[Federal Register Volume 88, Number 234 (Thursday, December 7, 2023)]
[Rules and Regulations]
[Pages 85364-85394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-26019]



[[Page 85363]]

Vol. 88

Thursday,

No. 234

December 7, 2023

Part II





Department of Transportation





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Federal Highway Administration





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23 CFR Part 490





National Performance Management Measures; Assessing Performance of the 
National Highway System, Greenhouse Gas Emissions Measure; Final Rule

  Federal Register / Vol. 88 , No. 234 / Thursday, December 7, 2023 / 
Rules and Regulations  

[[Page 85364]]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Part 490

[FHWA Docket No. FHWA-2021-0004]
RIN 2125-AF99


National Performance Management Measures; Assessing Performance 
of the National Highway System, Greenhouse Gas Emissions Measure

AGENCY: Federal Highway Administration (FHWA), U.S. Department of 
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: This final rule amends FHWA's regulations governing national 
performance management measures and establishes a method for the 
measurement and reporting of greenhouse gas (GHG) emissions associated 
with transportation (GHG measure). It requires State departments of 
transportation (State DOT) and metropolitan planning organizations 
(MPO) to establish declining carbon dioxide (CO2) targets 
for the GHG measure and report on progress toward the achievement of 
those targets. The rule does not mandate how low targets must be. 
Rather, State DOTs and MPOs have flexibility to set targets that are 
appropriate for their communities and that work for their respective 
climate change and other policy priorities, as long as the targets aim 
to reduce emissions over time. The FHWA will assess whether State DOTs 
have made significant progress toward achieving their targets.

DATES: This final rule is effective January 8, 2024.

FOR FURTHER INFORMATION CONTACT: Mr. John G. Davies, Office of Natural 
Environment, (202) 366-6039, or via email at [email protected], or 
Mr. Lev Gabrilovich, Office of the Chief Counsel, (202) 366-3813, or 
via email at [email protected]. Office hours are from 8 a.m. to 
4:30 p.m., E.T., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: 

Electronic Access and Filing

    This document, the notice of proposed rulemaking (NPRM), all 
comments received, and all supporting material may be viewed online at 
www.regulations.gov using the docket number listed above. Electronic 
retrieval help and guidelines are available on the website. It is 
available 24 hours each day, 365 days each year. An electronic copy of 
this document may also be downloaded from the Office of the Federal 
Register's website at www.federalregister.gov and the Government 
Publishing Office's website at www.GovInfo.gov.

I. Executive Summary

    The FHWA is amending its regulations on national performance 
management measures at 23 CFR part 490 (part 490) and establishing a 
method for the measurement and reporting of GHG emissions. The 
environmental sustainability, and specifically the carbon footprint, of 
the transportation system is a critically important attribute that 
State DOTs can and should use to assess the performance of the 
Interstate and non-Interstate NHS. Section 150(c) of Title 23, U.S.C., 
clearly directs FHWA to establish performance measures that the State 
DOTs can use to assess performance of the Interstate and non-Interstate 
NHS. Although the statute does not define the meaning of 
``performance'' of the Interstate and non-Interstate NHS under 23 
U.S.C. 150(c), Congress identified national goals under 23 U.S.C. 
150(b), which include environmental sustainability. See 23 U.S.C. 
150(b)(6). To support the environmental sustainability national goal, 
FHWA is interpreting ``performance'' of the Interstate System and non-
Interstate NHS under 23 U.S.C. 150(c) to include the system's 
environmental performance. This definition of ``performance'' is also 
consistent with other Title 23, U.S.C. provisions, such as 23 U.S.C. 
119, discussed later in this preamble.
    The GHG measure established in this rule is the same as the measure 
proposed in the NPRM, which is the percent change in on-road tailpipe 
CO2 emissions on the NHS relative to the reference year. The 
FHWA is finalizing a reference year of 2022 as part of this rule. The 
measure is part of the National Highway Performance Program (NHPP) 
performance measures that FHWA established in part 490 through prior 
rulemakings. The GHG measure requires State DOTs and MPOs that have NHS 
mileage within their State geographic boundaries and metropolitan 
planning area boundaries, respectively, to establish declining targets 
for reducing CO2 emissions \1\ generated by on-road mobile 
sources. The regulation uses ``NHS'' to mean the mainline highways of 
the NHS, consistent with the applicability of the measure described in 
Sec.  490.503(a)(2). Consistent with the Transportation Performance 
Management (TPM) framework, State DOTs will establish 2- and 4-year 
statewide emissions reduction targets, and MPOs will establish 4-year 
emissions reduction targets for their metropolitan planning areas. In 
addition, the rule will require certain MPOs serving UZAs with 
populations of 50,000 or more to establish additional joint targets. 
Specifically, when the metropolitan planning area boundaries of two or 
more MPOs overlap any portion of an UZA, and the UZA contains NHS 
mileage, those MPOs will establish joint 4-year targets for that UZA. 
This joint target will be established in addition to each MPO's target 
for their metropolitan planning area. State DOTs and MPOs have the 
flexibility to set targets that work for their respective climate 
change policies and other policy priorities, so long as they are 
declining. The State DOTs and MPOs are also required to report on their 
progress in meeting the targets. The final rule applies to the 50 
States, the District of Columbia, and Puerto Rico, consistent with the 
definition of the term ``State'' in 23 U.S.C. 101(a). To realize the 
benefits of a GHG measure as soon as is practicable, State DOTs will 
first establish targets and report those targets by February 1, 2024, 
and subsequent targets will be established and reported no later than 
October 1, 2026, with biennial reports thereafter.
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    \1\ The proposed GHG measure specifically applies to 
CO2 emissions, which is the predominant human-produced 
GHG. CO2 is also the predominant GHG from on-road mobile 
sources, accounting for approximately 97 percent of total GHG 
emissions weighted by global warming potential in 2021. See U.S. 
Environmental Protection Agency, 2023: Inventory of U.S. Greenhouse 
Gas Emissions and Sinks: 1990-2021, table 2-13, available at https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2021.
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    The GHG measure will help the United States (U.S.) confront the 
increasingly urgent climate crisis. The Sixth Assessment Report by the 
Intergovernmental Panel on Climate Change (IPCC), released on August 7, 
2021, confirms that human activities are increasing GHG concentrations 
that have warmed the atmosphere, ocean, and land at a rate that is 
unprecedented in at least the last 2000 years.\2\ Changes in extreme 
events, along with anticipated future increases in the occurrence and 
severity of these events because of climate change, threaten the 
reliability, safety, and efficiency of the transportation system and 
the people who rely on it to move themselves and transport goods. At 
the same time,

[[Page 85365]]

transportation contributes significantly to the causes of climate 
change,\3\ representing the largest source of U.S. CO2 
emissions, and each additional ton of CO2 produced by the 
combustion of fossil fuels contributes to future warming and other 
climate impacts.
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    \2\ See IPCC, 2021: Summary for Policymakers. In: Climate Change 
2021: The Physical Science Basis. Contribution of Working Group I to 
the Sixth Assessment Report of the Intergovernmental Panel on 
Climate Change, available at https://www.ipcc.ch/report/ar6/wg1/#SPM.
    \3\ Jacobs, J.M., M. Culp, L. Cattaneo, P. Chinowsky, A. Choate, 
S. DesRoches, S. Douglass, and R. Miller, 2018: Transportation. 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. 479-511. doi: 10.7930/NCA4.2018.CH12.
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    The GHG measure aligns with Executive Orders (E.O.) described later 
in this preamble and supports the U.S. target of reducing GHG emissions 
50-52 percent below 2005 levels in 2030, on course to reaching net-zero 
emissions economywide no later than 2050.\4\ As a matter of 
transportation policy, DOT considers the GHG measure essential to 
improve transportation sector performance and demonstrate Federal 
leadership in the assessment and disclosure of climate pollution. The 
first step toward reducing GHG emissions involves inventorying and 
monitoring those emissions. By providing consistent and timely 
information about on-road mobile source emissions on the NHS, the GHG 
measure has the potential to increase public awareness of GHG emissions 
trends, improve the transparency of transportation decisions, enhance 
decisionmaking at all levels of government, and support better informed 
planning choices to reduce GHG emissions or inform tradeoffs among 
competing policy choices.
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    \4\ White House Fact Sheet: The Biden-Harris Electric Vehicle 
Charging Action Plan (December 13, 2021), available at https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/13/fact-sheet-the-biden-harris-electric-vehicle-charging-action-plan/; 
White House Fact Sheet: President Biden Sets 2030 Greenhouse Gas 
Pollution Reduction Target Aimed at Creating Good-Paying Union Jobs 
and Securing U.S. Leadership on Clean Energy Technologies (Apr. 22, 
2021), available at https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/22/fact-sheet-president-biden-sets-2030-greenhouse-gas-pollution-reduction-target-aimed-at-creating-good-paying-union-jobs-and-securing-u-s-leadership-on-clean-energy-technologies/; White House Fact Sheet: President Biden's Leaders 
Summit on Climate (Apr. 23, 2021), available at https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/23/fact-sheet-president-bidens-leaders-summit-on-climate/.
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    Furthermore, the rule responds to the direction in sections 1 and 2 
of E.O. 13990 (86 FR 7037) that Federal agencies review any regulations 
issued or similar actions taken between January 20, 2017, and January 
20, 2021, and, consistent with applicable law, take steps to address 
any such actions that conflict with the national objectives set forth 
in the order to address climate change. The FHWA reviewed its 2018 
final rule (83 FR 24920, May 31, 2018) that repealed a GHG measure FHWA 
adopted in 2017 (2017 GHG measure) and determined that the repeal 
conflicts with those objectives.
    After reviewing the 2018 final rule, FHWA has reconsidered its 
position that the Agency's authority to promulgate the 2017 final rule 
reflected a ``strained reading of the statutory language in section 
150.'' 83 FR at 24923. The FHWA now concludes, as it did when 
establishing a GHG measure in the 2017 PM3 final rule, that it has the 
legal authority to establish the GHG measure under 23 U.S.C. 150. 
Specifically, FHWA is clearly directed under 23 U.S.C. 
150(c)(3)(A)(ii)(IV)-(V) to establish measures for States to use to 
assess the performance of the Interstate System and non-Interstate NHS. 
Although the statute does not define performance, 23 U.S.C. 150(b)(6) 
identifies environmental sustainability as a national goal of the 
Federal-aid highway program, and Congress, in 23 U.S.C. 150(a), has 
declared that performance management, including the use of performance 
measures, is key to meeting the national goals of section 150(b). To 
address the national goal of environmental sustainability, FHWA has 
determined that the performance of the Interstate System and the NHS 
under 23 U.S.C. 150(c)(3)(A)(ii)(IV)-(V) logically includes 
environmental performance. The GHG measure is also appropriate in light 
of other provisions of Title 23, U.S.C., notably the NHPP provisions at 
23 U.S.C. 119, which include requirements for State asset management 
plans that support progress toward the achievement of the national 
goals identified in 23 U.S.C. 150(b), including the national goal to 
enhance the performance of the transportation system while protecting 
and enhancing the natural environment at 23 U.S.C. 150(b)(6), and 
include a risk management analysis that specifically addresses extreme 
weather and resilience. See 23 U.S.C. 119(e)(2) and (e)(4)(D). This 
reconsideration is discussed in detail in section III.B in the NPRM, 
see 87 FR 42407-42410, and section III below.
    The regulatory impact analysis (RIA) prepared pursuant to E.O. 
12866, as amended by E.O. 14094, is available in the rulemaking docket 
(Docket No. FHWA-2021-0004). The RIA estimates the costs associated 
with establishing the GHG measure, derived from the costs of 
implementing the GHG measure for each component of the rule that may 
involve costs. To estimate the costs, FHWA assessed the level of effort 
that would be needed to comply with each applicable section in part 490 
with respect to the GHG measure, including labor hours by labor 
category, over a 10-year study period (2023-32). Total costs over this 
period are estimated to be $10.8 million, discounted at 7 percent, and 
$12.7 million, discounted at 3 percent. The RIA also discusses 
anticipated benefits of the rule qualitatively because the anticipated 
quantitative benefits are difficult to forecast and monetize. These 
benefits include: (1) more-informed decision-making through the 
creation of complete, consistent, and timely information on GHG 
emissions; (2) greater accountability through the establishment of a 
more highly visible and transparent performance reporting system; and 
(3) improved progress toward achieving national transportation goals by 
including declining targets for CO2 emissions on the NHS in 
the set of existing performance requirements designed to help the 
Federal-aid highway program support balanced performance outcomes and 
national climate policies.

II. Background and Regulatory History

    The 2012 Moving Ahead for Progress in the 21st Century Act (MAP-21) 
(Pub. L. 112-141) and the 2015 Fixing America's Surface Transportation 
(FAST Act) (Pub. L. 114-94) transformed the Federal-aid highway program 
by establishing performance management requirements and tasking FHWA 
with carrying them out. To implement this program, FHWA established an 
organizational unit with dedicated full-time staff to coordinate with 
program staff from each of the performance areas to design and 
establish an approach to effectively implement the Title 23 performance 
provisions. The FHWA has technical and policy experts on staff to 
assist State DOTs and MPOs with implementing performance management and 
oversee program requirements. The FHWA implemented this performance 
management network through multiple rulemakings, which established in 
23 CFR part 490 the performance measures and requirements for target 
establishment, reporting on progress, and how determinations would be 
made on whether State DOTs have made significant progress toward 
applicable targets.
    The TPM requirements provide increased accountability and 
transparency, and facilitate efficient investment of Federal 
transportation funds through a focus on performance outcomes for the 
seven national

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transportation goals concerning safety, infrastructure condition, 
congestion reduction, system reliability, freight movement and economic 
vitality, environmental sustainability, and reduced project delivery 
delays. See 23 U.S.C. 150(b). Through performance management, 
recipients of Federal-aid highway funds make transportation investments 
to achieve short-term performance targets and make progress toward the 
seven statutory national transportation goals. Performance management 
allows FHWA to more effectively evaluate and report on the Nation's 
surface transportation conditions and performance.
    Prior to MAP-21, there were no explicit statutory requirements for 
State DOTs or MPOs to demonstrate how their transportation programs 
supported national performance outcomes, making it difficult to assess 
the effectiveness of the Federal-aid highway program. The TPM 
requirements established in MAP-21 changed this paradigm by requiring 
State DOTs and MPOs to measure condition or performance, establish 
targets, assess progress toward targets, and report on condition or 
performance in a nationally consistent manner for the first time. See 
23 U.S.C. 150(e); 23 CFR 490.107. As previously noted, FHWA conducted 
several rulemakings implementing the performance management framework. 
Most relevant to this proposed rule are three related national 
performance management measure rulemakings in which FHWA established 
various measures for State DOTs and MPOs to use to assess performance, 
found at 23 CFR part 490. The first rulemaking focused on Safety 
Performance Management (PM1), and a final rule published on March 15, 
2016 (81 FR 13882), established performance measures for State DOTs to 
use to carry out the Highway Safety Improvement Program (HSIP). The 
second rulemaking on Infrastructure Performance Management (PM2) 
resulted in a final rule published on January 18, 2017 (82 FR 5886), 
that established performance measures for assessing pavement condition 
and bridge condition for the NHPP. The third rulemaking, System 
Performance Management (PM3), established measures for State DOTs and 
MPOs to use to assess the performance of the Interstate and non-
Interstate NHS for the purpose of carrying out the NHPP; to assess 
freight movement on the Interstate System; and to assess traffic 
congestion and on-road mobile source emissions for the purpose of 
carrying out the Congestion Mitigation and Air Quality (CMAQ) Program. 
The PM3 final rule was published on January 18, 2017 (82 FR 5970). The 
PM3 rule addressed a broad set of performance issues and some of the 
national transportation goals, such as environmental sustainability, 
that were not addressed in the earlier rulemakings focused solely on 
safety and infrastructure condition. In the preamble to the PM3 
proposed rule, published on April 22, 2016 (81 FR 23806), FHWA 
requested public comment on whether to establish a CO2 
emissions measure in the final rule and, if so, how to do so. The FHWA 
acknowledged the contribution of on-road sources to over 80 percent of 
U.S. transportation sector GHG emissions, and the historic Paris 
Agreement in which the U.S. and more than 190 other countries agreed in 
December 2015 to reduce GHG emissions, with the goal of limiting global 
temperature rise to less than 2 degrees Celsius above pre-industrial 
levels by 2050. The FHWA recognized that achieving U.S. climate goals 
would require significant GHG reductions from on-road transportation 
sources. See 81 FR 23830. Against this backdrop, FHWA stated that it 
was considering how GHG emissions could be estimated and used to inform 
planning and programming decisions to reduce long term emissions. The 
FHWA sought comment on the potential establishment and effectiveness of 
a GHG emissions measure as a planning, programming, and reporting tool, 
and FHWA requested feedback on specific considerations related to the 
design of such a measure. See 82 FR 23831.
    In the PM3 final rule, after considering extensive public comments 
on whether and how FHWA should establish such a measure, FHWA 
established a GHG emissions performance measure to measure 
environmental performance in accordance with 23 U.S.C. 150(c)(3). The 
measure involved the percent change in CO2 emissions from 
the reference year 2017, generated by on-road mobile sources on the 
NHS. After a change in Administration, FHWA repealed the 2017 GHG 
measure before the respective due dates for target setting or 
reporting. On October 5, 2017 (82 FR 46427), FHWA proposed to repeal 
the 2017 GHG measure. The FHWA requested public comment on whether to 
retain or revise the 2017 GHG measure. See 82 FR 46430. In light of 
policy direction at the time to review existing regulations to 
determine whether changes would be appropriate to eliminate duplicative 
regulations, reduce costs, and streamline regulatory processes, and 
after considering public comments received, on May 31, 2018 (83 FR 
24920), FHWA repealed the GHG measure, effective on July 2, 2018. The 
FHWA identified three main reasons for the repeal: (1) reconsideration 
of the underlying legal authority; (2) the cost of the GHG measure in 
relation to the lack of demonstrated benefits; and (3) potential 
duplication of information produced by the GHG measure and information 
produced by other initiatives related to measuring CO2 
emissions.
    On July 15, 2022 (87 FR 42401), FHWA published a NPRM to establish 
a GHG measure. After reconsidering the arguments for the 2018 final 
rule and finding them lacking, FHWA proposed to require State DOTs and 
MPOs that have NHS mileage within their State geographic boundaries and 
metropolitan planning area boundaries, respectively, to establish 
declining targets for reducing CO2 emissions generated by 
on-road mobile sources, that align with the Administration's target of 
net-zero emissions, economy-wide, by 2050, accordance with the national 
policy established under section 1 of E.O. 13990, ``Protecting Public 
Health and the Environment and Restoring Science to Tackle the Climate 
Crisis'', section 201 of E.O. 14008, ``Tackling the Climate Crisis at 
Home and Abroad'', and at the Leaders Summit on Climate. Under the 
proposed rule, State DOTs would establish 2- and 4-year statewide 
emissions reduction targets, and MPOs would establish 4-year emissions 
reduction targets for their metropolitan planning areas. In addition, 
FHWA proposed to require MPOs serving select UZA to establish 
additional joint targets. The term ``urbanized area'' means a 
geographic area with a population of 50,000 or more, as designated by 
the Bureau of the Census. See 23 U.S.C. 101(a)(36); 23 CFR 450.104. The 
NPRM specified that when the metropolitan planning area boundaries of 
two or more MPOs overlap any portion of the same UZA, and the UZA 
contains NHS mileage, those MPOs would establish joint 4-year targets 
for that UZA. This joint target would be established in addition to 
each MPO's target for their metropolitan planning area. Further, FHWA 
proposed to require State DOTs and MPOs to set declining targets for 
reducing tailpipe CO2 emissions on the NHS. Under the NPRM, 
State DOTs and MPOs would have the flexibility to set targets that work 
for their respective climate change policies and other policy 
priorities, so long as they aligned with the goal of net-zero GHG 
emissions, economy-wide, by 2050. The FHWA also proposed to require 
State DOTs and MPOs to report on their progress in

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meeting the targets. The FHWA identified that the proposed rule would 
apply to the 50 States, the District of Columbia, and Puerto Rico, 
consistent with the definition of the term ``State'' in 23 U.S.C. 
101(a). The FHWA now finalizes the proposed measure with some 
modifications.

