediate soak testing.
    (F) Early driveaway testing.
    (G) High-power PHEV engine starts.
* * * * *
    (n) Emission component durability. The manufacturer shall use good 
engineering judgment to determine that all emission-related components 
are designed to operate properly for the full useful life of the 
vehicles in actual use.


Sec. Sec.  86.1824-01 and 86.1824-07   [Removed]

0
49. Remove Sec. Sec.  86.1824-01 and 86.1824-07.
0
50. Amend Sec.  86.1824-08 by revising paragraphs (c)(1) and (k) to 
read as follows:


Sec.  86.1824-08   Durability demonstration procedures for evaporative 
emissions.

* * * * *
    (c) * * *
    (1) Mileage accumulation must be conducted using the SRC or any 
road cycle approved under the provisions of Sec.  86.1823-08(e)(1).
* * * * *
    (k) Emission component durability. The manufacturer shall use good 
engineering judgment to determine that all emission-related components 
are designed to operate properly for the full useful life of the 
vehicles in actual use.


Sec.  86.1825-01   [Removed]

0
51. Remove Sec.  86.1825-01.
0
52. Amend Sec.  86.1825-08 by revising the introductory text and 
paragraphs (c)(1) and (h) to read as follows:


Sec.  86.1825-08   Durability demonstration procedures for refueling 
emissions.

    The durability-related requirements of this section apply for 
vehicles subject to refueling standards under this subpart. Refer to 
the provisions of Sec. Sec.  86.1801 and 86.1813 to determine 
applicability of the refueling standards to different classes of 
vehicles. Diesel-fueled vehicles be exempt from the requirements of 
this section under Sec.  86.1829.
* * * * *
    (c) * * *
    (1) Mileage accumulation must be conducted using the SRC or a road 
cycle approved under the provisions of Sec.  86.1823-08(e)(1).
* * * * *
    (h) Emission component durability. The manufacturer shall use good 
engineering judgment to determine that all emission-related components 
are designed to operate properly for the full useful life of the 
vehicles in actual use.
* * * * *
0
53. Amend Sec.  86.1827-01 by revising paragraph (a)(5) to read as 
follows:


Sec.  86.1827-01   Test group determination.

* * * * *
    (a) * * *
    (5) Subject to the same emission standards (except for 
CO2), or FEL in the case of cold temperature NMHC or 
NMOG+NOx standards, except that a manufacturer may request to group 
vehicles into the same test group as vehicles subject to more stringent 
standards, so long as all the vehicles within the test group are 
certified to the most stringent standards applicable to any vehicle 
within that test group. Light-duty trucks and light-duty vehicles may 
be included in the same test group if all vehicles in the test group 
are subject to the same emission standards, with the exception of the 
CO2 standard.
* * * * *

[[Page 29428]]

0
54. Amend Sec.  86.1828-01 by revising paragraphs (a), (b)(1), (c), 
(e), and (f) and removing paragraph (g).
    The revisions read as follows:


Sec.  86.1828-01   Emission data vehicle selection.

    (a) Criteria exhaust testing. Within each test group, the vehicle 
configuration shall be selected which is expected to be worst-case for 
exhaust emission compliance on candidate in-use vehicles, considering 
all criteria exhaust emission constituents, all exhaust test 
procedures, and the potential impact of air conditioning on test 
results. Starting with Tier 4 vehicles, include consideration of cold 
temperature testing. See paragraph (c) of this section for cold 
temperature testing with vehicles subject to Tier 3 standards. The 
selected vehicle will include an air conditioning engine code unless 
the worst-case vehicle configuration selected is not available with air 
conditioning. This vehicle configuration will be used as the EDV 
calibration.
    (b) * * *
    (1) The vehicle configuration expected to exhibit the highest 
evaporative and/or refueling emission on candidate in-use vehicles 
shall be selected for each evaporative/refueling family and evaporative 
refueling emission system combination from among the corresponding 
vehicles selected for testing under paragraph (a) of this section. 
Separate vehicles may be selected to be tested for evaporative and 
refueling testing.
* * * * *
    (c) Cold temperature testing--Tier 3. For vehicles subject to Tier 
3 standards, select test vehicles for cold temperature testing as 
follows:
    (1) For cold temperature CO exhaust emission compliance for each 
durability group, the vehicle expected to emit the highest CO emissions 
at 20 degrees F on candidate in-use vehicles shall be selected from the 
test vehicles selected in accordance with paragraph (a) of this 
section.
    (2) For cold temperature NMHC exhaust emission compliance for each 
durability group, the manufacturer must select the vehicle expected to 
emit the highest NMHC emissions at 20 [deg]F on candidate in-use 
vehicles from the test vehicles specified in paragraph (a) of this 
section. When the expected worst-case cold temperature NMHC vehicle is 
also the expected worst-case cold temperature CO vehicle as selected in 
paragraph (c)(1) of this section, then cold temperature testing is 
required only for that vehicle; otherwise, testing is required for both 
the worst-case cold temperature CO vehicle and the worst-case cold 
temperature NMHC vehicle.
* * * * *
    (e) Alternative configurations. The manufacturer may use good 
engineering judgment to select an equivalent or worst-case 
configuration in lieu of testing the vehicle selected in paragraphs (a) 
through (c) of this section. Carryover data satisfying the provisions 
of Sec.  86.1839 may also be used in lieu of testing the configuration 
selected in paragraphs (a) through (c) of this section.
    (f) Good engineering judgment. The manufacturer shall use good 
engineering judgment in making selections of vehicles under this 
section.


Sec.  86.1829-01   [Removed]

0
55. Remove Sec.  86.1829-01.
0
56. Amend Sec.  86.1829-15 by revising paragraphs (a), (b), (d)(1) 
introductory text, (d)(6), and (f) to read as follows:


Sec.  86.1829-15   Durability and emission testing requirements; 
waivers.

* * * * *
    (a) Durability requirements apply as follows:
    (1) One durability demonstration is required for each durability 
group. The configuration of the DDV is determined according to Sec.  
86.1822. The DDV shall be tested and accumulate service mileage 
according to the provisions of Sec. Sec.  86.1823, 86.1824, 86.1825, 
and 86.1831. Small-volume manufacturers and small-volume test groups 
may optionally use the alternative durability provisions of Sec.  
86.1838.
    (2) The following durability testing requirements apply for 
electric vehicles and plug-in hybrid electric vehicles:
    (i) Manufacturers must perform monitor accuracy testing on in-use 
vehicles as described in Sec.  86.1845-04(g) for each monitor family. 
Carryover provisions apply as described in Sec.  86.1839-01(c).
    (ii) Manufacturers must perform battery durability testing as 
described in Sec.  86.1815(f)(2).
    (b) The manufacturer must test EDVs as follows to demonstrate 
compliance with emission standards:
    (1) Except as specified in this section, test one EDV in each test 
group using the test procedures specified in this subpart to 
demonstrate compliance with other exhaust emission standards.
    (2) Test one EDV in each durability group using the test procedures 
in 40 CFR part 1066 to demonstrate compliance with cold temperature 
exhaust emission standards.
    (3) Test one EDV in each test group to each of the three discrete 
mid-temperature intermediate soak standards identified in Sec.  
86.1811-27.
    (4) Test one EDV in each evaporative/refueling family and 
evaporative/refueling emission control system combination using the 
test procedures in subpart B of this part to demonstrate compliance 
with evaporative and refueling emission standards.
* * * * *
    (d) * * *
    (1) For vehicles subject to the Tier 3 p.m. standards in Sec.  
86.1811-17 (not the Tier 4 p.m. standards in Sec.  86.1811-27), a 
manufacturer may provide a statement in the application for 
certification that vehicles comply with applicable PM standards instead 
of submitting PM test data for a certain number of vehicles. However, 
each manufacturer must test vehicles from a minimum number of 
durability groups as follows:
* * * * *
    (6) Manufacturers may provide a statement in the application for 
certification that vehicles comply with the mid-temperature 
intermediate soak standards for soak times not covered by testing.
* * * * *
    (f) For electric vehicles and fuel cell vehicles, manufacturers may 
provide a statement in the application for certification that vehicles 
comply with all the emission standards and related requirements of this 
subpart instead of submitting test data. Tailpipe emissions of 
regulated pollutants from vehicles powered solely by electricity are 
deemed to be zero.
0
57. Amend Sec.  86.1834-01 by revising paragraph (h) to read as 
follows:


Sec.  86.1834-01   Allowable maintenance.

* * * * *
    (h) When air conditioning exhaust emission tests are required, the 
manufacturer must document that the vehicle's air conditioning system 
is operating properly and in a representative condition. Required air 
conditioning system maintenance is performed as unscheduled maintenance 
and does not require the Administrator's approval.
0
58. Amend Sec.  86.1835-01 by revising paragraphs (a)(1)(i), (a)(4), 
(b)(1), and (d) introductory text to read as follows:


Sec.  86.1835-01   Confirmatory certification testing.

    (a) * * *
    (1) * * *
    (i) The Administrator may adjust or cause to be adjusted any 
adjustable parameter of an emission-data vehicle which the 
Administrator has determined to be subject to adjustment for 
certification testing in accordance with Sec.  86.1833-01(a)(1), to any 
setting within the physically adjustable range

[[Page 29429]]

of that parameter, as determined by the Administrator in accordance 
with Sec.  86.1833-01(a)(3), prior to the performance of any tests to 
determine whether such vehicle or engine conforms to applicable 
emission standards, including tests performed by the manufacturer. 
However, if the idle speed parameter is one which the Administrator has 
determined to be subject to adjustment, the Administrator shall not 
adjust it to a setting which causes a higher engine idle speed than 
would have been possible within the physically adjustable range of the 
idle speed parameter on the engine before it accumulated any 
dynamometer service, all other parameters being identically adjusted 
for the purpose of the comparison. The Administrator, in making or 
specifying such adjustments, will consider the effect of the deviation 
from the manufacturer's recommended setting on emissions performance 
characteristics as well as the likelihood that similar settings will 
occur on in-use light-duty vehicles, light-duty trucks, or complete 
heavy-duty vehicles. In determining likelihood, the Administrator will 
consider factors such as, but not limited to, the effect of the 
adjustment on vehicle performance characteristics and surveillance 
information from similar in-use vehicles.
* * * * *
    (4) Retesting for fuel economy reasons or for compliance with 
greenhouse gas exhaust emission standards in Sec.  86.1818-12 may be 
conducted under the provisions of 40 CFR 600.008-08.
    (b) * * *
    (1) If the Administrator determines not to conduct a confirmatory 
test under the provisions of paragraph (a) of this section, 
manufacturers will conduct a confirmatory test at their facility after 
submitting the original test data to the Administrator under either of 
the following circumstances:
    (i) The vehicle configuration has previously failed an emission 
standard.
    (ii) The test exhibits high emission levels determined by exceeding 
a percentage of the standards specified by the Administrator for that 
model year.
* * * * *
    (d) Conditional certification. Upon request of the manufacturer, 
the Administrator may issue a conditional certificate of conformity for 
a test group which has not completed the Administrator testing required 
under paragraph (a) of this section. Such a certificate will be issued 
based upon the condition that the confirmatory testing be completed in 
an expedited manner and that the results of the testing be in 
compliance with all standards and procedures.
* * * * *
0
59. Amend Sec.  86.1838-01 by revising paragraph (b)(1)(i), the 
paragraph (b)(2)heading, and paragraph (b)(2)(i) to read as follows:


Sec.  86.1838-01   Small-volume manufacturer certification procedures.

* * * * *
    (b) * * *
    (1) * * *
    (i) Optional small-volume manufacturer certification procedures 
apply for vehicles produced by manufacturers with the following number 
of combined sales of vehicles subject to standards under this subpart 
in all states and territories of the United States in the model year 
for which certification is sought, including all vehicles and engines 
imported under the provisions of 40 CFR 85.1505 and 85.1509:
    (A) At or below 5,000 units for the Tier 3 standards described in 
Sec. Sec.  86.1811-17, 86.1813-17, and 86.1816-18 and the Tier 4 
standards described in Sec.  86.1811-27. This volume threshold applies 
for phasing in the Tier 3 and Tier 4 standards and for determining the 
corresponding deterioration factors.
    (B) No small-volume sales threshold applies for the heavy-duty 
greenhouse gas standards; alternative small-volume criteria apply as 
described in Sec.  86.1819-14(k)(5).
    (C) At or below 15,000 units for all other requirements. See Sec.  
86.1845 for separate provisions that apply for in-use testing.
* * * * *
    (2) Small-volume test groups and small-volume monitor families. (i) 
If the aggregated sales in all states and territories of the United 
States, as determined in paragraph (b)(3) of this section are equal to 
or greater than 15,000 units, then the manufacturer (or each 
manufacturer in the case of manufacturers in an aggregated 
relationship) will be allowed to certify a number of units under the 
small-volume test group certification procedures in accordance with the 
criteria identified in paragraphs (b)(2)(ii) through (iv) of this 
section. Similarly, the manufacturer will be exempt from Part A testing 
for monitor accuracy as described in Sec.  86.1845-04(g) in accordance 
with the criteria identified in paragraphs (b)(2)(ii) through (iv) of 
this section for individual monitor families with aggregated sales up 
to 5,000 units in the current model year.
* * * * *
0
60. Amend Sec.  86.1839-01 by revising paragraph (a) and adding 
paragraph (c) to read as follows:


Sec.  86.1839-01   Carryover of certification and battery monitoring 
data.

