[Federal Register Volume 89, Number 76 (Thursday, April 18, 2024)]
[Rules and Regulations]
[Pages 27842-28215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06214]
[[Page 27841]]
Vol. 89
Thursday,
No. 76
April 18, 2024
Part II
Environmental Protection Agency
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40 CFR Parts 85, 86, 600, et al.
Multi-Pollutant Emissions Standards for Model Years 2027 and Later
Light-Duty and Medium-Duty Vehicles; Final Rule
Federal Register / Vol. 89, No. 76 / Thursday, April 18, 2024 / Rules
and Regulations
[[Page 27842]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 85, 86, 600, 1036, 1037, 1066, and 1068
[EPA-HQ-OAR-2022-0829; FRL-8953-04-OAR]
RIN 2060-AV49
Multi-Pollutant Emissions Standards for Model Years 2027 and
Later Light-Duty and Medium-Duty Vehicles
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: Under the Clean Air Act, the Environmental Protection Agency
(EPA) is establishing new, more protective emissions standards for
criteria pollutants and greenhouse gases (GHG) for light-duty vehicles
and Class 2b and 3 (``medium-duty'') vehicles that will phase-in over
model years 2027 through 2032. In addition, EPA is finalizing GHG
program revisions in several areas, including off-cycle and air
conditioning credits, the treatment of upstream emissions associated
with zero-emission vehicles and plug-in hybrid electric vehicles in
compliance calculations, medium-duty vehicle incentive multipliers, and
vehicle certification and compliance. EPA is also establishing new
standards to control refueling emissions from incomplete medium-duty
vehicles, and battery durability and warranty requirements for light-
duty and medium-duty electric and plug-in hybrid electric vehicles. EPA
is also finalizing minor amendments to update program requirements
related to aftermarket fuel conversions, importing vehicles and
engines, evaporative emission test procedures, and test fuel
specifications for measuring fuel economy.
DATES: This final rule is effective on June 17, 2024. The incorporation
by reference of certain publications listed in this regulation is
approved by the Director of the Federal Register beginning June 17,
2024. The incorporation by reference of certain publications listed in
this regulation is approved by the Director of the Federal Register as
of March 27, 2023.
ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-OAR-2022-0829. All documents in the docket are listed on the
https://www.regulations.gov website. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available electronically through https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Michael Safoutin, Office of
Transportation and Air Quality, Assessment and Standards Division
(ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann
Arbor, MI 48105; telephone number: (734) 214-4348; email address:
[email protected].
SUPPLEMENTARY INFORMATION:
A. Does this action apply to me?
Entities potentially affected by this rule include light-duty
vehicle manufacturers, independent commercial importers, alternative
fuel converters, and manufacturers and converters of medium-duty
vehicles (i.e., vehicles between 8,501 and 14,000 pounds gross vehicle
weight rating (GVWR)). Potentially affected categories and entities
include:
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Category NAICS codes \a\ Examples of potentially affected entities
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Industry................................ 336111 Motor Vehicle Manufacturers.
336112
Industry................................ 811111 Commercial Importers of Vehicles and Vehicle
811112 Components.
811198
423110
Industry................................ 335312 Alternative Fuel Vehicle Converters.
811198
Industry................................ 333618 On-highway medium-duty engine & vehicle (8,501-
336120 14,000 pounds GVWR) manufacturers.
336211
336312
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\a\ North American Industry Classification System (NAICS).
This list is not intended to be exhaustive, but rather provides a
guide regarding entities likely to be affected by this action. To
determine whether particular activities may be regulated by this
action, you should carefully examine the regulations. You may direct
questions regarding the applicability of this action to the person
listed in FOR FURTHER INFORMATION CONTACT.
B. Did EPA conduct a peer review before issuing this action?
This regulatory action was supported by influential scientific
information. EPA therefore conducted peer review in accordance with
OMB's Final Information Quality Bulletin for Peer Review. Specifically,
we conducted peer review on six analyses: (1) Optimization Model for
reducing Emissions of Greenhouse gases from Automobiles (OMEGA 2.0),
(2) Advanced Light-duty Powertrain and Hybrid Analysis (ALPHA3), (3)
Motor Vehicle Emission Simulator (MOVES), (4) The Effects of New-
Vehicle Price Changes on New- and Used-Vehicle Markets and Scrappage;
(5) Literature Review on U.S. Consumer Acceptance of New Personally
Owned Light-Duty Plug-in Electric Vehicles; (6) Cost and Technology
Evaluation, Conventional Powertrain Vehicle Compared to an Electrified
Powertrain Vehicle, Same Vehicle Class and OEM. All peer reviews were
in the form of letter reviews conducted by a contractor. The peer
review reports for each analysis are in the docket for this action and
at EPA's Science Inventory (https://cfpub.epa.gov/si/).
Table of Contents
I. Executive Summary
A. Purpose of This Rule and Legal Authority
B. Summary of Light- and Medium-Duty Vehicle Emissions Programs
C. Summary of Emission Reductions, Costs, and Benefits
II. Public Health and Welfare Need for Emission Reductions
A. Climate Change From GHG Emissions
B. Background on Criteria and Air Toxics Pollutants Impacted by
This Rule
C. Health Effects Associated With Exposure to Criteria and Air
Toxics Pollutants
[[Page 27843]]
D. Welfare Effects Associated With Exposure to Criteria and Air
Toxics Pollutants Impacted by the Final Standards
III. Light- and Medium-Duty Vehicle Standards for Model Years 2027
and Later
A. Introduction and Background
B. EPA's Statutory Authority Under the Clean Air Act (CAA)
C. GHG Standards for Model Years 2027 and Later
D. Criteria Pollutant Emissions Standards
E. Modifications to the Medium-Duty Passenger Vehicle (MDPV)
Definition
F. What alternatives did EPA consider?
G. Certification, Compliance, and Enforcement Provisions
H. On-Board Diagnostics Program Updates
I. Coordination with Federal and State Partners
J. Stakeholder Engagement
IV. Technical Assessment of the Standards
A. What approach did EPA use in analyzing the standards?
B. EPA's Approach to Considering the No Action Case and
Sensitivities
C. How did EPA consider technology feasibility and related
issues?
D. Projected Compliance Costs and Technology Penetrations
E. How did EPA consider alternatives in selecting the final
program?
F. Sensitivities--LD GHG Compliance Modeling
G. Sensitivities--MD GHG Compliance Modeling
H. Additional Illustrative Scenarios
V. EPA's Basis That the Final Standards are Feasible and Appropriate
Under the Clean Air Act
A. Overview
B. Consideration of Technological Feasibility, Compliance Costs
and Lead Time
C. Consideration of Emissions of GHGs and Criteria Pollutants
D. Consideration of Impacts on Consumers, Energy, Safety and
Other Factors
E. Selection of the Final Standards Under CAA Section 202(a)
VI. How will this rule reduce GHG emissions and their associated
effects?
A. Estimating Emission Inventories in OMEGA
B. Impact on GHG Emissions
C. Global Climate Impacts Associated With the Rule's GHG
Emissions Reductions
VII. How will the rule impact criteria and air toxics emissions and
their associated effects?
A. Impact on Emissions of Criteria and Air Toxics Pollutants
B. How will the rule affect air quality?
C. How will the rule affect human health?
D. Demographic Analysis of Air Quality
VIII. Estimated Costs and Benefits and Associated Considerations
A. Summary of Costs and Benefits
B. Vehicle Technology and Other Costs
C. Fueling Impacts
D. Non-Emission Benefits
E. Greenhouse Gas Emission Reduction Benefits
F. Criteria Pollutant Health and Environmental Benefits
G. Transfers
H. U.S. Vehicle Sales Impacts
I. Employment Impacts
J. Environmental Justice
K. Additional Non-Monetized Considerations Associated With
Benefits and Costs
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 14094: Modernizing Regulatory Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: ``Federalism''
F. Executive Order 13175: ``Consultation and Coordination with
Indian Tribal Governments''
G. Executive Order 13045: Protection of Children from
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Energy Effects
I. National Technology Transfer and Advancement Act (NTTAA) and
1 CFR part 51
J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations and Executive Order 14096: Revitalizing Our Nation's
Commitment to Environmental Justice for All
K. Congressional Review Act (CRA)
L. Judicial Review
M. Severability
X. Statutory Provisions and Legal Authority
I. Executive Summary
A. Purpose of this Rule and Legal Authority
The Environmental Protection Agency (EPA) is finalizing
multipollutant emissions standards for light-duty passenger cars and
light trucks and for Class 2b and 3 vehicles (``medium-duty vehicles''
or MDVs) under its authority in section 202(a) of the Clean Air Act
(CAA), 42 U.S.C. 7521(a). The program establishes new, more stringent
vehicle emissions standards for criteria pollutant and greenhouse gas
(GHG) emissions from motor vehicles for model years (MYs) 2027 through
2032 and beyond.
Section 202(a) requires EPA to establish standards for emissions of
air pollutants from new motor vehicles which, in the Administrator's
judgment, cause or contribute to air pollution which may reasonably be
anticipated to endanger public health or welfare. Standards under
section 202(a) take effect ``after such period as the Administrator
finds necessary to permit the development and application of the
requisite technology, giving appropriate consideration to the cost of
compliance within such period.'' Thus, in establishing or revising
section 202(a) standards designed to reduce air pollution that
endangers public health and welfare, EPA also must consider issues of
technological feasibility, the cost of compliance, and lead time. EPA
also considers safety, consistent with CAA section 202(a)(4), and may
consider other factors, and in previous vehicle standards rulemakings
as well as in this rule, has considered impacts on the automotive
industry, impacts on vehicle purchasers/consumers, oil conservation,
energy security, and other relevant considerations.
This final rule follows a Notice of Proposed Rulemaking published
on May 5, 2023.\1\ EPA has conducted extensive engagement with the
public, including a wide range of interested stakeholders to gather
input which we considered in developing both the proposal and this
final rule. In developing this final rule, EPA considered comments
received during the public comment process, including the public
hearings. EPA held three days of virtual public hearings on May 9-11,
2023, and heard from approximately 240 speakers. During the public
comment period that ended on July 5, 2023, EPA received more than
250,000 written comments. Through the public comment process, we
received comments, data and analysis from a variety of stakeholders
including auto manufacturers, state and local governments, non-
governmental organizations (NGOs), labor organizations, environmental
justice groups, suppliers, consumer groups, academics, and others.
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\1\ 88 FR 29184, May 5, 2023.
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1. Need for Continued Emissions Reductions Under 202(a) of the Clean
Air Act
Since 1971, EPA has, at Congress' direction, been setting emissions
standards for motor vehicles. The earliest standards were for light-
duty vehicles for hydrocarbons, nitrogen oxides (NOX), and
carbon monoxide (CO), requiring a 90 percent reduction in emissions.
Since then, EPA has continued to set standards for the full range of
vehicle classes (including light-duty, medium-duty and heavy-duty
vehicles and passenger, cargo and vocational vehicles) to reduce
emissions of pollutants for which the Administrator has made an
endangerment finding pursuant to CAA section 202. In 2009, EPA made an
endangerment finding for GHG, and in 2010 issued the initial light-duty
GHG standards. More recently, in 2014, EPA finalized criteria pollutant
standards for light-duty vehicles (``Tier 3'') that were designed to be
implemented alongside the GHG standards for light-duty vehicles that
EPA had adopted in 2012
[[Page 27844]]
for model years 2017-2025.\2\ In 2020, EPA revised the GHG standards
that had previously been adopted for model years 2021-2026,\3\ and in
2021, EPA conducted a rulemaking (the ``2021 rulemaking'') \4\ that
again revised GHG standards for light-duty passenger cars and light
trucks for MYs 2023 through 2026, setting significantly more stringent
standards for those MYs than had been set by the 2020 rulemaking, and
somewhat more stringent than the standards adopted in 2012.
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\2\ 79 FR 23414, April 28, 2014, ``Control of Air Pollution From
Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel Standards.
\3\ 85 FR 24174, April 30, 2020, ``The Safer Affordable Fuel-
Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger
Cars and Light Trucks.''
\4\ 86 FR 74434, December 30, 2021, ``Revised 2023 and Later
Model Year Light-Duty Vehicle Greenhouse Gas Emissions Standards.''
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Despite the significant emissions reductions achieved by these and
other rulemakings, air pollution from motor vehicles continues to
impact public health, welfare, and the environment. Motor vehicle
emissions contribute to ozone, particulate matter (PM), and air toxics,
which are linked with premature death and other serious health impacts,
including respiratory illness, cardiovascular problems, and cancer.
This air pollution affects people nationwide, as well as those who live
or work near transportation corridors. In addition, the effects of
climate change represent a rapidly growing threat to human health and
the environment, and are caused by GHG emissions from human activity,
including motor vehicle transportation. Addressing these public health
and welfare needs will require substantial additional reductions in
criteria pollutants and GHG emissions from the transportation sector.
Recent trends and developments in vehicle technologies that reduce
emissions indicate that more stringent emissions standards are feasible
at reasonable cost and would lead to significant improvements in public
health and welfare.
Addressing the public health impacts of criteria pollutants
(including particulate matter (PM), ozone, and NOX) will
require continued reductions in these pollutants (and their precursors)
from the transportation sector. In 2023, mobile sources accounted for
approximately 54 percent of anthropogenic NOX emissions, 5
percent of anthropogenic direct PM2.5 emissions, and 23
percent of anthropogenic volatile organic compound (VOC) emissions
nationwide.5 6 7 Light- and medium-duty vehicles accounted
for approximately 23 percent, 20 percent, and 52 percent of 2023 mobile
source NOX, PM2.5, and VOC emissions,
respectively.6 7 7 The benefits of reductions in criteria
pollutant emissions accrue broadly across many populations and
communities. As of November 30, 2023, there are 12 PM2.5
nonattainment areas with a population of more than 32 million people
\8\ and 54 ozone nonattainment areas with a population of more than 119
million people. The importance of continued reductions in these
emissions is detailed at length in section II of this preamble.
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\5\ U.S. Environmental Protection Agency (2021). 2016v1 Platform
(https://www.epa.gov/air-emissions-modeling/2016v1-platform).
\6\ U.S. Environmental Protection Agency (2021). 2017 National
Emissions Inventory (NEI) Data. https://www.epa.gov/air-emissions-inventories/2017-national-emissions-inventory-nei-data.
\7\ U.S. Environmental Protection Agency (2023). MOVES 4.0.0.
https://www.epa.gov/moves.
\8\ The population total is calculated by summing, without
double counting, the 1997, 2006 and 2012 PM2.5
nonattainment populations contained in the Criteria Pollutant
Nonattainment Summary report (https://www.epa.gov/green-book/green-book-data-download).
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The transportation sector is the largest U.S. source of GHG
emissions, representing 29 percent of total GHG emissions.\9\ Within
the transportation sector, light-duty vehicles are the largest
contributor, at 58 percent, and thus comprise 16.5 percent of total
U.S. GHG emissions,\10\ even before considering the contribution of
medium-duty Class 2b and 3 vehicles which are also included under this
rule. GHG emissions have significant impacts on public health and
welfare as evidenced by the well-documented scientific record and as
set forth in EPA's Endangerment and Cause or Contribute Findings under
CAA section 202(a).\11\ Additionally, major scientific assessments
continue to be released that further advance our understanding of the
climate system and the impacts that GHGs have on public health and
welfare both for current and future generations, as discussed in
section II.A of this preamble, making it clear that continued GHG
emission reductions in the motor vehicle sector are needed to protect
public health and welfare.
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\9\ Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-
2021 (EPA-430-R-23-002, published April 2023).
\10\ Ibid.
\11\ 74 FR 66496, December 15, 2009; 81 FR 54422, August 15,
2016.
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In addition to and separate from this final rule, the
Administration has recognized the need for action to address climate
change. Executive Order 14008 (``Tackling the Climate Crisis at Home
and Abroad,'' January 27, 2021) recognizes the need for a government-
wide approach to addressing the climate crisis, directing Federal
departments and agencies to facilitate the organization and deployment
of such an effort. On April 22, 2021, the Administration announced a
new target for the United States to achieve a 50 to 52 percent
reduction from 2005 levels in economy-wide net greenhouse gas pollution
in 2030, consistent with the goal of limiting global warming to no more
than 1.5 degrees Celsius by 2050 and representing the U.S. Nationally
Determined Contribution (NDC) under the Paris Agreement. These actions,
while they do not inform the standards established here, serve to
underscore the importance of EPA acting pursuant to its Clean Air Act
authority to address pollution from motor vehicles.
EPA is establishing both criteria pollutant and GHG standards in
this rulemaking given the need for additional reductions in emissions
of these air pollutants to protect public health and welfare and based
on EPA's assessment of the suite of available control technologies for
those pollutants, some of which are effective in controlling both GHGs
and criteria pollutant emissions. Under these performance-based
emissions standards, manufacturers have the discretion to choose the
mix of technologies that achieve compliance across their fleets. EPA's
modeling provides information about several potential compliance paths
manufacturers could use to comply with the standards, based on multiple
inputs and assumptions (e.g., in what we have termed the central case,
that manufacturers will seek the lowest cost compliance path). EPA's
central analysis shows that both within the product lines of individual
manufacturers and for different manufacturers across the industry,
manufacturers will make use of a diverse range of technologies,
including advanced gasoline engines (reducing engine-out emissions),
improvements to tailpipe controls, additional electrification of
gasoline powertrains, and electric powertrains. EPA recognizes that,
although it has modeled individual compliance paths for each
manufacturer, manufacturers will make their own assessment of the
vehicle market and their own decisions about which technologies to
apply to which vehicles for any given model year. The standards are
performance-based, and while EPA finds modeling useful in evaluating
the feasibility of the standards, it is manufacturers who will decide
the ultimate mix of vehicle
[[Page 27845]]
technologies to comply. Although EPA cannot model every possible
compliance scenario, EPA did model several sensitivity analyses which
identify a number of example alternative compliance scenarios for the
industry. EPA has evaluated these alternative scenarios and has
concluded that the lead time and estimated costs to manufacturers under
each of these alternative compliance scenarios are reasonable and
appropriate for standards under CAA 202(a). Furthermore, EPA finds that
it would be technologically feasible to meet these standards without
additional zero-emission vehicles beyond the volumes already sold
today.\12\ Although our modeling projects that such a fleet would not
be the lowest cost alternative for complying with the standards, the
fact that it would comply underscores both the feasibility and the
flexibility of the standards, and confirms that manufacturers are
likely to continue to offer vehicles with a diverse range of
technologies, including advanced gasoline technologies as well as zero-
and near-zero emission vehicles for the duration of these standards and
beyond.
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\12\ EPA has analyzed this scenario as an illustrative scenario,
which we refer to as the ``No additional BEVs above base year
fleet'' scenario. For further details, please refer to Section IV.H
of this preamble.
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The Administrator finds that the standards herein are consistent
with EPA's responsibilities under the CAA and appropriate under CAA
section 202(a). EPA has carefully considered the statutory factors,
including technological feasibility and cost of the standards and the
available lead time for manufacturers to comply with them. Our analysis
for this action supports the conclusion that the final standards are
technologically feasible and that the costs of compliance for
manufacturers will be reasonable. The standards will result in
significant reductions in emissions of criteria pollutants, GHGs, and
air toxics, resulting in significant benefits for public health and
welfare. We also estimate that the standards will result in reduced
vehicle operating costs for consumers and that the benefits of the
program will exceed the costs. Based on EPA's analysis, it is the
agency's assessment that the standards are appropriate and justified
under CAA section 202(a).
2. Recent and Ongoing Advancements in Technology Enable Further
Emissions Reductions
Over five decades of setting standards, EPA has developed extensive
expertise in assessing the availability of new and existing
technologies to control pollution from motor vehicles. In some cases,
EPA has adopted standards based on its judgment that the industry could
further develop and commercialize technologies. In others, EPA has
based standards on the further deployment of existing technologies,
rather than on the further development of new technologies. Both
approaches are consistent with EPA's general authority for emissions
standards under section 202(a)(1)-(2), although Congress has specified
under 202(a)(3) that for heavy-duty criteria standards the
Administrator should identify the greatest degree of emissions
reduction achievable, taking into consideration certain factors.
In 2000, EPA adopted the Tier 2 standards, which required passenger
vehicles to be 77 to 95 percent cleaner (and encouraged certification
of zero-emitting vehicles through the establishment of ``Bin 1'', which
is now referred to as ``Bin 0'').\13\ More recently, in 2014, EPA
adopted Tier 3 emissions standards, which required a further reduction
of 60 to 80 percent of emissions (depending on pollutant and vehicle
class).\14\ Similar to the prior Tier 2 standards, Tier 3 established
``bins'' of Federal Test Procedure (FTP) standards, including bins for
zero-emitting vehicles.
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\13\ 65 FR 6698 (Feb. 10, 2000).
\14\ 79 FR 23414 (Apr. 28, 2014).
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EPA has also consistently set GHG emission standards applicable to
light-duty vehicles pursuant to CAA section 202(a), beginning with the
2010 rule, and continuing through subsequent rulemakings in 2012, and
2021.\15\ These rules achieved very significant reductions of GHGs
(with significant anticipated impacts on liquid fuel consumption and
costs to manufacturers which were, in some cases, comparable to or
greater than the impacts anticipated under this rule).
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\15\ See 75 FR 25324 (May 7, 2010) (setting GHG standards
applicable to model year 2012-2016 LD vehicles); 77 FR 62624 (Oct.
15, 2012) (setting GHG standards for model year 2017-2025 LD
vehicles and ``building on the success of the first phase of the
National program for these vehicles''); 86 FR 774434 (Dec. 30, 2021)
(revising GHG standards for model year 2023 and later light-duty
vehicle).
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In designing the scope, structure, and stringency of these
standards, the Administrator again considered a comprehensive array of
updated, real-world information related to advancements in vehicle
emissions control technologies. These include previous standards and
their impacts on emissions control technologies; the activities,
investments, and plans of manufacturers and other entities regarding
the adoption of new technologies related to vehicle emissions control;
trends in technology adoption by vehicle owners and operators,
including individual consumers and fleets; and related legal
requirements and government incentives, including most notably
Congress's recent actions in the Bipartisan Infrastructure Law (BIL)
and the Inflation Reduction Act (IRA). This action continues EPA's
longstanding approach of establishing an appropriate and achievable
trajectory of emissions reductions by means of performance-based
standards, for both criteria pollutant and GHG emissions, that can be
achieved by employing feasible and available emissions-reducing vehicle
technologies for the model years for which the standards apply.
CAA section 202(a) directs EPA to regulate emissions of air
pollutants from new motor vehicles and engines, which in the
Administrator's judgment cause or contribute to air pollution that may
reasonably be anticipated to endanger public health or welfare. While
standards promulgated pursuant to CAA section 202(a) are based on
application of technology, the statute does not specify a particular
technology or technologies that must be used to set such standards;
rather, Congress has authorized and directed EPA to adapt its standards
to emerging technologies. Thus, as with prior rules, EPA has assessed
the feasibility of the standards considering current and anticipated
progress by automakers in developing and deploying new technologies.
The levels of stringency for the standards established in this rule
continue the trend of increased emissions reductions which have been
adopted by prior EPA rules. For example, the Clean Air Act of 1970
required a 90 percent reduction in emissions, which drove development
of entirely new engine and emission control technologies such as
exhaust gas recirculation and catalytic converters, which in turn
required a switch to unleaded fuel and the development of major new
infrastructure to support the delivery and segregated distribution of a
different fuel. Similarly, the 2014 Tier 3 standards achieved
reductions of up to 80 percent in tailpipe criteria pollutant emissions
by requiring cleaner fuel as well as improved catalytic emissions
control systems.
Compliance with the EPA GHG standards over the past decade has been
achieved through both the application of advanced technologies to
internal combustion engine (ICE) vehicles as well as the increasing
adoption of electrification technologies. Notably, as the EPA GHG
standards have increased in stringency, automakers have relied to
[[Page 27846]]
a greater degree on a range of electrification technologies,\16\
including idle stop-start, mild hybrid electric vehicles with a belt
integrated starter-generator, hybrid electric vehicles (HEVs) and, in
recent years, plug-in electric vehicles (PEVs), which include plug-in
hybrid electric vehicles (PHEVs) and battery-electric vehicles (BEVs).
As these technologies have been advancing rapidly in the past several
years, becoming more popular with consumers and benefiting from
continued declines in battery costs, automakers are now including PEVs
as an integral and growing part of their current and future product
lines. This has also led to an increasing diversity of PEVs already
available and with an increasing array of makes and models planned for
the market. As a result, zero- and near-zero emission technologies are
more feasible and cost-effective now than at the time of prior
rulemakings and, together with advanced gasoline technologies, offer
manufacturers a wider array of compliance technologies.
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\16\ Electrification technologies can range from electrification
of specific accessories (for example, electric power steering to
reduce engine loads by eliminating parasitic loss) to hybrid
electric vehicles, which use a combination of batteries and an
engine for propulsion energy, to electrification of the entire
powertrain (as in the case of a battery electric vehicle).
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Separately from this final rule, the Administration has recognized
the recent industry advancements in zero-emission vehicle technologies
and their potential to bring about dramatic reductions in emissions.
Executive Order 14037 (``Strengthening American Leadership in Clean
Cars and Trucks,'' August 5, 2021) identified a goal for 50 percent of
U.S. new vehicle sales to be zero-emission \17\ vehicles by 2030.\18\
Congress passed the Bipartisan Infrastructure Law \19\ in 2021, and the
Inflation Reduction Act \20\ in 2022, which together provide further
support for a government-wide approach to reducing emissions by
providing significant funding and support for emissions reductions
across the economy, including specifically, for the component
technology and infrastructure for the manufacture, sales, and use of
zero- and near-zero emission vehicles.
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\17\ The Executive Order (E.O.) defines zero-emission vehicles
to include battery electric, plug-in hybrid and fuel cell vehicles.
In this Preamble we refer to these vehicles collectively as zero-
emission and near-zero-emission vehicles.
\18\ This Executive Order does not delegate any legal authority
to EPA and this final rule is promulgated under and consistent with
EPA's CAA section 202(a)(1)-(2) authority.
\19\ Public Law 117-58, November 15, 2021.
\20\ Public Law 117-169, August 16, 2022.
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As an important addition to the suite of control technologies that
can reduce emissions, zero- and near-zero emission cars and trucks can
simultaneously reduce both criteria pollutant and GHG emissions by a
large margin. Production and sale of these vehicles is already
occurring both domestically and globally, due to significant
investments from automakers, increased acceptance by consumers, added
support from Congress and state governments, and emissions regulations
in other countries. EPA recognizes that these industry advancements,
along with the additional support provided by the BIL and the IRA,
represent an important opportunity for achieving the public health
goals of the Clean Air Act. Recognizing that these technologies reduce
both criteria pollutant and GHG emissions and are already forming an
increasing portion of the fleet, EPA finds it appropriate to coordinate
new standards for both criteria pollutants and GHG in a single
rulemaking, rather than continuing its prior approach of coordinating
the standards but setting them in separate regulatory actions.\21\
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\21\ We emphasize, however, as discussed further in Section X of
this preamble, that the standards are severable.
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In the U.S., recent trends in PEV production and sales show that
demand continues to increase. Even under current standards, BEVs and
PHEVs are becoming a rapidly increasing part of the new vehicle fleet.
On a production basis, PEVs are growing steadily, expected to be 11.8
percent \22\ of U.S. light-duty vehicle production for MY 2023,\23\ up
from 6.7 percent in MY 2022, 4.4 percent in MY 2021 and 2.2 percent in
MY 2020.\24\ On a sales basis, U.S. new PEV sales in calendar year 2023
alone surpassed 1.4 million,25 26 an increase of more than
50 percent over the 807,000 sales that occurred in 2022.\27\ This
represents 9.3 percent of new light-duty passenger vehicle sales in
2023, up from 6.8 percent in 2022 \28\ and 3.2 percent the year
before.\29\ As depicted in Figure 1, this continues the growth trend
seen in previous years. In California, new light-duty zero-emission
vehicle sales have reached 25.1 percent through the third quarter of
2023, after reaching 18.8 percent in 2022, up from 12.4 percent in
2021.30 31
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\22\ At time of this publication, MY 2023 production data is not
yet final. Manufacturers will be confirming production volumes
delivered for sale in MY 2023 later in calendar year 2024.
\23\ Environmental Protection Agency, ``The 2023 EPA Automotive
Trends Report: Greenhouse Gas Emissions, Fuel Economy, and
Technology since 1975,'' EPA-420-R-23-033, December 2023.
\24\ Environmental Protection Agency, ``The 2022 EPA Automotive
Trends Report: Greenhouse Gas Emissions, Fuel Economy, and
Technology since 1975,'' EPA-420-R-22-029, December 2022.
\25\ Argonne National Laboratory, ``Light Duty Electric Drive
Vehicles Monthly Sales Updates,'' January 30, 2024. Accessed on
March 7, 2024 at https://www.anl.gov/esia/light-duty-electric-drive-vehicles-monthly-sales-updates.
\26\ Department of Energy, ``FOTW #1327, January 29, 2024:
Annual New Light-Duty EV Sales Topped 1 Million for the First Time
in 2023,'' January 29, 2024. Accessed on February 2, 2024 at https://www.energy.gov/eere/vehicles/articles/fotw-1327-january-29-2024-annual-new-light-duty-ev-sales-topped-1-million.
\27\ Colias, M., ``U.S. EV Sales Jolted Higher in 2022 as
Newcomers Target Tesla,'' Wall Street Journal, January 6, 2023.
\28\ Argonne National Laboratory, ``Light Duty Electric Drive
Vehicles Monthly Sales Updates,'' January 30, 2024. Accessed on
March 7, 2024 at https://www.anl.gov/esia/light-duty-electric-drive-vehicles-monthly-sales-updates.
\29\ Colias, M., ``U.S. EV Sales Jolted Higher in 2022 as
Newcomers Target Tesla,'' Wall Street Journal, January 6, 2023.
\30\ California Energy Commission, ``New ZEV Sales in
California'' online dashboard, viewed on February 13, 2023 at
https://www.energy.ca.gov/data-reports/energy-almanac/zero-emission-vehicle-and-infrastructure-statistics/new-zev-sales.
\31\ California Energy Commission, ``New ZEV Sales in
California'' online dashboard, viewed on December 15, 2023 at
https://www.energy.ca.gov/data-reports/energy-almanac/zero-emission-vehicle-and-infrastructure-statistics/new-zev-sales.
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[[Page 27847]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.000
Figure 1: U.S. PEV Sales by Calendar Year, 2010-2023 (Department of
Energy) \32\
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\32\ Department of Energy, ``FOTW #1327, January 29, 2024:
Annual New Light-Duty EV Sales Topped 1 Million for the First Time
in 2023,'' January 29, 2024. Accessed on February 2, 2024 at https://www.energy.gov/eere/vehicles/articles/fotw-1327-january-29-2024-annual-new-light-duty-ev-sales-topped-1-million.
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Before the IRA became law, analysts were already projecting that
significantly increased sales of PEVs would occur in the United States
and in global markets. For example, in 2021, IHS Markit predicted a
nearly 40 percent U.S. PEV share by 2030.\33\ Projections made in 2022
by Bloomberg New Energy Finance suggested that under then-current
policy and market conditions, and prior to the IRA and this final rule,
the U.S. was on pace to reach 43 percent PEVs by 2030 and when adjusted
for the effects of the IRA, this estimate increased to 52
percent.34 35 Another study by the International Council on
Clean Transportation (ICCT) and Energy Innovation that includes the
effect of the IRA estimates that the share of BEVs will increase to 56
to 67 percent by 2032.\36\ These projections typically are based on
assessment of a range of existing and developing factors, including
state policies (such as the California Advanced Clean Cars II program
and its adoption by section 177 states); although the assumptions and
other inputs to these forecasts vary, they point to greatly increased
penetration of electrification across the U.S. light-duty fleet in the
coming years, without specifically considering the effect of increased
emission standards under this rule.
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\33\ IHS Markit, ``US EPA Proposed Greenhouse Gas Emissions
Standards for Model Years 2023-2026; What to Expect,'' August 9,
2021. Accessed on March 9, 2023 at https://www.spglobal.com/mobility/en/research-analysis/us-epa-proposed-greenhouse-gas-emissions-standards-my2023-26.html. The table indicates 32.3 percent
BEVs and combined 39.7 percent BEV, PHEV, and range-extended
electric vehicle (REX) in 2030.
\34\ Bloomberg New Energy Finance (BNEF), ``Electric Vehicle
Outlook 2022,'' from chart labeled ``Global long-term EV share of
new passenger vehicle sales by market--Economic Transition
Scenario.''
\35\ Tucker, S., ``Study: More Than Half of Car Sales Could Be
Electric By 2030,'' Kelley Blue Book, October 4, 2022. Accessed on
February 24, 2023 at https://www.kbb.com/car-news/study-more-than-half-of-car-sales-could-be-electric-by-2030/.
\36\ International Council on Clean Transportation, ``Analyzing
the Impact of the Inflation Reduction Act on Electric Vehicle Uptake
in the US,'' ICCT White Paper, January 2023. Available at https://theicct.org/wp-content/uploads/2023/01/ira-impact-evs-us-jan23.pdf.
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Recent analyses of the market penetration of plug-in electric
vehicles have been completed that include the effects of the IRA.
Researchers from Harvard University, MIT, and Cornell University
examined the effects of subsidies and tax incentives provided by the
BIL and the IRA to promote plug-in electric vehicle sales and the
deployment of charging infrastructure. This study predicted plug-in
electric vehicle sales shares of 55 to 58 percent in 2030 when both
sales and infrastructure subsidies and incentives were considered.\37\
In addition, the U.S. Department of Energy, Office of Policy provided
updated economy-wide analysis that represents IRA and BIL impacts in
which they project 49 to 65 percent zero emissions light-duty vehicle
sales shares in 2030.\38\ Bloomberg's EV Outlook for 2023 projects that
``a major push from the Inflation Reduction Act means EVs make up
nearly 28 percent of passenger vehicle sales by 2026.'' Finally, the
International Energy Agency estimates U.S. PEV sales share of
approximately 50 percent in 2030 in both stated policies and announced
pledges scenarios.\39\ As with earlier analyses that EPA cited in the
proposal, assumptions and inputs vary across forecasts. However, all of
these recent studies point to greatly increased penetration of PEVs
across the U.S. light-duty fleet in the coming years,
[[Page 27848]]
even more so when the IRA and BIL are considered, and before
considering the effect of the revised emissions standards under this
rule. As discussed in detail in section IV.C.1 of this preamble, these
trends echo an ongoing global shift toward electrification and indicate
that an increasing share of new vehicle buyers are concluding that a
PEV is the best vehicle to meet their needs.
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\37\ Cole, C., Droste, M., Knittel, C., Li, S., and James, J.H.,
``Policies for Electrifying the Light-Duty Vehicle Fleet in the
United States,'' AEA Papers and Proceedings 2023, 113 (pp.316-322).
\38\ U.S. Department of Energy, Office of Policy, ``Investing in
American Energy: Significant Impacts of the Inflation Reduction Act
and Bipartisan Infrastructure Law on the U.S. Energy Economy and
Emissions Reductions,'' August 16, 2023. Accessed on November 30,
2023 at https://www.energy.gov/policy/articles/investing-american-energy-significant-impacts-inflation-reduction-act-and.
\39\ International Energy Agency, ``Global EV Outlook 2023,'' p.
114, 2023. Accessed on November 30, 2023 at https://www.iea.org/reports/global-ev-outlook-2023.
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Accompanying this trend has been a proliferation of announcements
by automakers in the past several years, signaling a rapidly growing
shift in product development focus toward electrification. For example,
in January 2021, General Motors announced plans to become carbon
neutral by 2040, including an effort to shift its light-duty vehicles
entirely to zero-emissions by 2035.\40\ In March 2021, Volvo announced
plans to make only electric cars by 2030,\41\ and Volkswagen announced
that it expects half of its U.S. sales will be all-electric by
2030.\42\ In April 2021, Honda announced a full electrification plan to
take effect by 2040, with 40 percent of North American sales expected
to be fully electric or fuel cell vehicles by 2030, 80 percent by 2035
and 100 percent by 2040.\43\ In May 2021, Ford announced that they
expect 40 percent of their global sales will be all-electric by
2030.\44\ In June 2021, Fiat announced a move to all electric vehicles
by 2030, and in July 2021 its parent corporation Stellantis announced
an intensified focus on electrification, including both BEVs and PHEVs,
across all of its brands.45 46 Also in July 2021, Mercedes-
Benz announced that all of its new architectures would be electric-only
from 2025, with plans to become ready to go all-electric by 2030 where
possible.\47\ In December 2021, Toyota announced plans to introduce 30
BEV models by 2030.\48\ In August 2023, Subaru announced that its
previous plan to target 40 percent combined HEVs and BEVs was being
revised to 50 percent BEVs globally by 2030.\49\ Some automakers have
also indicated a strong role for PHEVs in their product planning. For
example, Toyota continues to anticipate PHEVs forming an increasing
part of their offerings,\50\ and Stellantis will be introducing a plug-
in version of its Ram pickup for MY 2024.\51\ As discussed in more
detail in section IV.C.1 of this preamble, the number of PHEV and BEV
models has steadily grown and manufacturer announcements signal the
potential for significant growth in the years to come.
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\40\ General Motors, ``General Motors, the Largest U.S.
Automaker, Plans to be Carbon Neutral by 2040,'' Press Release,
January 28, 2021.
\41\ Volvo Car Group, ``Volvo Cars to be fully electric by
2030,'' Press Release, March 2, 2021.
\42\ Volkswagen Newsroom, ``Strategy update at Volkswagen: The
transformation to electromobility was only the beginning,'' March 5,
2021. Accessed June 15, 2021 at https://www.volkswagen-newsroom.com/en/stories/strategy-update-at-volkswagen-the-transformation-to-electromobility-was-only-the-beginning-6875.
\43\ Honda News Room, ``Summary of Honda Global CEO Inaugural
Press Conference,'' April 23, 2021. Accessed June 15, 2021 at
https://global.honda/newsroom/news/2021/c210423eng.html.
\44\ Ford Motor Company, ``Superior Value From EVs, Commercial
Business, Connected Services is Strategic Focus of Today's
`Delivering Ford+' Capital Markets Day,'' Press Release, May 26,
2021.
\45\ Stellantis, ``World Environment Day 2021--Comparing
Visions: Olivier Francois and Stefano Boeri, in Conversation to
Rewrite the Future of Cities,'' Press Release, June 4, 2021.
\46\ Stellantis, ``Stellantis Intensifies Electrification While
Targeting Sustainable Double-Digit Adjusted Operating Income Margins
in the Mid-Term,'' Press Release, July 8, 2021.
\47\ Mercedes-Benz, ``Mercedes-Benz prepares to go all-
electric,'' Press Release, July 22, 2021.
\48\ Toyota Motor Corporation, ``Video: Media Briefing on
Battery EV Strategies,'' Press Release, December 14, 2021. Accessed
on December 14, 2021 at https://global.toyota/en/newsroom/corporate/36428993.html.
\49\ Subaru Corporation, ``Briefing on the New Management
Policy,'' August 2, 2023. Accessed on December 5, 2023 at https://www.subaru.co.jp/pdf/news-en/en2023_0802_1_2023-08-01-193334.pdf.
\50\ Toyota Motor Corporation, ``New Management Policy &
Direction Announcement,'' April 7, 2023. Accessed on December 5,
2023 at https://global.toyota/en/newsroom/corporate/39013233.html.
\51\ Stellantis, ``All-new 2025 Ram 1500 Ramcharger Unveiled
With Class-shattering Unlimited Battery-electric Range,'' Press
Release, November 7, 2023. Accessed on December 5, 2023 at https://media.stellantisnorthamerica.com/newsrelease.do?id=25436.
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On August 5, 2021, many major automakers including Ford, GM,
Stellantis, BMW, Honda, Volkswagen, and Volvo, as well as the Alliance
for Automotive Innovation, expressed continued commitment to their
announcements of a shift to electrification, and expressed their
support for the goal of achieving 40 to 50 percent sales of zero-
emission vehicles by 2030.\52\ In September 2022, jointly with the
Environmental Defense Fund (EDF), General Motors (GM) announced a set
of recommendations including a recommendation that EPA establish
standards to achieve at least a 60 percent reduction in GHG emissions
(compared to MY 2021), and that the standards be consistent with
eliminating tailpipe pollution from new passenger vehicles by 2035.
These announcements have been accompanied by continued major
investments across the automotive industry in manufacturing facilities
for PEVs, production capacity for batteries, and sourcing of critical
minerals, as described further in sections IV.C.1 and IV.C.7 of this
preamble.
---------------------------------------------------------------------------
\52\ The White House, ``Statements on the Biden Administration's
Steps to Strengthen American Leadership on Clean Cars and Trucks,''
August 5, 2021. Accessed on October 19, 2021 at https://www.whitehouse.gov/briefing-room/statements-releases/2021/08/05/statements-on-the-biden-administrations-steps-to-strengthen-american-leadership-on-clean-cars-and-trucks/.
---------------------------------------------------------------------------
In comments on the proposal, submitted in July 2023, manufacturers
reiterated their continued commitment to electrification. Ford, for
example, stated ``Ford is all-in on electrification. We are investing
more than $50 billion through 2026 to deliver breakthrough electric
vehicles (EVs)'' and expressed their support for a 2032 endpoint of
approximately 67 percent PEVs.\53\ GM's comments ``reiterate[ ] our
commitment'' to sell 50 percent EVs by 2030 as ``the appropriate path
toward all EVs by 2035.'' \54\ Stellantis stated it ``is unwavering in
its commitment to an all-electric portfolio and building an EV
dominated market'' including a 50 percent EV mix for passenger cars and
light trucks by 2030.\55\ Volkswagen expressed its goal of 20 percent
BEV sales globally by 2025, and more than 50 percent by 2030.\56\ Other
OEMs also restated their own significant commitments to
electrification, with Honda restating its commitment to selling 40
percent zero-emitting vehicles by 2030 and 80 percent by 2035 \57\ and
Hyundai noting their support for selling 50 percent PEVs in 2030.\58\
In addition there were automakers supporting stronger standards that
would lead to somewhat higher levels of BEVs in 2032,\59\ and some
making commitments to significantly reduce vehicle emissions without
identifying a particular level of PEVs they intend to sell.\60\
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\53\ Ford Motor Company, EPA-HQ-OAR-2022-0829-0605 at p. 1.
\54\ General Motors, LLC, EPA-HQ-OAR-2022-0829-0700 at p. 3-4.
\55\ Stellantis, EPA-HQ-OAR-2022-0829-0678 at p. 2.
\56\ Volkswagen Group of America, Inc., EPA-HQ-OAR-2022-0829-
0669 at p. 2.
\57\ American Honda Motor Co. Inc., EPA-HQ-OAR-2022-0829-0652 at
p. 3.
\58\ Hyundai Motor America, EPA-HQ-OAR-2022-0829-0599 at p. 2
\59\ Tesla, Inc., EPA-HQ-OAR-2022-0829-0792, at 2 (supporting
greater than 69% BEV penetration in 2032).
\60\ Toyota Motor North America, EPA-HQ-OAR-2022-0829-0620 at 1
(plan to reduce average CO2 emissions for all new
vehicles worldwide by 33% by 2030 and by 50% by 2035, as compared to
2019).
---------------------------------------------------------------------------
In the second half of 2023, some automakers announced changes to
previously announced investment plans and made statements suggesting
increased attention to PHEVs or HEVs in their future product plans. For
example, in mid-2023, Ford paused construction (and then restarted
construction in
[[Page 27849]]
November 2023, as discussed below) of their recently announced battery
plant in Marshall, Michigan,\61\ and in November 2023 announced a
reduction in the size of the plant from 50 GWh to 20 GWh.\62\ In 2024,
Ford also signaled a growing interest in producing HEVs and a shift
from large BEV SUVs toward smaller BEVs.63 64 65 66
Similarly, General Motors indicated increased attention toward
producing PHEVs in addition to BEVs,67 68 and in an earnings
call Mercedes suggested that it would reach 50 percent ``xEVs'' in
``the second half of the decade.'' 69 70 Some industry
analysts have commented on the possibility that these developments
indicated a drop in PEV demand or a weakening of manufacturer interest
in investing in PEV technology.71 72 73 74
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\61\ Reuters, ``Ford pauses work on $3.5 bln battery plant in
Michigan,'' September 25, 2023. Accessed on December 15, 2023 at
https://www.reuters.com/business/autos-transportation/ford-pauses-work-35-billion-battery-plant-michigan-2023-09-25/.
\62\ New York Times, ``Ford Resumes Work on E.V. Battery Plant
in Michigan, at Reduced Scale,'' November 21, 2023. Accessed on
December 15, 2023 at https://www.nytimes.com/2023/11/21/business/ford-ev-battery-plant-michigan.html.
\63\ CNBC, ``Ford is reassessing its EV plans, including
vertical battery integration,'' February 6, 2024. Accessed on
February 7, 2024 at https://www.cnbc.com/2024/02/06/ford-reassessing-ev-plans-including-vertical-battery-integration.html.
\64\ Reuters, ``Ford slows EVs, sends a truckload of cash to
investors,'' February 7, 2024. Accessed on February 14, 2024 at
https://www.reuters.com/business/autos-transportation/ford-offer-regular-supplemental-dividend-2024-02-06/.
\65\ Green Car Reports, ``Ford CEO: Hybrids will play
`increasingly important role' alongside EVs,'' February 7, 2024.
Accessed on February 9, 2024 at https://www.greencarreports.com/news/1142233_ford-ceo-hybrids-alongside-evs.
\66\ Green Car Reports, ``Ford seeks smaller, lower-cost EVs to
rival $25,000 Tesla, China,'' February 7, 2024. Accessed on February
9, 2024 at https://www.greencarreports.com/news/1142232_ford-smaller-lower-cost-ev-platform-tesla-china.
\67\ Forbes, ``GM Does a U-Turn: Plug-In Hybrids are Coming
Back,'' January 31, 2024. Accessed on February 14, 2024 at https://www.forbes.com/sites/michaelharley/2024/01/31/gm-does-a-u-turn-plug-in-hybrids-are-coming-back/.
\68\ Detroit Free Press, ``General Motors to bring back hybrid
vehicles in North America, stay focused on EVs,'' January 30, 2024.
Accessed on February 14, 2024 at https://www.freep.com/story/money/cars/general-motors/2024/01/30/gm-hybrid-vehicles-north-america/72406811007/.
\69\ Reuters, ``Mercedes-Benz delays electrification goal, beefs
up combustion engine line-up,'' February 22, 2024. Accessed on March
6, 2024 at https://www.reuters.com/business/autos-transportation/mercedes-benz-hits-cars-returns-forecast-inflation-supply-chain-costs-bite-2024-02-22/.
\70\ Mercedes-Benz Group, ``Outlook,'' February 22, 2024.
Accessed on March 6, 2024 at https://group.mercedes-benz.com/investors/share/outlook/.
\71\ Reuters, ``US EV market struggles with price cuts and
rising inventories,'' July 11, 2023. Accessed on December 15, 2023
at https://www.reuters.com/business/autos-transportation/slow-selling-evs-are-auto-industrys-new-headache-2023-07-11/.
\72\ Marketplace, ``Electric vehicles face reality check as
automakers dial back production targets,'' November 2, 2023.
Accessed on December 15, 2023 at https://www.marketplace.org/2023/11/02/ev-demand-production-reality-check/.
\73\ The Wall Street Journal, ``EV Makers Turn to Discounts to
Combat Waning Demand,'' November 7, 2023. Accessed on December 15,
2023 at https://www.wsj.com/business/autos/ev-makers-turn-to-discounts-to-combat-waning-demand-3aa77535.
\74\ The Wall Street Journal, ``The Six Months That Short-
Circuited the Electric-Vehicle Revolution,'' February 14, 2024.
Accessed on February 15, 2024 at https://www.wsj.com/business/autos/ev-electric-vehicle-slowdown-ford-gm-tesla-b20a748e.
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EPA acknowledges these recent announcements regarding investment
plans. We have carefully considered these announcements, in light of
the larger universe of information about manufacturer plans including
comments submitted by the manufacturers on this rulemaking and our
ongoing engagement with the manufacturers. Overall, EPA finds that
these recent announcements do not reflect a significant change in
manufacturer intentions regarding PEVs generally or specifically
through the 2027-2032 timeframe of this rule. We also take into
consideration that sales of PEVs have increased dramatically in recent
years so periods where demand and supply of vehicles are temporarily
misaligned (either creating shortages or an over-supply of vehicles) is
not unexpected. Ford has since restarted construction of its plant;
\75\ at about the same as time Ford announced the delay, Toyota
announced an $8 billion increase in investment in its North Carolina
plant.\76\ Nor are U.S. PEV sales data for 2023 (presented previously
in Figure 1) consistent with a reduction in PEV demand,77 78
with sales up by 50 percent from 2022 to 2023, consistent with and
slightly larger than the 46 percent increase from 2021 to 2022 and in
line with the average year-over-year increase of 52 percent from 2012
to 2023.\79\ Both Ford and GM have characterized their recent moves as
complementary to their continued plans to electrify an increasing
portion of their product lines. For example, GM stated that it is
``deploying plug-in technology in strategic segments,'' and that ``for
calendar year 2024, EV is our focus,'' \80\ while Ford stated that its
next generation of BEVs ``will be profitable and return their cost of
capital.'' \81\ It is also difficult to draw conclusions about
industry-wide PEV demand or investment from only these two examples.