III. Statutory Authority for Performance Management and the GHG Measure

    The FHWA is establishing the GHG emissions performance measure 
under 23 U.S.C. 150(c)(3), which calls for FHWA to establish 
performance measures that the States can use to assess performance of 
the Interstate and non-Interstate NHS for the purpose of carrying out 
the NHPP under 23 U.S.C. 119. See 23 U.S.C. 150(c)(3)(A)(ii)(IV)-(V). 
The FHWA received many comments both in support and in opposition to 
the Agency's authority to promulgate this rulemaking. After considering 
these comments, FHWA reaffirms that Congress provided FHWA with clear 
authority to develop performance measures to help State DOTs and MPOs 
address significant and long-term issues impacting the performance of 
the transportation system. These comments and FHWA's response are 
further discussed in Section VII of this preamble.
    The FHWA has determined that measuring environmental performance of 
the Interstate and non-Interstate NHS is vital to meeting the Agency's 
obligations under 23 U.S.C. 150. As discussed in the NPRM, Congress 
charged FHWA with establishing performance measures, but did not define 
the term ``performance,'' as used in 23 U.S.C. 150(c)(3). Thus, FHWA 
must interpret this term in the context of the statute, FHWA's 
statutory authority in Title 23, U.S.C., to administer the Federal-aid 
highway program, and congressional intent. Accordingly, FHWA is 
interpreting ``performance'' of the Interstate System and non-
Interstate NHS under 23 U.S.C. 150(c) to include the system's 
environmental performance, consistent with the program's statutorily 
mandated goal to enhance the performance of the transportation system 
while protecting and enhancing the natural environment. See 23 U.S.C. 
150(b). As described further in this preamble, FHWA interprets this 
national goal to mean that the Agency should take reasonable steps to 
assist State DOTs and MPOs measure and evaluate the GHG emissions on 
the Interstate and non-Interstate NHS. The FHWA's interpretation of 
performance under 23 U.S.C. 150(c) is consistent with 23 U.S.C. 119(e), 
which calls for State DOTs to develop a performance-driven asset 
management plan that would ``support progress toward the achievement of 
the national goals identified in section 150(b).'' 23 U.S.C. 119(e)(2). 
In addition, 23 U.S.C. 119(b) provides the purposes of the NHPP, which 
include supporting the condition and performance of the NHS, supporting 
construction of new facilities on the NHS, ensuring investments of 
Federal-aid funds in highway construction are directed to support 
progress toward the achievement of performance targets established in a 
State asset management plan, and supporting activities to increase the 
resiliency of the NHS to mitigate the cost of damages from sea level 
rise, extreme weather events, flooding, wildfires, or other natural 
disasters. Assessing environmental performance provides support for 
activities to increase the resiliency of the NHS to mitigate the cost 
of damages from sea level rise, extreme weather events, flooding, 
wildfires, or other natural disasters.
    Importantly, FHWA does not believe its authority in this area is 
unlimited. Since 23 U.S.C. 150(c)(3)(A)(ii)(IV)-(V) refers only to the 
performance of the Interstate System and the non-Interstate NHS, FHWA 
only has authority to apply this measure to the Interstate System and 
the non-Interstate NHS. In addition, FHWA is only requiring that State 
DOTs and MPOs establish declining targets for GHG emissions on the NHS. 
The FHWA is neither requiring any specific targets nor mandating any 
penalties for failing to achieve these targets. The measure and the 
associated targets are intended only to help State DOTs and MPOs 
consistently and transparently monitor the current performance of the 
NHS, and plan transportation projects in a way that protects the long-
term performance of the NHS.
    As described in the NPRM, see 87 FR 42408, Congress specifically 
directed FHWA to establish measures for States to use to assess the 
performance of the Interstate System and the non-Interstate NHS. See 23 
U.S.C. 150(c)(3)(A)(ii)(IV)-(V). Although Congress did not define the 
meaning of performance under this provision, the statute identifies 
seven national goals to inform performance management. Environmental 
sustainability is one of the specifically identified goals, which is 
defined as ``enhanc[ing] the performance of the transportation system 
while protecting and enhancing the natural environment.'' 23 U.S.C. 
150(b)(6). Congress directed FHWA to determine the nature and scope of 
the specific performance measures that will fulfill the statutory 
mandate in 23 U.S.C. 150(c), and has not clarified this authority even 
after FHWA finalized the three national performance management measure 
rulemakings described earlier. The FHWA notes that 23 U.S.C. 
150(c)(2)(C) limits performance measures to those described in 23 
U.S.C. 150(c). When FHWA repealed the GHG performance measure, the 
Agency took an unduly narrow view and determined that since 23 U.S.C. 
150(c)(2)(C) directs FHWA to limit performance measures only to those 
described in 23 U.S.C. 150(c), FHWA's previous interpretation that 
performance of the Interstate System and the National Highway System 
under 23 U.S.C. 150(c)(3)(A)(ii)(IV)-(V) includes environmental 
performance was overly broad. As FHWA described in the NPRM, see 87 FR 
42408, this provision limits FHWA's authority to establish measures 
States use to assess performance only to the Interstate System and the 
non-Interstate NHS. However, the provision does not otherwise limit the 
meaning of ``performance,'' and upon reconsideration, FHWA has 
determined that its original interpretation of the scope of its section 
150(c) authority from the 2017 final rule is the better read of the 
statute. Specifically, in light of the explicit statutory goal of 
environmental sustainability, the significant risks that climate 
change-driven extreme weather pose to the condition and performance of 
NHS, and FHWA's unquestioned authority to establish performance 
measures, FHWA believes that it is appropriate to interpret the meaning 
of performance of the Interstate System and the non-Interstate NHS 
under 23 U.S.C. 150(c)(3)(A)(ii)(IV)-(V) to include environmental 
performance.
    As described in the NPRM and previously discussed in this preamble, 
this GHG measure is consistent with other parts of Title 23, U.S.C., 
notably 23 U.S.C. 119. Section 119(d)(1) of Title 23, U.S.C., 
establishes eligibility criteria for using funds apportioned to a State 
for carrying out the NHPP, but does not set forth all relevant 
considerations for carrying out the program. For example, 23 U.S.C. 
119(d)(2) identifies purposes for eligible projects, including 
development and implementation of a State DOT's asset management plan 
for the NHS under 23 U.S.C. 119(e), and environmental mitigation 
efforts related to projects funded under 23 U.S.C. 119(g). Section 
119(e) calls for a performance-driven asset management plan that would 
``support progress toward the achievement of the national goals 
identified in Section 150(b)'',

[[Page 85368]]

which includes the environmental sustainability national goal under 23 
U.S.C. 150(b)(6). Risk-based asset management planning under 23 U.S.C. 
119(e) includes consideration of life-cycle costs and risk management, 
financial planning, and investment strategies. Rapidly changing climate 
and increased weather extremes because of fossil fuel combustion 
directly impact the condition and performance of transportation 
facilities because of increases in heavy precipitation, coastal 
flooding, heat, wildfires, and other extreme events. Extreme events are 
already leading to transportation challenges, inducing societal and 
economic consequences, which will only increase in the years ahead. The 
number of billion-dollar climate disaster events has been much higher 
over the last 5 years than the annual average over the last 30 
years.\5\ Low-income and vulnerable populations are disproportionately 
affected by the impacts of climate change.\6\ These impacts are not 
attributable to any single action, but are exacerbated by a series of 
actions, including actions taken under the Federal-aid highway program. 
Recognizing the need to plan for and consider the risks of extreme 
weather, Congress amended the requirements for States' asset management 
plans under 23 U.S.C. 119(e) to include lifecycle cost and risk 
management analyses that specifically consider extreme weather and 
resilience. See 23 U.S.C. 119(e)(4)(D) (as amended by Pub. L. 117-58, 
sec. 11105). Measuring environmental performance through the GHG 
performance measure will assist States in considering CO2 
emissions from transportation in the performance management framework, 
including the impact of CO2 emissions on the medium- and 
long-term conditions of transportation assets arising from the risks 
of, and costs related to extreme weather, and help frame responses to 
the growing climate crisis. Therefore, the GHG performance measure is 
appropriate in light of 23 U.S.C. 119, and FHWA has determined that the 
Agency's interpretation of ``performance'' to include ``environmental 
performance'' is consistent with 23 U.S.C. 119.
---------------------------------------------------------------------------

    \5\ NOAA National Centers for Environmental Information (NCEI), 
2022: U.S. Billion-Dollar Weather and Climate Disasters, available 
at https://www.ncdc.noaa.gov/billions/, DOI: 10.25921/stkw-7w73.
    \6\ 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.
---------------------------------------------------------------------------

    As FHWA noted in the NPRM, several other provisions in Title 23, 
U.S.C., support FHWA's authority for its proposal to address GHG 
emissions in this rulemaking. To help conceptualize FHWA's framework 
for analyzing its authority under Title 23, U.S.C., this preamble 
restates these provisions as follows:
     In Section 101(b)(3)(G), Congress declared that 
``transportation should play a significant role in promoting economic 
growth, improving the environment, and sustaining the quality of 
life.''
     Section 134(a)(1) states as a matter of transportation 
planning policy that ``[i]t is in the national interest to encourage 
and promote the safe and efficient management, operation, and 
development of surface transportation systems . . . while minimizing 
transportation-related fuel consumption and air pollution through 
metropolitan and statewide transportation planning processes identified 
in this chapter.''
     Section 134(c)(1) requires MPOs to develop long range 
plans and transportation improvement programs to achieve the objectives 
in 23 U.S.C. 134(a)(1) through a performance-driven, outcome-based 
approach to planning.
     Section 134(h) defines the scope of the metropolitan 
planning process. Paragraphs (h)(1)(E) and (I), respectively, require 
consideration of projects and strategies that will ``. . . protect and 
enhance the environment, promote energy conservation, improve the 
quality of life . . .'' and ``. . . improve the resiliency and 
reliability of the transportation system . . .''.
     Section 135(d)(1) defines the scope of the statewide 
planning process. Paragraphs (d)(1)(E) and (I), respectively, require 
consideration of projects, strategies, and services that will ``. . . 
protect and enhance the environment, promote energy conservation, 
improve the quality of life . . .'', and ``. . . improve the resiliency 
and reliability of the transportation system . . .''.
     Section 135(d)(2) requires the statewide transportation 
planning process to ``. . . provide for the establishment and use of a 
performance-based approach to transportation decision-making to support 
the national goals described in Section 150(b) of this title . . .''.
    The FHWA reaffirms that these Title 23, U.S.C., provisions make it 
clear that assessing infrastructure performance under 23 U.S.C. 
150(c)(3) properly encompasses the assessment of environmental 
performance, including GHG emissions and other climate-related matters. 
As noted in FHWA's May 2018 repeal of the 2017 GHG measure, nothing in 
the statute specifically requires FHWA to adopt a GHG emissions 
measure. However, consistent with the statutory provisions cited above, 
no provision of law prohibits FHWA from adopting a GHG emissions 
measure, despite ample opportunity for Congress to do so.
    On November 15, 2021, President Biden signed the Infrastructure 
Investment and Jobs Act (IIJA) (Pub. L. 117-58, also known as the 
``Bipartisan Infrastructure Law'') (BIL) into law. The BIL does not 
explicitly direct FHWA to assess environmental performance. However, 
Congress set forth new programs and eligibilities under BIL that State 
DOTs and MPOs will use to address GHG emissions, and environmental 
performance will be central to proper administration of the programs. 
Thus, this GHG measure will help State DOTs and MPOs effectively use 
these new transportation dollars. For example, BIL authorized a new 
Carbon Reduction Program (CRP) codified at 23 U.S.C. 175. The CRP 
provides billions of dollars for Fiscal Years 2022-2026 for use on a 
range of projects that can demonstrate reductions in transportation 
emissions over the project's lifecycle. The CRP also requires State 
DOTs to develop a carbon reduction strategy in consultation with any 
MPO designated within the State to support efforts to reduce 
transportation emissions and identify projects and strategies to reduce 
these emissions. See 23 U.S.C. 175(d). Similarly, BIL included new 
language regarding national electric vehicle charging and hydrogen, 
propane, and natural gas fueling corridors to support changes in the 
transportation sector that help achieve a reduction in GHG emissions. 
See 23 U.S.C. 151. These programs are two examples of Congress' express 
focus on using transportation programs to reduce GHG emissions from 
transportation sources. The FHWA's GHG measure will help State DOTs and 
MPOs track the effectiveness of their transportation investments in 
projects that reduce GHG emissions, both through these programs and 
through other programs, such as the Surface Transportation Block Grant 
Program authorized at 23 U.S.C. 133.
    The establishment of the GHG measure does not force investments in 
specific projects or strategies to reduce emissions, nor does it 
require the achievement of an absolute reduction target. However, FHWA 
has determined that the targets for the GHG measure

[[Page 85369]]

should show a reduction in CO2 emissions. As discussed in 
response to comments in Section VII of this preamble, the establishment 
of declining targets is vital given the urgency of the climate crisis. 
Establishing declining targets will help State DOTs and MPOs plan 
toward reductions in GHG emissions and make Federal infrastructure 
investment decisions that reduce climate pollution, a principle set 
forth in E.O. 14008 (86 FR 7626). State DOTs and MPOs will set targets 
that indicate a reduction in CO2 emissions, which FHWA has 
determined will be supportive of the policy goals set forth in 23 
U.S.C. 150(b).
    Although the rule requires declining targets for CO2 
emissions, FHWA is not setting forth any requirements in this 
rulemaking to determine how State DOTs and MPOs should determine their 
declining targets. In addition, as directed by 23 U.S.C. 145, States 
determine which of their projects shall be federally financed by 
Federal-aid highway formula dollars. State DOTs and MPOs will set and 
determine targets based on appropriate data as informed by State DOT 
and MPO policies and priorities. The FHWA is not prescribing what 
declining targets would look like in each State or MPO, and FHWA is not 
requiring State DOTs and MPOs to achieve targeted emission reductions, 
nor prescribing the selection of specific projects under this 
rulemaking. Thus, this approach is consistent with the Agency's 
authority under 23 U.S.C. 150(c) to establish measures for States to 
use to assess the performance of the Interstate and non-Interstate NHS 
in the furtherance of the national goal to enhance the performance of 
the transportation system while protecting and enhancing the natural 
environment.
    In addition, adopting the measure for GHG emissions under 23 U.S.C. 
150(c)(3) is appropriate in light of the structure of the TPM program. 
As discussed in the NPRM, Congress required FHWA to establish 
performance measures for a number of programs in addition to the NHPP, 
including an emissions related measure for the CMAQ Program under 23 
U.S.C. 149. As discussed in the NPRM and in response to comments in 
Section VII of this preamble, the existence of the CMAQ emissions 
measure has raised questions regarding whether Congress intended FHWA 
to only measure emissions when those emissions are related to CMAQ, 
which is limited to criteria pollutants and nonattainment or 
maintenance areas under the Clean Air Act. However, this language only 
indicates congressional intent that FHWA establish a performance 
measure for on-road mobile source emissions for the purposes of 
carrying out the CMAQ Program. Nothing in 23 U.S.C. 150 limits measures 
that take into account emissions only to measures established for the 
purposes of carrying out the CMAQ Program. The FHWA has determined that 
it is appropriate to examine relevant emissions as part of assessing 
performance of the Interstate and non-Interstate NHS in support of the 
NHPP.
    For all of these reasons, FHWA asserts the GHG measure is 
consistent with FHWA's authority under 23 U.S.C. 150(c).
Reconsideration of Previous Actions
    As discussed in Section II of this preamble, and detailed in 
Section III.C of the NPRM, FHWA has previously proposed and finalized 
actions related to a GHG measure. Specifically, FHWA previously 
finalized the PM3 rule, through which the Agency considered extensive 
public comments on whether and how FHWA should establish a GHG measure. 
The FHWA determined that it was appropriate to measure environmental 
performance, specifically as the percent change in CO2 
emissions from the reference year 2017, generated by on-road mobile 
sources on the NHS (82 FR 5970). On October 5, 2017 (82 FR 46427), 
however, FHWA proposed to repeal the 2017 GHG measure. As discussed in 
more detail in the NPRM to this action, FHWA repealed the GHG measure 
on May 31, 2018 (83 FR 24920), in light of policy direction from the 
previous administration to review existing regulations to determine 
whether changes would be appropriate to eliminate duplicative 
regulations, reduce costs, and streamline regulatory processes, and 
after considering public comments received. The repeal was effective on 
July 2, 2018. The FHWA identified three main reasons for the repeal: 
(1) reconsideration of the underlying legal authority; (2) the cost of 
the GHG measure in relation to the lack of demonstrated benefits; and 
(3) potential duplication of information produced by the GHG measure 
and information produced by other initiatives related to measuring 
CO2 emissions.
    As part of this rulemaking, FHWA evaluated each of these rationales 
to examine whether they remain appropriate in light of current 
information. First, FHWA proposed, and now finalizes, that the Agency 
has reconsidered its interpretation of the statute. Consistent with the 
reasoning set forth in the PM3 rule, FHWA believes adopting this 
measure under 23 U.S.C. 150(c) is appropriate in light of the Agency's 
authority under that section and based on the Agency's authority under 
Title 23, U.S.C. as a whole, as previously described in this section 
and detailed further in Section III.B of the NPRM. See 87 FR 42407-
42410. Second, FHWA has determined that the benefits of the rulemaking, 
although difficult to quantify, are substantial and justify finalizing 
this action. In its 2022 NPRM, FHWA described how the substantial 
benefits of this regulation justified reconsidering and rejecting the 
Agency's conclusion in the 2018 final rule that the benefits of a GHG 
measure were too speculative and outweighed by the costs to justify 
retaining the measure as part of the TPM program. See 87 FR 42410-
42411. The benefits and policy rationale for this regulation are 
further described in Section IV of this preamble. Third, and as 
discussed in the 2022 NPRM, see 87 FR 42411-42412, FHWA has determined 
that the information produced by the GHG measure is not duplicative in 
relation to information produced by other initiatives related to 
measuring CO2 emissions, but rather complements that data to 
support a whole-of-government approach to addressing GHG emissions. The 
importance of this measure is further described in Section IV of this 
preamble.
    FHWA adopts in full its analysis in the 2022 NPRM justifying the 
reconsideration and rejection of the conclusion from the 2018 final 
rule that 23 U.S.C. 150 did not provide FHWA with authority to measure 
the environmental performance of the NHS and adopt a GHG measure, and 
that the overall statutory scheme of Title 23, U.S.C. supported a 
narrower interpretation of performance of the NHS, and emphasizes some 
key points here. In the 2018 repeal, FHWA concluded that 23 U.S.C. 
119(d)(1)(A) delineates the national goals that are relevant to 
eligibility of projects for funding under the NHPP, and the national 
goals included in section 119(d)(1)(A) are consistent with an 
interpretation of ``performance'' that focuses on the physical 
condition of the system and the efficiency of transportation operations 
across the system, rather than environmental performance. 83 FR 24923-
24924. Upon reexamination of the statute, FHWA has determined that this 
previous interpretation was incorrect. Section 119(d)(1) of Title 23, 
U.S.C., establishes eligibility criteria for using funds apportioned to 
a State for carrying out the NHPP, but does not set forth all

[[Page 85370]]

relevant considerations for carrying out the program. Specifically, 
States are also required to establish asset management plans under 23 
U.S.C. 119(e). These plans shall include strategies toward improving or 
preserving the condition of the assets and the performance of the 
system, including supporting progress toward the national goals in 23 
U.S.C. 150(b). FHWA's previous interpretation ignored Congress's 
express direction for States to develop these plans for the NHS, which 
address both asset condition and system performance, and referenced all 
of the national goals in section 150(b), rather than a subset of goals 
such as the goals identified in 23 U.S.C. 119(d)(1). In addition, FHWA 
observes that 23 U.S.C. 119(d)(2) provides eligibility for projects 
under the NHPP that go beyond the limited subset of national goals 
listed in section 119(d)(1). The statute identifies eligible projects 
that support the national goal of environmental sustainability, such as 
environmental restoration and pollution abatement, control of noxious 
weeds and establishment of native species, and other environmental 
mitigation efforts. See 23 U.S.C. 119(d)(2)(M)-(O). When FHWA repealed 
the PM3 rule and determined that performance measures under 23 U.S.C. 
150(c)(3) are limited to advancing the nationals goal in section 
119(d)(1), the Agency did not appropriately consider the section 119(e) 
requirement to develop an asset management plan that supports 
achievement of all national goals in 23 U.S.C. 150(b), and eligibility 
for projects that support achieving environmental sustainability. In 
reexamining this authority, FHWA has determined that the Agency must 
consider the totality of 23 U.S.C. 150(b) when interpreting the meaning 
of performance on the Interstate and non-Interstate NHS and how 
performance is to be measured.
    Additionally, FHWA has identified above several other provisions of 
Title 23, U.S.C., that support FHWA's proposal to address GHG emissions 
in this rulemaking and make it clear that assessing infrastructure 
performance under 23 U.S.C. 150(c)(3) properly encompasses the 
assessment of environmental performance, including GHG emissions. In 
the 2018 repeal final rule, FHWA considered these provisions irrelevant 
because they do not ``specifically direct[ ] or require[ ] FHWA to 
adopt a GHG measure.'' 83 FR at 24923. However, these provisions do not 
prohibit FHWA from adopting a GHG measure--nor does any other provision 
in Title 23--and by stating the importance of protecting the 
environment and improving the resiliency of the transportation system, 
including through the use of performance management, these provisions 
clearly support the use of a GHG measure to assess the environmental 
performance of the NHS. As discussed above, the passage of BIL added 
additional programs and eligibilities to Title 23, and the 
administration of these programs will greatly benefit from the 
measurement of the environmental performance, including measurement of 
GHG emissions on the NHS. FHWA believes that these provisions of Title 
23, including those added after the 2018 repeal of the GHG measure, 
serve to underscore the importance of reestablishing the GHG measure.
    As discussed in the preamble to the NPRM, FHWA acknowledges that 
this action largely reestablishes a measure similar to the measure 
finalized in 2017 and repealed in 2018. See 83 FR 24920. However, as 
discussed in the preamble to the NPRM, FHWA expects that States and 
MPOs have no reliance interests resulting from establishment and the 
repeal of the 2017 GHG measure. See 87 FR 42410. The FHWA repealed the 
2017 GHG measure before the respective due dates for target setting or 
reporting, and FHWA is unaware of any State DOTs or MPOs that incurred 
costs because of the promulgation and prompt repeal of that measure. 
Nor did the repeal itself impose any compliance costs on State DOTs or 
MPOs. Accordingly, FHWA does not expect this final rule to result in 
any increased burden on State DOTs or MPOs by virtue of the fact that 
FHWA previously established a similar measure that was repealed before 
any State DOTs or MPOs relied on and implemented its target setting and 
reporting requirements. This measure is a new one, which State DOTs and 
MPOs have not previously implemented. As a result, FHWA expects that 
States and MPOs would not have any reliance interests based on the 
repeal of the 2017 GHG measure. After reviewing the comments on the 
proposal, FHWA reaffirms that any potential reliance interest would be 
outweighed by the benefits of this action, to the extent those 
interests exist.