    (a) In lieu of testing an emission-data or durability vehicle 
selected under Sec.  86.1822, Sec.  86.1828, or Sec.  86.1829, and 
submitting data therefrom, a manufacturer may submit exhaust emission 
data, evaporative emission data and/or refueling emission data, as 
applicable, on a similar vehicle for which certification has been 
obtained or for which all applicable data required under Sec.  86.1845 
has previously been submitted. To be eligible for this provision, the 
manufacturer must use good engineering judgment and meet the following 
criteria:
    (1) In the case of durability data, the manufacturer must determine 
that the previously generated durability data represent a worst case or 
equivalent rate of deterioration for all applicable emission 
constituents compared to the configuration selected for durability 
demonstration. Prior to certification, the Administrator may require 
the manufacturer to provide data showing that the distribution of 
catalyst temperatures of the selected durability configuration is 
effectively equivalent or lower than the distribution of catalyst 
temperatures of the vehicle configuration which is the source of the 
previously generated data.
    (2) In the case of emission data, the manufacturer must determine 
that the previously generated emissions data represent a worst case or 
equivalent level of emissions for all applicable emission constituents 
compared to the configuration selected for emission compliance 
demonstration.
* * * * *
    (c) In lieu of testing electric vehicles or plug-in hybrid electric 
vehicles for monitor accuracy under Sec.  86.1822-01(a) and submitting 
the test data, a manufacturer may rely on previously conducted testing 
on a similar vehicle for which such test data have previously been 
submitted to demonstrate compliance with monitor accuracy requirements. 
For vehicles to be eligible for this provision, they must have designs 
for battery monitoring that are identical in all material respects to 
the vehicles tested under Sec.  86.1845-04(g). If a monitor family 
fails to meet accuracy requirements, repeat the testing under Sec.  
86.1845-04(g) as soon as practicable.
0
61. Revise Sec.  86.1840-01 to read as follows:

[[Page 29430]]

Sec.  86.1840-01   Special test procedures.

    Provisions for special test procedures apply as described in 40 CFR 
1065.10 and 1066.10. For example, manufacturers must propose a 
procedure for EPA's review and advance approval for testing and 
certifying vehicles equipped with periodically regenerating 
aftertreatment devices, including sufficient documentation and data for 
EPA to fully evaluate the request.
0
62. Amend Sec.  86.1841-01 by revising paragraphs (a)(1)(iii), (a)(3), 
and (e) to read as follows:


Sec.  86.1841-01   Compliance with emission standards for the purpose 
of certification.

    (a) * * *
    (1) * * *
    (iii) For a composite standard of NMHC + NOX, the 
measured results of NMHC and NOX must each be adjusted by 
their corresponding deterioration factors before the composite NMHC + 
NOX certification level is calculated. Where the applicable 
FTP exhaust hydrocarbon emission standard is an NMOG standard, the 
applicable NMOG deterioration factor must be used in place of the NMHC 
deterioration factor, unless otherwise approved by the Administrator.
* * * * *
    (3) Compliance with full useful life CO2 exhaust 
emission standards shall be demonstrated at certification by the 
certification levels on the duty cycles specified for carbon-related 
exhaust emissions according to Sec.  600.113 of this chapter.
* * * * *
    (e) Unless otherwise approved by the Administrator, manufacturers 
must not use Reactivity Adjustment Factors (RAFs) in their calculation 
of the certification level of any pollutant for any vehicle.
0
63. Amend Sec.  86.1844-01 by:
0
a. Revising paragraphs (d)(7)(i) and (ii), (d)(11)(iv), and (d)(15).
0
b. Adding paragraphs (d)(18) through (20).
0
c. Revising paragraphs (e)(1), (3), and (5), (g)(11), and (h).
0
d. Removing paragraph (i).
    The revisions and additions read as follows:


Sec.  86.1844-01   Information requirements: Application for 
certification and submittal of information upon request.

* * * * *
    (d) * * *
    (7) * * *
    (i) For vehicles certified to any Tier 3 or Tier 4 emission 
standards, include a comparison of drive-cycle metrics as specified in 
40 CFR 1066.425(j) for each drive cycle or test phase, as appropriate.
    (ii) For gasoline-fueled vehicles subject to Tier 3 evaporative 
emission standards, identify the method of accounting for ethanol in 
determining evaporative emissions, as described in Sec.  86.1813.
* * * * *
    (11) * * *
    (iv) For Tier 4 vehicles with spark-ignition engines, describe how 
AECDs comply with the requirements of Sec. Sec.  86.1809-12(d)(2) and 
86.1811-27(d).
* * * * *
    (15) For vehicles with fuel-fired heaters, describe the control 
system logic of the fuel-fired heater, including an evaluation of the 
conditions under which it can be operated and an evaluation of the 
possible operational modes and conditions under which evaporative 
emissions can exist. Use good engineering judgment to establish an 
estimated exhaust emission rate from the fuel-fired heater in grams per 
mile for each pollutant subject to a fleet-average standard. Adjust 
fleet-average compliance calculations in Sec. Sec.  86.1861, 86.1864, 
and 86.1865 as appropriate to account for emissions from fuel-fired 
heaters. Describe the testing used to establish the exhaust emission 
rate.
* * * * *
    (18) For vehicles equipped with RESS, the recharging procedures and 
methods for determining battery performance, such as state of charge 
and charging capacity.
    (19) The following information for each monitor family for electric 
vehicles and plug-in hybrid electric vehicles, as applicable:
    (1) The monitor, battery, and other specifications that are 
relevant to establishing monitor families and battery durability 
families to comply with the requirements of this section.
    (2) The certified usable battery energy for each battery durability 
family.
    (3) A statement attesting that the SOCE monitor meets the 5 percent 
accuracy requirement.
    (4) For light-duty program vehicles, a statement that each battery 
durability family meets the Minimum Performance Requirement.
    (20) Acknowledgement, if applicable, that you are including 
vehicles with engines certified under 40 CFR part 1036 in your 
calculation to demonstrate compliance with the fleet average 
CO2 standard in this subpart as described in Sec.  86.1819-
14(j).
    (e) * * *
    (1) Identify all emission-related components, including those that 
can affect GHG emissions. Also identify software, AECDs, and other 
elements of design that are used to control criteria, GHG, or 
evaporative/refueling emissions. Identify the emission-related 
components by part number. Identify software by part number or other 
convention, as appropriate. Organize part numbers by engine code or 
other similar classification scheme.
* * * * *
    (3) Identification and description of all vehicles covered by each 
certificate of conformity to be produced and sold within the U.S. The 
description must be sufficient to identify whether any given in-use 
vehicle is, or is not, covered by a given certificate of conformity, 
the test group and the evaporative/refueling family to which it belongs 
and the standards that are applicable to it, by matching readily 
observable vehicle characteristics and information given in the 
emission control information label (and other permanently attached 
labels) to indicators in the Part 1 Application. For example, the 
description must include any components or features that contribute to 
measured or demonstrated control of emissions for meeting criteria, 
GHG, or evaporative/refueling standards under this subpart. In 
addition, the description must be sufficient to determine for each 
vehicle covered by the certificate, all appropriate test parameters and 
any special test procedures necessary to conduct an official 
certification exhaust or evaporative emission test as was required by 
this subpart to demonstrate compliance with applicable emission 
standards. The description shall include, but is not limited to, 
information such as model name, vehicle classification (light-duty 
vehicle, light-duty truck, or complete heavy-duty vehicle), sales area, 
engine displacement, engine code, transmission type, tire size and 
parameters necessary to conduct exhaust emission tests such as 
equivalent test weight, curb and gross vehicle weight, test horsepower 
(with and without air conditioning adjustment), coast down time, shift 
schedules, cooling fan configuration, etc. and evaporative tests such 
as canister working capacity, canister bed volume, and fuel temperature 
profile. Actual values must be provided for all parameters.
* * * * *
    (5) Copies of all service manuals, service bulletins and 
instructions regarding the use, repair, adjustment, maintenance, or 
testing of such vehicles relevant to the control of crankcase, exhaust 
or evaporative emissions, as applicable, issued by the manufacturer for 
use by other manufacturers, assembly plants, distributors, dealers, and 
ultimate purchasers. These shall be

[[Page 29431]]

submitted in electronic form to the Agency when they are made available 
to the public and must be updated as appropriate throughout the useful 
life of the corresponding vehicles.
* * * * *
    (g) * * *
    (11) A description of all procedures, including any special 
procedures, used to comply with applicable test requirements of this 
subpart. Any special procedures used to establish durability data or 
emission deterioration factors required to be determined under 
Sec. Sec.  86.1823, 86.1824 and 86.1825 and to conduct emission tests 
required to be performed on applicable emission data vehicles under 
Sec.  86.1829 according to test procedures contained within this Title 
must also be included.
* * * * *
    (h) Manufacturers must submit the in-use testing information 
required in Sec.  86.1847.
0
64. Amend Sec.  86.1845-04 by:
0
a. Revising paragraph (a)(3)(i).
0
b. Adding paragraph (a)(4).
0
c. Revising paragraphs (b)(5) through (7), (c)(5), (d), and (e)(2).
0
d. Adding paragraph (f) introductory text.
0
e. Revising paragraph (f)(1).
0
f. Adding paragraph (g).
    The revisions and additions read as follows:


Sec.  86.1845-04   Manufacturer in-use verification testing 
requirements.

    (a) * * *
    (3) * * *
    (i) Vehicles certified under Sec.  86.1811 must always measure 
emissions over the FTP, then over the HFET (if applicable), then over 
the US06. If a vehicle meets all the applicable emission standards 
except the FTP or HFET emission standard for NMOG + NOX, and 
a fuel sample from the tested vehicle (representing the as-received 
condition) has a measured fuel sulfur level exceeding 15 ppm when 
measured as described in 40 CFR 1065.710, the manufacturer may repeat 
the FTP and HFET measurements and use the new emission values as the 
official results for that vehicle. For all other cases, measured 
emission levels from the first test will be considered the official 
results for the test vehicle, regardless of any test results from 
additional test runs. Where repeat testing is allowed, the vehicle may 
operate for up to two US06 cycles (with or without measurement) before 
repeating the FTP and HFET measurements. The repeat measurements must 
include both FTP and HFET, even if the vehicle failed only one of those 
tests, unless the HFET is not required for a particular vehicle. 
Vehicles may not undergo any other vehicle preconditioning to eliminate 
fuel sulfur effects on the emission control system, unless we approve 
it in advance. This paragraph (a)(3)(i) does not apply for Tier 2 
vehicles.
* * * * *
    (4) Battery-related in-use testing requirements apply for electric 
vehicles and plug-in hybrid electric vehicles as described in paragraph 
(g) of this section.
    (b) * * *
    (5) Testing. (i) Each test vehicle of a test group shall be tested 
in accordance with the FTP and the US06 as described in subpart B of 
this part, when such test vehicle is tested for compliance with 
applicable exhaust emission standards under this subpart. Test vehicles 
subject to applicable exhaust CO2 emission standards under 
this subpart shall also be tested in accordance with the HFET as 
described in 40 CFR 1066.840.
    (ii) For vehicles subject to Tier 3 p.m. standards, manufacturers 
must measure PM emissions over the FTP and US06 driving schedules for 
at least 50 percent of the vehicles tested under paragraph (b)(5)(i) of 
this section. For vehicles subject to Tier 4 p.m. standards, this test 
rate increases to 100 percent.
    (iii) Starting with model year 2018 vehicles, manufacturers must 
demonstrate compliance with the Tier 3 leak standard specified in Sec.  
86.1813, if applicable, as described in this paragraph (b)(5)(iii). 
Manufacturers must evaluate each vehicle tested under paragraph 
(b)(5)(i) of this section, except that leak testing is not required for 
vehicles tested under paragraph (b)(5)(iv) of this section for diurnal 
emissions. In addition, manufacturers must evaluate at least one 
vehicle from each leak family for a given model year. Manufacturers may 
rely on OBD monitoring instead of testing as follows:
    (A) A vehicle is considered to pass the leak test if the OBD system 
completed a leak check within the previous 750 miles of driving without 
showing a leak fault code.
    (B) Whether or not a vehicle's OBD system has completed a leak 
check within the previous 750 miles of driving, the manufacturer may 
operate the vehicle as needed to force the OBD system to perform a leak 
check. If the OBD leak check does not show a leak fault, the vehicle is 
considered to pass the leak test.
    (C) If the most recent OBD leak check from paragraph (b)(5)(iii)(A) 
or (B) of this section shows a leak-related fault code, the vehicle is 
presumed to have failed the leak test. Manufacturers may perform the 
leak measurement procedure described in 40 CFR 1066.985 for an official 
result to replace the finding from the OBD leak check.
    (D) Manufacturers may not perform repeat OBD checks or leak 
measurements to over-ride a failure under paragraph (b)(5)(iii)(C) of 
this section.
    (iv) For vehicles other than gaseous-fueled vehicles and electric 
vehicles, one test vehicle of each evaporative/refueling family shall 
be tested in accordance with the supplemental 2-diurnal-plus-hot-soak 
evaporative emission and refueling emission procedures described in 
subpart B of this part, when such test vehicle is tested for compliance 
with applicable evaporative emission and refueling standards under this 
subpart. For gaseous-fueled vehicles, one test vehicle of each 
evaporative/refueling family shall be tested in accordance with the 3-
diurnal-plus-hot-soak evaporative emission and refueling emission 
procedures described in subpart B of this part, when such test vehicle 
is tested for compliance with applicable evaporative emission and 
refueling standards under this subpart. The test vehicles tested to 
fulfill the evaporative/refueling testing requirement of this paragraph 
(b)(5)(iv) will be counted when determining compliance with the minimum 
number of vehicles as specified in Table S04-06 and Table S04-07 in 
paragraph (b)(3) of this section for testing under paragraph (b)(5)(i) 
of this section only if the vehicle is also tested for exhaust 
emissions under the requirements of paragraph (b)(5)(i) of this 
section.
    (6) Test condition. Each test vehicle not rejected based on the 
criteria specified in appendix II to this subpart shall be tested in 
as-received condition.
    (7) Diagnostic maintenance. A manufacturer may conduct subsequent 
diagnostic maintenance and/or testing of any vehicle. Any such 
maintenance and/or testing shall be reported to the Agency as specified 
in Sec.  86.1847.
    (c) * * *
    (5) Testing. (i) Each test vehicle shall be tested in accordance 
with the FTP and the US06 as described in subpart B of this part when 
such test vehicle is tested for compliance with applicable exhaust 
emission standards under this subpart. Test vehicles subject to 
applicable exhaust CO2 emission standards under this subpart 
shall also be tested in accordance with the HFET as described in 40 CFR 
1066.840. One test vehicle from each test group shall be tested over 
the FTP at high altitude. The test vehicle tested at high altitude is 
not required to be one of the same test vehicles tested at low 
altitude. The test