Specific factors have been active during the same period, such as the
2023 United Auto Workers strike,\82\ and an increase in inventories for
light-duty vehicles of all types,\83\ which may be related to economic
conditions such as high interest rates and higher average transaction
prices.84 85 86 Economic conditions across the industry have
also been cited in relation to manufacturers' recent investment
decisions.87 88 89 For
[[Page 27850]]
example, Mercedes-Benz cited slower economic growth, 48-volt component
shortages, European policy uncertainty, lower than expected demand in
China, and trade tensions with China as all affecting its earnings
outlook.90 91 Meanwhile, some other manufacturers have seen
strong BEV demand and have reaffirmed their plans, for example, Hyundai
and Kia have indicated strong demand and are maintaining or
accelerating investment plans,92 93 and Stellantis reported
making a profit on EVs globally and stated that it is ``keeping full
speed on electrification.'' 94 95 At the same time,
automakers continue to compete in a global market where emission
reduction targets and PEV demand continue to spur investments in these
technologies. Given the unprecedented rate and size of recent
investment activity in PEV technology, adjustments to previously
announced plans would ordinarily be expected to occur, and to date have
included both reductions and increases in investment amounts and
pacing. Our assessment of the feasibility of the standards is based on
our assessment of the full record as discussed in sections III and IV
of this preamble and in the RIA, and EPA does not consider such
adjustments to be indicative of any broad trend that would change our
assessment of PEV feasibility as an emission control technology.
Further, the rulemaking establishes performance-based standards, which
manufacturers can meet using a variety of technologies, including ICE
vehicles across a range of electrification, and the sensitivity
analyses confirm that the standards are feasible and appropriate under
a range of future circumstances. At the same time, the final standards
incorporate a reduced rate of stringency increase in the early years as
compared to the proposed standards, providing additional lead time
which supports the kinds of product planning changes described in these
recent announcements.\96\
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\75\ CBS News, ``Ford resuming construction of Michigan EV
battery plant delayed by strike, scaling back jobs,'' November 21,
2023. Accessed on December 15, 2023 at https://www.cbsnews.com/detroit/news/ford-resuming-construction-of-michigan-ev-battery-plant-delayed-by-strike-scaling-back-jobs/.
\76\ Toyota Newsroom, ``Toyota Supercharges North Carolina
Battery Plant with New $8 Billion Investment,'' Press Release,
October 31, 2023. Available at https://pressroom.toyota.com/toyota-supercharges-north-carolina-battery-plant-with-new-8-billion-investment/.
\77\ Fortune, ``EV sales expected to hit new U.S. record in
2023--but Germany, China and Norway still lead the way,'' November
23, 2023. Accessed on December 11, 2023 at https://fortune.com/2023/11/23/us-electric-vehicle-sales-2023-record/.
\78\ BloombergNEF, ``Four Takeaways on the Future of the Global
EV Market,'' June 8, 2023. Accessed on December 8, 2023 at https://www.bloomberg.com/news/articles/2023-06-08/global-ev-sales-have-soared-as-overall-new-car-sales-sag.
\79\ Derived from the yearly sales depicted in Figure 1.
\80\ Detroit Free Press, ``General Motors to bring back hybrid
vehicles in North America, stay focused on EVs,'' January 30, 2024.
Accessed on February 14, 2024 at https://www.freep.com/story/money/cars/general-motors/2024/01/30/gm-hybrid-vehicles-north-america/72406811007/.
\81\ Reuters, ``Ford slows EVs, sends a truckload of cash to
investors,'' February 7, 2024. Accessed on February 14, 2024 at
https://www.reuters.com/business/autos-transportation/ford-offer-regular-supplemental-dividend-2024-02-06//.
\82\ CBS News, ``Ford resuming construction of Michigan EV
battery plant delayed by strike, scaling back jobs,'' November 21,
2023. Accessed on December 15, 2023 at https://www.cbsnews.com/detroit/news/ford-resuming-construction-of-michigan-ev-battery-plant-delayed-by-strike-scaling-back-jobs/.
\83\ National Automobile Dealers Association, ``NADA Market
Beat,'' November 2023. Accessed on December 11, 2023 at https://www.nada.org/nada/nada-headlines/nada-market-beat-new-light-vehicle-inventory-reaches-20-month-high.
\84\ Reuters, ``More alarm bells sound on slowing demand for
electric vehicles,'' October 25, 2023. Accessed on December 15, 2023
at https://www.reuters.com/business/autos-transportation/more-alarm-bells-sound-slowing-demand-electric-vehicles-2023-10-25/.
\85\ CNBC, ``Sparse inventory drives prices for new, used
vehicles higher,'' October 17, 2023. Accessed on December 15, 2023
at https://www.cnbc.com/2023/10/17/sparse-inventory-drives-prices-for-new-used-cars-higher.html.
\86\ San Diego Union-Tribune, ``Has enthusiasm for electric cars
waned?,'' October 27, 2023. Accessed on December 15, 2023 at https://www.sandiegouniontribune.com/business/story/2023-10-27/has-enthusiasm-for-electric-cars-waned.
\87\ Reuters, ``Hyundai, Kia see strong demand for EVs, despite
rivals' concerns,'' November 17, 2023. Accessed on February 14, 2024
at https://www.reuters.com/business/autos-transportation/hyundai-kia-see-strong-demand-evs-despite-rivals-concerns-2023-11-17/.
\88\ Reuters, ``Mexico gives Tesla land-use permits for
gigafactory, says state government,'' December 12, 2023. Accessed on
February 14, 2024 at https://www.reuters.com/business/autos-transportation/mexico-gives-tesla-land-use-permits-gigafactory-says-state-government-2023-12-13/.
\89\ Mexico Now, ``Taxes and global economy stop Tesla plant in
Nuevo Leon,'' October 23, 2023. Accessed on February 14, 2024 at
https://mexico-now.com/taxes-and-global-economy-stop-tesla-plant-in-nuevo-leon/.
\90\ Mercedes-Benz Group, ``Outlook,'' February 22, 2024.
Accessed on March 6, 2024 at https://group.mercedes-benz.com/investors/share/outlook/.
\91\ Seeking Alpha, ``Mercedes-Benz Group AG (MBGAF) Q4 2023
Earnings Call Transcript,'' February 22,2024. Accessed on March 6,
2024 at https://seekingalpha.com/article/4672324-mercedes-benz-group-ag-mbgaf-q4-2023-earnings-call-transcript.
\92\ Reuters, ``Hyundai sticks to EV rollout plans, sees solid
growth this year,'' October 26, 2023. Accessed on February 14, 2024
at https://www.reuters.com/business/autos-transportation/hyundai-motors-q3-net-profit-rises-151-beats-forecasts-2023-10-26/.
\93\ Reuters, ``Hyundai, Kia see strong demand for EVs, despite
rivals' concerns,'' November 17, 2023. Accessed on February 14, 2024
at https://www.reuters.com/business/autos-transportation/hyundai-kia-see-strong-demand-evs-despite-rivals-concerns-2023-11-17/. We
note that Hyundai submitted a late comment on November 1, 2023
reiterating its support for a mechanism to potentially revise the
stringency of the standards in future years in light of developments
(EPA-HQ-OAR-2022-0829-5102) but neither Hyundai nor any other
automaker submitted additional comments after the close of the
comment period indicating they were adjusting their plans for future
PEV products and sales.
\94\ CNN, ``A traditional automaker just turned a profit on
EVs,'' February 15, 2024. Accessed on February 15, 2024 at https://www.cnn.com/2024/02/15/business/stellantis-earnings-electric-vehicles/index.html.
\95\ The Wall Street Journal, ``Chrysler-Parent Stellantis
Staying the Course on EVs, Despite Slowdown,'' February 15, 2024.
Accessed on February 16, 2024 at https://www.wsj.com/livecoverage/stock-market-today-dow-jones-02-15-2024/card/chrysler-parent-stellantis-staying-the-course-on-evs-despite-slowdown-pCHVXXe6Igo4do3pBFoQ.
\96\ Of course, as with any rulemaking, the Administrator has
the discretion to propose modifications to the program through the
public notice and comment process, in the case that modifications
are found to be appropriate in the future to address any constraints
that might have developed.
---------------------------------------------------------------------------
Electrification plans are not limited to light-duty vehicles.
Electrification of MDVs is also increasing rapidly, primarily within
the area of last-mile delivery. MDV delivery vans using dedicated
battery-electric vehicle (BEV) architectures are beginning to enter the
U.S. market, with the first mass-produced models having become
available for MY 2023 and additional production volume and models
announced for MY 2024. Initial dedicated BEV van chassis have been
predominantly targeted towards parcel delivery and include the GM
BrightDrop Zevo 400 and Zevo 600; and the Rivian EDV 500 and EDV
700.97 98
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\97\ https://www.gobrightdrop.com/.
\98\ https://rivian.com/fleet.
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Numerous commitments to purchase all-electric medium-duty delivery
vans have also been announced by large fleet owners including
FedEx,\99\ Amazon,\100\ and Walmart,\101\ in partnerships with various
OEMs. For example, Amazon has deployed thousands of electric delivery
vans in over 100 cities, with the goal of 100,000 vans by 2030. Many
other fleet electrification commitments that include large numbers of
medium-duty and heavier vehicles have been announced by large
corporations in many sectors of the economy, including not only
retailers like Amazon and Walmart but also consumer product
manufacturers with large delivery fleets (e.g., IKEA, Unilever), large
delivery firms (e.g., DHL, FedEx, USPS), and numerous firms in many
other sectors including power and utilities, biotech, public
transportation, and municipal fleets across the country.\102\ As
another example, Daimler Trucks North America announced in 2021 that it
expected 60 percent of its sales in 2030 and 100 percent of its sales
by 2039 would be zero-emission.\103\
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\99\ BrightDrop, ``BrightDrop Accelerates EV Production with
First 150 Electric Delivery Vans Integrated into FedEx Fleet,''
Press Release, June 21, 2022.
\100\ Amazon Corporation, ``Amazon's Custom Electric Delivery
Vehicles from Rivian Start Rolling Out Across the U.S.,'' Press
Release, July 21, 2022.
\101\ Walmart, ``Walmart To Purchase 4,500 Canoo Electric
Delivery Vehicles To Be Used for Last Mile Deliveries in Support of
Its Growing eCommerce Business,'' Press Release, July 12, 2022.
\102\ Environmental Defense Fund and ERM, ``Electric Vehicle
Market Update: Manufacturer Commitments and Public Policy
Initiatives Supporting Electric Mobility in the U.S. and
Worldwide,'' September 2022.
\103\ Carey, N., ``Daimler Truck 'all in' on green energy as it
targets costs,'' May 20, 2021.
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Investments in PEV charging infrastructure have likewise grown
rapidly in recent years and are expected to continue to climb.
According to BloombergNEF, total cumulative global investment in PEV
charging reached almost $55 billion in 2022 and was estimated to reach
nearly $93 billion in 2023.\104\ U.S. infrastructure spending has also
grown significantly over the past several years with estimated public
charging investments of $2.7 billion in 2023 alone.\105\
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\104\ BloombergNEF, ``Zero-Emission Vehicles Factbook, A
BloombergNEF special report prepared for COP28,'' December 2023, at
https://assets.bbhub.io/professional/sites/24/2023-COP28-ZEV-Factbook.pdf.
\105\ BloombergNEF, ``Zero-Emission Vehicles Factbook, A
BloombergNEF special report prepared for COP28,'' December 2023, at
https://assets.bbhub.io/professional/sites/24/2023-COP28-ZEV-Factbook.pdf.
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As described in the next section, the U.S. government is making
large investments in infrastructure through the Bipartisan
Infrastructure Law \106\ and the Inflation Reduction Act.\107\ However,
we expect that private investments will also play a critical role in
meeting future infrastructure needs. Private charging companies have
already attracted billions globally in venture capital and mergers and
acquisitions indicating strong interest in the future of the charging
industry.\108\ And Bain projects that by 2030, the U.S. market for
electric vehicle charging will be ``large and profitable'' with both
revenue and profits estimated to grow
[[Page 27851]]
by a factor of twenty relative to 2021.\109\ The White House estimates
over $25 billion in commitments to expand the U.S. charging network has
been announced as of January 2024.\110\ This includes more than $10
billion in private sector investments from automakers, charging
companies, and retailers among others. See section IV.C.4 of this
preamble and Chapter 5 of the Regulatory Impact Analysis (RIA) \111\
for a discussion of public and private infrastructure investments.
---------------------------------------------------------------------------
\106\ https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf.
\107\ https://www.congress.gov/117/plaws/publ169/PLAW-117publ169.pdf.
\108\ Hampleton, ``Autotech & Mobility M&A market report
1H2023''. Accessed March 4, 2023, at https://www.hampletonpartners.com/fileadmin/user_upload/Report_PDFs/Hampleton-Partners-Autotech-Mobility-Report-1H2023-FINAL.pdf.
\109\ Zayer, E. et al., ``EV Charging Shifts into High Gear,''
Bain & Company, June 20, 2022. Accessed March 4, 2023, at https://www.bain.com/insights/electric-vehicle-charging-shifts-into-high-gear/.
\110\ The White House, ``FACT SHEET: Biden-Harris Administration
Announces New Actions to Cut Electric Vehicle Costs for Americans
and Continue Building Out a Convenient, Reliable, Made-in-America EV
Charging Network'', January 19, 2024. Accessed at https://www.whitehouse.gov/briefing-room/statements-releases/2024/01/19/fact-sheet-biden-harris-administration-announces-new-actions-to-cut-electric-vehicle-costs-for-americans-and-continue-building-out-a-convenient-reliable-made-in-america-ev-charging-network/.
\111\ Multi-Pollutant Emissions Standards for Model Years 2027
and Later Light-Duty and Medium-Duty Vehicles--Regulatory Impact
Analysis; EPA-420-R-24-004.
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Taken together, these developments indicate that proven
technologies such as BEVs and PHEVs are already poised to become a
rapidly growing segment of the U.S. fleet, as manufacturers continue to
invest in these technologies and integrate them into their product
plans, and infrastructure continues to be developed. Accordingly, EPA
considers these technologies to be available and feasible for
controlling motor vehicle emissions, and expects that these
technologies will likely play a significant role in meeting the
standards for both criteria pollutants and GHGs.
At the same time, EPA anticipates that a compliant fleet under the
final performance-based emissions standards will include a diverse
range of technologies. The advanced gasoline technologies that have
played a fundamental role in meeting previous standards will continue
to play an important role going forward 112 113 114 as they
remain key to reducing the criteria and GHG emissions of ICE, mild HEV,
strong HEV and PHEV powertrains. PHEVs also provide a technology option
that combines the benefits of both electric and ICE technology. EPA's
standards are performance-based and allow each manufacturer to choose
the array of technologies it wishes to use, without requiring any
particular technology for any particular vehicle category. The final
standards will also provide regulatory certainty to support the many
private automaker announcements and investments in PEVs that have been
outlined in the preceding paragraphs. In developing these standards,
EPA also considered many of the key issues associated with growth in
penetration of PEVs, including charging infrastructure, consumer
acceptance, critical minerals and mineral security, and others, as well
as the emissions from the wide range of ICE-based vehicle technologies
(e.g., non-hybrid ICE, mild HEVs, strong HEVs) that will continue to be
produced during the timeframe of these standards. We discuss each of
these issues in more detail in respective sections of the preamble and
RIA.
---------------------------------------------------------------------------
\112\ Wards Auto, ``GM Investing Billions in ICE Truck, SUV
Production,'' June 13, 2023. Accessed on January 5, 2024 at https://www.wardsauto.com/industry-news/gm-investing-billions-ice-truck-suv-production.
\113\ Forbes, ``GM To Put Nearly $1 Billion More Into Production
of Internal Combustion Engines,'' January 20, 2023. Accessed on
January 5, 2024 at https://www.forbes.com/sites/edgarsten/2023/01/20/internal-combustion-engine-production-wins-nearly-all-1-billion-of-new-gm-plant-investments/?sh=ec7346969383.
\114\ Wards Auto, ``BMW `Not Ready' to Give Up on ICE,'' August
3, 2023. Accessed on January 5, 2024 at https://www.wardsauto.com/industry-news/bmw-not-ready-give-ice.
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3. The Bipartisan Infrastructure Law and Inflation Reduction Act
A particular consideration with regard to the increased penetration
of zero-emission vehicle technology is Congress' passage of the
Bipartisan Infrastructure Law (BIL) 115 116 in 2021 and the
Inflation Reduction Act (IRA) \117\ in 2022. These measures represent
significant Congressional support for investment in expanding the
manufacture, sale, and use of zero-emission vehicles by addressing
elements critical to the advancement of clean transportation and clean
electricity generation in ways that will facilitate and accelerate the
development, production and adoption of zero-emission technology during
the time frame of this rule. Congressional passage of the BIL and IRA
represent pivotal milestones in the creation of a broad-based
infrastructure instrumental to the expansion of clean transportation,
including light- and medium-duty zero-emission vehicles, and we have
taken these developments into account in assessing the feasibility of
the standards.
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\115\ https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf.
\116\ Also known as the Infrastructure Investment and Jobs Act
(IIJA).
\117\ https://www.congress.gov/117/plaws/publ169/PLAW-117publ169.pdf.
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The BIL became law in November 2021 and includes a wide range of
programs and significant funding for infrastructure investments, many
of which are oriented toward reducing GHG emissions across the U.S.
transportation network, upgrading power generation infrastructure, and
making the transportation infrastructure resilient to climate impacts
such as extreme weather. Notably, in support of light-duty zero-
emissions transportation, the BIL included $7.5 billion in funding for
installation of public charging and other alternative fueling
infrastructure. This will have a major impact on feasibility of PEVs
across the U.S. by improving access to charging and other
infrastructure, and it will further support the Administration's goal
of deploying 500,000 PEV chargers by 2030. It also includes $5 billion
for electrification of school buses through the Clean School Bus
Program, providing for further reductions in emissions from the heavy-
duty sector.118 119 To help ensure that clean vehicles are
powered by clean energy, it also includes $65 billion to upgrade the
power infrastructure to facilitate increased use of renewables and
clean energy. Further, the BIL allocated an additional $10.5 billion to
DOE's Grid Deployment Office (GDO) and the Grid Resilience and
Innovation Partnerships program (GRIP) for investments to increase the
flexibility, efficiency and reliability of the electric power system,
which will further support PEV adoption.
---------------------------------------------------------------------------
\118\ https://www.epa.gov/cleanschoolbus. Accessed February 14,
2023.
\119\ U.S. EPA, ``EPA Clean School Bus Program Second Report to
Congress,'' EPA 420-R-23-002, February 2023.
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The IRA became law in August 2022, bringing significant new
momentum to clean vehicles (PEVs and fuel cell electric vehicles
(FCEVs)) through measures that reduce the cost to purchase and
manufacture them, incentivize the growth of manufacturing capacity and
onshore sourcing of critical minerals and battery components needed for
their manufacture, incentivize buildout of public charging
infrastructure for PEVs, and promote modernization of the electrical
grid that will power them. It includes significant consumer incentives
of up to $7,500 for new clean vehicles (Clean Vehicle Credit or
Internal Revenue Code (IRC) 30D, and Commercial Clean Vehicle Credit or
IRC 45W) and up to $4,000 for used vehicles (Used Clean Vehicle Credit
or IRC 25E). These credits will have a strong and immediate impact on
the upfront affordability of these vehicles for a wide range of
customers, including buyers at over 10,000 dealers that have registered
to offer the 30D or
[[Page 27852]]
25E credits at the point of sale,\120\ buyers of vehicles for
commercial and fleet use under 45W, and indirectly to lessees of
vehicles purchased for lease to consumers. Manufacturer production tax
incentives of $35 per kWh for U.S. production of battery cells, $10 per
kWh for U.S. production of modules, and 10 percent of production cost
for U.S.-made critical minerals and electrode active materials
(Production Tax Credit, IRC 45X), will significantly reduce the
manufacturing cost of these battery components, further reducing PEV
and FCEV cost for consumers. In addition, the IRA includes significant
tax credits for certain charging and hydrogen infrastructure equipment
(Alternative Fuel Vehicle Refueling Infrastructure Property Tax Credit,
IRC 30C), and sizeable incentives for investment in and production of
clean electricity.
---------------------------------------------------------------------------
\120\ U.S. Department of the Treasury, ``Remarks by Assistant
Secretary for Tax Policy Lily Batchelder on Phase Three of
Implementation of the Inflation Reduction Act's Clean Energy
Provisions,'' January 31, 2024. Accessed February 4, 2024 at https://home.treasury.gov/news/press-releases/jy2070.
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With respect to sourcing of critical minerals and battery
components, and building a secure supply chain for clean vehicles and
refueling infrastructure, the IRA also includes provisions that will
greatly reduce reliance on imports by strongly supporting the continued
development of a domestic and North American supply chain, as well as
securing sources among Free Trade Agreement (FTA) countries and other
trade partners and allies. Manufacturers who want their customers to
take advantage of the Clean Vehicle Credit (30D) must assemble the
vehicles in North America, must meet a gradually increasing value
requirement for sourcing of critical minerals from U.S. or free-trade
countries, and battery components from within North America, and cannot
utilize content acquired from foreign entities of concern (FEOCs).\121\
Manufacturer eligibility for the Production Tax Credit (45X) for cells
and modules is conditioned on their manufacture in the U.S., as is
eligibility for the 10 percent credit on the cost of producing critical
minerals and electrode active materials. Manufacturers are already
taking advantage of these opportunities to improve their sales and
reduce their production costs by securing eligible sources of critical
mineral content and siting new production facilities in the
U.S.122 123 124 125 126 127 128 129 130 Although 45W is not
subject to the sourcing requirements of 30D, the latter remains highly
influential in manufacturer siting decisions; for example, Hyundai has
increased the leasing of vehicles to consumers while also continuing
plans to site battery and vehicle manufacturing in the U.S.,\131\ and
the Korean battery industry is renegotiating ventures to comply with
FEOC restrictions that impact 30D.132 133 According to ANL's
most recent analysis of public announcements of cell manufacturing
plants in North America through January 2024, cell manufacturers in the
United States could supply about 10 million new light-duty electric
vehicles each year by 2030, assuming an average pack size of 80 to 100
kWh.\134\ There is a coordinated effort by Executive Branch agencies,
including the Department of Energy and the National Laboratories, to
provide guidance and resources and to administer funding to support
this collective effort to further develop a robust supply chain for
clean vehicles and the infrastructure that will support
them.135 136 137 138 139 140 Section IV.C.7 of this preamble
and Chapters 3.1.3 and 3.1.4 of the RIA discuss these provisions and
measures in more detail.
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\121\ Foreign entities of concern include entities (individuals
and businesses) ``owned by, controlled by, or subject to
jurisdiction or direction of'' a ``covered nation'' (defined in 10
U.S. Code 2533(c)(d)(2) as the Democratic People's Republic of North
Korea, the People's Republic of China, the Russian Federation, and
the Islamic Republic of Iran).
\122\ Green Car Congress, ``Ford sources battery capacity and
raw materials for 600K EV annual run rate by late 2023, 2M by end of
2026; adding LFP,'' July 22, 2022.
\123\ Ford Motor Company, ``Ford Releases New Battery Capacity
Plan, Raw Materials Details to Scale EVs; On Track to Ramp to 600K
Run Rate by '23 and 2M+ by '26, Leveraging Global Relationships,''
Press Release, July 21, 2022.
\124\ Green Car Congress, ``GM signs major Li-ion supply chain
agreements: CAM with LG Chem and lithium hydroxide with Livent,''
July 26, 2022.
\125\ Grzelewski, J., ``GM says it has enough EV battery raw
materials to hit 2025 production target,'' The Detroit News, July
26, 2022.
\126\ Hall, K., ``GM announces new partnership for EV battery
supply,'' The Detroit News, April 12, 2022.
\127\ Hawkins, A., ``General Motors makes moves to source rare
earth metals for EV motors in North America,'' The Verge, December
9, 2021.
\128\ Piedmont Lithium, ``Piedmont Lithium Signs Sales Agreement
With Tesla,'' Press Release, September 28, 2020.
\129\ Subramanian, P., ``Why Honda's EV battery plant likely
wouldn't happen without new climate credits,'' Yahoo Finance, August
29, 2022.
\130\ LG Chem, ``LG Chem to Establish Largest Cathode Plant in
US for EV Batteries,'' Press Release, November 22, 2022.
\131\ Korea Economic Daily, ``Hyundai Motor to boost EV leasing
in US for tax credits from 2023,'' December 30, 2022. Accessed on
February 14, 2024 at https://www.kedglobal.com/electric-vehicles/newsView/ked202212300014.
\132\ Nikkei Asia, ``U.S. rules force South Korea's EV battery
makers to rethink China deals,'' December 8, 2023. Accessed on
February 14, 2024 at https://asia.nikkei.com/Business/Business-Spotlight/U.S.-rules-force-South-Korea-s-EV-battery-makers-to-rethink-China-deals.
\133\ Korea Economic Daily, ``US regulations push Korean battery
industry to cut reliance on China,'' December 12, 2023. Accessed on
February 14, 2024 at https://www.kedglobal.com/batteries/newsView/ked202312120008.
\134\ Argonne National Laboratory, ``Light Duty Electric Drive
Vehicles Monthly Sales Updates'', January 2024. Accessed February 2,
2024 at https://www.anl.gov/esia/light-duty-electric-drive-vehicles-monthly-sales-updates.
\135\ Executive Order 14017, Securing America's Supply Chains,
February 24, 2021. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/02/24/executive-order-on-americas-supply-chains/.
\136\ The White House, ``FACT SHEET: Biden-Harris Administration
Driving U.S. Battery Manufacturing and Good-Paying Jobs,'' October
19, 2022. Available at: https://www.whitehouse.gov/briefing-room/statements-releases/2022/10/19/fact-sheet-biden-harris-administration-driving-u-s-battery-manufacturing-and-good-paying-jobs/.
\137\ Department of Energy, ``Biden Administration, DOE to
Invest $3 Billion to Strengthen U.S. Supply Chain for Advanced
Batteries for Vehicles and Energy Storage,'' February 11, 2022.
Available at: https://www.energy.gov/articles/biden-administration-doe-invest-3-billion-strengthen-us-supply-chain-advanced-batteries.
\138\ Department of Energy, ``Supply Chains Progress Report,''
August 2023. https://www.energy.gov/sites/default/files/2023-08/Supply%20Chain%20Progress%20Report%20-%20August%202023.pdf.
\139\ Argonne National Laboratory, ``Quantification of
Commercially Planned Battery Component Supply in North America
through 2035,'' ANL-24/14, March 2024. https://publications.anl.gov/anlpubs/2024/03/187735.pdf.
\140\ Argonne National Laboratory, ``Securing Critical Materials
for the U.S. Electric Vehicle Industry: A Landscape Assessment of
Domestic and International Supply Chains for Five Key EV Battery
Materials,'' ANL-24/06, February 2024. https://publications.anl.gov/anlpubs/2024/03/187907.pdf.
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Incentives provided by the IRA, along with manufacturers'
strategies to meet consumer demand, are expected to result in even
greater adoption of electrification technologies. Our No Action case
(i.e., without this rule) includes effects of the IRA. The third-party
estimates to which we compare our No Action case are all very recent
and include the IRA. Importantly, they do not include these standards,
but do differ in other assumptions such as state level policies and
consideration of manufacturer announced plans. We project PEV
penetration of 42 percent in 2030 in the No Action case, while mid-
range third-party projections we have reviewed range from 48 to 58
percent in 2030.141 142 143 144 145 146 147 We consider
[[Page 27853]]
our No Action case projections to be somewhat more conservative than
these third-party estimates, although generally consistent given the
differences in treatment of state-level policies and manufacturer
announced plans. Nevertheless, the very substantial rates of PEV
penetration under the No Action scenario underscore that a shift to
widespread use of electrification technologies is already well
underway, which contributes to the feasibility of further emissions
controls under these standards.
---------------------------------------------------------------------------
\141\ Cole, Cassandra, Michael Droste, Christopher Knittel,
Shanjun Li, and James H. Stock. 2023. ``Policies for Electrifying
the Light-Duty Fleet in the United States.'' AEA Papers and
Proceedings 113: 316-322. doi:https://doi.org/10.1257/pandp.20231063.
\142\ IEA. 2023. ``Global EV Outlook 2023: Catching up with
climate ambitions.'' International Energy Agency.
\143\ Forsythe, Connor R., Kenneth T. Gillingham, Jeremy J.
Michalek, and Kate S. Whitefoot. 2023. ``Technology advancement is
driving electric vehicle adoption.'' PNAS 120 (23). doi:https://doi.org/10.1073/pnas.2219396120.
\144\ Bloomberg NEF. 2023. ``Electric Vehicle Outlook 2023.''
\145\ U.S. Department of Energy, Office of Policy. 2023.
``Investing in American Energy: Significant Impacts of the Inflation
Reduction Act and Bipartisan Infrastructure Law on the U.S. Energy
Economy and Emissions Reductions.''
\146\ Slowik, Peter, Stephanie Searle, Hussein Basma, Josh
Miller, Yuanrong Zhou, Felipe Rodriguez, Claire Buysse, et al. 2023.
``Analyzing the Impact of the Inflation Reduction Act on Electric
Vehicle Uptake in the United States.'' International Council on
Clean Transportation and Energy Innovation Policy & Technology LLC.
\147\ Mid-range third-party estimates exclude more extreme
scenarios, which did not include all IRA incentives or were
described as ``High'' or ``Advanced'' by respective study authors.
See RIA Chapter 4.1.2.
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B. Summary of Light- and Medium-Duty Vehicle Emissions Programs
EPA is establishing new emissions standards for both light-duty and
medium-duty vehicles. The light-duty vehicle category includes
passenger cars and light trucks consistent with previous EPA criteria
pollutant and GHG rules. In this rule, heavy-duty Class 2b and 3
vehicles are referred to as ``medium-duty vehicles'' (MDVs) to
distinguish them from Class 4 and higher vehicles, which remain under
the heavy-duty program. EPA has not previously used the MDV
nomenclature, referring to these larger vehicles in prior rules as
light-heavy-duty vehicles,\148\ heavy-duty Class 2b and 3
vehicles,\149\ or heavy-duty pickups and vans.\150\ In the context of
this rule, the MDV category includes primarily large pickups and vans
with a gross vehicle weight rating (GVWR) of 8,501 to 14,000 pounds and
excludes vehicles used primarily as passenger vehicles (which are
called medium-duty passenger vehicles, or MDPVs, and which are covered
under the light-duty program).
---------------------------------------------------------------------------
\148\ 66 FR 5002.
\149\ 79 FR 23414.
\150\ 76 FR 57106.
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The program consists of several key elements: more stringent
emissions standards for GHGs, more stringent emissions standards for
criteria pollutants, changes to certain optional credit programs,
durability provisions for light-duty and medium-duty electrified
vehicle batteries, warranty provisions for both electrified vehicles
and diesel engine-equipped vehicles, and various improvements to
several elements of the existing light-duty and medium-duty programs.
For both light- and medium-duty vehicles, the levels of stringency
established by this rule continue the trend over the past 50 years (for
criteria pollutants) and over the past 14 years (for GHGs) of EPA
establishing numerically lower performance-based emissions standards in
recognition of both the continued threat to human health and welfare
from pollution and continued advancements in emissions control
technology that make it possible to achieve important emissions
reductions at a reasonable cost. EPA has also continued its
longstanding approach of allowing manufacturers flexibilities, such as
averaging, banking and trading, to reduce their cost of reducing
emissions while producing a diverse fleet meeting consumers' varied
preferences. In addition to advanced ICE technologies, including hybrid
electric vehicles, the feasibility assessment for this rule recognizes
the increasing availability of zero and near-zero tailpipe emissions
technologies, including PEVs, as cost-effective compliance
technologies. The technological feasibility of PEVs is further
supported by the economic incentives provided in the IRA and the auto
manufacturers' stated plans for significantly increasing the production
of zero and near-zero emission vehicles, including PEVs, independent of
this rule. This increased feasibility of PEVs, in addition to ICE and
advanced ICE technologies, is one of the factors EPA considered in
setting the stringency of the standards.
Through the public comment process, EPA heard from a wide range of
stakeholders and individuals who provided a diversity of views on a
broad range of issues, including stringency and pace of the standards;
availability and readiness of the industry to support the needs of
electrified vehicles (such as battery critical minerals, charging
infrastructure, electric grid, and consumer acceptance); and specific
elements of EPA's analysis (such as potential PEV adoption rates,
battery costs, BIL and IRA impacts, and other areas). As part of their
comments, many stakeholders, including NGOs, industry groups, and
others, provided detailed technical analyses for EPA to consider.
Many commenters strongly supported the proposal overall. Comments
from organizations representing environmental, public health, and
consumer groups, as well as numerous state and local governments and
associations, emphasized the importance of air pollution emissions
reductions to protect public health and welfare and combat climate
change, and noted that emissions reductions are especially critical in
communities overburdened by air pollution. Many of these commenters
recommended adopting the strongest standards possible for both GHGs and
criteria pollutants. Some of these commenters supported light-duty GHG
standards even more stringent than the proposal's most stringent
alternative. Similarly, automakers that produce only electric vehicles
(including Tesla, Rivian, and Lucid) and commenters representing the
electric vehicle industry also expressed strong support for the
proposal, with some of these stakeholders also advocating standards
more stringent than the proposal's most stringent alternative.
Automotive suppliers largely expressed strong support for performance-
based standards for GHG and criteria pollutants. Some suggested that
the GHG standards should phase-in more gradually, relying on increased
ICE technology in the near term. Suppliers also strongly supported the
proposed particulate matter (PM) emissions standard, attested to the
feasibility and readiness of gasoline particulate filter technology
expected to be used to meet the standard, and urged that the standard
be phased in even sooner than proposed. Several commenters provided
supportive data on development of the battery supply chain, critical
minerals, grid readiness, and charging infrastructure.
Comments from automakers that historically have produced primarily
ICE vehicles, such as comments by the Alliance for Automotive
Innovation (hereafter referred to as ``the Alliance'') as well as
comments by several individual automakers, generally expressed the auto
industry's strong commitment to the goals of the proposed rule and to
the transition to zero emission vehicles, as well as their support for
continued efforts to reduce emissions from ICE vehicles that will
continue to be produced during the transition to electrification. Many
auto companies described their significant R&D investments in clean
transportation and their corporate commitments to carbon neutrality and
transitioning their vehicle offerings to electrified vehicles. The
Alliance and many auto companies expressed their concern that the
proposed standards would be very challenging to meet. A common theme
was that the proposed GHG standards
[[Page 27854]]
``moved the goalposts'' with respect to the Administration's goal of 50
percent zero emission vehicle sales by 2030, which the automakers had
supported. These commenters noted that automakers' support for the
Administration's goal was premised on various developments important to
electrification, as well as governmental support for such developments,
that they believe are unlikely to be ready in time to meet the proposed
standards (for example, development of charging infrastructure,
critical minerals, consumer acceptance, and readiness of the electric
grid). Several auto manufacturers, including Ford, supported the MY
2032 end point for the proposed standards, but indicated that a more
gradual ramp rate in early years (such as the proposal's Alternative 3)
is needed to align with their anticipated scaling of the electric
vehicle (EV) supply chain and manufacturing base. Another common theme
from many auto manufacturers was that meeting the proposed criteria
pollutant standards in addition to GHG standards could divert the auto
manufacturers' investments away from electrification and toward ICE
technology.
The United Auto Workers (UAW) expressed support for the transition
to a cleaner auto industry and believes that regulations that push the
industry to adopt cleaner technologies are important to create a strong
domestic manufacturing base. Both UAW and the United Steelworkers
expressed concern regarding the pace of the proposed standards and its
possible effects on employment. These organizations believed that the
pace of technology transition under the proposed standards could lead
to job disruptions and lower-quality jobs, and generally suggested that
EPA pursue GHG standards that phase in more gradually over a longer
time period. The United Steelworkers expressed strong support for the
proposed PM standard.
In contrast to the strong support expressed by many state and local
governments described above, several other state and local governments
and a group of state Attorneys General expressed strong concerns with
the proposal. These comments included that they question EPA's
authority to set standards that would promote production of electric
vehicles, believe there are significant hurdles to widespread EV
adoption, and otherwise raise concerns with various aspects of EPA's
analysis.
Commenters representing the fuels industry (petroleum and/or
biofuels) expressed many concerns with the proposal, in particular the
levels of increased BEV penetrations projected. Other themes included
questions regarding EPA's Clean Air Act authority related to electric
vehicles and fleet averaging, concerns about dependence on imports of
critical minerals, concerns about grid reliability, infrastructure
needs, and safety. Many of the fuel industry commenters recommended
that EPA adopt a life cycle analysis approach to setting standards and
give greater consideration to the role of low carbon fuels.
Utility organizations generally indicated that the proposal sends
appropriate signals to support continued infrastructure buildout.
Investor-owned utilities believe they can accommodate localized power
needs at the pace of customer demand, provided customer engagement and
enabling policies are in place. Not-for-profit electric cooperatives
serving rural areas and underserved communities highlighted the
substantial grid upgrade investments needed to support increased
transportation electrification and urged EPA to account for these
costs.
EPA has thoroughly considered the public comments, including the
data and information submitted by commenters, as well as our updated
analysis based on this public record and the best available
information. This preamble, together with the accompanying Response to
Comments (RTC) document, responds to the comments we received on the
proposed rule. This final rule reflects the input we received through
the public comment process and is also supported by updated analyses
for which EPA considered the most recent and best available technical
and scientific data.
The following sections summarize at a high level each of the
standards and program provisions finalized in this rule. Section III of
this preamble includes a more detailed discussion of each of these
elements and how we considered public comments and updated information
in determining the final standards and program provisions.
1. GHG Emissions Standards
EPA is establishing GHG standards for both light-duty vehicles and
medium-duty vehicles for MYs 2027 through 2032 that are more stringent
than the prior standards applicable under the 2021 rule. For light-duty
vehicles, EPA is finalizing standards that increase in stringency each
year over a six-year period, from MYs 2027-2032. The standards are
projected to result in an industry-wide average target for the light-
duty fleet of 85 grams/mile (g/mile) of CO2 in MY 2032,
representing a nearly 50 percent reduction in projected fleet average
GHG emissions target levels from the existing MY 2026 standards. Table
1 presents a summary of the projected industry average targets for the
light-duty GHG standards for MY 2027-2032 for cars, trucks, and the
overall light-duty fleet.
Table 1--Projected Targets for Final Light-Duty Vehicle GHG Standards, by Regulatory Class
[CO2 grams/mile] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
2026
(reference) 2027 2028 2029 2030 2031 2032
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cars.................................... 131 139 125 112 99 86 73
Trucks.................................. 184 184 165 146 128 109 90
Total Fleet............................. 168 170 153 136 119 102 85
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ This table does not reflect changes in credit flexibilities such as the phase-out of available off-cycle and A/C credits. Adjusted targets are shown
in section III.C.2.iv.b of the preamble.
In the NPRM, EPA requested comment on the proposed light-duty GHG
standards as well as three alternatives: a more stringent alternative
(Alternative 1), a less stringent alternative (Alternative 2), and an
alternative that landed at the same stringency as the proposal in MY
2032 but provided a linear ramp rate from MY 2027 to 2032 (Alternative
3). Alternative 3's linear ramp rate had less stringent light-duty GHG
standards than the proposed standards for MYs 2027-2031.
As discussed in this section above, in public comments, various
stakeholders had opposing views on the light-duty GHG standards
stringency alternatives.
[[Page 27855]]
Many environmental and public health NGOs, states, consumer groups,
BEV-only manufacturers, and PEV industry groups supported the strongest
possible standards, with many supporting standards even more stringent
than Alternative 1. The major automakers, in contrast, expressed
concern that the proposed standards were too ambitious, that EPA's
technical analysis was overly optimistic, and that the levels of
battery electric vehicles (BEVs) projected under the proposed standards
would be challenging to reach, especially given uncertainties in the
battery supply chain, market demand, and infrastructure buildout. Labor
groups urged a slower transition to PEVs to mitigate potential adverse
impacts on jobs. A few automakers, including Ford, supported the 2032
end point of the proposal, but believed that a slower ramp rate, like
Alternative 3, was necessary in the early years to allow for the scale
up of PEV supply chains and manufacturing. These companies recommended
that in addition to Alternative 3, EPA should slow the phase-down of
several credit provisions, such as the off-cycle credits and air
conditioning leakage credits, which would be additional ways to address
lead time in the early years.
Based on our consideration of the public comments and our updated
technical analysis, EPA is finalizing light-duty GHG standards that
land at the same stringency level as proposed in MY 2032 but have a
relatively more linear ramp rate of standards stringency, one that is
more gradual in the early years from MYs 2027-2031. Specifically, the
final standards are the proposal's Alternative 3 footprint
CO2 standards curves. In addition, in response to auto
industry and labor group concerns about lead time, particularly for MYs
2027-2029, EPA is finalizing an extended phase-down for two optional
credit flexibilities: off-cycle credits and air conditioning leakage
credits. The extension of these two flexibility provisions will help to
address lead time issues in the early years of the program, by
providing additional paths for automakers to earn GHG credits that
contribute to compliance with the footprint-based CO2
standards. EPA also is delaying the phase-in of the revised PHEV
utility factor from MY 2027 until MY 2031, to provide additional
stability for the program, and to give manufacturers ample time to
transition to the new compliance calculation for PHEVs. EPA discusses
the light-duty GHG final standards in detail in section III.C.1 of this
preamble. The off-cycle credits, air conditioning credits, and PHEV
utility factor provisions are described in more detail in sections
III.C.4 through III.C.6 of this preamble.
For medium-duty vehicles, EPA is revising the existing standard for
MY 2027 given the increased feasibility of GHG emissions reducing
technologies in this sector in this time frame. EPA's standards for
MDVs increase in stringency year over year from MY 2027 through MY
2032. EPA is finalizing MDV GHG standards that land at the same
stringency as the proposal in MY 2032, but which have a more gradual
rate of stringency in the early years compared to the proposed
standards. These changes are responsive to comments from manufacturers
that recommended additional lead time in early years of the program.
When phased in, the MDV standards are projected to result in an average
fleet target of 274 grams/mile of CO2 by MY 2032, which
represents a reduction of 44 percent compared to the current MY 2026
standards. Table 2 presents a summary of the industry average targets
projected for the medium-duty GHG standards for MYs 2027-2032, for
vans, MDV pickups, and the MDV fleet overall.
Table 2--Projected Targets for Final Medium-Duty Vehicle GHG Standards, by Body Style
[CO2 grams/mile]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2026
(reference) 2027 2028 2029 2030 2031 2032
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vans.................................... 423 392 391 355 317 281 245
Pickups................................. 522 497 486 437 371 331 290
Total Fleet............................. 488 461 453 408 353 314 274
--------------------------------------------------------------------------------------------------------------------------------------------------------
EPA emphasizes that its standards are performance-based, and
manufacturers are not required to use particular technologies to meet
the standards. There are many potential pathways to compliance with the
final standards manufacturers may choose that involve different
mixtures of vehicle technologies. The technology pathway in our central
case \151\ supporting the feasibility of the final rule standards
includes a projected mix of improvements to internal combustion engine
performance, as well as increases in use of powertrain electrification
technologies (across the range from mild hybrid to BEV). In addition,
to further assess the feasibility of the standards under different
potential scenarios and to illustrate that there are many potential
pathways to compliance with the final standards that include a wide
range of potential technology mixes, we evaluated examples of other
potential compliance pathways. Table 3 presents three such pathways as
examples, including: Pathway A, which reflects a higher level of BEVs
and a lower level of HEVs and PHEVs (and is also our central case
analysis); Pathway B, which achieves compliance at a lower level of BEV
production and a moderate level of HEVs and PHEVs; and Pathway C, which
achieves compliance with no additional BEVs beyond those projected in
the No Action case, and with a higher level of HEVs and PHEVs.\152\ EPA
also
[[Page 27856]]
evaluated additional technology pathways as sensitivities which are
presented fully in sections IV.F and G of this preamble and Chapter 12
of the RIA. In addition, we evaluated an illustrative scenario that
does not rely on any new BEV introductions beyond those in the existing
fleet (see section IV.H.1 of the preamble).
---------------------------------------------------------------------------
\151\ EPA recognizes that the pathway labeled as the central
case, shown as Pathway A in Table 3, features greater BEV
penetration than Pathways B and C, which feature greater use of
various ICE technologies. This does not mean that EPA requires or
prefers any manufacturer to adopt the pathway in this case over the
other cases. EPA has conducted significant analysis for each of the
cases. However, we had to identify a single case to subject to the
full scope of our analysis given practical limitations on agency
resources, the complexity and wide-ranging nature of the analysis,
and the importance of promulgating this rule in a reasonable
timeframe so as to address the significant public health and welfare
impacts associated with motor vehicle emissions. Moreover, the
reason Pathway A is the central case is not due to any a priori
agency inclination to any specific technology, but rather because
our evaluation of updated real-world information, described in this
section and throughout the record, shows that the market is most
likely to comply with increasing GHG emission standards through
increased BEV production and that BEV technologies are the most
cost-effective way to do so.
\152\ Specifically, Pathway B reflects a scenario in which
manufacturers limit production of BEVs and consumer adoption of
PHEVs is more prevalent than for BEVs, and Pathway C reflects a
scenario in which manufacturers sell approximately the number of
BEVs that we project to be sold under the No Action scenario for our
central case projection and thus produce a greater share of PHEVs
and HEVs under the standards. In our discussion of sensitivities in
section IV.F.5, Pathways B and C are titled ``Lower BEV Production''
and ``No Additional BEVs Beyond the No Action Case,'' respectively.
See sections IV.F and G of this preamble for additional description
of these and other sensitivity scenarios.
\153\ In this table, the ICE category includes ICE vehicles
(base ICE and advanced ICE) and mild HEVs. The Hybrids (HEVs)
category represent strong hybrids only. See section III.A of this
preamble for further clarification of definitions.
Table 3--Projected New Vehicle Technology Penetrations for Final Light-Duty Vehicle GHG Standards for Varying Scenarios \153\
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
Pathway Technology (percent) (percent) (percent) (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pathway A--Higher BEV Pathway (central ICE.......................... 64 58 49 43 35 29
analysis case).
HEV.......................... 4 5 5 4 3 3
PHEV......................... 6 6 8 9 11 13
BEV.......................... 26 31 39 44 51 56
Pathway B--Moderate HEV and PHEV Pathway... ICE.......................... 62 56 49 39 28 21
HEV.......................... 4 4 3 6 7 6
PHEV......................... 10 12 15 18 24 29
BEV.......................... 24 29 33 37 41 43
Pathway C--Higher HEV and PHEV Pathway..... ICE.......................... 61 41 35 27 19 17
HEV.......................... 4 15 13 16 15 13
PHEV......................... 10 17 22 27 32 36
BEV.......................... 24 26 30 31 34 35
--------------------------------------------------------------------------------------------------------------------------------------------------------
EPA also sought comment on whether the standards should continue to
increase in stringency for future years, such as through MY 2035. While
a few commenters supported extending standards to MY 2035, many
commenters raised concerns with setting standards beyond 2032, pointing
to considerable uncertainty in projecting out ten or more years the
state of the BEV market and supporting conditions, such as charging
infrastructure buildout, given that the proposal had projected high
penetrations of BEVs. Other commenters suggested that if standards were
extended beyond MY 2032, that some form of mid-course review could be
necessary given the increased uncertainty. In consideration of these
comments and recognizing the increased uncertainty around emissions
technology developments and costs in the MYs 2033-2035 timeframe, EPA
is establishing standards in this action for MYs 2027 through 2032.
The light-duty CO2 standards continue to be footprint-
based, with separate standards curves for cars and light trucks. EPA
has updated its assessment of the footprint standards curves to reflect
anticipated changes in the vehicle technologies that we project will be
used to meet the standards. EPA also has assessed ways to ensure future
fleet mix changes do not inadvertently provide an incentive for
manufacturers to change the size or regulatory class of vehicles as a
compliance strategy. EPA is finalizing the proposed approach to flatten
the slope of each footprint standards curve and to narrow the numerical
stringency difference between the car and truck curves. The medium-duty
vehicle standards continue to be based on a work-factor metric designed
for commercially-oriented vehicles, which reflects a combination of
payload, towing and 4-wheel drive equipment.
EPA has reassessed certain credit programs available under the
existing GHG programs considering the agency's experience with the
program implementation to date, trends in technology development,
recent related statutory provisions, and other factors. EPA is revising
the air conditioning (A/C) credits program in two ways. First, for A/C
system efficiency credits under the light-duty GHG program, EPA is
limiting the eligibility for these voluntary credits for tailpipe
CO2 emissions control to ICE vehicles starting in MY 2027
(i.e., BEVs do not earn A/C efficiency credits because A/C efficiency
improvements do not result in any reduction in direct vehicle
emissions). Second, EPA is significantly reducing the magnitude of
available refrigerant-based A/C credits for light-duty vehicles
because, under a separate rulemaking, EPA has disallowed the use of
high Global Warming Potential (GWP) refrigerants under the Technology
Transitions Rule of October 2023, implemented under the American
Innovation and Manufacturing (AIM) Act of 2020. EPA is finalizing
provisions that phase-down the A/C refrigerant credits beginning in MY
2027. For MY 2031 and later, EPA is retaining small A/C refrigerant
credits designed to incentivize the continued application of A/C
refrigerant leakage mitigation countermeasures and the use of
refrigerants with GWP lower than that required under the Technology
Transitions Rule.