IV. Basis & Benefits of These Regulations

    The FHWA believes that the performance management requirements are 
a powerful tool for achieving all seven of the statutory national 
transportation goals, including the Federal-aid highway program's 
national goal for environmental sustainability identified under 23 
U.S.C. 150(b)(6), and establishing a GHG measure in FHWA's TPM Program 
will provide a consistent basis for addressing the environmental 
sustainability of the transportation system and estimating on-road GHG 
emissions. In addition, the GHG measure will result in a consistent set 
of data that can be used to inform the future investment decisions of 
the Federal Government, State DOTs, and MPOs towards achieving their 
targets or goals.
    By establishing the GHG performance measure, FHWA is taking action 
to address the largest source of U.S. CO2 emissions. In 
2021, the transportation sector accounted for 34.8 percent of total 
U.S. CO2 emissions, with 82.7 percent of the sector's total 
CO2 emissions coming from on-road sources.\7\ The 
transportation sector is expected to remain the largest source of U.S. 
CO2 emissions through 2050, increasing at an average annual 
rate of 0.3 percent per year despite improvements in the energy 
efficiency of light-duty vehicles, trucks, and aircraft.\8\ Factors 
such as population growth, expansion of urban centers, a growing 
economy, and increased international trade are expected to result in 
growing passenger and freight movement. These changes can make GHG 
reductions and environmental sustainability both more challenging to 
implement and more important to achieve.\9\
---------------------------------------------------------------------------

    \7\ U.S. Environmental Protection Agency, 2023: Inventory of 
U.S. Greenhouse Gas Emissions and Sinks: 1990-2021, available at 
https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2021.
    \8\ U.S. Energy Information Administration, 2021: Annual Energy 
Outlook 2021, available at https://www.eia.gov/outlooks/aeo/tables_ref.php.
    \9\ Jacobs, J.M., M. Culp, L. Cattaneo, P. Chinowsky, A. Choate, 
S. DesRoches, S. Douglass, and R. Miller, 2018: Transportation. 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. 479-511. doi: 10.7930/NCA4.2018.CH12, available at 
https://nca2018.globalchange.gov/chapter/12/.
---------------------------------------------------------------------------

    In addition to being the largest source of U.S. CO2 
emissions,\10\ the transportation sector is increasingly vulnerable to 
the effects of climate change including higher temperatures, more 
frequent and intense precipitation, and sea level rise. Much of 
existing transportation infrastructure was designed and constructed 
without consideration of these changes. The Sixth Assessment Report by 
the IPCC, released on August 7, 2021, confirms that human activities 
are increasing GHG concentrations that have warmed

[[Page 85371]]

the atmosphere, ocean, and land at a rate that is unprecedented in at 
least the last 2000 years.\11\ According to the report, global mean sea 
level has increased between 1901 and 2018, and changes in extreme 
events such as heatwaves, heavy precipitation, hurricanes, wildfires, 
and droughts have intensified since the last assessment report in 
2014.\12\ These changes in extreme events, along with anticipated 
future changes in these events because of climate change, threaten the 
reliability, safety and efficiency of the transportation system. At the 
same time, transportation contributes significantly to the causes of 
climate change \13\ and each additional ton of CO2 produced 
by the combustion of fossil fuels contributes to future warming and 
other climate impacts.
---------------------------------------------------------------------------

    \10\ See EPA, Inventory of U.S. Greenhouse Gas Emissions and 
Sinks 1990-2021, at 2-28.
    \11\ See IPCC, 2021: Summary for Policymakers. In: Climate 
Change 2021: The Physical Science Basis. Contribution of Working 
Group I to the Sixth Assessment Report of the Intergovernmental 
Panel on Climate Change, available at https://www.ipcc.ch/report/ar6/wg1/#SPM.
    \12\ IPCC, 2021: Climate Change 2021: The Physical Science 
Basis. Contribution of Working Group I to the Sixth Assessment 
Report of the Intergovernmental Panel on Climate Change [Masson-
Delmotte, V., P. Zhai, A. Pirani, S.L. Connors, C. Pe[acute]an, S. 
Berger, N. Caud, Y. Chen, L. Goldfarb, M.I. Gomis, M. Huang, K. 
Leitzell, E. Lonnoy, J.B.R. Matthews, T.K. Maycock, T. Waterfield, 
O. Yelek[ccedil]i, R. Yu, and B. Zhou (eds.)]. Cambridge University 
Press. In Press.
    \13\ Jacobs, J.M., M. Culp, L. Cattaneo, P. Chinowsky, A. 
Choate, S. DesRoches, S. Douglass, and R. Miller, 2018: 
Transportation. 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. 479-511. doi:10.7930/
NCA4.2018.CH12.
---------------------------------------------------------------------------

    The first step toward reducing GHG emissions involves inventorying 
and monitoring those emissions. By establishing a consistent method for 
estimating GHG emissions and reporting on trends, the GHG measure 
aligns with E.O. 13990, E.O. 14008, and supports a U.S. target of 
reducing GHG emissions economy-wide 50 to 52 percent below 2005 by 
2030, on a course toward reaching net-zero emissions economywide by no 
later than 2050.\14\ Section 1 of E.O. 13990, ``Protecting Public 
Health and the Environment and Restoring Science to Tackle the Climate 
Crisis,'' (86 FR 7037), articulates national policy objectives, 
including listening to the science, improving public health and 
protecting the environment, reducing GHG emissions, and strengthening 
resilience to the impacts of climate change. The E.O. 14008, ``Tackling 
the Climate Crisis at Home and Abroad,'' (86 FR 7619), recommits the 
U.S. to the Paris Agreement and calls on the U.S. to begin the process 
of developing its nationally determined contribution to global GHG 
reductions. See E.O. 14008, Sec.  102. The E.O. 14008 also calls for a 
government-wide approach to the climate crisis and acknowledges 
opportunities to create well-paying, union jobs to build a modern, 
sustainable infrastructure, to provide an equitable, clean energy 
future, and to put the U.S. on a path to achieve net-zero emissions, 
economywide, no later than 2050. See id., Sec.  201.
---------------------------------------------------------------------------

    \14\ White House Fact Sheet: The Biden-Harris Electric Vehicle 
Charging Action Plan (December 13, 2021), available at https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/13/fact-sheet-the-biden-harris-electric-vehicle-charging-action-plan/; 
White House Fact Sheet: President Biden Sets 2030 Greenhouse Gas 
Pollution Reduction Target Aimed at Creating Good-Paying Union Jobs 
and Securing U.S. Leadership on Clean Energy Technologies (Apr. 22, 
2021), available at https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/22/fact-sheet-president-biden-sets-2030-greenhouse-gas-pollution-reduction-target-aimed-at-creating-good-paying-union-jobs-and-securing-u-s-leadership-on-clean-energy-technologies/; White House Fact Sheet: President Biden's Leaders 
Summit on Climate (Apr. 23, 2021), available at https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/23/fact-sheet-president-bidens-leaders-summit-on-climate/.
---------------------------------------------------------------------------

    As a matter of transportation policy, FHWA considers the GHG 
measure essential not only to improve transportation sector performance 
and work toward achieving net-zero emissions economy-wide by 2050, but 
also to demonstrate Federal leadership in the assessment and disclosure 
of climate pollution from the transportation sector. Measuring and 
reporting complete, consistent, and timely information for on-road 
mobile source emissions is necessary so that all levels of government 
and the public can monitor changes in GHG emissions over time and make 
more informed decisions about the role of transportation investments 
and other strategies in achieving GHG reductions.
    After reviewing the comments provided on the NPRM, FHWA has decided 
to finalize the measure proposed in the NPRM, which is the percent 
change in tailpipe CO2 emissions on the NHS relative to the 
reference year. In choosing this measure, FHWA considered the measure's 
sensitivity to strategies and policies of interest to transportation 
agencies, as well as its simplicity, ease of calculation, and reliance 
on data States already report to FHWA. In particular, the GHG measure 
will utilize fuel use estimates collected by FHWA very shortly after 
these data are finalized, providing a consistent and timely data source 
that is better suited for setting targets and monitoring trends in 
mobile source CO2 emissions on the NHS. As a new source of 
information, the measure has the potential to result in greater public 
awareness of GHG emissions trends, provide increased transparency and 
improved decisionmaking at all levels of government, and support better 
informed planning choices to reduce GHG emissions or inform tradeoffs 
among competing policy choices. In these capacities, the proposed GHG 
measure is integral to a whole-of-government approach to address 
climate change and its effects.

V. Summary of Comments

    The FHWA received 39,751 submissions to the docket, including 
39,522 from 7 comment campaigns, in response to the NPRM, resulting in 
236 unique submissions containing 999 individual comments. The 
submissions were signed by 105,484 separate groups/individuals. The 
FHWA received comments from 98 advocacy and interest groups (including 
advocacy groups for active transportation and public transit, the 
natural environment, climate change action, clean air, and equity/
environmental justice, among others), 31 State DOTs and the District of 
Columbia DOT, 33 State Attorneys General, one State Governor, 33 MPOs, 
two State environmental agencies, 10 County/Local government agencies, 
as well as 57 U.S. Senators from 38 states and 56 U.S. Representatives 
from 25 states. The FHWA also received comments from 24 industry 
associations (including the American Association of State Highway 
Transportation Officials (AASHTO), the Association of Metropolitan 
Planning Organizations (AMPO), and the American Public Transportation 
Association (APTA), as well as those representing highway and 
transportation users, roadway materials producers and roadway builders, 
and energy companies, among others). The FHWA also received comments 
from over 104,500 private citizens, the majority of which were 
submitted as part of comment campaigns.

VI. Summary of Changes Made in This Final Rule

    This section provides a summary of the changes made in the rule 
compared to the NPRM. Section VII provides further discussion on the 
significant changes and the reasons they were made.

A. Reference Year

    In the final rule, FHWA establishes that 2022 will be the reference 
year for this measure. The FHWA has changed

[[Page 85372]]

the definition in 23 CFR 490.505 and updated the calculation of the 
measure in 23 CFR 490.513(d) \15\ accordingly.
---------------------------------------------------------------------------

    \15\ In this section, the citations to 23 CFR part 490 refer to 
provisions as amended by this final rule.
---------------------------------------------------------------------------

B. Net-Zero

    The definition of net-zero was removed from 23 CFR 490.101, and 23 
CFR 490.105(e)(10) was revised so targets must be declining for 
reducing tailpipe CO2 emissions on the NHS, but they are not 
required to demonstrate reductions toward net-zero targets.

C. State DOT Targets & Reports

    In the final rule, FHWA establishes that State DOTs will establish 
initial targets for the GHG measure and report them no later than 
February 1, 2024. 23 CFR 490.105(e)(1) and 490.107(d). The February 1, 
2024, date required changes to several sections of existing regulation. 
Below is a general summary of the initial target establishment 
requirements, the reporting process for the State Initial GHG Report 
due February 1, 2024, and the significant progress determinations that 
will be completed after the State biennial reports submitted by October 
1, 2024, and 2026.
State DOT Target Establishment & Reporting Related to February 1, 2024
    The performance period for the GHG measure will begin January 1, 
2022 and extend 4 years. 23 CFR 490.105(e)(1). By February 1, 2024, 
State DOTs will establish initial targets for the GHG measure. 23 CFR 
490.105(e)(1)(ii). Initially, State DOTs will establish 4-year targets; 
2-year targets will not be established. 23 CFR 490.105(e)(1), 
490.105(e)(4)(iii), and 490.105(e)(10)(i). For the initial 4-year 
target, the reference year will be used as the baseline. 23 CFR 
490.105(e)(10)(i)(C).
    State DOTs will report their 4-year targets to FHWA in the State 
Initial GHG Report by no later than February 1, 2024. 23 CFR 
490.107(d). The State Initial GHG Report shall include the State DOT's 
4-year target for the GHG measure, the basis for the target, a 
discussion of how the target relates to other longer-term performance 
expectations, and the metric information for the reference year. 23 CFR 
490.107(d)(1). The metric reported will be calculated using the data 
specified in 23 CFR 490.107(d)(2). Because of the 2024 State Initial 
GHG Report, State DOTs will not include additional GHG information in 
the 2024 Mid Performance Period Progress Report, due October 1, 2024. 
23 CFR 490.107(b)(2)(i). Biennial reporting related to the GHG measure 
will begin with the 2026 Full Performance Period Progress Report and 
the 2026 Baseline Performance Period Report. 23 CFR 490.107(b)(1)(i), 
490.107(b)(2)(i), and 490.107(b)(3)(i).
Significant Progress Determination on Initial Targets
    After the 2026 Full Performance Period Progress Report, FHWA will 
determine whether a State DOT has made significant progress toward the 
achievement of the 4-year target for the GHG measure. The FHWA will use 
the data described in 23 CFR 490.109(d)(1) when calculating the actual 
performance and making the significant progress determination. The 
performance for the reference year will be used as the baseline 
performance in the 2026 significant progress determination. 23 CFR 
490.105(e)(10)(i)(C).
    The significant progress determination requirements related to the 
GHG measure will be phased in as described in 23 CFR 490.109(e)(6). The 
FHWA will not determine significant progress toward 2-year targets for 
this measure after the 2024 Mid Performance Period Progress Report 
since 2-year targets will not have been established, and information 
related to the GHG measure will not have been included in the 2024 Mid 
Performance Period Progress Report. Therefore, in 2024, FHWA will 
classify the assessment of progress toward the achievement of 2-year 
targets for the GHG measure as ``progress not determined'' and they 
will not be subject to any additional reporting requirements. 23 CFR 
490.109(e)(6).
Biennial Reporting
    FHWA revised proposed changes to section 490.107(b)(1), (b)(2), and 
(b)(3) to require biennial reporting related to the GHG measure to 
begin with the 2026 Full Performance Period Progress Report. And, 
consistent with 23 CFR 490.105(e)(5), the State DOT's 2- and 4-year 
targets will be reported in the 2026 Baseline Performance Period 
Report. See the discussion under ``State DOT Data for the GHG Metric 
Calculation'' for more information on the State DOT biennial reporting 
associated with the GHG metric.

D. State DOT Data for the GHG Metric Calculation

    State DOTs are required to calculate and report both the GHG 
measure and the GHG metric, the latter of which is defined as the 
calculation of tailpipe CO2 emissions on the NHS for a given 
year computed in million metric tons (mmt) and round to the nearest 
hundredth. 23 CFR 490.511(c). State DOTs use the metric to calculate 
the measure, which is the percent change between the current year and 
the reference year. To calculate the metric, State DOTs require several 
data inputs, and they are defined in 23 CFR 490.511(c). To ensure 
consistent calculation of the metric, the data requirements are defined 
in 23 CFR 490.509. To provide transparency and consistency, FHWA 
defines the specific data sources it will use when it calculates the 
metric and measure for the significant progress determination in 23 CFR 
490.109(d).
    In this final rule, proposed 23 CFR 490.509(h) was revised so that 
the State DOT will be able to use their best available vehicle miles 
traveled (VMT) data when establishing targets, reporting baseline and 
actual performance and discussing progress. This change addresses a 
comment that stated VMT data might not be finalized within the Highway 
Performance Monitoring System (HPMS) for all States by August 15th. The 
VMT data used by State DOTs will represent the prior calendar year and 
should be consistent with the final VMT data submitted by the State DOT 
to HPMS, to the maximum extent practicable. 23 CFR 490.509(h). The HPMS 
data as of November 30, 2023, will be used to calculate the metric for 
the reference year. 23 CFR 490.509(h).
    Because FHWA will not necessarily have the VMT data the State DOT 
used, the biennial reporting requirements in proposed 23 CFR 
490.107(b)(1)(ii)(H), (b)(2)(ii)(J), and (b)(3)(ii)(I) were revised in 
this final rule to require the State DOT to report the GHG metric value 
they calculated, the individual values used to calculate the GHG 
metric, and a description of the data source(s) used for the VMT 
information. This final rule removes the proposed requirement for the 
State DOT to report CO2 emissions on all public roads as 
part of reporting the metric information since the values used to 
calculate the GHG metric can be used to calculate the all-roads value. 
A corresponding change was made to 23 CFR 490.511(f)(2) to align with 
the metric reporting requirements in the State DOT's biennial reports.
    Section 490.109(d)(1)(vi) and (d)(1)(vii) were revised to require 
the significant progress determination to calculate the GHG metric and 
measure for the baseline and actual performance using the HPMS data 
available on November 30th of the year the significant progress 
determination is made. For the reference year, FHWA will use the HPMS 
data as of November 30, 2023. 23 CFR 490.109(d)(1)(vi)-(vii).

[[Page 85373]]

Section 490.109(d)(1)(viii) was added to specify that the significant 
progress determination will use the CO2 factors specified in 
section 490.509(f).
    In the final rule, FHWA has added the requirement for State DOTs to 
submit the State Initial GHG Report, as described in VI.C. For that 
report, the State DOT will use the data specified in 23 CFR 
490.107(d)(2) to calculate the metric.
    Please note, 23 CFR 490.511 includes different requirements for 
State DOTs and MPOs when calculating the metric used to calculate the 
GHG measure. The State DOT's method is defined in 23 CFR 490.511(c) and 
the method will be the same for all states. The MPOs are granted 
flexibility in how they calculate the metric, as described in 23 CFR 
490.511(d). This section only discusses the changes made in the final 
rule in relation to the data the State DOT will use when calculating 
the GHG metric. The changes made related to the MPO metric requirements 
are summarized below in Section VI.E.

E. Initial MPO Targets & Reports

    The final rule, in 23 CFR 490.511(d), retains the additional 
flexibility granted to MPOs in how they calculate the GHG metric. The 
final rule removes the proposed requirement for MPOs and State DOTs to 
mutually agree upon a method for calculating the metric, and instead 
requires MPOs to report a description of their metric calculation 
method(s). When that method is not one of the ones specified in 23 CFR 
490.511(d), the MPO will include information demonstrating the 
method(s) has valid and useful results for measuring transportation 
related CO2. 23 CFR 490.107(c)(2)(ii). While MPOs are not 
required to select a metric calculation in coordination with their 
State DOT, they are encouraged to coordinate with the State DOT on the 
data used to the maximum extent practicable.
    The final rule removes the proposed requirement for the MPO to 
report CO2 emissions on all public roads.

F. Severability

    The final rule adds a new section 23 CFR 490.515 that contains a 
severability clause applicable to the amendments to 23 CFR part 490 
made by this final rule. FHWA believes that the amendments to part 490, 
including establishment and calculation of the GHG performance measure 
and declining targets, are capable of operating independently of one 
another. If one or more aspects of the GHG measure are determined to be 
invalid, the remaining provisions should remain unaffected and in 
force.

G. Other Changes

    The final rule contains several technical changes from the proposed 
rule. These changes are described in Table 1.

               Table 1--Technical Edits to the Final Rule
------------------------------------------------------------------------
         CFR section                     Description of change
------------------------------------------------------------------------
23 CFR 490.101...............  Corrects the abbreviated name for the
                                Fuels and Financial Analysis System--
                                Highways (Fuels & FASH) database.
                                Corresponding changes were made
                                throughout the rule.
23 CFR 490.105(c)(5).........  Clarifies language describing the GHG
                                measure.
23 CFR 490.105(d)(4).........  Clarifies the applicability of the joint
                                targets.
23 CFR 490.105(e)(4)(i)(C)...  Moves information about the performance
                                period from the location proposed in the
                                NPRM to here to align with references to
                                the performance period throughout 23 CFR
                                part 490.
23 CFR 490.105(f)(10)........  Clarifies rule language.
23 CFR 490.107(a)(1).........  Updates language to capture the edition
                                of Section 490.107(d) in the final rule.
23 CFR 490.107(c)(2).........  Revises the structure and organization of
                                the paragraph to improve readability.
23 CFR 490.109(d)(1)(v) and    Clarifies that the reference year data
 (d)(1)(vii).                   will not be updated each time the data
                                for the previous year is compiled.
23 CFR 490.109(d)(1)(viii)...  Clarifies that the CO2 factor specified
                                in Section 490.509(f) will be used.
23 CFR 490.109(e)(4)(vi).....  Substitutes ``accepted'' instead of
                                ``cleared.''
23 CFR 490.109(e)(4)(vii)....  Adds the HPMS data extraction date.
                                Listing this date is consistent with
                                Section 490.109(e)(4)(vi) and does not
                                change the intended approach.
23 CFR 490.109(f)(1)(v)......  Revises rule language to use consistent
                                terminology.
23 CFR 490.505...............  Clarifies that approximately 97 percent
                                of on-road tailpipe GHG emissions are
                                CO2.
23 CFR 490.509(f)............  Clarifies rule language.
23 CFR 490.509(f)(2).........  Revises rule language to use consistent
                                terminology.
------------------------------------------------------------------------

VII. Section-by-Section Discussion

    This final rule was developed in response to comments received on 
the NPRM. Section VII summarizes major comments received and any 
substantive changes made to each section in this final rule. Editorial 
or minor changes in language are not addressed in this section. For 
sections where no substantive changes are discussed, the substantive 
proposal from the NPRM has been adopted in this final rule.

Questions Posed in the NPRM

    The FHWA requested comment on a number of items in the NPRM. The 
FHWA invited comments on the following:
     How should FHWA structure improving targets for the GHG 
measure, as well as the associated reporting and significant progress 
requirements, and how could these targets align with and inform 
existing transportation planning and programming processes?
     Besides requiring targets that reduce GHGs over time, are 
there any specific ways the proposed GHG measure could be implemented 
within the framework of TPM to better support emissions reductions to 
achieve national policies for reductions in total U.S. GHG emissions?
     What changes to the proposed measure or its implementation 
in TPM could better the impact of transportation decisions on 
CO2 emissions, and enable States to achieve tailpipe 
CO2 emissions reductions necessary to achieve national 
targets?
     In instances that MPOs are establishing a joint UZA 
target, should FHWA require that the individual MPO-wide targets be the 
same as the jointly established UZA target?
     Should MPOs that establish a joint UZA target be exempt 
from establishing individual MPO-level targets, and instead only be 
required to adopt and support the joint UZA target?

[[Page 85374]]

     In cases where there are multiple MPOs with boundaries 
that overlap any portion of an UZA, and that UZA contains NHS mileage, 
should each of those MPOs establish their own targets, with no 
requirement for a joint UZA target?
     Are there other approaches to target setting in UZAs 
served by multiple MPOs that would better help MPOs reach net-zero 
emissions?
    The FHWA also requested comment on assumptions that were developed 
as part of the RIA, as well as information on other benefits or costs 
that would result from implementation of the rule, as follows:
     The RIA includes assumptions regarding the applicability, 
level of effort and frequency of activities under proposed 23 CFR 
490.105, 490.107, 490.109, 490.511, and 490.513. Are these assumptions 
reasonable? Are there circumstances that may result in greater or 
lesser burden relative to the RIA assumptions?
     Would the staff time spent implementing this measure 
reduce the burden of carrying out other aspects of State DOT and MPO 
missions, such as forecasting fuel tax revenues? If so, please describe 
and provide any information on programs that would benefit from this 
measure and estimate any costs that would be reduced by implementing 
this measure.
     Would the proposed rule result in economies of scale or 
other efficiencies, such as the development of consulting services or 
specialized tools that would lower the cost of implementation? If so, 
please describe such efficiencies and provide any information on 
potential cost savings.
     Would the proposed rule result in the qualitative benefits 
identified in the RIA, including more informed decisionmaking, greater 
accountability, and progress on National Transportation Goals 
identified in MAP-21? Would the proposed rule result in other benefits 
or costs? Would the proposed measure change transportation investment 
decisions and if so, in what ways? For State DOTs and MPOs that have 
already implemented their own GHG measure(s), FHWA welcomes information 
on the impact and effectiveness of their GHG emissions measure(s).
    The FHWA received many comments on these items, and thanks 
commenters for their useful input. The FHWA considered these comments 
in developing this final rule and responds to significant adverse 
comments related to these questions and other comments in the following 
section.