[[Page 29432]]

vehicle tested at high altitude is counted when determining the 
compliance with the requirements shown in Table S04-06 and Table S04-07 
in paragraph (b)(3) of this section or the expanded sample size as 
provided for in this paragraph (c).
    (ii) For vehicles subject to Tier 3 p.m. standards, manufacturers 
must measure PM emissions over the FTP and US06 driving schedules for 
at least 50 percent of the vehicles tested under paragraph (c)(5)(i) of 
this section. For vehicles subject to Tier 4 p.m. standards, this test 
rate increases to 100 percent.
    (iii) Starting with model year 2018 vehicles, manufacturers must 
evaluate each vehicle tested under paragraph (c)(5)(i) of this section 
to demonstrate compliance with the Tier 3 leak standard specified in 
Sec.  86.1813, except that leak testing is not required for vehicles 
tested under paragraph (c)(5)(iv) of this section for diurnal 
emissions. In addition, manufacturers must evaluate at least one 
vehicle from each leak family for a given model year. Manufacturers may 
rely on OBD monitoring instead of testing as described in paragraph 
(b)(5)(iii) of this section.
    (iv) For vehicles other than gaseous-fueled vehicles and electric 
vehicles, one test vehicle of each evaporative/refueling family shall 
be tested in accordance with the supplemental 2-diurnal-plus-hot-soak 
evaporative emission procedures described in subpart B of this part, 
when such test vehicle is tested for compliance with applicable 
evaporative emission and refueling standards under this subpart. For 
gaseous-fueled vehicles, one test vehicle of each evaporative/refueling 
family shall be tested in accordance with the 3-diurnal-plus-hot-soak 
evaporative emission procedures described in subpart B of this part, 
when such test vehicle is tested for compliance with applicable 
evaporative emission and refueling standards under this subpart. The 
vehicles tested to fulfill the evaporative/refueling testing 
requirement of this paragraph (c)(5)(iv) will be counted when 
determining compliance with the minimum number of vehicles as specified 
in Table S04-06 and table S04-07 in paragraph (b)(3) of this section 
for testing under paragraph (c)(5)(i) of this section only if the 
vehicle is also tested for exhaust emissions under the requirements of 
paragraph (c)(5)(i) of this section.
* * * * *
    (d) Test vehicle procurement. Vehicles tested under this section 
shall be procured as follows:
    (1) Vehicle ownership. Vehicles shall be procured from the group of 
persons who own or lease vehicles registered in the procurement area. 
Vehicles shall be procured from persons which own or lease the vehicle, 
excluding commercial owners/lessees owned or controlled by the vehicle 
manufacturer, using the procedures described in appendix I to this 
subpart. See Sec.  86.1838-01(c)(2)(i) for small volume manufacturer 
requirements.
    (2) Geographical limitations. (i) Test groups certified to 50-state 
standards: For low altitude testing no more than fifty percent of the 
test vehicles may be procured from California. The test vehicles 
procured from the 49-state area must be procured from a location with a 
heating degree day 30-year annual average equal to or greater than 
4,000.
    (ii) Test groups certified to 49-state standards: The test vehicles 
procured from the 49-state area must be procured from a location with a 
heating degree day 30-year annual average equal to or greater than 
4,000.
    (iii) Vehicles procured for high altitude testing may be procured 
from any area located above 4,000 feet.
    (3) Rejecting candidate vehicles. Vehicles may be rejected for 
procurement or testing under this section if they meet one or more of 
the rejection criteria in appendix II to this subpart. Vehicles may 
also be rejected after testing under this section if they meet one or 
more of the rejection criteria in appendix II to this subpart. Any 
vehicle rejected after testing must be replaced in order that the 
number of test vehicles in the sample comply with the sample size 
requirements of this section. Any post-test vehicle rejection and 
replacement procurement and testing must take place within the testing 
completion requirements of this section.
    (e) * * *
    (2) Notification of test facility. The manufacturer shall notify 
the Agency of the name and location of the testing laboratory(s) to be 
used to conduct testing of vehicles of each model year conducted 
pursuant to this section. Such notification shall occur at least thirty 
working days prior to the initiation of testing of the vehicles of that 
model year.
* * * * *
    (f) NMOG and formaldehyde. The following provisions apply for 
measuring NMOG and formaldehyde:
    (1) A manufacturer must conduct in-use testing on a test group by 
determining NMOG exhaust emissions using the same methodology used for 
certification, as described in 40 CFR 1066.635.
* * * * *
    (g) Battery testing. Manufacturers of electric vehicles and plug-in 
hybrid electric vehicles must perform in-use testing related to battery 
monitor accuracy and battery durability for those vehicles as described 
in Sec.  86.1815. Perform Part A testing for each monitor family as 
follows to verify that SOCE monitors meet accuracy requirements:
    (1) Determine accuracy by measuring SOCE from in-use vehicles using 
the procedures specified in Sec.  86.1815(c) and comparing the measured 
values to the SOCE value displayed on the monitor at the start of 
testing.
    (2) Perform low-mileage testing of the vehicles in a monitor family 
within 12 months of the end of production of that monitor family for 
that model year. All test vehicles must have a minimum odometer mileage 
of 10,000 miles.
    (3) Perform intermediate-mileage testing of the vehicles in a 
monitor family within 3 years of the end of production of that monitor 
family for that model year. All test vehicles must have a minimum 
odometer mileage of 30,000 miles.
    (4) Perform high-mileage testing of the vehicles in a monitor 
family by starting the test program within 4 years of the end of 
production of the monitor family and completing the test program within 
5 years of the end of production of the monitor family. All test 
vehicles must have a minimum odometer mileage of 50,000 miles.
    (5) Select test vehicles from the United States as described in 
paragraphs (b)(6), (c)(6), and (d)(1) and (3) of this section. Send 
notification regarding test location as described in paragraph (e)(2) 
of this section.
    (6) You may perform diagnostic maintenance as specified in 
paragraph (b)(7) and (c)(7) of this section.
    (7) See Sec.  86.1838-01(b)(2) for a testing exemption that applies 
for small-volume monitor families.
0
65. Amend Sec.  86.1846-01 by revising paragraphs (a)(1), (b), (e), and 
(j) to read as follows:


Sec.  86.1846-01   Manufacturer in-use confirmatory testing 
requirements.

    (a) * * *
    (1) Manufacturers must test, or cause testing to be conducted, 
under this section when the emission levels shown by a test group 
sample from testing under Sec.  86.1845 exceeds the criteria specified 
in paragraph (b) of this section. The testing required under this 
section applies separately to each test group and at each test point 
(low and high mileage) that meets the specified criteria. The testing 
requirements apply separately for each model year. These

[[Page 29433]]

provisions do not apply to emissions of CH4 or 
N2O.
* * * * *
    (b) Criteria for additional testing. (1) A manufacturer shall test 
a test group, or a subset of a test group, as described in paragraph 
(j) of this section when the results from testing conducted under Sec.  
86.1845 show mean exhaust emissions of any criteria pollutant for that 
test group to be at or above 1.30 times the applicable in-use standard 
for at least 50 percent of vehicles tested from the test group.
    (2) A manufacturer shall test a test group, or a subset of a test 
group, as described in paragraph (j) of this section when the results 
from testing conducted under Sec.  86.1845 show mean exhaust emissions 
of CO2 (City-highway combined CREE) for that test group to 
be at or above the applicable in-use standard for at least 50 percent 
of vehicles tested from the test group.
    (3) Additional testing is not required under this paragraph (b) 
based on evaporative/refueling testing or based on low-mileage US06 
testing conducted under Sec.  86.1845-04(b)(5)(i). Testing conducted at 
high altitude under the requirements of Sec.  86.1845-04(c) will be 
included in determining if a test group meets the criteria triggering 
the testing required under this section.
    (4) The vehicle designated for testing under the requirements of 
Sec.  86.1845-04(c)(2) with a minimum odometer reading of 105,000 miles 
or 75% of useful life, whichever is less, will not be included in 
determining if a test group meets the triggering criteria.
    (5) The SFTP composite emission levels for Tier 3 vehicles shall 
include the IUVP FTP emissions, the IUVP US06 emissions, and the values 
from the SC03 Air Conditioning EDV certification test (without DFs 
applied). The calculations shall be made using the equations prescribed 
in Sec.  86.164. If more than one set of certification SC03 data exists 
(due to running change testing or other reasons), the manufacturer 
shall choose the SC03 result to use in the calculation from among those 
data sets using good engineering judgment.
    (6) If fewer than 50 percent of the vehicles from a leak family 
pass either the leak test or the diurnal test under Sec.  86.1845, EPA 
may require further leak testing under this paragraph (b)(6). Testing 
under this section must include five vehicles from the family. If all 
five of these vehicles fail the test, the manufacturer must test five 
additional vehicles.
    EPA will determine whether to require further leak testing under 
this section after providing the manufacturer an opportunity to discuss 
the results, including consideration of any of the following 
information, or other items that may be relevant:
    (i) Detailed system design, calibration, and operating information, 
technical explanations as to why the individual vehicles tested failed 
the leak standard.
    (ii) Comparison of the subject vehicles to other similar models 
from the same manufacturer.
    (iii) Data or other information on owner complaints, technical 
service bulletins, service campaigns, special policy warranty programs, 
warranty repair data, state I/M data, and data available from other 
manufacturer-specific programs or initiatives.
    (iv) Evaporative emission test data on any individual vehicles that 
did not pass leak testing during IUVP.
* * * * *
    (e) Emission testing. Each test vehicle of a test group or Agency-
designated subset shall be tested in accordance with the driving cycles 
performed under Sec.  86.1845 corresponding to emission levels 
requiring testing under this section) as described in subpart B of this 
part, when such test vehicle is tested for compliance with applicable 
exhaust emission standards under this subpart.
* * * * *
    (j) Testing a subset. EPA may designate a subset of the test group 
for testing under this section in lieu of testing the entire test group 
when the results for the entire test group from testing conducted under 
Sec.  86.1845 show mean emissions and a failure rate which meet these 
criteria for additional testing.
0
66. Amend Sec.  86.1847-01 by adding paragraph (g) to read as follows:


Sec.  86.1847-01   Manufacturer in-use verification and in-use 
confirmatory testing; submittal of information and maintenance of 
records.

* * * * *
    (g) Manufacturers of electric vehicles and plug-in hybrid electric 
vehicles certified under this subpart must meet the following reporting 
and recordkeeping requirements related to testing under Sec.  86.1815:
    (1) Submit the following records organized by battery durability 
family and monitor family related to Part A testing to verify accuracy 
of SOCE monitors within 30 days after completing low-mileage, 
intermediate-mileage, or high-mileage testing:
    (i) A complete record of all tests performed, the dates and 
location of testing, measured SOCE values for each vehicle, along with 
the corresponding displayed SOCE values at the start of testing.
    (ii) Test vehicle information, including model year, make, model, 
and odometer reading.
    (iii) A summary of statistical information showing whether the 
testing shows a pass or fail result.
    (2) Keep the following records related to testing under paragraph 
(g)(1) of this section:
    (i) Test reports submitted under paragraph (g)(1) of this section.
    (ii) Test facility information.
    (iii) Routine testing records, such as dynamometer trace, and 
temperature and humidity during testing.
    (3) Submit an annual report related to Part B testing to verify 
compliance with the Minimum Performance Requirement for SOCE. Submit 
the report by October 1 for testing you perform over the preceding year 
or ask us to approve a different annual reporting period based on your 
practice for starting a new model year. Include the following 
information in your annual reports, organized by battery durability 
family and monitor family:
    (i) Displayed values of SOCE for each sampled vehicle, along with a 
description of each vehicle to identify its model year, make, model, 
odometer reading, and state of registration. Also include the date for 
assessing each selected vehicle.
    (ii) A summary of results to show whether 90 percent of sampled 
vehicles from each battery durability family meet the Minimum 
Performance Requirement.
    (iii) A description of any selected vehicles excluded from the test 
results and the justification for excluding them.
    (iv) Information regarding warranty claims and statistics on 
repairs for batteries and for other components or systems for each 
battery durability family that might influence a vehicle's electric 
energy consumption.
    (4) Keep the following records related to testing under paragraph 
(g)(3) of this section:
    (i) Test reports submitted under paragraph (g)(3) of this section.
    (ii) Documentation related to the method of selecting vehicles.
    (5) Keep records required under this paragraph (g) for eight years 
after submitting reports to EPA.


Sec.  86.1848-01   [Removed]

0
67. Remove Sec.  86.1848-01.
0
68. Revise Sec.  86.1848-10 to read as follows:


Sec.  86.1848-10   Compliance with emission standards for the purpose 
of certification.