EPA is also sunsetting the off-cycle credits program for light-duty
vehicles as follows. First, EPA is phasing out menu-based credits by
reducing the menu credit cap year-over-year until it is fully phased
out in MY 2033. Specifically, EPA is setting a declining menu cap of
10/8/6/0 grams per mile (g/mile) for non-BEVs over MYs 2030-2033 such
that MY 2032 would be the last year manufacturers could generate
optional off-cycle credits. Second, EPA is eliminating the 5-cycle and
public process pathways for generating off-cycle credits starting in MY
2027. Third, EPA is limiting eligibility for off-cycle credits only to
vehicles with tailpipe emissions greater than zero (i.e., vehicles
equipped with IC engines) starting in MY 2027.
EPA is not reopening its averaging, banking, and trading
provisions, which continue to be a central part of its fleet average
standards compliance program, and which help manufacturers to employ a
wide range of compliance paths. EPA is also not reopening its existing
regulations which sunset in MY 2024 light-duty multiplier incentives
for BEVs, PHEVs and fuel cell vehicles. EPA is revising multiplier
incentives previously in place for MDVs for MY 2027 (established in the
heavy-duty Phase 2 rule) to end the multipliers one model year earlier,
such that MY 2026 is the last year that MDV multipliers will be in
effect. EPA is also finalizing regulatory text to ensure that
compliance with vehicle GHG emissions standards continues to be
assessed based on vehicle emissions. Under this final rule, BEVs and
the electric operation of PHEVs will continue to be counted as zero g/
mile in a
[[Page 27857]]
manufacturer's compliance calculation as has been the case since the
beginning of the light-duty GHG program in MY 2012.
Finally, EPA is establishing provisions for small volume
manufacturers (i.e., production of less than 5,000 vehicles per year)
to transition them from the prior approach of unique case-by-case
alternative standards to the primary program standards by MY 2032,
recognizing that this extended lead time is appropriate given the level
of the existing case-by-case alternative standards.
2. Criteria Pollutant Standards
EPA is finalizing more stringent emissions standards for criteria
pollutants \154\ for both light-duty and medium-duty vehicles that
begin in MY 2027. For light-duty vehicles, EPA is finalizing non-
methane organic gases (NMOG) plus nitrogen oxides (NOX)
standards \155\ that would phase-down to a fleet average level of 15
milligrams per mile (mg/mile) by MY 2032, representing a 50 percent
reduction from the existing 30 mg/mile standards for MY 2025
established in the Tier 3 rule in 2014. For medium-duty vehicles, EPA
is finalizing NMOG+NOX standards that require a fleet
average level of 75 mg/mile by MY 2031 representing a 58 percent to 70
percent reduction from the Tier 3 standards of 178 mg/mile for Class 2b
vehicles and 247 mg/mile for Class 3 vehicles. EPA is also finalizing
cold temperature (-7[deg]C) NMOG+NOX standards for all
light-duty vehicles and gasoline medium-duty vehicles to ensure robust
emissions control over a broad range of operating conditions.
---------------------------------------------------------------------------
\154\ In this notice, EPA is using ``criteria pollutants'' to
refer generally to criteria pollutants and their precursors,
including tailpipe NMOG, NOX, PM, and CO, as well as
evaporative and refueling HC.
\155\ Together referred to as NMOG+NOX.
---------------------------------------------------------------------------
For all light-duty vehicles and gasoline medium-duty vehicles, EPA
is finalizing a particulate matter (PM) standard of 0.5 mg/mile and a
requirement that the standard be met across three test cycles,
including a cold temperature (-7[deg]C) test. This standard revises the
existing PM standards established in the 2014 Tier 3 rule. Through the
application of readily available emissions control technology and
requiring compliance across the broad range of driving conditions
represented by the three test cycles, EPA projects the standards will
reduce tailpipe PM emissions from ICE vehicles by over 95 percent. In
addition to reducing PM emissions, the standards will reduce emissions
of mobile source air toxics.
EPA is finalizing in-use standards for medium-duty vehicles with
high gross combination weight rating (GCWR), changes to medium-duty
vehicle refueling emissions requirements for incomplete vehicles, and
several NMOG+NOX provisions aligned with the California Air
Resources Board (CARB) Advanced Clean Cars II program for light-duty
vehicles. EPA is finalizing changes to the carbon monoxide and
formaldehyde standards for light- and medium-duty vehicles, including
at -7[deg]C. EPA is not finalizing new limitations on the application
of commanded enrichment, but will revisit the issue as a follow-on to
this final rule. As with the GHG program, EPA is not reopening its
averaging, banking, and trading provisions for the criteria pollutant
program, excepting discrete provisions regarding how credits may be
transferred from the Tier 3 program.
3. Electrified Vehicle Battery Durability and Warranty Provisions
EPA is establishing new requirements related to battery durability
for PEVs, substantially as proposed. As described in more detail in
section III.G.2 of this preamble, the importance of battery durability
in the context of PEVs is well documented and has been cited by several
authorities in recent years. Because electrified vehicles are playing
an increasing role in automakers' compliance strategies, their
durability and reliability are important to achieving the full useful
life for which emissions reductions are projected under this program.
To this end we are establishing battery durability monitoring and
performance requirements for light-duty PEVs and battery durability
monitoring requirements for medium-duty PEVs. In addition, the agency
is including PEV batteries and associated electric powertrain
components under existing emission warranty provisions. Relatedly, EPA
is also finalizing the addition of two new grouping definitions for
PEVs (monitor family and battery durability family), new reporting
requirements, and a new calculation for the PHEV charge depletion test
to support the battery durability requirements. The background and
content of the battery durability and warranty provisions are outlined
in section III.G.2 of this preamble.
4. Light-Duty Vehicle Certification and Testing Program Improvements
EPA is finalizing various improvements to the current light-duty
program to clarify, simplify, streamline and update the certification
and testing provisions for manufacturers. These improvements include:
Clarification of the certification compliance and enforcement
requirements for CO2 exhaust emission standards to more
accurately reflect the intention of the 2010 light-duty vehicle GHG
rule; a revision to the In Use Confirmatory Program (IUCP) threshold
criteria; changes to the Part 2 application; updating the On Board
Diagnostics (OBD) program to the latest version of the CARB OBD
regulation and the removal of any conflicting or redundant text from
EPA's OBD requirements; streamlining the test procedures for Fuel
Economy Data Vehicles (FEDVs); streamlining the manufacturer conducted
confirmatory testing requirements; updating the emissions warranty for
diesel powered vehicles (including Class 2b and 3 vehicles) by
designating major emissions components subject to the 8year/80,000 mile
warranty period; making the definition of light-duty truck consistent
between the GHG and criteria pollutant programs; and miscellaneous
other amendments. EPA is also establishing, as proposed, that gasoline
particulate filters (GPFs) qualify as specified major emission control
components for purposes of applying warranty requirements. These
changes are described in more detail in sections III.G and III.H of
this preamble.
C. Summary of Emission Reductions, Costs, and Benefits
This section summarizes our analyses of the rule's estimated
emission impacts, costs, and monetized benefits, which are described in
more detail in sections V through VIII of this preamble. EPA notes
that, consistent with CAA section 202, in evaluating potential
standards we carefully weighed the statutory factors, including the
emissions impacts of the standards, and the feasibility of the
standards (including cost of compliance in light of available lead
time). We monetize benefits of the standards and evaluate costs in part
to enable a comparison of costs and benefits pursuant to E.O. 12866,
but we recognize there are benefits that we are currently unable to
fully quantify and monetize. EPA's practice has been to set standards
to achieve improved air quality consistent with CAA section 202, and
not to rely on cost-benefit calculations, with their uncertainties and
limitations, as identifying the appropriate standards. Nonetheless, our
conclusion that the monetized estimated benefits exceed the estimated
costs of the final program reinforces our view that the standards are
appropriate under section 202(a).
[[Page 27858]]
The standards will result in substantial net reductions of
emissions of GHGs and criteria air pollutants in 2055, considering the
impacts from light- and medium-duty vehicles, power plants (i.e.,
electric generating units (EGUs)), and refineries. Table 4 shows the
GHG emission impacts in 2055 while Table 5 shows the cumulative impacts
for the years 2027 through 2055. CO2 equivalent
(CO2e) values use 100-year global warming potential values
of 28 and 265 for CH4 and N2O, respectively.\156\
We show cumulative impacts for GHGs because elevated concentrations of
GHGs in the atmosphere are resulting in warming and other changes in
the Earth's climate. Table 6 shows the criteria pollutant emissions
impacts in 2055, which include the substantial reduction in criteria
pollutants from vehicle and refinery emissions, and the significant
reduction in net criteria pollutant impacts as a result of this final
rule. As shown in Table 7, we also predict reductions in air toxic
emissions from light- and medium-duty vehicles. We project that GHG and
criteria pollutant emissions from EGUs will increase as a result of the
increased demand for electricity associated with the final rule,
although those projected impacts decrease over time because of
projected increases in clean electricity in the future power generation
mix. We also project that GHG and criteria pollutant emissions from
refineries will decrease as a result of the lower demand for liquid
fuel associated with the GHG standards. Notably, even at their highest
levels, the EGU emissions increases are more than offset by the large
reductions in vehicle emissions as well as reductions from the refinery
sector. Sections VI and VII of this preamble and Chapter 8 of the RIA
provide more information on the projected emission reductions for the
standards.
---------------------------------------------------------------------------
\156\ IPCC, 2014: Climate Change 2014: Synthesis Report.
Contribution of Working Groups I, II and III to the Fifth Assessment
Report of the Intergovernmental Panel on Climate Change [Core
Writing Team, R.K. Pachauri and L.A. Meyer (eds.)], pp 87. Available
online: https://www.ipcc.ch/site/assets/uploads/2018/02/SYR_AR5_FINAL_full.pdf.
Table 4--Projected GHG Emission Impacts From the Final Rule in 2055
[Million metric tons] \a\
----------------------------------------------------------------------------------------------------------------
Pollutant Vehicle EGU Refinery Net impact Net impact (%)
----------------------------------------------------------------------------------------------------------------
CO2............................. -410 21 -16 -410 -37
CH4............................. -0.0079 0.00083 -0.00088 -0.0079 -34
N2O............................. -0.0071 0.0001 -0.00013 -0.0072 -38
CO2e............................ -410 21 -16 -410 -37
----------------------------------------------------------------------------------------------------------------
\a\ Percent changes reflect changes associated with the light- and medium-duty fleet, not total U.S.
inventories.
Table 5--Projected Cumulative GHG Emission Impacts From the Final Rule in 2027-2055
[Million metric tons] \a\
----------------------------------------------------------------------------------------------------------------
Pollutant Vehicle EGU Refinery Net impact Net impact (%)
----------------------------------------------------------------------------------------------------------------
CO2............................. -7,500 550 -280 -7,200 -21
CH4............................. -0.13 0.027 -0.016 -0.12 -15
N2O............................. -0.13 0.0034 -0.0023 -0.13 -23
CO2e............................ -7,500 550 -280 -7,200 -21
----------------------------------------------------------------------------------------------------------------
\a\ Percent changes reflect changes associated with the light- and medium-duty fleet, not total U.S.
inventories.
Table 6--Projected criteria air pollutant impacts from the final rule in 2055
[U.S. tons] \a\
----------------------------------------------------------------------------------------------------------------
Pollutant Vehicle EGU Refinery Net impact Net impact (%)
----------------------------------------------------------------------------------------------------------------
PM2.5........................... -8,500 1,500 -1,800 -8,700 -22
NOX............................. -35,000 5,500 -7,400 -36,000 -25
VOC............................. -140,000 930 -5,100 -150,000 -46
SOX............................. -1,900 1,300 -2,200 -2,800 -16
CO.............................. -1,700,000 0 -4,900 -1,700,000 -52
----------------------------------------------------------------------------------------------------------------
\a\ EPA did not have data available to calculate CO impacts from EGUs. Percent changes reflect changes
associated with the light- and medium-duty fleet, not total U.S. inventories.
Table 7--Projected vehicle air toxic impacts from the final rule in 2055
[U.S. tons] \a\
------------------------------------------------------------------------
Pollutant Vehicle Vehicle (%)
------------------------------------------------------------------------
Acetaldehyde............................ -740 -47
Benzene................................. -2,300 -51
Formaldehyde............................ -440 -47
Naphthalene............................. -90 -51
1,3-Butadiene........................... -290 -51
[[Page 27859]]
15 Polyaromatic Hydrocarbons............ -4 -78
------------------------------------------------------------------------
\a\ Percent changes reflect changes associated with the light- and
medium-duty fleet, not total U.S. inventories.
These GHG emission reductions will make an important contribution
to efforts to limit climate change and subsequently reduce the
probability of severe climate change related impacts including heat
waves, drought, sea level rise, extreme climate and weather events,
coastal flooding, and wildfires. People of color, low-income
populations and/or indigenous peoples may be especially vulnerable to
the impacts of climate change (see section VIII.J.2 of this preamble).
The decreases in vehicle emissions will reduce traffic-related
pollution in close proximity to roadways. As discussed in section
II.C.8 of this preamble, concentrations of many air pollutants are
elevated near high-traffic roadways, and populations who live, work, or
go to school near high-traffic roadways experience higher rates of
numerous adverse health effects, compared to populations far away from
major roads. An EPA study estimated that 72 million people live near
truck freight routes, which includes many large highways and other
routes where light- and medium-duty vehicles operate.\157\ Our
consideration of scientific literature indicates that people of color
and people with low income are disproportionately exposed to elevated
concentrations of many pollutants in close proximity to major roadways
(see section VIII.J.3.i of this preamble).
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\157\ U.S. EPA (2021). Estimation of Population Size and
Demographic Characteristics among People Living Near Truck Routes in
the Conterminous United States. Memorandum to the Docket.
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The changes in emissions of criteria and toxic pollutants from
vehicles, EGUs, and refineries will also impact ambient levels of
ozone, PM2.5, NO2, SO2, CO, and air
toxics over a larger geographic scale. As discussed in section VII.B of
this preamble, we expect that in 2055 the final rule will result in
widespread decreases in ozone, PM2.5, NO2, CO,
and some air toxics, even when accounting for the impacts of increased
electricity generation. We expect that in some localized areas,
increased electricity generation will increase ambient SO2,
PM2.5, ozone, or some air toxics. However, as the power
sector becomes cleaner over time, these impacts will decrease as a
result of the IRA as well as future policies that are not accounted for
in this analysis.
Climate benefits are monetized using estimates of the social cost
of greenhouse gases (SC-GHG), which in principle includes the value of
all climate change impacts (both negative and positive), however in
practice, data and modeling limitations naturally restrain the ability
of SC-GHG estimates to include all the important physical, ecological,
and economic impacts of climate change, such that the estimates are a
partial accounting of climate change impacts and will therefore, tend
to be underestimates of the marginal benefits of abatement. In our
proposal, EPA used interim Social Cost of GHGs (SC-GHG) values
developed for use in benefit-cost analyses until updated estimates of
the impacts of climate change could be developed based on the best
available science and economics. In response to recent advances in the
scientific literature on climate change and its economic impacts,
incorporating recommendations made by the National Academies of
Science, Engineering, and Medicine (National Academies, 2017), and to
address public comments on this topic, for this final rule we are using
updated SC-GHG values. EPA presented these updated values in a
sensitivity analysis in the December 2022 Oil and Gas Rule RIA which
underwent public comment on the methodology and use of these estimates
as well as external peer review. After consideration of public comment
and peer review, EPA issued a technical report in December 2023
updating the estimates of SC-GHG in light of recent information and
advances. This is discussed further in section VIII.E.1 of this
preamble and RIA Chapter 9.
EPA estimates that the total benefits of this action far exceed the
total costs with the annualized value of monetized net benefits to
society estimated at $99 billion through the year 2055, assuming a 2
percent discount rate, as shown in Table 8.\158\ The annualized value
of monetized emission benefits is $85 billion, with $72 billion of that
attributed to climate-related economic benefits from reducing emissions
of GHGs that contribute to climate change and the remainder attributed
to reduced emissions of criteria pollutants that contribute to ambient
concentrations of smaller particulate matter (PM2.5).
PM2.5 is associated with premature death and serious health
effects such as hospital admissions due to respiratory and
cardiovascular illnesses, nonfatal heart attacks, aggravated asthma,
and decreased lung function.
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\158\ All subsequent annualized costs and annualized benefits
cited in this executive summary refer to the values generated at a 2
percent discount rate.
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The annualized value of vehicle technology costs is estimated at
$40 billion. Notably, this rule will result in significant savings in
vehicle maintenance and repair for consumers, which we estimate at an
annualized value of $16 billion (note that these values are presented
as negative costs, or savings, in the table). EPA projects generally
lower maintenance and repair costs for electric vehicles and those
societal maintenance and repair savings grow significantly over time.
We also estimate various impacts associated with our assumption that
consumers choose to drive more due to the lower cost of driving under
the standards, called the rebound effect (as discussed further in
section VIII of this preamble and in Chapters 4, 8 and 9 of the RIA).
Increased traffic noise and congestion costs are two such effects due
to the rebound effect, which we estimate at an annualized value of $1.2
billion.
EPA also estimates impacts associated with fueling the vehicles
under our standards. The rule will provide significant savings to
society through reduced fuel expenditures with annualized pre-tax fuel
savings of $46 billion. Somewhat offsetting those fuel savings is the
expected cost of EV chargers, or electric vehicle supply equipment
(EVSE), of $9 billion.
This rule includes other benefits not associated with emission
reductions. Energy security benefits are estimated at an annualized
value of $2.1 billion. The drive value benefit, which is the value of
consumers' choice to drive more under the rebound effect, has an
estimated annualized value of $2.1 billion. The refueling time impact
includes two effects: time saved refueling for ICE vehicles with lower
[[Page 27860]]
fuel consumption under our standards, and mid-trip recharging events
for electric vehicles. Our past GHG rules have estimated that refueling
time would be reduced due to the lower fuel consumption of new
vehicles; hence, a benefit. However, in this analysis, we are
estimating that refueling time will increase somewhat overall for the
fleet due to our additional assumption for mid-trip recharging events
for electric vehicles. Therefore, the refueling time impact represents
a disbenefit (a negative benefit) as shown, with an annualized value at
negative $0.8 billion. As noted in section VIII of this preamble and in
RIA Chapter 4, we have updated our refueling time estimates but still
consider that they may be conservatively high for electric vehicles
considering the rapid changes taking place in electric vehicle charging
infrastructure, including those driven by the Bipartisan Infrastructure
Law and the Inflation Reduction Act.
Note that some costs are shown as negative values in Table 8. Those
entries represent savings but are included under the ``costs'' category
because, in past rules, categories such as repair and maintenance have
been viewed as costs of vehicle operation; as discussed above, under
this rule we project significant savings in repair and maintenance
costs for consumers. Where negative values are shown, we are estimating
that those costs are lower under the final standards than in the No
Action case.
Table 8--Monetized Costs, Benefits, and Net Benefits of the Final Program for Calendar Years (CYs) 2027 Through 2055
[Billions of 2022 dollars] a, b, c, d
--------------------------------------------------------------------------------------------------------------------------------------------------------
CY 2055 PV, 2% PV, 3% PV, 7% AV, 2% AV, 3% AV, 7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs................ $38 $870 $760 $450 $40 $39 $37
Insurance Costs......................... 1.9 33 28 15 1.5 1.4 1.2
Repair Costs............................ -7.1 -40 -32 -12 -1.8 -1.6 -0.99
Maintenance Costs....................... -35 -300 -250 -110 -14 -13 -9.3
Congestion Costs........................ 2.4 25 21 10 1.2 1.1 0.83
Noise Costs............................. 0.04 0.41 0.34 0.17 0.019 0.018 0.014
---------------------------------------------------------------------------------------------------------------
Sum of Costs........................ 0.59 590 530 350 27 28 29
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pre-tax Fuel Savings.................... 94 1,000 840 420 46 44 34
EVSE Port Costs......................... 8.6 190 160 96 9 8.8 7.9
---------------------------------------------------------------------------------------------------------------
Sum of Fuel Savings less EVSE Port 86 820 680 330 37 35 26
Costs..............................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Drive Value Benefits.................... 4.7 46 38 18 2.1 2 1.5
Refueling Time Benefits................. -1.7 -17 -15 -7.5 -0.8 -0.76 -0.61
Energy Security Benefits................ 4.1 47 39 20 2.1 2 1.6
---------------------------------------------------------------------------------------------------------------
Sum of Non-Emission Benefits........ 7 75 62 30 3.4 3.2 2.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Climate Benefits, 2% Near-term Ramsey... 150 1,600 1,600 1,600 72 72 72
PM2.5 Health Benefits................... 25 240 200 88 13 10 7.2
---------------------------------------------------------------------------------------------------------------
Sum of Emission Benefits............ 170 1,800 1,800 1,700 85 83 80
---------------------------------------------------------------------------------------------------------------
Net Benefits.................... 270 2,100 2,000 1,700 99 94 80
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Net benefits are emission benefits, non-emission benefits, and fuel savings (less EVSE port costs) minus the costs of the program. Values rounded to
two significant figures; totals may not sum due to rounding. Present and annualized values are based on the stream of annual calendar year costs and
benefits included in the analysis (2027--2055) and discounted back to year 2027. Climate benefits are based on reductions in GHG emissions and are
calculated using three different SC-GHG estimates that assume either a 1.5 percent, 2.0 percent, or 2.5 percent near-term Ramsey discount rate. See
EPA's Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific Advances (EPA, 2023). For presentational purposes in
this table, we use the climate benefits associated with the SC-GHG under the 2-percent near-term Ramsey discount rate. All other costs and benefits
are discounted using either a 2-percent, 3-percent, or 7-percent constant discount rate. For further discussion of the SC-GHGs and how EPA accounted
for these estimates, please refer to section VIII.E of this preamble and Chapter 6.2 of the RIA.
\b\ To calculate net benefits, we use the monetized suite of total avoided PM2.5-related health effects that includes avoided deaths based on the Pope
III et al., 2019 study, which is the larger of the two PM2.5 health benefits estimates presented in section VIII.F of this preamble.
\c\ The annual PM2.5 health benefits estimate presented in the CY 2055 column reflects the value of certain avoided health outcomes, such as avoided
deaths, that are expected to accrue over more than a single year discounted using a 3-percent discount rate.
\d\ We do not currently have year-over-year estimates of PM2.5 benefits that discount such annual health outcomes using a 2-percent discount rate. We
have therefore discounted the annual stream of health benefits that reflect a 3-percent discount rate lag adjustment using a 2-percent discount rate
to populate the PV, 2 percent and AV, 2 percent columns. The annual stream of PM2.5-related health benefits that reflect a 3-percent and 7-percent
discount rate lag adjustment were used to populate the PV/AV 3 percent and PV/AV 7 percent columns, respectively. See section VIII.F of this preamble
for more details on the annual stream of PM2.5-related benefits associated with this rule.
As described in section VII of this preamble and RIA Chapter 7, EPA
conducted an air quality modeling analysis of a light- and medium-duty
vehicle policy scenario in 2055. The results of that analysis found
that in 2055, consistent with the emission inventory results presented
in section VII of the preamble,\159\ the standards will result in
widespread decreases in criteria pollutant emissions that will lead to
substantial improvements in public health and welfare. We estimate that
in 2055, 1,000 to 2,000 PM2.5-related premature deaths will
be avoided as a result of the modeled policy scenario, depending on the
assumed long-term exposure study of PM2.5-related premature
mortality risk. We also estimate that the modeled policy scenario will
avoid 25 to 550 ozone-related premature deaths, depending on the
assumed study of ozone-related mortality risk. The monetized benefits
of the improvements in public health in 2055 related to the modeled
policy scenario (including reductions in both mortality and non-fatal
illnesses) are $16 billion to $36 billion assuming a 2 percent discount
rate (2022 dollars).
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\159\ Section VII of the preamble presents emission inventory
results from OMEGA, EPA's light- and medium-duty GHG compliance and
effects model. We discuss OMEGA in detail in the RIA, specifically
Chapters 2, 4, 8 and 12.
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[[Page 27861]]
EPA estimates the average upfront per-vehicle cost for
manufacturers to meet the light-duty standards to be approximately
$1,200 on average over the six-year rulemaking period between MYs 2027-
2032, and range from about $200 in MY 2027 to about $2,100 in MY 2032,
as shown in Table 9.\160\ We discuss per-vehicle cost in more detail in
section IV.C of this preamble and RIA Chapter 12. These costs are
attributable to our projection that the MY 2032 fleet will be made up
of a larger share of BEVs relative to ICE vehicles. However, after
considering purchase incentives and their lower operating costs
relative to ICE vehicles, BEVs are estimated to save vehicle owners
money over time. We estimate that the standards will save an average
consumer approximately $6,000 over the lifetime of a light-duty
vehicle, as compared to a vehicle meeting the MY 2026 standards.\161\
As another example, over an eight-year period (the average period of
first ownership), we estimate a MY 2032 PEV owner will, on average,
save $8,000 on purchase and operating costs compared to a gasoline
vehicle that meets these standards.\162\ We discuss ownership savings
and expenses in more detail in RIA Chapter 4.2.2.
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\160\ Unless otherwise specified, all monetized values are
expressed in 2022 dollars.
\161\ This vehicle lifetime savings estimate takes into account
the fleet-wide average Federal purchase incentive under the final
standards and under the MY 2026 standards. See RIA Chapter 4.2.2 for
additional discussion.
\162\ This 8-year savings estimate includes the average Federal
purchase incentive of $6,000 for BEVs and PHEVs. See RIA Chapter
4.2.2.
Table 9--Average Incremental Vehicle Cost by Reg Class, Relative to the No Action Scenario, Light-Duty Vehicles
(2022 dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-year avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cars.................................... $135 $348 $552 $968 $849 $934 $631
Trucks.................................. 276 642 1,199 1,703 2,318 2,561 1,450
Total................................... 232 552 1,002 1,481 1,875 2,074 1,203
--------------------------------------------------------------------------------------------------------------------------------------------------------
For medium-duty vehicles, EPA estimates the average upfront per-
vehicle cost for manufacturers to be approximately $1,400 over the six-
year rulemaking period between MYs 2027-2032 and range from an average
cost of about $100 in MY 2027 to about $3,300 in MY 2032, as shown in
Table 10.
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\163\ For more details on the medium-duty GHG standards, refer
to Section III.C.3 of the preamble.
Table 10--Average Incremental Vehicle Cost by Body Style, Relative to the No Action Scenario, Medium-Duty Vehicles
(2022 dollars) \163\
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-year avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vans.................................... $178 $185 $1,443 $2,732 $4,128 $4,915 $2,264
Pickups................................. 97 88 531 1,432 1,516 2,416 1,013
Total................................... 125 122 847 1,881 2,416 3,275 1,444
--------------------------------------------------------------------------------------------------------------------------------------------------------
In addition, the standards will result in significant savings for
consumers from fuel savings for all vehicles and, for PEVs, reduced
vehicle repair and maintenance. These lower operating costs will offset
the upfront vehicle costs. The annualized retail fuel savings, which
include fuel taxes and therefore represents the amount consumers will
save through 2055, are estimated at $57 billion at a 2 percent discount
rate, see section VIII.C of this preamble. These savings are in
addition to the already mentioned savings associated with reduced
maintenance and repair costs (See section VIII.B of this preamble and
Chapter 4 of the RIA).
II. Public Health and Welfare Need for Emission Reductions
A. Climate Change From GHG Emissions
Elevated concentrations of greenhouse gases (GHGs) have been
warming the planet, leading to changes in the Earth's climate that are
occurring at a pace and in a way that threatens human health, society,
and the natural environment. While EPA is not making any new scientific
or factual findings with regard to the well-documented impact of GHG
emissions on public health and welfare in support of this rule, EPA is
providing in this section a brief scientific background on climate
change to offer additional context for this rulemaking and to help the
public understand the public health and environmental impacts of GHGs.
Extensive information on climate change is available in the
scientific assessments and the EPA documents that are briefly described
in this section, as well as in the technical and scientific information
supporting them. One of those documents is EPA's 2009 Endangerment and
Cause or Contribute Findings for Greenhouse Gases Under section 202(a)
of the Clean Air Act (CAA) (74 FR 66496, December 15, 2009). In the
2009 Endangerment Finding, the Administrator found under section 202(a)
of the CAA that elevated atmospheric concentrations of six key well-
mixed GHGs--CO2, methane (CH4), nitrous oxide
(N2O), HFCs, perfluorocarbons (PFCs), and sulfur
hexafluoride (SF6)--``may reasonably be anticipated to endanger the
public health and welfare of current and future generations'' (74 FR
66523, December 15, 2009). The 2009 Endangerment Finding, together with
the extensive scientific and technical evidence in the supporting
record, documented that climate change caused by human emissions of
GHGs threatens the public health of the U.S. population. It explained
that by raising average temperatures, climate change increases the
likelihood of heat waves, which are associated with increased deaths
and illnesses (74 FR 66497, December 15, 2009). While climate change
also increases the likelihood of reductions in cold-related mortality,
evidence indicates that the increases in heat mortality will be larger
than the decreases in cold mortality in the United States (74 FR 66525,
December 15, 2009). The 2009 Endangerment
[[Page 27862]]
Finding further explained that compared with a future without climate
change, climate change is expected to increase tropospheric ozone
pollution over broad areas of the United States, including in the
largest metropolitan areas with the worst tropospheric ozone problems,
and thereby increase the risk of adverse effects on public health (74
FR 66525, December 15, 2009). Climate change is also expected to cause
more intense hurricanes and more frequent and intense storms of other
types and heavy precipitation, with impacts on other areas of public
health, such as the potential for increased deaths, injuries,
infectious and waterborne diseases, and stress-related disorders (74 FR
66525, December 15, 2009). Children, the elderly, and the poor are
among the most vulnerable to these climate-related health effects (74
FR 66498, December 15, 2009).
The 2009 Endangerment Finding also documented, together with the
extensive scientific and technical evidence in the supporting record,
that climate change touches nearly every aspect of public welfare \164\
in the U.S., including: Changes in water supply and quality due to
changes in drought and extreme rainfall events; increased risk of storm
surge and flooding in coastal areas and land loss due to inundation;
increases in peak electricity demand and risks to electricity
infrastructure; and the potential for significant agricultural
disruptions and crop failures (though offset to some extent by carbon
fertilization). These impacts are also global and may exacerbate
problems outside the U.S. that raise humanitarian, trade, and national
security issues for the U.S. (74 FR 66530).
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\164\ The CAA states in section 302(h) that ``[a]ll language
referring to effects on welfare includes, but is not limited to,
effects on soils, water, crops, vegetation, manmade materials,
animals, wildlife, weather, visibility, and climate, damage to and
deterioration of property, and hazards to transportation, as well as
effects on economic values and on personal comfort and well-being,
whether caused by transformation, conversion, or combination with
other air pollutants.'' 42 U.S.C. 7602(h).
---------------------------------------------------------------------------
In 2016, the Administrator issued a similar finding for GHG
emissions from aircraft under section 231(a)(2)(A) of the CAA.\165\ In
the 2016 Endangerment Finding, the Administrator found that the body of
scientific evidence amassed in the record for the 2009 Endangerment
Finding compellingly supported a similar endangerment finding under CAA
section 231(a)(2)(A), and also found that the science assessments
released between the 2009 and the 2016 Findings ``strengthen and
further support the judgment that GHGs in the atmosphere may reasonably
be anticipated to endanger the public health and welfare of current and
future generations'' (81 FR 54424).
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\165\ ``Finding That Greenhouse Gas Emissions From Aircraft
Cause or Contribute to Air Pollution That May Reasonably Be
Anticipated To Endanger Public Health and Welfare.'' 81 FR 54422,
August 15, 2016. (``2016 Endangerment Finding'').
---------------------------------------------------------------------------
Since the 2016 Endangerment Finding, the climate has continued to
change, with new observational records being set for several climate
indicators such as global average surface temperatures, GHG
concentrations, and sea level rise. Additionally, major scientific
assessments continue to be released that further advance our
understanding of the climate system and the impacts that GHGs have on
public health and welfare both for current and future generations.
These updated observations and projections document the rapid rate of
current and future climate change both globally and in the United
States.\166\ \167\ \168\ \169\ \170\ \171\ \172\ \173\ \174\ \175\
\176\ \177\ \178\
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\166\ USGCRP, 2017: Climate Science Special Report: Fourth
National Climate Assessment, Volume I [Wuebbles, D.J., D.W. Fahey,
K.A. Hibbard, D.J. Dokken, B.C. Stewart, and T.K. Maycock (eds.)].
U.S. Global Change Research Program, Washington, DC, USA, 470 pp,
doi: 10.7930/J0J964J6.
\167\ USGCRP, 2016: The Impacts of Climate Change on Human
Health in the United States: A Scientific Assessment. Crimmins, A.,
J. Balbus, J.L. Gamble, C.B. Beard, J.E. Bell, D. Dodgen, R.J.
Eisen, N. Fann, M.D. Hawkins, S.C. Herring, L. Jantarasami, D.M.
Mills, S. Saha, M.C.
\168\ USGCRP, 2018: Impacts, Risks, and Adaptation in the United
States: Fourth National Climate Assessment, Volume II [Reidmiller,
D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K.
Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research
Program, Washington, DC, USA, 1515 pp. doi:10.7930/NCA4.2018.
\169\ IPCC, 2018: Global Warming of 1.5 [deg]C. An IPCC Special
Report on the impacts of global warming of 1.5 [deg]C above pre-
industrial levels and related global greenhouse gas emission
pathways, in the context of strengthening the global response to the
threat of climate change, sustainable development, and efforts to
eradicate poverty [Masson-Delmotte, V., P. Zhai, H.-O. P[ouml]rtner,
D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C.
P[eacute]an, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X.
Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T.
Waterfield (eds.)].
\170\ IPCC, 2019: Climate Change and Land: an IPCC special
report on climate change, desertification, land degradation,
sustainable land management, food security, and greenhouse gas
fluxes in terrestrial ecosystems [P.R. Shukla, J. Skea, E. Calvo
Buendia, V. Masson-Delmotte, H.-O. P[ouml]rtner, D. C. Roberts, P.
Zhai, R. Slade, S. Connors, R. van Diemen, M. Ferrat, E. Haughey, S.
Luz, S. Neogi, M. Pathak, J. Petzold, J. Portugal Pereira, P. Vyas,
E. Huntley, K. Kissick, M. Belkacemi, J. Malley, (eds.)].
\171\ IPCC, 2019: IPCC Special Report on the Ocean and
Cryosphere in a Changing Climate [H.-O. P[ouml]rtner, DC Roberts, V.
Masson-Delmotte, P. Zhai, M. Tignor, E. Poloczanska, K. Mintenbeck,
A. Alegr[iacute]a, M. Nicolai, A. Okem, J. Petzold, B. Rama, N.M.
Weyer (eds.)].
1 IPCC, 2023: Summary for Policymakers. In: Climate Change 2023:
Synthesis Report. Contribution of Working Groups I, II and III to
the Sixth Assessment Report of the Intergovernmental Panel on
Climate Change [Core Writing Team, H. Lee and J. Romero (eds.)].
IPCC, Geneva, Switzerland, pp. 1-34, doi:10.59327/IPCC/AR6-
9789291691647.001.
\172\ National Academies of Sciences, Engineering, and Medicine.
2016. Attribution of Extreme Weather Events in the Context of
Climate Change. Washington, DC: The National Academies Press.
https://doi.org/10.17226/21852.
\173\ National Academies of Sciences, Engineering, and Medicine.
2017. Valuing Climate Damages: Updating Estimation of the Social
Cost of Carbon Dioxide. Washington, DC: The National Academies
Press. https://doi.org/10.17226/24651.
\174\ National Academies of Sciences, Engineering, and Medicine.
2019. Climate Change and Ecosystems. Washington, DC: The National
Academies Press. https://doi.org/10.17226/25504.
\175\ Blunden, J., T. Boyer, and E. Bartow-Gillies, Eds., 2023:
``State of the Climate in 2022''. Bull. Amer. Meteor. Soc., 104 (9),
Si-S501 https://doi.org/10.1175/2023BAMSStateoftheClimate.1.
\176\ EPA. 2021. Climate Change and Social Vulnerability in the
United States: A Focus on Six Impacts. U.S. Environmental Protection
Agency, EPA 430-R-21-003.
\177\ Jay, A.K., A.R. Crimmins, C.W. Avery, T.A. Dahl, R.S.
Dodder, B.D. Hamlington, A. Lustig, K. Marvel, P.A. M[eacute]ndez-
Lazaro, M.S. Osler, A. Terando, E.S. Weeks, and A. Zycherman, 2023:
Ch. 1. Overview: Understanding risks, impacts, and responses. In:
Fifth National Climate Assessment. Crimmins, A.R., C.W. Avery, D.R.
Easterling, K.E. Kunkel, B.C. Stewart, and T.K. Maycock, Eds. U.S.
Global Change Research Program, Washington, DC, USA.https://doi.org/10.7930/NCA5.2023.CH1.
\178\ Jay, A.K., A.R. Crimmins, C.W. Avery, T.A. Dahl, R.S.
Dodder, B.D. Hamlington, A. Lustig, K. Marvel, P.A. M[eacute]ndez-
Lazaro, M.S. Osler, A. Terando, E.S. Weeks, and A. Zycherman, 2023:
Ch. 1. Overview: Understanding risks, impacts, and responses. In:
Fifth National Climate Assessment. Crimmins, A.R., C.W. Avery, D.R.
Easterling, K.E. Kunkel, B.C. Stewart, and T.K. Maycock, Eds. U.S.
Global Change Research Program, Washington, DC, USA.https://doi.org/10.7930/NCA5.2023.CH1.
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The most recent information demonstrates that the climate is
continuing to change in response to the human-induced buildup of GHGs
in the atmosphere. These recent assessments show that atmospheric
concentrations of GHGs have risen to a level that has no precedent in
human history and that they continue to climb, primarily because of
both historical and current anthropogenic emissions, and that these
elevated concentrations endanger our health by affecting our food and
water sources, the air we breathe, the weather we experience, and our
interactions with the natural and built environments. For example,
atmospheric concentrations of one of these GHGs, CO2,
measured at Mauna Loa in Hawaii and at other sites around the world
reached an annual mean of 419 parts per million (ppm) in 2022 (nearly
50 percent higher than preindustrial levels) \179\ and have continued
to rise at a rapid rate. Global average temperature has increased by
about 1.1 [deg]C (2.0 [deg]F) in the 2011-2020
[[Page 27863]]
decade relative to 1850-1900.\180\ The years 2015-2022 were the warmest
8 years in the 1880-2022 record.\181\ The Intergovernmental Panel on
Climate Change (IPCC) determined (with medium confidence) that this
past decade was warmer than any multi-century period in at least the
past 100,000 years.\182\ Global average sea level has risen by about 8
inches (about 21 centimeters (cm)) from 1901 to 2018, with the rate
from 2006 to 2018 (0.15 inches/year or 3.7 millimeters (mm)/year)
almost twice the rate over the 1971 to 2006 period, and three times the
rate of the 1901 to 2018 period.\183\ The rate of sea level rise over
the 20th century was higher than in any other century in at least the
last 2,800 years.\184\ Higher CO2 concentrations have led to
acidification of the surface ocean in recent decades to an extent
unusual in the past 2 million years, with negative impacts on marine
organisms that use calcium carbonate to build shells or skeletons.\185\
Arctic sea ice extent continues to decline in all months of the year;
the most rapid reductions occur in September (very likely almost a 13
percent decrease per decade between 1979 and 2018) and are
unprecedented in at least 1,000 years.\186\ Human-induced climate
change has led to heatwaves and heavy precipitation becoming more
frequent and more intense, along with increases in agricultural and
ecological droughts \187\ in many regions.\188\
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\179\ https://gml.noaa.gov/webdata/ccgg/trends/co2/co2_annmean_mlo.txt.
\180\ 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 [Masson-Delmotte, V., P. Zhai, A. Pirani, S.L.
Connors, C. P[eacute]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, Cambridge, United Kingdom and
New York, NY, USA, pp. 3-32, doi:10.1017/9781009157896.001.
\181\ Blunden, et al. 2023.
\182\ IPCC, 2021.
\183\ IPCC, 2021.
\184\ USGCRP, 2018: Impacts, Risks, and Adaptation in the United
States: Fourth National Climate Assessment, Volume II [Reidmiller,
D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K.
Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research
Program, Washington, DC, USA, 1515 pp. doi:10.7930/NCA4.2018.
\185\ IPCC, 2021.
\186\ IPCC, 2021.
\187\ These are drought measures based on soil moisture.
\188\ IPCC, 2021.
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The assessment literature demonstrates that modest additional
amounts of warming may lead to a climate different from anything humans
have ever experienced. The 2022 CO2 concentration of 419 ppm
is already higher than at any time in the last 2 million years.\189\ If
concentrations exceed 450 ppm, they would likely be higher than any
time in the past 23 million years: \190\ at the current rate of
increase of more than 2 ppm per year, this would occur in about 15
years. While GHGs are not the only factor that controls climate, it is
illustrative that 3 million years ago (the last time CO2
concentrations were above 400 ppm) Greenland was not yet completely
covered by ice and still supported forests, while 23 million years ago
(the last time concentrations were above 450 ppm) the West Antarctic
ice sheet was not yet developed, indicating the possibility that high
GHG concentrations could lead to a world that looks very different from
today and from the conditions in which human civilization has
developed. If the Greenland and Antarctic ice sheets were to melt
substantially, sea levels would rise dramatically--the IPCC estimated
that over the next 2,000 years, sea level will rise by 7 to 10 feet
even if warming is limited to 1.5 [deg]C (2.7 [deg]F), from 7 to 20
feet if limited to 2 [deg]C (3.6 [deg]F), and by 60 to 70 feet if
warming is allowed to reach 5 [deg]C (9 [deg]F) above preindustrial
levels.\191\ For context, almost all of the city of Miami is less than
25 feet above sea level, and the 4th National Climate Assessment NCA4
stated that 13 million Americans would be at risk of migration due to 6
feet of sea level rise. Moreover, the CO2 being absorbed by
the ocean has resulted in changes in ocean chemistry due to
acidification of a magnitude not seen in 65 million years,\192\ putting
many marine species--particularly calcifying species--at risk.
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\189\ Annual Mauna Loa CO2 concentration data from
https://gml.noaa.gov/webdata/ccgg/trends/co2/co2_annmean_mlo.txt,
accessed September 9, 2023.
\190\ IPCC, 2013.
\191\ IPCC, 2021.
\192\ IPCC, 2018.
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The NCA4 found that it is very likely (greater than 90 percent
likelihood) that by mid-century, the Arctic Ocean will be almost
entirely free of sea ice by late summer for the first time in about 2
million years.\193\ Coral reefs will be at risk for almost complete (99
percent) losses with 1 [deg]C (1.8 [deg]F) of additional warming from
today (2 [deg]C or 3.6 [deg]F since preindustrial). At this
temperature, between 8 and 18 percent of animal, plant, and insect
species could lose over half of the geographic area with suitable
climate for their survival, and 7 to 10 percent of rangeland livestock
would be projected to be lost.\194\ The IPCC similarly found that
climate change has caused substantial damages and increasingly
irreversible losses in terrestrial, freshwater, and coastal and open
ocean marine ecosystems.
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\193\ USGCRP, 2018.
\194\ IPCC, 2018.
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Every additional increment of temperature comes with consequences.
For example, the half degree of warming from 1.5 to 2 [deg]C (0.9
[deg]F of warming from 2.7 [deg]F to 3.6 [deg]F) above preindustrial
temperatures is projected on a global scale to expose 420 million more
people to extreme heatwaves at least every five years, and 62 million
more people to exceptional heatwaves at least every five years (where
heatwaves are defined based on a heat wave magnitude index which takes
into account duration and intensity--using this index, the 2003 French
heat wave that led to almost 15,000 deaths would be classified as an
``extreme heatwave'' and the 2010 Russian heatwave which led to
thousands of deaths and extensive wildfires would be classified as
``exceptional''). It would increase the frequency of sea-ice-free
Arctic summers from once in 100 years to once in a decade. It could
lead to 4 inches of additional sea level rise by the end of the
century, exposing an additional 10 million people to risks of
inundation as well as increasing the probability of triggering
instabilities in either the Greenland or Antarctic ice sheets. Between
half a million and a million additional square miles of permafrost
would thaw over several centuries. Risks to food security would
increase from medium to high for several lower-income regions in the
Sahel, southern Africa, the Mediterranean, central Europe, and the
Amazon. In addition to food security issues, this temperature increase
would have implications for human health in terms of increasing ozone
concentrations, heatwaves, and vector-borne diseases (for example,
expanding the range of the mosquitoes which carry dengue fever,
chikungunya, yellow fever, and the Zika virus, or the ticks which carry
Lyme, babesiosis, or Rocky Mountain Spotted Fever).\195\ Moreover,
every additional increment in warming leads to larger changes in
extremes, including the potential for events unprecedented in the
observational record. Every additional degree will intensify extreme
precipitation events by about 7 percent. The peak winds of the most
intense tropical cyclones (hurricanes) are projected to increase with
warming. In addition to a higher intensity, the IPCC found that
precipitation and frequency of rapid intensification of these storms
has already increased, the movement speed has decreased, and elevated
sea levels have increased coastal flooding,
[[Page 27864]]
all of which make these tropical cyclones more damaging.\196\
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\195\ IPCC, 2018.
\196\ IPCC, 2021.
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The NCA4 also evaluated a number of impacts specific to the United
States. Severe drought and outbreaks of insects like the mountain pine
beetle have killed hundreds of millions of trees in the western United
States. Wildfires have burned more than 3.7 million acres in 14 of the
17 years between 2000 and 2016, and Federal wildfire suppression costs
were about a billion dollars annually.\197\ The National Interagency
Fire Center has documented U.S. wildfires since 1983, and the 10 years
with the largest acreage burned have all occurred since 2004.\198\
Wildfire smoke degrades air quality, increasing health risks, and more
frequent and severe wildfires due to climate change would further
diminish air quality, increase incidences of respiratory illness,
impair visibility, and disrupt outdoor activities, sometimes thousands
of miles from the location of the fire. Meanwhile, sea level rise has
amplified coastal flooding and erosion impacts, requiring the
installation of costly pump stations, flooding streets, and increasing
storm surge damages. Tens of billions of dollars of U.S. real estate
could be below sea level by 2050 under some scenarios. Increased
frequency and duration of drought will reduce agricultural productivity
in some regions, accelerate depletion of water supplies for irrigation,
and expand the distribution and incidence of pests and diseases for
crops and livestock. The NCA4 also recognized that climate change can
increase risks to national security, both through direct impacts on
military infrastructure and by affecting factors such as food and water
availability that can exacerbate conflict outside U.S. borders.
Droughts, floods, storm surges, wildfires, and other extreme events
stress nations and people through loss of life, displacement of
populations, and impacts on livelihoods.\199\
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\197\ USGCRP, 2018.
\198\ NIFC (National Interagency Fire Center). 2021. Total
wildland fires and acres (1983-2020). Accessed August 2021.
www.nifc.gov/fireInfo/fireInfo_stats_totalFires.html.
\199\ USGCRP, 2018.
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EPA modeling efforts can further illustrate how these impacts from
climate change may be experienced across the United States. EPA's
Framework for Evaluating Damages and Impacts (FrEDI) \200\ uses
information from over 30 peer-reviewed climate change impact studies to
project the physical and economic impacts of climate change to the
United States. resulting from future temperature changes. These impacts
are projected for specific regions within the United States. and for
more than 20 impact categories, which span a large number of sectors of
the U.S. economy.\201\ Using this framework, EPA estimates that global
emission projections, with no additional mitigation, will result in
significant climate-related damages to the United States.\202\ These
damages to the United States. would mainly be from increases in lives
lost due to increases in temperatures, as well as impacts to human
health from increases in climate-driven changes in air quality, dust
and wildfire smoke exposure, and incidence of suicide. Additional major
climate-related damages would occur to U.S. infrastructure such as
roads and rail, as well as transportation impacts and coastal flooding
from sea level rise, increases in property damage from tropical
cyclones, and reductions in labor hours worked in outdoor settings and
buildings without air conditioning. These impacts are also projected to
vary from region to region with the Southeast, for example, projected
to see some of the largest damages from sea level rise, the West Coast
projected to experience damages from wildfire smoke more than other
parts of the country, and the Northern Plains states projected to see a
higher proportion of damages to rail and road infrastructure. While
information on the distribution of climate impacts helps to better
understand the ways in which climate change may impact the United
States, recent analyses are still only a partial assessment of climate
impacts relevant to U.S. interests and do not reflect increased damages
that occur due to interactions between different sectors impacted by
climate change or all the ways in which physical impacts of climate
change occurring abroad have spillover effects in different regions of
the United States.