General Comments

FHWA's Legal Justification for the GHG Measure
    Comment: A large number of commenters addressed FHWA's legal 
authority for this measure. Many commenters affirmed FHWA's legal 
authority to establish the measure under 23 U.S.C. 150. These 
commenters note that under MAP-21, FHWA is required to establish 
``performance'' measures to assess performance of the Interstate and 
non-Interstate NHS, see 23 U.S.C. 150(c)(3)(A)(ii)(IV)-(V), and FHWA's 
interpretation of ``performance'' to include environmental performance 
is consistent with the express statutory goals of the Federal-aid 
highway program, which include environmental sustainability under 23 
U.S.C. 150(b)(6). In contrast, many commenters disputed FHWA's legal 
authority to establish the proposed measure. Several commenters stated 
that, contrary to FHWA's statements, this action will in fact set 
performance targets for the States and MPOs by requiring State DOTs and 
MPOs with NHS mileage to establish declining CO2 emissions 
targets that align with the Administration's net-zero targets, while 
FHWA's authority is limited to establishing measures for States to use 
to measure performance. These commenters largely characterized the 
measure as a requirement that State DOTs and MPOs reduce GHG emissions. 
Notably, a large number of commenters stated that FHWA does not have 
the authority to regulate GHGs, as Congress has not assigned such 
authority to the Agency, and such authority would be more appropriately 
assigned to the Environmental Protection Agency (EPA). Similarly, 
several commenters claim that FHWA should not focus on regulating GHGs, 
and instead should work with the EPA to reduce CO2 
emissions. A commenter also asserted that the proposed rule 
inappropriately seeks to rebalance Congress's funding priorities.
    Response: As discussed in Section III of this preamble, FHWA 
affirms that the Agency has the requisite statutory authority to adopt 
the GHG measure. A significant number of commenters questioning FHWA's 
authority to adopt the GHG measure have mischaracterized this 
rulemaking. The FHWA is not regulating GHG emissions via this measure, 
is not mandating any reductions, is not forcing States to select 
specific projects, and is not asserting authority through this 
rulemaking over GHG emissions from the transportation sector. Rather, 
this measure is designed to provide State DOTs and MPOs with the 
information necessary to make informed transportation decisions. 
Although FHWA is requiring that State DOTs and MPOs set targets--
consistent with the rest of the TPM program--FHWA is not mandating 
specific targets and is not setting those targets for State DOTs and 
MPOs. The FHWA is also neither approving nor disapproving individual 
targets. Thus, FHWA is applying the Agency's authority under 23 U.S.C. 
150(c) and is not extending beyond that authority. However, upon 
examining comments and the preamble to the NPRM, FHWA recognizes that 
the language regarding aligning with net-zero targets could be 
clarified to better indicate FHWA's intent. Therefore, FHWA is 
clarifying that the Agency is not requiring that declining targets 
align to the Administration's net-zero targets as outlined in the 
national policy established under E.O. 14008. Rather, FHWA recommends 
that State DOTs and MPOs consider the Administration's targets when 
setting their declining targets.
    Comment: Several commenters asserted that FHWA has not sufficiently 
justified changing its approach. Commenters assert that FHWA is merely 
reinstating a previous action and is changing the Agency's position 
based on policy preferences provided in E.O.s rather than technical 
expertise, such as by stating that the emissions measure would result 
in substantial benefits, while also stating that the benefits are not 
easily quantifiable. Several commenters assert that FHWA has failed to 
adequately justify this measure by relying on general reports on 
CO2 emissions and climate change harms. In addition, 
commenters asserted that FHWA may not merely reexamine previous 
assertions in rulemakings and must instead provide technical analysis 
in support of the rulemaking. Commenters asserted that FHWA failed to 
consider whether declining targets will interfere with other statutory 
schemes by encouraging States to adopt electric vehicles to reduce GHGs 
while not focusing on reducing criteria pollutants under CMAQ. In 
addition, commenters assert FHWA failed to consider whether the 
rulemaking will disadvantage States with a range of different 
conditions, such as extreme climates and freight traffic.
    Response: The FHWA disagrees with these commenters' assertions. The 
FHWA has reexamined the rationale for the 2018 repeal and has 
determined that FHWA has the authority to adopt this GHG measure and 
has provided updated analyses identifying why the GHG measure is 
appropriate and reasonable in light of FHWA's statutory mandate to 
adopt performance measures. The

[[Page 85375]]

FHWA's legal authority, technical justification, and reasoned analysis 
for this measure are detailed in the NPRM and in Sections III. and IV. 
of this preamble. FHWA has acknowledged that it is changing the 
position the Agency put forward in the 2018 repeal final rule and 
provided detailed legal, technical, and policy reasons for doing so. 
Commenters' assertion that FHWA must do more to justify changing its 
approach has no basis in law. See FCC v. Fox Television Stations, Inc., 
556 U.S. 502, 515-16 (2009). The FHWA also disagrees with the 
commenters' assertions about FHWA's failure to consider whether 
declining targets will disadvantage States or cause any potential harm 
through the adoption of electric vehicles. These comments are 
predicated on a misconception that FHWA is requiring any specific 
behavior by State DOTs and MPOs to reduce GHG emissions. The FHWA is 
not mandating reductions, and this rulemaking does not require or 
purport to require State DOTs or MPOs to select GHG reducing projects. 
Rather, State DOTs and MPOs will determine appropriate declining 
targets based on the conditions relevant to the State DOTs and MPOs. 
The FHWA expects--but does not require--that this measure will help 
State DOTs and MPOs select projects that will reduce GHG emissions.
    Comment: Several commenters assert that FHWA lacks the authority to 
adopt the GHG measure based on the recent decision of West Virginia v. 
EPA, 142 S. Ct. 2587 (2022), related to the Major Questions Doctrine.
    Response: The FHWA disagrees with the assertion that this measure 
is inconsistent with recent Supreme Court precedent. This rulemaking is 
not an extraordinary case. It does not involve a novel interpretation 
of longstanding FHWA authority, nor does it represent an unheralded 
assertion of regulatory authority with the significant economic and 
political impacts that implicate a major questions case under West 
Virginia v. EPA. The FHWA's approach is in line with FHWA's prior 
requirements for performance measures related to the national goals in 
23 U.S.C. 150(b). This rulemaking also does not require State DOTs and 
MPOs to change their approach to selecting projects. Rather, the 
measure will provide them with additional information to inform their 
decisionmaking. As described in the RIA, this rulemaking has minimal 
costs for State DOTs and MPOs. Additionally, there is clear 
congressional authorization to establish performance measures under 23 
U.S.C. 150(c). Contrary to inaccurate statements made by commenters, 
FHWA is not regulating GHG emissions, but rather is setting forth an 
approach by which to measure GHG emissions related to transportation on 
the Interstate System and non-Interstate NHS, using publicly available 
data, which States and MPOs can use to make better-informed 
transportation investment decisions. Therefore, FHWA disagrees with the 
commenters' assertions related to the Major Questions Doctrine.
    Comment: A number of commenters stated that FHWA does not have the 
authority to issue this GHG measure under 23 U.S.C. 150(c) because the 
statute limits performance measures only to those described in that 
subsection.
    Response: As described in the NPRM and discussed in Section III of 
this preamble, FHWA has reconsidered its previous interpretation that 
this provision limits FHWA's authority to establish measures States use 
to assess performance on the NHS to measures that focus on the physical 
condition of the system and the efficiency of transportation operations 
across the system. FHWA now concludes that 23 U.S.C. 150(c) limits FHWA 
to establishing measures to carry out 23 U.S.C. 119 to measures that 
assess performance on the Interstate System and the NHS. However, the 
provision does not otherwise limit the meaning of ``performance.'' 
Thus, FHWA has concluded that the ``performance'' of the Interstate and 
non-Interstate NHS includes environmental performance, and FHWA 
disagrees with the commenters' conclusion that FHWA does not have 
authority to adopt this GHG measure.
    Comment: Commenters noted that although FHWA is not proposing any 
penalties, FHWA would be able to influence the selection of projects by 
States that rely on formula funds that Congress requires FHWA to 
distribute to States.
    Response: The FHWA did not propose, and is not finalizing, any 
requirements for specific use of funds related to the GHG measure. The 
measure and the associated targets established through the final rule 
are intended to help State DOTs and MPOs consistently and transparently 
monitor the current performance of the NHS, and plan transportation 
projects in a way that protects the long-term performance of the NHS. 
The final rule does not direct any action on the part of the State DOT 
or MPO with respect to selecting projects under the Federal-aid highway 
program. As per 23 U.S.C. 145, State DOTs determine which eligible 
projects are federally funded, and FHWA reaffirms that nothing in this 
final rule should be construed to affect that bedrock principle. 
Therefore, FHWA disagrees with the commenters' assertion that FHWA may 
influence project selection through this measure.
    Comment: Commenters note that BIL did not provide FHWA with new 
authority to regulate GHGs, but rather BIL established new programs to 
incentivize and reward State DOTs and MPOs for implementing emissions 
reduction strategies. Commenters also note that BIL and the Inflation 
Reduction Act (IRA) (Pub. L. 117-169) did not authorize FHWA to mandate 
GHG performance targets that States would be required to meet. One 
commenter asserts that the legislative history of BIL indicates that 
Congress considered but did not pursue climate change policy for FHWA. 
Commenters assert that Congress specifically chose not to address GHG 
emissions under 23 U.S.C. 150(c), and thus FHWA lacks authority to 
issue this measure. Commenters also assert that since Congress 
addressed GHG emissions in programs like the CRP under 23 U.S.C. 175 
but did not add them to the performance measures in 23 U.S.C. 150(c), 
Congress intended to set performance measures for some programs and not 
set performance measures for other programs.
    Response: As described in Section III of this preamble, FHWA's 
authority for this measure arises under 23 U.S.C. 150(c), and FHWA's 
interpretation of that authority is informed in part by new changes 
from BIL. Additionally, FHWA did not propose--and is not finalizing--
any FHWA-mandated performance targets that States would be required to 
meet. The BIL contains a number of programs that aim to reduce GHG 
emissions from transportation sources, and collection and analysis of 
the GHG measure can support implementation of those programs. However, 
FHWA did not propose, and is not finalizing, any requirements related 
to those programs. In addition, FHWA disagrees with the assertion that 
BIL does not address climate change. As discussed in this preamble, 
there are a number of GHG emissions-related provisions in BIL, such as 
those found in division A, title I, subtitle D, titled ``Climate 
Change.'' These provisions include both the CRP under 23 U.S.C. 175 and 
the Promoting Resilient Operations for Transformative, Efficient, and 
Cost-Saving Transportation (PROTECT) program under 23 U.S.C. 176. The 
FHWA recognizes that these programs do not mandate reductions in GHG 
emissions, and as such, FHWA

[[Page 85376]]

does not assert authority over GHG emissions. However, FHWA disagrees 
with the commenters regarding congressional intent as related to the 
measurement of GHGs under 23 U.S.C. 150(c). Congress did not provide 
exact parameters for performance measures under 23 U.S.C. 150(c), and 
it did not clarify, let alone impose restrictions on, these parameters 
in BIL. Rather, FHWA must--based on the Agency's expertise--determine 
how to structure performance measures. As described in this preamble 
and in the preamble to the 2022 NPRM, FHWA has determined that 
measuring environmental performance is vital to assessing performance 
on the Interstate and non-Interstate NHS.
    In addition, FHWA disagrees with the commenters' assertion that 
Congress's designation of mandatory performance measures for some 
programs but not others prohibits FHWA from exercising Agency expertise 
to define performance of the Interstate and non-Interstate NHS. 
Although Congress did not include a specific performance measure for 
GHG-related programs in enacting 23 U.S.C. 150, Congress also decided 
not to define performance under 23 U.S.C. 150(c)(3)(A)(ii)(IV)-(V) and, 
in the decade since enactment of MAP-21, Congress has not qualified 
FHWA's authority to define performance on the NHS, even after FHWA 
promulgated a GHG measure in the PM3 rule. For the same reasons, FHWA 
also disagrees with the commenters' statements regarding legislative 
history of BIL and IRA, and in particular, the significance that can be 
attributed to GHG and environmental performance-related language not 
being included in the enacted legislation. By itself, congressional 
inaction on a subject is an unreliable indicator of legislative intent 
because ``several equally tenable inferences may be drawn from such 
inaction, including the inference that the existing legislation already 
incorporated the offered change.'' Pension Benefit Guaranty Corp. v. 
LTV Corp., 496 U.S. 633, 650 (1990) (quoting United States v. Wise, 370 
U.S. 405, 411 (1962)) (internal quotation marks omitted). In this 
instance, there is no contemporaneous legislative record to explain why 
language relating to measuring GHG emissions with respect to 
performance of the NHS was not included in BIL. Moreover, BIL was 
passed long after the PM3 rulemaking was proposed and finalized. If 
anything, the fact that Congress was aware of FHWA's prior action to 
promulgate a GHG performance measure and did not use the opportunity in 
BIL to amend existing statutory language on performance measures or the 
definition of performance on the NHS more likely indicates that 
Congress intended to leave such determinations to Agency expertise to 
be handled via regulatory authority. See id. Therefore, FHWA rejects 
the commenters' interpretation of congressional intent to restrict 
FHWA's authority to establish measures to assess performance of the 
NHS.
    Comment: Commenters disagreed with FHWA's approach to supporting 
resilience through this measure. Commenters assert that both the NHPP 
under 23 U.S.C. 119 and BIL are focused on the physical condition of 
the highway system, and FHWA must focus on addressing physical issues 
with the roads, rather than CO2 emissions. Commenters assert 
that, likewise, resilience deals with impacts on the transportation 
system, rather than impacts from emissions from the transportation 
system. Commenters also contend that CO2 regulation is the 
purview of the EPA, not FHWA.
    Response: The FHWA disagrees with the commenters' limited view of 
23 U.S.C. 119's substantial focus on resilience and their 
characterization of FHWA's action to establish the GHG measure. As 
discussed in section III above, the NHPP is not solely focused on the 
physical performance of highways. For example, the requirements for 
State asset management plans include strategies supporting the progress 
toward the achievement of all national goals identified in 23 U.S.C. 
150(b), including the goal to enhance the performance of the 
transportation system while protecting and enhancing the natural 
environment at 23 U.S.C. 150(b)(6). See 23 U.S.C. 119(e)(2). In 
addition, the BIL amended the requirements for asset management plans' 
lifecycle cost and risk management analyses so that they now must 
specifically take into consideration extreme weather and resilience. 
See 23 U.S.C. 119(e)(4)(D). In explicitly stating that both the purpose 
of the NHPP under 23 U.S.C. 119 is to increase the resiliency of the 
NHS and that environmental sustainability is an express national goal 
of the Federal-aid highway program under 23 U.S.C. 150(b), Congress 
clearly spoke to the importance of addressing environmental impacts 
related to the transportation system. Assessing environmental 
performance will support State and MPO efforts to increase the 
resiliency of the NHS to mitigate the cost of damages from sea level 
rise, extreme weather events, flooding, wildfires, or other natural 
disasters. By addressing the performance of the transportation system 
related to the largest source of U.S. CO2 emissions, FHWA is 
implementing Congress's express direction regarding NHPP goals. 
Measuring environmental performance though the GHG performance measure 
will assist States to consider CO2 emissions from 
transportation in the performance management framework and help frame 
responses to the growing climate crisis. Reducing GHG emissions that 
are causing increases in temperature, sea level, extreme weather 
events, flooding, wildfires, and other natural disasters should then 
decrease the severity and impact of those conditions in the future. The 
FHWA has applied its expertise related to the transportation system and 
found that mitigating the cost of damage from natural disasters also 
requires helping State DOTs and MPOs address the cause of those 
disasters. However, and as discussed above, FHWA is not regulating 
CO2 emissions or otherwise mandating specific reductions.
    Comment: One commenter asserted that FHWA's action is a broad 
attempt to regulate GHGs, and Congress must speak more clearly before 
FHWA may assert it has authority to mandate that all of the States and 
Puerto Rico decrease on-road CO2 emissions in furtherance of 
the Administration's emissions goals.
    Response: The FHWA is not mandating that States or MPOs decrease 
emissions or compelling States to undertake projects that reduce GHGs. 
Consistent with the rest of the TPM program, FHWA is setting forth a 
program to measure performance on the Interstate and non-Interstate 
NHS, as directed by Congress.
    Comment: One commenter stated that FHWA should develop an 
Environmental Impact Statement (EIS) for this action because of the 
rule's wide-ranging potential impacts.
    Response: The FHWA disagrees that an EIS is appropriate for this 
rulemaking. The FHWA has analyzed this rule pursuant to the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and 
has determined that it is categorically excluded under 23 CFR 
771.117(c)(20), which applies to the promulgation of rules, 
regulations, and directives. As discussed further in Section VIII of 
this preamble, FHWA does not anticipate any adverse environmental 
impacts from this rule, the purpose of which is to inform 
decisionmaking about the transportation sector's contribution to GHG 
emissions, and thereby contribute to environmental sustainability. 
Therefore, a categorical exclusion is appropriate for this rulemaking 
and no further NEPA approvals are required.

[[Page 85377]]

Comments on the Appropriateness of the Proposed Measure
    Comment: A large number of commenters questioned the 
appropriateness of the proposed measure to assess GHG emissions. A 
small number of these commenters asserted the proposed measure is not 
appropriate for rural States since rural residents need to drive 
further to access essential goods and services and alternative 
transportation modes are limited. In addition, several other commenters 
asserted the proposed measure does not account for exogenous factors 
beyond the control of State DOTs and MPOs, including population growth, 
economic growth, goods movement, and State and local policies, among 
others. Relatedly, many commenters recommended using a per-capita 
measure in addition to or instead of a measure of total emissions. A 
smaller number of commenters recommended using a measure of VMT to 
demonstrate the impact of transportation decisions on changes in travel 
behavior. Some commenters stated that the measure places an unequal 
burden on rural States and States with growing populations.
    Other commenters addressed technical considerations underlying the 
suitability of the proposed measure. A couple of commenters indicated 
the measure does not account for fluctuations to NHS mileage resulting 
from roadway reclassifications, and one commenter asserted the measure 
does not account for regional variations in vehicle fleet efficiency or 
roadway speeds. Several commenters recommended the proposed measure 
consider lifecycle processes, such as electricity used by electric 
vehicles and embodied carbon associated with vehicle manufacture and 
transportation infrastructure. One commenter recommended that the 
measure account for excess fuel consumption associated with poor 
pavement condition.
    Response: The FHWA has retained the GHG performance measure 
proposed in the NPRM, the percent change in tailpipe CO2 
emissions on the NHS compared to the reference year, because of its 
simplicity, ease of calculation, and reliance on data States already 
report to FHWA. The FHWA acknowledges commenters' observations that the 
GHG footprint of on-road transportation extends beyond tailpipe 
CO2 emissions and includes lifecycle processes supporting to 
generation of electricity used by EVs, the production of transportation 
fuels, the manufacture of vehicles, and the construction and 
maintenance of transportation infrastructure. However, FHWA believes 
that addressing these factors in a GHG measure would lead to more 
complicated and potentially less reliable calculations.
    In addition, FHWA believes that the measure sufficiently accounts 
for several of the factors cited by commenters, such as the effect of 
roadway speed, changes vehicle fleet efficiency, and the effect of 
pavement condition on fuel efficiency, all of which are represented 
through State-reported fuel sales that are used to calculate the 
measure. The FHWA also believes that a GHG measure is preferable to a 
VMT-only measure, which would serve an indirect proxy for GHG emissions 
that would not account for the benefits of highway operations and 
pavement strategies implemented by State DOTs, electrification of the 
vehicle fleet, or other improvements in vehicle efficiency. The GHG 
measure FHWA is establishing also supports tracking of progress toward 
GHG reduction goals. This would not be the case with a measure that 
normalizes the effect of population or economic growth or excludes 
truck CO2 emissions. The FHWA notes that regulation does not 
prevent State DOTs and MPOs from using additional performance measures 
at the local level.
    The FHWA rejects the concept that this measure places an unequal 
burden on rural States and States with rapidly growing populations, as 
States with various conditions can implement this measure to help 
evaluate performance. The FHWA also reiterates that this rulemaking 
does not set any specific targets or require any GHG reductions. The 
commenters' assertions about disadvantaging rural areas falsely assume 
that this measure mandates GHG reductions and penalizes States and MPOs 
that fail to achieve reductions. Neither the proposal, nor the final 
rule, do any such thing. Therefore, FHWA disagrees with the commenters' 
assertions about unequal burden on rural States and States with rapidly 
growing populations.
Comments on Transportation Agencies' Influence on GHG Emissions
    Comment: Several commenters addressed State DOTs' and MPOs' ability 
to reduce GHG emissions year over year through planning and programming 
of transportation projects. Several commenters asserted State DOTs and 
MPOs have limited ability to materially reduce GHG emissions. These 
commenters noted that performance against the GHG measure is affected 
by many different factors outside the control of State DOTs and MPOs, 
including a State government's policies, population and economic 
growth, and fuel prices, among others. They also assert that 
transportation planning and programming is a multiyear process and 
State DOTs and MPOs cannot have a meaningful impact on GHG emission 
reductions year over year.
    In contrast, a large number of commenters asserted that 
transportation agency decisions influence GHG emissions, and that a GHG 
measure is important for evaluating the impact of these decisions. Many 
commenters asserted that establishing a nationwide, uniform performance 
measure would ensure consistency in tracking progress and help State 
DOTs, MPOs, and FHWA to identify the most effective programs, 
strategies, and projects for carbon reduction. The commenters also 
asserted that the proposed performance measure would inform State DOT 
and MPO efforts to carry out performance-based planning and project 
selection, consistent with statutory requirements. Several commenters 
asserted that the decisions that State DOTs make in terms of designing 
infrastructure and constructing the built environment have a profound 
influence on travel behavior. A large number of comment campaign 
letters also asserted that a GHG measure is important for understanding 
the long-term impact of transportation investments on GHG emissions and 
to better connect transportation decisions with climate goals.
    Response: Upon review of the comments, FHWA has retained the 
measure as proposed. The FHWA agrees with commenters asserting that a 
GHG measure is useful for evaluating the impact of transportation 
investments and other policies on GHG emissions. The FHWA also agrees 
that transportation investments have a meaningful impact on travel 
behavior, and that transportation agencies' policies and programs 
involving vehicle electrification, highway operations, and roadway 
maintenance practices provide further opportunities to reduce GHG 
emissions in absence of changes to travel behavior. The BIL provides 
more than $27 billion in Federal funding to help State DOTs and MPOs 
achieve their GHG reduction targets. This total includes $6.4 billion 
in formula funding to State DOTs and local governments through the CRP 
to support a range of projects designed to reduce on-road 
CO2 emissions; $5 billion to State DOTs through the National 
Electric Vehicle Infrastructure Formula Program to build out a national 
electric vehicle charging network; $2.5 billion in competitive funding 
to State DOTs and local governments to deploy electric vehicle

[[Page 85378]]

and alternative fuel infrastructure, $7.2 billion for the 
Transportation Alternatives Set-Aside that State DOTs and local 
governments can use to carry out pedestrian and bicycle infrastructure 
projects, and more than $5 billion to ensure the nation's transit 
systems are tackling the climate crisis.\16\ In addition, 
transportation agencies have for decades been able to use Federal-aid 
Highway Program funds to support projects that reduce GHG emissions, 
including transit improvements, congestion reduction and traffic flow 
improvements, freight and intermodal initiatives, idle reduction 
technologies, travel demand management, carsharing, carpooling and 
vanpooling, and bike and pedestrian facilities. Given the range of 
options available to transportation agencies to reduce GHG emissions 
and the significant financial resources provided by BIL, FHWA rejects 
the premise that transportation agencies have limited capacity to 
influence GHG emissions.
---------------------------------------------------------------------------

    \16\ See Biden-Harris Administration Takes Step Forward to 
Combat Climate Change, Announces Proposed Transportation Greenhouse 
Gas Emission Reduction Framework, available at https://highways.dot.gov/newsroom/biden-harris-administration-takes-step-forward-combat-climate-change-announces-proposed.
---------------------------------------------------------------------------