    (a)(1) If, after a review of the manufacturer's submitted Part I 
application, information obtained from

[[Page 29434]]

any inspection, such other information as the Administrator may 
require, and any other pertinent data or information, the Administrator 
determines that the application is complete and that all vehicles 
within a test group or monitor family as described in the application 
meet the requirements of this part and the Clean Air Act, the 
Administrator shall issue a certificate of conformity.
    (2) If, after review of the manufacturer's application, request for 
certification, information obtained from any inspection, such other 
information as the Administrator may require, and any other pertinent 
data or information, the Administrator determines that the application 
is not complete or the vehicles within a test group or monitor family 
as described in the application, do not meet applicable requirements or 
standards of the Act or of this part, the Administrator may deny the 
issuance of, suspend, or revoke a previously issued certificate of 
conformity. The Administrator will notify the manufacturer in writing, 
setting forth the basis for the determination. The manufacturer may 
request a hearing on the Administrator's determination.
    (b) A certificate of conformity will be issued by the Administrator 
for a period not to exceed one model year and upon such terms as deemed 
necessary or appropriate to assure that any new motor vehicle covered 
by the certificate will meet the requirements of the Act and of this 
part.
    (c) Failure to meet any of the following conditions will be 
considered a failure to satisfy a condition upon which a certificate 
was issued, and any affected vehicles are not covered by the 
certificate:
    (1) The manufacturer must supply all required information according 
to the provisions of Sec. Sec.  86.1843 and 86.1844.
    (2) The manufacturer must comply with all certification and in-use 
emission standards contained in subpart S of this part both during and 
after model year production. This includes the monitor accuracy and 
battery durability requirements for electric vehicles and plug-in 
hybrid electric vehicles as described in Sec.  86.1815.
    (3) The manufacturer must comply with all implementation schedules 
sales percentages as required in this subpart.
    (4) New incomplete vehicles must, when completed by having the 
primary load-carrying device or container attached, conform to the 
maximum curb weight and frontal area limitations described in the 
application for certification as required in Sec.  86.1844.
    (5) The manufacturer must meet the in-use testing and reporting 
requirements contained in Sec. Sec.  86.1815, 86.1845, 86.1846, and 
86.1847, as applicable.
    (6) Vehicles must in all material respects be as described in the 
manufacturer's application for certification (Part I and Part II).
    (7) Manufacturers must meet all the provisions of Sec. Sec.  
86.1811, 86.1813, 86.1816, and 86.1860 through 86.1862 both during and 
after model year production, including compliance with the applicable 
fleet average standard and phase-in requirements. The manufacturer 
bears the burden of establishing to the satisfaction of the 
Administrator that the terms and conditions upon which each certificate 
was issued were satisfied. For recall and warranty purposes, vehicles 
not covered by a certificate of conformity will continue to be held to 
the standards stated or referenced in the certificate that otherwise 
would have applied to the vehicles. A manufacturer may not sell credits 
it has not generated.
    (8) Manufacturers must meet all provisions related to cold 
temperature standards in Sec. Sec.  86.1811 and 86.1864 both during and 
after model year production, including compliance with the applicable 
fleet average standard and phase-in requirements. The manufacturer 
bears the burden of establishing to the satisfaction of the 
Administrator that the terms and conditions upon which each certificate 
was issued were satisfied. For recall and warranty purposes, vehicles 
not covered by a certificate of conformity will continue to be held to 
the standards stated or referenced in the certificate that otherwise 
would have applied to the vehicles. A manufacturer may not sell credits 
it has not generated.
    (9) Manufacturers must meet all the provisions of Sec. Sec.  
86.1818, 86.1819, and 86.1865 both during and after model year 
production, including compliance with the applicable fleet average 
standard. The manufacturer bears the burden of establishing to the 
satisfaction of the Administrator that the terms and conditions upon 
which the certificate(s) was (were) issued were satisfied. For recall 
and warranty purposes, vehicles not covered by a certificate of 
conformity will continue to be held to the standards stated or 
referenced in the certificate that otherwise would have applied to the 
vehicles. A manufacturer may not sell credits it has not generated.
    (i) Manufacturers that are determined to be operationally 
independent under Sec.  86.1838-01(d) must report a material change in 
their status within 60 days as required by Sec.  86.1838-01(d)(2).
    (ii) Manufacturers subject to an alternative fleet average 
greenhouse gas emission standard approved under Sec.  86.1818-12(g) 
must comply with the annual sales thresholds that are required to 
maintain use of those standards, including the thresholds required for 
new entrants into the U.S. market.
    (10) Manufacturers must meet all the provisions of Sec.  86.1815 
both during and after model year production. The manufacturer bears the 
burden of establishing to the satisfaction of the Administrator that 
the terms and conditions related to issued certificates were satisfied.
    (d) One certificate will be issued for each test group and 
evaporative/refueling family combination. For plug-in hybrid electric 
vehicles, one certificate will be issued for each test group, 
evaporative/refueling family, and monitor family combination. For 
electric vehicles, one certificate will be issued for each monitor 
family. For diesel fueled vehicles, one certificate will be issued for 
each test group. A certificate of conformity is deemed to cover the 
vehicles named in such certificate and produced during the model year.
    (e) A manufacturer of new light-duty vehicles, light-duty trucks, 
and complete heavy-duty vehicles must obtain a certificate of 
conformity covering such vehicles from the Administrator prior to 
selling, offering for sale, introducing into commerce, delivering for 
introduction into commerce, or importing into the United States the new 
vehicle. Vehicles produced prior to the effective date of a certificate 
of conformity may also be covered by the certificate, once it is 
effective, if the following conditions are met:
    (1) The vehicles conform in all respects to the vehicles described 
in the application for the certificate of conformity.
    (2) The vehicles are not sold, offered for sale, introduced into 
commerce, or delivered for introduction into commerce prior to the 
effective date of the certificate of conformity.
    (3) EPA is notified prior to the beginning of production when such 
production will start, and EPA is provided a full opportunity to 
inspect and/or test the vehicles during and after their production. EPA 
must have the opportunity to conduct SEA production line testing as if 
the vehicles had been produced after the effective date of the 
certificate.
    (f) Vehicles imported by an original equipment manufacturer after 
December 31 of the calendar year for which the model year is named are 
still covered by the certificate of conformity as long as the 
production of the vehicle was

[[Page 29435]]

completed before December 31 of that year.
    (g) For test groups required to have an emission control diagnostic 
system, certification will not be granted if, for any emission data 
vehicle or other test vehicle approved by the Administrator in 
consultation with the manufacturer, the malfunction indicator light 
does not illuminate as required under Sec.  86.1806.
    (h) Vehicles equipped with aftertreatment technologies such as 
catalysts, otherwise covered by a certificate, which are driven outside 
the United States, Canada, and Mexico will be presumed to have been 
operated on leaded gasoline resulting in deactivation of such 
components as catalysts and oxygen sensors. If these vehicles are 
imported or offered for importation without retrofit of the catalyst or 
other aftertreatment technology, they will be considered not to be 
within the coverage of the certificate unless included in a catalyst or 
other aftertreatment technology control program operated by a 
manufacturer or a United States Government agency and approved by the 
Administrator.
0
69. Amend Sec.  86.1850-01 by revising the section heading and 
paragraphs (b) introductory text and (d) and removing paragraph (f).
    The revisions read as follows:


Sec.  86.1850-01  EPA decisions regarding a certificate of conformity.

* * * * *
    (b) Notwithstanding the fact that the vehicles described in the 
application may comply with all other requirements of this subpart, the 
Administrator may deny issuance of, suspend, revoke, or void a 
previously issued certificate of conformity if the Administrator finds 
any one of the following infractions:
* * * * *
    (d) If a manufacturer commits any fraudulent act that results in 
the issuance of a certificate of conformity, or fails to comply with 
the conditions specified in Sec.  86.1843, the Administrator may deem 
such certificate void ab initio.
* * * * *


Sec.  86.1860-04  [Removed]

0
70. Remove Sec.  86.1860-04.
0
71. Amend Sec.  86.1860-17 by revising the section heading and 
paragraphs (a) and (b) and removing paragraph (c)(4).
    The revisions read as follows:


Sec.  86.1860-17  How to comply with the Tier 3 and Tier 4 fleet-
average standards.

    (a) You must show that you meet the applicable Tier 3 fleet-average 
NMOG + NOX standards from Sec. Sec.  86.1811-17 and 86.1816-
18, the Tier 3 fleet-average evaporative emission standards from Sec.  
86.1813-17, and the Tier 4 fleet-average NMOG + NOX 
standards from Sec.  86.1811-27 as described in this section. Note that 
separate fleet-average calculations are required for Tier 3 FTP and 
SFTP exhaust emission standards under Sec.  86.1811-17.
    (b) Calculate your fleet-average value for each model year for all 
vehicle models subject to a separate fleet-average standard using the 
following equation, rounded to the nearest 0.001 g/mile for NMOG + 
NOX emissions and the nearest 0.001 g/test for evaporative 
emissions:
[GRAPHIC] [TIFF OMITTED] TP05MY23.047

Where:

I = A counter associated with each separate test group or 
evaporative family.
B = The number of separate test groups or evaporative families from 
a given averaging set to which you certify your vehicles.
Ni = The actual nationwide sales for the model year for 
test group or evaporative family i. Include allowances for 
evaporative emissions as described in Sec.  86.1813.
FELi = The FEL selected for test group or evaporative 
family i. Disregard any separate standards that apply for in-use 
testing or for testing under high-altitude conditions.
Ntotal = The actual nationwide sales for the model year 
for all vehicles from the averaging set, except as described in 
paragraph (c) of this section. The pool of vehicle models included 
in Ntotal may vary by model year, and it may be different 
for evaporative standards, FTP exhaust standards, and SFTP exhaust 
standards in a given model year.
* * * * *


Sec.  86.1861-04  [Removed]

0
72. Remove Sec.  86.1861-04.
0
73. Amend Sec.  86.1861-17 by revising paragraphs (b) and (c) to read 
as follows:


Sec.  86.1861-17  How do the NMOG + NOX and evaporative emission credit 
programs work?

* * * * *
    (b) The following restrictions apply instead of those specified in 
40 CFR 1037.740:
    (1) Except as specified in paragraph (b)(2) of this section, 
emission credits may be exchanged only within an averaging set, as 
follows:
    (i) HDV represent a separate averaging set with respect to all 
emission standards.
    (ii) Except as specified in paragraph (b)(1)(iii) of this section, 
LDV and LDT represent a single averaging set with respect to all 
emission standards. Note that FTP and SFTP credits for Tier 3 vehicles 
are not interchangeable.
    (iii) LDV and LDT1 certified to standards based on a useful life of 
120,000 miles and 10 years together represent a single averaging set 
with respect to NMOG + NOX emission standards. Note that FTP 
and SFTP credits for Tier 3 vehicles are not interchangeable.
    (iv) The following separate averaging sets apply for evaporative 
emission standards:
    (A) LDV and LDT1 together represent a single averaging set.
    (B) LDT2 represents a single averaging set.
    (C) HLDT represents a single averaging set.
    (D) HDV represents a single averaging set.
    (2) You may exchange evaporative emission credits across averaging 
sets as follows if you need additional credits to offset a deficit 
after the final year of maintaining deficit credits as allowed under 
paragraph (c) of this section:
    (i) You may exchange LDV/LDT1 and LDT2 emission credits.
    (ii) You may exchange HLDT and HDV emission credits.
    (3) Except as specified in paragraph (b)(4) of this section, 
credits expire after five years.
    For example, credits you generate in model year 2018 may be used 
only through model year 2023.
    (4) For the Tier 3 declining fleet-average FTP and SFTP emission 
standards for NMOG + NOX described in Sec.  86.1811-
17(b)(8), credits generated in model years 2017 through 2024 expire 
after eight years, or after model year 2030, whichever comes first; 
however, these credits may not be

[[Page 29436]]

traded after five years. This extended credit life also applies for 
small-volume manufacturers generating credits under Sec.  86.1811-
17(h)(1) in model years 2022 through 2024. Note that the longer credit 
life does not apply for heavy-duty vehicles, for vehicles certified 
under the alternate phase-in described in Sec.  86.1811-17(b)(9), or 
for vehicles generating early Tier 3 credits under Sec.  86.1811-
17(b)(11) in model year 2017.
    (5) Tier 3 credits for NMOG+NOX may be used to 
demonstrate compliance with Tier 4 standards without adjustment, except 
as specified in Sec.  86.1811-27.
    (c) The credit-deficit provisions 40 CFR 1037.745 apply to the NMOG 
+ NOX and evaporative emission standards for Tier 3 and Tier 
4 vehicles.
* * * * *
0
74. Amend Sec.  86.1862-04 by revising paragraphs (a), (c)(2), and (d) 
to read as follows:


Sec.  86.1862-04  Maintenance of records and submittal of information 
relevant to compliance with fleet-average standards.