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\200\ (1) Hartin, C., et al. (2023). Advancing the estimation of
future climate impacts within the United States. Earth Syst. Dynam.,
14, 1015-1037, https://doi.org/10.5194/esd-14-1015-2023. (2)
Supplementary Material for the Regulatory Impact Analysis for the
Supplemental Proposed Rulemaking, ``Standards of Performance for
New, Reconstructed, and Modified Sources and Emissions Guidelines
for Existing Sources: Oil and Natural Gas Sector Climate Review,''
Docket ID No. EPA-HQ-OAR-2021-0317, September 2022, (3) The Long-
Term Strategy of the United States: Pathways to Net-Zero Greenhouse
Gas Emissions by 2050. Published by the U.S. Department of State and
the U.S. Executive Office of the President, Washington, DC. November
2021, (4) Climate Risk Exposure: An Assessment of the Federal
Government's Financial Risks to Climate Change, White Paper, Office
of Management and Budget, April 2022.
\201\ EPA (2021). Technical Documentation on the Framework for
Evaluating Damages and Impacts (FrEDI). U.S. Environmental
Protection Agency, EPA 430-R-21-004, available at https://www.epa.gov/cira/fredi. Documentation has been subject to both a
public review comment period and an independent expert peer review,
following EPA peer-review guidelines.
\202\ Compared to a world with no additional warming after the
model baseline (1986-2005).
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Some GHGs also have impacts beyond those mediated through climate
change. For example, elevated concentrations of CO2
stimulate plant growth (which can be positive in the case of beneficial
species, but negative in terms of weeds and invasive species, and can
also lead to a reduction in plant micronutrients \203\) and cause ocean
acidification. Nitrous oxide depletes the levels of protective
stratospheric ozone.\204\
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\203\ Ziska, L., A. Crimmins, A. Auclair, S. DeGrasse, J.F.
Garofalo, A.S. Khan, I. Loladze, A.A. P[eacute]rez de Le[oacute]n,
A. Showler, J. Thurston, and I. Walls, 2016: Ch. 7: Food Safety,
Nutrition, and Distribution. The Impacts of Climate Change on Human
Health in the United States: A Scientific Assessment. U.S. Global
Change Research Program, Washington, DC, 189-216. https://health2016.globalchange.gov/low/ClimateHealth2016_07_Food_small.pdf.
\204\ WMO (World Meteorological Organization), Scientific
Assessment of Ozone Depletion: 2018, Global Ozone Research and
Monitoring Project--Report No. 58, 588 pp., Geneva, Switzerland,
2018.
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These scientific assessments, the EPA analyses, and documented
observed changes in the climate of the planet and of the United States
present clear support regarding the current and future dangers of
climate change and the importance of GHG emissions mitigation.
B. Background on Criteria and Air Toxics Pollutants Impacted by This
Rule
1. Particulate Matter
Particulate matter (PM) is a complex mixture of solid particles and
liquid droplets distributed among numerous atmospheric gases which
interact with solid and liquid phases. Particles in the atmosphere
range in size from less than 0.01 to more than 10 micrometers
([micro]m) in diameter.\205\ Atmospheric particles can be grouped into
several classes according to their aerodynamic diameter and physical
sizes. Generally, the three broad classes of particles include
ultrafine particles (UFPs, generally considered as particles with a
diameter less than or equal to 0.1 [micro]m [typically based on
physical size, thermal diffusivity or electrical mobility]), ``fine''
particles (PM2.5; particles with a nominal mean aerodynamic
diameter less than or equal to 2.5 [micro]m), and ``thoracic''
particles (PM10; particles with a nominal mean aerodynamic
diameter less than or equal to 10 [micro]m).
[[Page 27865]]
Particles that fall within the size range between PM2.5 and
PM10, are referred to as ``thoracic coarse particles''
(PM10-2.5, particles with a nominal mean aerodynamic
diameter greater than 2.5 [micro]m and less than or equal to 10
[micro]m). EPA currently has NAAQS for PM2.5 and
PM10.\206\
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\205\ U.S. EPA. Policy Assessment (PA) for the Reconsideration
of the PM NAAQS. U.S. Environmental Protection Agency, Washington,
DC, EPA/452/R-22-004, 2022.
\206\ Regulatory definitions of PM size fractions, and
information on reference and equivalent methods for measuring PM in
ambient air, are provided in 40 CFR parts 50, 53, and 58. With
regard to NAAQS which provide protection against health and welfare
effects, the 24-hour PM10 standard provides protection
against effects associated with short-term exposure to thoracic
coarse particles (i.e., PM10-2.5).
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Most particles are found in the lower troposphere, where they can
have residence times ranging from a few hours to weeks. Particles are
removed from the atmosphere by wet deposition, such as when they are
carried by rain or snow, or by dry deposition, when particles settle
out of suspension due to gravity. Atmospheric lifetimes are generally
longest for PM2.5, which often remains in the atmosphere for
days to weeks before being removed by wet or dry deposition.\207\ In
contrast, atmospheric lifetimes for UFP and PM10-2.5 are
shorter. Within hours, UFP can undergo coagulation and condensation
that lead to formation of larger particles in the accumulation mode, or
can be removed from the atmosphere by evaporation, deposition, or
reactions with other atmospheric components. PM10-2.5 are
also generally removed from the atmosphere within hours, through wet or
dry deposition.\208\
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\207\ U.S. EPA. Integrated Science Assessment (ISA) for
Particulate Matter (Final Report, 2019). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019. Table 2-
1.
\208\ U.S. EPA. Integrated Science Assessment (ISA) for
Particulate Matter (Final Report, 2019). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019. Table 2-
1.
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Particulate matter consists of both primary and secondary
particles. Primary particles are emitted directly from sources, such as
combustion-related activities (e.g., industrial activities, motor
vehicle operation, biomass burning), while secondary particles are
formed through atmospheric chemical reactions of gaseous precursors
(e.g., sulfur oxides (SOX), nitrogen oxides (NOX)
and volatile organic compounds (VOCs)). From 2000 to 2021, national
annual average ambient PM2.5 concentrations have declined by
over 35 percent,\209\ largely reflecting reductions in emissions of
precursor gases.
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\209\ See https://www.epa.gov/air-trends/particulate-matter-pm25-trends for more information.
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There are two primary NAAQS for PM2.5: An annual
standard (9.0 micrograms per cubic meter ([mu]g/m\3\)) and a 24-hour
standard (35 [mu]g/m\3\), and there are two secondary NAAQS for
PM2.5: An annual standard (15.0 [mu]g/m\3\) and a 24-hour
standard (35 [mu]g/m\3\). The initial PM2.5 standards were
set in 1997 and revisions to the standards were finalized in 2006, in
2012, and in 2024.
We received comments on the proposal that referenced EPA modeling
of ambient concentrations in 2032 that indicates that the primary
annual PM2.5 NAAQS will be met in most areas of the country
outside of California.210 211 On February 5, 2024, EPA
finalized a rule to revise the primary annual PM2.5 standard
to 9.0 [mu]g/m\3\.\212\ The revised primary annual PM2.5
NAAQS could lead to additional designations of nonattainment areas in
the future. In addition, there are many areas of the country that are
currently in nonattainment for the annual and 24-hour primary
PM2.5 NAAQS. As of November 30, 2023, more than 19 million
people lived in the 3 areas that are designated as nonattainment for
the 1997 PM2.5 NAAQS. Also, as of November 30, 2023, more
than 31 million people lived in the 11 areas that are designated as
nonattainment for the 2006 PM2.5 NAAQS and more than 20
million people lived in the 5 areas designated as nonattainment for the
2012 PM2.5 NAAQS. In total, there are currently 12
PM2.5 nonattainment areas with a population of more than 32
million people.\213\ The light- and medium-duty vehicle standards
established in this rule will take effect beginning in MY 2027 and will
assist some areas with attaining the NAAQS and may relieve areas with
already stringent local regulations from some of the burden associated
with adopting additional local controls. The rule will also assist some
counties with ambient concentrations near the level of the NAAQS who
are working to ensure long-term attainment or maintenance of the
PM2.5 NAAQS.
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\210\ https://www.epa.gov/pm-pollution/proposed-decision-reconsideration-national-ambient-air-quality-standards-particulate.
\211\ Detailed discussion of the comments we received on the
PM2.5 emissions and air quality impact of the standards
can be found in Sections 4 and 11 of the RTC.
\212\ https://www.epa.gov/pm-pollution/national-ambient-air-quality-standards-naaqs-pm.
\213\ The population total is calculated by summing, without
double counting, the 1997, 2006 and 2012 PM2.5
nonattainment populations contained in the Criteria Pollutant
Nonattainment Summary report (https://www.epa.gov/green-book/green-book-data-download).
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2. Ozone
Ground-level ozone pollution forms in areas with high
concentrations of ambient NOX and VOCs when solar radiation
is strong. Major U.S. sources of NOX are highway and nonroad
motor vehicles, engines, power plants and other industrial sources,
with natural sources, such as soil, vegetation, and lightning, serving
as smaller sources. Vegetation is the dominant source of VOCs in the
United States. Volatile consumer and commercial products, such as
propellants and solvents, highway and nonroad vehicles, engines, fires,
and industrial sources also contribute to the atmospheric burden of
VOCs at ground-level.
The processes underlying ozone formation, transport, and
accumulation are complex. Ground-level ozone is produced and destroyed
by an interwoven network of free radical reactions involving the
hydroxyl radical (OH), NO, NO2, and complex reaction
intermediates derived from VOCs. Many of these reactions are sensitive
to temperature and available sunlight. High ozone events most often
occur when ambient temperatures and sunlight intensities remain high
for several days under stagnant conditions. Ozone and its precursors
can also be transported hundreds of miles downwind, which can lead to
elevated ozone levels in areas with otherwise low VOC or NOX
emissions. As an air mass moves and is exposed to changing ambient
concentrations of NOX and VOCs, the ozone photochemical
regime (relative sensitivity of ozone formation to NOX and
VOC emissions) can change.
When ambient VOC concentrations are high, comparatively small
amounts of NOX catalyze rapid ozone formation. Without
available NOX, ground-level ozone production is severely
limited, and VOC reductions would have little impact on ozone
concentrations. Photochemistry under these conditions is said to be
``NOX-limited.'' When NOX levels are sufficiently
high, faster NO2 oxidation consumes more radicals, dampening
ozone production. Under these ``VOC-limited'' conditions (also referred
to as ``NOX-saturated'' conditions), VOC reductions are
effective in reducing ozone, and NOX can react directly with
ozone, resulting in suppressed ozone concentrations near NOX
emission sources. Under these NOX-saturated conditions,
NOX reductions can actually increase local ozone under
certain circumstances, but overall ozone production (considering
downwind formation) decreases and even in VOC-limited areas,
NOX reductions are not expected to increase ozone levels if
the NOX reductions are sufficiently large--large enough to
become NOX-limited.
[[Page 27866]]
The primary NAAQS for ozone, established in 2015 and retained in
2020, is an 8-hour standard with a level of 0.07 ppm.\214\ EPA is also
implementing the previous 8-hour ozone primary standard, set in 2008,
at a level of 0.075 ppm. As of November 30, 2023, there were 34 ozone
nonattainment areas for the 2008 ozone NAAQS, composed of 141 full or
partial counties, with a population of more than 90 million, and 46
ozone nonattainment areas for the 2015 ozone NAAQS, composed of 191
full or partial counties, with a population of more than 115 million.
In total, there are currently, as of November 30, 2023, 54 ozone
nonattainment areas with a population of more than 119 million
people.\215\
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\214\ https://www.epa.gov/ground-level-ozone-pollution/ozone-national-ambient-air-quality-standards-naaqs.
\215\ The population total is calculated by summing, without
double counting, the 2008 and 2015 ozone nonattainment populations
contained in the Criteria Pollutant Nonattainment Summary report
(https://www.epa.gov/green-book/green-book-data-download).
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States with ozone nonattainment areas are required to take action
to bring those areas into attainment. The attainment date assigned to
an ozone nonattainment area is based on the area's classification. The
attainment dates for areas designated nonattainment for the 2008 8-hour
ozone NAAQS are in the 2015 to 2032 timeframe, depending on the
severity of the problem in each area. Attainment dates for areas
designated nonattainment for the 2015 ozone NAAQS are in the 2021 to
2038 timeframe, again depending on the severity of the problem in each
area.\216\ The standards will take effect starting in MY 2027 and will
assist areas with attaining the NAAQS and may relieve areas with
already stringent local regulations from some of the burden associated
with adopting additional local controls. The rule will also provide
assistance to counties with ambient concentrations near the level of
the NAAQS who are working to ensure long-term attainment or maintenance
of the NAAQS.
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\216\ https://www.epa.gov/ground-level-ozone-pollution/ozone-naaqs-timelines.
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3. Nitrogen Oxides
Oxides of nitrogen (NOX) refers to nitric oxide (NO) and
nitrogen dioxide (NO2). Most NO2 is formed in the
air through the oxidation of nitric oxide (NO) emitted when fuel is
burned at a high temperature. NOX is a criteria pollutant,
regulated for its adverse effects on public health and the environment,
and highway vehicles are an important contributor to NOX
emissions. NOX, along with VOCs, are the two major
precursors of ozone and NOX is also a major contributor to
secondary PM2.5 formation. There are two primary NAAQS for
NO2: An annual standard (53 ppb) and a 1-hour standard (100
ppb).\217\ In 2010, EPA established requirements for monitoring
NO2 near roadways expected to have the highest
concentrations within large cities. Monitoring within this near-roadway
network began in 2014, with additional sites deployed in the following
years. At present, there are no nonattainment areas for NO2.
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\217\ The statistical form of the 1-hour NAAQS for
NO2 is the 3-year average of the yearly distribution of
1-hour daily maximum concentrations.
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4. Sulfur Oxides
Sulfur dioxide (SO2), a member of the sulfur oxide
(SOX) family of gases, is formed from burning fuels
containing sulfur (e.g., coal or oil), extracting gasoline from oil, or
extracting metals from ore. SO2 and its gas phase oxidation
products can dissolve in water droplets and further oxidize to form
sulfuric acid which reacts with ammonia to form sulfates, which are
important components of ambient PM.
EPA most recently completed a review of the primary SO2
NAAQS in February 2019 and decided to retain the existing 2010
SO2 NAAQS.\218\ The current primary NAAQS for SO2
is a 1-hour standard of 75 ppb. As of November 30, 2023, more than two
million people lived in the 30 areas that are designated as
nonattainment for the 2010 SO2 NAAQS.\219\
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\218\ https://www.epa.gov/so2-pollution/primary-national-ambient-air-quality-standard-naaqs-sulfur-dioxide.
\219\ https://www3.epa.gov/airquality/greenbook/tnsum.html.
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5. Carbon Monoxide
Carbon monoxide (CO) is a colorless, odorless gas formed by
incomplete combustion of carbon-containing fuels and by photochemical
reactions in the atmosphere. Nationally, particularly in urban areas,
the majority of CO emissions to ambient air come from mobile
sources.\220\
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\220\ U.S. EPA, (2010). Integrated Science Assessment for Carbon
Monoxide (Final Report). U.S. Environmental Protection Agency,
Washington, DC, EPA/600/R-09/019F, 2010. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=218686. See Section 2.1.
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6. Diesel Exhaust
Diesel exhaust is a complex mixture composed of particulate matter,
carbon dioxide, oxygen, nitrogen, water vapor, carbon monoxide,
nitrogen compounds, sulfur compounds and numerous low-molecular-weight
hydrocarbons. A number of these gaseous hydrocarbon components are
individually known to be toxic, including aldehydes, benzene and 1,3-
butadiene. The diesel particulate matter present in diesel exhaust
consists mostly of fine particles (<2.5 [micro]m), of which a
significant fraction is ultrafine particles (<0.1 [micro]m). These
particles have a large surface area which makes them an excellent
medium for adsorbing organics and their small size makes them highly
respirable. Many of the organic compounds present in the gases and on
the particles, such as polycyclic organic matter, are individually
known to have mutagenic and carcinogenic properties.
Diesel exhaust varies significantly in chemical composition and
particle sizes between different engine types (heavy-duty, light-duty),
engine operating conditions (idle, acceleration, deceleration), and
fuel formulations (high/low sulfur fuel). Also, there are emissions
differences between onroad and nonroad engines because the nonroad
engines are generally of older technology. After being emitted in the
engine exhaust, diesel exhaust undergoes dilution as well as chemical
and physical changes in the atmosphere. The lifetimes of the components
present in diesel exhaust range from seconds to months.
7. Air Toxics
The most recent available data indicate that millions of Americans
live in areas where air toxics pose potential health
concerns.221 222 The levels of air toxics to which people
are exposed vary depending on where people live and work and the kinds
of activities in which they engage, as discussed in detail in EPA's
2007 Mobile Source Air Toxics Rule.\223\ According to EPA's 2017
National Emissions Inventory (NEI), mobile sources were responsible for
39 percent of outdoor anthropogenic toxic emissions. Further, mobile
sources were the largest contributor to national average risk of cancer
and immunological and respiratory health effects from directly emitted
pollutants, according to EPA's Air Toxics Screening
[[Page 27867]]
Assessment (AirToxScreen) for 2019.224 225 Mobile sources
are also significant contributors to precursor emissions which react to
form air toxics.\226\ Formaldehyde is the largest contributor to cancer
risk of all 72 pollutants quantitatively assessed in the 2019
AirToxScreen. Mobile sources were responsible for 26 percent of primary
anthropogenic emissions of this pollutant in the 2017 NEI and are
significant contributors to formaldehyde precursor emissions. Benzene
is also a large contributor to cancer risk, and mobile sources account
for about 60 percent of average exposure to ambient concentrations.
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\221\ Air toxics are pollutants known to cause or suspected of
causing cancer or other serious health effects. Air toxics are also
known as toxic air pollutants or hazardous air pollutants. https://www.epa.gov/AirToxScreen/airtoxscreen-glossary-terms#air-toxics.
\222\ U.S. EPA (2022) Technical Support Document EPA Air Toxics
Screening Assessment. 2018 AirToxScreen TSD. https://www.epa.gov/system/files/documents/2023-02/AirToxScreen_2018%20TSD.pdf.
\223\ U.S. Environmental Protection Agency (2007). Control of
Hazardous Air Pollutants from Mobile Sources; Final Rule. 72 FR
8434, February 26, 2007.
\224\ U.S. EPA. (2022) 2019 AirToxScreen: Assessment Results.
https://www.epa.gov/AirToxScreen/2019-airtoxscreen-assessment-results.
\225\ AirToxScreen also includes estimates of risk attributable
to background concentrations, which includes contributions from
long-range transport, persistent air toxics, and natural sources; as
well as secondary concentrations, where toxics are formed via
secondary formation. Mobile sources substantially contribute to
long-range transport and secondarily formed air toxics.
\226\ Rich Cook, Sharon Phillips, Madeleine Strum, Alison Eyth &
James Thurman (2020): Contribution of mobile sources to secondary
formation of carbonyl compounds, Journal of the Air & Waste
Management Association, DOI: 10.1080/10962247.2020.1813839.
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C. Health Effects Associated With Exposure to Criteria and Air Toxics
Pollutants
Emissions sources impacted by this rulemaking, including vehicles
and power plants, emit pollutants that contribute to ambient
concentrations of PM, ozone, NO2, SO2, CO, and
air toxics. This section of the preamble discusses the health effects
associated with exposure to these pollutants.
Additionally, because children have increased vulnerability and
susceptibility for adverse health effects related to air pollution
exposures, EPA's findings regarding adverse effects for children
related to exposure to pollutants that are impacted by this rule are
noted in this section. The increased vulnerability and susceptibility
of children to air pollution exposures may arise because infants and
children generally breathe more relative to their size than adults do,
and consequently may be exposed to relatively higher amounts of air
pollution.\227\ Children also tend to breathe through their mouths more
than adults and their nasal passages are less effective at removing
pollutants, which leads to greater lung deposition of some pollutants,
such as PM.228 229 Furthermore, air pollutants may pose
health risks specific to children because children's bodies are still
developing.\230\ For example, during periods of rapid growth such as
fetal development, infancy and puberty, their developing systems and
organs may be more easily harmed.231 232 EPA produces the
report titled ``America's Children and the Environment,'' which
presents national trends on air pollution and other contaminants and
environmental health of children.\233\
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\227\ EPA (2009) Metabolically-derived ventilation rates: A
revised approach based upon oxygen consumption rates. Washington,
DC: Office of Research and Development. EPA/600/R-06/129F. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=202543.
\228\ U.S. EPA Integrated Science Assessment for Particulate
Matter (Final Report, 2019). U.S. Environmental Protection Agency,
Washington, DC, EPA/600/R-19/188, 2019. Chapter 4 ``Overall
Conclusions'' p. 4-1.
\229\ Foos, B.; Marty, M.; Schwartz, J.; Bennet, W.; Moya, J.;
Jarabek, A.M.; Salmon, A.G. (2008) Focusing on children's inhalation
dosimetry and health effects for risk assessment: An introduction. J
Toxicol Environ Health 71A: 149-165.
\230\ Children's environmental health includes conception,
infancy, early childhood and through adolescence until 21 years of
age as described in the EPA Memorandum: Issuance of EPA's 2021
Policy on Children's Health. October 5, 2021. Available at https://www.epa.gov/system/files/documents/2021-10/2021-policy-on-childrens-health.pdf.
\231\ EPA (2006) A Framework for Assessing Health Risks of
Environmental Exposures to Children. EPA, Washington, DC, EPA/600/R-
05/093F, 2006.
\232\ U.S. Environmental Protection Agency. (2005). Supplemental
guidance for assessing susceptibility from early-life exposure to
carcinogens. Washington, DC: Risk Assessment Forum. EPA/630/R-03/
003F. https://www3.epa.gov/airtoxics/childrens_supplement_final.pdf.
\233\ U.S. EPA. America's Children and the Environment.
Available at: https://www.epa.gov/americaschildrenenvironment.
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Information on environmental effects associated with exposure to
these pollutants is included in section II.D of the preamble,
information on environmental justice is included in section VIII.I of
the preamble and information on emission reductions and air quality
impacts from this rule are included in sections VI and VII of this
preamble.
1. Particulate Matter
Scientific evidence spanning animal toxicological, controlled human
exposure, and epidemiologic studies shows that exposure to ambient PM
is associated with a broad range of health effects. These health
effects are discussed in detail in the Integrated Science Assessment
for Particulate Matter, which was finalized in December 2019 (2019 p.m.
ISA), with a more targeted evaluation of studies published since the
literature cutoff date of the 2019 p.m. ISA in the Supplement to the
Integrated Science Assessment for PM (Supplement).234 235
The PM ISA characterizes the causal nature of relationships between PM
exposure and broad health categories (e.g., cardiovascular effects,
respiratory effects, etc.) using a weight-of-evidence approach.\236\
Within this characterization, the PM ISA summarizes the health effects
evidence for short-term (i.e., hours up to one month) and long-term
(i.e., one month to years) exposures to PM2.5,
PM10-2.5, and ultrafine particles, and concludes that
exposures to ambient PM2.5 are associated with a number of
adverse health effects. The following discussion highlights the PM
ISA's conclusions, and summarizes additional information from the
Supplement where appropriate, pertaining to the health effects evidence
for both short- and long-term PM exposures. Further discussion of PM-
related health effects can also be found in the 2022 Policy Assessment
for the review of the PM NAAQS.\237\
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\234\ U.S. EPA. Integrated Science Assessment (ISA) for
Particulate Matter (Final Report, 2019). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
\235\ U.S. EPA. Supplement to the 2019 Integrated Science
Assessment for Particulate Matter (Final Report, 2022). U.S.
Environmental Protection Agency, Washington, DC, EPA/635/R-22/028,
2022.
\236\ The causal framework draws upon the assessment and
integration of evidence from across scientific disciplines, spanning
atmospheric chemistry, exposure, dosimetry and health effects
studies (i.e., epidemiologic, controlled human exposure, and animal
toxicological studies), and assess the related uncertainties and
limitations that ultimately influence our understanding of the
evidence. This framework employs a five-level hierarchy that
classifies the overall weight-of-evidence with respect to the causal
nature of relationships between criteria pollutant exposures and
health and welfare effects using the following categorizations:
causal relationship; likely to be causal relationship; suggestive
of, but not sufficient to infer, a causal relationship; inadequate
to infer the presence or absence of a causal relationship; and not
likely to be a causal relationship (U.S. EPA. (2019). Integrated
Science Assessment for Particulate Matter (Final Report). U.S.
Environmental Protection Agency, Washington, DC, EPA/600/R-19/188,
Section P. 3.2.3).
\237\ U.S. EPA. Policy Assessment (PA) for the Reconsideration
of the National Ambient Air Quality Standards for Particulate Matter
(Final Report, 2022). U.S. Environmental Protection Agency,
Washington, DC, EPA-452/R-22-004, 2022.
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EPA has concluded that recent evidence in combination with evidence
evaluated in the 2009 p.m. ISA supports a ``causal relationship''
between both long- and short-term exposures to PM2.5 and
premature mortality and cardiovascular effects and a ``likely to be
causal relationship'' between long- and short-term PM2.5
exposures and respiratory effects.\238\ Additionally, recent
experimental and epidemiologic studies provide evidence supporting a
``likely to be causal relationship''
[[Page 27868]]
between long-term PM2.5 exposure and nervous system effects,
and long-term PM2.5 exposure and cancer. Because of
remaining uncertainties and limitations in the evidence base, EPA
determined a ``suggestive of, but not sufficient to infer, a causal
relationship'' for long-term PM2.5 exposure and reproductive
and developmental effects (i.e., male/female reproduction and
fertility; pregnancy and birth outcomes), long- and short-term
exposures and metabolic effects, and short-term exposure and nervous
system effects.
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\238\ U.S. EPA. (2009). Integrated Science Assessment for
Particulate Matter (Final Report). U.S. Environmental Protection
Agency, Washington, DC, EPA/600/R-08/139F.
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As discussed extensively in the 2019 p.m. ISA and the Supplement,
recent studies continue to support a ``causal relationship'' between
short- and long-term PM2.5 exposures and
mortality.239 240 For short-term PM2.5 exposure,
multi-city studies, in combination with single- and multi-city studies
evaluated in the 2009 p.m. ISA, provide evidence of consistent,
positive associations across studies conducted in different geographic
locations, populations with different demographic characteristics, and
studies using different exposure assignment techniques. Additionally,
the consistent and coherent evidence across scientific disciplines for
cardiovascular morbidity, including exacerbations of chronic
obstructive pulmonary disease (COPD) and asthma, provide biological
plausibility for cause-specific mortality and ultimately total
mortality. Recent epidemiologic studies evaluated in the Supplement,
including studies that employed alternative methods for confounder
control, provide additional support to the evidence base that
contributed to the 2019 p.m. ISA conclusion for short-term
PM2.5 exposure and mortality.
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\239\ U.S. EPA. Integrated Science Assessment (ISA) for
Particulate Matter (Final Report, 2019). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
\240\ U.S. EPA. Supplement to the 2019 Integrated Science
Assessment for Particulate Matter (Final Report, 2022). U.S.
Environmental Protection Agency, Washington, DC, EPA/635/R-22/028,
2022.
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The 2019 p.m. ISA concluded a ``causal relationship'' between long-
term PM2.5 exposure and mortality. In addition to reanalyses
and extensions of the American Cancer Society (ACS) and Harvard Six
Cities (HSC) cohorts, multiple new cohort studies conducted in the
United States and Canada consisting of people employed in a specific
job (e.g., teacher, nurse), and that apply different exposure
assignment techniques, provide evidence of positive associations
between long-term PM2.5 exposure and mortality. Biological
plausibility for mortality due to long-term PM2.5 exposure
is provided by the coherence of effects across scientific disciplines
for cardiovascular morbidity, particularly for coronary heart disease,
stroke, and atherosclerosis, and for respiratory morbidity,
particularly for the development of COPD. Additionally, recent studies
provide evidence indicating that as long-term PM2.5
concentrations decrease there is an increase in life expectancy. Recent
cohort studies evaluated in the Supplement, as well as epidemiologic
studies that conducted accountability analyses or employed alternative
methods for confounder controls, support and extend the evidence base
that contributed to the 2019 p.m. ISA conclusion for long-term
PM2.5 exposure and mortality.
A large body of studies examining both short- and long-term
PM2.5 exposure and cardiovascular effects supports and
extends the evidence base evaluated in the 2009 p.m. ISA. The strongest
evidence for cardiovascular effects in response to short-term
PM2.5 exposures is for ischemic heart disease and heart
failure. The evidence for short-term PM2.5 exposure and
cardiovascular effects is coherent across scientific disciplines and
supports a continuum of effects ranging from subtle changes in
indicators of cardiovascular health to serious clinical events, such as
increased emergency department visits and hospital admissions due to
cardiovascular disease and cardiovascular mortality. For long-term
PM2.5 exposure, there is strong and consistent epidemiologic
evidence of a relationship with cardiovascular mortality. This evidence
is supported by epidemiologic and animal toxicological studies
demonstrating a range of cardiovascular effects including coronary
heart disease, stroke, impaired heart function, and subclinical markers
(e.g., coronary artery calcification, atherosclerotic plaque
progression), which collectively provide coherence and biological
plausibility. Recent epidemiologic studies evaluated in the Supplement,
as well as studies that conducted accountability analyses or employed
alternative methods for confounder control, support and extend the
evidence base that contributed to the 2019 p.m. ISA conclusion for both
short- and long-term PM2.5 exposure and cardiovascular
effects.
Studies evaluated in the 2019 p.m. ISA continue to provide evidence
of a ``likely to be causal relationship'' between both short- and long-
term PM2.5 exposure and respiratory effects. Epidemiologic
studies provide consistent evidence of a relationship between short-
term PM2.5 exposure and asthma exacerbation in children and
COPD exacerbation in adults as indicated by increases in emergency
department visits and hospital admissions, which is supported by animal
toxicological studies indicating worsening allergic airways disease and
subclinical effects related to COPD. Epidemiologic studies also provide
evidence of a relationship between short-term PM2.5 exposure
and respiratory mortality. However, there is inconsistent evidence of
respiratory effects, specifically lung function declines and pulmonary
inflammation, in controlled human exposure studies. With respect to
long term PM2.5 exposure, epidemiologic studies conducted in
the United States and abroad provide evidence of a relationship with
respiratory effects, including consistent changes in lung function and
lung function growth rate, increased asthma incidence, asthma
prevalence, and wheeze in children; acceleration of lung function
decline in adults; and respiratory mortality. The epidemiologic
evidence is supported by animal toxicological studies, which provide
coherence and biological plausibility for a range of effects including
impaired lung development, decrements in lung function growth, and
asthma development.
Since the 2009 p.m. ISA, a growing body of scientific evidence
examined the relationship between long-term PM2.5 exposure
and nervous system effects, resulting for the first time in a causality
determination for this health effects category of a ``likely to be
causal relationship.'' The strongest evidence for effects on the
nervous system come from epidemiologic studies that consistently report
cognitive decrements and reductions in brain volume in adults. The
effects observed in epidemiologic studies in adults are supported by
animal toxicological studies demonstrating effects on the brain of
adult animals including inflammation, morphologic changes, and
neurodegeneration of specific regions of the brain. There is more
limited evidence for neurodevelopmental effects in children, with some
studies reporting positive associations with autism spectrum disorder
and others providing limited evidence of an association with cognitive
function. While there is some evidence from animal toxicological
studies indicating effects on the brain (i.e., inflammatory and
morphological changes) to support a biologically plausible pathway for
neurodevelopmental effects, epidemiologic studies are limited due to
[[Page 27869]]
their lack of control for potential confounding by copollutants, the
small number of studies conducted, and uncertainty regarding critical
exposure windows.
Building off the decades of research demonstrating mutagenicity,
DNA damage, and other endpoints related to genotoxicity due to whole PM
exposures, recent experimental and epidemiologic studies focusing
specifically on PM2.5 provide evidence of a relationship
between long-term PM2.5 exposure and cancer. Epidemiologic
studies examining long-term PM2.5 exposure and lung cancer
incidence and mortality provide evidence of generally positive
associations in cohort studies spanning different populations,
locations, and exposure assignment techniques. Additionally, there is
evidence of positive associations with lung cancer incidence and
mortality in analyses limited to never smokers. The epidemiologic
evidence is supported by both experimental and epidemiologic evidence
of genotoxicity, epigenetic effects, carcinogenic potential, and that
PM2.5 exhibits several characteristics of carcinogens, which
collectively provides biological plausibility for cancer development
and resulted in the conclusion of a ``likely to be causal
relationship.''
For the additional health effects categories evaluated for
PM2.5 in the 2019 PM ISA, experimental and epidemiologic
studies provide limited and/or inconsistent evidence of a relationship
with PM2.5 exposure. As a result, the 2019 PM ISA concluded
that the evidence is ``suggestive of, but not sufficient to infer a
causal relationship'' for short-term PM2.5 exposure and
metabolic effects and nervous system effects, and for long-term
PM2.5 exposures and metabolic effects as well as
reproductive and developmental effects.
In addition to evaluating the health effects attributed to short-
and long-term exposure to PM2.5, the 2019 PM ISA also
conducted an extensive evaluation as to whether specific components or
sources of PM2.5 are more strongly related with health
effects than PM2.5 mass. An evaluation of those studies
resulted in the 2019 PM ISA concluding that ``many PM2.5
components and sources are associated with many health effects, and the
evidence does not indicate that any one source or component is
consistently more strongly related to health effects than
PM2.5 mass.'' \241\
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\241\ U.S. EPA. Integrated Science Assessment (ISA) for
Particulate Matter (Final Report, 2019). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
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For both PM10-2.5 and ultrafine particles (UFPs), for
all health effects categories evaluated, the 2019 PM ISA concluded that
the evidence was ``suggestive of, but not sufficient to infer, a causal
relationship'' or ``inadequate to determine the presence or absence of
a causal relationship.'' For PM10-2.5, although a Federal
Reference Method was instituted in 2011 to measure PM10-2.5
concentrations nationally, the causality determinations reflect that
the same uncertainty identified in the 2009 PM ISA with respect to the
method used to estimate PM10-2.5 concentrations in
epidemiologic studies persists. Specifically, across epidemiologic
studies, different approaches are used to estimate PM10-2.5
concentrations (e.g., direct measurement of PM10-2.5,
difference between PM10 and PM2.5
concentrations), and it remains unclear how well correlated
PM10-2.5 concentrations are both spatially and temporally
across the different methods used.
For UFPs, which have often been defined as particles less than 0.1
[micro]m, the uncertainty in the evidence for the health effect
categories evaluated across experimental and epidemiologic studies
reflects the inconsistency in the exposure metric used (i.e., particle
number concentration, surface area concentration, mass concentration)
as well as the size fractions examined. In epidemiologic studies the
size fraction examined can vary depending on the monitor used and
exposure metric, with some studies examining number count over the
entire particle size range, while experimental studies that use a
particle concentrator often examine particles up to 0.3 [micro]m.
Additionally, due to the lack of a monitoring network, there is limited
information on the spatial and temporal variability of UFPs within the
United States, as well as population exposures to UFPs, which adds
uncertainty to epidemiologic study results.
The 2019 PM ISA cites extensive evidence indicating that ``both the
general population as well as specific populations and life stages are
at risk for PM2.5-related health effects.'' \242\ For
example, in support of its ``causal'' and ``likely to be causal''
determinations, the ISA cites substantial evidence for: (1) PM-related
mortality and cardiovascular effects in older adults; (2) PM-related
cardiovascular effects in people with pre-existing cardiovascular
disease; (3) PM-related respiratory effects in people with pre-existing
respiratory disease, particularly asthma exacerbations in children; and
(4) PM-related impairments in lung function growth and asthma
development in children. The ISA additionally notes that stratified
analyses (i.e., analyses that directly compare PM-related health
effects across groups) provide strong evidence for racial and ethnic
differences in PM2.5 exposures and in the risk of
PM2.5-related health effects, specifically within Hispanic
and non-Hispanic Black populations, with some evidence of increased
risk for populations of low socioeconomic status. Recent studies
evaluated in the Supplement support the conclusion of the 2019 PM ISA
with respect to disparities in both PM2.5 exposure and
health risk by race and ethnicity and provide additional support for
disparities for populations of lower socioeconomic status.\243\
Additionally, evidence spanning epidemiologic studies that conducted
stratified analyses, experimental studies focusing on animal models of
disease or individuals with pre-existing disease, dosimetry studies, as
well as studies focusing on differential exposure suggest that
populations with pre-existing cardiovascular or respiratory disease,
populations that are overweight or obese, populations that have
particular genetic variants, and current/former smokers could be at
increased risk for adverse PM2.5-related health effects. The
2022 Policy Assessment for the review of the PM NAAQS also highlights
that factors that may contribute to increased risk of PM2.5-
related health effects include lifestage (children and older adults),
pre-existing diseases (cardiovascular disease and respiratory disease),
race/ethnicity, and socioeconomic status.\244\
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\242\ U.S. EPA. Integrated Science Assessment (ISA) for
Particulate Matter (Final Report, 2019). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
\243\ U.S. EPA. Supplement to the 2019 Integrated Science
Assessment for Particulate Matter (Final Report, 2022). U.S.
Environmental Protection Agency, Washington, DC, EPA/635/R-22/028,
2022.
\244\ U.S. EPA. Policy Assessment (PA) for the Reconsideration
of the National Ambient Air Quality Standards for Particulate Matter
(Final Report, 2022). U.S. Environmental Protection Agency,
Washington, DC, EPA-452/R-22-004, 2022, p. 3-53.
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2. Ozone
This section provides a summary of the health effects associated
with exposure to ambient concentrations of ozone.\245\ The information
in this
[[Page 27870]]
section is based on the information and conclusions in the April 2020
Integrated Science Assessment for Ozone (Ozone ISA).\246\ The Ozone ISA
concludes that human exposures to ambient concentrations of ozone are
associated with a number of adverse health effects and characterizes
the weight of evidence for these health effects.\247\ The following
discussion highlights the Ozone ISA's conclusions pertaining to health
effects associated with both short-term and long-term periods of
exposure to ozone.
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\245\ Human exposure to ozone varies over time due to changes in
ambient ozone concentration and because people move between
locations which have notably different ozone concentrations. Also,
the amount of ozone delivered to the lung is influenced not only by
the ambient concentrations but also by the breathing route and rate.
\246\ U.S. EPA. Integrated Science Assessment (ISA) for Ozone
and Related Photochemical Oxidants (Final Report). U.S.
Environmental Protection Agency, Washington, DC, EPA/600/R-20/012,
2020.
\247\ The ISA evaluates evidence and draws conclusions on the
causal relationship between relevant pollutant exposures and health
effects, assigning one of five ``weight of evidence''
determinations: causal relationship, likely to be a causal
relationship, suggestive of a causal relationship, inadequate to
infer a causal relationship, and not likely to be a causal
relationship. For more information on these levels of evidence,
please refer to Table II in the Preamble of the ISA.
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For short-term exposure to ozone, the Ozone ISA concludes that
respiratory effects, including lung function decrements, pulmonary
inflammation, exacerbation of asthma, respiratory-related hospital
admissions, and mortality, are causally associated with ozone exposure.
It also concludes that metabolic effects, including metabolic syndrome
(i.e., changes in insulin or glucose levels, cholesterol levels,
obesity, and blood pressure) and complications due to diabetes are
likely to be causally associated with short-term exposure to ozone and
that evidence is suggestive of a causal relationship between
cardiovascular effects, central nervous system effects and total
mortality and short-term exposure to ozone.
For long-term exposure to ozone, the Ozone ISA concludes that
respiratory effects, including new onset asthma, pulmonary inflammation
and injury, are likely to be causally related with ozone exposure. The
Ozone ISA characterizes the evidence as suggestive of a causal
relationship for associations between long-term ozone exposure and
cardiovascular effects, metabolic effects, reproductive and
developmental effects, central nervous system effects and total
mortality. The evidence is inadequate to infer a causal relationship
between chronic ozone exposure and increased risk of cancer.
Finally, interindividual variation in human responses to ozone
exposure can result in some groups being at increased risk for
detrimental effects in response to exposure. In addition, some groups
are at increased risk of exposure due to their activities, such as
outdoor workers and children. The Ozone ISA identified several groups
that are at increased risk for ozone-related health effects. These
groups are people with asthma, children and older adults, individuals
with reduced intake of certain nutrients (i.e., Vitamins C and E),
outdoor workers, and individuals having certain genetic variants
related to oxidative metabolism or inflammation. Ozone exposure during
childhood can have lasting effects through adulthood. Such effects
include altered function of the respiratory and immune systems.
Children absorb higher doses (normalized to lung surface area) of
ambient ozone, compared to adults, due to their increased time spent
outdoors, higher ventilation rates relative to body size, and a
tendency to breathe a greater fraction of air through the mouth.
Children also have a higher asthma prevalence compared to adults.
Recent epidemiologic studies provide generally consistent evidence that
long-term ozone exposure is associated with the development of asthma
in children. Studies comparing age groups reported higher magnitude
associations for short-term ozone exposure and respiratory hospital
admissions and emergency room visits among children than among adults.
Panel studies also provide support for experimental studies with
consistent associations between short-term ozone exposure and lung
function and pulmonary inflammation in healthy children. Additional
children's vulnerability and susceptibility factors are listed in
section IX.G of the preamble.
3. Nitrogen Oxides
The most recent review of the health effects of oxides of nitrogen
completed by EPA can be found in the 2016 Integrated Science Assessment
for Oxides of Nitrogen--Health Criteria (Oxides of Nitrogen ISA).\248\
The largest source of NO2 is motor vehicle emissions, and
ambient NO2 concentrations tend to be highly correlated with
other traffic-related pollutants. Thus, a key issue in characterizing
the causality of NO2-health effect relationships was
evaluating the extent to which studies supported an effect of
NO2 that is independent of other traffic-related pollutants.
EPA concluded that the findings for asthma exacerbation integrated from
epidemiologic and controlled human exposure studies provided evidence
that is sufficient to infer a causal relationship between respiratory
effects and short-term NO2 exposure. The strongest evidence
supporting an independent effect of NO2 exposure comes from
controlled human exposure studies demonstrating increased airway
responsiveness in individuals with asthma following ambient-relevant
NO2 exposures. The coherence of this evidence with
epidemiologic findings for asthma hospital admissions and ED visits as
well as lung function decrements and increased pulmonary inflammation
in children with asthma describe a plausible pathway by which
NO2 exposure can cause an asthma exacerbation. The 2016 ISA
for Oxides of Nitrogen also concluded that there is likely to be a
causal relationship between long-term NO2 exposure and
respiratory effects. This conclusion is based on new epidemiologic
evidence for associations of NO2 with asthma development in
children combined with biological plausibility from experimental
studies.
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\248\ U.S. EPA. Integrated Science Assessment for Oxides of
Nitrogen--Health Criteria (2016 Final Report). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-15/068, 2016.
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In evaluating a broader range of health effects, the 2016 ISA for
Oxides of Nitrogen concluded that evidence is ``suggestive of, but not
sufficient to infer, a causal relationship'' between short-term
NO2 exposure and cardiovascular effects and mortality and
between long-term NO2 exposure and cardiovascular effects
and diabetes, birth outcomes, and cancer. In addition, the scientific
evidence is inadequate (insufficient consistency of epidemiologic and
toxicological evidence) to infer a causal relationship for long-term
NO2 exposure with fertility, reproduction, and pregnancy, as
well as with postnatal development. A key uncertainty in understanding
the relationship between these non-respiratory health effects and
short- or long-term exposure to NO2 is co-pollutant
confounding, particularly by other roadway pollutants. The available
evidence for non-respiratory health effects does not adequately address
whether NO2 has an independent effect or whether it
primarily represents effects related to other or a mixture of traffic-
related pollutants.
The 2016 ISA for Oxides of Nitrogen concluded that people with
asthma, children, and older adults are at increased risk for
NO2-related health effects. In these groups and lifestages,
NO2 is consistently related to larger effects on outcomes
related to asthma exacerbation, for which there is confidence in the
relationship with NO2 exposure.
[[Page 27871]]
4. Sulfur Oxides
This section provides an overview of the health effects associated
with SO2. Additional information on the health effects of
SO2 can be found in the 2017 Integrated Science Assessment
for Sulfur Oxides--Health Criteria (SOX ISA).\249\ Following
an extensive evaluation of health evidence from animal toxicological,
controlled human exposure, and epidemiologic studies, EPA has concluded
that there is a causal relationship between respiratory health effects
and short-term exposure to SO2. The immediate effect of
SO2 on the respiratory system in humans is
bronchoconstriction. People with asthma are more sensitive to the
effects of SO2, likely resulting from preexisting
inflammation associated with this disease. In addition to those with
asthma (both children and adults), there is suggestive evidence that
all children and older adults may be at increased risk of
SO2-related health effects. In free-breathing laboratory
studies involving controlled human exposures to SO2,
respiratory effects have consistently been observed following 5-10 min
exposures at SO2 concentrations >= 400 ppb in people with
asthma engaged in moderate to heavy levels of exercise, with
respiratory effects occurring at concentrations as low as 200 ppb in
some individuals with asthma. A clear concentration-response
relationship has been demonstrated in these studies following exposures
to SO2 at concentrations between 200 and 1000 ppb, both in
terms of increasing severity of respiratory symptoms and decrements in
lung function, as well as the percentage of individuals with asthma
adversely affected. Epidemiologic studies have reported positive
associations between short-term ambient SO2 concentrations
and hospital admissions and emergency department visits for asthma and
for all respiratory causes, particularly among children and older
adults (>= 65 years). The studies provide supportive evidence for the
causal relationship.
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\249\ U.S. EPA. Integrated Science Assessment (ISA) for Sulfur
Oxides--Health Criteria (Final Report, Dec 2017). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-17/451, 2017.
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For long-term SO2 exposure and respiratory effects, EPA
has concluded that the evidence is suggestive of a causal relationship.
This conclusion is based on new epidemiologic evidence for positive
associations between long-term SO2 exposure and increases in
asthma incidence among children, together with animal toxicological
evidence that provides a pathophysiologic basis for the development of
asthma. However, uncertainty remains regarding the influence of other
pollutants on the observed associations with SO2 because
these epidemiologic studies have not examined the potential for co-
pollutant confounding.
Consistent associations between short-term exposure to
SO2 and mortality have been observed in epidemiologic
studies with larger effect estimates reported for respiratory mortality
than for cardiovascular mortality. While this finding is consistent
with the demonstrated effects of SO2 on respiratory
morbidity, uncertainty remains with respect to the interpretation of
these observed mortality associations due to potential confounding by
various copollutants. Therefore, EPA has concluded that the overall
evidence is suggestive of a causal relationship between short-term
exposure to SO2 and mortality.
5. Carbon Monoxide
Information on the health effects of carbon monoxide (CO) can be
found in the January 2010 Integrated Science Assessment for Carbon
Monoxide (CO ISA).\250\ The CO ISA presents conclusions regarding the
presence of causal relationships between CO exposure and categories of
adverse health effects.\251\ This section provides a summary of the
health effects associated with exposure to ambient concentrations of
CO, along with the CO ISA conclusions.\252\
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\250\ U.S. EPA, (2010). Integrated Science Assessment for Carbon
Monoxide (Final Report). U.S. Environmental Protection Agency,
Washington, DC, EPA/600/R-09/019F, 2010. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=218686.
\251\ The ISA evaluates the health evidence associated with
different health effects, assigning one of five ``weight of
evidence'' determinations: causal relationship, likely to be a
causal relationship, suggestive of a causal relationship, inadequate
to infer a causal relationship, and not likely to be a causal
relationship. For definitions of these levels of evidence, please
refer to Section 1.6 of the ISA.
\252\ Personal exposure includes contributions from many
sources, and in many different environments. Total personal exposure
to CO includes both ambient and non-ambient components; and both
components may contribute to adverse health effects.
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Controlled human exposure studies of subjects with coronary artery
disease show a decrease in the time to onset of exercise-induced angina
(chest pain) and electrocardiogram changes following CO exposure. In
addition, epidemiologic studies presented in the CO ISA observed
associations between short-term CO exposure and cardiovascular
morbidity, particularly increased emergency room visits and hospital
admissions for coronary heart disease (including ischemic heart
disease, myocardial infarction, and angina). Some epidemiologic
evidence is also available for increased hospital admissions and
emergency room visits for congestive heart failure and cardiovascular
disease as a whole. The CO ISA concludes that a causal relationship is
likely to exist between short-term exposures to CO and cardiovascular
morbidity. It also concludes that available data are inadequate to
conclude that a causal relationship exists between long-term exposures
to CO and cardiovascular morbidity.
Animal studies show various neurological effects with in-utero CO
exposure. Controlled human exposure studies report central nervous
system and behavioral effects following low-level CO exposures,
although the findings have not been consistent across all studies. The
CO ISA concludes that the evidence is suggestive of a causal
relationship with both short- and long-term exposure to CO and central
nervous system effects.
A number of studies cited in the CO ISA have evaluated the role of
CO exposure in birth outcomes such as preterm birth or cardiac birth
defects. There is limited epidemiologic evidence of a CO-induced effect
on preterm births and birth defects, with weak evidence for a decrease
in birth weight. Animal toxicological studies have found perinatal CO
exposure to affect birth weight, as well as other developmental
outcomes. The CO ISA concludes that the evidence is suggestive of a
causal relationship between long-term exposures to CO and developmental
effects and birth outcomes.