    The FHWA also believes that it is important for the measure to 
address total tailpipe CO2 emissions on the NHS rather than 
normalizing this value by population or other factors, since 
atmospheric CO2 concentrations are ultimately influenced by 
the total quantity of CO2 emissions produced. The FHWA 
believes a measure addressing total emissions supports a whole-of-
government approach to addressing climate change by implementing a 
consistent measure of CO2 emissions on the NHS at the 
National, State, and metropolitan levels. The FHWA is requiring State 
DOTs and MPOs to establish declining GHG emissions targets. Contrary to 
the commenters' assertions FHWA is not requiring States to set specific 
declining target levels or achieve actual reductions in GHG emissions. 
State DOTs and MPOs have flexibility to set targets that are 
appropriate for their communities and that work for their respective 
climate change and other policy priorities, as long as the targets are 
declining.
Comments on Incentives and Disincentives
    Comment: A large number of commenters addressed the creation of 
incentives or disincentives to strengthen the proposed GHG measure. The 
vast majority of these comments stated that the proposed rule would be 
strengthened by including clear and specific incentives for those 
States and regions that meet their targets, such as providing extra 
points in competitive grant programs, favorable local match 
requirements, or expediated project/application review processes. Other 
commenters recommended restricting use of Federal transportation funds 
to projects that reduce GHG emissions in States and regions that did 
not meet their targets. A couple of commenters opposed creation of 
incentives or disincentives.
    Response: Under 23 U.S.C. 145, the Federal-aid highway program is a 
federally assisted, State-administered program; FHWA does not determine 
which eligible projects, as selected by States, shall be financed. The 
FHWA cannot broadly limit the use of transportation funds in the manner 
recommended by commenters, and FHWA does not have the authority to 
restrict transportation funding for States that fail to meet their 
targets. However, BIL includes new programs that will help States and 
MPOs fund projects that reduce GHG emissions, which in turn, could 
assist them in meeting the targets that they set. This topic is further 
discussed in Section III this preamble. States and MPOs can 
additionally leverage their own programs to reduce GHG emissions by 
accounting for expected GHG impacts in the analysis and selection of 
transportation projects.
Comments on Penalties
    Comment: Several commenters addressed the possibility of penalties 
being associated with the proposed measure. A few of these commenters 
sought clarification on whether FHWA intends to apply a penalty 
(including penalties associated with failure to comply with Federal 
requirements under 23 CFR 1.36). Other commenters requested the final 
rule include a section specifying that no penalties would be applied 
for not meeting a target. Other commenters asserted that FHWA is in 
fact providing a penalty for failing to reduce GHGs based on the 
Agency's authority under 23 CFR 1.36.
    Response: There are no specific penalties for failing to achieve 
GHG targets. Rather, consistent with existing NHPP performance 
measures, if significant progress is not made for the target 
established for the GHG measure in 23 CFR 490.507(b), the State DOT 
must document the actions it will take to achieve that target no later 
than in its next biennial report, but is encouraged to do so sooner. 
Significant progress toward achieving NHPP performance targets is 
further described in 23 CFR 490.109. The FHWA did not propose specific 
penalties for failure to achieve performance targets, and is not 
finalizing any such penalty. Failure to achieve significant progress 
for this measure, as defined in 23 CFR 490.109, will also not trigger 
any penalties. State DOTs and MPOs that set a declining target but fail 
to achieve their targets can satisfy regulatory requirements by 
documenting the actions they will take to achieve that target in their 
next biennial report. The FHWA does not set or approve the State DOT's 
or MPO's targets.
Comments on Exemptions
    Comment: Several commenters recommended various entities be exempt 
from the proposed measure for various reasons. The majority of these 
commenters asserted that rural States have limited options to reduce 
transportation GHG emissions through transit and other strategies that 
reduce VMT and should accordingly be exempted from the measure. A few 
commenters recommended that States and MPOs in attainment with the 
National Ambient Air Quality Standards be exempted from the GHG 
measure. One commenter asserted that the GHG measure does not recognize 
that rural States produce fewer GHG emissions than urban areas.
    Response: The FHWA considered the comments suggesting certain 
entities be exempt from the GHG measure and declines to do so. 
Greenhouse gas emissions are produced on all NHS facilities. Once 
released, CO2 and other GHGs take many years to leave the 
atmosphere, resulting in increasing global atmospheric concentrations 
of CO2 emissions regardless of where they are produced. 
Urban and rural areas both contribute to increased carbon pollution in 
the atmosphere, and FHWA believes this rule will provide both with the 
tools to reduce carbon pollution. This is different from criteria 
pollutants, which last no more than weeks in the atmosphere and only 
impact local or regional air quality.
    The FHWA also rejects commenters' suggestion that rural States have 
limited options to reduce transportation GHG emissions. If these States 
determine that transit and other measures to reduce VMT are not 
effective means of influencing GHG emissions, they have a wide range of 
alternative strategies and funding programs available. This includes 
both formula funding and discretionary grants to deploy electric 
vehicle charging infrastructure and thereby increase EV adoption, 
funding to improve roadway operations, and asset management practices 
to maintain

[[Page 85379]]

roads and reduce excess fuel consumption from poor road condition 
surface. The FHWA reiterates that the final rule does not require rural 
States, or any State, set targets at a specific level or to reduce GHG 
emissions. The final rule also does not impose any penalties on a State 
for failing to meet its GHG targets. Therefore, there is no 
justification to exempt rural States, and doing so would run counter to 
the purpose of this rule, which is to provide consistent and timely 
information about on-road mobile source emissions on the NHS to support 
better informed planning choices to reduce GHG emissions or inform 
tradeoffs among competing policy choices.
Comments on Benefits of a GHG Measure
    Comment: A large number of commenters addressed potential benefits 
from the proposed GHG measure. Several commenters, including State 
DOTs, that have independently measured and reported GHG emissions 
asserted that a GHG performance measure can inform planning and 
decision making, including project prioritization and statewide 
transportation planning processes. A few of these commenters 
additionally asserted that implementation of the proposed GHG measure 
as part of TPM would complement existing GHG reduction efforts. 
Additional benefits identified by commenters included: empowering State 
and local leaders to better align their transportation decisions with 
climate goals, enhancing transparency and accountability of investment 
decisions, supporting a consistent and coordinated approach to reducing 
GHG emissions across all levels of government, and supporting national 
GHG emission reduction goals in accordance with E.O. 13990 and E.O. 
14008.
    By contrast, several commenters questioned the benefits of the 
proposed measure. Several commenters asserted that DOTs and MPOs have 
limited influence over GHG emissions. One commenter asserted that the 
proposed measure would not help agencies identify projects to reduce 
GHG emissions and a couple of commenters asserted that the measure 
would not impact transportation decisions. Another commenter stated 
this is because the proposed rule does not propose a method for 
requiring continually decreasing GHG emissions and does not penalize 
noncompliance.
    Response: The FHWA is establishing a GHG emissions performance 
measure in response to an increasingly urgent climate crisis and to 
improve the transportation sector's GHG performance, which has lagged 
behind other major U.S. sectors. The EPA estimates of GHG emissions 
date back to 1990, and over that time the transportation sector has 
gone from being the third largest to the largest source of U.S. GHG 
emissions. The FHWA agrees with commenters that establishing a GHG 
performance measure is a critical step in improving transportation 
system performance and supporting national GHG reduction goals. A key 
premise underlying the GHG measure is that measuring and reporting 
complete, consistent, and timely information on CO2 
emissions from on-road mobile sources will provide opportunities for 
all levels of government and the public to make more informed decisions 
that consider transportation's contribution to climate change and 
opportunities to reduce GHG emissions. The FHWA believes that by 
establishing a uniform GHG measure, it is more likely that GHG 
emissions will be consistently and collaboratively considered by State 
DOTs and MPOs through transportation planning and performance 
management. The FHWA also agrees with the comments enumerating the 
benefits of establishing the GHG measure.
    The FHWA disagrees that State DOTs and MPOs have limited influence 
over GHG emissions. As noted earlier, BIL provides more than $27 
billion in Federal funding to help State DOTs and MPOs achieve their 
GHG reduction targets, and States have additional ability to influence 
GHG emissions through highway operations and roadway maintenance. The 
FHWA also disagrees with commenters asserting that a GHG measure would 
not inform planning and investment decisions. As noted in comments from 
agencies that have implemented their own GHG measures, performance-
based approaches that include GHG emissions have been successfully used 
to guide planning and investment decisions.
Comments on Burden Posed by a GHG Measure
    Comment: Several commenters identified concerns about the impact of 
the proposed rule on State DOTs and MPOs. Several commenters asserted 
that the proposed rule would duplicate established and effective 
programs such as fuel economy standards established under the Corporate 
Average Fuel Economy (CAFE) Program, and transportation CO2 
estimates published by EPA and the Department of Energy (DOE). Other 
commenters asserted the implementation of calculating and tracking GHG 
emissions would be overly burdensome, and that the costs of complying 
with declining targets would be significant for some States. A few 
commenters additionally asserted that the proposed GHG measure would 
not be sufficient for making program- and project-level investment 
decisions.
    Response: FHWA disagrees that the measure established under this 
rule would place undue burden on States and MPOs. The FHWA also 
disagrees that the GHG measure would duplicate other Federal programs 
addressing transportation GHG emissions. A key purpose of the GHG 
measure is to provide an information source to help State DOTs, MPOs 
and other agencies set targets, monitor trends, and evaluate the impact 
of transportation investments and other strategies to reduce on-road 
GHG emissions. This is a different function from the CAFE program, 
which regulates GHG emissions rates for new vehicles and is not 
intended to account for factors such as changes in travel demand, 
congestion, and other factors affecting total on-road GHG emissions. 
While Federal agencies such as EPA and DOE publish estimates of total 
transportation CO2 emissions, these data are not 
disaggregated to reflect on-road activity, and also lag the publication 
of FHWA fuel use data by up to a year. Since FHWA's GHG measure 
specifically addresses CO2 on-road activity and utilizes 
FHWA's data for the estimated fuel volumes distributed shortly after 
its publication, it will serve as a comprehensive and timely 
information source to support transportation decision making and to 
track progress toward national goals.
    Several State DOTs that have independently implemented their own 
on-road tailpipe CO2 measure observed that all State DOTs 
already compile the necessary data as part of existing reporting 
obligations. These commenters asserted that the labor hour assumptions 
from the RIA are reasonable, that neither the estimation of the measure 
nor target setting would result in significant burdens for State DOT 
staff.
    Lastly, FHWA disagrees that the cost of complying with declining 
targets will be burdensome to transportation agencies. The BIL provides 
over $27 billion in Federal funding to help State DOTs and MPOs achieve 
the declining GHG targets that they will set under this rule. The rule 
does not impose compliance costs associated with achieving declining 
targets since the rule does not require that emissions actually 
decrease or establish any penalties in the event that declining targets 
are not achieved.

[[Page 85380]]

Sec.  490.101 Definitions

Comments on the Measure's Relationship to National GHG Goals
    Comment: A large number of commenters addressed the proposed 
performance measure's relationship to the national GHG goals. Several 
commenters asserted that the proposed performance measure would support 
the national GHG goals and expressed support for this connection. A 
smaller number of commenters asserted that the proposed performance 
measure would not support the national goals, as meeting them through 
the targets is unattainable/unrealistic, would require actions beyond 
State DOT/MPO authority, and would not match the timeline needed to see 
improvements from BIL-funded projects.
    In addition, several of these commenters asked for clarifications 
related to the Administration's national goals for reducing GHG 
emissions. One commenter asked whether the declining targets must 
demonstrate a 50-52 percent reduction in on-road CO2 
emissions relative to 2005 levels by 2030 and net-zero on-road 
CO2 emissions by 2050, or whether the targets must only aid 
in meeting the Administration's goals. One commenter requested 
additional guidance on how to set targets consistent with the national 
GHG goals for 2030 and 2050, and another requested guidance on how to 
translate the proposed GHG targets, which would be expressed relative 
to 2021 levels, to the Administration's goals, which are expressed 
relative to 2005 levels. Another commenter requested clarification on 
the meaning of net-zero, and asked whether FHWA will provide mechanisms 
to offset remaining emissions to achieve net-zero by 2050.
    Response: Upon considering public comments, FHWA recognizes that 
the reference to net-zero targets and national GHG goals in the NPRM 
may have caused confusion, and FHWA has removed the definition of net-
zero from 23 CFR 490.101 and the requirement in 23 CFR 490.105(e)(10) 
that targets for the GHG measure ``demonstrate reductions toward net-
zero targets.'' In the final rule, FHWA is not requiring State DOTs and 
MPOs to set any specific declining targets or achieve national GHG 
goals. Declining targets are not required to align with the 
Administration's goal for the U.S. to reduce CO2 emissions 
50-52 percent below 2005 levels by 2030 and achieve net-zero emissions 
economywide by 2050, in accordance with national policy established 
under E.O.s 13990 and 14008. Rather, FHWA believes these national goals 
can provide a useful roadmap for State DOTs and MPOs as they consider 
how their targets fit into a longer timeframe of emission reductions.

Sec.  490.105 Establishment of Performance Targets

Comments on Establishing Declining Targets
    Comment: A large number of commenters addressed the requirement to 
establish declining targets. The majority of these commenters were 
opposed to this requirement. Most of these commenters asserted that a 
declining target is inconsistent with 23 U.S.C. 150, which provides 
States with discretion in setting performance targets. Commenters 
asserted that States should set data-driven targets based on their own 
circumstances and analysis, which is not possible when declining 
targets are required. Commenters also asserted that a requirement for 
declining targets would reflect FHWA's influencing the selection of 
projects, with States facing pressure to select projects to support 
declining targets without commensurate funding through BIL to implement 
this type of change.
    One commenter noted this would be the only measure to which MPOs 
would be expected to aid States in documenting declining targets, and 
requested that FHWA provide MPOs a 5-year grace period before requiring 
the declining targets to be established.
    In contrast, several commenters supported the requirement to 
establish declining targets. These commenters asserted that such a 
requirement would require States to set targets that will result in 
improvement, as opposed to other performance measures, and support 
urgent progress on reducing GHG emissions from transportation. These 
commenters also asserted that the declining target requirement would 
not impinge on States' authority to set their own targets.
    A few commenters recommended that FHWA require State DOTs and MPOs 
to provide their underlying assumptions and rationale for vehicle 
emissions rates and VMT, as well as to clarify in the final rule that 
targets should be based not only on projections for improvement in 
vehicle efficiency, but also on projections for reductions in emissions 
because of VMT-reducing investments, system efficiency enhancements, 
and/or other strategies.
    Response: After considering these comments, FHWA has retained the 
requirement for State DOTs and MPOs to set declining targets as 
proposed in the NPRM and as further discussed in this final rule. State 
DOTs and MPOs that have NHS mileage within their State geographic 
boundaries and metropolitan planning area boundaries, respectively, are 
required under the rule to establish declining targets for reducing 
CO2 emissions generated by on-road mobile sources. Given the 
urgency of responding to the climate crisis, FHWA believes it is 
inappropriate for State DOTs and MPOs to delay establishing targets. 
The FHWA also believes States and MPOs have the tools necessary to meet 
these timelines. State DOTs will establish targets no later than 
February 1, 2024, and MPOs are required to establish targets no later 
than 180 days after the State DOT establishes their targets. See 23 CFR 
490.105(e)(1)(ii) and 490.105(f)(1).
    The requirement for State DOTs and MPOs to establish declining 
targets for tailpipe CO2 emissions on the NHS is vital given 
the urgency of the climate crisis. Declining targets will help State 
DOTs and MPOs plan toward reductions in GHG emissions and make Federal 
infrastructure investment decisions that reduce climate pollution, a 
principle set forth in E.O. 14008 (86 FR 7626). As discussed in the 
NPRM, FHWA is not prescribing what declining targets would look like in 
each State or MPO. State DOTs and MPOs have the flexibility to set 
targets that work for their respective policies and priorities, so long 
as the targets are declining. Under the rule, State DOTs and MPOs have 
discretion in setting an appropriate declining target as informed by 
complete, consistent, and timely State and local information on GHG 
emissions from on-road mobile source emissions. The rule provides State 
DOTs and MPOs with the tools to consider GHG emissions in making 
transportation decisions and imposes no penalties on States and MPOs 
that do not meet their targets; therefore, FHWA rejects the 
characterization that State DOTs and MPOs are being pressured or 
otherwise required to select any specific project based on this 
measure.
    The FHWA disagrees with the assertion that States and MPOs cannot 
set data-driven targets based on their own circumstances and analyses 
when the targets must be declining. States and MPOs will use the 
appropriate data to set declining targets, as informed by their 
policies and priorities. State DOTs and MPOs will use the data to 
evaluate current performance and predict future performance when 
establishing declining targets.
    In addition, FHWA has removed the proposed requirement for 
declining targets to demonstrate reductions toward net-zero targets. 
For additional

[[Page 85381]]

information on FHWA's decision not to include net-zero in the final 
rule, see the discussion under Comments on the Measure's Relationship 
to National GHG goals, in the Section-by-Section Discussion of Sec.  
490.101.
Comments on Alternative Target Setting Frequencies
    Comment: A large number of commenters provided feedback related to 
a question raised in the NPRM about introducing a new requirement for 
State DOTs and MPOs to establish 8- and 20-year targets at the 
beginning of each 4-year performance period. Many commenters favored 
adding long-term targets. Commenters in favor of the requirement noted 
that long-term targets can function as policy goals to allow for more 
forward-looking evaluation of emissions trajectories. The other 
commenters supporting this change asserted that long-term targets 
better align with FHWA planning requirements (Long Range Transportation 
Plan (LRTP), Metropolitan Transportation Plan (MTP), State 
Transportation Improvement Program (STIP), Transportation Improvement 
Program (TIP)), and would create greater visibility and accountability.
    In contrast, a small number of commenters opposed adding long-term 
targets. A few of these commenters noted that they support establishing 
long-term targets as a best practice, but not as a requirement. Others 
responded that long-term targets would be too burdensome to develop and 
would lead to speculative results that will not add value to the target 
setting process.
    Response: The FHWA considered the comments citing the benefits of 
establishing long-term targets but declines to do so at this time to 
remain consistent with the existing TPM framework used for the other 
NHPP measures. Providing consistency with other measures minimizes the 
complexity of the TPM requirements. It also allows the measures with 
biennial targets to be considered in relation to each other, which can 
help illustrate how these measure areas are part of a single 
transportation system. State DOTs and MPOs can voluntarily establish 
longer-term targets in the manner that best aligns with their 
individual policies and plans.
Comments on MPO Joint Targets
    Comment: Several commenters expressed concern about the proposed 
requirement for joint UZA targets. Almost all of these commenters 
otherwise supported the proposed measure but recommended removing the 
joint UZA target from the final rule. They identified a variety of 
concerns, particularly that a joint UZA target would be duplicative of 
the requirement for metropolitan planning area targets, thereby adding 
administrative burden for both MPOs and State DOTs. They also asserted 
that a joint UZA target would be overly complex, especially for 
planning agencies that are part of multiple UZAs or for those that 
share borders with a planning agency that serves a different 
population, such as rural and urban. A few commenters suggested 
alternatives to the joint UZA target: removing the target based on MPO 
boundaries and only requiring targets based on UZA; only requiring 
targets on either MPO boundaries or those based on UZAs; or limiting 
the targets based on MPO boundaries and on UZA boundaries only to MPOs 
and UZAs of a certain size, regardless of if there is a joint target or 
only metropolitan planning area targets.
    Response: The FHWA has considered these comments and decided to 
retain the requirement for joint UZA targets. The FHWA disagrees with 
comments suggesting a joint UZA target is duplicative of the 
requirement for metropolitan planning area targets. The FHWA believes 
the requirement to establish a joint UZA target would encourage 
collaboration across MPO boundaries through coordinated systems and 
region-based approaches to reducing GHG emissions. The FHWA believes 
this collaboration is useful regardless of the MPO or UZA size. 
Therefore, FHWA has retained the requirement for MPOs to collectively 
establish a single joint 4-year target for each UZA that contains NHS 
mileage and that is overlapped by the boundaries of two or more 
metropolitan planning areas. As provided in 23 CFR 490.105(f)(10), 
joint targets are also required to be declining targets for reducing 
CO2 emissions from on-road mobile sources, and these targets 
are established in addition to each MPO's individual target for their 
metropolitan planning area. The targets established are required to be 
a quantifiable target, which means a value must be used.
    To support implementation of this final rule, FHWA is publishing in 
the docket applicability tables with the MPOs required to establish 
joint targets in accordance with 23 CFR 490.105(d)(4) and 
490.105(f)(10). As with all other MPO targets, and consistent with 23 
CFR 490.105(f)(1), joint targets are to be established no later than 
180 days after the MPOs' respective State DOT(s) establish their 
targets. For additional information on the timeline for establishing 
joint targets, see the discussion under Comments on MPO Target Setting 
Frequency in this section.
Comments on MPO Target Setting Frequency
    Comment: A small number of commenters provided feedback on the 
frequency of MPO targets. A couple of these commenters recommended that 
the final rule only include 4-year targets for MPOs. Another requested 
that the final rule add 2-year targets for MPOs to increase 
coordination with States on the same schedule. In addition, one 
commented that the final rule should leave out both the 2- and 4-year 
targets, and instead adopt 8- and 20-year targets.
    Response: Upon consideration of the comments, FHWA has retained the 
requirement for MPOs to establish 4-year targets as previously 
established in 23 CFR 490.105(f). The FHWA believes the benefits 
associated with requiring MPOs to establish additional 2-year targets 
for the GHG measure would not exceed the additional burden to MPOs. The 
FHWA believes that introducing 8- and 20-year targets that would only 
apply to the MPOs and would only apply to a single measure would add 
confusion and complexity that would not be offset by meaningful 
benefits.
    The final rule makes no changes to the MPO target establishment 
schedule, and MPOs will continue to report their baseline performance 
and progress toward their targets in their system performance report. 
See 23 CFR 490.107(c)(2). An MPO will establish targets for this 
measure, including any required joint targets, no later than 180 days 
after their respective State DOT(s) establishes their 4-year target for 
the measure. See 23 CFR 490.105(f)(1). The MPOs will report their 
established GHG targets, including any joint targets, to the State DOT 
in a manner that is documented and mutually agreed upon by both 
parties. See 23 CFR 490.107(c)(1).
Comments on Technical Assistance
    Comment: A large number of commenters requested technical 
assistance from FHWA to assist in the implementation of the proposed 
performance measure. Examples cited by these commenters included tools 
and best practices for modeling the emissions impacts of various types 
of projects; strategies/pathways/roadmaps to reduce tailpipe 
CO2 emissions (especially those with other social and 
economic impacts, including for disadvantaged communities); factors to 
consider in setting targets; and recommended targets to meet national 
GHG reduction goals.

[[Page 85382]]

    Response: The FHWA believes the existing technical assistance, 
technical tools, and guidance available through FHWA's TPM and Energy 
and Emissions Websites, as well as resources provided by the National 
Highway Institute (NHI), AASHTO, AAMPO, and other publicly available 
sources provide the information necessary for State DOTs and MPOs to 
establish targets for the GHG measure. In addition to these existing 
resources, FHWA recently launched an Every Day Counts (EDC) innovation 
to help transportation agencies quantify GHG emissions and set targets 
for reducing GHG emissions through transportation planning. As this 
measure is implemented, FHWA will continue to consider how best to 
support State DOTs and MPOs in implementing all the TPM requirements in 
23 CFR part 490 and will provide technical assistance on an ongoing 
basis.
Comments on Benchmarks
    Comment: A few commenters suggested that FHWA provide intermediate 
benchmarks for States to use to ensure they are on track to meet the 
2030 national GHG reduction goal.
    Response: As noted earlier, while FHWA encourages State DOTs and 
MPOs to consider the Administration's GHG emissions reduction and net-
zero goals when establishing targets, FHWA has removed the proposed 
requirement for State DOTs to align their declining targets with the 
Administration's GHG reduction goals. State DOTs and MPOs have the 
flexibility to set targets that work for their respective policies and 
priorities, so long as the targets are declining. For example, a State 
DOT might set targets that would result in steady, incremental progress 
toward net-zero emissions, or that achieve aggressive early GHG 
emissions reductions, or be more gradual at first and become more 
aggressive later. Therefore, FHWA declines to provide intermediate 
benchmarks at this time. However, State DOTs may voluntarily establish 
longer-term targets to serve as intermediate benchmarks to help them 
align their short-term emission reduction targets with their long-term 
GHG reduction goals.