    (a) Overview. This section describes reporting and recordkeeping 
requirements for vehicles subject to the following standards:
    (1) Tier 4 criteria exhaust emission standards, including cold 
temperature NMOG+NOX standards, in Sec.  86.1811-27.
    (2) Tier 3 evaporative emission standards in Sec.  86.1813-17.
    (3) Tier 3 FTP emission standard for NMOG + NOX for LDV 
and LDT in Sec.  86.1811-17.
    (4) Tier 3 SFTP emission standard for NMOG + NOX for LDV 
and LDT (including MDPV) in Sec.  86.1811-17.
    (5) Tier 3 FTP emission standard for NMOG + NOX for HDV 
(other than MDPV) in Sec.  86.1816-18.
    (6) Cold temperature NMHC standards in Sec.  86.1811-17 for 
vehicles subject to Tier 3 NMOG+NOX standards.
* * * * *
    (c) * * *
    (2) When a manufacturer calculates compliance with the fleet-
average standard using the provisions in Sec.  86.1860-17(f), the 
annual report must state that the manufacturer has elected to use such 
provision and must contain the fleet-average standard as the fleet-
average value for that model year.
* * * * *
    (d) Notice of opportunity for hearing. Any voiding of the 
certificate under this section will be made only after EPA has offered 
the manufacturer concerned an opportunity for a hearing conducted in 
accordance with 40 CFR part 1068, subpart G, and, if a manufacturer 
requests such a hearing, will be made only after an initial decision by 
the Presiding Officer.


Sec.  86.1863-07   [Removed]

0
75. Remove Sec.  86.1863-07.
0
76. Revise Sec.  86.1864-10 to read as follows:


Sec.  86.1864-10   How to comply with cold temperature fleet-average 
standards.

    (a) Applicability. Cold temperature fleet-average standards apply 
for NMHC or NMOG+NOX emissions as described in Sec.  
86.1811. Certification testing provisions described in this subpart 
apply equally for meeting cold temperature exhaust emission standards 
except as specified.
    (b) Calculating the cold temperature fleet-average standard. 
Manufacturers must compute separate sales-weighted cold temperature 
fleet-average emissions at the end of the model year using actual sales 
and certifying test groups to FELs, as defined in Sec.  86.1803-01. The 
FEL becomes the standard for each test group, and every test group can 
have a different FEL. The certification resolution for the FEL is 0.1 
grams/mile. Determine fleet-average emissions separately for each set 
of vehicles subject to different fleet-average emission standards. Do 
not include electric vehicles or fuel cell vehicles when calculating 
fleet-average emissions. Starting with Tier 4 vehicles, determine 
fleet-average emissions based on separate averaging sets for light-duty 
program vehicles and medium-duty vehicles. Calculate the sales-weighted 
cold temperature fleet averages using the following equation, rounded 
to the nearest 0.1 grams/mile:

Cold temperature fleet-average exhaust emissions (grams/mile) = [Sigma] 
(N x FEL) / Total number of vehicles sold from the applicable cold 
temperature averaging set

Where:

N = The number of vehicles subject to a given fleet-average emission 
standard based on vehicles counted at the point of first sale.
FEL = Family Emission Limit (grams/mile).

    (c) Certification compliance and enforcement requirements for cold 
temperature fleet-average standards. Each manufacturer must comply on 
an annual basis with fleet-average standards as follows:
    (1) Manufacturers must report in their annual reports to the Agency 
that they met the relevant fleet-average standard by showing that their 
sales-weighted cold temperature fleet-average emissions are at or below 
the applicable fleet-average standard for each averaging set.
    (2) If the sales-weighted average is above the applicable fleet-
average standard, manufacturers must obtain and apply sufficient 
credits as permitted under paragraph (d)(8) of this section. A 
manufacturer must show via the use of credits that they have offset any 
exceedance of the cold temperature fleet-average standard. 
Manufacturers must also include their credit balances or deficits.
    (3) If a manufacturer fails to meet the cold temperature fleet-
average standard for two consecutive years, the vehicles causing the 
exceedance will be considered not covered by the certificate of 
conformity (see paragraph (d)(8) of this section). A manufacturer will 
be subject to penalties on an individual-vehicle basis for sale of 
vehicles not covered by a certificate.
    (4) EPA will review each manufacturer's sales to designate the 
vehicles that caused the exceedance of the fleet-average standard. EPA 
will designate as nonconforming those vehicles in test groups with the 
highest certification emission values first, continuing until reaching 
a number of vehicles equal to the calculated number of noncomplying 
vehicles as determined above. In a group where only a portion of 
vehicles would be deemed nonconforming, EPA will determine the actual 
nonconforming vehicles by counting backwards from the last vehicle 
produced in that test group. Manufacturers will be liable for penalties 
for each vehicle sold that is not covered by a certificate.
    (d) Requirements for the cold temperature averaging, banking, and 
trading (ABT) program. (1) Manufacturers must average the cold 
temperature fleet average emissions of their vehicles and comply with 
the cold temperature fleet average standard. A manufacturer whose cold 
temperature fleet average emissions exceed the applicable standard must 
complete the calculation in paragraph (d)(4) of this section to 
determine the size of its credit deficit. A manufacturer whose cold 
temperature fleet average emissions are less than the applicable 
standard must complete the calculation in paragraph (d)(4) of this 
section to generate credits.
    (2) There are no property rights associated with cold temperature 
credits generated under this subpart. Credits are a limited 
authorization to emit the designated amount of emissions. Nothing in 
this part or any other provision of law should be construed to limit 
EPA's authority to terminate or limit this authorization through 
rulemaking.
    (3) Cold temperature NMHC credits may be used to demonstrate 
compliance with the cold temperature NMOG+NOX emission 
standards for Tier 4 vehicles.

[[Page 29437]]

The value of a cold temperature NMHC credit is deemed to be equal to 
the value of a cold temperature NMOG+NOX credit.
    (4) Credits are earned on the last day of the model year. 
Manufacturers must calculate, for a given model year, the number of 
credits or debits it has generated according to the following equation, 
rounded to the nearest 0.1 grams/mile:

Fleet average Credits or Debits = (Cold Temperature NMHC or 
NMOG+NOX Standard--Manufacturer's Sales-Weighted Cold 
Temperature Fleet Average Emissions) x (Total Number of Vehicles Sold)

Where:

Manufacturer's Sales-Weighted Cold Temperature Fleet Average 
Emissions = average calculated according to paragraph (b) of this 
section.
Total Number of Vehicles Sold = Total 50-State sales based on the 
point of first sale.

    (5) [Reserved]
    (6) NMHC credits are not subject to any discount or expiration date 
except as required under the deficit carryforward provisions of 
paragraph (d)(8) of this section. There is no discounting of unused 
credits. NMHC credits have unlimited lives, subject to the limitations 
of paragraph (d)(2) of this section. Tier 3 to Tier 4.
    (7) Credits may be used as follows:
    (i) Credits generated and calculated according to the method in 
paragraph (d)(4) of this section may be used only to offset deficits 
accrued with respect to the standard in Sec.  86.1811-10(g)(2). Credits 
may be banked and used in a future model year in which a manufacturer's 
average cold temperature fleet-average level exceeds the applicable 
standard. Credits may be exchanged only within averaging sets. Credits 
may also be traded to another manufacturer according to the provisions 
in paragraph (d)(9) of this section. Before trading or carrying over 
credits to the next model year, a manufacturer must apply available 
credits to offset any credit deficit, where the deadline to offset that 
credit deficit has not yet passed.
    (ii) The use of credits shall not be permitted to address Selective 
Enforcement Auditing or in-use testing failures. The enforcement of the 
averaging standard occurs through the vehicle's certificate of 
conformity. A manufacturer's certificate of conformity is conditioned 
upon compliance with the averaging provisions. The certificate will be 
void ab initio if a manufacturer fails to meet the corporate average 
standard and does not obtain appropriate credits to cover its 
shortfalls in that model year or in the subsequent model year (see 
deficit carryforward provision in paragraph (d)(8) of this section). 
Manufacturers must track their certification levels and sales unless 
they produce only vehicles certified with FELs at or below the 
applicable to cold temperature fleet-average levels below the standard 
and have chosen to forgo credit banking.
    (8) The following provisions apply if debits are accrued:
    (i) If a manufacturer calculates that it has negative credits (also 
called ``debits'' or a ``credit deficit'') for a given model year, it 
may carry that deficit forward into the next model year. Such a carry-
forward may only occur after the manufacturer exhausts any supply of 
banked credits. At the end of that next model year, the deficit must be 
covered with an appropriate number of credits that the manufacturer 
generates or purchases. Any remaining deficit is subject to an 
enforcement action, as described in this paragraph (d)(8). 
Manufacturers are not permitted to have a credit deficit for two 
consecutive years.
    (ii) If debits are not offset within the specified time period, the 
number of vehicles not meeting the cold temperature fleet average 
standards (and therefore not covered by the certificate) must be 
calculated by dividing the total amount of debits for the model year by 
the cold temperature fleet average standard applicable for the model 
year in which the debits were first incurred.
    (iii) EPA will determine the number of vehicles for which the 
condition on the certificate was not satisfied by designating vehicles 
in those test groups with the highest certification cold temperature 
NMHC or NMOG+NOX emission values first and continuing until 
reaching a number of vehicles equal to the calculated number of 
noncomplying vehicles as determined above. If this calculation 
determines that only a portion of vehicles in a test group contribute 
to the debit, EPA will designate actual vehicles in that test group as 
not covered by the certificate, starting with the last vehicle produced 
and counting backwards.
    (iv)(A) If a manufacturer ceases production of vehicles affected by 
a debit balance, the manufacturer continues to be responsible for 
offsetting any debits outstanding within the required time period. Any 
failure to offset the debits will be considered a violation of 
paragraph (d)(8)(i) of this section and may subject the manufacturer to 
an enforcement action for sale of vehicles not covered by a 
certificate, pursuant to paragraphs (d)(8)(ii) and (iii) of this 
section.
    (B) If a manufacturer is purchased by, merges with, or otherwise 
combines with another manufacturer, the controlling entity is 
responsible for offsetting any debits outstanding within the required 
time period. Any failure to offset the debits will be considered a 
violation of paragraph (d)(8)(i) of this section and may subject the 
manufacturer to an enforcement action for sale of vehicles not covered 
by a certificate, pursuant to paragraphs (d)(8)(ii) and (iii) of this 
section.
    (v) For purposes of calculating the statute of limitations, a 
violation of the requirements of paragraph (d)(8)(i) of this section, a 
failure to satisfy the conditions upon which a certificate(s) was 
issued and hence a sale of vehicles not covered by the certificate, all 
occur upon the expiration of the deadline for offsetting debits 
specified in paragraph (d)(8)(i) of this section.
    (9) The following provisions apply for trading cold temperature 
credits:
    (i) EPA may reject credit trades if the involved manufacturers fail 
to submit the credit trade notification in the annual report. A 
manufacturer may not sell credits that are not available for sale 
pursuant to the provisions in paragraphs (d)(7)(i) of this section.
    (ii) In the event of a negative credit balance resulting from a 
transaction that a manufacturer could not cover by the reporting 
deadline for the model year in which the trade occurred, both the buyer 
and seller are liable, except in cases involving fraud by either the 
buyer or seller. EPA may void ab initio the certificates of conformity 
of all engine families participating in such a trade.
    (iii) A manufacturer may only trade credits that it has generated 
pursuant to paragraph (d)(4) of this section or acquired from another 
party.
0
77. Amend Sec.  86.1865-12 by revising paragraphs (i)(1), (i)(2) 
introductory text, and (j) and removing paragraph (k)(7)(iii).
    The revisions read as follows:


Sec.  86.1865-12   How to comply with the fleet average CO2 standards.

* * * * *
    (i) * * *
    (1) Through model year 2026, manufacturers must compute separate 
production-weighted fleet average carbon-related exhaust emissions at 
the end of the model year for passenger automobiles and light trucks, 
using actual production, where production means vehicles produced and 
delivered for sale, and certifying model types to standards as defined 
in Sec.  86.1818-12.

[[Page 29438]]