Epidemiologic studies provide evidence of associations between
short-term CO concentrations and respiratory morbidity such as changes
in pulmonary function, respiratory symptoms, and hospital admissions. A
limited number of epidemiologic studies considered copollutants such as
ozone, SO2, and PM in two-pollutant models and found that CO
risk estimates were generally robust, although this limited evidence
makes it difficult to disentangle effects attributed to CO itself from
those of the larger complex air pollution mixture. Controlled human
exposure studies have not extensively evaluated the effect of CO on
respiratory morbidity. Animal studies at levels of 50-100 ppm CO show
preliminary evidence of altered pulmonary vascular remodeling and
oxidative injury. The CO ISA concludes that the evidence is suggestive
of a causal relationship between short-term CO exposure and respiratory
morbidity, and inadequate to
[[Page 27872]]
conclude that a causal relationship exists between long-term exposure
and respiratory morbidity.
Finally, the CO ISA concludes that the epidemiologic evidence is
suggestive of a causal relationship between short-term concentrations
of CO and mortality. Epidemiologic evidence suggests an association
exists between short-term exposure to CO and mortality, but limited
evidence is available to evaluate cause-specific mortality outcomes
associated with CO exposure. In addition, the attenuation of CO risk
estimates which was often observed in co-pollutant models contributes
to the uncertainty as to whether CO is acting alone or as an indicator
for other combustion-related pollutants. The CO ISA also concludes that
there is not likely to be a causal relationship between relevant long-
term exposures to CO and mortality.
6. Diesel Exhaust
In EPA's 2002 Diesel Health Assessment Document (Diesel HAD),
exposure to diesel exhaust was classified as likely to be carcinogenic
to humans by inhalation from environmental exposures, in accordance
with the revised draft 1996/1999 EPA cancer
guidelines.253 254 A number of other agencies (National
Institute for Occupational Safety and Health, the International Agency
for Research on Cancer, the World Health Organization, California EPA,
and the U.S. Department of Health and Human Services) made similar
hazard classifications prior to 2002. EPA also concluded in the 2002
Diesel HAD that it was not possible to calculate a cancer unit risk for
diesel exhaust due to limitations in the exposure data for the
occupational groups or the absence of a dose-response relationship.
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\253\ U.S. EPA. (1999). Guidelines for Carcinogen Risk
Assessment. Review Draft. NCEA-F-0644, July. Washington, DC: U.S.
EPA. Retrieved on March 19, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=54932.
\254\ U.S. EPA (2002). Health Assessment Document for Diesel
Engine Exhaust. EPA/600/8-90/057F Office of research and
Development, Washington DC. Retrieved on March 17, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060. pp. 1-1 1-2.
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In the absence of a cancer unit risk, the Diesel HAD sought to
provide additional insight into the significance of the diesel exhaust
cancer hazard by estimating possible ranges of risk that might be
present in the population. An exploratory analysis was used to
characterize a range of possible lung cancer risk. The outcome was that
environmental risks of cancer from long-term diesel exhaust exposures
could plausibly range from as low as 10-5 to as high as
10-3. Because of uncertainties, the analysis acknowledged
that the risks could be lower than 10-5, and a zero risk
from diesel exhaust exposure could not be ruled out.
Noncancer health effects of acute and chronic exposure to diesel
exhaust emissions are also of concern to EPA. EPA derived a diesel
exhaust reference concentration (RfC) from consideration of four well-
conducted chronic rat inhalation studies showing adverse pulmonary
effects. The RfC is 5 [micro]g/m\3\ for diesel exhaust measured as
diesel particulate matter. This RfC does not consider allergenic
effects such as those associated with asthma or immunologic or the
potential for cardiac effects. There was emerging evidence in 2002,
discussed in the Diesel HAD, that exposure to diesel exhaust can
exacerbate these effects, but the exposure-response data were lacking
at that time to derive an RfC based on these then-emerging
considerations. The Diesel HAD states, ``With [diesel particulate
matter] being a ubiquitous component of ambient PM, there is an
uncertainty about the adequacy of the existing [diesel exhaust]
noncancer database to identify all of the pertinent [diesel exhaust]-
caused noncancer health hazards.'' The Diesel HAD also noted ``that
acute exposure to [diesel exhaust] has been associated with irritation
of the eye, nose, and throat, respiratory symptoms (cough and phlegm),
and neurophysiological symptoms such as headache, lightheadedness,
nausea, vomiting, and numbness or tingling of the extremities.'' The
Diesel HAD notes that the cancer and noncancer hazard conclusions
applied to the general use of diesel engines then on the market and as
cleaner engines replace a substantial number of existing ones, the
applicability of the conclusions would need to be reevaluated.
It is important to note that the Diesel HAD also briefly summarizes
health effects associated with ambient PM and discusses EPA's then-
annual PM2.5 NAAQS of 15 [micro]g/m\3\.\255\ In 2012, EPA
revised the level of the annual PM2.5 NAAQS to 12 [micro]g/
m\3\ and in 2024 EPA revised the level of the annual PM2.5
NAAQS to 9.0 [micro]g/m\3\.\256\ There is a large and extensive body of
human data showing a wide spectrum of adverse health effects associated
with exposure to ambient PM, of which diesel exhaust is an important
component. The PM2.5 NAAQS provides protection from the
health effects attributed to exposure to PM2.5. The
contribution of diesel PM to total ambient PM varies in different
regions of the country and also within a region from one area to
another. The contribution can be high in near-roadway environments, for
example, or in other locations where diesel engine use is concentrated.
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\255\ See Section II.B.1 of the preamble for discussion of the
current PM2.5 NAAQS standard, and https://www.epa.gov/pm-pollution/national-ambient-air-quality-standards-naaqs-pm.
\256\ https://www.epa.gov/pm-pollution/national-ambient-air-quality-standards-naaqs-pm.
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Since 2002, several new studies have been published which continue
to report increased lung cancer risk associated with occupational
exposure to diesel exhaust from older engines. Of particular note since
2011 are three new epidemiology studies that have examined lung cancer
in occupational populations, including, truck drivers, underground
nonmetal miners, and other diesel motor-related occupations. These
studies reported increased risk of lung cancer related to exposure to
diesel exhaust, with evidence of positive exposure-response
relationships to varying degrees.257 258 259 These newer
studies (along with others that have appeared in the scientific
literature) add to the evidence EPA evaluated in the 2002 Diesel HAD
and further reinforce the concern that diesel exhaust exposure likely
poses a lung cancer hazard. The findings from these newer studies do
not necessarily apply to newer technology diesel engines (i.e., heavy-
duty highway engines from 2007 and later model years) since the newer
engines have large reductions in the emission constituents compared to
older technology diesel engines.
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\257\ Garshick, Eric, Francine Laden, Jaime E. Hart, Mary E.
Davis, Ellen A. Eisen, and Thomas J. Smith. 2012. Lung cancer and
elemental carbon exposure in trucking industry workers.
Environmental Health Perspectives 120(9): 1301-1306.
\258\ Silverman, D. T., Samanic, C. M., Lubin, J. H., Blair, A.
E., Stewart, P. A., Vermeulen, R., & Attfield, M. D. (2012). The
diesel exhaust in miners study: a nested case-control study of lung
cancer and diesel exhaust. Journal of the National Cancer Institute.
\259\ Olsson, Ann C., et al. ``Exposure to diesel motor exhaust
and lung cancer risk in a pooled analysis from case-control studies
in Europe and Canada.'' American journal of respiratory and critical
care medicine 183.7 (2011): 941-948.
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In light of the growing body of scientific literature evaluating
the health effects of exposure to diesel exhaust, in June 2012 the
World Health Organization's International Agency for Research on Cancer
(IARC), a recognized international authority on the carcinogenic
potential of chemicals and other agents, evaluated the full range of
cancer-related health effects data for diesel engine exhaust. IARC
concluded that diesel exhaust should be regarded as ``carcinogenic to
[[Page 27873]]
humans.'' \260\ This designation was an update from its 1988 evaluation
that considered the evidence to be indicative of a ``probable human
carcinogen.''
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\260\ IARC [International Agency for Research on Cancer].
(2013). Diesel and gasoline engine exhausts and some nitroarenes.
IARC Monographs Volume 105. Online at http://monographs.iarc.fr/ENG/Monographs/vol105/index.php.
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7. Air Toxics
Light- and medium-duty engine emissions contribute to ambient
levels of air toxics that are known or suspected human or animal
carcinogens or that have noncancer health effects. These compounds
include, but are not limited to, acetaldehyde, benzene, 1, 3-butadiene,
formaldehyde, naphthalene, and polycyclic organic matter. These
compounds were all identified as national or regional cancer risk
drivers or contributors in the 2019 AirToxScreen
Assessment.261 262
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\261\ U.S. EPA (2022) Technical Support Document EPA's Air
Toxics Screening Assessment. 2018 AirToxScreen TSD. https://www.epa.gov/system/files/documents/2023-02/AirToxScreen_2018%20TSD.pdf.
\262\ U.S. EPA (2023) 2019 AirToxScreen Risk Drivers. https://www.epa.gov/AirToxScreen/airtoxscreen-risk-drivers.
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i. Acetaldehyde
Acetaldehyde is classified in EPA's IRIS database as a probable
human carcinogen, based on nasal tumors in rats, and is considered
toxic by the inhalation, oral, and intravenous routes.\263\ The
inhalation unit risk estimate (URE) in IRIS for acetaldehyde is 2.2 x
10-6 per [micro]g/m\3\.\264\ Acetaldehyde is reasonably
anticipated to be a human carcinogen by the NTP in the 14th Report on
Carcinogens and is classified as possibly carcinogenic to humans (Group
2B) by the IARC.265 266
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\263\ U.S. EPA (1991). Integrated Risk Information System File
of Acetaldehyde. Research and Development, National Center for
Environmental Assessment, Washington, DC. This material is available
electronically at https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=290.
\264\ U.S. EPA (1991). Integrated Risk Information System File
of Acetaldehyde. This material is available electronically at
https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=290.
\265\ NTP (National Toxicology Program). 2016. Report on
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S.
Department of Health and Human Services, Public Health Service.
https://ntp.niehs.nih.gov/go/roc14.
\266\ International Agency for Research on Cancer (IARC).
(1999). Re-evaluation of some organic chemicals, hydrazine, and
hydrogen peroxide. IARC Monographs on the Evaluation of Carcinogenic
Risk of Chemical to Humans, Vol 71. Lyon, France.
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The primary noncancer effects of exposure to acetaldehyde vapors
include irritation of the eyes, skin, and respiratory tract.\267\ In
short-term (4 week) rat studies, degeneration of olfactory epithelium
was observed at various concentration levels of acetaldehyde
exposure.\268\ Data from these studies were used by EPA to develop an
inhalation reference concentration of 9 [micro]g/m3. Some asthmatics
have been shown to be a sensitive subpopulation to decrements in
functional expiratory volume (FEV1 test) and bronchoconstriction upon
acetaldehyde inhalation.\269\ Children, especially those with diagnosed
asthma, may be more likely to show impaired pulmonary function and
symptoms of asthma than are adults following exposure to
acetaldehyde.\270\
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\267\ U.S. EPA (1991). Integrated Risk Information System File
of Acetaldehyde. This material is available electronically at
https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=290.
\268\ Appleman, L.M., R.A. Woutersen, and V.J. Feron. (1982).
Inhalation toxicity of acetaldehyde in rats. I. Acute and subacute
studies. Toxicology. 23: 293-297.
\269\ Myou, S.; Fujimura, M.; Nishi K.; Ohka, T.; and Matsuda,
T. (1993). Aerosolized acetaldehyde induces histamine-mediated
bronchoconstriction in asthmatics. Am. Rev. Respir.Dis.148(4 Pt 1):
940-943.
\270\ California OEHHA, 2014. TSD for Noncancer RELs: Appendix
D. Individual, Acute, 8-Hour, and Chronic Reference Exposure Level
Summaries. December 2008 (updated July 2014). https://oehha.ca.gov/media/downloads/crnr/appendixd1final.pdf.
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ii. Benzene
EPA's Integrated Risk Information System (IRIS) database lists
benzene as a known human carcinogen (causing leukemia) by all routes of
exposure, and concludes that exposure is associated with additional
health effects, including genetic changes in both humans and animals
and increased proliferation of bone marrow cells in
mice.271 272 273 EPA states in its IRIS database that data
indicate a causal relationship between benzene exposure and acute
lymphocytic leukemia and suggest a relationship between benzene
exposure and chronic non-lymphocytic leukemia and chronic lymphocytic
leukemia. EPA's IRIS documentation for benzene also lists a range of
2.2 x 10-6 to 7.8 x 10-6 per [micro]g/m\3\ as the
unit risk estimate (URE) for benzene.274 275 The
International Agency for Research on Cancer (IARC) has determined that
benzene is a human carcinogen, and the U.S. Department of Health and
Human Services (DHHS) has characterized benzene as a known human
carcinogen.276 277
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\271\ U.S. EPA. (2000). Integrated Risk Information System File
for Benzene. This material is available electronically at: https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=276.
\272\ International Agency for Research on Cancer. (1982). IARC
monographs on the evaluation of carcinogenic risk of chemicals to
humans, Volume 29, Some industrial chemicals and dyestuffs,
International Agency for Research on Cancer, World Health
Organization, Lyon, France 1982.
\273\ Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.; Henry,
V.A. (1992). Synergistic action of the benzene metabolite
hydroquinone on myelopoietic stimulating activity of granulocyte/
macrophage colony-stimulating factor in vitro, Proc. Natl. Acad.
Sci. 89:3691-3695.
\274\ A unit risk estimate is defined as the increase in the
lifetime risk of cancer of an individual who is exposed for a
lifetime to 1 [micro]g/m3 benzene in air.
\275\ U.S. EPA. (2000). Integrated Risk Information System File
for Benzene. This material is available electronically at: https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=276.
\276\ International Agency for Research on Cancer (IARC, 2018.
Monographs on the evaluation of carcinogenic risks to humans, volume
120. World Health Organization--Lyon, France. http://publications.iarc.fr/Book-And-Report-Series/Iarc-Monographs-On-The-Identification-Of-Carcinogenic-Hazards-To-Humans/Benzene-2018.
\277\ NTP (National Toxicology Program). 2016. Report on
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S.
Department of Health and Human Services, Public Health Service.
https://ntp.niehs.nih.gov/go/roc14.
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A number of adverse noncancer health effects, including blood
disorders such as preleukemia and aplastic anemia, have also been
associated with long-term exposure to benzene.278 279 The
most sensitive noncancer effect observed in humans, based on current
data, is the depression of the absolute lymphocyte count in
blood.280 281 EPA's inhalation reference concentration (RfC)
for benzene is 30 [micro]g/m\3\. The RfC is based on suppressed
absolute lymphocyte counts seen in humans under occupational exposure
conditions. In addition, studies sponsored by the Health Effects
Institute (HEI) provide evidence that biochemical responses occur at
lower levels of benzene exposure than previously
known.282 283 284 285 EPA's IRIS program
[[Page 27874]]
has not yet evaluated these new data. EPA does not currently have an
acute reference concentration for benzene. The Agency for Toxic
Substances and Disease Registry (ATSDR) Minimal Risk Level (MRL) for
acute exposure to benzene is 29 [micro]g/m\3\ for 1-14 days
exposure.286 287
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\278\ Aksoy, M. (1989). Hematotoxicity and carcinogenicity of
benzene. Environ. Health Perspect. 82: 193-197. EPA-HQ-OAR-2011-
0135.
\279\ Goldstein, B.D. (1988). Benzene toxicity. Occupational
medicine. State of the Art Reviews. 3: 541-554.
\280\ Rothman, N., G.L. Li, M. Dosemeci, W.E. Bechtold, G.E.
Marti, Y.Z. Wang, M. Linet, L.Q. Xi, W. Lu, M.T. Smith, N. Titenko-
Holland, L.P. Zhang, W. Blot, S.N. Yin, and R.B. Hayes. (1996).
Hematotoxicity among Chinese workers heavily exposed to benzene. Am.
J. Ind. Med. 29: 236-246.
\281\ U.S. EPA (2002). Toxicological Review of Benzene
(Noncancer Effects). Environmental Protection Agency, Integrated
Risk Information System (IRIS), Research and Development, National
Center for Environmental Assessment, Washington DC. This material is
available electronically at https://cfpub.epa.gov/ncea/iris/iris_documents/documents/toxreviews/0276tr.pdf.
\282\ Qu, O.; Shore, R.; Li, G.; Jin, X.; Chen, C.L.; Cohen, B.;
Melikian, A.; Eastmond, D.; Rappaport, S.; Li, H.; Rupa, D.;
Suramaya, R.; Songnian, W.; Huifant, Y.; Meng, M.; Winnik, M.; Kwok,
E.; Li, Y.; Mu, R.; Xu, B.; Zhang, X.; Li, K. (2003). HEI Report
115, Validation & Evaluation of Biomarkers in Workers Exposed to
Benzene in China.
\283\ Qu, Q., R. Shore, G. Li, X. Jin, L.C. Chen, B. Cohen, et
al. (2002). Hematological changes among Chinese workers with a broad
range of benzene exposures. Am. J. Industr. Med. 42: 275-285.
\284\ Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et al.
(2004). Hematotoxically in Workers Exposed to Low Levels of Benzene.
Science 306: 1774-1776.
\285\ Turtletaub, K.W. and Mani, C. (2003). Benzene metabolism
in rodents at doses relevant to human exposure from Urban Air.
Research Reports Health Effect Inst. Report No.113.
\286\ U.S. Agency for Toxic Substances and Disease Registry
(ATSDR). (2007). Toxicological profile for benzene. Atlanta, GA:
U.S. Department of Health and Human Services, Public Health Service.
http://www.atsdr.cdc.gov/ToxProfiles/tp3.pdf.
\287\ A minimal risk level (MRL) is defined as an estimate of
the daily human exposure to a hazardous substance that is likely to
be without appreciable risk of adverse noncancer health effects over
a specified duration of exposure.
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There is limited information from two studies regarding an
increased risk of adverse effects to children whose parents have been
occupationally exposed to benzene.288 289 Data from animal
studies have shown benzene exposures result in damage to the
hematopoietic (blood cell formation) system during
development.290 291 292 Also, key changes related to the
development of childhood leukemia occur in the developing fetus.\293\
Several studies have reported that genetic changes related to eventual
leukemia development occur before birth. For example, there is one
study of genetic changes in twins who developed T cell leukemia at nine
years of age.\294\
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\288\ Corti, M; Snyder, CA. (1996) Influences of gender,
development, pregnancy and ethanol consumption on the hematotoxicity
of inhaled 10 ppm benzene. Arch Toxicol 70:209-217.
\289\ McKinney P.A.; Alexander, F.E.; Cartwright, R.A.; et al.
(1991) Parental occupations of children with leukemia in west
Cumbria, north Humberside, and Gateshead, Br Med J 302:681-686.
\290\ Keller, KA; Snyder, CA. (1986) Mice exposed in utero to
low concentrations of benzene exhibit enduring changes in their
colony forming hematopoietic cells. Toxicology 42:171-181.
\291\ Keller, KA; Snyder, CA. (1988) Mice exposed in utero to 20
ppm benzene exhibit altered numbers of recognizable hematopoietic
cells up to seven weeks after exposure. Fundam Appl Toxicol 10:224-
232.
\292\ Corti, M; Snyder, CA. (1996) Influences of gender,
development, pregnancy and ethanol consumption on the hematotoxicity
of inhaled 10 ppm benzene. Arch Toxicol 70:209-217.
\293\ U. S. EPA. (2002). Toxicological Review of Benzene
(Noncancer Effects). National Center for Environmental Assessment,
Washington, DC. Report No. EPA/635/R-02/001F. https://cfpub.epa.gov/ncea/iris/iris_documents/documents/toxreviews/0276tr.pdf.
\294\ Ford, AM; Pombo-de-Oliveira, MS; McCarthy, KP; MacLean,
JM; Carrico, KC; Vincent, RF; Greaves, M. (1997) Monoclonal origin
of concordant T-cell malignancy in identical twins. Blood 89:281-
285.
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iii. 1,3-Butadiene
EPA has characterized 1,3-butadiene as carcinogenic to humans by
inhalation.295 296 The IARC has determined that 1,3-
butadiene is a human carcinogen and the U.S. DHHS has characterized
1,3-butadiene as a known human carcinogen.297 298 299 300
There are numerous studies consistently demonstrating that 1,3-
butadiene is metabolized into genotoxic metabolites by experimental
animals and humans. The specific mechanisms of 1,3-butadiene-induced
carcinogenesis are unknown; however, the scientific evidence strongly
suggests that the carcinogenic effects are mediated by genotoxic
metabolites. Animal data suggest that females may be more sensitive
than males for cancer effects associated with 1,3-butadiene exposure;
there are insufficient data in humans from which to draw conclusions
about sensitive subpopulations. The URE for 1,3-butadiene is 3 x 10-5
per [micro]g/m\3\.\301\ 1,3-butadiene also causes a variety of
reproductive and developmental effects in mice; no human data on these
effects are available. The most sensitive effect was ovarian atrophy
observed in a lifetime bioassay of female mice.\302\ Based on this
critical effect and the benchmark concentration methodology, an RfC for
chronic health effects was calculated at 0.9 ppb (approximately 2
[micro]g/m\3\).
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\295\ U.S. EPA. (2002). Health Assessment of 1,3-Butadiene.
Office of Research and Development, National Center for
Environmental Assessment, Washington Office, Washington, DC. Report
No. EPA600-P-98-001F. This document is available electronically at
https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=54499.
\296\ U.S. EPA. (2002) ``Full IRIS Summary for 1,3-butadiene
(CASRN 106-99-0)'' Environmental Protection Agency, Integrated Risk
Information System (IRIS), Research and Development, National Center
for Environmental Assessment, Washington, DC https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=139.
\297\ International Agency for Research on Cancer (IARC).
(1999). Monographs on the evaluation of carcinogenic risk of
chemicals to humans, Volume 71, Re-evaluation of some organic
chemicals, hydrazine and hydrogen peroxide, World Health
Organization, Lyon, France.
\298\ International Agency for Research on Cancer (IARC).
(2008). Monographs on the evaluation of carcinogenic risk of
chemicals to humans, 1,3-Butadiene, Ethylene Oxide and Vinyl Halides
(Vinyl Fluoride, Vinyl Chloride and Vinyl Bromide) Volume 97, World
Health Organization, Lyon, France.
\299\ NTP (National Toxicology Program). 2016. Report on
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S.
Department of Health and Human Services, Public Health Service.
https://ntp.niehs.nih.gov/go/roc14.
\300\ International Agency for Research on Cancer (IARC).
(2012). Monographs on the evaluation of carcinogenic risk of
chemicals to humans, Volume 100F chemical agents and related
occupations, World Health Organization, Lyon, France.
\301\ U.S. EPA. (2002). ``Full IRIS Summary for 1,3-butadiene
(CASRN 106-99-0)'' Environmental Protection Agency, Integrated Risk
Information System (IRIS), Research and Development, National Center
for Environmental Assessment, Washington, DC https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=139.
\302\ Bevan, C.; Stadler, J.C.; Elliot, G.S.; et al. (1996).
Subchronic toxicity of 4-vinylcyclohexene in rats and mice by
inhalation. Fundam. Appl. Toxicol. 32:1-10.
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iv. Formaldehyde
In 1991, EPA concluded that formaldehyde is a Class B1 probable
human carcinogen based on limited evidence in humans and sufficient
evidence in animals.\303\ An Inhalation URE for cancer and a reference
dose for oral noncancer effects were developed by EPA and posted on the
IRIS database. Since that time, the NTP and IARC have concluded that
formaldehyde is a known human carcinogen.304 305 306
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\303\ EPA. Integrated Risk Information System. Formaldehyde
(CASRN 50-00-0) https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=419.
\304\ NTP (National Toxicology Program). 2016. Report on
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S.
Department of Health and Human Services, Public Health Service.
https://ntp.niehs.nih.gov/go/roc14.
\305\ IARC Monographs on the Evaluation of Carcinogenic Risks to
Humans Volume 88 (2006): Formaldehyde, 2-Butoxyethanol and 1-tert-
Butoxypropan-2-ol.
\306\ IARC Monographs on the Evaluation of Carcinogenic Risks to
Humans Volume 100F (2012): Formaldehyde.
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The conclusions by IARC and NTP reflect the results of
epidemiologic research published since 1991 in combination with
previous and more recent animal, human, and mechanistic evidence.
Research conducted by the National Cancer Institute reported an
increased risk of nasopharyngeal cancer and specific
lymphohematopoietic malignancies among workers exposed to
formaldehyde.307 308 309 A National Institute of
Occupational Safety and Health study of garment workers also reported
increased risk of death due to leukemia among workers exposed to
formaldehyde.\310\ Extended follow-up of
[[Page 27875]]
a cohort of British chemical workers did not report evidence of an
increase in nasopharyngeal or lymphohematopoietic cancers, but a
continuing statistically significant excess in lung cancers was
reported.\311\ Finally, a study of embalmers reported formaldehyde
exposures to be associated with an increased risk of myeloid leukemia
but not brain cancer.\312\
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\307\ Hauptmann, M.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.;
Blair, A. 2003. Mortality from lymphohematopoetic malignancies among
workers in formaldehyde industries. Journal of the National Cancer
Institute 95: 1615-1623.
\308\ Hauptmann, M.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.;
Blair, A. 2004. Mortality from solid cancers among workers in
formaldehyde industries. American Journal of Epidemiology 159: 1117-
1130.
\309\ Beane Freeman, L. E.; Blair, A.; Lubin, J. H.; Stewart, P.
A.; Hayes, R. B.; Hoover, R. N.; Hauptmann, M. 2009. Mortality from
lymphohematopoietic malignancies among workers in formaldehyde
industries: The National Cancer Institute cohort. J. National Cancer
Inst. 101: 751-761.
\310\ Pinkerton, L. E. 2004. Mortality among a cohort of garment
workers exposed to formaldehyde: an update. Occup. Environ. Med. 61:
193-200.
\311\ Coggon, D, EC Harris, J Poole, KT Palmer. 2003. Extended
follow-up of a cohort of British chemical workers exposed to
formaldehyde. J National Cancer Inst. 95:1608-1615.
\312\ Hauptmann, M,; Stewart P. A.; Lubin J. H.; Beane Freeman,
L. E.; Hornung, R. W.; Herrick, R. F.; Hoover, R. N.; Fraumeni, J.
F.; Hayes, R. B. 2009. Mortality from lymphohematopoietic
malignancies and brain cancer among embalmers exposed to
formaldehyde. Journal of the National Cancer Institute 101:1696-
1708.
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Health effects of formaldehyde in addition to cancer were reviewed
by the Agency for Toxic Substances and Disease Registry in 1999,
supplemented in 2010, and by the World Health
Organization.313 314 315 These organizations reviewed the
scientific literature concerning health effects linked to formaldehyde
exposure to evaluate hazards and dose response relationships and
defined exposure concentrations for minimal risk levels (MRLs). The
health endpoints reviewed included sensory irritation of eyes and
respiratory tract, reduced pulmonary function, nasal histopathology,
and immune system effects. In addition, research on reproductive and
developmental effects and neurological effects were discussed along
with several studies that suggest that formaldehyde may increase the
risk of asthma--particularly in the young.
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\313\ ATSDR. 1999. Toxicological Profile for Formaldehyde, U.S.
Department of Health and Human Services (HHS), July 1999.
\314\ ATSDR. 2010. Addendum to the Toxicological Profile for
Formaldehyde. U.S. Department of Health and Human Services (HHS),
October 2010.
\315\ IPCS. 2002. Concise International Chemical Assessment
Document 40. Formaldehyde. World Health Organization.
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In June 2010, EPA released a draft Toxicological Review of
Formaldehyde--Inhalation Assessment through the IRIS program for peer
review by the National Research Council (NRC) and public comment.\316\
That draft assessment reviewed more recent research from animal and
human studies on cancer and other health effects. The NRC released
their review report in April 2011.\317\ EPA addressed the NRC (2011)
recommendations and applied systematic review methods to the evaluation
of the available noncancer and cancer health effects evidence and
released a new draft IRIS Toxicological Review of Formaldehyde--
Inhalation in April 2022.\318\ In this draft, updates to the 1991 IRIS
finding include a stronger determination of the carcinogenicity of
formaldehyde inhalation to humans, as well as characterization of its
noncancer effects to propose an overall reference concentration for
inhalation exposure. The National Academies of Sciences, Engineering,
and Medicine released their review of EPA's 2022 Draft Formaldehyde
Assessment in August 2023, concluding that EPA's ``findings on
formaldehyde hazard and quantitative risk are supported by the evidence
identified.'' \319\ EPA is currently revising the draft IRIS assessment
in response to comments received.\320\
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\316\ EPA (U.S. Environmental Protection Agency). 2010.
Toxicological Review of Formaldehyde (CAS No. 50-00-0)--Inhalation
Assessment: In Support of Summary Information on the Integrated Risk
Information System (IRIS). External Review Draft. EPA/635/R-10/002A.
U.S. Environmental Protection Agency, Washington DC [online].
Available: http://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=223614.
\317\ NRC (National Research Council). 2011. Review of the
Environmental Protection Agency's Draft IRIS Assessment of
Formaldehyde. Washington DC: National Academies Press. http://books.nap.edu/openbook.php?record_id=13142.
\318\ U.S. EPA. 2022. IRIS Toxicological Review of Formaldehyde-
Inhalation (External Review Draft, 2022). U.S. Environmental
Protection Agency, Washington, DC, EPA/635/R-22/039.
\319\ National Academies of Sciences, Engineering, and Medicine.
2023. Review of EPA's 2022 Draft Formaldehyde Assessment.
Washington, DC: The National Academies Press. https://doi.org/10.17226/27153.
\320\ For more information, see https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=248150#.
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v. Naphthalene
Naphthalene is found in small quantities in gasoline and diesel
fuels. Naphthalene emissions have been measured in larger quantities in
both gasoline and diesel exhaust compared with evaporative emissions
from mobile sources, indicating it is primarily a product of
combustion.
Acute (short-term) exposure of humans to naphthalene by inhalation,
ingestion, or dermal contact is associated with hemolytic anemia and
damage to the liver and the nervous system.\321\ Chronic (long term)
exposure of workers and rodents to naphthalene has been reported to
cause cataracts and retinal damage.\322\ Children, especially neonates,
appear to be more susceptible to acute naphthalene poisoning based on
the number of reports of lethal cases in children and infants
(hypothesized to be due to immature naphthalene detoxification
pathways).\323\ EPA released an external review draft of a reassessment
of the inhalation carcinogenicity of naphthalene based on a number of
recent animal carcinogenicity studies.\324\ The draft reassessment
completed external peer review.\325\ Based on external peer review
comments received, EPA is developing a revised draft assessment that
considers inhalation and oral routes of exposure, as well as cancer and
noncancer effects.\326\ The external review draft does not represent
official agency opinion and was released solely for the purposes of
external peer review and public comment. The NTP listed naphthalene as
``reasonably anticipated to be a human carcinogen'' in 2004 on the
basis of bioassays reporting clear evidence of carcinogenicity in rats
and some evidence of carcinogenicity in mice.\327\ California EPA has
released a risk assessment for naphthalene,\328\ and the IARC has
reevaluated naphthalene and re-classified it as Group 2B: possibly
carcinogenic to humans.\329\
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\321\ U. S. EPA. 1998. Toxicological Review of Naphthalene
(Reassessment of the Inhalation Cancer Risk), Environmental
Protection Agency, Integrated Risk Information System, Research and
Development, National Center for Environmental Assessment,
Washington, DC. This material is available electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
\322\ U. S. EPA. 1998. Toxicological Review of Naphthalene
(Reassessment of the Inhalation Cancer Risk), Environmental
Protection Agency, Integrated Risk Information System, Research and
Development, National Center for Environmental Assessment,
Washington, DC. This material is available electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
\323\ U. S. EPA. (1998). Toxicological Review of Naphthalene
(Reassessment of the Inhalation Cancer Risk), Environmental
Protection Agency, Integrated Risk Information System, Research and
Development, National Center for Environmental Assessment,
Washington, DC. This material is available electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
\324\ U. S. EPA. (1998). Toxicological Review of Naphthalene
(Reassessment of the Inhalation Cancer Risk), Environmental
Protection Agency, Integrated Risk Information System, Research and
Development, National Center for Environmental Assessment,
Washington, DC. This material is available electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
\325\ Oak Ridge Institute for Science and Education. (2004).
External Peer Review for the IRIS Reassessment of the Inhalation
Carcinogenicity of Naphthalene. August 2004. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=84403.
\326\ U.S. EPA. (2018) See: https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=436.
\327\ NTP (National Toxicology Program). 2016. Report on
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S.
Department of Health and Human Services, Public Health Service.
https://ntp.niehs.nih.gov/go/roc14.
\328\ California Environmental Protection Agency Office of
Environmental Health Hazard. (2002). https://oehha.ca.gov/media/downloads/proposition-65/chemicals/41902not.pdf.
\329\ International Agency for Research on Cancer (IARC).
(2002). Monographs on the Evaluation of the Carcinogenic Risk of
Chemicals for Humans. Vol. 82. Lyon, France.
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Naphthalene also causes a number of non-cancer effects in animals
following
[[Page 27876]]
chronic and less-than-chronic exposure, including abnormal cell changes
and growth in respiratory and nasal tissues.\330\ The current EPA IRIS
assessment includes noncancer data on hyperplasia and metaplasia in
nasal tissue that form the basis of the inhalation RfC of 3 [micro]g/
m\3\.\331\ The ATSDR MRL for acute and intermediate duration oral
exposure to naphthalene is 0.6 mg/kg-day based on maternal toxicity in
a developmental toxicology study in rats.\332\ ATSDR also derived an ad
hoc reference value of 6 x 10-2 mg/m\3\ for acute (<=24-
hour) inhalation exposure to naphthalene in a Letter Health
Consultation dated March 24, 2014 to address a potential exposure
concern in Illinois.\333\ The ATSDR acute inhalation reference value
was based on a qualitative identification of an exposure level
interpreted not to cause pulmonary lesions in mice. More recently, EPA
developed acute RfCs for 1-, 8-, and 24-hour exposure scenarios; the
<=24-hour reference value is 2 x 10-2 mg/m\3\.\334\ EPA's
acute RfCs are based on a systematic review of the literature,
benchmark dose modeling of naphthalene-induced nasal lesions in rats,
and application of a PBPK (physiologically based pharmacokinetic)
model.
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\330\ U. S. EPA. (1998). Toxicological Review of Naphthalene,
Environmental Protection Agency, Integrated Risk Information System,
Research and Development, National Center for Environmental
Assessment, Washington, DC. This material is available
electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
\331\ U.S. EPA. (1998). Toxicological Review of Naphthalene.
Environmental Protection Agency, Integrated Risk Information System
(IRIS), Research and Development, National Center for Environmental
Assessment, Washington, DC https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
\332\ ATSDR. Toxicological Profile for Naphthalene, 1-
Methylnaphthalene, and 2-Methylnaphthalene (2005). https://www.atsdr.cdc.gov/ToxProfiles/tp67-p.pdf.
\333\ ATSDR. Letter Health Consultation, Radiac Abrasives, Inc.,
Chicago, Illinois (2014). https://www.atsdr.cdc.gov/HAC/pha/RadiacAbrasives/Radiac%20Abrasives,%20Inc.%20_%20LHC%20(Final)%20_%2003-24-
2014%20(2)_508.pdf.
\334\ U. S. EPA. Derivation of an acute reference concentration
for inhalation exposure to naphthalene. Report No. EPA/600/R-21/292.
https://cfpub.epa.gov/ncea/risk/recordisplay.cfm?deid=355035.
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vi. POM/PAHs
The term polycyclic organic matter (POM) defines a broad class of
compounds that includes the polycyclic aromatic hydrocarbon compounds
(PAHs). One of these compounds, naphthalene, is discussed separately in
section II.C.7.vii of the preamble. POM compounds are formed primarily
from combustion and are present in the atmosphere in gas and
particulate form as well as in some fried and grilled foods.
Epidemiologic studies have reported an increase in lung cancer in
humans exposed to diesel exhaust, coke oven emissions, roofing tar
emissions, and cigarette smoke; all of these mixtures contain POM
compounds.335 336 In 1991 EPA classified seven PAHs
(benzo[a]pyrene, benz[a]anthracene, chrysene, benzo[b]fluoranthene,
benzo[k]fluoranthene, dibenz[a,h]anthracene, and indeno[1,2,3-
cd]pyrene) as Group B2, probable human carcinogens based on the 1986
EPA Guidelines for Carcinogen Risk Assessment.\337\ Studies in multiple
animal species demonstrate that benzo[a]pyrene is carcinogenic at
multiple tumor sites (alimentary tract, liver, kidney, respiratory
tract, pharynx, and skin) by all routes of exposure. An increasing
number of occupational studies demonstrate a positive exposure-response
relationship with cumulative benzo[a]pyrene exposure and lung cancer.
The inhalation URE in IRIS for benzo[a]pyrene is 6 x 10-4
per [micro]g/m\3\ and the oral slope factor for cancer is 1 per mg/kg-
day.\338\
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\335\ Agency for Toxic Substances and Disease Registry (ATSDR).
(1995). Toxicological profile for Polycyclic Aromatic Hydrocarbons
(PAHs). Atlanta, GA: U.S. Department of Health and Human Services,
Public Health Service. Available electronically at http://www.atsdr.cdc.gov/ToxProfiles/TP.asp?id=122&tid=25.
\336\ U.S. EPA (2002). Health Assessment Document for Diesel
Engine Exhaust. EPA/600/8-90/057F Office of Research and
Development, Washington DC. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060.
\337\ U.S. EPA (1991). Drinking Water Criteria Document for
Polycyclic Aromatic Hydrocarbons (PAHS). ECAO-CIN-0010. EPA Research
and Development.
\338\ U.S. EPA (2017). Toxicological Review of Benzo[a]pyrene.
This material is available electronically at: https://cfpub.epa.gov/ncea/iris/iris_documents/documents/toxreviews/0136tr.pdf.
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Animal studies demonstrate that exposure to benzo[a]pyrene is also
associated with developmental (including developmental neurotoxicity),
reproductive, and immunological effects. In addition, epidemiology
studies involving exposure to PAH mixtures have reported associations
between internal biomarkers of exposure to benzo[a]pyrene
(benzo[a]pyrene diol epoxide-DNA adducts) and adverse birth outcomes
(including reduced birth weight, postnatal body weight, and head
circumference), neurobehavioral effects, and decreased fertility. The
inhalation RfC for benzo[a]pyrene is 2 x 10-6 mg/m\3\ and
the RfD for oral exposure is 3 x 10-4 mg/kg-day.\339\
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\339\ U.S. EPA (2017). Toxicological Review of Benzo[a]pyrene.
This material is available electronically at: https://cfpub.epa.gov/ncea/iris/iris_documents/documents/toxreviews/0136tr.pdf.
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8. Exposure and Health Effects Associated With Traffic
Locations near major roadways generally have elevated
concentrations of many air pollutants emitted from motor vehicles.
Hundreds of studies have been published in peer-reviewed journals,
concluding that concentrations of CO, CO2, NO,
NO2, benzene, aldehydes, particulate matter, black carbon,
and many other compounds are elevated in ambient air within
approximately 300-600 meters (about 1,000-2,000 feet) of major
roadways. The highest concentrations of most pollutants emitted
directly by motor vehicles are found within 50 meters (about 165 feet)
of the edge of a roadway's traffic lanes.
A large-scale review of air quality measurements in the vicinity of
major roadways between 1978 and 2008 concluded that the pollutants with
the steepest concentration gradients in vicinities of roadways were CO,
ultrafine particles, metals, elemental carbon (EC), NO, NOX,
and several VOCs.\340\ These pollutants showed a large reduction in
concentrations within 100 meters downwind of the roadway. Pollutants
that showed more gradual reductions with distance from roadways
included benzene, NO2, PM2.5, and
PM10. In reviewing the literature, Karner et al. (2010)
reported that results varied based on the method of statistical
analysis used to determine the gradient in pollutant concentration.
More recent studies of traffic-related air pollutants continue to
report sharp gradients around roadways, particularly within several
hundred meters.341 342 343 344 345 346 347 348 There is
[[Page 27877]]
evidence that EPA's regulations for vehicles have lowered the near-road
concentrations and gradients.\349\ Starting in 2010, EPA required
through the NAAQS process that air quality monitors be placed near
high-traffic roadways for determining concentrations of CO,
NO2, and PM2.5. The monitoring data for
NO2 and CO indicate that in urban areas, monitors near
roadways often report the highest concentrations.350 351
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\340\ Karner, A.A.; Eisinger, D.S.; Niemeier, D.A. (2010). Near-
roadway air quality: synthesizing the findings from real-world data.
Environ Sci Technol 44: 5334-5344.
\341\ McDonald, B.C.; McBride, Z.C.; Martin, E.W.; Harley, R.A.
(2014) High-resolution mapping of motor vehicle carbon dioxide
emissions. J. Geophys. Res. Atmos.,119, 5283-5298, doi:10.1002/
2013JD021219.
\342\ Kimbrough, S.; Baldauf, R.W.; Hagler, G.S.W.; Shores,
R.C.; Mitchell, W.; Whitaker, D.A.; Croghan, C.W.; Vallero, D.A.
(2013) Long-term continuous measurement of near-road air pollution
in Las Vegas: seasonal variability in traffic emissions impact on
air quality. Air Qual Atmos Health 6: 295-305. DOI 10.1007/s11869-
012-0171-x.
\343\ Kimbrough, S.; Palma, T.; Baldauf, R.W. (2014) Analysis of
mobile source air toxics (MSATs)--Near-road VOC and carbonyl
concentrations. Journal of the Air &Waste Management Association,
64:3, 349-359, DOI: 10.1080/10962247.2013.863814.
\344\ Kimbrough, S.; Owen, R.C.; Snyder, M.; Richmond-Bryant, J.
(2017) NO to NO2 Conversion Rate Analysis and
Implications for Dispersion Model Chemistry Methods using Las Vegas,
Nevada Near-Road Field Measurements. Atmos Environ 165: 23-24.
\345\ Apte, J.S.; Messier, K.P.; Gani, S.; Brauer, M.;
Kirchstetter, T.W.; Lunden, M.M.; Marshall, J.D.; Portier, C.J.;
Vermeulen, R.C.H.; Hamburg, S.P. (2017) High-Resolution Air
Pollution Mapping with Google Street View Cars: Exploiting Big Data.
Environ Sci Technol 51: 6999-7008. https://doi.org/10.1021/acs.est.7b00891.
\346\ Gu, P.; Li, H.Z.; Ye, Q.; et al. (2018) Intercity
variability of particulate matter is driven by carbonaceous sources
and correlated with land-use variables. Environ Sci Technol 52: 52:
11545-11554. [Online at http://dx.doi.org/10.1021/acs.est.8b03833].
\347\ Hilker, N.; Wang, J.W.; Jong, C-H.; Healy, R.M.; Sofowote,
U.; Debosz, J.; Su, Y.; Noble, M.; Munoz, A.; Doerkson, G.; White,
L.; Audette, C.; Herod, D.; Brook, J.R.; Evans, G.J. (2019) Traffic-
related air pollution near roadways: discerning local impacts from
background. Atmos. Meas. Tech., 12, 5247-5261. https://doi.org/10.5194/amt-12-5247-2019.
\348\ Dabek-Zlotorzynska, E., V. Celo, L. Ding, D. Herod, C-H.
Jeong, G. Evans, and N. Hilker. 2019. ``Characteristics and sources
of PM2.5 and reactive gases near roadways in two
metropolitan areas in Canada.'' Atmos Environ 218: 116980.
\349\ Sarnat, J.A.; Russell, A.; Liang, D.; Moutinho, J.L;
Golan, R.; Weber, R.; Gao, D.; Sarnat, S.; Chang, H.H.; Greenwald,
R.; Yu, T. (2018) Developing Multipollutant Exposure Indicators of
Traffic Pollution: The Dorm Room Inhalation to Vehicle Emissions
(DRIVE) Study. Health Effects Institute Research Report Number 196.
[Online at: https://www.healtheffects.org/publication/developing-multipollutant-exposure-indicators-traffic-pollution-dorm-room-inhalation].
\350\ Gantt, B; Owen, R.C.; Watkins, N. (2021) Characterizing
nitrogen oxides and fine particulate matter near major highways in
the United States using the National Near-road Monitoring Network.
Environ Sci Technol 55: 2831-2838. [Online at https://doi.org/10.1021/acs.est.0c05851].
\351\ Lal, R.M.; Ramaswani, A.; Russell, A.G. (2020) Assessment
of the near-road (monitoring) network including comparison with
nearby monitors within U.S. cities. Environ Res Letters 15: 114026.
[Online at https://doi.org/10.1088/1748-9326/ab8156].
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For pollutants with relatively high background concentrations
relative to near-road concentrations, detecting concentration gradients
can be difficult. For example, many carbonyls have high background
concentrations because of photochemical breakdown of precursors from
many different organic compounds. However, several studies have
measured carbonyls in multiple weather conditions and found higher
concentrations of many carbonyls downwind of
roadways.352 353 These findings suggest a substantial
roadway source of these carbonyls.
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\352\ Liu, W.; Zhang, J.; Kwon, J.l; et l. (2006).
Concentrations and source characteristics of airborne carbonyl
compounds measured outside urban residences. J Air Waste Manage
Assoc 56: 1196-1204.
\353\ Cahill, T.M.; Charles, M.J.; Seaman, V.Y. (2010).
Development and application of a sensitive method to determine
concentrations of acrolein and other carbonyls in ambient air.
Health Effects Institute Research Report 149. Available at https://www.healtheffects.org/system/files/Cahill149.pdf.
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In the past 30 years, many studies have been published with results
reporting that populations who live, work, or go to school near high-
traffic roadways experience higher rates of numerous adverse health
effects, compared to populations far away from major roads.\354\ In
addition, numerous studies have found adverse health effects associated
with spending time in traffic, such as commuting or walking along high-
traffic roadways, including studies among
children.355 356 357 358
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\354\ In the widely used PubMed database of health publications,
between January 1, 1990 and December 31, 2021, 1,979 publications
contained the keywords ``traffic, pollution, epidemiology,'' with
approximately half the studies published after 2015.
\355\ Laden, F.; Hart, J.E.; Smith, T.J.; Davis, M.E.; Garshick,
E. (2007) Cause-specific mortality in the unionized U.S. trucking
industry. Environmental Health Perspect 115:1192-1196.
\356\ Peters, A.; von Klot, S.; Heier, M.; Trentinaglia, I.;
H[ouml]rmann, A.; Wichmann, H.E.; L[ouml]wel, H. (2004) Exposure to
traffic and the onset of myocardial infarction. New England J Med
351: 1721-1730.
\357\ Zanobetti, A.; Stone, P.H.; Spelzer, F.E.; Schwartz, J.D.;
Coull, B.A.; Suh, H.H.; Nearling, B.D.; Mittleman, M.A.; Verrier,
R.L.; Gold, D.R. (2009) T-wave alternans, air pollution and traffic
in high-risk subjects. Am J Cardiol 104: 665-670.
\358\ Adar, S.; Adamkiewicz, G.; Gold, D.R.; Schwartz, J.;
Coull, B.A.; Suh, H. (2007) Ambient and microenvironmental particles
and exhaled nitric oxide before and after a group bus trip. Environ
Health Perspect 115: 507-512.
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Numerous reviews of this body of health literature have been
published. In a 2022 final report, an expert panel of the Health
Effects Institute (HEI) employed a systematic review focusing on
selected health endpoints related to exposure to traffic-related air
pollution.\359\ The HEI panel concluded that there was a high level of
confidence in evidence between long-term exposure to traffic-related
air pollution and health effects in adults, including all-cause,
circulatory, and ischemic heart disease mortality.\360\ The panel also
found that there is a moderate-to-high level of confidence in evidence
of associations with asthma onset and acute respiratory infections in
children and lung cancer and asthma onset in adults. The panel
concluded that there was a moderate level of evidence of associations
with small for gestational age births, but low-to-moderate confidence
for other birth outcomes (term birth weight and preterm birth). This
report follows on an earlier expert review published by HEI in 2010,
where it found strongest evidence for asthma-related traffic impacts.
Other literature reviews have been published with conclusions generally
similar to the HEI panels'.361 362 363 364 Additionally, in
2014, researchers from the U.S. Centers for Disease Control and
Prevention (CDC) published a systematic review and meta-analysis of
studies evaluating the risk of childhood leukemia associated with
traffic exposure and reported positive associations between postnatal
proximity to traffic and leukemia risks, but no such association for
prenatal exposures.\365\ The U.S. Department of Health and Human
Services' National Toxicology Program published a monograph including a
systematic review of traffic-related air pollution and its impacts on
hypertensive disorders of pregnancy. The National Toxicology Program
concluded that exposure to traffic-related air pollution is ``presumed
to be a hazard to pregnant women'' for developing hypertensive
disorders of pregnancy.\366\
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\359\ HEI Panel on the Health Effects of Long-Term Exposure to
Traffic-Related Air Pollution (2022) Systematic review and meta-
analysis of selected health effects of long-term exposure to
traffic-related air pollution. Health Effects Institute Special
Report 23. [Online at https://www.healtheffects.org/publication/systematic-review-and-meta-analysis-selected-health-effects-long-term-exposure-traffic] This more recent review focused on health
outcomes related to birth effects, respiratory effects,
cardiometabolic effects, and mortality.