Sec.  490.107 Reporting on Performance Targets

Comments on Reporting Start Date
    Comment: Many commenters provided feedback on the reporting start 
date of October 1, 2022. All these commenters oppose this date, which 
they indicated would precede the NPRM public comment period, which 
closed on October 13, 2022. One commenter recommended that the rule be 
revised to either (1) not require States to set two-year targets for 
the 2022-2025 time period, and have States set their four-year targets 
for the 2022-2025 time period as part of the October 1, 2024 mid-
performance period progress report; or (2) delay implementation 
altogether until the 2026-2029 performance period. Other commenters 
recommended a reporting start date in 2023, with the expectation that 
they would have six months to one year from the final rule for target 
setting/coordination before their first reporting. Other commenters 
recommended October 1, 2024 or October 1, 2028, indicating that these 
dates would correspond with other performance measures. A few 
commenters suggested a phased approach, such as reporting reference 
year data and their four-year target in the October 1, 2024 Mid 
Performance Period Progress Report, and then continuing with two- and 
four-year targets in the next performance period.
    Response: Upon consideration of comments, FHWA determined that 
State DOTs and MPOs will establish or adjust targets every two years 
beginning in 2024. Targets will first be established for this measure 
by State DOTs and reported to FHWA in a State Initial GHG Report, no 
later than February 1, 2024. See 490.105(e)(1)(ii) and 490.107(d). The 
information provided by State DOTs in the 2024 State Initial GHG Report 
will be considered the 2024 Mid Performance Period Progress Report. See 
490.107(b)(2)(i). State DOT reporting will follow an October 1st cycle 
beginning in 2026 to align with other measure reporting requirements. 
Recognizing the urgency of addressing the climate crisis, FHWA is 
establishing an initial date that is as early as practicable and will 
reflect the best available data. The FHWA is also establishing a 
February 1, 2024 reporting date for the first GHG targets to increase 
the opportunities for the targets to be used to help guide overall 
Federal investments available through the many programs available in 
BIL that can reduce CO2 emissions. The February 1, 2024 
reporting date is supportive of a 2022 GHG measure reference year since 
the 2022 VMT data are expected to be finalized by November 30, 2023.
    The FHWA made changes throughout the regulation in response to the 
February 1, 2024 target establishment and reporting date, and they are 
summarized here. Consistent with all other NHPP measures, the GHG 
measure will have a 4-year performance period that will begin January 
1, 2022. See 23 CFR 490.105(e)(4)(i) and 490.105(e)(4)(i)(C). The mid-
point of the performance period is 2024, and the end of the performance 
period is 2026. The FHWA acknowledges that this date is in advance of 
this final rule's effective date. However, the start of the performance 
period merely serves as the benchmark that begins the TPM schedule. 
This measure does not generate any requirements for State DOTs or MPOs 
in advance of the effective date. The first GHG targets will be due on 
February 1, 2024, after the effective date of this rulemaking. The FHWA 
believes it is appropriate to begin the performance period on January 
1, 2022 to align with the TPM program and to facilitate a mid-point of 
the performance period in 2024, and to align with TPM's existing 4-year 
performance period.
    Since initial targets will be established so close to the mid-
point, FHWA determined that 2-year targets would not be required. See 
23 CFR 490.105(10)(i)(A) and 490.105(e)(4)(iii). Section 
490.105(e)(10)(i)(B) requires that 4-year targets for this measure be 
established, and section 490.105(e)(1)(ii) requires they be established 
no later than February 1, 2024. Section 490.107(d) was added to create 
the State Initial GHG Report to receive the State DOT's initial 4-year 
GHG target.
    The State Initial GHG Report requirements are similar to the 
Baseline Performance Period Report. In the State Initial GHG Report, 
State DOTs will provide the 4-year target, the basis for the target, 
the baseline data, which is the reference year for this performance 
period only, the relationship with other performance expectations, the 
data points used to calculate the GHG metric, described in 23 CFR 
490.511(c), and the value calculated. The data used to calculate the 
metric for the reference year for the Initial GHG Report is specified 
in section 490.107(d)(2). Information on the GHG measure will be 
submitted as part of the biennial reports starting with the 2026 Full 
Performance Period Progress Report. See 23 CFR 490.107(b)(1), (b)(2), 
and (b)(3).
    For additional information on how the initial target establishment 
requirements associated with February 1, 2024 will impact the 
significant progress determination done after the 2024 Mid Performance 
Period Progress Report, see the discussion under Comments on 
Significant Progress Timing, in the Section-by-Section Discussion of 
section 490.109.

[[Page 85383]]

Comments on MPO Reporting Frequency and Process
    Comment: Many commenters responded to the MPO reporting 
requirements and many proposed revisions to the requirements. Many of 
these commenters noted that the final rule should require MPOs to 
report every two years on progress towards the performance measure, 
asserting that MPOs have a significant impact on transportation 
investment decisions in metropolitan planning areas, and therefore, 
should be as transparent as States in this regard. Similarly, another 
commenter suggested that the final rule could encourage but not require 
MPO reporting every two years given the additional burden of biennial 
reporting.
    A couple of commenters requested that the final rule not require 
additional reporting by MPOs outside of the system performance report 
so as not to increase the reporting and tracking burden on MPOs and 
State DOTs.
    Response: The FHWA considered the comments and determined the 
existing reporting requirements for MPOs in 23 CFR 490.107(c), which 
FHWA has successfully implemented for other performance measures, are 
appropriate for reporting on the GHG measure. The MPOs are required to 
report on performance within their metropolitan transportation plan 
(MTP), which are developed every 4 or 5 years. See 23 CFR 450.324(d). 
Biennial reporting by MPOs would necessitate an additional report 
outside of the MTP. At this time, FHWA does not believe that adding a 
new process for reporting on performance specifically for the GHG 
measure would provide benefits that would exceed the increased burden 
from additional reporting requirements. Therefore, FHWA has not made 
any changes in the final rule based on the comments. The FHWA has 
retained the requirement for MPOs to report progress toward their GHG 
target in their system performance report in the metropolitan plan.
    For related information on the MPO target establishment timeline, 
see the discussion under Comments on MPO Target Setting Frequency in 
the Section-By-Section Discussion for section 490.105.
    For additional information related to MPO reporting, see the 
discussion under Comments on MPO Report Content in this section.
Comments on MPO Report Content
    Comment: One commenter noted that there does not appear to be a 
requirement for the MPO to report the value of the measure (percent 
reduction in tailpipe CO2 emissions on the NHS) for their 
MPA or any required joint UZA targets (for those UZAs that overlap 
multiple MPOs). In addition, a commenter asked for clarification that 
reporting of the MPO metric calculation method is not required when an 
MPO supports the State targets. Another commenter noted that if an MPO 
chooses to support the State targets, reporting the MPO region total 
appears unnecessary. Commenters noted that for all the other 
performance measures (e.g., safety measures bridge and pavement 
condition measures, and system performance and reliability measures), 
there is no requirement for MPOs to calculate and report metric or 
measure values to the State DOT(s).
    Response: The FHWA has not made any changes in the final rule based 
on these comments. The FHWA believes that the requirement for MPOs to 
report the metrics used to calculate the measure and the metric 
calculation method is justified because MPOs can use a range of 
different approaches to calculate the metric, even if they choose to 
adopt State targets. For this measure, MPOs are required to report all 
targets they are required to establish, including any joint targets, to 
the State DOT in a manner that is documented and mutually agreed upon 
by both parties. See 23 CFR 490.107(c)(1). In the system performance 
report, MPOs will report baseline performance for this measure and 
progress toward the achievement of their targets. They will also report 
the calculation of annual tailpipe CO2 emissions for the NHS 
for the period between the reference year and the first system 
performance report that includes the GHG measure information. 
Subsequent reports will cover the period between the current report and 
the last report. In addition, the MPO will report a description of 
their metric calculation method(s).
    The FHWA has removed the proposed requirement for MPOs to report 
tailpipe CO2 emissions on all roads. The reason for removing 
this requirement is described in response to the comments on MPO metric 
reporting, in the discussion for section 490.511.
    As a new requirement of the rule, in the system performance report, 
FHWA is requiring MPOs using metric calculation methods not specified 
in section 490.511(d) to include information demonstrating the 
method(s) has valid and useful results for measuring transportation 
related CO2. The reason for this requirement is provided in 
the discussion under Comments on Mutual Agreement of Metric Calculation 
Method by State DOTs and MPOs, in the Section-by-Section Discussion for 
section 490.511.
    Consistent with 23 CFR 450.226 and 23 CFR 450.340, the MPO's MTP 
and TIP must meet the Performance-Based Planning and Programming (PBPP) 
requirements of the planning rule for this performance measure by no 
later than 2 years after the effective date of this rule.
Comments on Biennial Reporting Cycle
    Comment: A few commenters provided general feedback on the State 
DOT biennial reporting cycle and recommended that the final rule not 
require two-year reporting for State DOTs.
    Response: The FHWA has not made any changes in the final rule based 
on the comments. Section 150(e) of Title 23, U.S.C., requires State 
DOTs to report on performance to FHWA on a biennial basis. The FHWA 
considered the comments and determined the existing biennial reporting 
cycle established in 23 CFR 490.107(b), which FHWA has successfully 
implemented for other performance measures, will support State DOTs as 
they implement the new GHG measure within the context of the overall 
TPM program. This two-year reporting for State DOTs is consistent with 
other performance measures, which minimizes the incremental burden 
since State DOTs do not need to develop an additional reporting process 
and cycle for this one measure. Two-year reporting is also useful in 
helping State DOTs progress toward a longer-term goal and can reflect 
short-term actions such as operational improvements. Such short-term 
actions are typically outside the control of MPOs, which consequently 
have 4-year reporting requirements.
Comments on Alternative Progress Reporting Requirements
    Comment: A couple of commenters suggested additions to the 
reporting requirements. One requested a provision for qualitative 
reporting to describe progress on the measure, to be able to report 
trends and overall actions and strategies that contribute to lower 
sales of fossil fuel used for on-road vehicles. Another requested 
requiring State DOTs and MPOs to identify planned actions to reduce 
emissions and actions that have been implemented to reduce emissions.
    Response: The FHWA has not made any changes in the final rule based 
on the comments. The reporting requirements in 23 CFR 490.107 represent 
the minimum requirements for State DOTs and MPOs under the TPM 
regulations. The requirements in the final rule do not prevent State 
DOTs

[[Page 85384]]

and MPOs from providing more detailed qualitative reporting on progress 
and planned actions at the State and local level.
Comments on Publicizing GHG Reporting Information
    Comment: A large number of commenters provided recommendations 
intended to increase the transparency and accessibility of reporting on 
performance. Some commenters recommended that FHWA publish a regular 
report on State DOT and MPO progress, with a couple of these commenters 
suggesting that such a report should be issued within three months of 
FHWA receiving the data and be made available in an interactive format 
that allows viewers to see both detailed and summary data. Commenters 
noted that having the data publicly available would also help 
stakeholders to hold State DOTs and MPOs accountable for progress 
toward their GHG targets.
    Response: The FHWA has not made any changes in the final rule based 
on the comments. As part of FHWA's commitment to transparency, FHWA 
regularly publishes the State DOT's biennial reports and FHWA's 
significant progress determinations on its website as part of the 
publicly available TPM Dashboards, and the GHG measure will be included 
in the TPM Dashboards. The State performance dashboards and reports are 
available at https://www.fhwa.dot.gov/tpm/reporting/state/.
    State DOTs and MPOs are required to report on progress as outlined 
in this final rule and described in 23 CFR 490.107. External reporting 
by the U.S. DOT on funds spent in specific areas is outside the scope 
of this rulemaking.

Sec.  490.109 Assessing Significant Progress Toward Achieving the 
Performance Targets for the National Highway Performance Program and 
the National Highway Freight Program

Comments on Consequences of Not Achieving Significant Progress
    Comment: A small number of commenters addressed the requirement 
that State DOTs document the actions they will take should they fail to 
demonstrate significant progress toward their targets. Some of the 
commenters asserted such a requirement would not influence future 
target achievement. Some of these commenters recommended the final rule 
include requirements for State DOTs to provide more detailed 
information on projects or programs to reduce emissions. Such 
information would identify future actions to reduce emissions, and 
include estimated emissions reductions, timelines for implementation 
and funding sources. One commenter recommended the requirement be 
revised to require a State DOT to document actions that have been taken 
in support of targets and identify barriers preventing target 
achievement. One commenter asked for clarification on whether the 
documented actions would be binding for MPOs.
    Response: The FHWA has not made any changes in the final rule based 
on the comments. The FHWA does not intend to use the significant 
progress determination process to be punitive or to encourage State 
DOTs to establish easy-to-achieve targets. Establishing targets and 
assessing progress is intended to encourage State DOTs and MPOs to 
establish data-supported targets that consider anticipated resources 
and potential uncertainties and to provide data-supported explanations 
of performance changes. If a State DOT does not make significant 
progress, FHWA expects the State DOT to provide data-supported 
explanations for not achieving significant progress, and their plan to 
achieve said progress in the future.
    The FHWA determined that creating additional requirements related 
to the consequences of not achieving significant progress toward 
achieving GHG performance targets would create potential burdens that 
outweigh the potential benefits of such efforts. The documentation 
requirements in 23 CFR 490.109(f)(1)(v) represents the minimum 
information State DOTs are federally required to provide. State DOTs 
can provide additional information in their biennial reports if they 
feel it supports their discussion of target achievement, or significant 
progress.
    Information provided by the State DOT in response to the 
requirement in 23 CFR 490.109(f)(1)(v), does not, on its own, require 
that an MPO within that State select a specific project.
Comments on Significant Progress Criteria
    Comment: A small number of commenters recommended that significant 
progress be defined more narrowly. Commenters suggested the significant 
progress determination be changed to require performance better than 
the level that would be achieved through reductions in vehicle emission 
rates alone, define a minimum percentage of a target that must be 
reached, use a trend based on multiple performance periods, or use some 
combination of such factors.
    Response: The FHWA considered these comments and declines to apply 
a narrower definition of significant progress. The existing criteria at 
23 CFR 490.109(e)(2) for determining significant progress are well 
understood and have been applied successfully for the other NHPP and 
NHFP measures identified in 23 CFR 490.105(c)(1)-(6). Maintaining 
consistency with the existing significant progress determination 
criteria will ensure consistency with the other measures and simplify 
the process. Accordingly, FHWA will determine that a State DOT has made 
significant progress toward the achievement of each 2-year or 4-year 
applicable GHG target if (1) the actual performance level is better 
than the baseline performance, or (2) the actual performance level is 
equal to or better than the established target, as defined in 23 CFR 
490.109(e)(2).
Comments on Significant Progress Timing
    Comment: One commenter recommended that FHWA not require a 
significant progress determination for the first performance period 
since transportation emissions in initial years would reflect planning 
and investment decisions made prior to the final rule.
    Response: In response to this and other comments and in line with 
4-year targets being reported February 1, 2024, FHWA will not assess 
significant progress toward the achievement of 2-year targets for the 
GHG measure following the 2024 Mid Performance Period Progress Report. 
State DOT planning and investment decisions follow a cyclical process 
and should be informed by State DOT progress toward achieving its GHG 
targets. As a result, FHWA believes it to be beneficial to begin 
significant progress determinations for the GHG measure as early as is 
reasonable. The FHWA will first assess significant progress toward the 
achievement of targets for the GHG measure after the 2026 Full 
Performance Period Progress Report (due October 1, 2026).
    In response to the initial target establishment requirements 
related to February 1, 2024, when conducting the significant progress 
determination after the 2026 Full Performance Period Progress Report, 
the performance for the reference year shall be used as the baseline 
performance, as described in 23 CFR 490.105(e)(10)(i)(C).
    For additional information on the target establishment requirements 
associated with February 1, 2024, see the discussion under Comments on 
Reporting Start Date, in the Section-by-Section Discussion of section 
490.107.

[[Page 85385]]

Sec.  490.503 Applicability

Comments on Roadway Applicability
    Comment: A large number of commenters recommended that State DOTs 
and MPOs be required to set targets and track GHG emissions from travel 
on all public roads and not just the NHS. These comments asserted that 
the NHS represents only about 5 percent of total U.S. roadways, and 
just over 50 percent of vehicle miles traveled. They also asserted that 
setting targets and tracking emissions from travel on all public roads 
would provide a more comprehensive understanding of transportation 
emissions and allow for more comprehensive solutions.
    Response: The FHWA is finalizing as proposed that this measure will 
assess performance on the NHS. The FHWA acknowledges that the NHS only 
represents a limited set of U.S. roadways, and a measure for all public 
roads would capture more emissions from the transportation sector. 
However, as detailed in Section III of this preamble, FHWA is 
promulgating this rulemaking under 23 U.S.C. 150(c)(3)(A)(ii)(IV)-(V), 
which requires that the Secretary establish measures for States to use 
to assess the performance of the Interstate System and the non-
Interstate NHS. The statute does not provide authority to measure 
performance on public roads other than the Interstate and non-
Interstate NHS. Thus, the GHG measure under 23 CFR 490.105(c)(5), and 
associated requirements, must be based on performance on the Interstate 
System and non-Interstate NHS. However, State DOTs and MPOs can choose 
to implement other measures to support their programs, including 
measures that apply to all roads, in a manner that best aligns with 
their individual policies and plans.

Sec.  490.505 Definitions

Comments on Reference Year
    Comment: Many commenters, including those both supporting and 
opposed to the proposed measure, provided feedback on the use of 
calendar year (CY) 2021 as the reference year, with all asserting that 
it would not be appropriate because of the lingering effects of the 
COVID-19 pandemic on travel in 2021. Commenters noted that using CY 
2021 would set the baseline artificially low as VMT and fuels sales 
continue to rebound and would make it difficult for States to meet 
declining targets. Commenters provided one or more of the following 
suggestions as an alternative to using CY 2021 as the reference year: 
2022 or a year further in the future; 2019 as a pre-pandemic year; 2005 
as a reference to the national GHG targets; or the 5-year average as 
the baseline.
    Response: The FHWA agrees with the commenters' observation that the 
COVID-19 pandemic reduced travel demand, motor fuel consumption, and 
CO2 emissions in 2021 as compared to pre-pandemic levels, 
and that using 2021 as a reference year would establish a lower-than-
normal basis for evaluating future performance. In response to these 
concerns, FHWA is establishing 2022 as the reference year for the GHG 
measure. In 2022, travel activity is estimated to have nearly rebounded 
to pre-pandemic levels, with FHWA's December 2022 Traffic Volume Trends 
report showing cumulative mileage of 3.17 trillion miles in 2022, 
compared with 3.27 trillion miles in 2019.\17\ 2022 is also the most 
recent year for which finalized VMT estimates will be available to use 
in calculating the State DOTs' GHG metric and measure.
---------------------------------------------------------------------------

    \17\ See Office of Highway Policy Information, Federal Highway 
Administration, Traffic Volume Trends December 2022, available at 
https://www.fhwa.dot.gov/policyinformation/travel_monitoring/22dectvt/; Traffic Volume Trends December 2019, available at https://www.fhwa.dot.gov/policyinformation/travel_monitoring/19dectvt/.
---------------------------------------------------------------------------

Comments on Definition of GHG Emissions
    Comment: Several commenters requested clarification on the 
definition of GHG emissions provided in the NPRM. These commenters 
asserted that definition proposed at 23 CFR 490.505 goes beyond 
tailpipe CO2 emissions to include methane, nitrous oxides, 
and hydrofluorocarbons. Commenters asserted that this broader 
definition could open the door to further regulation without a 
rulemaking.
    Response: The definition of GHG included in the NPRM is a common, 
scientific definition of GHG emissions, which include CO2 in 
addition to other gases such as methane (CH4), nitrous oxide 
(N2O), and hydrofluorocarbons (HFCs). According to EPA data, 
CO2 accounts for approximately 97 percent of on-road GHG 
emissions when weighting the 100-year global warming potential of 
CO2 and other greenhouse gases.\18\ The FHWA concluded that 
because approximately 97 percent of on-road GHG emissions are from 
CO2, including non-CO2 gases in the measure would 
not yield significant benefits. Any changes to the GHG measure, 
including any expansion to the applicability of this measure beyond 
tailpipe CO2 emissions, would follow notice and comment 
rulemaking.
---------------------------------------------------------------------------

    \18\ See EPA Inventory of U.S. Greenhouse Gas Emissions and 
Sinks: 1990-2021, table 2-13, available at https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2021. EPA's estimates weight CO2 and other greenhouse 
gases on their 100-year global warming potentials, as specified in 
the Intergovernmental Panel on Climate Change Fifth Assessment 
Report.
---------------------------------------------------------------------------

Sec.  490.509 Data Requirements

Comments on CO2 Emissions Factor
    Comment: Several commenters provided feedback on the proposal for 
FHWA to provide a standard CO2 emissions factor for each 
fuel type. A few of the commenters said FHWA should establish 
CO2 emissions factors, with one recommending that FHWA 
provide optional supplemental fuel blend information and State-specific 
carbon intensity values based on Low Carbon Fuel Standards reporting. 
Several commenters requested that FHWA consider accommodating 
alternative emissions factors for fuel blends when States and MPOs 
provide credible alternatives. A few commenters requested additional 
clarity on CO2 emissions factors, including what they will 
look like, how they will change over time, how they will be accessed, 
whether they will vary based on location, and for some specific 
examples. One commenter stated there is a need to incorporate the 
biogenic nature of CO2 from bioethanol into the emissions 
factor calculation, with one commenter expressing general concerns 
about the inputs to EPA's Motor Vehicle Emissions Simulator (MOVES) 
Model.
    Response: As proposed in the NPRM, FHWA will publish uniform 
CO2 emissions factors for each fuel type to be used by all 
States in calculating the State DOT's metric for the GHG measure. The 
FHWA believes that the requirement for States to use a uniform factor, 
for each fuel type will ensure consistency and comparability of States' 
estimates of tailpipe CO2 emissions.
    The FHWA recognizes that some States have implemented or are 
considering the implementation of low carbon fuels programs to reduce 
the overall carbon intensity of transportation fuels. However, since 
these programs often target reductions in the GHG emissions from well-
to-pump processes, FHWA believes that including emission factors for 
alternative fuel blends as part of a tailpipe-only measure would be 
overly complex. The FHWA recognizes that CO2 emissions 
estimates for the transportation sector as reported in the EPA's 
Inventory of U.S. GHG Emissions and Sinks do not include CO2 
emissions associated with biofuels, such as the ethanol component of 
E10 and other gasoline blends, since it is assumed that