The model type carbon-related exhaust emission results determined 
according to 40 CFR part 600, subpart F (in units of grams per mile 
rounded to the nearest whole number) become the certification standard 
for each model type.
    (2) Through model year 2026, manufacturers must separately 
calculate production-weighted fleet average carbon-related exhaust 
emissions levels for the following averaging sets according to the 
provisions of 40 CFR part 600, subpart F:
* * * * *
    (j) Certification compliance and enforcement requirements for CO2 
exhaust emission standards. (1) Compliance and enforcement requirements 
are provided in this section and Sec.  86.1848-10(c)(9).
    (2) The certificate issued for each test group requires all model 
types within that test group to meet the in-use emission standards to 
which each model type is certified. The in-use standards for passenger 
automobiles and light duty trucks (including MDPV) are described in 
Sec.  86.1818-12(d). The in-use standards for non-MDPV heavy-duty 
vehicles are described in Sec.  86.1819-14(b).
    (3) EPA will issue a recall order as described in 40 CFR part 85, 
subpart S, if EPA or the manufacturer determines that a substantial 
number of a class or category of vehicles produced by that 
manufacturer, although properly maintained and used, do not conform to 
in-use CO2 emission standards, or do not conform to the 
monitor accuracy requirements in Sec.  86.1815. The recall would be 
intended to remedy repairable problems to bring the vehicle into 
compliance; however, if there is no demonstrable, repairable problem 
that could be remedied to bring the vehicles into compliance, the 
manufacturer must submit an alternative plan for to address the 
noncompliance. For example, manufacturers may need to calculate a 
correction to its emission credit balance based on the GHG emissions of 
the actual number of vehicles produced. EPA may void credits originally 
calculated from noncompliant vehicles, unless traded, and will adjust 
debits. In the case of traded credits, EPA will adjust the selling 
manufacturer's credit balance to reflect the sale of such credits and 
any resulting credit deficit. Manufacturers may voluntarily recall 
vehicles to remedy such a noncompliance and submit a voluntary recall 
report as described in 40 CFR part 85, subpart T.
    (4) The manufacturer may request a hearing under 40 CFR part 1068, 
subpart G, regarding any voiding of credits or adjustment of debits 
under paragraph (j)(3) of this section. Manufacturers must submit such 
a request in writing describing the objection and any supporting data 
within 30 days after we make a decision.
    (5) Each manufacturer must comply with the applicable 
CO2 fleet average standard on a production-weighted average 
basis, at the end of each model year. Use the procedure described in 
paragraph (i) of this section for passenger automobiles and light 
trucks (including MDPV). Use the procedure described in Sec.  86.1819-
14(d)(9)(iv) for non-MDPV heavy-duty vehicles.
    (6) Each manufacturer must comply on an annual basis with the fleet 
average standards as follows:
    (i) Manufacturers must report in their annual reports to the Agency 
that they met the relevant corporate average standard by showing that 
the applicable production-weighted average CO2 emission 
levels are at or below the applicable fleet average standards; or
    (ii) If the production-weighted average is above the applicable 
fleet average standard, manufacturers must obtain and apply sufficient 
CO2 credits as authorized under paragraph (k)(8) of this 
section. A manufacturer must show that they have offset any exceedance 
of the corporate average standard via the use of credits. Manufacturers 
must also include their credit balances or deficits in their annual 
report to the Agency.
    (iii) If a manufacturer fails to meet the corporate average 
CO2 standard for four consecutive years, the vehicles 
causing the corporate average exceedance will be considered not covered 
by the certificate of conformity (see paragraph (k)(8) of this 
section). A manufacturer will be subject to penalties on an individual-
vehicle basis for sale of vehicles not covered by a certificate.
    (iv) EPA will review each manufacturer's production to designate 
the vehicles that caused the exceedance of the corporate average 
standard. EPA will designate as nonconforming those vehicles in test 
groups with the highest certification emission values first, continuing 
until reaching a number of vehicles equal to the calculated number of 
noncomplying vehicles as determined in paragraph (k)(8) of this 
section. In a group where only a portion of vehicles would be deemed 
nonconforming, EPA will determine the actual nonconforming vehicles by 
counting backwards from the last vehicle produced in that test group. 
Manufacturers will be liable for penalties for each vehicle sold that 
is not covered by a certificate.
* * * * *
0
78. Amend Sec.  86.1866-12 by revising paragraphs (a) and (c)(3) to 
read as follows:


Sec.  86.1866-12   CO2 credits for advanced technology vehicles.

* * * * *
    (a) Electric vehicles, plug-in hybrid electric vehicles, and fuel 
cell vehicles that are certified and produced for sale in the states 
and territories of the United States may use a value of zero grams 
CO2 per mile to represent the proportion of electric 
operation of a vehicle that is derived from electricity generated from 
sources that are not onboard the vehicle.
* * * * *
    (c) * * *
    (3) Multiplier-based credits for model years 2022 through 2024 may 
not exceed credit caps, as follows:
    (i) Calculate a nominal annual credit cap in Mg using the following 
equation, rounded to the nearest whole number:
[GRAPHIC] [TIFF OMITTED] TP05MY23.048

Where:

Pauto = total number of certified passenger automobiles the 
manufacturer produced in a given model year for sale in any state or 
territory of the United States.
Ptruck = total number of certified light trucks (including MDPV) the 
manufacturer produced in a given model year for sale in any state or 
territory of the United States.

    (ii) Calculate an annual g/mile equivalent value for the 
multiplier-based credits using the following equation, rounded to the 
nearest 0.1 g/mile:

[[Page 29439]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.049

Where:

annual credits = a manufacturer's total multiplier-based credits in 
a given model year from all passenger automobiles and light trucks 
as calculated under this paragraph (c).

    (iii) Calculate a cumulative g/mile equivalent value for the 
multiplier-based credits in each year by adding the annual g/mile 
equivalent values calculated under paragraph (c)(3)(ii) of this 
section.
    (iv) The cumulative g/mile equivalent value may not exceed 10.0 in 
any year.
    (v) For every year of certifying with multiplier-based credits, the 
annual credit report must include the calculated values for the nominal 
annual credit cap in Mg and the cumulative g/mile equivalent value.
0
79. Amend Sec.  86.1867-12 by revising the introductory text to read as 
follows:


Sec.  86.1867-12   CO2 credits for reducing leakage of air conditioning 
refrigerant.

    Through model year 2026, manufacturers may generate credits 
applicable to the CO2 fleet average program described in 
Sec.  86.1865-12 by implementing specific air conditioning system 
technologies designed to reduce air conditioning refrigerant leakage 
over the useful life of their passenger automobiles and/or light trucks 
(including MDPV); only the provisions of paragraph (a) of this section 
apply for non-MDPV heavy-duty vehicles. Credits shall be calculated 
according to this section for each air conditioning system that the 
manufacturer is using to generate CO2 credits. Manufacturers 
may no longer generate credits under this section starting in model 
year 2027.
* * * * *
0
80. Amend Sec.  86.1868-12 by:
0
a. Revising the introductory text.
0
b. Removing paragraph (a)(1).
0
c. Redesignating paragraph (a)(2) as paragraph (a).
0
d. Revising the redesignated paragraph (a).
0
e. Adding a heading to the table in newly redesignated paragraph (a).
0
f. Revising paragraph (b).
0
g. Removing and reserving paragraphs (e) and (f).
0
h. Revising paragraph (g) introductory text.
    The revisions and addition read as follows:


Sec.  86.1868-12   CO2 credits for improving the efficiency of air 
conditioning systems.

    Manufacturers may generate credits applicable to the CO2 
fleet average program described in Sec.  86.1865-12 by implementing 
specific air conditioning system technologies designed to reduce air 
conditioning-related CO2 emissions over the useful life of 
their passenger automobiles and light trucks (including MDPV). The 
provisions of this section do not apply for non-MDPV heavy-duty 
vehicles. Credits shall be calculated according to this section for 
each air conditioning system that the manufacturer is using to generate 
CO2 credits. Manufacturers must validate credits under this 
section based on testing as described in paragraph (g) of this section. 
Starting in model year 2027, manufacturers may generate credits under 
this section only for vehicles propelled by internal combustion 
engines.
    (a) Air conditioning efficiency credits are available for the 
following technologies in the gram per mile amounts indicated for each 
vehicle category in the following table:

Table 1 to Paragraph (a)

* * * * *
    (b) Air conditioning efficiency credits are determined on an air 
conditioning system basis. For each air conditioning system that is 
eligible for a credit based on the use of one or more of the items 
listed in paragraph (a) of this section, the total credit value is the 
sum of the gram per mile values for the appropriate model year listed 
in paragraph (a) for each item that applies to the air conditioning 
system. The total credit value for an air conditioning system may not 
be greater than 5.0 grams per mile for any passenger automobile or 7.2 
grams per mile for any light truck.
* * * * *
    (g) AC17 validation testing and reporting requirements. 
Manufacturers must validate air conditioning credits by using the AC17 
Test Procedure in 40 CFR 1066.845 as follows:
* * * * *
0
81. Amend Sec.  86.1869-12 by revising the introductory text and 
paragraph (b)(2) to read as follows:


Sec.  86.1869-12   CO2 credits for off-cycle CO2 reducing technologies.

    This section describes how manufacturers may generate credits for 
off-cycle CO2-reducing technologies through model year 2030. 
The provisions of this section do not apply for non-MDPV heavy-duty 
vehicles, except that Sec.  86.1819-14(d)(13) describes how to apply 
paragraphs (c) and (d) of this section for those vehicles. 
Manufacturers may no longer generate credits under this section 
starting in model year 2027 for vehicles deemed to have zero tailpipe 
emissions and in model year 2031 for all other vehicles. Manufacturers 
may no longer generate credits under paragraphs (c) and (d) of this 
section for any type of vehicle starting in model year 2027.
* * * * *
    (b) * * *
    (2) The maximum allowable decrease in the manufacturer's combined 
passenger automobile and light truck fleet average CO2 
emissions attributable to use of the default credit values in paragraph 
(b)(1) of this section is specified in paragraph (b)(2)(v) of this 
section. If the total of the CO2 g/mi credit values from 
paragraph (b)(1) of this section does not exceed the specified off-
cycle credit cap for any passenger automobile or light truck in a 
manufacturer's fleet, then the total off-cycle credits may be 
calculated according to paragraph (f) of this section. If the total of 
the CO2 g/mi credit values from paragraph (b)(1) of this 
section exceeds the specified off-cycle credit cap for any passenger 
automobile or light truck in a manufacturer's fleet, then the gram per 
mile decrease for the combined passenger automobile and light truck 
fleet must be determined according to paragraph (b)(2)(ii) of this 
section to determine whether the applicable limitation has been 
exceeded.
    (i) Determine the gram per mile decrease for the combined passenger 
automobile and light truck fleet using the following formula:
[GRAPHIC] [TIFF OMITTED] TP05MY23.050


[[Page 29440]]


Where:

Credits = The total of passenger automobile and light truck credits, 
in Megagrams, determined according to paragraph (f) of this section 
and limited to those credits accrued by using the default gram per 
mile values in paragraph (b)(1) of this section.
ProdC = The number of passenger automobiles produced by 
the manufacturer and delivered for sale in the U.S.
ProdT = The number of light trucks produced by the 
manufacturer and delivered for sale in the U.S.

    (ii) If the value determined in paragraph (b)(2)(i) of this section 
is greater than the off-cycle credit cap specified in paragraph 
(b)(2)(v) of this section, the total credits, in Megagrams, that may be 
accrued by a manufacturer using the default gram per mile values in 
paragraph (b)(1) of this section shall be determined using the 
following formula:
[GRAPHIC] [TIFF OMITTED] TP05MY23.051

Where:

cap = the off-cycle credit cap specified in paragraph (b)(2)(v) of 
this section.
ProdC = The number of passenger automobiles produced by 
the manufacturer and delivered for sale in the U.S.
ProdT = The number of light trucks produced by the 
manufacturer and delivered for sale in the U.S.

    (iii) If the value determined in paragraph (b)(2)(i) of this 
section is not greater than the off-cycle credit cap specified in 
paragraph (b)(2)(v) of this section, then the credits that may be 
accrued by a manufacturer using the default gram per mile values in 
paragraph (b)(1) of this section do not exceed the allowable limit, and 
total credits may be determined for each category of vehicles according 
to paragraph (f) of this section.
    (iv) If the value determined in paragraph (b)(2)(i) of this section 
is greater than the off-cycle credit cap specified in paragraph 
(b)(2)(v) of this section, then the combined passenger automobile and 
light truck credits, in Megagrams, that may be accrued using the 
calculations in paragraph (f) of this section must not exceed the value 
determined in paragraph (b)(2)(ii) of this section. This limitation 
should generally be done by reducing the amount of credits attributable 
to the vehicle category that caused the limit to be exceeded such that 
the total value does not exceed the value determined in paragraph 
(b)(2)(ii) of this section.
    (v) The manufacturer's combined passenger automobile and light 
truck fleet average CO2 emissions attributable to use of the 
default credit values in paragraph (b)(1) of this section may not 
exceed the specific values as described in this paragraph (b)(2)(v). 
Starting in model year 2027, adjust the credit contribution from PHEVs 
in the fleet-average calculation by dividing the PHEV off-cycle credit 
value by the utility factor established under 40 CFR 600.116-12(c)(1) 
or (c)(10)(iii) (weighted 55 percent city, 45 percent highway). For 
example, if a PHEV has utility factor of 0.3 and an off-cycle credit of 
3.0, count it as having a credit value of 10 (3/0.3) for calculating 
the fleet average value. The following maximum values apply for off-
cycle credits:

------------------------------------------------------------------------
                                                             Off-cycle
                       Model year                         credit cap (g/
                                                               mile)
------------------------------------------------------------------------
(A) 2023-2026...........................................              15
(B) 2027................................................              10
(C) 2028................................................             8.0
(D) 2029................................................             6.0
(E) 2030................................................             3.0
------------------------------------------------------------------------

* * * * *


Sec.  86.1871-12   [Removed]

0
82. Remove Sec.  86.1871-12.

PART 600--FUEL ECONOMY AND GREENHOUSE GAS EXHAUST EMISSIONS OF 
MOTOR VEHICLES

0
83. The authority citation for part 1036 continues to read as follows:

    Authority:  49 U.S.C. 32901--23919q, Pub. L. 109-58.

0
84. Amend Sec.  600.007 by revising paragraph (b)(4) introductory text 
to read as follows:


Sec.  600.007   Vehicle acceptability.

* * * * *
    (b) * * *
    (4) Each fuel economy data vehicle must meet the same exhaust 
emission standards as certification vehicles of the respective engine-
system combination during the test in which the fuel economy test 
results are generated. This may be demonstrated using one of the 
following methods:
* * * * *
0
85. Amend Sec.  600.113-12 by revising the introductory text and 
paragraph (n) to read as follows:


Sec.  600.113-12   Fuel economy, CO2 emissions, and carbon-related 
exhaust emission calculations for FTP, HFET, US06, SC03 and cold 
temperature FTP tests.