\360\ Boogaard, H.; Patton, A.P.; Atkinson, R.W.; Brook, J.R.;
Chang, H.H.; Crouse, D.L.; Fussell, J.C.; Hoek, G.; Hoffmann, B.;
Kappeler, R.; Kutlar Joss, M.; Ondras, M.; Sagiv, S.K.; Samoli, E.;
Shaikh, R.; Smargiassi, A.; Szpiro, A.A.; Van Vliet, E.D.S.;
Vienneau, D.; Weuve, J.; Lurmann, F.W.; Forastiere, F. (2022) Long-
term exposure to traffic-related air pollution and selected health
outcomes: A systematic review and meta-analysis. Environ Internatl
164: 107262. [Online at https://doi.org/10.1016/j.envint.2022.107262].
\361\ Boothe, V.L.; Shendell, D.G. (2008). Potential health
effects associated with residential proximity to freeways and
primary roads: review of scientific literature, 1999-2006. J Environ
Health 70: 33-41.
\362\ Salam, M.T.; Islam, T.; Gilliland, F.D. (2008). Recent
evidence for adverse effects of residential proximity to traffic
sources on asthma. Curr Opin Pulm Med 14: 3-8.
\363\ Sun, X.; Zhang, S.; Ma, X. (2014) No association between
traffic density and risk of childhood leukemia: a meta-analysis.
Asia Pac J Cancer Prev 15: 5229-5232.
\364\ Raaschou-Nielsen, O.; Reynolds, P. (2006). Air pollution
and childhood cancer: a review of the epidemiological literature.
Int J Cancer 118: 2920-9.
\365\ Boothe, VL.; Boehmer, T.K.; Wendel, A.M.; Yip, F.Y. (2014)
Residential traffic exposure and childhood leukemia: a systematic
review and meta-analysis. Am J Prev Med 46: 413-422.
\366\ National Toxicology Program (2019) NTP Monograph on the
Systematic Review of Traffic-related Air Pollution and Hypertensive
Disorders of Pregnancy. NTP Monograph 7. https://ntp.niehs.nih.gov/ntp/ohat/trap/mgraph/trap_final_508.pdf.
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For several other health outcomes there are publications to suggest
the
[[Page 27878]]
possibility of an association with traffic-related air pollution, but
insufficient evidence to draw definitive conclusions. Among these
outcomes are neurological and cognitive impacts (e.g., autism and
reduced cognitive function, academic performance, and executive
function) and reproductive outcomes (e.g., preterm birth, low birth
weight).367 368 369 370 371 372
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\367\ Volk, H.E.; Hertz-Picciotto, I.; Delwiche, L.; et al.
(2011). Residential proximity to freeways and autism in the CHARGE
study. Environ Health Perspect 119: 873-877.
\368\ Franco-Suglia, S.; Gryparis, A.; Wright, R.O.; et al.
(2007). Association of black carbon with cognition among children in
a prospective birth cohort study. Am J Epidemiol. doi: 10.1093/aje/
kwm308. [Online at http://dx.doi.org/10.1093/aje/kwm308].
\369\ Power, M.C.; Weisskopf, M.G.; Alexeef, SE; et al. (2011).
Traffic-related air pollution and cognitive function in a cohort of
older men. Environ Health Perspect 2011: 682-687.
\370\ Wu, J.; Wilhelm, M.; Chung, J.; Ritz, B. (2011). Comparing
exposure assessment methods for traffic-related air pollution in an
adverse pregnancy outcome study. Environ Res 111: 685-692. https://doi.org/10.1016/j.envres.2011.03.008.
\371\ Stenson, C.; Wheeler, A.J.; Carver, A.; et al. (2021) The
impact of traffic-related air pollution on child and adolescent
academic performance: a systematic review. Environ Intl 155: 106696
[Online at https://doi.org/10.1016/j.envint.2021.106696].
\372\ Gartland, N.; Aljofi, H.E.; Dienes, K.; et al. (2022) The
effects of traffic air pollution in and around schools on executive
function and academic performance in children: a rapid review. Int J
Environ Res Public Health 19: 749. https://doi.org/10.3390/ijerph19020749.
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Numerous studies have also investigated potential mechanisms by
which traffic-related air pollution affects health, particularly for
cardiopulmonary outcomes. For example, some research indicates that
near-roadway exposures may increase systemic inflammation, affecting
organ systems, including blood vessels and
lungs.373 374 375 376 Additionally, long-term exposures in
near-road environments have been associated with inflammation-
associated conditions, such as atherosclerosis and
asthma.377 378 379
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\373\ Riediker, M. (2007). Cardiovascular effects of fine
particulate matter components in highway patrol officers. Inhal
Toxicol 19: 99-105. doi: 10.1080/08958370701495238.
\374\ Alexeef, SE; Coull, B.A.; Gryparis, A.; et al. (2011).
Medium-term exposure to traffic-related air pollution and markers of
inflammation and endothelial function. Environ Health Perspect 119:
481-486. doi:10.1289/ehp.1002560.
\375\ Eckel. S.P.; Berhane, K.; Salam, M.T.; et al. (2011).
Residential Traffic-related pollution exposure and exhaled nitric
oxide in the Children's Health Study. Environ Health Perspect.
doi:10.1289/ehp.1103516.
\376\ Zhang, J.; McCreanor, J.E.; Cullinan, P.; et al. (2009).
Health effects of real-world exposure diesel exhaust in persons with
asthma. Res Rep Health Effects Inst 138. [Online at http://www.healtheffects.org].
\377\ Adar, S.D.; Klein, R.; Klein, E.K.; et al. (2010). Air
pollution and the microvasculature: a cross-sectional assessment of
in vivo retinal images in the population-based Multi-Ethnic Study of
Atherosclerosis. PLoS Med 7(11): E1000372. doi:10.1371/
journal.pmed.1000372. Available at http://dx.doi.org/10.1371/journal.pmed.1000372.
\378\ Kan, H.; Heiss, G.; Rose, K.M.; et al. (2008). Prospective
analysis of traffic exposure as a risk factor for incident coronary
heart disease: The Atherosclerosis Risk in Communities (ARIC) study.
Environ Health Perspect 116: 1463-1468. doi:10.1289/ehp.11290.
Available at http://dx.doi.org/doi:10.1289/ehp.11290.
\379\ McConnell, R.; Islam, T.; Shankardass, K.; et al. (2010).
Childhood incident asthma and traffic-related air pollution at home
and school. Environ Health Perspect 1021-1026.
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As described in section VIII.I of the preamble, people who live or
attend school near major roadways are more likely to be people of color
and/or have a low SES. Additionally, people with low SES often live in
neighborhoods with multiple stressors and health risk factors,
including reduced health insurance coverage rates, higher smoking and
drug use rates, limited access to fresh food, visible neighborhood
violence, and elevated rates of obesity and some diseases such as
asthma, diabetes, and ischemic heart disease. Although questions
remain, several studies find stronger associations between air
pollution and health in locations with such chronic neighborhood
stress, suggesting that populations in these areas may be more
susceptible to the effects of air
pollution.380 381 382 383 384 385 386 387
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\380\ Islam, T.; Urban, R.; Gauderman, W.J.; et al. (2011).
Parental stress increases the detrimental effect of traffic exposure
on children's lung function. Am J Respir Crit Care Med.
\381\ Clougherty, J.E.; Kubzansky, L.D. (2009) A framework for
examining social stress and susceptibility to air pollution in
respiratory health. Environ Health Perspect 117: 1351-1358.
Doi:10.1289/ehp.0900612.
\382\ Clougherty, J.E.; Levy, J.I.; Kubzansky, L.D.; Ryan, P.B.;
Franco Suglia, S.; Jacobson Canner, M.; Wright, R.J. (2007)
Synergistic effects of traffic-related air pollution and exposure to
violence on urban asthma etiology. Environ Health Perspect 115:
1140-1146. doi:10.1289/ehp.9863.
\383\ Finkelstein, M.M.; Jerrett, M.; DeLuca, P.; Finkelstein,
N.; Verma, D.K.; Chapman, K.; Sears, M.R. (2003) Relation between
income, air pollution and mortality: a cohort study. Canadian Med
Assn J 169: 397-402.
\384\ Shankardass, K.; McConnell, R.; Jerrett, M.; Milam, J.;
Richardson, J.; Berhane, K. (2009) Parental stress increases the
effect of traffic-related air pollution on childhood asthma
incidence. Proc Natl Acad Sci 106: 12406-12411. doi:10.1073/
pnas.0812910106.
\385\ Chen, E.; Schrier, H.M.; Strunk, R.C.; et al. (2008).
Chronic traffic-related air pollution and stress interact to predict
biologic and clinical outcomes in asthma. Environ Health Perspect
116: 970-5.
\386\ Currie, J. and R. Walker (2011) Traffic Congestion and
Infant Health: Evidence from E-ZPass. American Economic Journal:
Applied Economics, 3 (1): 65-90. https://doi.org/10.1257/app.3.1.65.
\387\ Knittel, C.R.; Miller, D.L.; Sanders N.J. (2016) Caution,
Drivers! Children Present: Traffic, Pollution, and Infant Health.
The Review of Economics and Statistics, 98 (2): 350-366. https://doi.org/10.1162/REST_a_00548.
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The risks associated with residence, workplace, or school near
major roads are of potentially high public health significance due to
the large population in such locations. We analyzed several data sets
to estimate the size of populations living or attending school near
major roads. Our evaluation of environmental justice concerns in these
studies is presented in section VI.D.3 of this preamble.
Every two years from 1997 to 2009 and in 2011 and 2013, the U.S.
Census Bureau's American Housing Survey (AHS) conducted a survey that
includes whether housing units are within 300 feet of an ``airport,
railroad, or highway with four or more lanes.'' \388\ The 2013 AHS
reports that 17.3 million housing units, or 13 percent of all housing
units in the United States, were in such areas. Assuming that
populations and housing units are in the same locations, this
corresponds to a population of more than 41 million U.S. residents near
high-traffic roadways or other transportation sources. According to the
Central Intelligence Agency's World Factbook, based on data collected
between 2012-2022, the United States had 6,586,610 km of roadways,
293,564 km of railways, and 13,513 airports.\389\ As such, highways
represent the overwhelming majority of transportation facilities
described by this factor in the AHS.
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\388\ The variable was known as ``ETRANS'' in the questions
about the neighborhood.
\389\ Central Intelligence Agenda. World Factbook: United
States. [Online at https://www.cia.gov/the-world-factbook/countries/united-states/#transportation].
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In examining schools near major roadways, we used the Common Core
of Data from the U.S. Department of Education, which includes
information on all public elementary and secondary schools and school
districts nationwide.\390\ To determine school proximities to major
roadways, we used a geographic information system (GIS) to map each
school and roadway based on the U.S. Census's TIGER roadway file.\391\
We estimated that about 10 million students attend public schools
within 200 meters of major roads, about 20 percent of the total number
of public school students in the United States.392 393 394
About 800,000 students
[[Page 27879]]
attend public schools within 200 meters of primary roads, or about 2
percent of the total.
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\390\ http://nces.ed.gov/ccd/.
\391\ TIGER/Line shapefiles for the year 2010. [Online at
https://www.census.gov/geographies/mapping-files/time-series/geo/tiger-line-file.2010.html].
\392\ Pedde, M.; Bailey, C. (2011) Identification of Schools
within 200 Meters of U.S. Primary and Secondary Roads. Memorandum to
the docket.
\393\ Here, ``major roads'' refer to those TIGER classifies as
either ``Primary'' or ``Secondary.'' The Census Bureau describes
primary roads as ``generally divided limited-access highways within
the Federal interstate system or under state management.'' Secondary
roads are ``main arteries, usually in the U.S. highway, state
highway, or county highway system.''
\394\ For this analysis we analyzed a 200-meter distance based
on the understanding that roadways generally influence air quality
within a few hundred meters from the vicinity of heavily traveled
roadways or along corridors with significant trucking traffic. See
U.S. EPA, 2014. Near Roadway Air Pollution and Health: Frequently
Asked Questions. EPA-420-F-14-044.
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EPA also conducted a study to estimate the number of people living
near truck freight routes in the United States, which includes many
large highways and other routes where light- and medium-duty vehicles
operate.\395\ Based on a population analysis using the U.S. Department
of Transportation's (USDOT) Freight Analysis Framework 4 (FAF4) and
population data from the 2010 decennial census, an estimated 72 million
people live within 200 meters of these FAF4 roads, which are used by
all types of vehicles.\396\ The FAF4 analysis includes the population
living within 200 meters of major roads, while the AHS uses a 100-meter
distance; the larger distance and other methodological differences
explain the difference in the two estimates for populations living near
major roads.\397\
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\395\ U.S. EPA (2021). Estimation of Population Size and
Demographic Characteristics among People Living Near Truck Routes in
the Conterminous United States. Memorandum to the Docket.
\396\ FAF4 is a model from the USDOT's Bureau of Transportation
Statistics (BTS) and Federal Highway Administration (FHWA), which
provides data associated with freight movement in the U.S. It
includes data from the 2012 Commodity Flow Survey (CFS), the Census
Bureau on international trade, as well as data associated with
construction, agriculture, utilities, warehouses, and other
industries. FAF4 estimates the modal choices for moving goods by
trucks, trains, boats, and other types of freight modes. It includes
traffic assignments, including truck flows on a network of truck
routes. https://ops.fhwa.dot.gov/freight/freight_analysis/faf/.
\397\ The same analysis estimated the population living within
100 meters of a FAF4 truck route is 41 million.
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EPA's Exposure Factor Handbook also indicates that, on average,
Americans spend more than an hour traveling each day, bringing nearly
all residents into a high-exposure microenvironment for part of the
day.398 399 While near-roadway studies focus on residents
near roads or others spending considerable time near major roads, the
duration of commuting results in another important contributor to
overall exposure to traffic-related air pollution. Studies of health
that address time spent in transit have found evidence of elevated risk
of cardiac impacts.400 401 402
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\398\ EPA. (2011) Exposure Factors Handbook: 2011 Edition.
Chapter 16. Online at https://www.epa.gov/expobox/about-exposure-factors-handbook.
\399\ It is not yet possible to estimate the long-term impact of
growth in telework associated with the COVID-19 pandemic on travel
behavior. There were notable changes during the pandemic. For
example, according to the 2021 American Time Use Survey, a greater
fraction of workers did at least part of their work at home (38%) as
compared with the 2019 survey (24%). [Online at https://www.bls.gov/news.release/atus.nr0.htm].
\400\ Riediker, M.; Cascio, W.E.; Griggs, T.R.; et al. (2004)
Particulate matter exposure in cars is associated with
cardiovascular effects in healthy young men. Am J Respir Crit Care
Med 169. [Online at https://doi.org/10.1164/rccm.200310-1463OC].
\401\ Peters, A.; von Klot, S.; Heier, M.; et al. (2004)
Exposure to traffic and the onset of myocardial infarction. New Engl
J Med 1721-1730. [Online at https://doi.org/10.1056/NEJMoa040203].
\402\ Adar, S.D.; Gold, D.R.; Coull, B.A.; (2007) Focused
exposure to airborne traffic particles and heart rate variability in
the elderly. Epidemiology 18: 95-103 [Online at 351: https://doi.org/10.1097/01.ede.0000249409.81050.46].
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D. Welfare Effects Associated With Exposure to Criteria and Air Toxics
Pollutants Impacted by the Final Standards
This section discusses the welfare effects associated with
pollutants affected by this rule, specifically particulate matter,
ozone, NOX, SOX, and air toxics.
1. Visibility
Visibility can be defined as the degree to which the atmosphere is
transparent to visible light.\403\ Visibility impairment is caused by
light scattering and absorption by suspended particles and gases. It is
dominated by contributions from suspended particles except under
pristine conditions. Visibility is important because it has direct
significance to people's enjoyment of daily activities in all parts of
the country. Individuals value good visibility for the well-being it
provides them directly, where they live and work, and in places where
they enjoy recreational opportunities. Visibility is also highly valued
in significant natural areas, such as national parks and wilderness
areas, and special emphasis is given to protecting visibility in these
areas. For more information on visibility see the final 2019 p.m.
ISA.\404\
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\403\ National Research Council, (1993). Protecting Visibility
in National Parks and Wilderness Areas. National Academy of Sciences
Committee on Haze in National Parks and Wilderness Areas. National
Academy Press, Washington, DC. This book can be viewed on the
National Academy Press website at https://www.nap.edu/catalog/2097/protecting-visibility-in-national-parks-and-wilderness-areas.
\404\ U.S. EPA. Integrated Science Assessment (ISA) for
Particulate Matter (Final Report, 2019). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
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EPA is working to address visibility impairment. Reductions in air
pollution from implementation of various programs associated with the
Clean Air Act Amendments of 1990 provisions have resulted in
substantial improvements in visibility and will continue to do so in
the future. Nationally, because trends in haze are closely associated
with trends in particulate sulfate and nitrate due to the relationship
between their concentration and light extinction, visibility trends
have improved as emissions of SO2 and NOX have
decreased over time due to air pollution regulations such as the Acid
Rain Program.\405\ However, in the western part of the country, changes
in total light extinction were smaller, and the contribution of
particulate organic matter to atmospheric light extinction was
increasing due to increasing wildfire emissions.\406\
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\405\ U.S. EPA. Integrated Science Assessment (ISA) for
Particulate Matter (Final Report, 2019). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
\406\ Hand, JL;Prenni, AJ; Copeland, S; Schichtel, BA; Malm, WC.
(2020). Thirty years of the Clean Air Act Amendments: Impacts on
haze in remote regions of the United States (1990-2018). Atmos
Environ 243: 117865.
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In the Clean Air Act Amendments of 1977, Congress recognized
visibility's value to society by establishing a national goal to
protect national parks and wilderness areas from visibility impairment
caused by manmade pollution.\407\ In 1999, EPA finalized the regional
haze program to protect the visibility in Mandatory Class I Federal
areas.\408\ There are 156 national parks, forests and wilderness areas
categorized as Mandatory Class I Federal areas.\409\ These areas are
defined in CAA section 162 as those national parks exceeding 6,000
acres, wilderness areas and memorial parks exceeding 5,000 acres, and
all international parks which were in existence on August 7, 1977.
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\407\ See Section 169(a) of the Clean Air Act.
\408\ 64 FR 35714, July 1, 1999.
\409\ 62 FR 38680-38681, July 18, 1997.
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EPA has also concluded that PM2.5 causes adverse effects
on visibility in other areas that are not targeted by the Regional Haze
Rule, such as urban areas, depending on PM2.5 concentrations
and other factors such as dry chemical composition and relative
humidity (i.e., an indicator of the water composition of the
particles). The secondary (welfare-based) PM NAAQS provide protection
against visibility effects. In recent PM NAAQS reviews, EPA evaluated a
target level of protection for visibility impairment that is expected
to be met through attainment of the existing secondary PM standards.
[[Page 27880]]
2. Ozone Effects on Ecosystems
The welfare effects of ozone include effects on ecosystems, which
can be observed across a variety of scales, i.e., subcellular,
cellular, leaf, whole plant, population, and ecosystem. Ozone effects
that begin at small spatial scales, such as the leaf of an individual
plant, when they occur at sufficient magnitudes (or to a sufficient
degree) can result in effects being propagated to higher and higher
levels of biological organization. For example, effects at the
individual plant level, such as altered rates of leaf gas exchange,
growth, and reproduction, can, when widespread, result in broad changes
in ecosystems, such as productivity, carbon storage, water cycling,
nutrient cycling, and community composition.
Ozone can produce both acute and chronic injury in sensitive plant
species depending on the concentration level and the duration of the
exposure.\410\ In those sensitive species,\411\ effects from repeated
exposure to ozone throughout the growing season of the plant can tend
to accumulate, so even relatively low concentrations experienced for a
longer duration have the potential to create chronic stress on
vegetation.412 413 Ozone damage to sensitive plant species
includes impaired photosynthesis and visible injury to leaves. The
impairment of photosynthesis, the process by which the plant makes
carbohydrates (its source of energy and food), can lead to reduced crop
yields, timber production, and plant productivity and growth. Impaired
photosynthesis can also lead to a reduction in root growth and
carbohydrate storage below ground, resulting in other, more subtle
plant and ecosystems impacts.\414\ These latter impacts include
increased susceptibility of plants to insect attack, disease, harsh
weather, interspecies competition and overall decreased plant vigor.
The adverse effects of ozone on areas with sensitive species could
potentially lead to species shifts and loss from the affected
ecosystems,\415\ resulting in a loss or reduction in associated
ecosystem goods and services. Additionally, visible ozone injury to
leaves can result in a loss of aesthetic value in areas of special
scenic significance like national parks and wilderness areas and
reduced use of sensitive ornamentals in landscaping.\416\ In addition
to ozone effects on vegetation, newer evidence suggests that ozone
affects interactions between plants and insects by altering chemical
signals (e.g., floral scents) that plants use to communicate to other
community members, such as attraction of pollinators.
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\410\ U.S. EPA. Integrated Science Assessment (ISA) for Ozone
and Related Photochemical Oxidants (Final Report). U.S.
Environmental Protection Agency, Washington, DC, EPA/600/R-20/012,
2020.
\411\ 73 FR 16491, March 27, 2008. Only a small percentage of
all the plant species growing within the U.S. (over 43,000 species
have been catalogued in the USDA PLANTS database) have been studied
with respect to ozone sensitivity.
\412\ U.S. EPA. Integrated Science Assessment (ISA) for Ozone
and Related Photochemical Oxidants (Final Report). U.S.
Environmental Protection Agency, Washington, DC, EPA/600/R-20/012,
2020.
\413\ The concentration at which ozone levels overwhelm a
plant's ability to detoxify or compensate for oxidant exposure
varies. Thus, whether a plant is classified as sensitive or tolerant
depends in part on the exposure levels being considered.
\414\ U.S. EPA. Integrated Science Assessment (ISA) for Ozone
and Related Photochemical Oxidants (Final Report). U.S.
Environmental Protection Agency, Washington, DC, EPA/600/R-20/012,
2020.
\415\ Ozone impacts could be occurring in areas where plant
species sensitive to ozone have not yet been studied or identified.
\416\ U.S. EPA. Integrated Science Assessment (ISA) for Ozone
and Related Photochemical Oxidants (Final Report). U.S.
Environmental Protection Agency, Washington, DC, EPA/600/R-20/012,
2020.
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The Ozone ISA presents more detailed information on how ozone
affects vegetation and ecosystems.\417\ The Ozone ISA reports causal
and likely causal relationships between ozone exposure and a number of
welfare effects and characterizes the weight of evidence for different
effects associated with ozone.\418\ The Ozone ISA concludes that
visible foliar injury effects on vegetation, reduced vegetation growth,
reduced plant reproduction, reduced productivity in terrestrial
ecosystems, reduced yield and quality of agricultural crops, alteration
of below-ground biogeochemical cycles, and altered terrestrial
community composition are causally associated with exposure to ozone.
It also concludes that increased tree mortality, altered herbivore
growth and reproduction, altered plant-insect signaling, reduced carbon
sequestration in terrestrial ecosystems, and alteration of terrestrial
ecosystem water cycling are likely to be causally associated with
exposure to ozone.
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\417\ U.S. EPA. Integrated Science Assessment (ISA) for Ozone
and Related Photochemical Oxidants (Final Report). U.S.
Environmental Protection Agency, Washington, DC, EPA/600/R-20/012,
2020.
\418\ The Ozone ISA evaluates the evidence associated with
different ozone related health and welfare effects, assigning one of
five ``weight of evidence'' determinations: causal relationship,
likely to be a causal relationship, suggestive of a causal
relationship, inadequate to infer a causal relationship, and not
likely to be a causal relationship. For more information on these
levels of evidence, please refer to Table II of the ISA.
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3. Deposition
The Integrated Science Assessment for Oxides of Nitrogen, Oxides of
Sulfur, and Particulate Matter--Ecological Criteria documents the
ecological effects of the deposition of these criteria air
pollutants.\419\ It is clear from the body of evidence that oxides of
nitrogen, oxides of sulfur, and particulate matter contribute to total
nitrogen (N) and sulfur (S) deposition. In turn, N and S deposition
cause either nutrient enrichment or acidification depending on the
sensitivity of the landscape or the species in question. Both
enrichment and acidification are characterized by an alteration of the
biogeochemistry and the physiology of organisms, which can result in
ecologically harmful declines in biodiversity in terrestrial,
freshwater, wetland, and estuarine ecosystems in the United States.
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\419\ U.S. EPA. Integrated Science Assessment (ISA) for Oxides
of Nitrogen, Oxides of Sulfur and Particulate Matter Ecological
Criteria (Final Report). U.S. Environmental Protection Agency,
Washington, DC, EPA/600/R-20/278, 2020.
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Terrestrial, wetland, freshwater, and estuarine ecosystems in the
United States are affected by nitrogen enrichment/eutrophication caused
by nitrogen deposition. These effects, though improving recently as
emissions and deposition decline, have been consistently documented
across the United States for hundreds of species and have likely been
occurring for decades. In terrestrial systems nitrogen loading can lead
to loss of nitrogen-sensitive lichen species, decreased biodiversity of
grasslands, meadows and other sensitive habitats, and increased
potential for invasive species. In aquatic systems nitrogen loading can
alter species assemblages and cause eutrophication. For a broader
explanation of the topics treated here, refer to the description in
Chapter 6 of the RIA.
The sensitivity of terrestrial and aquatic ecosystems to
acidification from nitrogen and sulfur deposition is predominantly
governed by the intersection of geology and deposition. Prolonged
exposure to excess nitrogen and sulfur deposition in sensitive areas
acidifies lakes, rivers, and soils. Increased acidity in surface waters
creates inhospitable conditions for biota and affects the abundance and
biodiversity of fishes, zooplankton and macroinvertebrates and
ecosystem function. Over time, acidifying deposition also removes
essential nutrients from forest soils, depleting the capacity of soils
to neutralize future acid loadings and negatively affecting forest
sustainability. Major effects in forests in the past have included a
decline in sensitive tree species, such as red spruce (Picea rubens)
and sugar maple (Acer saccharum).
[[Page 27881]]
Building materials including metals, stones, cements, and paints
undergo natural weathering processes from exposure to environmental
elements (e.g., wind, moisture, temperature fluctuations, sunlight,
etc.). Pollution can worsen and accelerate these effects. Deposition of
PM is associated with both physical damage (materials damage effects)
and impaired aesthetic qualities (soiling effects). Wet and dry
deposition of PM can physically affect materials, adding to the effects
of natural weathering processes, by potentially promoting or
accelerating the corrosion of metals, by degrading paints and by
deteriorating building materials such as stone, concrete, and
marble.\420\ The effects of PM are exacerbated by the presence of
acidic gases and can be additive or synergistic due to the complex
mixture of pollutants in the air and surface characteristics of the
material. Acidic deposition has been shown to have an effect on
materials including zinc/galvanized steel and other metal, carbonate
stone (as monuments and building facings), and surface coatings
(paints).\421\ The effects on historic buildings and outdoor works of
art are of particular concern because of the uniqueness and
irreplaceability of many of these objects. In addition to aesthetic and
functional effects on metals, stone, and glass, altered energy
efficiency of photovoltaic panels by PM deposition is also an emerging
consideration for impacts of air pollutants on materials.
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\420\ U.S. EPA. Integrated Science Assessment (ISA) for
Particulate Matter (Final Report, 2019). U.S. Environmental
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
\421\ Irving, P.M., e.d. 1991. Acid Deposition: State of Science
and Technology, Volume III, Terrestrial, Materials, Health, and
Visibility Effects, The U.S. National Acid Precipitation Assessment
Program, Chapter 24, page 24-76.
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4. Welfare Effects Associated With Air Toxics
Emissions from producing, transporting, and combusting fuel
contribute to ambient levels of pollutants that contribute to adverse
effects on vegetation. Volatile organic compounds (VOCs), some of which
are considered air toxics, have long been suspected to play a role in
vegetation damage.\422\ In laboratory experiments, a wide range of
tolerance to VOCs has been observed.\423\ Decreases in harvested seed
pod weight have been reported for the more sensitive plants, and some
studies have reported effects on seed germination, flowering, and fruit
ripening. Effects of individual VOCs or their role in conjunction with
other stressors (e.g., acidification, drought, temperature extremes)
have not been well studied. In a recent study of a mixture of VOCs
including ethanol and toluene on herbaceous plants, significant effects
on seed production, leaf water content and photosynthetic efficiency
were reported for some plant species.\424\
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\422\ U.S. EPA. (1991). Effects of organic chemicals in the
atmosphere on terrestrial plants. EPA/600/3-91/001.
\423\ Cape JN, ID Leith, J Binnie, J Content, M Donkin, M
Skewes, DN Price AR Brown, AD Sharpe. (2003). Effects of VOCs on
herbaceous plants in an open-top chamber experiment. Environ.
Pollut. 124:341-343.
\424\ Cape JN, ID Leith, J Binnie, J Content, M Donkin, M
Skewes, DN Price AR Brown, AD Sharpe. (2003). Effects of VOCs on
herbaceous plants in an open-top chamber experiment. Environ.
Pollut. 124:341-343.
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Research suggests an adverse impact of vehicle exhaust on plants,
which has in some cases been attributed to aromatic compounds and in
other cases to nitrogen oxides.425 426 427 The impacts of
VOCs on plant reproduction may have long-term implications for
biodiversity and survival of native species near major roadways. Most
of the studies of the impacts of VOCs on vegetation have focused on
short-term exposure and few studies have focused on long-term effects
of VOCs on vegetation and the potential for metabolites of these
compounds to affect herbivores or insects.
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\425\ Viskari E-L. (2000). Epicuticular wax of Norway spruce
needles as indicator of traffic pollutant deposition. Water, Air,
and Soil Pollut. 121:327-337.
\426\ Ugrekhelidze D, F Korte, G Kvesitadze. (1997). Uptake and
transformation of benzene and toluene by plant leaves. Ecotox.
Environ. Safety 37:24-29.
\427\ Kammerbauer H, H Selinger, R Rommelt, A Ziegler-Jons, D
Knoppik, B Hock. (1987). Toxic components of motor vehicle emissions
for the spruce Picea abies. Environ. Pollut. 48:235-243.
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III. Light- and Medium-Duty Vehicle Standards for Model Years 2027 and
Later
A. Introduction and Background
This section III of the preamble outlines the final GHG and
criteria pollutant standards and related provisions that are included
in the rulemaking.
Throughout this section and elsewhere in this FRM, EPA uses the
following conventions to identify specific vehicle technology types and
groupings, also depicted schematically in Figure 2.\428\
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\428\ More information about these vehicle technologies may be
found in the 2016 EPA Draft Technical Assessment Report (EPA-420-D-
16-900, July 2016).
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ICE vehicle: a vehicle powered by an internal combustion
engine (ICE).
Electrified ICE vehicle: a vehicle powered by an ICE and
any amount of powertrain electrification (includes MHEV, HEV, PHEV).
MHEV: Mild Hybrid Electric Vehicle.\429\
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\429\ Mild hybrids most commonly operate at or about 48 volts
and provide idle-stop capability and launch assistance. See also
Draft Technical Assessment Report, EPA-420-D-16-900, July 2016, p.
5-11.
---------------------------------------------------------------------------
HEV: Hybrid Electric Vehicle (or strong hybrid).\430\
---------------------------------------------------------------------------
\430\ Strong hybrids typically operate at high voltage (greater
than 60 volts and most often up to several hundred volts) to provide
significant engine assist and regenerative braking, and most
commonly occur in what are known as P2 and power-split or other
parallel/series drive configurations. See also Draft Technical
Assessment Report, EPA-420-D-16-900, July 2016, pp. 5-11 and 5-12.
---------------------------------------------------------------------------
PHEV: Plug-in Hybrid Electric Vehicle (or near-zero
emission vehicle).
BEV: Battery Electric Vehicle.
FCEV: Fuel Cell Electric Vehicle.
PEV: Plug-in Electric Vehicle (refers collectively to BEVs
and PHEVs).
Hybrid: refers collectively to HEVs and MHEVs.
Zero-emission vehicle: refers collectively to BEV and
FCEV.
Electrified vehicle: refers to any vehicle with powertrain
electrification.
[[Page 27882]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.001
Figure 2: Vehicle technology types and groupings.
1. What vehicle categories and pollutants are covered by the rule?
EPA is establishing emissions standards for both light-duty
vehicles and medium-duty (Class 2b and 3) vehicles. The light-duty
vehicle category includes passenger cars, light trucks, and medium-duty
passenger vehicles (MDPVs), consistent with previous EPA GHG and
criteria pollutant rules.\431\ In this rule, Class 2b and 3 vehicles
are referred to as ``medium-duty vehicles'' (MDVs) to distinguish them
from Class 4 and higher vehicles that remain under the heavy-duty
program in 40 CFR parts 1036 and 1037 and to distinguish them from
light-duty categories. EPA has not previously used the MDV
nomenclature, referring to these larger vehicles in prior rules as
either heavy-duty Class 2b and 3 vehicles or heavy-duty pickups and
vans.\432\ MDV nomenclature is commonly used to describe commercial use
of Class 2b and Class 3 vans, pickups and incomplete vehicles. Our
regulatory definition of MDV includes large pickups, vans, and
incomplete vehicles with gross vehicle weight ratings of 8,501 to
14,000 pounds, but excludes MDPVs. Examples of vehicles in this
category include GM or Stellantis 2500 and 3500 series, and Ford 250
and 350 series, pickups and vans.
---------------------------------------------------------------------------
\431\ Light-duty trucks (LDTs) that have gross vehicle weight
ratings above 6,000 pounds and all MDVs are considered ``heavy-duty
vehicles'' under the CAA. See section 202(b)(3)(C). For regulatory
purposes, we generally refer to those LDTs which are above 6,000
pounds GVWR and at or below 8,500 pounds GVWR as ``heavy light-duty
trucks'' made up of LDT3s and LDT4s, and we have defined MDPVs
primarily as vehicles between 8,501 and 10,000 pounds GVWR designed
primarily for the transportation of persons. See 40 CFR 86.1803-01.
\432\ See 76 FR 57106 and 79 FR 23414. Heavy-duty vehicles
subject to standards under 40 CFR part 86, subpart S, are defined at
40 CFR 86.1803-01 to include all vehicles above 8,500 pounds GVWR,
and also incomplete vehicles with lower GVWR if they have curb
weight above 6,000 pounds or basic vehicle frontal area greater than
45 square feet.
---------------------------------------------------------------------------
Additionally, in the context of the criteria pollutant program, the
abbreviation LDV refers to light-duty vehicles that are not otherwise
designated as a light-duty truck (LDT) or medium-duty passenger vehicle
(MDPV). This final rule also amends the definition of MDPV. Light-duty
(unabbreviated) refers to LDV, LDT and MDPV combined. LDT with a number
following (e.g., LDT1, LDT2, LDT3, LDT4) refers to specific light-duty
truck weight categories defined in 40 CFR 86.1803-01. LDT weight
categories may be combined with text, e.g., LDT3/4 refers to the weight
categories LDT3 and LDT4 combined, which are also defined in 40 CFR
86.1803-01 as ``heavy-light-duty-trucks''. In this rulemaking, the new
nomenclature ``medium-duty vehicle'' (MDV) refers to a combination of
both Class 2b and 3 vehicles as defined in 40 CFR 86.1803-01. ``High
gross combination weight medium-duty vehicle'' (high GCWR MDV) is a
separate subcategory of MDV with very high tow capability, specifically
defined as having a GCWR of 22,001 pounds and greater.
EPA is finalizing new standards for both light- and medium-duty
vehicles for emissions of GHGs, hydrocarbons plus oxides of nitrogen
(NOX), and particulate matter (PM), and emissions
requirement changes for carbon monoxide (CO) and formaldehyde (HCHO).
EPA's final standards are based on an assessment of all available
vehicle emissions control technologies, including advancements in
gasoline vehicle technologies, hybrids, PHEVs, and BEVs over the model
years affected by the rule.
EPA notes that it is not finalizing the proposed standards for high
GCWR MDVs that would have required compliance with engine-based
criteria pollutant emissions standards under EPA's heavy-duty engine
standards under 40 CFR part 1036 rather than meeting MDV chassis-based
standards. Instead, we are finalizing one of the alternatives for high
GCWR MDV criteria pollutant emissions standards on which we solicited
comment, specifically, as discussed in section III.D of this preamble,
additional in-use standards that are comparable to those recently
adopted by California.
2. Light-Duty and Medium-Duty Vehicle Standards: Background and History
i. GHG Standards
This section provides an overview of the prior rules and the
standards structures for EPA's light-duty GHG emissions standards,
medium-duty GHG emissions standards, and criteria pollutant emissions
standards for both light- and medium-duty vehicles.\433\ While this
rule addresses both light- and medium-duty vehicles under a single
umbrella rulemaking, EPA is finalizing standards for each class and for
each
[[Page 27883]]
pollutant pursuant to the relevant statutory provisions for each class
and pollutant based on its assessment of the feasibility of more
stringent standards for each class and pollutant,\434\ and the programs
will continue to follow the basic structures EPA has previously
adopted.
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\433\ Previously, EPA has addressed medium-duty vehicle
emissions as part of regulatory programs for GHG emissions along
with the heavy-duty sector, and for criteria pollutant emissions
along with the light-duty sector. As a result, the program structure
for medium-duty vehicles is similar to that of the light-duty
program for criteria pollutants but differs from that of light-duty
program for GHG emissions.
\434\ As discussed in Section IX.M of the preamble and elsewhere
in this notice, EPA has independently considered and adopted each of
these standards, as well as other elements of the final rule, and
each is severable should there be judicial review.
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EPA has issued four rules establishing light-duty vehicle GHG
standards, which EPA refers to in this rule based on the year in which
the relevant final rule was issued, as shown in Table 11.\435\
---------------------------------------------------------------------------
\435\ The first three rules were issued jointly with NHTSA,
while EPA issued the 2021 Rule in coordination with NHTSA but not as
a joint rulemaking.
Table 11--Previous GHG Light-Duty Vehicles Standards Rules
----------------------------------------------------------------------------------------------------------------
Federal Register
Rule MYs covered Title citation
----------------------------------------------------------------------------------------------------------------
2010 Rule............................ Initial 2010 rule Light-Duty Vehicle 75 FR 25324, May 7,
established standards Greenhouse Gas 2010.
for MYs 2012-2016 and Emission Standards and
later. Corporate Average Fuel
Economy Standards.
2012 Rule............................ Set more stringent 2017 and Later Model 77 FR 62624, October
standards for MYs 2017- Year Light-Duty 15, 2012.
2025 and later. Vehicle Greenhouse Gas
Emissions and
Corporate Average Fuel
Economy Standards.
2020 Rule............................ Revised the standards The Safer Affordable 85 FR 24174, April 30,
for MYs 2022-2025 to Fuel-Efficient (SAFE) 2020.
make them less Vehicles Rule for
stringent and Model Years 2021-2026
established a new Passenger Cars and
standard for MYs 2026 Light Trucks.
and later.
2021 Rule............................ Revised the standards Revised 2023 and Later 86 FR 74434, December
for MYs 2023-2026 to Model Year Light-Duty 30, 2021.
make them more Vehicle Greenhouse Gas
stringent, with the MY Emissions Standards.
2026 standards being
the most stringent GHG
standards established
by EPA to date.
----------------------------------------------------------------------------------------------------------------
The GHG standards have all been based on fleet average
CO2 emissions. Each vehicle model is assigned a
CO2 target based on the vehicle's ``footprint'' in square
feet (ft\2\), generally consisting of the area of the rectangle formed
by the four points at which the tires rest on the ground. Generally,
vehicles with larger footprints have higher assigned CO2
emissions targets. The most recent set of footprint curves established
by the 2021 rule for model years 2023-2026 are shown in Figure 3 and
Figure 4, along with the curves for MYs 2021-2022, included for
comparison. As shown, passenger cars and light trucks have separate
footprint standards curves, which result in separate fleet average
standards for the two sets of vehicles. The fleet-average standards are
the production-weighted fleet average of the footprint targets for all
the vehicles in a manufacturer's fleet for a given model year. As a
result, the footprint-based fleet average standards, which
manufacturers are required to meet on an annual basis, will vary for
each manufacturer based on its actual production of vehicles in a given
model year. Individual vehicles are not required to meet their
footprint-based CO2 targets, although they are required to
demonstrate compliance with applicable in-use standards.
[[Page 27884]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.002
Figure 3: Car footprint curves for MYs 2021-2026.
[GRAPHIC] [TIFF OMITTED] TR18AP24.003
Figure 4: Truck footprint curves for MYs 2021-2026.
[[Page 27885]]
For medium-duty vehicles,\436\ EPA has established GHG standards
previously as part of our heavy-duty vehicle GHG Phase 1 and 2 rules,
shown in Table 12.
---------------------------------------------------------------------------
\436\ Note, the HD GHG rules referred to MDVs as HD pickups and
vans.
Table 12--Prior Heavy-Duty GHG Rules Covering MDOMVs
----------------------------------------------------------------------------------------------------------------
Federal Register
Rule MYs covered Title Citation
----------------------------------------------------------------------------------------------------------------
HD Phase 1........................... Initial MDV standards Greenhouse Gas 76 FR 57106, September
phased in over MYs Emissions Standards 15, 2011.
2014-2018. and Fuel Efficiency
Standards for Medium-
and Heavy-Duty Engines
and Vehicles.
HD Phase 2........................... More stringent MDV Greenhouse Gas 81 FR 73478, October
standards phased in Emissions and Fuel 25, 2016.
over MYs 2021-2027. Efficiency Standards
for Medium- and Heavy-
Duty Engines and
Vehicles-- Phase 2.
----------------------------------------------------------------------------------------------------------------
The MDV standards are also attribute-based. However, they are based
on a ``work factor'' attribute rather than the footprint attribute used
in the light-duty vehicle program. Work-based measures such as payload
and towing capability are two key factors that characterize differences
in the design of vehicles, as well as differences in how the vehicles
are expected to be regularly used. The work factor attribute combines
vehicle payload capacity and vehicle towing capacity, in pounds (lb),
with an additional fixed adjustment for four-wheel drive vehicles. This
adjustment accounts for the fact that four-wheel drive, critical to
enabling heavy-duty work (payload or trailer towing) in certain road
conditions, results in additional vehicle weight. The GHG standards and
work factor are calculated as follows:
CO2 Target (g/mile) = [a x WF] + b
WF = Work Factor = [0.75 x (Payload Capacity + xwd)] + [0.25 x
Towing Capacity]
Payload Capacity = GVWR (pounds)-Curb Weight (pounds)
xwd = 500 pounds for 4wd, 0 lbs. for 2wd
Towing Capacity = GCWR (pounds)-GVWR (pounds)
Coefficients a and b represent the mathematical slope and offset,
respectively, that define the work-factor-based standards.
Under this approach, CO2 targets are determined for each
vehicle with a unique work factor (analogous to a target for each
discrete vehicle footprint in the light-duty vehicle rules). These
targets are then production weighted and summed to derive a
manufacturer's annual fleet average standard for its MDVs. The current
program includes separate standards for gasoline and diesel-fueled
vehicles.\437\ Graphical representations of the Phase 2 work factor
standards are shown in Figure 5 and Figure 6.
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\437\ See 81 FR 73736-73739.
[GRAPHIC] [TIFF OMITTED] TR18AP24.004
Figure 5: EPA HD Phase 2 CO2 work factor targets for
gasoline fueled MDVs.
[[Page 27886]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.005
Figure 6: EPA HD Phase 2 CO2 Work Factor Targets for Diesel
Fueled MDVs.
ii. Criteria and Toxic Pollutant Emissions Standards
Since 1971, EPA has, at Congress' direction, been setting emissions
standards for motor vehicles. The earliest standards were for light-
duty vehicles for hydrocarbons, nitrogen oxides (NOX), and
carbon monoxide (CO), requiring a 90 percent reduction in emissions.
Since then, EPA has continued to set standards achieving comparably
significant reductions in criteria pollutant (and precursor) emissions
for the full range of vehicle classes (including light-duty, medium-
duty and heavy-duty vehicles and passenger, cargo and vocational
vehicles). Over the last several decades, EPA has set progressively
more stringent vehicle emissions standards for criteria
pollutants.\438\ For example, in 1997 EPA adopted the National Low
Emission Vehicle program, which included provisions for certifying zero
emissions vehicles. In 2000, EPA adopted the Tier 2 standards, which
required passenger vehicles to be 77 to 95 percent cleaner (and further
encouraged certification of zero emission vehicles through the
establishment of ``Bin 1'', which is referred to as ``Bin 0'').
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\438\ EPA's recent criteria pollutants rulemakings for passenger
cars and light trucks can be found on our website at https://www.epa.gov/regulations-emissions-vehicles-and-engines/regulations-smog-soot-and-other-air-pollution-passenger.
---------------------------------------------------------------------------
Most recently, in 2014, EPA adopted Tier 3 emissions standards,
which required a further reduction of 60 to 80 percent of emissions
(depending on pollutant and vehicle class). Unlike GHG standards,
criteria pollutant standards are not attribute-based. The Tier 3 rule
included standards for both light-duty and medium-duty vehicles.
Similar to the prior Tier 2 standards, Tier 3 established ``bins'' of
Federal Test Procedure (FTP) standards, shown in Table 13 Each bin
contains a milligrams per mile (mg/mile) standard for non-methane
organic gases (NMOG) plus oxides of nitrogen) or NMOG+NOX,
particulate matter (PM), carbon monoxide (CO), and formaldehyde (HCHO).
Table 13--Tier 3 FTP Standards for LDVs and MDPVs
[mg/mile]
----------------------------------------------------------------------------------------------------------------
NMOG+NOX PM CO HCHO
----------------------------------------------------------------------------------------------------------------
Bin 160......................................... 160 3 4.2 4
Bin 125......................................... 125 3 2.1 4
Bin 70.......................................... 70 3 1.7 4
Bin 50.......................................... 50 3 1.7 4
Bin 30.......................................... 30 3 1.0 4
Bin 20.......................................... 20 3 1.0 4
Bin 0........................................... 0 0 0 0
----------------------------------------------------------------------------------------------------------------
Manufacturers select, or assign, a standards bin to each vehicle
model and vehicles must meet all of the standards in that bin over the
vehicle's full useful life. Each manufacturer must also meet a fleet
average NMOG + NOX standard each model year, which declines
over a phase-in period for the Tier 3 final standards. The declining
NMOG+NOX standards are shown in Table 14. As shown, the
fleet is split between two categories: 1) Passenger cars and small
light trucks and 2) larger light trucks and MDPVs, with final
NMOG+NOX
[[Page 27887]]
fleet average standards of 30 mg/mile for both vehicle categories.\439\
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\439\ Small light trucks are those vehicles in the LDT1 class,
while larger light trucks are those in the LDT2-4 classes.
Table 14--Tier 3 NMOG+NOX Fleet Average FTP Standards for Light-Duty Vehicles and MDPVs
[mg/mile]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Model year
----------------------------------------------------------------------------------------------------
2025 and
2017 2018 2019 2020 2021 2022 2023 2024 later
--------------------------------------------------------------------------------------------------------------------------------------------------------
Passenger cars and small trucks.................... 86 79 72 65 58 51 44 37 30
Larger light trucks and MDPVs...................... 101 93 83 74 65 56 47 38 30
--------------------------------------------------------------------------------------------------------------------------------------------------------
The Tier 3 rule also established more stringent criteria pollutant
emissions standards for MDVs. The Tier 3 MDV standards are also based
on a bin structure, but with generally less stringent bin standards and
with less stringent NMOG+NOX fleet average standards. As
discussed in section III.A.1 of this preamble, the MDV category
consists of vehicles with gross vehicle weight ratings (GVWR) between
8,501-14,000 pounds. For Tier 3, EPA set separate standards for two
sub-categories of vehicles, Class 2b (8,501-10,000 pounds GVWR) and
Class 3 (10,001-14,000 pounds GVWR) vehicles. Table 15 provides the
final Tier 3 FTP standards bins for MDVs and Table 16 provides the
NMOG+NOX fleet average standards that apply to these
vehicles in MYs 2018 and later. It is important to note that MDVs are
tested at a higher test weight than light-duty vehicles, as discussed
in section III.C.3 of this preamble, and as such the numeric standards
are not directly comparable across the light-duty and MDV categories.