[[Page 85386]]

the combustion of the biogenic component of these fuels is recycled as 
biofuel crops and forests regenerate. The FHWA will consider EPA's 
accounting practice for addressing biofuel CO2 emissions as 
it develops the standard CO2 emissions factors to support 
this final rule. The FHWA will publish these factors on its website by 
August 15th of each biennial reporting year.
Comments on Data Availability Date
    Comment: A small number of commenters requested that FHWA provide 
data to calculate the system performance earlier than the annual date 
of August 15, with a few specifying that this should be no later than 
May 1 of each year or, if no joint UZA target is required, then no 
later than July 1.
    One commenter indicated that the prior year's data in Table VM-3--
Annual Vehicle Miles and Table MF-21--Motor-Fuel Use has been published 
in mid-late October in the past, which would conflict with an October 1 
deadline for report submissions.
    Response: The FHWA appreciates commenters' interest in having data 
available as early as possible to support State biennial reporting on 
October 1 of each even year. While estimates of annual motor fuel 
volumes distributed are not expected to be finalized by FHWA until 
August 15th, States and MPOs can develop preliminary estimates and 
forecasts of GHG emissions using the values in FHWA's Monthly Motor 
Fuel Reported by States publication, available on the website of FHWA's 
Office of Highway Policy Information, and the State-reported fuel sale 
information.
    In response to the comments requesting data earlier than proposed 
and FHWA's reexamination of when the VMT data will be available, FHWA 
revised 23 CFR 490.509(h) as well as 23 CFR 490.109(d)(1)(vi) and 
(d)(1)(vii) to ensure that State DOTs are able to use their most 
accurate VMT data to estimate the NHS share of total on-road tailpipe 
CO2 emissions when reporting actual performance and 
discussing progress. These changes were made in response to a comment 
noting that HPMS VMT data may not be finalized by August 15, as 
proposed in the NPRM.
    The final rule allows State DOTs to use their best available VMT 
data that represents the prior calendar year when reporting performance 
and their GHG measure and metric information in the biennial reports. 
See 23 CFR 490.509(h). Related changes were made to the State DOT 
metric reporting requirements the biennial reports. See 
490.107(b)(1)(ii)(H), (b)(2)(ii)(J) and (b)(3)(ii)(I). Because the VMT 
data used by the State DOT when preparing the biennial report may not 
be known to FHWA, State DOTs are required to provide the values they 
use to calculate the reported metric, and a description of the data 
source(s) used for the VMT information they report. Section 
490.511(f)(2) was revised to be consistent with the metric reporting 
requirements in 23 CFR 490.107(b)(1)(ii)(H), (b)(2)(ii)(J), and 
(b)(3)(ii)(I).
    The change to 23 CFR 490.509(h) necessitated changes to the data 
FHWA will use in the significant progress determination. In 23 CFR 
490.109(d)(1)(vi) and (d)(1)(vii) FHWA has specified that for the 
significant progress determination, baseline performance will be based 
on data from HPMS as of November 30th of the baseline report year, and 
the reference year will be based on HPMS data as of November 30, 2023. 
The FHWA also added section 490.109(e)(4)(vii) to clarify that the data 
used must be accepted by FHWA by the dates specified in section 
490.109(d)(1).
Comments on Accessibility of Fuel Sales Data
    Comment: A small number of commenters expressed concern at MPOs' 
inability to access the Fuels & FASH dataset and requested more 
guidance on how the data could be accessed. One commenter suggested 
using publicly available State data instead. Another requested 
clarification on how a State will calculate the aggregate fuel 
consumption by fuel type.
    Response: States are responsible for submitting preliminary 
estimated totals of monthly fuel volumes distributed for gasoline and 
``special fuel'' (which primarily consists of diesel) which are due to 
FHWA 90 days following the end of a given month. These estimates are 
made publicly available for each State as part of FHWA's Monthly Motor 
Fuel Report, accessible on the Office of Highway Policy Information 
website. Final estimated fuel for a given year are adjusted to account 
for: (1) updated monthly fuel volumes distributed for gasoline and 
``special fuel'' provided by the States, and (2) non-highway use of 
fuels. These estimates will be available by August 15 of each reporting 
year (i.e., the following year).
Comments on Non-Highway Fuel Use
    Comment: A couple of commenters asserted a portion of fuel sales 
are consumed off the roadway network, which is a circumstance that is 
likely more prevalent in rural areas. These commenters asserted that 
off-highway use of fuels would not be accounted for in fuel use data 
provided by FHWA.
    Response: The FHWA uses a modeling process to estimate the portion 
of gasoline that is distributed and used for non-highway purposes. 
These data are then used to adjust the gasoline volume data submitted 
by the States to identify the volumes that are used specifically for 
on-highway purposes. In addition, FHWA instructs all States not to 
report non-highway use of special fuels, including red dyed diesel and 
kerosene that is untaxed and intended for non-highway applications.
Comments on GHG Emissions Analysis Techniques
    Comment: A commenter asserted that the effectiveness of the 
proposed rule would be limited by current traffic modeling practices. 
The commenter asserted that the final rule would benefit from improved 
data collection and analysis techniques, a more standardized approach 
to documenting projects within the STIP/TIP and ensuring a requirement 
that emissions from induced demand be included in modeling.
    Response: The FHWA believes the data and methods specified in the 
NPRM are appropriate to evaluate performance related to the GHG 
measure. State CO2 estimates are calculated by multiplying 
gallons of fuel taxed by each State by the CO2 emissions for 
each fuel type. The FHWA's Fuels & FASH database-will serve as the 
source of fuel use data since it is a national, established, and 
validated source of fuel use information as reported by States. The 
FHWA believes that Fuels & FASH provides advantages for estimating fuel 
consumption and CO2 emissions compared to model-based 
approaches, which by necessity are built on simplified mathematical 
representations of transportation networks, travel choices, vehicle 
fuel efficiency, and other factors. Fuels sales data implicitly 
accounts for travel demand and fuel consumption resulting from 
transportation policies and investments, including behavioral changes 
following highway construction (sometimes referred to as ``induced 
demand''). The FHWA recognizes that fuel sales may not precisely align 
with the amount of fuel combustion and CO2 emissions within 
the boundaries of a State, particularly since drivers may cross State 
lines to purchase fuel. However, FHWA believes the data and methods for 
the State DOT metric calculation achieve an appropriate balance between 
simplicity and accuracy and will

[[Page 85387]]

provide a useful way to monitor trends over time.
    The FHWA recognizes that MPOs lack a data source comparable to 
Fuels & FASH and therefore must estimate CO2 emissions using 
an approach different from the States. The FHWA believes that it is 
appropriate to leave the data and metric calculation methods to the 
discretion of MPOs, and that it would be unreasonable to specify data 
collection standards or modeling practices, particularly since some 
MPOs do not employ technical staff or support travel and emissions 
models. However, FHWA has updated the final rule to require MPOs that 
choose a metric calculation approach not enumerated in section 
490.511(d) to demonstrate the method has valid and useful results.
    Finally, State DOTs and MPOs may employ travel models, emissions 
models, and other analytics to support transportation planning, 
programming, and the development of GHG reduction targets. In so doing, 
they can consider the degree to which their models are sensitive to the 
travel and emissions impacts of GHG reduction strategies and other 
decisions, such as future highway capacity. However, FHWA believes it 
is not appropriate to specify the models or other practices that States 
and MPOs use for these purposes as part of the final rule.
    For additional information related to the CO2 factor, 
see the discussion under Comments on CO2 Emissions Factor, 
in this section.

Sec.  490.511 Calculation of National Highway System Performance 
Metrics

Comments on State DOT GHG Metric Calculation Method
    Comment: Several commenters provided input on the calculation of 
the proposed GHG performance measure. A few commenters expressed 
support for using existing national data sets for fuel sales and VMT 
data, while a few comments offered proposed revisions. Alternatives 
suggested included allowing States to propose alternative or additional 
data sets or methodologies and requiring States to use one of the 
methods offered for MPOs in the proposed rule (i.e., MOVES or FHWA's 
Energy and Emissions Reduction Policy Analysis Tool (EERPAT)).
    Response: The FHWA has retained the State DOT metric calculation 
method proposed in the NPRM. This approach is based on fuel use data 
that is already collected by States and reported to FHWA, ensuring 
comparability between State estimates. As noted in response to the 
previous comment, FHWA believes this approach provides a more accurate 
estimate of total fuel use and CO2 emissions than model-
based approaches. The FHWA recognizes that this approach includes some 
simplifying assumptions, particularly by assuming a similar rate of GHG 
emissions on NHS and non-NHS facilities per VMT. While it is expected 
that emissions rates would differ somewhat between NHS- and non-NHS 
facilities, FHWA believes that this simplifying assumption is justified 
since the difference between emissions rates on NHS- and non-NHS 
facilities would be largely constant from year-to-year and similar 
across States, providing a consistent way to monitor performance.
    For additional information on how the MPO's metric calculation 
method is selected and documented, see the discussion under Comments on 
Mutual Agreement on MPO Metric Calculation Method by State DOTs and 
MPOs, which is part of this section.
Comments on MPO GHG Metric Calculation Method
    Comment: Several commenters addressed MPO metric calculation 
methodology and reporting. Approximately half of these commenters 
supported preserving MPOs' flexibility in calculating the GHG metric. 
In contrast, a couple of commenters supported requiring MPOs to use the 
MOVES model to calculate GHG emissions, while one asserted that FHWA 
should provide the data needed for MPOs to calculate a metric for the 
GHG measure. In addition, one commenter questioned the requirement for 
MPOs to calculate and report tailpipe CO2 emissions on all 
roads, noting the MPO may choose a methodology that allows for 
calculating the GHG metric for NHS roads directly.
    Response: Upon consideration of comments, FHWA is preserving MPOs' 
flexibility to use a range of different approaches in calculating the 
metric for the GHG measure. The FHWA recognizes that technical 
capabilities vary across MPOs and that some MPOs may not support a 
travel demand model or be required to use EPA's MOVES model. The FHWA 
also appreciates the observation that some MPOs may choose to calculate 
tailpipe CO2 emissions on the NHS facilities directly. This 
is inherently different from State DOTs, which are required to 
calculate CO2 emissions for all roads before estimating the 
proportion of emissions associated with the NHS. Accordingly, in the 
final rule, FHWA has removed the requirement for MPOs to report 
tailpipe CO2 emissions for all roads.
Comments on Mutual Agreement on MPO Metric Calculation Method by State 
DOTs and MPOs
    Comment: A small number of commenters addressed the requirement for 
the MPO metric calculation method to be mutually agreed upon by both 
the State DOT and the MPO. A few commenters opposed the requirement for 
the MPO to obtain concurrence on the metric calculation method. 
Similarly, one commenter recommended that an MPO be allowed to use, 
without the need to obtain additional approvals, any regional data, 
models, and methodologies that is already used to measure GHG for 
purposes of air quality conformity modeling or other GHG performance 
measures. One commenter recommended the metric calculation method be 
covered in the ``written provisions'' section of the system performance 
report.
    Response: The FHWA agrees with commenters that the requirement for 
MPOs and States to agree on the MPO's metric calculation method creates 
burden for both groups. In response to the comments, FHWA is not 
requiring the MPO's metric calculation method to be mutually agreed 
upon by the State DOT and MPO, but MPOs are encouraged to coordinate 
with the State DOT on the data used to the maximum extent practicable.
    The FHWA has instead added a requirement to section 
490.107(c)(2)(ii) that if the metric calculation method used by the MPO 
is not specified in section 490.511(d), the MPO must demonstrate the 
method's validity and usefulness in measuring transportation-related 
CO2 emissions in the system performance report. The FHWA 
believes that this change will be sufficient to ensure accountability 
in the methods MPOs use to calculate the GHG metric, absent the 
requirement for mutual agreement on the method with State DOTs. 
Consistent with FHWA's collaboration and coordination requirements in 
23 CFR part 450, FHWA encourages MPOs and the State DOTs to work 
together in identifying methods, tools, and data the MPO's can use to 
calculate the MPO's metric for the GHG measure.
    For additional information related to reporting of the MPO's 
metric, see the discussion under Comments on MPO Report Content, in the 
Section-by-Section Discussion for section 490.107.

[[Page 85388]]

Comments on the RIA

Comments on the Estimated Cost of the Regulation
    Comment: Many commenters discussed cost estimates from the RIA. 
Many commenters asserted that the RIA underestimated direct 
implementation costs of the measure and provided examples of costs that 
they believe were underestimated. Examples cited include the time and 
level of expertise needed to establish targets, conduct biennial 
reporting, conduct stakeholder engagement, develop and maintain models, 
and achieve coordination between DOTs, MPOs, and State agencies. 
Several commenters also asserted that achieving national GHG reduction 
goals would require significant changes to transportation investments 
that would carry significant monetary costs and would require 
significant time to implement. A few commenters also asserted that 
achieving GHG reductions through strategies to reduce on-road travel 
activity would create further social and economic costs including 
increased congestion and travel times. Another commenter asserted that 
reducing on-road GHG emissions would reduce the consumption of 
traditionally taxed fuels and require the establishment of a different 
highway finance revenue model that is not based on the consumption of 
fossil fuels.
    In contrast, several commenters asserted that the burdens of the 
proposed performance measure would be negligible. These commenters 
noted that States and MPOs have already established processes and 
partnerships under the TPM framework and that staff efforts to quantify 
and report GHG emissions on the NHS would not be expected to create 
significant cost burden and are in line with existing performance 
measures.
    Other commenters noted that work performed in support of the GHG 
measure would not support other aspects State DOTs' and MPOs' missions 
in ways that would mitigate net costs of the proposed rule. One State 
DOT also asked for clarification on how the total costs of compliance 
in time and cost is calculated.
    Response: The FHWA has reexamined the RIA considering public 
comments and any updated information, and FHWA has determined that the 
RIA cost estimates should be primarily unchanged from the RIA in 
support of the NPRM, with a small reduction in estimated burden based 
on the elimination of the NPRM requirement for States and MPOs to 
estimate CO2 emissions for all roads in addition to the NHS. 
The FHWA recognizes commenters' observations that many State DOTs and 
MPOs will need to develop capacity to address GHG emissions through 
interagency coordination, stakeholder engagement, and the consideration 
of strategies to support GHG reduction targets. The FHWA believes that 
these examples of costs were addressed through the NPRM RIA labor hour 
estimates for section 490.105, which assume that the level of effort 
for setting targets in the first reporting period will be approximately 
twice that of subsequent reporting periods. The FHWA has included in 
the RIA a break-even analysis of the CO2 reductions from the 
rule that would be necessary to equal its costs. This analysis 
determined that the required reductions would represent a very small 
proportion of total transportation CO2 emissions.
    In addition, FHWA reiterates State DOTs and MPOs will not 
experience costs from achieving GHG reduction targets since FHWA is not 
requiring specific declining target values be established, nor is it 
mandating penalties for failing to meet the targets established.
    The FHWA recognizes that changes in fuel use may impact highway 
funding. However, as this rulemaking does not require any reductions in 
fuel use, this issue is outside of the scope of this rulemaking, nor 
does FHWA have any authority to change the statutory funding scheme 
established by Congress.
Comments on the Use of the Social Cost of Carbon
    Comment: Several commenters raised concerns about the use of the 
social cost of carbon dioxide (SC-CO2) to conduct a ``break-
even'' analysis of CO2 reductions required for the proposed 
measure to equal its costs. These commenters asserted that use of the 
Interagency Working Group (IWG) on Social Cost of Greenhouse Gases \19\ 
``interim'' social costs of GHGs overstate damages from GHG emissions. 
In contrast, several commenters noted the social cost of carbon likely 
significantly underestimates the actual cost of climate damages caused 
by GHG emissions because important categories of climate damages cannot 
be quantified.
---------------------------------------------------------------------------

    \19\ Interagency Working Group on Social Cost of Greenhouse 
Gases, U.S. Government. ``Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990'' (February 2021), available at https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------

    Response: As discussed further in the RIA for the final rule, the 
IWG on Social Cost of Greenhouse Gases published interim estimated for 
the SC-CO2 per ton of carbon emissions for each year from 
2020 to 2050. As noted by the IWG's technical support document prepared 
under E.O. 13990, the SC-CO2 framework in principle can 
capture all climate change impacts, including (but not limited to) 
changes in net agricultural productivity, human health effects, 
property damage from increased flood risk natural disasters, disruption 
of energy systems, risk of conflict, environmental migration, and the 
value of ecosystem services. The SC-CO2 estimates used in 
the break-even analysis for this rule were developed over many years, 
using transparent process, peer-reviewed methodologies, the best 
science available at the time of that process, and with input from the 
public. However, many important categories of climate damages cannot 
currently be fully quantified and monetized, and so the SC-
CO2 values very likely underestimate the climate damages 
caused by GHG pollution. The IWG's technical support document further 
notes that the SC-CO2 as estimated should reflect the 
societal value of reducing CO2 emissions by one metric ton, 
and that the SC-CO2 is the theoretically appropriate value 
to use in conducting economic analyses of policies that affect 
CO2 emissions.\20\ The DOT is an IWG member, and FHWA has 
reviewed the technical support document and has determined that the 
recommended values are appropriate for use in the break-even analysis 
in the RIA.
---------------------------------------------------------------------------

    \20\ Interagency Working Group on Social Cost of Greenhouse 
Gases, U.S. Government. ``Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990'' (February 2021), available at https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------

VIII. Rulemaking Analyses and Notices

A. Executive Order 12866 (Regulatory Planning and Review), Executive 
Order 13563 (Improving Regulation and Regulatory Review), and DOT 
Regulatory Policies and Procedures

    The Office of Management and Budget (OMB) has determined that this 
rulemaking is a significant regulatory action within the meaning of 
E.O. 12866, as amended by E.O. 14094 (``Modernizing Regulatory 
Review''), because it raises legal or policy issues for which 
centralized review would meaningfully further the President's

[[Page 85389]]

priorities or the principles set forth E.O. 12866. The rule will not 
have an annual effect on the economy of $200 million or more. The rule 
will not adversely affect in a material way the economy, any sector of 
the economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, territorial, or tribal governments 
or communities. In addition, the changes would not interfere with any 
action taken or planned by another agency and would not materially 
alter the budgetary impact of any entitlements, grants, user fees, or 
loan programs. As described above, FHWA estimates that total costs 
associated with this rule, between 2023 and 2032, will be $10.8 
million, discounted at 7 percent, and $12.7 million discounted at 3 
percent (these figures are estimated in 2020 dollars). On an annual 
basis, the total costs would be $1,535,045 discounted at 7 percent and 
$1,494,406 discounted at 3 percent. The FHWA is unable to quantify the 
benefits of the rulemaking; consequently, FHWA describes the expected 
benefits qualitatively in the preamble and the RIA. These benefits 
include potentially significant reductions in GHG emissions resulting 
from decisions and actions based on greater consideration of GHG 
emissions in transportation planning, public awareness of GHG emissions 
trends, and better information on the impact of transportation 
decisions on GHG emissions. While many of the benefits in the proposed 
rule are difficult to quantify, FHWA believes that the benefits justify 
the costs. As discussed in greater detail in the RIA, FHWA estimates 
that benefits of this rule would exceed its costs with a reduction of 
less than 0.01 percent of the average annual amount of CO2 
emissions from U.S. transportation sources in 2019, based on a range of 
discount rates used to estimate the social cost of CO2 and 
the 7 and 3 percent discount rates used to estimate the total costs of 
the final rule. The full RIA is available in the docket.

B. Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 
5 U.S.C. 601-612), FHWA has evaluated the effects of this rule on small 
entities and has determined that it is not anticipated to have a 
significant economic impact on a substantial number of small entities. 
The rule will affect two types of entities: State governments and MPOs. 
State governments are not included in the definition of small entity 
set forth in 5 U.S.C. 601. Metropolitan planning organizations are 
considered governmental jurisdictions, and to qualify as a small entity 
they would need to serve fewer than 50,000 people. See 5 U.S.C. 601(5). 
Metropolitan planning organizations are designated to serve UZAs with 
populations of 50,000 or more. See 23 U.S.C. 134(d)(1). Therefore, FHWA 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities.

C. Unfunded Mandates Reform Act of 1995

    This rule would not impose unfunded mandates as defined by the 
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48). The 
Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to 
prepare a written statement, which includes estimates of anticipated 
impacts, before proposing ``any rule that includes any Federal mandate 
that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of 
$100,000,000 or more (adjusted annually for inflation) in any one 
year.'' The current threshold after adjustment for inflation is $177 
million, using the most current (2022) Implicit Price Deflator for the 
Gross Domestic Product. This rule will not result in the expenditure by 
State, local, and Tribal governments, in the aggregate, or by the 
private sector, of $177 million or more in any one year (2 U.S.C. 
1532). In addition, the definition of ``Federal Mandate'' in the 
Unfunded Mandates Reform Act excludes financial assistance of the type 
in which State, local, or Tribal governments have authority to adjust 
their participation in the program in accordance with changes made in 
the program by the Federal Government. The Federal-aid highway program 
permits this type of flexibility.

D. Executive Order 13132 (Federalism Assessment)

    This rule has been analyzed in accordance with the principles and 
criteria contained in E.O. 13132, and FHWA has determined that this 
rule will not have sufficient federalism implications to warrant the 
preparation of a federalism assessment. The FHWA also has determined 
that this rule will not preempt any State law or State regulation or 
affect the States' ability to discharge traditional State governmental 
functions.

E. Paperwork Reduction Act of 1995

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et 
seq.), Federal agencies must obtain approval from OMB for each 
collection of information they conduct, sponsor, or require through 
regulations. The FHWA has determined that this rule contains collection 
of information requirements for the purposes of the PRA. This rule 
introduces a GHG performance measure that will be implemented as part 
of the overarching TPM regulations in 23 CFR part 490, which includes 
State DOT reporting on performance. The collection of State DOT reports 
in support of 23 CFR 490.107 is covered by OMB Control No. 2125-0656.
    The FHWA has analyzed this rule under the PRA and has determined 
the following:
    Respondents: 52 State DOTs.
    Frequency: Single State Initial GHG Report, and ongoing biennial 
reporting.
    Estimated Average Burden per Response: Approximately 88 hours to 
complete and submit the required report, or 44 hours annually.
    Estimated Total Annual Burden Hours: Approximately 2,288 hours 
annually.
    In addition, MPO coordination and reporting activities are covered 
by OMB Control No. 2132-0529, Metropolitan and Statewide and 
Nonmetropolitan Transportation Planning.

F. National Environmental Policy Act

    The FHWA has analyzed this rule pursuant to the NEPA and has 
determined that it is categorically excluded under 23 CFR 
771.117(c)(20), which applies to the promulgation of rules, 
regulations, and directives. Categorically excluded actions meet the 
criteria for categorical exclusions under the Council on Environmental 
Quality regulations and under 23 CFR 771.117(a) and normally do not 
require any further NEPA approvals by FHWA. This rule will establish in 
FHWA regulations a performance measure for on-road CO2 
emissions on the NHS for use by States and MPOs in measuring 
transportation performance. The FHWA does not anticipate any adverse 
environmental impacts from this rule, the purpose of which is to inform 
decisionmaking about the transportation sector's contribution to GHG 
emissions, and thereby contribute to environmental sustainability; 
moreover, no unusual circumstances are present under 23 CFR 771.117(b).

G. Executive Order 13175 (Tribal Consultation)

    The FHWA has analyzed this rule in accordance with the principles 
and criteria contained in E.O. 13175, ``Consultation and Coordination 
with Indian Tribal Governments.'' The rule will implement statutory 
requirements under 23 U.S.C. 150(c)(3)(A)(ii)(IV)-(V) to establish 
measures for States to assess the performance of the Interstate and

[[Page 85390]]

non-Interstate NHS, which FHWA interprets to include environmental 
performance. This measure establishes requirements only for States and 
MPOs that receive Title 23 Federal-aid highway funds and have NHS 
mileage within their jurisdictions; it would not have direct effects on 
one or more Indian Tribes, would not impose substantial direct 
compliance costs on Indian Tribal governments, and would not preempt 
Tribal laws. Accordingly, the funding and consultation requirements of 
E.O. 13175 do not apply and a Tribal summary impact statement is not 
required.
    As noted above, FHWA anticipates the benefits from this rulemaking 
include potentially significant reductions in GHG emissions resulting 
from decisions and actions based on greater consideration of GHG 
emissions in transportation planning by States and MPOs, public 
awareness of GHG emissions trends, and better information on the impact 
of transportation decisions on GHG emissions. Although this rulemaking 
does not apply to Tribes, FHWA expects that Tribes would benefit from 
potential reductions in GHG emissions that result from State and MPO 
implementation of this rulemaking.