    The Administrator will use the calculation procedure set forth in 
this section for all official EPA testing of vehicles fueled with 
gasoline, diesel, alcohol-based or natural gas fuel. The calculations 
of the weighted fuel economy and carbon-related exhaust emission values 
require input of the weighted grams/mile values for total hydrocarbons 
(HC), carbon monoxide (CO), and carbon dioxide (CO2); and, 
additionally for methanol-fueled automobiles, methanol 
(CH3OH) and formaldehyde (HCHO); and, additionally for 
ethanol-fueled automobiles, methanol (CH3OH), ethanol 
(C2H5OH), acetaldehyde 
(C2H4O), and formaldehyde (HCHO); and 
additionally for natural gas-fueled vehicles, non-methane hydrocarbons 
(NMHC) and methane (CH4). For manufacturers selecting the 
fleet averaging option for N2O and CH4 as allowed 
under Sec.  86.1818 of this chapter the calculations of the carbon-
related exhaust emissions require the input of grams/mile values for 
nitrous oxide (N2O) and methane (CH4). Emissions 
shall be determined for the FTP, HFET, US06, SC03, and cold temperature 
FTP tests. Additionally, the specific gravity, carbon weight fraction 
and net heating value of the test fuel must be determined. The FTP, 
HFET, US06, SC03, and cold temperature FTP fuel economy and carbon-
related exhaust emission values shall be calculated as specified in 
this section. An example fuel economy calculation appears in Appendix 
II of this part.
* * * * *
    (n) Manufacturers may use a value of 0 grams CO2 and 
CREE per mile to represent the emissions of fuel cell vehicles and the 
proportion of electric operation of a electric vehicles and plug-in 
hybrid electric vehicles that is derived from electricity that is 
generated from sources that are not onboard the vehicle.
* * * * *
0
86. Amend Sec.  600.116-12 by revising paragraphs (c)(1), (c)(2)(i) and 
(iii), and (c)(5) and (10) and adding paragraph (c)(11) to read as 
follows:

[[Page 29441]]

Sec.  600.116-12   Special procedures related to electric vehicles and 
hybrid electric vehicles.

* * * * *
    (c) * * *
    (1) To determine CREE values to demonstrate compliance with GHG 
standards, calculate composite values representing combined operation 
during charge-depleting and charge-sustaining operation using the 
following utility factors, except as otherwise specified in this 
paragraph (c):

                  Table 1 to Paragraph (c)(1)--Fleet Utility Factors for Urban ``City'' Driving
----------------------------------------------------------------------------------------------------------------
                                           Model year 2026 and earlier            Model year 2027 and later
   Schedule range for UDDS phases,   ---------------------------------------------------------------------------
                miles                   Cumulative UF      Sequential UF      Cumulative UF      Sequential UF
----------------------------------------------------------------------------------------------------------------
3.59................................              0.125              0.125              0.062              0.062
7.45................................              0.243              0.117              0.125              0.062
11.04...............................              0.338              0.095              0.178              0.054
14.90...............................              0.426              0.088              0.232              0.053
18.49...............................              0.497              0.071              0.278              0.046
22.35...............................              0.563              0.066              0.324              0.046
25.94...............................              0.616              0.053              0.363              0.040
29.80...............................              0.666              0.049              0.403              0.040
33.39...............................              0.705              0.040              0.437              0.034
37.25...............................              0.742              0.037              0.471              0.034
40.84...............................              0.772              0.030              0.500              0.029
44.70...............................              0.800              0.028              0.530              0.029
48.29...............................              0.822              0.022              0.555              0.025
52.15...............................              0.843              0.021              0.580              0.025
55.74...............................              0.859              0.017              0.602              0.022
59.60...............................              0.875              0.016              0.624              0.022
63.19...............................              0.888              0.013              0.643              0.019
67.05...............................              0.900              0.012              0.662              0.019
70.64...............................              0.909              0.010              0.679              0.017
----------------------------------------------------------------------------------------------------------------


                     Table 2 to Paragraph (c)(1)--Fleet Utility Factors for Highway Driving
----------------------------------------------------------------------------------------------------------------
                                           Model year 2026 and earlier            Model year 2027 and later
   Schedule range for HFET, miles    ---------------------------------------------------------------------------
                                        Cumulative UF      Sequential UF      Cumulative UF      Sequential UF
----------------------------------------------------------------------------------------------------------------
10.3................................              0.123              0.123              0.168              0.168
20.6................................              0.240              0.117              0.303              0.136
30.9................................              0.345              0.105              0.414              0.110
41.2................................              0.437              0.092              0.503              0.090
51.5................................              0.516              0.079              0.576              0.073
61.8................................              0.583              0.067              0.636              0.060
72.1................................              0.639              0.056              0.685              0.049
----------------------------------------------------------------------------------------------------------------

    (2) * * *
    (i) For vehicles that are not dual fueled automobiles, determine 
fuel economy using the utility factors specified in paragraph (c)(1) of 
this section for model year 2026 and earlier vehicles. Do not use the 
petroleum-equivalence factors described in 10 CFR 474.3.
* * * * *
    (iii) For 2016 and later model year dual fueled automobiles, you 
may determine fuel economy based on the following equation, separately 
for city and highway driving:
[GRAPHIC] [TIFF OMITTED] TP05MY23.052

Where:

UF = The appropriate utility factor for city or highway driving 
specified in paragraph (c)(1) of this section for model year 2026 
and earlier vehicles.
* * * * *
    (5) Instead of the utility factors specified in paragraphs (c)(1) 
through (3) of this section, calculate utility factors using the 
following equation for vehicles whose maximum speed is less than the 
maximum speed specified in the driving schedule, where the vehicle's 
maximum speed is determined, to the nearest 0.1 mph, from observing the 
highest speed over the first duty cycle (FTP, HFET, etc.):

[[Page 29442]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.053

Where:

UFi = the utility factor for phase i. Let UF0 = 0.
J = a counter to identify the appropriate term in the summation 
(with terms numbered consecutively).
K = the number of terms in the equation (see Table 5 of this 
section).
di = the distance driven in phase i.
ND = the normalized distance. Use 399 for both FTP and HFET 
operation for fleet values CAFE, and for GHG through model year 
2026. Use 583 for both FTP and HFET operation for GHG fleet values 
starting in model year 2027. Use 399 for both FTP and HFET operation 
for multi-day individual value for labeling.
Cj = the coefficient for term j from the following table:

                 Table 5 to Paragraph (c)(5)--City/Highway Specific Utility Factor Coefficients
----------------------------------------------------------------------------------------------------------------
                                                    Fleet values for I, and for    Fleet values      Multi-day
                                                        GHG through MY 2026           for GHG       individual
                                                 -------------------------------- starting in MY     value for
                   Coefficient                                                         2027          labeling
                                                                                 -------------------------------
                                                       City           Highway         City or         City or
                                                                                      highway         highway
----------------------------------------------------------------------------------------------------------------
1...............................................           14.86             4.8           10.52            13.1
2...............................................           2.965              13          -7.282           -18.7
3...............................................          -84.05             -65          -26.37            5.22
4...............................................           153.7             120           79.08            8.15
5...............................................          -43.59         -100.00          -77.36            3.53
6...............................................          -96.94           31.00           26.07           -1.34
7...............................................           14.47  ..............  ..............           -4.01
8...............................................           91.70  ..............  ..............           -3.90
9...............................................          -46.36  ..............  ..............           -1.15
10..............................................  ..............  ..............  ..............            3.88
----------------------------------------------------------------------------------------------------------------
n = the number of test phases (or bag measurements) before the vehicle reaches the end-of-test criterion.

* * * * *
    (10) The utility factors described in this paragraph (c) and in 
Sec.  600.510 are derived from equations in SAE J2841. You may 
alternatively calculate utility factors from the corresponding 
equations in SAE J2841 as follows:
    (i) Calculate utility factors for labeling directly from the 
equation in SAE J2841 Section 6.2 using the Table 2 MDIUF Fit 
Coefficients (C1 through C10) and a normalized distance (norm_dist) of 
399 miles.
    (ii) Calculate utility factors for fuel economy standards from the 
equation in SAE J2841 Section 6.2 using the Table 5 Fit Coefficients 
for city/Hwy Specific FUF curves weighted 55 percent city, 45 percent 
highway and a normalized distance (norm_dist) of 399 miles.
    (iii) Starting in model year 2027, calculate utility factors for 
GHG compliance with emission standards from the equation in SAE J2841 
Section 6.2 using the Table 2 FUF Fit Coefficients (C1 through C6) and 
a normalized distance (norm_dist) of 583 miles. For model year 2026 and 
earlier, calculate utility factors for compliance with GHG emission 
standards as described in paragraph (c)(10)(ii) of this section.
    (11) The following methodology is used to determine the useable 
battery energy (UBE) for a PHEV using data obtained during either the 
UDDS Full Charge Test (FCT) or the HFET Full Charge Test as described 
in SAE J1711:
    (i) Perform the measurements described in SAE J1711 Section 
4.3.2.3.d. Record initial and final SOC of the RESS for each cycle in 
the FCT.
    (ii) Calculate utility factors for fuel economy standards from the 
equation in SAE J2841 Section 6.2 using the Table 5 Fit Coefficients 
for city/Hwy Specific FUF curves (weighted 55 percent city, 45 percent 
highway) and a normalized distance (norm_dist) of 399 miles.
    (iii) Determine average RESS voltage during each cycle of the FCT 
by averaging the results of either the continuous voltage measurement 
or by averaging the initial and final voltage measurement.
    (iv) Determine the DC discharge energy for each cycle of the FCT by 
multiplying the change in SOC of each cycle by the average voltage for 
the cycle. You may instead use a DC wideband power analyzer meeting the 
requirements of SAE J1711 Section 4.2.a. to directly measure the DC 
discharge energy of the RESS during each cycle of the FCT.
    (v) After completing the FCT, determine the cycles comprising the 
Charge-Depleting Cycle Range (Rcdc) as described in SAE J1711 Section 
3.1.13. Rcdc includes the transitional cycle or cycles where the 
vehicle may have operated in both charge-depleting and charge-
sustaining modes. Do not include charge-sustaining cycles in Rcdc.
    (vi) Determine the UBE of the PHEV by summing the measured DC 
discharge energy for each cycle comprising Rcdc. Following the charge-
depleting cycles and during the transition to charge-sustaining 
operation, one or more of the transition cycles may involve vehicle 
charging without discharging the RESS. Include these negative discharge 
results in the summation.
* * * * *
0
87. Revise Sec.  600.117 to read as follows:


Sec.  600.117   Interim provisions.

    (a) The following provisions apply instead of other provisions 
specified in this part through model year 2026:
    (1) Except as specified in paragraphs (a)(5) and (6) of this 
section, manufacturers must demonstrate compliance with greenhouse gas 
emission standards and determine fuel economy values using E0 gasoline 
test fuel as specified in 40 CFR 86.113-04(a)(1), regardless of any 
testing with E10 test fuel specified in 40 CFR 1065.710(b) under 
paragraph (a)(2) of this section.

[[Page 29443]]

    (2) Manufacturers may demonstrate that vehicles comply with 
emission standards for criteria pollutants as specified in 40 CFR part 
86, subpart S, during fuel economy measurements using the E0 gasoline 
test fuel specified in 40 CFR 86.113-04(a)(1), as long as this test 
fuel is used in fuel economy testing for all applicable duty cycles 
specified in 40 CFR part 86, subpart S. If a vehicle fails to meet an 
emission standard for a criteria pollutant using the E0 gasoline test 
fuel specified in 40 CFR 86.113-04(a)(1), the manufacturer must retest 
the vehicle using the E10 test fuel specified in 40 CFR 1065.710(b) (or 
the equivalent LEV III test fuel for California) to demonstrate 
compliance with all applicable emission standards over that test cycle.
    (3) If a manufacturer demonstrates compliance with emission 
standards for criteria pollutants over all five test cycles using the 
E10 test fuel specified in 40 CFR 1065.710(b) (or the equivalent LEV 
III test fuel for California), the manufacturer may use test data with 
the same test fuel to determine whether a test group meets the criteria 
described in Sec.  600.115 for derived 5-cycle testing for fuel economy 
labeling. Such vehicles may be tested over the FTP and HFET cycles with 
the E0 gasoline test fuel specified in 40 CFR 86.113-04(a)(1) under 
this paragraph (a)(3); the vehicles must meet the emission standards 
for criteria pollutants over those test cycles as described in 
paragraph (a)(2) of this section.
    (4) Manufacturers may perform testing with the appropriate gasoline 
test fuels specified in 40 CFR 86.113-04(a)(1), 86.213(a)(2), and 
1065.710(b) to evaluate whether their vehicles meet the criteria for 
derived 5-cycle testing under Sec.  600.115. All five tests must use 
test fuel with the same nominal ethanol concentration.
    (5) For IUVP testing under 40 CFR 86.1845, manufacturers may 
demonstrate compliance with greenhouse gas emission standards using a 
test fuel meeting specifications for demonstrating compliance with 
emission standards for criteria pollutants.
    (6) Manufacturers may alternatively demonstrate compliance with 
greenhouse gas emission standards and determine fuel economy values 
using E10 gasoline test fuel as specified in 40 CFR 1065.710(b). 
However, manufacturers must then multiply measured CO2 
results by 1.0166 and round to the nearest 0.01 g/mile and calculate 
fuel economy using the equations appropriate equation for testing with 
E10 test fuel.
    (7) If a vehicle uses an E10 test fuel for evaporative emission 
testing and E0 is the applicable test fuel for exhaust emission 
testing, exhaust measurement and reporting requirements apply over the 
course of the evaporative emission test, but the vehicle need not meet 
the exhaust emission standards during the evaporative emission test 
run.
    (b) Manufacturers may certify model year 2027 through 2029 vehicles 
to greenhouse gas emission standards using data with E0 test fuel from 
testing for earlier model years, subject to the carryover provisions of 
40 CFR 86.1839. In the case of the fleet average CO2 
standard, manufacturers must divide the measured CO2 results 
by 1.0166 and round to the nearest 0.01 g/mile.

PART 1036--CONTROL OF EMISSIONS FROM NEW AND IN-USE HEAVY-DUTY 
HIGHWAY ENGINES

0
88. The authority citation for part 1036 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

0
89. Add Sec.  1036.635 to read as follows:


Sec.  1036.635   Certification requirements for high-GCWR medium-duty 
vehicles.