Table 15--MDV Tier 3 FTP Final Standards Bins
----------------------------------------------------------------------------------------------------------------
NMOG+NOX PM CO HCHO
----------------------------------------------------------------------------------------------------------------
Class 2b (10,001-14,000 lb GVWR)
----------------------------------------------------------------------------------------------------------------
Bin 250......................................... 250 8 6.4 6
Bin 200......................................... 200 8 4.2 6
Bin 170......................................... 170 8 4.2 6
Bin 150......................................... 150 8 3.2 6
Bin 0........................................... 0 0 0 0
----------------------------------------------------------------------------------------------------------------
Class 3 (8.501-10,000 lb GVWR)
----------------------------------------------------------------------------------------------------------------
Bin 400......................................... 400 10 7.3 6
Bin 270......................................... 270 10 4.2 6
Bin 230......................................... 230 10 4.2 6
Bin 200......................................... 200 10 3.7 6
Bin 0........................................... 0 0 0 0
----------------------------------------------------------------------------------------------------------------
Table 16--MDV Tier 3 Final Fleet Average NMOG+NOX Standards
[mg/mile]
----------------------------------------------------------------------------------------------------------------
2018 2019 2020 2021 2022 and later
----------------------------------------------------------------------------------------------------------------
Class 2b........................ 278 253 228 203 178
Class 3......................... 451 400 349 298 247
----------------------------------------------------------------------------------------------------------------
EPA has also established supplemental Federal test procedure (SFTP)
standards for light- and medium-duty vehicles, as well as cold
temperature standards for CO and HC. These standards address emissions
outside of the FTP test conditions such as at high vehicle speeds and
differing ambient temperatures. EPA did not reopen the current SFTP
standards in this rulemaking.
B. EPA's Statutory Authority Under the Clean Air Act (CAA)
This section summarizes the statutory authority for the final rule.
Statutory authority for the standards EPA is finalizing is found in CAA
section 202(a)(1)-(2), 42 U.S.C. 7521 (a)(1)-(2), which requires EPA to
establish standards applicable to emissions of air pollutants from new
motor vehicles and engines which in the Administrator's judgment cause
or contribute to air pollution which may reasonably be anticipated to
endanger public health or welfare. Section 202(a)(3) further addresses
EPA authority to establish standards for emissions of NOX,
PM, HC, and CO from heavy-duty engines and vehicles.\440\ Additional
statutory authority for the action is found in CAA
[[Page 27888]]
sections 202-209, 216, and 301, 42 U.S.C. 7521-7543, 7550, and 7601.
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\440\ Light-duty trucks (LDTs) that have gross vehicle weight
ratings above 6,000 pounds and all MDVs are considered ``heavy-duty
vehicles'' under the CAA. See section 202(b)(3)(C).
---------------------------------------------------------------------------
Section III.B.1 of the preamble overviews the text of the relevant
statutory provisions read in their context. We discuss the statutory
definition of ``motor vehicle'' in section 216 of the Act, EPA's
authority to establish emission standards for such motor vehicles in
section 202, and authorities related to compliance and testing in
sections 203, 206, and 207.
Section III.B.2 of the preamble addresses comments regarding our
legal authority to consider a wide range of technologies, including
electrified technologies that completely prevent vehicle tailpipe
emissions. EPA's standard-setting authority under section 202 is not
limited to any specific type of emissions control technology, such as
technologies applicable only to ICE vehicles; rather, the Agency must
consider all technologies that reduce emissions from motor vehicles--
including technologies that allow for complete prevention of emissions
such as battery electric vehicle (BEV) technologies--in light of the
lead time provided and the costs of compliance. Many commenters
supported EPA's legal authority to consider such technologies. At the
same time, the final standards do not require the manufacturers to
adopt any specific technological pathway and can be achieved through
the use of a variety of technologies, including without producing
additional BEVs to comply with this rule.
Section III.B.3 of the preamble summarizes our responses to certain
other comments relating to our legal authority, including whether this
rule implicates the major questions doctrine, whether EPA has authority
for its Averaging, Banking, and Trading (ABT) program, and whether EPA
properly considered BEVs as part of the class of vehicles for GHG
regulation. We discuss our legal authority and rationale for battery
durability and warranty separately in section III.G.2 of the preamble.
Additional discussion of legal authority for the entire rule is found
in section 2 of the RTC. EPA's assessment of the statutory and other
factors in selecting the final standards is found in section V of this
preamble, and further discussion of our statutory authority in support
of all the revised compliance provisions is found in their respective
sections of the preamble.
1. Summary of Key Clean Air Act Provisions
Title II of the Clean Air Act provides for comprehensive regulation
of emissions from mobile sources, authorizing EPA to regulate emissions
of air pollutants from all mobile source categories, including motor
vehicles under CAA section 202(a). To understand the scope of
permissible regulation, we first must understand the scope of the
regulated sources. CAA section 216(2) defines ``motor vehicle'' as
``any self-propelled vehicle designed for transporting persons or
property on a street or highway.'' \441\ Congress has intentionally and
consistently used the broad term ``any self-propelled vehicle'' since
the Motor Vehicle Air Pollution Control Act of 1965 to include vehicles
propelled by various fuels (e.g., gasoline, diesel, or hydrogen) and
systems of propulsion, whether they be ICE engine, hybrid, or electric
motor powertrains.\442\ The subjects of this rulemaking all fit that
definition: they are self-propelled, via a number of different
powertrains, and they are designed for transporting persons or property
on a street or highway. The Act's focus is on reducing emissions from
classes of motor vehicles and the ``requisite technologies'' that could
feasibly reduce those emissions, giving appropriate consideration to
cost of compliance and lead time.
---------------------------------------------------------------------------
\441\ EPA subsequently interpreted this provision through a 1974
rulemaking. 39 FR 32611 (Sept. 10, 1974), codified at 40 CFR
85.1703. The regulatory provisions establish more detailed criteria
for what qualifies as a motor vehicle, including criteria related to
speed, safety, and practicality for use on streets and ways. The
regulation, however, does not draw any distinctions based on whether
the vehicle emits pollutants or its powertrain.
\442\ The Motor Vehicle Air Pollution Act of 1965 defines
``motor vehicle'' as ``any self-propelled vehicle designed for
transporting persons or property on a street or highway.'' Public
Law 89-272, 79 Stat. 992, 995 (Oct. 20, 1965). See also, e.g., 116
S. Cong. Rec. at 42382 (Dec. 18, 1970) (Clean Air Act Amendments of
1970--Conference Report) (``The urgency of the problems require that
the industry consider, not only the improvement of existing
technology, but also alternatives to the internal combustion engine
and new forms of transportation.'').
---------------------------------------------------------------------------
Congress delegated to the Administrator the authority to identify
available control technologies, and it did not place any restrictions
on the types of emission reduction technologies EPA could consider,
including different powertrain technologies. By contrast, other parts
of the Act explicitly limit EPA's authority by powertrain type,\443\ so
Congress's conscious decision not to do so when defining ``motor
vehicle'' in section 216 further highlights the breadth of EPA's
standard-setting authority for such vehicles. As we explain further
below, Congress did place some limitations on EPA's standard setting
under CAA section 202(a),\444\ but these limitations generally did not
restrict EPA's authority to broadly regulate motor vehicles to any
particular vehicle type or emissions control technology.
---------------------------------------------------------------------------
\443\ See CAA section 213 (authorizing EPA to regulate ``non-
road'' engines''), 216(10) (defining non-road engine to ``mean[] an
internal combustion engine''). Elsewhere in the Act, Congress also
specified specific technological controls, further suggesting its
decision not to limit the technological controls EPA could consider
in section 202(a)(1)-(2) was intentional. See, e.g., CAA section
407(d) (``Units subject to subsection (b)(1) for which an
alternative emission limitation is established shall not be required
to install any additional control technology beyond low
NOX burners.'').
\444\ See, e.g., CAA section 202(a)(4)(A) (``no emission control
device, system, or element of design shall be used in a new motor
vehicle or new motor vehicle engine for purposes of complying with
requirements prescribed under this subchapter if such device,
system, or element of design will cause or contribute to an
unreasonable risk to public health, welfare, or safety in its
operation or function''). In addition, Congress established
particular limitations for discrete exercises of CAA section
202(a)(1) authority which are not at issue in this rulemaking. See,
e.g., CAA section 202(b)(1) (additional requirements applicable to
certain model years).
---------------------------------------------------------------------------
We turn now to section 202(a)(1)-(2), which provides the statutory
authority for the final standards in this action. This section governs
EPA's authority to establish standards for light-duty vehicles, as well
as to establish GHG standards for heavy-duty vehicles. For vehicles
meeting the statutory definition of heavy-duty vehicles, section
202(a)(3) provides additional and more specific criteria governing
adoption of certain criteria pollutant emissions standards under
section 202(a)(1); we discuss these additional criteria following our
general discussion of section 202(a)(1)-(2).
Section 202(a)(1) directs the Administrator to set ``standards
applicable to the emission of any air pollutant from any class or
classes of new motor vehicles or new motor vehicle engines, which in
his judgment cause, or contribute to, air pollution which may
reasonably be anticipated to endanger public health or welfare.'' This
core directive has remained the same, with only minor edits, since
Congress first enacted it in the Motor Vehicle Pollution Control Act of
1965.\445\ Thus the first step when EPA regulates emissions from motor
vehicles is a finding (the ``endangerment finding''), either as part of
the initial standard setting or prior to it, that the emission of an
air pollutant from a class or classes of new motor vehicles or new
motor engines causes or contributes to air pollution which may
reasonably be anticipated to endanger public health or welfare.
---------------------------------------------------------------------------
\445\ Public Law 89-272.
---------------------------------------------------------------------------
The statute directs EPA to define the class or classes of new motor
vehicles for which the Administrator is making
[[Page 27889]]
the endangerment finding.\446\ EPA for decades has defined ``classes''
subject to regulation according to their weight and function. This is
consistent with both Congress's functional definition of a ``motor
vehicle,'' as discussed above, and Congress's explicit contemplation of
functional classes or categories. See CAA section 202(b)(3)(C)
(defining ``heavy-duty vehicle'' with reference to function and
weight), 202(a)(3)(A)(ii) (``the Administrator may base such classes or
categories on gross vehicle weight, horsepower, type of fuel used, or
other appropriate factors.'').\447\
---------------------------------------------------------------------------
\446\ See CAA section 202(a)(1) (``The Administrator shall by
regulation prescribe . . . standards applicable to the emission of
any air pollutant from any class or classes of new motor vehicles or
new motor vehicle engines, which in his judgment cause, or
contribute to, air pollution which may reasonably be anticipated to
endanger public health or welfare.'' (emphasis added)),
202(a)(3)(A)(ii) (``the Administrator may base such classes or
categories on gross vehicle weight, horsepower, type of fuel used,
or other appropriate factors'' (emphasis added)).
\447\ Section 202(a)(3)(A)(ii) applies to standards established
under section 202(a)(3), not to standards otherwise established
under section 202(a)(1). However, we think it nonetheless provides
guidance on what kinds of classifications and categorizations
Congress generally thought were appropriate.
---------------------------------------------------------------------------
In 2009, EPA made an endangerment finding for GHG and explicitly
stated that ``[t]he new motor vehicles and new motor vehicle engines .
. . addressed are: Passenger cars, light-duty trucks, motorcycles,
buses, and medium and heavy-duty trucks.'' (74 FR 66496, 66537,
December 15, 2009) 448 449 Then EPA reviewed the GHG
emissions data from ``new motor vehicles'' and determined that these
classes of vehicles do contribute to air pollution that may reasonably
be anticipated to endanger public health and welfare. The endangerment
finding was made with regard to pollutants--in this case, GHGs--emitted
from ``any class or classes of new motor vehicles or new motor vehicle
engines.'' This approach--of identifying a class or classes or vehicles
that contribute to endangerment--is how EPA has always implemented the
statute.
---------------------------------------------------------------------------
\448\ EPA considered this list to be a comprehensive list of the
new motor vehicle classes. See id. (``This contribution finding is
for all of the CAA section 202(a) source categories.''); id. at
66544 (``the Administrator is making this finding for all classes of
new motor vehicles under CAA section 202(a)''). By contrast, in
making an endangerment finding for GHG emissions from aircraft, EPA
limited the endangerment finding to engines used in specific classes
of aircraft (such as civilian subsonic jet aircraft with maximum
take off mass greater than 5,700 kilograms). 81 FR 54421, Aug. 15,
2016.
\449\ EPA is not reopening the 2009 or any other prior
endangerment finding in this action. Rather, we are discussing the
2009 endangerment finding to provide the reader with helpful
background information relating to this action.
---------------------------------------------------------------------------
For purposes of establishing GHG emissions standards, EPA has
regarded passenger cars, light, medium, and heavy-duty trucks each as
its own class and has then made further sub-categorizations based on
weight and functionality in promulgating standards for the air
pollutant. EPA's class and categorization framework allows the Agency
to recognize real-world variations in how vehicles are designed to be
used, as well as the lead time and costs of emissions control
technology for different vehicle types. It also ensures that consumers
can continue to access a wide variety of vehicles to meet their
mobility needs, while enabling continued emissions reductions for all
vehicle types, including to the point of completely preventing
emissions where appropriate.
In setting standards, CAA section 202(a)(1) requires that any
standards promulgated thereunder ``shall be applicable to such vehicles
and engines for their useful life (as determined under [CAA section
202(d)], relating to useful life of vehicles for purposes of
certification), whether such vehicle and engines are designed as
complete systems or incorporate devices to prevent or control such
pollution.'' \450\ In other words, Congress specifically determined
that EPA's standards could be based on a wide array of technologies,
including technologies for the engine and for the other (non-engine)
parts of the vehicle, technologies that ``incorporate devices'' on top
of an existing motor vehicle system as well as technologies that are
``complete systems'' and that may involve a complete redesign of the
vehicle. Congress also determined that EPA could base its standards on
both technologies that ``prevent'' the pollution from occurring in the
first place--such as the zero emissions technologies considered in this
rule--as well as technologies that ``control'' or reduce the pollution
once produced.\451\
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\450\ See also Engine Mfrs. Ass'n v. S. Coast Air Quality Mgmt.
Dist., 541 U.S. 246, 252-53 (2004) (As stated by the Supreme Court,
a standard is defined as that which ``is established by authority,
custom, or general consent, as a model or example; criterion; test.
. . . This interpretation is consistent with the use of `standard'
throughout Title II of the CAA. . .to denote requirements such as
numerical emission levels with which vehicles or engines must comply
. . ., or emission-control technology with which they must be
equipped.'').
\451\ Pollution prevention is a cornerstone of the Clean Air
Act. The title of 42 U.S.C. chapter 85 is ``Air Pollution Prevention
and Control''; see also CAA section 101(a)(3), (c). One of the very
earliest vehicle pollution control technologies (one which is still
in use by some vehicles) was exhaust gas recirculation, which
reduces in-cylinder temperature and oxygen concentration, and, as a
result, engine-out NOX emissions from the vehicles. More
recent examples of pollution prevention technologies include
cylinder deactivation, and electrification technologies such as idle
start-stop or PEVs.
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While emission standards set by EPA under CAA section 202(a)(1)
generally do not mandate use of particular technologies, they are
technology-based, as the levels chosen must be premised on a finding of
technological feasibility. EPA must therefore necessarily identify
potential control technologies, evaluate the rate each technology could
be introduced, and its cost. Standards promulgated under CAA section
202(a) are to take effect only ``after such period as the Administrator
finds necessary to permit the development and application of the
requisite technology, giving appropriate consideration to the cost of
compliance within such period.'' \452\ This reference to ``cost of
compliance'' means that EPA must consider costs to those entities which
are directly subject to the standards,\453\ but ``does not mandate
consideration of costs to other entities not directly subject to the
standards.'' \454\ Given the prospective nature of standard-setting and
the inherent uncertainties in predicting the future development of
technology, Congress entrusted the Administrator with assessing issues
of technical feasibility and availability of lead time to implement new
technology. Such determinations are ``subject to the restraints of
reasonableness'' but ``EPA is not obliged to provide detailed solutions
to every engineering problem posed in the perfection of [a particular
device]. In the absence of theoretical objections to the technology,
the agency need only identify the major steps necessary for development
of the device, and give plausible reasons for its belief that the
industry will be able to solve those problems in the time remaining.
EPA is not required to rebut all speculation that unspecified factors
may hinder `real world' emission control.'' \455\
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\452\ CAA section 202(a)(2); see also NRDC v. EPA, 655 F. 2d
318, 322 (D.C. Cir. 1981).
\453\ Motor & Equipment Mfrs. Ass'n Inc. v. EPA, 627 F. 2d 1095,
1118 (D.C. Cir. 1979).
\454\ Coal. for Responsible Regulation v. EPA, 684 F.3d 120, 128
(D.C. Cir. 2012).
\455\ NRDC, 655 F. 2d at 328, 333-34.
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Although standards under CAA section 202(a)(1) are technology-
based, they are not based exclusively on technological capability.
Pursuant to the broad grant of authority in section 202, when setting
emission standards, EPA must consider certain factors and may also
consider other relevant factors and has done so previously when setting
such standards. For instance, in the
[[Page 27890]]
2021 light-duty GHG rule, EPA explained that when acting under this
authority EPA has considered such issues as technology effectiveness,
its cost (including for manufacturers and for purchasers), the lead
time necessary to implement the technology, and, based on this, the
feasibility of potential standards; the impacts of potential standards
on emissions reductions; the impacts of standards on oil conservation
and energy security; the impacts of standards on fuel savings by
vehicle operators; the impacts of standards on the vehicle
manufacturing industry; as well as other relevant factors such as
impacts on safety.\456\ EPA has considered these factors in this
rulemaking as well.
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\456\ 86 FR 74434, 74436.
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Rather than specifying levels of stringency in section 202(a)(1)-
(2), Congress directed EPA to determine the appropriate level of
stringency for the standards taking into consideration the statutory
factors therein. EPA has clear authority to set standards under CAA
section 202(a)(1)-(2) that are technology forcing when EPA considers
that to be appropriate,\457\ but is not required to do so. The statute
directs EPA to give appropriate consideration to cost and lead time
necessary to allow for the development and application of such
technology. The breadth of this delegated authority is particularly
clear when contrasted with sections 202(b), (g), (h), which identify
specific levels of emissions reductions on specific timetables for past
model years.\458\ In determining the level of the standards, CAA
section 202(a) does not specify the degree of weight to apply to each
factor such that the Agency has the authority to choose an appropriate
balance among factors and may decide how to balance stringency and
technology considerations with cost and lead time.459 460
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\457\ Indeed, the D.C. Circuit has repeatedly cited NRDC v. EPA,
which construes section 202(a)(1), as support for EPA's actions when
EPA acted pursuant to other provisions of section 202 or Title II
that are explicitly technology forcing. See, e.g., NRDC v. Thomas,
805 F. 2d 410, 431-34 (D.C. Cir. 1986) (section 202 (a)(3)(B), 202
(a)(3)(A)); Husqvarna AB v. EPA, 254 F. 3d 195, 201 (D.C. Cir. 2001)
(section 213(a)(3)); Nat'l Petroleum and Refiners Ass'n v. EPA, 287
F. 3d 1130, 1136 (D.C. Cir. 2002) (section 202(a)(3)).
\458\ See also CAA 202(a)(3)(A).
\459\ See Sierra Club v. EPA, 325 F.3d 374, 378 (D.C. Cir. 2003)
(even where a provision is technology-forcing, the provision ``does
not resolve how the Administrator should weigh all [the statutory]
factors''); Nat'l Petrochemical and Refiners Ass'n v. EPA, 287 F.3d
1130, 1135 (D.C. Cir. 2002) (EPA decisions, under CAA provision
authorizing technology-forcing standards, based on complex
scientific or technical analysis are accorded particularly great
deference); see also Husqvarna AB v. EPA, 254 F. 3d 195, 200 (D.C.
Cir. 2001) (great discretion to balance statutory factors in
considering level of technology-based standard, and statutory
requirement ``to [give appropriate] consideration to the cost of
applying . . . technology'' does not mandate a specific method of
cost analysis); Hercules Inc. v. EPA, 598 F. 2d 91, 106 (D.C. Cir.
1978) (``In reviewing a numerical standard we must ask whether the
agency's numbers are within a zone of reasonableness, not whether
its numbers are precisely right.'').
\460\ Additionally, with respect to regulation of vehicular GHG
emissions, EPA is not ``required to treat NHTSA's . . . regulations
as establishing the baseline for the [section 202(a) standards].''
Coal. for Responsible Regulation, 684 F.3d at 127 (noting that the
section 202(a) standards provide ``benefits above and beyond those
resulting from NHTSA's fuel-economy standards'').
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We now turn to the more specific statutory authority for the heavy-
duty criteria pollutant standards found in section 202(a)(3). This more
specific statutory authority applies only for heavy-duty vehicles,
which include light-duty trucks (LDTs) that have gross vehicle weight
ratings above 6,000 pounds and all MDVs.\461\ In addition, it only
applies for certain criteria pollutant standards, including the PM,
NMOG+NOX, and CO standards, EPA is establishing in today's
final rule, but does not apply to any GHG standards. For applicable
standards, section 202(a)(3)(A) requires that they ``reflect the
greatest degree of emission reduction achievable through the
application of technology which the Administrator determines will be
available for the model year to which such standards apply, giving
appropriate consideration to cost, energy, and safety factors
associated with the application of such technology.'' Section
202(a)(3)(C) further provides that standards set under section
202(a)(3) shall apply for a period of no less than three model years
beginning no earlier than the model year commencing four years after
promulgation.
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\461\ See CAA section 202(b)(3)(C).
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We now turn from section 202(a) to overview several other sections
of the Act relevant to this action. CAA section 202(d) directs EPA to
prescribe regulations under which the ``useful life'' of vehicles and
engines shall be determined for the purpose of setting standards under
CAA section 202(a)(1). Useful life standards for LDV and MDV are
described in 40 CFR 86.1805-17.
Additional sections of the Act provide authorities relating to
compliance, including certification, testing, and warranty. Under
section 203 of the CAA, sales of vehicles are prohibited unless the
vehicle is covered by a certificate of conformity, and EPA issues
certificates of conformity pursuant to section 206 of the CAA. based on
pre-sale testing conducted either by EPA or by the manufacturer. The
Federal Test Procedure (FTP or ``city'' test) and the Highway Fuel
Economy Test (HFET or ``highway'' test) are used for this purpose.
Compliance with standards is required not only at certification but
throughout a vehicle's useful life, so that testing requirements may
continue post-certification. To assure each vehicle complies during its
useful life, EPA may apply an adjustment factor to account for vehicle
emission control deterioration or variability in use. EPA also
establishes the test procedures under which compliance with the CAA
emissions standards is measured. EPA has also developed tests with
additional cycles (the so-called 5-cycle tests) which are used for
purposes of fuel economy labeling, SFTP standards, and extending off-
cycle credits under the light-duty vehicle GHG program. The regulatory
provisions for demonstrating compliance with emissions standards have
been successfully implemented for decades, including compliance through
our Averaging, Banking, and Trading (ABT) program.\462\
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\462\ EPA's consideration of averaging in standard-setting dates
back to 1985. 50 FR 10606 (Mar. 15, 1985) (``Emissions averaging, of
both particulate and oxides of nitrogen emissions from heavy-duty
engines, is allowed beginning with the 1991 model year. Averaging of
NO, emissions from light-duty trucks is allowed beginning in
1988.''). The availability of averaging as a compliance flexibility
has an even earlier pedigree. See 48 FR 33456 (July 21, 1983) (EPA's
first averaging program for mobile sources); 45 FR 79382 (Nov. 28,
1980) (advance notice of proposed rulemaking investigating averaging
for mobile sources). We have included banking and trading in our
rules dating back to 1990. 55 FR 30584 (July 26, 1990) (``This final
rule announces new programs for banking and trading of particulate
matter and oxides of nitrogen emission credits for gasoline-,
diesel- and methanol-powered heavy-duty engines.''). Since that
time, ABT has been a regular feature of EPA's vehicle rules
promulgated under section 202(a) including the Tier 2 and Tier 3
criteria pollutant standards, and all of the GHG standards.
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Under CAA section 207(a), manufacturers are required to provide
emission-related warranties. The generally applicable emission-related
warranty period for new LD vehicles and engines under section 207(i)(1)
is 2 years or 24,000 miles. For components designated by the
Administrator as ``specified major emission control component[s]''
under section 207(i)(2), the warranty period is 8 years or 80,000
miles. The emission-related warranty period for HD engines and vehicles
under CAA section 207(i)(1) is ``the period established by the
Administrator by regulation (promulgated prior to November 15, 1990)
for such purposes unless the Administrator subsequently modifies such
regulation.'' CAA section 207 also grants EPA broad authority to
require manufacturers to remedy
[[Page 27891]]
nonconformity if EPA determines there are a substantial number of
noncomplying vehicles. These warranty and remedy provisions have also
been applied for decades under our regulations, including where
compliance occurs through use of ABT provisions. Further discussion of
these sections of the Act, including as they relate to the compliance
provisions we are finalizing, is found in section III.G of the
preamble.
2. Authority To Consider Technologies in Setting Motor Vehicle GHG
Standards
Having provided an overview of the key statutory authorities for
this action, we now elaborate on the specific issue of the types of
control technology that are to be considered in setting standards.
EPA's position on this issue is consistent with our position in our
prior GHG and criteria pollutant rules, and with the historical
exercise of the Agency's authority over the last five decades,
including under section 202(a)(1)-(2) as well as section 202(a)(3)(A).
That is, EPA's standard-setting authority under section 202(a)(1)-(2)
is not a priori limited to consideration of specific types of emissions
control technology; rather, in determining the level of the standards,
the agency must account for emissions control technologies that are
available or will become available for the relevant model year.\463\ In
this rulemaking, EPA has accounted for a wide range of emissions
control technologies, including ICE engine and vehicle technologies
(e.g., engine, transmission, drivetrain, aerodynamics, tire rolling
resistance improvements, the use of low carbon fuels like CNG and LNG),
advanced ICE technologies (which include advanced turbocharged
downsized engines, advanced Atkinson engines, and Miller cycle
engines), hybrid technologies (e.g., HEV and PHEV), and zero-emission
vehicle technologies (e.g., BEV). These include technologies applied to
motor vehicles with ICE (including hybrid powertrains) and without ICE,
and a range of electrification across the technologies.
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\463\ For example, in 1998, EPA published regulations for the
voluntary National Low Emission Vehicle (NLEV) program that allowed
LD motor vehicle manufacturers to comply with tailpipe standards for
cars and light-duty trucks more stringent than that required by EPA
in exchange for credits for such low emission and zero emission
vehicles. 63 FR 926 (Jan. 7, 1998). In 2000, EPA promulgated LD Tier
2 emission standards which built upon ``the recent technology
improvements resulting from the successful [NLEV] program.'' 65 FR
6698 (Feb. 10, 2000).
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In response to the proposed rulemaking, the agency received
numerous comments on this issue, specifically on our consideration of
BEV technologies. Comments of regulated entities relating to these
technologies, and those of many stakeholders, were often technical and
policy in nature; for example, relating to the pace at which
manufacturers could adopt and deploy such technologies in the real
world or the pace at which enabling infrastructure could be deployed.
We address these comments in detail in section III.C and III.D of this
preamble and sections 3 and 17 of the RTC and have revised the
standards from those proposed after consideration of comments.
A few commenters, however, alleged that the agency lacked statutory
authority altogether to consider BEVs because they believed the Act
limited EPA to considering only technologies applicable to ICE vehicles
or to technologies that reduce, rather than altogether prevent,
pollution. EPA disagrees. The constraints they would impose have no
foundation in the statutory text, are contrary to the statutory
purpose, are undermined by a substantial body of statutory and
legislative history, and are inconsistent with how the agency has
applied the statute in numerous rulemakings over five decades. The
following discussion elaborates our position on this issue; further
discussion is found in section 2 of the RTC.
The text of the Act directly addresses this issue and unambiguously
provides authority for EPA to consider all motor vehicle technologies,
including a range of electrified technologies such as fully-electrified
vehicle technologies without an ICE that achieve zero vehicle tailpipe
emissions (e.g., BEVs), plug-in hybrid partially electrified
technologies, and other ICE vehicles across a range of electrification.
As described earlier in this section, the Act directs EPA to prescribe
emission standards for ``motor vehicles,'' which are defined broadly in
CAA section 216(2) and do not exclude any forms of vehicle propulsion.
The Act then directs EPA to promulgate emission standards for such
vehicles, ``whether such vehicles and engines are designed as complete
systems or incorporate devices to prevent or control such pollution,''
based on the ``development and application of the requisite
technology.'' There is no question that electrified technologies,
including various ICE, hybrid and BEV technologies, meet all of these
specific statutory criteria. They apply to ``motor vehicles'', are
systems and incorporate devices that ``prevent'' and ``control''
emissions,\464\ and qualify as ``technology.''
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\464\ The statute emphasizes that the agency must consider
emission reductions technologies regardless of ``whether such
vehicles and engines are designed as complete systems or incorporate
devices to prevent or control such pollution.'' CAA section
202(a)(1); see also CAA section 202(a)(4)(B) (describing conditions
for ``any device, system, or element of design'' used for compliance
with the standards''; Truck Trailer Manufacturers Ass'n, Inc v. EPA,
17 F.4th 1198, 1202 (D.C. Cir. 2021) (the statute ``created two
categories of complete motor vehicles. Category one: motor vehicles
with built-in pollution control. Category two: motor vehicles with
add-in devices for pollution control.''). While the statute does not
define system, section 202 does use the word expansively, to include
``vapor recovery system[s]'' (CAA section 202(a)(5)(A)), ``new power
sources or propulsion systems'' (CAA section 202(e)), and onboard
diagnostics systems (CAA section 202(m)(1)(D)). In any event, the
intentional use of the phrase ``complete systems'' shows that
Congress expressly contemplated as methods of pollution control not
only add-on devices (like catalysts that control emissions after
they are produced by the engine), but wholesale redesigns of the
motor vehicle and the motor vehicle engine to prevent and reduce
pollution. Many technologies that reduce vehicle GHG emissions today
can be characterized as systems that reduce or prevent GHG
emissions, including advanced engine designs in ICE and hybrid
vehicles; integration of electric drive units in hybrids, PHEVs, BEV
and FCEV designs; high voltage batteries and controls; redesigned
climate control systems improvements, and more.
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While the statute also imposes certain specific limitations on
EPA's consideration of technology, none of these statutory limitations
preclude the consideration of electrified technologies, a subset of
electrified technologies, or any other technologies that achieve zero
vehicle tailpipe emissions. Specifically, the statute states that the
following technologies cannot serve as the basis for the standards:
first, technologies which cannot be developed and applied within the
relevant time period, giving appropriate consideration to the cost of
compliance; and second, technologies that ``cause or contribute to an
unreasonable risk to public health, welfare, or safety in [their]
operation or function.'' CAA section 202(a)(2), (4).\465\
[[Page 27892]]
EPA has undertaken a comprehensive assessment of the statutory factors,
further discussed in sections III, IV, and V of the preamble and
throughout the RIA and the RTC, and has found that the CAA plainly
authorizes the consideration of electrification technologies, including
BEV technologies, at the levels that support the modeled potential
compliance pathway to achieve the final standards.
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\465\ In addition, under section 202(a)(3)(A), EPA must
promulgate under section 202(a)(1) certain criteria pollutant
standards for ``classes or categories'' of heavy-duty vehicles that
``reflect the greatest degree of emission reduction achievable
through the application of technology which the Administrator
determines will be available . . . giving appropriate consideration
to cost, energy, and safety factors associated with the application
of such technology.'' EPA thus lacks discretion to base such
standards on a technological pathway that reflects less than the
greatest degree of emission reduction achievable for the class
(giving consideration to cost, energy, and safety). In other words,
where EPA has identified available control technologies that can
completely prevent pollution and otherwise comport with the statute,
the agency lacks the discretion to rely on less effective control
technologies to set weaker standards that achieve fewer emissions
reductions. And while section 202(a)(3)(A) does not govern standards
for light-duty vehicles or any GHG standards, which are established
only under section 202(a)(1)-(2), we think it is also informative as
to the breadth of EPA's authority under those provisions.
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Having discussed what the statutory text does say, we note what the
statutory text does not say. Nothing in section 202(a)(1)-(2)
distinguishes technologies that prevent vehicle tailpipe emissions from
other technologies as being suitable for consideration in establishing
the standards. Moreover, nothing in the statute suggests that certain
kinds of electrified technologies are appropriate for consideration
while other kinds of electrified technologies are not.\466\ While some
commenters suggest that BEVs represent a difference in kind from all
other emissions control technologies, that is simply untrue. As we
explain in section III.A of this preamble and RIA Chapter 3,
electrified technologies comprise a large range of motor vehicle
technologies. In fact, all new motor vehicles manufactured in the
United States today have some degree of electrification and rely on
electrified technology to control emissions.
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\466\ Congress' approach here is notably distinct from its
approach under EPCA, where it specified that DOT should not consider
fuel economy of alternative fuel vehicles in determining fuel
economy standards. See 49 U.S.C. 32902(h)(1).
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ICE vehicles are equipped with alternators that generate
electricity and batteries that store such electricity. The electricity
in turn is used for numerous purposes, such as starting the ICE and
powering various vehicle electronics and accessories. More
specifically, electrified technology is a vital part of controlling
emissions on all new motor vehicles produced today: motor vehicles rely
on electronic control modules for controlling and monitoring their
operation, including the fuel mixture (whether gasoline fuel, diesel
fuel, natural gas fuel, etc.), ignition timing, transmission, and
emissions control system. In enacting the Clean Air Act Amendments of
1990, Congress itself recognized the great importance of this
particular electrified technology for emissions control in certain
vehicles.\467\ It would be impossible to drive any ICE vehicle produced
today or to control the emissions of such a vehicle without such
electrified technology.
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\467\ See CAA 207(i)(2) (for light-duty vehicles, statutorily
designating ``specified major emission control components'' subject
to extended warranty provisions as including ``an electronic
emissions control unit''). Congress also designated by statute
``onboard emissions diagnostic devices'' as ``specified major
emission control components''; OBD devices also rely on electrified
technology.
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Indeed, many of the extensive suite of technologies that
manufacturers have devised for controlling emissions rely on
electrified technology and do so in a host of different ways. These
include technologies that improve the efficiency of the engine and
system of propulsion, such as the electronic control modules,
electronically-controlled fuel injection (for all manners of fuel
including but not limited to gasoline, diesel, natural gas, propane,
and hydrogen), and automatic transmission; technologies that reduce the
amount of ICE engine use such as engine start-stop technology and other
idle reduction technologies; add-on technologies to control pollution
after it has been generated by the engine, such as gasoline three-way
catalysts, and diesel selective catalytic reduction and particulate
filters that rely on electrified technology to control and monitor
their performance; non-engine technologies that rely on electrified
systems to improve vehicle aerodynamics; technologies related to
vehicle electricity production, such as high efficiency alternators;
and engine accessory technologies that increase the efficiency of the
vehicle, such as electric coolant pumps, electric steering pumps, and
electric air conditioning compressors. Because electrified technologies
reduce emissions, EPA has long considered them relevant for regulatory
purposes under Title II. For example, EPA has relied on various such
technologies to justify the feasibility of the standards promulgated
under section 202(a), promulgated requirements and guidance related to
testing involving such technologies under section 206, required
manufacturers to provide warranties for them under section 207, and
prohibited their tampering under section 203.
Certain vehicles rely to a greater extent on electrification as an
emissions control strategy. These include (1) hybrid vehicles, which
rely principally on an ICE to power the wheels, but also derive
propulsion from an on-board electric motor, which can charge batteries
through regenerative braking, and feature a range of larger batteries
than non-hybrid ICE vehicles; \468\ (2) plug-in hybrid vehicles (PHEV),
which have an even larger battery that can also be charged by plugging
it into an outlet and can rely principally on electricity for
propulsion, along with an ICE; (3) hydrogen fuel-cell vehicles (FCEV),
which are fueled by hydrogen to produce electricity to power the wheels
and have a range of larger battery sizes; and (4) battery electric
vehicles (BEV), which rely entirely on plug-in charging and the battery
to provide the energy for propulsion. Manufacturers may choose to sell
different models of the same vehicle with different levels of
electrification.\469\ In many but not all cases,\470\ electrified
technologies are systems which ``prevent'' (partially or completely)
the emission of pollution from the motor vehicle engine.\471\ Nothing
in the statute indicates that EPA is limited from considering any of
these technologies. For instance, nothing in the statute says that EPA
may only consider emissions control technologies with a certain kind or
level of electrification, e.g., where the battery is smaller than a
certain size, where the energy derived from the battery is less than a
certain percentage of total vehicle energy, where certain energy can be
recharged by plugging the vehicle into an outlet as opposed to running
the internal combustion engine, etc. The statute does not differentiate
in terms of such details, but simply commands EPA to adopt emissions
standards based on the ``development and application of the requisite
technology, giving appropriate consideration to the cost of compliance
within such period.''
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\468\ Hybrid vehicles include both mild hybrids, which have a
relatively smaller battery and can use the electric motor to
supplement the propulsion provided by the ICE, as well as strong
hybrids, which have a relatively larger battery and can drive for
limited distances entirely on battery power.
\469\ For example, Hyundai has offered the Ioniq as an HEV,
PHEV, and BEV. One automaker stated in comments that ``[b]y the end
of the decade, every model will be available with a fully electric
version.'' Docket No. EPA-HQ-OAR-2022-0829-0744 at 2 (Comments of
Jaguar Land Rover).
\470\ For example, some vehicles also use electrified technology
to preheat the catalyst and improve catalyst efficiency especially
when starting in cold temperatures.
\471\ CAA section 202(a)(1).
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EPA's interpretation also accords with the purpose and primary
operation of section 202(a), which is to reduce emissions of air
pollutants from motor vehicles that are anticipated to endanger public
health or welfare.\472\ This statutory purpose compels EPA to consider
available technologies that reduce emissions of air pollutants most
effectively, including vehicle
[[Page 27893]]
technologies that result in no vehicle tailpipe emissions of GHGs and
completely ``prevent'' such emissions.\473\ And, given Congress's
directive to reduce air pollution, it would make little sense for
Congress to have authorized EPA to consider technologies that achieve
99 percent pollution reduction (for example, as some PM filter
technologies do to control criteria pollutants, see section III.D of
this preamble), but not 100 percent pollution reduction. At minimum,
the statute allows EPA to consider such technologies. Today, many of
the available technologies that can achieve the greatest emissions
control are those that rely on greater levels of electrification, with
BEV technologies capable of completely preventing vehicle tailpipe
emissions.
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\472\ See also Coal. for Responsible Regul., Inc. v. EPA, 684
F.3d 102, 122 (D.C. Cir. 2012), aff'd in part, rev'd in part sub
nom. Util. Air Regul. Grp. v. EPA., 573 U.S. 302 (2014), and amended
sub nom. Coal. for Responsible Regul., Inc. v. EPA, 606 F. App'x 6
(D.C. Cir. 2015) (the purpose of section 202(a) is ``utilizing
emission standards to prevent reasonably anticipated endangerment
from maturing into concrete harm'').
\473\ CAA section 202(a)(1); see also CAA section 202(a)(4)(B)
directing EPA to consider whether a technology ``eliminates the
emission of unregulated pollutants'' in assessing its safety.
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The surrounding statutory context further highlights that Congress
intended section 202 to lead to reductions to the point of complete
pollution prevention. Consistent with section 202(a)(1), section 101(c)
of the Act states ``A primary goal of this chapter is to encourage or
otherwise promote reasonable Federal, State, and local governmental
actions, consistent with the provisions of this chapter, for pollution
prevention.'' \474\ Section 101(a)(3) further explains the term ``air
pollution prevention'' (as contrasted with ``air pollution control'')
to mean ``the reduction or elimination, through any measures, of the
amount of pollutants produced or created at the source.'' That is to
say, EPA is not limited to requiring small reductions, but instead has
authority to consider technologies that may entirely prevent the
pollution from occurring in the first place. Congress also repeatedly
amended the Act to itself impose extremely large reductions in motor
vehicle pollution.\475\ Similarly, Congress prescribed EPA to set
standards achieving specific, numeric levels of emissions reductions
(which in many instances cumulatively amount to multiple orders of
magnitude),\476\ while explicitly stating that EPA's 202(a) authority
allowed the agency to go still further.\477\ Consistent with these
statutory authorities, prior rulemakings have also required very large
emissions reductions, including to the point of completely preventing
certain types of emissions.\478\
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\474\ Clean Air Act Amendments, 104 Stat. 2399, 2468 (Nov. 15,
1990); see also 42 U.S.C. chapter 85 title (``Air Pollution
Prevention and Control'').
\475\ See, e.g., CAA section 202(a)(3)(A)(i) (directed EPA to
promulgate standards that ``reflect the greatest decree of emission
reduction achievable'' for certain pollutants).
\476\ CAA section 202(a), (g)-(h), and (j).
\477\ See, e.g., CAA section 202(b)(1)(C) (``The Administrator
may promulgate regulations under subsection (a)(1) revising any
standard prescribed or previously revised under this subsection. . .
. Any revised standard shall require a reduction of emissions from
the standard that was previously applicable.''), (i)(3)(B)(iii)
(``Nothing in this paragraph shall prohibit the Administrator from
exercising the Administrator's authority under subsection (a) to
promulgate more stringent standards for light-duty vehicles and
light-duty . . . at any other time thereafter in accordance with
subsection (a).'').
\478\ See, e.g., 31 FR 5171 (Mar. 30, 1966) (``No crankcase
emissions shall be discharged into the ambient atmosphere from any
new motor vehicle or new motor vehicle engine subject to this
subpart.'').
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This reading of the statute accords with the practical reality of
administering an effective emissions control program, a matter in which
the Agency has developed considerable expertise over the last five
decades. Such a program is necessarily predicated on the continuous
development of increasingly effective emissions control technologies.
In determining the standards, EPA appropriately considers updated data
and analysis on pollution control technologies, without a priori
limiting its consideration to a particular set of technologies. Given
the continuous development of pollution control technologies since the
early days of the CAA, this approach means that EPA has routinely
considered new and projected technologies developed or refined since
the time of the CAA's enactment, including for instance,
electrification technologies.\479\ The innumerable technologies on
which EPA's standards have been premised, or which EPA has otherwise
incentivized, are presented in summary form later in this section and
then in full in Chapter 3 of the RIA. This approach is inherent in the
statutory text of section 202(a)(2): in requiring EPA to consider lead
time for the development and application of technology before standards
may take effect, Congress directed EPA to consider future technological
advancements and innovation rather than limiting the Agency to only
those technologies in place at the time the statute was enacted. The
text of section 202(a)(3)(A) is even more clear on this point: EPA must
establish standards that ``reflect the greatest degree of emission
reduction achievable through the application of technology which the
Administrator determines will be available for the model year to which
such standards apply. . . .'' In other words, the Administrator is
mandated to make a predictive judgment about technology availability in
a future year, and then establish the standards based on such
technologies. In the report accompanying the Senate bill for the 1965
legislation establishing section 202(a), the Senate Committee wrote
that it ``believes that exact standards need not be written
legislatively but that the Secretary should adjust to changing
technology.'' \480\ This forward-looking regulatory approach keeps pace
with real-world technological developments that have the potential to
reduce emissions and comports with Congressional intent and
precedent.\481\
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\479\ For example, when EPA issued its Tier 2 standards for
light-duty and medium-duty vehicles in 2000, the Agency established
``bins'' of standards in addition to a fleet average requirement. 65
FR 6698, 6734-35, February 10, 2000. One ``bin'' was used to certify
electric vehicles that have zero criteria pollutant emissions. Id.
Under the Tier 2 program, a manufacturer could designate which bins
their different models fit into, and the weighted average across
bins was required to meet the fleet average standard. Id. at 6746.
\480\ S. Rep. No. 89-192, at 4 (1965). Likewise, the report
accompanying the House bill stated that ``the objective of achieving
fully effective control of motor vehicle pollution will not be
accomplished overnight. . . . [T]he techniques now available provide
only a partial reduction in motor vehicle emissions. For the future,
better methods of control will clearly be needed; the committee
expects that [the agency] will accelerate its efforts in this
area.'' H.R. Rep. No. 89-899, at 4 (1965).
\481\ See also NRDC, 655 F.2d at 328 (EPA is ``to project future
advances in pollution control capability. It was `expected to press
for the development and application of improved technology rather
than be limited by that which exists today.' '' To do otherwise
would thwart Congressional intent and leave EPA ``unable to set
pollutant levels until the necessary technology is already
available.'').
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For all these reasons, EPA's consideration of electrified
technologies and technologies that prevent vehicle tailpipe emissions
in establishing the standards is unambiguously permitted by the Act;
indeed, given the Act's purpose to use technology to prevent air
pollution from motor vehicles, and the agency's factual finding based
on voluminous record evidence that BEV technologies are the most
effective and available technologies for doing so, the Agency's
consideration of such technologies is compelled by the statute. Because
the statutory text in its context is plain, we could end our
interpretive inquiry here. However, we have taken the additional step
of reviewing the extensive statutory and legislative history regarding
the kinds of technology, including electric vehicle technology, that
Congress expected EPA to consider in exercising its section 202(a)
authority. Over six decades of Congressional enactments and statements
provide overwhelming support for EPA's consideration of electrified
technologies and technologies that prevent vehicle
[[Page 27894]]
tailpipe emissions in establishing the final standards.
As explained, section 202 does not specify or expect any particular
type of motor vehicle propulsion system to remain prevalent, and it was
clear to Congress as early as the 1960s that ICE vehicles might be
inadequate to achieve the country's air quality goals. In 1967, the
Senate Committees on Commerce and Public Works held five days of
hearings on ``electric vehicles and other alternatives to the internal
combustion engine,'' which Chairman Magnuson opened by saying ``The
electric [car] will help alleviate air pollution and urban congestion.
The consumer will benefit from instant starting, reduced maintenance,
long life, and the economy of electricity as a fuel. . . . The electric
car does not mean a new way of life, but rather it is a new technology
to help solve the new problems of our age.'' \482\ In a 1970 message to
Congress seeking a stronger CAA, President Nixon stated he was
initiating a program to develop ``an unconventionally powered,
virtually pollution free automobile'' because of the possibility that
``the sheer number of cars in densely populated areas will begin
outrunning the technological limits of our capacity to reduce pollution
from the internal combustion engine.'' \483\
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\482\ Electric Vehicles and Other Alternatives to the Internal
Combustion Engine: Joint Hearings before the Comm. On Commerce and
the Subcomm. On Air and Water Pollution of the Comm. On Pub. Works,
90th Cong. (1967).
\483\ Richard Nixon, Special Message to the Congress on
Environmental Quality (Feb. 10, 1970), https://www.presidency.ucsb.edu/documents/special-message-the-congress-environmental-quality.
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Since the earliest days of the CAA, Congress has also emphasized
that the goal of section 202 is to address air quality hazards from
motor vehicles, not to simply reduce emissions from internal combustion
engines to the extent feasible. In the Senate Report accompanying the
1970 CAA Amendments, Congress made clear EPA ``is expected to press for
the development and application of improved technology rather than be
limited by that which exists'' and identified several
``unconventional'' technologies that could successfully meet air
quality-based emissions targets for motor vehicles.\484\ In the 1970
amendments, Congress further demonstrated its recognition that
developing new technology to ensure that pollution control keeps pace
with economic development is not merely a matter of refining the ICE,
but requires considering new types of motor vehicle propulsion.\485\
Congress provided EPA with authority to fund the development of ``low
emission alternatives to the present internal combustion engine'' as
well as a program to encourage Federal purchases of ``low-emission
vehicles.'' See CAA section 104(a)(2) (previously codified as CAA
section 212).\486\ As discussed further in RTC section 2.3, Congress
also adopted section 202(e) expressly to grant the Administrator
discretion under certain conditions regarding the certification of
vehicles and engines based on ``new power sources or propulsion
system[s],'' that is to say, power sources and propulsion systems
beyond the existing internal combustion engine and fuels available at
the time of the statute's enactment. As the D.C. Circuit stated in
1975, ``We may also note that it is the belief of many experts--both in
and out of the automobile industry--that air pollution cannot be
effectively checked until the industry finds a substitute for the
conventional automotive power plant--the reciprocating internal
combustion (i.e., `piston') engine. . . . It is clear from the
legislative history that Congress expected the Clean Air Amendments to
force the industry to broaden the scope of its research--to study new
types of engines and new control systems.'' \487\
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\484\ S. Rep. No. 91-1196, at 24-27 (1970).
\485\ In the lead up to enactment of the CAA of 1970, Senator
Edmund Muskie, Chair of the Subcommittee on Environmental Pollution
of the Committee on Public Works (now the Committee on Environment
and Public Works), stated that ``[t]he urgency of the problems
required that the industry consider, not only the improvement of
existing technology, but also alternatives to the internal
combustion engine and new forms of transportation.'' 116 Cong. Rec.
42382 (Dec. 18, 1970).
\486\ A Senate report on the Federal Low-Emission Vehicle
Procurement Act of 1970, the standalone legislation that ultimately
became the low-emission vehicle procurement provisions of the 1970
CAA, stated that the purpose of the bill was to direct federal
procurement to ``stimulate the development, production and
distribution of motor vehicle propulsion systems which emit few or
no pollutants'' and explained that ``the best long range method of
solving the vehicular air pollution problem is to substitute for
present propulsion systems a new system which, during its life,
produces few pollutants and performs as well or better than the
present powerplant.'' S. Rep. No. 91-745, at 1, 4 (Mar. 20, 1970).
\487\ Int'l Harvester Co. v. Ruckelshaus, 478 F.2d 615, 634-35
(D.C. Cir. 1975).