H. Executive Order 12898 (Environmental Justice)

    The E.O. 12898 requires that each Federal Agency make achieving 
environmental justice part of its mission by identifying and 
addressing, as appropriate, disproportionately high and adverse human 
health or environmental effects of its programs, policies, and 
activities on minorities and low-income populations. The FHWA has 
determined that this rule does not raise any environmental justice 
issues.

I. Regulation Identifier Number

    A RIN is assigned to each regulatory action listed in the Unified 
Agenda of Federal Regulations. The Regulatory Information Service 
Center publishes the Unified Agenda in April and October of each year. 
The RIN contained in the heading of this document can be used to cross 
reference this action with the Unified Agenda.

List of Subjects in 23 CFR Part 490

    Bridges, Highway safety, Highways and roads, Reporting and 
recordkeeping requirements.

    Issued under authority delegated in 49 CFR 1.81 and 1.85.
Shailen P. Bhatt,
Administrator, Federal Highway Administration.

    In consideration of the foregoing, FHWA amends Title 23, Code of 
Federal Regulations by revising part 490, to read as follows:

PART 490--NATIONAL PERFORMANCE MANAGEMENT MEASURES

0
1. The authority citation for part 490 continues to read as follows:

    Authority:  23 U.S.C. 134, 135, 148(i), and 150; 49 CFR 1.85.


0
2. Amend Sec.  490.101 by adding in alphabetical order the definition 
of ``Fuels and Financial Analysis System--Highways (Fuels & FASH)'' to 
read as follows:


Sec.  490.101  Definitions.

* * * * *
    Fuels and Financial Analysis System--Highways (Fuels & FASH) as 
used in this part means FHWA's system of record for motor fuel, highway 
program funding, licensed drivers, and registered vehicles data.
* * * * *

0
3. Amend Sec.  490.105 by:
0
a. Adding paragraph (c)(5);
0
b. Revising paragraph (d) introductory text, and adding paragraphs 
(d)(1)(v) and (d)(4);
0
c. Adding paragraphs (e)(1)(i), (e)(1)(ii), and (e)(4)(i)(C), revising 
paragraph (e)(4)(iii), and adding paragraph (e)(10); and
0
d. Revising paragraphs (f)(1)(i) and (f)(3), and adding paragraph 
(f)(10).
    The additions and revisions read as follows:


Sec.  490.105  Establishment of performance targets.

* * * * *
    (c) * * *
    (5) 490.507(b) for greenhouse gas (GHG) emissions on the NHS;
* * * * *
    (d) Target scope. Targets established by State DOTs and MPOs shall, 
regardless of ownership, represent the transportation network or 
geographic area, including bridges that cross State borders, that are 
applicable to the measures as specified in paragraphs (d)(1), (2), and 
(4) of this section.
    (1) * * *
    (v) 490.503(a)(2) for the GHG measure specified in Sec.  
490.507(b);
* * * * *
    (4) MPOs shall establish a joint target for the GHG measure 
specified in Sec.  490.507(b), for each urbanized area that meets the 
criteria specified in paragraph (f)(10) of this section. The joint 
target shall represent the performance of the transportation network 
specified in Sec.  490.503(a)(2).
    (e) * * *
    (1) Schedule. State DOTs shall establish targets not later than the 
dates provided in paragraphs (e)(1)(i) and (e)(1)(ii) of this section, 
and for each performance period thereafter, in a manner that allows for 
the time needed to meet the requirements specified in this section and 
so that the final targets are submitted to FHWA by the due date 
provided in Sec.  490.107(b).
    (i) State DOTs shall establish initial targets not later than May 
20, 2018, except as provided in paragraph (e)(1)(ii) of this section.
    (ii) State DOTs shall establish initial targets for the GHG measure 
identified in Sec.  490.507(b) not later than February 1, 2024.
* * * * *
    (4) * * *
    (i) * * *
    (C) For the GHG measure in Sec.  490.105(c)(5), the performance 
period will begin on January 1, 2022 and will extend for a duration of 
4-years. Subsequent performance periods will begin as described in 
paragraph (4)(i)(A) of this section.
* * * * *
    (iii) Except as provided in paragraphs (e)(7) and (e)(8)(v), and 
(e)(10)(i) of this section, State DOTs shall establish 2-year targets 
that reflect the anticipated condition/performance level at the 
midpoint of each performance period for the measures in paragraphs 
(c)(1) through (7) of this section, and the anticipated cumulative 
emissions reduction to be reported for the first 2 years of a 
performance period by applicable criteria pollutant and precursor for 
the measure in paragraph (c)(8) of this section.
* * * * *
    (10) Targets for the GHG measure. Targets established for the GHG 
measure in paragraph (c)(5) of this section shall be declining targets 
for reducing tailpipe CO2 emissions on the NHS.
    (i) The following requirements apply only to the targets 
established for the State Initial GHG Report, described in Sec.  
490.107(d), and 2026 Full Performance Period Progress Report, described 
in Sec.  490.107(b)(3), for the measure in Sec.  490.507(b):
    (A) State DOTs are exempt from the required 2-year target described 
in paragraph (e)(4)(iii) of this section.
    (B) State DOTs shall establish a 4-year target, required under 
paragraph

[[Page 85391]]

(e)(4)(iv) of this section, and report this target in their 2024 State 
Initial GHG Report, required under Sec.  490.107(d).
    (C) The performance for the reference year shall be used as the 
baseline performance.
    (f) * * *
    (1) * * *
    (i) The MPOs shall establish 4-year targets, described in paragraph 
(e)(4)(iv) of this section, for all applicable measures, described in 
paragraphs (c) and (d) of this section. For the GHG measure described 
in (c)(5) of this section, the targets established shall be declining 
targets for reducing tailpipe CO2 emissions on the NHS.
* * * * *
    (3) Target establishment options. For each performance measure 
identified in paragraph (c) of this section, except the CMAQ Traffic 
Congestion measures in paragraph (f)(5) of this section, MPOs meeting 
the criteria under paragraph (f)(6)(iii) of this section for Total 
Emissions Reduction measure, the MPOs shall establish targets for the 
metropolitan planning area by either:
    (i) Agreeing to plan and program projects so that they contribute 
toward the accomplishment of the relevant State DOT target for that 
performance measure; or
    (ii) Committing to a quantifiable target for that performance 
measure for their metropolitan planning area.
* * * * *
    (10) Joint Targets for the GHG Measure. Where an urbanized area 
contains mainline highways on the NHS, and any portion of that 
urbanized area is overlapped by the metropolitan planning area 
boundaries of two or more MPOs, those MPOs shall collectively establish 
a single joint 4-year target for that urbanized area, described in 
paragraph (e)(4)(iv) of this section. The target established shall be a 
declining target for reducing tailpipe CO2 emissions on the 
NHS. This joint target is in addition to the targets for the 
metropolitan planning area required in paragraph (f)(1)(i) of this 
section.
    (i) The NHS designations and urbanized area data shall be from the 
data contained in HPMS 1 year before the State DOT Baseline Performance 
Period Report is due to FHWA.
    (ii) Only one target shall be established for the entirety of each 
applicable urbanized area regardless of roadway ownership. In 
accordance with paragraph (f)(9) of this section, each MPO shall report 
the same joint target for the urbanized area.
    (iii) The target established for each urbanized area shall 
represent a quantifiable target for that urbanized area.

0
4. Amend Sec.  490.107 by
0
a. Revising paragraphs (a)(1) and (b)(1)(i), and adding paragraph 
(b)(1)(ii)(H);
0
b. Revising paragraph (b)(2)(i) and adding paragraph (b)(2)(ii)(J);
0
c. Revising paragraph (b)(3)(i) and adding paragraph (b)(3)(ii)(I);
0
d. Revising paragraph (c)(2); and
0
e. Adding paragraph (d).
    The additions and revisions read as follows:


Sec.  490.107  Reporting on performance targets.

    (a) * * *
    (1) All State DOTs and MPOs shall report in accordance with the 
schedule and content requirements under paragraphs (b), (c), and (d) of 
this section, respectively.
* * * * *
    (b) * * *
    (1) * * *
    (i) Schedule. State DOTs shall submit a Baseline Performance Period 
Report to FHWA by October 1st of the first year in a performance 
period. State DOTs shall submit their first Baseline Performance Period 
Report to FHWA by October 1, 2018, and subsequent Baseline Performance 
Period Reports to FHWA by October 1st every 4 years thereafter, except 
for the GHG measure specified in Sec.  490.105(c)(5). For the Baseline 
Performance Period Report, State DOTs shall submit information related 
to the GHG measure in the report due to FHWA by October 1, 2026, and 
every 4 years thereafter.
    (ii) * * *
    (H) GHG metric and metric information for the GHG measure. The 
metric and the individual values used to calculate the GHG metric, as 
described in Sec.  490.511(c), for the calendar year preceding the 
reporting year, and a description of the data source(s) used for the 
VMT information.
* * * * *
    (2) * * *
    (i) Schedule. State DOTs shall submit a Mid Performance Period 
Progress Report to FHWA by October 1st of the third year in a 
performance period. State DOTs shall submit their first Mid Performance 
Period Progress Report to FHWA by October 1, 2020, and subsequent Mid 
Performance Period Progress Reports to FHWA by October 1st every 4 
years thereafter, except for the GHG measure specified in Sec.  
490.105(c)(5). For the Mid Performance Period Progress Report, the 
State DOTs shall submit information related to the GHG measure in the 
report due to FHWA by October 1, 2028, and every 4 years thereafter.
    (ii) * * *
    (J) GHG metric and metric information for the GHG measure. The 
metric and the individual values used to calculate the GHG metric, as 
described in Sec.  490.511(c), for the calendar year preceding the 
reporting year, and a description of the data source(s) used for the 
VMT information.
* * * * *
    (b) * * *
    (3) * * *
    (i) Schedule. State DOTs shall submit a progress report on the full 
performance period to FHWA by October 1st of the first year following 
the reference performance period. State DOTs shall submit their first 
Full Performance Period Progress Report to FHWA by October 1, 2022, and 
subsequent Full Performance Period Progress Reports to FHWA by October 
1st every 4 years thereafter, except for the GHG measure specified in 
Sec.  490.105(c)(5). For the Full Performance Period Progress Report, 
State DOTs shall submit information related to the GHG measure in the 
report due to FHWA by October 1, 2026, and every 4 years thereafter.
    (ii) * * *
    (I) GHG metric and metric information for the GHG measure. The 
metric and the individual values used to calculate the GHG metric, as 
described in Sec.  490.511(c), for the calendar year preceding the 
reporting year, and a description of the data source(s) used for the 
VMT information.
    (c) * * *
    (2) The MPOs shall report baseline condition/performance and 
progress toward the achievement of their targets in the system 
performance report in the metropolitan transportation plan in 
accordance with part 450 of this chapter. For the GHG measure in Sec.  
490.105(c)(5), the MPOs shall also report:
    (i) The calculation of annual tailpipe CO2 emissions for 
the NHS, and may include all public roads, described in Sec.  
490.511(f), for the period between the current and previous system 
performance report, and the reference year.
    (ii) A description of the metric calculation method(s) used, as 
described in Sec.  490.511(d). When the method(s) used are not 
specified in Sec.  490.511(d), the MPO must include information 
demonstrating the method(s) has valid and useful results for measuring 
transportation related CO2.
* * * * *
    (d) State Initial GHG Report. For the GHG measure in Sec.  
490.105(c)(5), State DOTs shall submit an Initial GHG Report by 
February 1, 2024.

[[Page 85392]]

    (1) The State Initial GHG Report shall include:
    (i) Targets. The 4-year target for the performance period, as 
required in Sec.  490.105(e), and a discussion, to the maximum extent 
practicable, of the basis for the established target;
    (ii) Baseline performance. Performance derived from the data 
collected for the reference year, for the 4-year target required under 
paragraph (d)(1) of this section;
    (iii) Relationship with other performance expectations. A 
discussion, to the maximum extent practicable, on how the established 
target in paragraph (d)(1) of this section support expectations 
documented in longer range plans, such as the State asset management 
plan required by 23 U.S.C. 119(e) and the long-range statewide 
transportation plan provided in part 450 of this chapter; and
    (iv) GHG metric and metric information for the GHG measure. The 
metric and the individual values used to calculate the GHG metric, as 
described in Sec.  490.511(c), for the reference year.
    (2) For the State Initial GHG Report, the State DOT shall use the 
following data to calculate the GHG metric, described in Sec.  
490.511(c), for the reference year.
    (i) Data published by FHWA for the CO2 factors for each 
on-road fuel type associated with the reference year.
    (ii) The fuel consumed data shall meet the requirements in Sec.  
490.509(g) for the reference year.
    (iii) The VMT data shall meet the requirements of Sec.  490.509(h) 
for the reference year.

0
5. Amend Sec.  490.109 by adding paragraph (d)(1)(v), revising 
paragraph (d)(1)(vi), and adding paragraphs (d)(1)(vii) and (viii), 
(e)(4)(vi) and (vii), (e)(6), and (f)(1)(v) to read as follows:


Sec.  490.109  Assessing significant progress toward achieving the 
performance targets for the National Highway Performance Program and 
the National Highway Freight Program.

* * * * *
    (d) * * *
    (1) * * *
    (v) Data contained within Fuels & FASH on August 15th of the year 
in which the significant progress determination is made that represents 
performance from the prior year for targets established for the GHG 
measure in Sec.  490.105(c)(5), and data from Fuels & FASH that 
represents performance for the reference year.
    (vi) Baseline condition/performance data contained in Fuels & FASH, 
HPMS, and NBI of the year in which the Baseline Period Performance 
Report is due to FHWA that represents baseline conditions/performances 
for the performance period for the measures in Sec. Sec.  490.105(c)(1) 
through (5). For the GHG measure, specified in Sec.  490.105(c)(5), the 
baseline performance data from HPMS shall be the data contained within 
HPMS on November 30th of the year the Baseline Period Performance 
Report is due to FHWA.
    (vii) Data contained within the HPMS on November 30th of the year 
in which the significant progress determination is made that represents 
performance from the prior year for targets established for the GHG 
measure specified in Sec.  490.105(c)(5), and HPMS data as of November 
30, 2023 that represents performance for the reference year.
    (viii) The CO2 factor specified in Sec.  490.509(f) for 
the baseline performance, prior year, and reference year for targets 
established for the GHG measure specified in Sec.  490.105(c)(5).
* * * * *
    (e) * * *
    (4) * * *
    (vi) A State DOT's reported data are not accepted in the Fuels & 
FASH, by the data extraction date specified in paragraph (d)(1) of this 
section for the GHG measure in Sec.  490.105(c)(5).
    (vii) A State DOT's reported data are not accepted in the HPMS by 
the data extraction date specified in paragraph (d)(1) of this section 
for the GHG measure in Sec.  490.105(c)(5).
* * * * *
    (6) Phase-in of new requirements for the GHG Measure. The following 
requirements shall only apply to the GHG targets, described in Sec.  
490.513(d), and the significant progress determination conducted 
immediately after the submittal of the 2024 Mid Performance Period 
Progress Report, described in Sec.  490.107(b)(2):
    (i) Consistent with Sec.  490.105(e)(10)(i), State DOTs are not 
required to establish a 2-year target, and, consistent with 
490.107(b)(2), State DOTs will not submit information related to the 
GHG measure in the 2024 Mid Performance Period Progress Report.
    (ii) At the midpoint of the performance period, FHWA shall not make 
a determination of significant progress toward the achievement of 2-
year targets for the GHG measure; and
    (iii) The FHWA will classify the assessment of progress toward the 
achievement of targets in paragraph (e)(6)(ii) of this section as 
``progress not determined'' and they will be excluded from the 
requirement under paragraph (e)(2) of this section.
    (f) * * *
    (1) * * *
    (v) If significant progress is not made for the target established 
for the GHG measure in Sec.  490.105(c)(5), then the State DOT shall 
document the actions it will take to achieve the GHG performance 
target.
* * * * *

Subpart E--National Performance Management Measures To Assess 
Performance of the National Highway System

0
6. Amend Sec.  490.503 by adding paragraph (a)(2) to read as follows:


Sec.  490.503  Applicability.

    (a) * * *
    (2) The Greenhouse Gas (GHG) measure in Sec.  490.507(b) is 
applicable to all mainline highways on the Interstate and non-
Interstate NHS.
* * * * *

0
7. Amend Sec.  490.505 by adding in alphabetical order definitions of 
``Greenhouse gas'', and ``Reference year'' to read as follows:


Sec.  490.505  Definitions.

* * * * *
    Greenhouse gas (GHG) is any gas that absorbs infrared radiation 
(traps heat) in the atmosphere. Approximately 97 percent of on-road GHG 
emissions are carbon dioxide (CO2) from burning fossil fuel. 
Other transportation GHGs are methane (CH4), nitrous oxide 
(N2O), and hydrofluorocarbons (HFCs).
* * * * *
    Reference year is calendar year 2022 for the purpose of the GHG 
measure.
* * * * *

0
8. Amend Sec.  490.507 by revising the introductory text and adding 
paragraph (b) to read as follows:


Sec.  490.507  National performance management measures for system 
performance.

    There are three performance measures to assess the performance of 
the Interstate System and the performance of the non-Interstate NHS for 
the purpose of carrying out the National Highway Performance Program 
(referred to collectively as the NHS Performance measures).
* * * * *
    (b) One measure is used to assess GHG emissions, which is the 
percent change in tailpipe CO2 emissions on the NHS compared 
to the reference year (referred to as the GHG measure).

0
9. Amend Sec.  490.509 by adding paragraphs (f) through (h) to read as 
follows:

[[Page 85393]]

Sec.  490.509  Data requirements.

* * * * *
    (f) The FHWA will post on the FHWA website, no later than August 
15th of each reporting year, the CO2 factors for each on-
road fuel type that will be used to calculate the GHG metric for the 
GHG measure in Sec.  490.105(c)(5).
    (g) Fuel sales information needed to calculate the fuel consumed 
for the GHG measure in Sec.  490.507(b) shall:
    (1) Represent the total number of gallons of fuel consumed by fuel 
type; and
    (2) Be based on fuels sales data for the prior calendar year, and 
reported to Fuels & FASH.
    (h) Annual vehicle miles traveled (VMT) needed to calculate the GHG 
measure in Sec.  490.507(b) shall come from the best available data 
that represents the prior calendar year and is consistent, to the 
maximum extent practicable, with data submitted to HPMS. The VMT data 
needed to calculate the GHG metric in Sec.  490.511(c) for the 
reference year, shall be the HPMS data as of November 30, 2023.

0
10. Amend Sec.  490.511 by adding paragraphs (a)(2), (c), (d), and (f) 
to read as follows:


Sec.  490.511  Calculation of National Highway System performance 
metrics.

    (a) * * *
    (2) Annual Total Tailpipe CO2 Emissions on the NHS for 
the GHG measure in Sec.  490.507(b) (referred to as the GHG metric).
* * * * *
    (c) Tailpipe CO2 emissions on the NHS for a given year 
shall be computed in million metric tons (mmt) and rounded to the 
nearest hundredth as follows:
[GRAPHIC] [TIFF OMITTED] TR07DE23.000

Where:

(Tailpipe CO2 Emissions on NHS)CY = Total 
tailpipe CO2 emissions on the NHS in a calendar year 
(expressed in mmt, and rounded to the nearest hundredth);
T = the total number of on-road fuel types;
t = an on-road fuel type;
(Fuel Consumed)t = the quantity of total annual fuel consumed for 
on-road fuel type ''t'' (to the nearest thousand gallons);
(CO2 Factor)t = is the amount of CO2 released 
per unit of fuel consumed for on-road fuel type ``t'';
NHS VMT = annual total vehicle-miles traveled on NHS (to the nearest 
one million vehicle-miles); and
Total VMT = annual total vehicle-miles traveled on all public roads 
(to the nearest one million vehicle-miles).

    (d) For the GHG measure specified in Sec.  490.507(b), MPOs are 
granted additional flexibility in how they calculate the GHG metric, 
described in Sec.  490.511(a)(2). MPOs may use the MPO share of the 
State's VMT as a proxy for the MPO share of CO2 emissions in 
the State, VMT estimates along with MOVES \1\ emissions factors, FHWA's 
Energy and Emissions Reduction Policy Analysis Tool (EERPAT) model, or 
other method the MPO can demonstrate has valid and useful results for 
CO2 measurement.
* * * * *
    (f) Tailpipe CO2 emissions generated by on-road sources 
travelling on the NHS (the GHG metric), and generated by on-road 
sources travelling on all roadways (the step in the calculation prior 
to computing the GHG metric) shall be calculated as specified in 
paragraph (c) of this section. The calculations shall be reported in 
the State Biennial Performance Reports, as required in Sec.  490.107, 
and shall address the following time periods.
    (1) The reference year, as required in Sec.  490.107(b)(1)(ii)(H); 
and
    (2) The calendar year preceding the reporting year, as required in 
Sec.  490.107(b)(1)(ii)(H), (b)(2)(ii)(J) and (b)(3)(ii)(I).

    \1\ MOVES (Motor Vehicle Emission Simulator) is EPA's emission 
modeling system that estimates emissions for mobile sources at the 
national, county, and project level for criteria air pollutants, 
GHGs, and air toxics. See https://www.epa.gov/moves. The EMFAC model 
is used in California for emissions analysis.


0
11. Amend Sec.  490.513 by adding paragraph (d) to read as follows:


Sec.  490.513  Calculation of National Highway System performance 
measures.

* * * * *
    (d) The GHG measure specified in Sec.  490.507(b) shall be computed 
to the nearest tenth of a percent as follows:
[GRAPHIC] [TIFF OMITTED] TR07DE23.001

Where:

(Tailpipe CO2 Emissions on NHS)CY = total 
tailpipe CO2 emissions on the NHS in a calendar year 
(expressed in million metric tons (mmt), and rounded to the nearest 
hundredth); and
(Tailpipe CO2 Emissions on NHS)reference year 
= total tailpipe CO2 emissions on the NHS in calendar 
year 2022 (expressed in million metric tons (mmt), and rounded to 
the nearest hundredth).


0
12. Add Sec.  490.515 to read as follows:

[[Page 85394]]

Sec.  490.515  Severability.

    The provisions of Sec. Sec.  490.105(c)(5), 105(d), 105(d)(1)(v), 
105(d)(4), 105(e)(1)(i), 105(e)(1)(ii), 105(e)(4)(i)(C), 
105(e)(4)(iii), 105(e)(10), 105(f)(1)(i), 105(f)(3), 105(f)(10), 
107(a)(1), 107(b)(1)(i), 107(b)(1)(ii)(H), 107(b)(2)(i), 
107(b)(2)(ii)(J), 107(b)(3)(i), 107(b)(3)(ii)(I), 107(c)(2), 107(d), 
109(d)(1)(v), 109(d)(1)(vi), 109(d)(1)(vii), 109(d)(1)(viii), 
109(e)(4)(vi), 109(e)(4)(vii), 109(e)(6), 109(f)(1)(v), 503(a)(2), 505, 
507(b), 509(f), 509(g), 509(h), 511(a)(2), 511(c), 511(d) 511(f), and 
513(d) are separate and severable from one another and from the other 
provisions of this part. If any provision is stayed or determined to be 
invalid, the remaining provisions shall continue in effect.

[FR Doc. 2023-26019 Filed 12-6-23; 8:45 am]
BILLING CODE 4910-22-P