    This section describes provisions that apply for engines certified 
under this part for installation in vehicles at or below 14,000 pounds 
GVWR that have GCWR above 22,000 pounds.
    (a) Engines that will be installed in complete vehicles must meet 
the criteria pollutant emission standards specified in Sec.  1036.104. 
Those engines are exempt from the greenhouse gas emission standards in 
Sec.  1036.108, but engine certification under this part 1036 depends 
on the following conditions:
    (1) The vehicles in which the engines are installed must meet the 
following vehicle-based standards under 40 CFR part 86, subpart S:
    (i) Evaporative and refueling emission standards as specified in 40 
CFR 86.1813-17.
    (ii) Greenhouse gas emission standards as specified in 40 CFR 
86.1819-14.
    (iii) For electric vehicles, battery durability standards in 40 CFR 
86.1815.
    (2) Additional provisions related to greenhouse gas emission 
standards from 40 CFR part 86, subpart S, apply for certifying engines 
under this part, as illustrated in the following examples:
    (i) The engine's emission control information label must state that 
the vehicle meets evaporative and refueling emission standards under 40 
CFR 86.1813-17 and greenhouse gas emission standards under 40 CFR 
86.1819-14.
    (ii) The application for certification must include the information 
related to complying with evaporative, refueling, and greenhouse gas 
emission standards.
    (iii) We may require you to perform testing on in-use vehicles as 
specified in 40 CFR 86.1845-04 and 86.1846-01.
    (iv) Demonstrate compliance with the fleet average CO2 
standard as described in 40 CFR 86.1865-12 by including vehicles 
certified under this section in the compliance calculations as part of 
the averaging set for medium-duty vehicles certified under 40 CFR part 
86, subpart S.
    (3) State in the application for certification that you are using 
the provisions of this section to meet the fleet average CO2 
standard in 40 CFR 86.1819-14 instead of meeting the standards of Sec.  
1036.108 and instead of certifying the vehicle to standards under 40 
CFR part 1037.
    (b) The provisions of this section are optional for engines 
installed in incomplete vehicles at or below 14,000 pounds GVWR that 
have GCWR above 22,000 pounds.

PART 1037--CONTROL OF EMISSIONS FROM NEW HEAVY-DUTY MOTOR VEHICLES

0
90. The authority citation for part 1037 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

0
91. Amend Sec.  1037.150 by revising paragraph (l) to read as follows:


Sec.  1037.150  Interim provisions.

* * * * *
    (l) Optional certification to GHG standards under 40 CFR part 86. 
The greenhouse gas standards in 40 CFR part 86, subpart S, may apply 
instead of the standards of Sec.  1037.105 as follows:
    (1) Complete or cab-complete vehicles may optionally meet 
alternative standards as described in 40 CFR 86.1819-14(j).
    (2) Complete high-GCWR vehicles must meet the greenhouse gas 
standards of 40 CFR part 86, subpart S, as described in 40 CFR 
1036.635.
    (3) Incomplete high-GCWR vehicles may meet the greenhouse gas 
standards of 40 CFR part 86, subpart S, as described in 40 CFR 
1036.635.
* * * * *

PART 1066--VEHICLE-TESTING PROCEDURES

0
92. The authority citation for part 1066 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

0
93. Amend Sec.  1066.801 by revising the introductory text and 
paragraphs (c) and (e) to read as follows:

[[Page 29444]]

Sec.  1066.801  Applicability and general provisions.

    This subpart I specifies how to apply the test procedures of this 
part for light-duty vehicles, light-duty trucks, and heavy-duty 
vehicles at or below 14,000 pounds GVWR that are subject to chassis 
testing for exhaust emissions under 40 CFR part 86, subpart S. For 
these vehicles, references in this part 1066 to the standard-setting 
part include this subpart I.
* * * * *
    (c) This subpart covers the following test procedures:
    (1) The Federal Test Procedure (FTP), which includes the general 
driving cycle. This procedure is also used for measuring evaporative 
emissions. This may be called the conventional test since it was 
adopted with the earliest emission standards.
    (i) The FTP consists of one Urban Dynamometer Driving Schedule 
(UDDS) as specified in paragraph (a) of appendix I of 40 CFR part 86, 
followed by a 10-minute soak with the engine off and repeat driving 
through the first 505 seconds of the UDDS. Note that the UDDS 
represents about 7.5 miles of driving in an urban area. Engine startup 
(with all accessories turned off), operation over the initial UDDS, and 
engine shutdown make a complete cold-start test. The hot-start test 
consists of the first 505 seconds of the UDDS following the 10-minute 
soak and a hot-running portion of the UDDS after the first 505 seconds. 
The first 505 seconds of the UDDS is considered the transient portion; 
the remainder of the UDDS is considered the stabilized (or hot-
stabilized) portion. The hot-stabilized portion for the hot-start test 
is generally measured during the cold-start test; however, in certain 
cases, the hot-start test may involve a second full UDDS following the 
10-minute soak, rather than repeating only the first 505 seconds. See 
Sec. Sec.  1066.815 and 1066.820.
    (ii) Evaporative emission testing includes a preconditioning drive 
with the UDDS and a full FTP cycle, including exhaust measurement, 
followed by evaporative emission measurements. In the three-day diurnal 
test sequence, the exhaust test is followed by a running loss test 
consisting of a UDDS, then two New York City Cycles as specified in 
paragraph (e) of appendix I of 40 CFR part 86, followed by another 
UDDS; see 40 CFR 86.134. Note that the New York City Cycle represents 
about 1.18 miles of driving in a city center. The running loss test is 
followed by a high-temperature hot soak test as described in 40 CFR 
86.138 and a three-day diurnal emission test as described in 40 CFR 
86.133. In the two-day diurnal test sequence, the exhaust test is 
followed by a low-temperature hot soak test as described in 40 CFR 
86.138-96(k) and a two-day diurnal emission test as described in 40 CFR 
86.133-96(p).
    (iii) Refueling emission tests for vehicles that rely on integrated 
control of diurnal and refueling emissions includes vehicle operation 
over the full FTP test cycle corresponding to the three-day diurnal 
test sequence to precondition and purge the evaporative canister. For 
non-integrated systems, there is a preconditioning drive over the UDDS 
and a refueling event, followed by repeated UDDS driving to purge the 
evaporative canister. The refueling emission test procedures are 
described in 40 CFR 86.150 through 86.157.
    (2) The US06 driving cycle is specified in paragraph (g) of 
appendix I of 40 CFR part 86. Note that the US06 driving cycle 
represents about 8.0 miles of relatively aggressive driving.
    (3) The SC03 driving cycle is specified in paragraph (h) of 
appendix I of 40 CFR part 86. Note that the SC03 driving schedule 
represents about 3.6 miles of urban driving with the air conditioner 
operating.
    (4) The hot portion of the LA-92 driving cycle is specified in 
paragraph (c) of appendix I of 40 CFR part 86. Note that the hot 
portion of the LA-92 driving cycle represents about 9.8 miles of 
relatively aggressive driving for commercial trucks. This driving cycle 
applies for heavy-duty vehicles above 10,000 pounds GVWR and at or 
below 14,000 pounds GVWR only for vehicles subject to Tier 3 standards.
    (5) The Highway Fuel Economy Test (HFET) is specified in appendix I 
of 40 CFR part 600. Note that the HFET represents about 10.2 miles of 
rural and freeway driving with an average speed of 48.6 mi/hr and a 
maximum speed of 60.0 mi/hr. See Sec.  1066.840.
    (6) Cold temperature standards apply for CO and NMHC emissions when 
vehicles operate over the FTP at a nominal temperature of -7 [deg]C. 
See 40 CFR part 86, subpart C, and subpart H of this part.
    (7) Emission measurement to determine air conditioning credits for 
greenhouse gas standards. In this optional procedure, manufacturers 
operate vehicles over repeat runs of the AC17 test sequence to allow 
for calculating credits as part of demonstrating compliance with 
CO2 emission standards. The AC17 test sequence consists of a 
UDDS preconditioning drive, followed by emission measurements over the 
SC03 and HFET driving cycles. See Sec.  1066.845.
    (8) The mid-temperature intermediate soak FTP is specified as the 
procedure for Partial Soak Emission Testing in Section E4.4 of CARB's 
PHEV Test Procedures for plug-in hybrid electric vehicles, in Part II 
Section I.7 of CARB's LMDV Test Procedures for other hybrid electric 
vehicles, and in Part II, Section B.9.1 and B.9.3 of CARB's LMDV Test 
Procedures for other vehicles (both incorporated by reference, see 
Sec.  1066.1010).
    (9) The early driveaway FTP is specified as the procedure for Quick 
Drive-Away Emission Testing in Section E4.5 of CARB's PHEV Test 
Procedures for plug-in hybrid electric vehicles, in Part II Section I.8 
of CARB's LMDV Test Procedures for other hybrid electric vehicles, and 
in Part II, Section B.9.2 and B.9.4 of CARB's LMDV Test Procedures for 
other vehicles (both incorporated by reference, see Sec.  1066.1010).
    (10) The high-load PHEV engine starts US06 is specified in Section 
E7.2 of CARB's PHEV Test Procedures using the cold-start US06 Charge-
Depleting Emission Test (incorporated by reference, see Sec.  
1066.1010).
* * * * *
    (e) The following figure illustrates the FTP test sequence for 
measuring exhaust and evaporative emissions:

Figure 1 to Paragraph (e)

[[Page 29445]]

[GRAPHIC] [TIFF OMITTED] TP05MY23.054

0
94. Amend Sec.  1066.805 by revising paragraph (c) to read as follows:


Sec.  1066.805  Road-load power, test weight, and inertia weight class 
determination.

* * * * *
    (c) For FTP, US06, SC03, New York City Cycle, HFET, and LA-92 
testing, determine road-load forces for each test vehicle at speeds 
between 9.3 and 71.5 miles per hour. The road-load force must represent 
vehicle operation on a smooth, level road with no wind or calm winds, 
no precipitation, an ambient temperature of approximately 20 [deg]C, 
and atmospheric pressure of 98.21 kPa. You may extrapolate road-load 
force for speeds below 9.3 mi/hr.
0
95. Revise Sec.  1066.830 to read as follows:


Sec.  1066.830  Supplemental Federal Test Procedures; overview.

    Sections 1066.831 and 1066.835 describe the detailed procedures for 
the Supplemental Federal Test Procedure (SFTP). This testing applies 
for Tier 3 vehicles subject to the SFTP standards in 40 CFR 86.1811-17 
or 86.1816-18. The SFTP test procedure consists of FTP testing and two 
additional test elements--a sequence of vehicle operation with more 
aggressive driving and a sequence of vehicle operation that accounts 
for the impact of the vehicle's air conditioner. Tier 4 vehicles 
subject to 40 CFR 86.1811-27 must meet standards for each individual 
driving cycle.
    (a) The SFTP standard applies as a composite representing the three 
test elements. The emission results from the aggressive driving test 
element (Sec.  1066.831), the air conditioning test element (Sec.  
1066.835), and the FTP test element (Sec.  1066.820) are analyzed 
according to the calculation methodology and compared to the applicable 
SFTP emission standards as described in 40 CFR part 86, subpart S.
    (b) The test elements of the SFTP may be run in any sequence that 
includes the specified preconditioning steps.
0
96. Amend Sec.  1066.831 by revising paragraph (e)(2) to read as 
follows:


Sec.  1066.831  Exhaust emission test procedures for aggressive 
driving.

* * * * *
    (e) * * *
    (2) Operate the vehicle over the full US06 driving schedule, with 
the following exceptions that apply only for Tier 3 vehicles:
    (i) For heavy-duty vehicles above 10,000 pounds GVWR, operate the 
vehicle over the Hot LA-92 driving schedule.
    (ii) Heavy-duty vehicles at or below 10,000 pounds GVWR with a 
power-to-weight ratio at or below 0.024 hp/pound may be certified using 
only the highway portion of the US06 driving schedule as described in 
40 CFR 86.1816.
* * * * *
0
97. Amend Sec.  1066.1001 by removing the definition of ``SFTP'' and 
adding a definition of ``Supplemental FTP (SFTP)'' in alphabetical 
order.
    The addition reads as follows:


Sec.  1066.1001  Definitions.

* * * * *
    Supplemental FTP (SFTP) means the collection of test cycles as 
given in 1066.830.
* * * * *
0
98. Amend Sec.  1066.1010 by adding paragraph (c) to read as follows:


Sec.  1066.1010  Incorporation by reference.

* * * * *
    (c) California Air Resources Board. The following documents are 
available from the California Air Resources Board, 1001 I Street, 
Sacramento, CA 95812, (916) 322-2884, or http://www.arb.ca.gov:

[[Page 29446]]

    (1) California 2026 and Subsequent Model Year Criteria Pollutant 
Exhaust Emission Standards and Test Procedures for Passenger Cars, 
Light-Duty Trucks, And Medium-Duty Vehicles (``CARB's LMDV Test 
Procedures''); adopted August 25, 2022; IBR approved for Sec.  
1066.801(c).
    (2) California Test Procedures for 2026 and Subsequent Model Year 
Zero-Emission Vehicles and Plug-In Hybrid Electric Vehicles, in the 
Passenger Car, Light-Duty Truck and Medium-Duty Vehicle Classes 
(``CARB's PHEV Test Procedures''); adopted August 25, 2022; IBR 
approved for Sec.  1066.801(c).

[FR Doc. 2023-07974 Filed 5-4-23; 8:45 am]
BILLING CODE 6560-50-P