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Moreover, Congress believed that the motor vehicle emissions
program could achieve enormous emissions reductions, not merely modest
ones, through the application and development of ever-improving
emissions control technologies. For example, the Clean Air Act of 1970
required a 90 percent reduction in emissions, which was to be achieved
with less lead time than this rule provides for its final
standards.\488\ Ultimately, although the industry was able to meet the
standard using ICE technologies, the standard drove development of
entirely new engine and emission control technologies such as exhaust
gas recirculation and catalytic converters, which in turn required a
switch to unleaded fuel and the development of massive new
infrastructure (not present at the time the standard was finalized) to
support the distribution of this fuel.\489\
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\488\ See Clean Air Act Amendments of 1970, Public Law 91-604,
at sec. 6, 84 Stat. 1676, 1690 (Dec. 31, 1970) (amending section 202
of the CAA and directing EPA to issue regulations to reduce carbon
monoxide and hydrocarbons from LD vehicles and engines by 90 percent
in MY 1975 compared to MY 1970 and directing EPA to issue
regulations to reduce NOX emissions from LD vehicles and
engines by 90 percent in MY 1976 when compared with MY 1971).
\489\ Since the new vehicle technology required on all model
year 1975-76 vehicles would be poisoned by the lead in the existing
gasoline, it required the rollout of an entirely new fuel to the
marketplace with new refining technology needed to produce it. It
was not possible for refiners to make the change that quickly to all
of the nation's gasoline production, so this in turn required
installation of a new parallel fuel distribution infrastructure to
distribute and new retail infrastructure to dispense unleaded
gasoline to the customers with MY1975 and later vehicles while still
supplying leaded gasoline to the existing fleet. In order to ensure
availability of unleaded gasoline across the nation, all refueling
stations with sales greater than 200,000 gallons per year were
required to dispense the new unleaded gasoline. In 1974, less than
10 percent of all gasoline sold was unleaded gasoline, but by 1980
nearly 50 percent was unleaded. See generally Richard G. Newell and
Kristian Rogers, The U.S. Experience with the Phasedown of Lead in
Gasoline, Resources for the Future (June 2003), available at https://web.mit.edu/ckolstad/www/Newell.pdf.
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Since that time, Congress has continued to emphasize the importance
of technology development to achieving the goals of the CAA.\490\ In
the 1990 amendments, Congress determined that evolving technologies
could support further order of magnitude reductions in emissions. For
example, the statutory Tier I light-duty standards required (on top of
the existing standards) a further 30 percent reduction in nonmethane
hydrocarbons, 60 percent reduction in NOX, and 80 percent
reduction in PM for diesel vehicles. The Tier 2 light-duty standards in
turn required passenger vehicles to be 77 to 95 percent cleaner.\491\
Congress instituted a clean fuel vehicles program to promote further
progress in emissions reductions, which also applied to motor vehicles
as
[[Page 27895]]
defined under section 216, see CAA section 241(1), and explicitly
defined motor vehicles qualifying under the program as including
vehicles running on an alternative fuel or ``power source (including
electricity),'' CAA section 241(2).\492\
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\490\ For example, in the lead up to the CAA Amendments of 1990,
the House Committee on Energy and Commerce reported that ``[t]he
Committee wants to encourage a broad range of vehicles using
electricity, improved gasoline, natural gas, alcohols, clean diesel
fuel, propane, and other fuels.'' H. Rep. No. 101-490, at 283 (May
17, 1990).
\491\ See 65 FR 28 (Feb. 10, 2000).
\492\ See also CAA section 246(f)(4) (under the clean fuels
program, directing the Administrator to issue standards ``for Ultra-
Low Emission Vehicles (`ULEV's) and Zero Emissions Vehicles
(`ZEV's)'' and to conform certain such standards ``as closely as
possible to standards which are established by the State of
California for ULEV and ZEV vehicles in the same class.'').
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Congress also directed EPA to phase-in certain section 202(a)
standards in CAA section 202(g)-(j).\493\ In doing so, Congress
recognized that certain technologies, while extremely potent at
achieving lower emissions, would be difficult for the entire industry
to adopt all at once. Rather, it would be more appropriate for the
industry to gradually implement the standards over a longer period of
time. This is directly analogous to EPA's assessment in this final
rule, which finds that industry will gradually shift to more effective
emissions control technologies over a period of time. Generally
speaking, phase-ins, fleet averages, and ABT all are means of
addressing the question, recognized by Congress in section 202, of how
to achieve emissions reductions to protect public health when it may be
difficult to implement a stringency increase across the entire fleet
simultaneously.
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\493\ CAA section 202(g) required a phase in for LD trucks up to
6,000 lbs GVWR and LD vehicles beginning with MY 1994 for emissions
of nonmethane hydrocarbons (NMHC), carbon monoxide (CO), nitrogen
oxides (NOX), and particular matter (PM). These standards
phased in over several years. Similarly, CAA section 202(h) required
standards to be phased in beginning with MY 1995 for LD trucks of
more than 6,000 lbs GVWR for the same pollutants. CAA section 202(i)
required EPA to study whether further emission reductions should be
required with respect to MYs after January 1, 2003 for certain
vehicles. CAA section 202(j) required EPA to promulgate regulations
applicable to CO emissions from LD vehicles and LD trucks when
operated under ``cold start'' conditions i.e., when the vehicle is
operated at 20 degrees Fahrenheit. Congress directed EPA to phase in
these regulations beginning with MY 1994 under Phase I, and to study
the need for further reductions of CO and the maximum reductions
achievable for MY 2001 and later LD vehicles and LD trucks when
operated in cold start conditions. In addition, Congress specified
that any ``revision under this subchapter may provide for a phase-in
of the standard.'' CAA 202(b)(1)(C).
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Similar to EPA's ABT program, these statutory phase-in provisions
also evaluated compliance with respect to a manufacturers' fleet of
vehicles over the model year. More specifically, CAA section 202(g)-(j)
each required a specified percentage of a manufacturer's fleet to meet
a specified standard for each model year (e.g., 40 percent of a
manufacturer's sales volume must meet certain standards by MY 1994).
This made the level of a manufacturer's production over a model year a
core element of the standard. In other words, the form of the standard
mandated by Congress in these sections recognized that pre-production
certification would be based on a projection of production for the
upcoming model year, with actual compliance with the required
percentages not demonstrated until after the end of the model year.
Compliance was evaluated not only with respect to individual vehicles,
but with respect to the fleet as a whole. EPA's ABT provisions use this
same approach, adopting a similar, flexible form, that also makes the
level of a manufacturer's production a core element of the standard and
evaluates compliance at the fleet level, in addition to at the
individual vehicle level.
In enacting the Energy Independence and Security Act of 2007,
Congress also recognized the possibility of fleet-average standards.
The statute barred Federal agencies from acquiring ``a light duty motor
vehicle or medium duty passenger vehicle that is not a low greenhouse
gas emitting vehicle.'' \494\ It directed the Administrator to
promulgate guidance on such ``low greenhouse gas emitting vehicles,''
but explicitly prohibited vehicles from so qualifying ``if the vehicle
emits greenhouse gases at a higher rate than such standards allow for
the manufacturer's fleet average grams per mile of carbon dioxide-
equivalent emissions for that class of vehicle, taking into account any
emissions allowances and adjustment factors such standards provide.''
\495\ Congress thus explicitly contemplated the possibility of motor
vehicle GHG standards with a fleet average form.\496\
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\494\ 42 U.S.C. 13212(f)(2)(A).
\495\ 42 U.S.C. 13212(f)(3)(C) (emphasis added).
\496\ 42 U.S.C. 13212 does not specifically refer back to
section 202(a). However, we think it is plain that Congress intended
for EPA in implementing section 13212 to consider relevant CAA
section 202(a) standards as well as standards issued by the State of
California. See 42 U.S.C. 13212(f)(3)(B) (``In identifying vehicles
under subparagraph (A), the Administrator shall take into account
the most stringent standards for vehicle greenhouse gas emissions
applicable to and enforceable against motor vehicle manufacturers
for vehicles sold anywhere in the United States.''). As explained in
the text, EPA has historically set fleet average standards under CAA
section 202(a) for certain emissions from motor vehicles. Under
section 209(b) of the Clean Air Act, EPA may also authorize the
State of California to adopt and enforce its own motor vehicle
emissions standards subject the statutory criteria. California has
also adopted certain fleet average motor vehicle emissions
standards. No other Federal agency or State government has authority
to establish emissions standards for new motor vehicles, although
certain States may choose to adopt standards identical to
California's pursuant to CAA section 177.
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The recently-enacted IRA \497\ demonstrates Congress's continued
resolve to drive down emissions from motor vehicles through the
application of the entire range of available technologies, and
specifically highlights the importance of ZEV technologies. The IRA
``reinforces the longstanding authority and responsibility of [EPA] to
regulate GHGs as air pollutants under the Clean Air Act,'' \498\ and
``the IRA clearly and deliberately instructs EPA to use'' this
authority by ``combin[ing] economic incentives to reduce climate
pollution with regulatory drivers to spur greater reductions under
EPA's CAA authorities.'' \499\ To assist with this, as described in
sections I, III, and IV of the preamble, and RIA Chapter 2, the IRA
provides a number of economic incentives for BEVs and the
infrastructure necessary to support them, and specifically affirms
Congress's previously articulated statements that non-ICE technologies
will be a key component of achieving emissions reductions from the
mobile source sector.\500\ The legislative history reflects that
``Congress recognizes EPA's longstanding authority under CAA section
202 to adopt standards that rely on zero emission technologies, and
Congress expects that future EPA regulations will increasingly rely on
and incentivize zero-emission vehicles as appropriate.'' \501\ These
developments further confirm that the focus of CAA section 202 is on
application of innovative technologies to reduce vehicular emissions,
and not on the means by which vehicles are powered.
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\497\ Inflation Reduction Act, Public Law 117-169, 136 Stat.
1818, (2022), available at https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf.
\498\ 168 Cong. Rec. E868-02 (daily ed. Aug. 12, 2022)
(statement of Rep. Pallone, Chairman of the House Energy and
Commerce Committee).
\499\ 168 Cong. Rec. E879-02, at 880 (daily ed. Aug. 26, 2022)
(statement of Rep. Pallone).
\500\ See Inflation Reduction Act, Public Law 117-169, at
Sec. Sec. 13204, 13403, 13404, 13501, 13502, 50142-50145, 50151-
50153, 60101-60104, 70002 136 Stat. 1818, (2022), available at
https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf.
\501\ 168 Cong. Rec. E879-02, at 880 (daily ed. Aug. 26, 2022)
(statement of Rep. Pallone).
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This statutory and legislative history, beginning with the 1960s
and through the recently enacted IRA, demonstrate Congress's historical
and contemporary commitment to reducing motor vehicle emissions through
the application of increasingly advanced technologies. Consistent with
Congress's intent and this legislative history, EPA's rulemakings have
taken the same approach, basing standards on ever-
[[Page 27896]]
evolving technologies that have allowed for enormous emissions
reductions. As required by the Act, EPA has consistently considered the
lead time and costs of control technologies in determining whether and
how they should be included in the technological packages for the
standards, along with other factors that affect the real-world adoption
or impacts of the technologies as appropriate. Over time, EPA's motor
vehicle emission standards have been based on and stimulated the
development of a broad set of advanced technologies--such as electronic
fuel injection systems, gasoline catalytic convertors, diesel
particulate filters, diesel NOX reduction catalysts,
gasoline direct injection fuel systems, and advanced transmission
technologies--which have been the building blocks of vehicle designs
and have yielded not only lower pollutant emissions, but improved
vehicle performance, reliability, and durability. Many of these
technologies did not exist when Congress first granted EPA's section
202(a) authority in 1965, but these technologies nonetheless have been
successfully adopted and reduced emissions by multiple orders of
magnitude.
As previously discussed, beginning in 2010, EPA has set vehicle and
engine standards under section 202(a)(1)-(2) for GHGs.\502\
Manufacturers have responded to these standards over the past decade by
continuing to develop and deploy a wide range of technologies,
including more efficient engine designs, transmissions, aerodynamics,
tires, and air conditioning systems that contribute to lower GHG
emissions, as well as vehicles based on methods of propulsion beyond
diesel- and gasoline-fueled ICE vehicles, including ICE running on
alternative fuels, as well as various levels of electrified vehicle
technologies from mild hybrids, to strong hybrids, and up through
battery electric vehicles and fuel-cell vehicles.
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\502\ 75 FR 25324, May 7, 2010; see also 76 FR 57106, September
15, 2011 (establishing first ever GHG standards for heavy-duty
vehicles).
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EPA has long established performance-based emissions standards that
anticipate the use of new and emerging technologies. In each of EPA's
earlier GHG rules, as in this rule, EPA specifically considered the
availability of electrified technologies, including BEV
technologies.\503\ In the 2010 LD GHG rule, EPA determined based on the
record before it that BEVs should not be part of the technology
packages to support the feasibility of the standards given that they
were not expected to be sufficiently available during the model years
for those rules, giving consideration to lead time and costs of
compliance. Instead, recognizing the possible future use of those
technologies and their potential to achieve very large emissions
reductions, EPA incentivized their development and deployment through
advanced technology credit multipliers, which give manufacturers
additional ABT credits for producing such vehicles. In the 2012 rule
which set standards for MYs 2017-2025 light-duty vehicles, EPA included
BEV and PHEV technologies in its analysis, and projected that by MY
2025 BEV penetrations would reach 2 percent.\504\ By the time of the
2021 LD GHG rule, the increasing presence of PEVs in the market led EPA
to judge that additional ABT credits for PEVs would no longer be
warranted after MY 2024. Accordingly, EPA's technology pathway
supporting the feasibility of the standards accounted for the
increasing penetrations of such technologies, along with improved ICE
technologies, in establishing the most protective LD GHG standards to
date. In this rule, EPA continues to consider these technologies, and
based on the updated record, finds that such technologies will be
available at a reasonable cost during the timeframe for this rule, and
therefore has included them in the technology packages to support the
level of the standards under the modeled potential compliance pathway.
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\503\ These include the 2010, 2012, 2020, and 2021 LD GHG rules,
as well as the 2011 and 2016 HD GHG rules.
\504\ EPA's projection turned out to be an underestimate, as
PEVs comprised 7.5 percent of new vehicle sales in MY 2022 and sales
are expected to continue to grow. See 2023 EPA Automotive Trends
Report.
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The above analysis of the statutory text, purpose and history, as
well as EPA's history of implementing the statute, demonstrate that the
agency must, or at a minimum may, appropriately consider available
electrified technologies that completely prevent emissions in
determining the final standards. In this rulemaking, EPA has done so.
The agency has made the necessary predictive judgments as to potential
technological developments that can support the feasibility of the
final standards, and also as to the availability of supporting
infrastructure and critical minerals necessary to support those
technological developments, as applicable. In making these judgments,
EPA has adhered to the long-standing approach established by the D.C.
Circuit, identifying a reasonable sequence of future developments,
noting potential difficulties, and explaining how they may be obviated
within the lead time afforded for compliance. EPA has also consulted
with other organizations with relevant expertise such as the
Departments of Energy and Transportation, including through careful
consideration of their reports and related analytic work reflected in
the administrative record for this rulemaking.
Although the standards are supported by the Administrator's
predictive judgments regarding pollution control technologies and the
modeled potential compliance pathway, we emphasize that the final
standards are not a mandate for a specific type of technology. They do
not legally or de facto require a manufacturer to follow a specific
technological pathway to comply. Consistent with our historical
practice, EPA is finalizing performance-based standards that provide
compliance flexibility to manufacturers. While EPA projects that
manufacturers may comply with the standards through the use of certain
technologies, including a mix of ICE vehicles, advanced ICE, HEVs,
PHEVs, and BEVs, manufacturers may select any technology or mix of
technologies that would enable them to meet the final standards.
These choices are real and valuable to manufacturers, as attested
to by the historical record. The real-world results of our prior
rulemakings make clear that industry sometimes chooses to comply with
our standards in ways that the Agency did not anticipate, presumably
because it is more cost-effective for them to do so. In other words,
while EPA sets standards that are feasible based on our modeling of
potential compliance pathways, manufacturers may find what they
consider to be better pathways to meet the standards and may opt to
comply by following those pathways instead.
For example, in promulgating the 2010 LD GHG rule, EPA modeled a
technology pathway for compliance with the MY 2016 standards. In
actuality, manufacturers diverged from EPA's projections across a wide
range of technologies, instead choosing their own technology pathways
best suited for their fleets.505 506 For example, EPA
projected greater penetration of dual-clutch transmissions than
ultimately occurred in the MY 2016 fleet; by contrast, use of 6-speed
automatic transmissions was twice what EPA had predicted. Both
transmission
[[Page 27897]]
technologies represented substantial improvements over the existing
transmission technologies, with the manufacturers choosing which
specific technology was best suited for their products and customers.
Looking specifically at electrification technologies, start-stop
systems were projected at 45 percent and were used in 10 percent of
vehicles, while strong hybrids were projected to be 6.5 percent of the
MY 2016 fleet and were actually only 2 percent.\507\ Notwithstanding
these differences between EPA's projections and actual manufacturer
decisions, the industry as a whole was not only able to comply with the
standards during the period of those standards (2012-2016), but to
generate substantial additional credits for overcompliance.\508\
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\505\ See EPA Memorandum to the docket for this rulemaking,
``Comparison of EPA CO2 Reducing Technology Projections
between 2010 Light-duty Vehicle Rulemaking and Actual Technology
Production for Model Year 2016''.
\506\ Similarly, in our 2001 final rule promulgating heavy-duty
nitrogen oxide (NOX) and particulate matter (PM)
standards, for example, we predicted that manufacturers would comply
with the new nitrogen oxide (NOX) standards through the
addition of NOX absorbers or ``traps.'' 66 FR 5002, 5036
(Jan. 18, 2001) (``[T]he new NOX standard is projected to
require the addition of a highly efficient NOX emission
control system to diesel engines.''). We stated that we were not
basing the feasibility of the standards on selective catalytic
reduction (SCR) noting that SCR ``was first developed for stationary
applications and is currently being refined for the transient
operation found in mobile applications.'' Id. at 5053. However,
industry's approach to complying with the 2001 standards ultimately
included the use of SCR for diesel engines. We also projected that
manufacturers would comply with the final PM standards through the
addition of PM traps to diesel engines; however, industry was able
to meet the PM standards without the use of PM traps or any other PM
aftertreatment systems.
\507\ Although in 2010, EPA overestimated technology
penetrations for strong hybrids, in 2012, we underestimated
technology penetrations for PEVs, projecting on 1 percent
penetration by MY 2021, while actual sales exceeded 4 percent.
Compare 2012 Rule RIA, table 3.5-22 with 2022 Automotive Trends
Report, table 4.1.
\508\ See 2022 Automotive Trends Report, Fig. ES-8 (industry
generated credits each year from 2012-2015 and generated net credits
for the years 2012-2016).
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In support of the final standards, EPA has also performed
additional modeling demonstrating that the standards can be met in
multiple ways. As discussed in section IV.F-G of the final rule
preamble and Chapter 2 of the RIA, while our modeled potential
compliance pathway includes a mix of ICE, HEV, PHEV and BEV
technologies, we also evaluated several examples of potential
technology packages and potential compliance pathways. These include
sensitivity analyses that account for the implementation of the
Advanced Clean Car II program, lower and higher battery costs, faster
and slower BEV acceptance, no credit trading, lower BEV production, and
no additional BEV production beyond the No-Action case.\509\ Likewise,
we have concluded based on the record that the final GHG,
NMOG+NOX and PM standards can also be met solely with
vehicles containing internal combustion engines.\510\ We conclude that
per vehicle costs are also reasonable and lead time is sufficient for
all of the sensitivity analyses, including those with higher cost
impacts. Overall, the sensitivity analyses demonstrate that the final
standards are achievable under a wide range of differing assumptions
and lend additional support for the feasibility of the final standards,
considering costs and lead time.
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\509\ We stress, however, that these additional pathways are not
necessary to justify this rulemaking; the statute requires EPA to
demonstrate that the standards can be met by the development and
application of technology, but it does not require the agency to
identify multiple technological solutions to the pollution control
problem before mandating more stringent standards. That EPA has done
so in this rulemaking, identifying a wide array of technologies
capable of further reducing emissions, only highlights the
feasibility of the standards and the significant practical
flexibilities manufacturers have to attain compliance. We observe
that some past standards have been premised on the application of a
single known technology at the time, such as the catalytic
converter. See Int'l Harvester v. Ruckelshaus, 478 F.2d 615, 625
(D.C. Cir. 1973) (in setting standards for light duty vehicles, the
Court upheld EPA's reliance on a single kind of technology); see
also 36 FR 12657 (1971) (promulgating regulations for light duty
vehicles based on the catalytic converter).
\510\ EPA notes that all of its compliance path modeling is
based on an expectation that there will be at least some BEVs in the
fleet, since BEVs are a cost-effective compliance strategy and
represented over 9 percent of new light-duty vehicles sales in 2023.
However, EPA has also assessed the technical feasibility of vehicles
with ICE meeting both the GHG and criteria pollutant standards and
has concluded that across the range of vehicle footprints it would
be feasible for manufacturers to produce vehicles with internal
combustion engines (e.g., PHEVs) that meet their CO2
footprint targets (see RIA Chapter 3.5.5) and criteria pollutant
standards (see RIA Chapter 3.2).
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3. Response to Other Comments Raising Legal Issues
In this section, EPA summarizes our response to certain other
comments relating to our legal authority. These include three comments
relating to our legal authority to consider certain technologies
discussed in section III.B.1 of this preamble above: whether this rule
implicates the major questions doctrine, whether EPA has authority for
its Averaging, Banking, and Trading (ABT) program, and whether EPA
erred in considering BEVs as part of the same class as other vehicles
in setting the standards. We separately discuss our legal authority and
rationale for battery durability and warranty in section III.G.2-3 of
the preamble.
Major questions doctrine. While many commenters recognized EPA's
legal authority to adopt the final standards, certain commenters
claimed that this rule asserts a novel and transformative exercise of
regulatory power that implicates the major questions doctrine and
exceeds EPA's legal authority. These arguments were intertwined with
arguments challenging EPA's consideration of electrified technologies.
Some commenters claimed that the agency's decision to do so and the
resulting standards would mandate a large increase in electric
vehicles. According to these commenters, this in turn would cause
indirect impacts, including relating to issues allegedly outside EPA's
traditional areas of expertise, such as to the petroleum refining
industry, electricity transmission and distribution infrastructure,
grid reliability, and U.S. national security.
EPA does not agree that this rule implicates the major questions
doctrine, as that doctrine has been elucidated by the Supreme Court in
West Virginia v. EPA and related cases.\511\ The Court has made clear
that the doctrine is reserved for extraordinary cases involving
assertions of highly consequential power beyond what Congress could
reasonably be understood to have granted. This is not such an
extraordinary case in which Congressional intent is unclear. Here, EPA
is acting within the heartland of its statutory authority and
faithfully implementing Congress's precise direction and intent.
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\511\ W. Virginia v. Env't Prot. Agency, 142 S. Ct. 2587, 2605,
2610 (2022).
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First, as we explain in section III.B.2 of the preamble, the
statute provides clear Congressional authorization for EPA to consider
updated data on pollution control technologies--including BEV
technologies--and to determine the emission standards accordingly. In
section 202(a), Congress made the major policy decision to regulate air
pollution from motor vehicles. Congress also prescribed that EPA should
accomplish this mandate through a technology-based approach, and it
plainly entrusted to the Administrator's judgment the evaluation of
pollution control technologies that are or will become available given
the available lead-time and the consequent determination of the
emission standards. In the final rule, the Administrator determined
that a wide variety of technologies exist to further control GHGs from
light- and medium-duty vehicles--including various ICE, hybrid, PHEV,
and BEV technologies--and that such technologies could be applied at a
reasonable cost to achieve significant reductions of GHG emissions
[[Page 27898]]
that contribute to the ongoing climate crisis. These subsidiary
technical and policy judgments were clearly within the Administrator's
delegated authority.
Second, the agency is not invoking a novel authority. As described
above, EPA has been regulating emissions from motor vehicles based upon
the availability of feasible technologies to reduce vehicle emissions
for over five decades. EPA has regulated GHG emissions since 2010 and
criteria pollutant emissions since the 1970s. Our rules have
consistently considered available technology to reduce or prevent
emissions of the relevant pollutant, including technologies to reduce
or completely prevent GHGs. Our consideration of zero-emitting
technologies specifically has a long pedigree, beginning with the 1998
National Low Emission Vehicle (NLEV) program. The administrative record
here indicates the industry will likely choose to deploy an increasing
number of vehicles with emissions control technologies such as PHEV and
BEV, in light of new technological advances, the IRA and other
government programs, as well as this rule. That the industry will
continue to apply the latest technologies to reduce pollution is no
different than how the industry has responded to EPA's rules for half a
century. The agency's factual findings and resulting determination of
the degree of stringency do not represent the exercise of a newfound
power. Iterative increases to the stringency of an existing program
based on new factual developments hardly reflect an unprecedented
expansion of agency authority.
Not only does this rule not invoke any new authority, it also falls
well within EPA's traditionally delegated powers. Through five decades
of regulating vehicle emissions under the CAA, EPA has developed great
expertise in the regulation of motor vehicle emissions. The agency's
expertise is reflected in the comprehensive analyses present in the
administrative record. The courts have recognized the agency's
authority in this area.\512\ The agency's analysis includes our
assessment of available pollution control technologies; the design and
application of a quantitative model for assessing feasible rates of
technology adoption; the economic costs of developing, applying, and
using pollution control technologies; the context for deploying such
technologies (e.g., the supply of raw materials and components, and the
availability of supporting charging and refueling infrastructure); the
impacts of using pollution control technologies on emissions, and
consequent impacts on public health, welfare, and the economy. While
each rule necessarily deals with different facts, such as advances in
new pollution control technologies at the time of that rule, the above
factors are among the kinds of considerations that EPA regularly
evaluates in its motor vehicle rules, including all our prior GHG
rules.
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\512\ See, e.g., Massachusetts v. E.P.A., 549 U.S. 497, 532
(2007) (``Because greenhouse gases fit well within the Clean Air
Act's capacious definition of ``air pollutant,'' we hold that EPA
has the statutory authority to regulate the emission of such gases
from new motor vehicles.'').
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Third, this rule does not involve decisions of vast economic and
political importance exceeding EPA's delegated authority. To begin
with, commenters err in characterizing this rule as a ban on gasoline
engines or a zero-emission vehicle mandate. That is false as a legal
matter and a practical matter. As a legal matter, this rule does not
mandate that any manufacturer use any specific technology to meet the
standards in this rule; nor does the rule ban gasoline engines. And as
a practical matter, as explained in section IV.F-G of the preamble and
Chapter 2 of the RIA, manufacturers can adopt a wide array of
technologies, including various ICE, HEV, PHEV, and BEV technologies,
to comply with this rule.
Specifically, EPA has concluded that the standards could be met by
additional PHEVs and has identified several additional compliance
pathways, with a wide range of BEVs, that can be achieved in the lead-
time provided and at a reasonable cost. In all of these pathways,
manufacturers continue to produce gasoline engine vehicles. Indeed,
EPA's central case modeling shows that over 84 percent of the on-road
fleet will still use gasoline or diesel in 2032, and 58 percent will in
2055. Moreover, the adoption of additional control technologies,
including BEVs, are complementary to what the manufacturers are already
doing regardless of this rule. As explained under section I.A.2 of the
preamble, the production of new PEVs is growing steadily, and even
without this rule, is expected to reach 11.8 percent of U.S. light-duty
vehicle production for MY 2023,\513\ up from 6.7 percent in MY 2022,
4.4 percent in MY 2021 and 2.2 percent in MY 2020--this reflects a
growth of over 400 percent in three years. On a sales basis, U.S. new
PEV sales in calendar year 2023 alone surpassed 1.4
million,514 515 an increase of more than 50 percent over the
807,000 sales that occurred in 2022.\516\ Looking to the future under
the No Action case, we project that by 2030, 42 percent of new vehicles
will be PEVs, while mid-range third-party projections we have reviewed
range from 48 to 58 percent in 2030.
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\513\ At time of this publication, MY 2023 production data is
not yet final. Manufacturers will be confirming production volumes
delivered for sale in MY 2023 later in calendar year 2024.
\514\ Argonne National Laboratory, ``Light Duty Electric Drive
Vehicles Monthly Sales Updates,'' January 30, 2024. Accessed on
March 7, 2024 at https://www.anl.gov/esia/light-duty-electric-drive-vehicles-monthly-sales-updates.
\515\ Department of Energy, ``FOTW #1327, January 29, 2024:
Annual New Light-Duty EV Sales Topped 1 Million for the First Time
in 2023,'' January 29, 2024. Accessed on February 2, 2024 at https://www.energy.gov/eere/vehicles/articles/fotw-1327-january-29-2024-annual-new-light-duty-ev-sales-topped-1-million.
\516\ Colias, M., ``U.S. EV Sales Jolted Higher in 2022 as
Newcomers Target Tesla,'' Wall Street Journal, January 6, 2023.
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Manufacturers have made significant commitments regarding increased
production of PEVs as well as supporting announcements that the vast
majority of their research and development funding will go towards
PEVs, not ICE. These efforts are spurred by a wide range of factors,
including the IRA, decreasing costs of producing electric vehicles and
their batteries, and more protective GHG standards and EV requirements
established by other jurisdictions. To the extent that commenters are
concerned about vehicle electrification, that phenomenon is already
occurring and accelerating regardless of this final rule. As such, the
[[Page 27899]]
absence of this rule is not a world with ICE vehicles being produced at
the same high rates as in prior years; rather, it is a world with
rapidly declining production of ICE vehicles and increasing production
of PEVs. The final rule builds on these industry trends. It will likely
cause some manufacturers to adopt control technologies more rapidly
than they otherwise would (particularly in the later model years
covered by this rule), and this will result in significant pollution
reductions and large public health and welfare benefits. However, that
is the entire point of section 202(a); that the regulated industry will
deploy additional technology to comply with EPA's standards and further
Congress's purposes does not mean the agency has exceeded its delegated
authority.
The regulatory burdens of this rule are also reasonable and not
different in kind from prior exercises of EPA's authority under section
202. The regulated community of vehicle manufacturers in this rule was
also regulated by earlier rules. In terms of costs of compliance for
regulated entities, the average costs per-vehicle in the final year of
the phase-in ($2,100 in MY 2032) fall within the range of prior rules,
for example less than that of the 2012 rule ($2,400 in MY 2025).\517\
The per-vehicle costs, moreover, are small relative to what Congress
itself accepted in enacting section 202.\518\ We acknowledge that the
total costs of compliance for this rule are greater than for prior
rules, for example slightly over 10% higher than the costs for the 2012
rule after adjusting for inflation ($760 billion versus $689 billion in
2022$ (3% PV)). The moderately higher compliance costs of this rule
hardly amount to an unprecedented and transformative change, but merely
reflect an ordinary fluctuation in regulatory impacts in response to
changed circumstances. The rule also does not create any other
excessive regulatory burdens on regulated entities; for example, the
rule does not require any manufacturer to shut down, or to curtail or
delay production.
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\517\ We provide detailed numerical comparisons of costs and
other metrics between this rule and prior rules in RTC Section 2.3.
\518\ See Motor & Equip. Mfrs. Ass'n, Inc. v. EPA, 627 F.2d
1095, 1118 (D.C. Cir. 1979) (``Congress wanted to avoid undue
economic disruption in the automotive manufacturing industry and
also sought to avoid doubling or tripling the cost of motor vehicles
to purchasers.'').
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While section 202 does not require EPA to consider consumer
impacts, the agency recognizes that consumer acceptance of new
pollution control technologies can affect the adoption of such
technologies. As such, EPA carefully evaluated these issues. In the
final rule, EPA considered the upfront costs associated with purchasing
cleaner vehicles as well as the costs of operating such vehicles over
their lifetime. EPA found that lower operating costs for vehicles
substantially outweigh the increased technology costs of meeting the
standards over the life of the vehicles. EPA also carefully designed
the final rule to avoid any other kinds of disruptions to purchasers.
For example, we recognize that light- and medium-duty vehicles
represent a diverse array of vehicles and use cases, and we carefully
tailored the standards to ensure that purchasers could obtain the kinds
of vehicles they need. We also recognized that vehicles require
supporting infrastructure (e.g., charging infrastructure) to operate,
and we accounted for sufficient lead-time for the development of that
infrastructure. We also identified numerous industry standards and
safety protocols to ensure the safety of vehicles, including BEVs.
We acknowledge the rule may have other impacts beyond those on
regulated entities and their customers (for purposes of discussion
here, referred to as ``indirect impacts''). But indirect impacts are
inherent in section 202 rulemakings, including past rulemakings going
back half a century. As the D.C. Circuit has observed, in the specific
context of EPA's Clean Air Act Title II authority to regulate motor
vehicles, ``[e]very effort at pollution control exacts social costs.
Congress . . . made the decision to accept those costs.'' \519\ In
EPA's long experience of promulgating environmental regulations, the
presence of indirect impacts does not reflect the extraordinary nature
of agency action, but rather the ordinary state of the highly
interconnected and global supply chain for motor vehicles. In any
event, EPA has considerable expertise in evaluating the broader social
impacts of the agency's regulations, for example on public health and
welfare, safety, energy, employment, and national security. Congress
has recognized the agency's expertise in many of these areas in the
Clean Air Act, including in section 202(a) itself,\520\ and EPA has
regularly considered such indirect impacts in our prior rules.
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\519\ Motor & Equip. Mfrs. Ass'n, Inc. v. EPA, 627 F.2d 1095,
1118 (D.C. Cir. 1979); see also id. (``There is no indication that
Congress intended section 202's cost of compliance consideration to
embody social costs of the type petitioners advance,'' and holding
that the statute does not require EPA to consider antitrust
concerns); Coal. for Responsible Regulation Inc. v. EPA, 684 F.3d
102, 128 (D.C. Cir. 2012) (holding that the statute ``does not
mandate consideration of costs to other entities not directly
subject to the proposed standards''); Massachusetts v. EPA, 549 U.S.
497, 534 (2007) (impacts on ``foreign affairs'' are not sufficient
reason for EPA to decline making the endangerment finding under
section 202(a)(1)).
\520\ See, e.g., CAA section 202(a)(1) (requiring EPA
Administrator to promulgate standards for emissions from motor
vehicles ``which in his judgment cause, or contribute to, air
pollution which may reasonably be anticipated to endanger public
health or welfare''), 202(a)(3)(A) (requiring the agency to
promulgate certain motor vehicle emission standards ``giving
appropriate consideration to cost, energy, and safety factors
associated with the application of such technology''), 203(b)(1)
(authorizing the Administrator to ``exempt any new motor vehicle or
new motor vehicle engine'' from certain statutory requirements
``upon such terms and conditions as he may find necessary . . . for
reasons of national security''), 312(a) (directing EPA to conduct a
``comprehensive analysis of the impact of this chapter on the public
health, economy, and environment of the United States'').
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EPA carefully analyzed indirect impacts and coordinated with
numerous Federal and other partners with relevant expertise, as
described in sections III.I-J of the preamble.\521\ The consideration
of many indirect impacts is included in our assessment of the rule's
costs and benefits. We estimate annualized net benefits of $110 billion
through the year 2055 when assessed at a 2 percent discount rate
(2022$). The net benefits are not different in kind from prior rules;
they are also a small fraction when compared to the size of the
regulated industry itself, which grossed $1.21 trillion in 2022 and is
rapidly
[[Page 27900]]
expanding,\522\ and a tiny fraction of the size of the U.S.
economy.\523\
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\521\ For example, we consulted with the following Federal
agencies and workgroups on their relevant areas of expertise:
National Highway Traffic Safety Administration (NHTSA) at the
Department of Transportation (DOT), Department of Energy (DOE)
including several national laboratories (Argonne National Laboratory
(ANL), National Renewable Energy Laboratory (NREL), and Oak Ridge
National Laboratory (ORNL)), United States Geological Survey (USGS)
at the Department of Interior (DOI), Joint Office of Energy and
Transportation (JOET), Federal Energy Regulatory Commission (FERC),
Department of Commerce (DOC), Department of Defense (DOD),
Department of State, Federal Consortium for Advanced Batteries
(FCAB), and Office of Management and Budget (OMB). We also consulted
with State and regional agencies, and we engaged extensively with a
diverse set of stakeholders, including vehicle manufacturers, labor
unions, technology suppliers, dealers, utilities, charging
providers, environmental justice organizations, environmental
organizations, public health experts, tribal governments, and other
organizations.
\522\ See Alliance for Automotive Innovation, Economic Insights
Map, available at https://www.autosinnovate.org/resources/insights.
\523\ U.S. GDP reached $25.46 trillion dollars in 2022. See
Bureau of Economic Analysis, Gross Domestic Product, Fourth Quarter
and Year 2022 (Second Estimate) (Feb. 23, 2023), available at
https://www.bea.gov/news/2023/gross-domestic-product-fourth-quarter-and-year-2022-third-estimate-gdp-industry-and.
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EPA also carefully evaluated many indirect impacts outside of the
net benefits assessment and we identified no significant indirect harms
and the potential for indirect benefits. Based on our analysis, EPA
projects that this rulemaking will not cause significant adverse
impacts on electric grid reliability or resource adequacy, that there
will be sufficient battery production and critical minerals available
to support increasing electric vehicle production including due to
large increases in domestic battery and critical mineral production,
that there will be sufficient lead-time to develop charging
infrastructure, and that the rule will have significant positive
national security benefits. We also identified significant initiatives
by the Federal government (such as the BIL and IRA), State and local
government, and private firms, that complement EPA's final rule,
including initiatives to reduce the costs to purchase PEVs; support the
development of domestic critical mineral, battery, and PEV production;
improve the electric grid, and accelerate the establishment of charging
infrastructure.
These and other kinds of indirect impacts, moreover, are similar in
kind to the impacts of past EPA motor vehicle rules. For example, this
rule may reduce the demand for gasoline and diesel for light-duty and
medium-duty vehicles domestically and affect the petroleum refining
industry, but that has been the case for all of EPA's past GHG vehicle
rules, which also reduced demand for liquid fuels through advances in
ICE engine and vehicle technologies and corresponding fuel efficiency.
And while production of PEVs does rely on a global supply chain, that
is true for all motor vehicles, whose production rely extensively on
imports, from raw materials like aluminum to components like
semiconductors; addressing supply chain vulnerabilities is a key
component of managing any significant manufacturing operation in
today's global world. Further, while PEVs may require supporting
infrastructure to operate, the same is true for ICE vehicles; indeed,
supporting infrastructure for ICE vehicles has changed considerably
over time in response to environmental regulation, for example, with
the elimination of lead from gasoline, the provisioning of diesel
exhaust fluid (DEF) at truck stops to support selective catalytic
reduction (SCR) technologies, and the introduction of low sulfur diesel
fuel to support diesel particulate filter (DPF) technologies.
As with prior vehicle rules, many indirect impacts are positive:
\524\ foremost, the significant benefits of mitigating air pollution
including both criteria pollutants, which contribute to a range of
adverse effects on human health including premature mortality, and
GHGs, which contribute to climate change and pose catastrophic risks
for human health and the environment, water supply and quality, storm
surge and flooding, electricity infrastructure, agricultural
disruptions and crop failures, human rights, international trade, and
national security. Other positive indirect impacts include reduced
dependence on foreign oil and increased energy security and
independence; increased regulatory certainty for domestic production of
pollution control technologies and their components (including PEVs,
batteries, battery components, and critical minerals) and for the
development of electric charging infrastructure, with attendant
benefits for employment and US global competitiveness in these sectors;
and increased use of electric charging and potential for vehicle-to-
grid technologies that can benefit electric grid reliability.
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\524\ As noted above, our use of ``indirect impacts'' in this
section refers to impacts beyond those on regulated entities.
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Moreover, many of the indirect impacts find close analogs in the
impacts Congress itself recognized and accepted. For instance, in 1970
Congress debated whether to adopt standards that would depend heavily
on platinum-based catalysts in light of a world-wide shortage of
platinum,\525\ and in the leadup to the 1977 and 1990 Amendments,
Congress recognized that increasing use of three-way catalysts to
control motor vehicle pollution risked relying on foreign sources of
the critical mineral rhodium.\526\ In each case, Congress nonetheless
enacted statutory standards premised on this technology. Similarly,
Congress recognized and accepted the potential for employment impacts
caused by the Clean Air Act; it then chose to address such impacts not
by limiting EPA's authority to promulgate motor vehicle rules, but by
other measures, such as funding training and employment services for
affected workers.\527\
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\525\ See, e.g., Environmental Policy Division of the
Congressional Research Service Volume 1, 93d Cong., 2d Sess., A
Legislative History of the Clean Air Amendments of 1970 at 307
(Comm. Print 1974) (Senator Griffin opposed the vehicle emissions
standards because the vehicle that had been shown capable of meeting
the standards used platinum-based catalytic converters and ``[a]side
from the very high cost of the platinum in the exhaust system, the
fact is that there is now a worldwide shortage of platinum and it is
totally impractical to contemplate use in production line cars of
large quantities of this precious material. . . .'').
\526\ See, e.g., 136 Cong. Rec. 5102-04 (1990) and 123 Cong.
Rec. 18173-74 (1977) (In debate over both the 1977 and 1990
amendments to the Clean Air Act, some members of Congress supported
relaxing NOX controls from motor vehicles due to concerns
over foreign control of rhodium supplies); see also EPA, Tier 2
Report to Congress, EPA420-R-98-008, July 1998, p. E-13 (describing
concerns about potential shortages in palladium that could result
from the Tier 2 standards).
\527\ Public Law 101-549, at sec. 1101, amending the Job
Training Partnership Act, 29 U.S.C. 1501 et seq. (since repealed).
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In sum, the final rule is a continuation of what the Administrator
has been doing for over fifty years: evaluate updated data on pollution
control technologies and set emissions standards accordingly. The rule
maintains the fundamental regulatory structure of the existing program
and iteratively strengthens the standards from its predecessor rules.
The consequences of the rule are analogous to and not different in kind
from those of prior rules. And while the rule is associated with
indirect impacts, EPA comprehensively assessed such impacts and found
that the final rule does not cause significant indirect harms as
alleged by commenters and on balance creates net benefits for society.
We further discuss our response to the major questions doctrine
comments in section 2 of the RTC.
ABT. Some commenters claim that the ABT program, or fleetwide
averaging, or both, exceed EPA's statutory authority. As further
explained in sections III.C.4 and III.D.2.v of the preamble, EPA has
long employed fleetwide averaging and ABT compliance provisions,
particularly with respect to the GHG and NMOG+NOX standards.
In upholding the first HD final rule that included an averaging
provision, the D.C. Circuit rejected a petitioner's challenge to EPA's
statutory authority for averaging. NRDC v. Thomas, 805 F.2d 410, 425
(D.C. Cir. 1986).\528\ In the subsequent 1990 amendments, Congress,
noting NRDC v. Thomas and
[[Page 27901]]
EPA's ABT program, ``chose not to amend the Clean Air Act to
specifically prohibit averaging, banking and trading authority.'' \529\
``The intention was to retain the status quo,'' i.e., EPA's existing
authority to allow ABT and establish fleet average standards.\530\
Since then the agency has routinely used ABT in its motor vehicle
programs, including in all of our motor vehicle GHG rules, and
repeatedly considered the availability of ABT in determining the level
of stringency of fleet average standards. Manufacturers have come to
rely on ABT in developing their compliance plans. The agency did not
reopen the ABT regulations in this rulemaking, with discrete exceptions
in the criteria pollutant program corresponding to changes in the
transition from Tier 3 to Tier 4 standards. Comments challenging the
agency's authority for ABT regulations and use of fleet averaging are
therefore beyond the scope of the rulemaking.
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\528\ The court explained that ``[l]acking any clear
congressional prohibition of averaging, the EPA's argument that
averaging will allow manufacturers more flexibility in cost
allocation while ensuring that a manufacturer's overall fleet still
meets the emissions reduction standards makes sense.'' NRDC v.
Thomas, 805 F.2d at 425.
\529\ 136 Cong. Rec. 35,367, 1990 WL 1222469, at *1.
\530\ 136 Cong. Rec. 35,367, 1990 WL 1222469 at *1; see also 136
Cong. Rec. 36,713, 1990 WL 1222468 at *1.
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In any event, the CAA authorizes EPA to establish an ABT program
and fleet average standards.\531\ Section 202(a)(1) directs EPA to set
standards ``applicable to the emission of any air pollutant from any
class or classes of new motor vehicles'' that cause or contribute to
harmful air pollution. The term ``class or classes'' refers expressly
to groups of vehicles, indicating that EPA may set standards based on
the emissions performance of the class as a whole, which is precisely
what ABT and fleet averaging enable. Moreover, as we detail in section
III.C.4 of the preamble and section 2 of the RTC, consideration of ABT
in standard setting relates directly to considerations of technical
feasibility, cost, and lead time, the factors EPA is required to
consider under CAA section 202(a)(2) in setting standards.\532\ For
decades, EPA has found that considering ABT, particularly the averaging
provisions, is consistent with the statute and affords regulated
entities more flexibility in phasing in technologies in a way that is
economically efficient, promotes the goals of the Act, supports vehicle
redesign cycles, and responds to market fluctuations, allowing for
successful deployment of new technologies and achieving emissions
reductions at lower cost and with less lead time.\533\
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\531\ As we explain in Section V.B of the preamble, EPA finds
that the standards are feasible and appropriate even in the absence
of trading. Thus, trading is an optional compliance flexibility for
this rule and severable from the standards.
\532\ While we specifically address section 202(a)(1)-(2) in
this response regarding ABT and the following response regarding
BEVs as part of the regulated class, the same arguments apply to
standards under section 202(a)(3)(A)(i), which are also promulgated
pursuant to section 202(a)(1), address standards for ``classes'' (or
``categories'') of vehicles and require EPA to consider feasibility,
costs, and lead-time.
\533\ Beyond the statute's general provisions regarding cost and
lead time, Congress has also repeatedly endorsed the specific
concept of phase-in of advanced emissions control technologies
throughout section 202, which is analogous to ABT in that it
considers a manufacturer's production volume and the performance of
vehicles across the fleet in determining compliance. See discussion
above citing provisions including 202(g)-(j), 202(b)(1)(C).
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ABT and fleet average standards are also consistent with other
provisions in Title II, including those related to compliance and
enforcement in CAA sections 203, 206, and 207. Commenters who alleged
inconsistency with the compliance and enforcement provisions
fundamentally misapprehend the nature of EPA's motor vehicle program
and the ABT regulations, where compliance and enforcement do in fact
apply to individual vehicles consistent with the statute. It is true
that ABT allows manufacturers to meet emissions standards by offsetting
emissions credits and debits for individual vehicles. However,
individual vehicles must also continue to themselves comply with in-use
standards applicable on a vehicle-by-vehicle basis throughout that
vehicle's useful life. As appropriate, EPA can suspend, revoke, or void
certificates for individual vehicles. Manufacturers' warranties, which
are mandated under CAA section 207, apply to individual vehicles. EPA
and manufacturers perform testing on individual vehicles, and recalls
can be implemented based on evidence of non-conformance by a
substantial number of individual vehicles within the class. We further
discuss our response to this comment, including detailed exposition of
each of the relevant statutory provisions, in RTC section 2.
BEVs as part of the regulated class. We now address the related
comment that EPA cannot consider averaging, especially of BEVs, in
supporting the feasibility of the standards. The comments allege that
because BEVs do not emit the relevant air pollutants they are not part
of the ``class'' of vehicles that can be regulated by EPA under section
202(a)(1); therefore EPA should not establish standards based on
manufacturers' ability to produce BEVs. We disagree with these
commenters' reading of the statute, and moreover, as we explain further
below, their underlying factual premise--that BEVs do not emit the
relevant air pollutants--is incorrect.
As discussed in section III.B.1 of the preamble, Congress required
EPA to prescribe standards applicable to the emission of any air
pollutant from any class or classes of new motor vehicles, which in his
judgment cause, or contribute to, air pollution which endangers public
health and welfare. Congress defined ``motor vehicles'' by their
function: ``any self-propelled vehicle designed for transporting
persons or property on a street or highway.'' \534\ Likewise, with
regard to classes, Congress explicitly contemplated functional
categories: ``the Administrator may base such classes or categories on
gross vehicle weight, horsepower, type of fuel used, or other
appropriate factors.'' \535\ It is indisputable that electric vehicles
are ``new motor vehicles'' as defined by the statute and that they fall
into the weight-based ``classes'' that EPA established with Congress's
explicit support.
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\534\ CAA section 216(2).
\535\ CAA section 216(a)(3)(A)(ii). This section applies to
standards established under section 202(a)(3), not to standards
otherwise established under section 202(a)(1). But it nonetheless
provides guidance on what kinds of classifications and
categorizations Congress thought were appropriate.
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In making the GHG Endangerment Finding in 2009, EPA defined the
classes of motor vehicles and engines as ``Passenger cars, light-duty
trucks, motorcycles, buses, and medium and heavy-duty trucks.'' \536\
Light- and medium-duty BEVs fall within the classes of passenger cars,
light-duty trucks, and medium and heavy-duty trucks. EPA did not reopen
the 2009 Endangerment Finding in this rulemaking, and therefore
comments on whether BEVs are part of the ``class or classes'' subject
to GHG regulation are beyond the scope of this rulemaking.
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\536\ 74 FR 66496, 66537 (Dec. 15, 2009).
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Some commenters nonetheless contend that BEVs fall outside of EPA's
regulatory reach under this provision because they do not cause, or
contribute to, air pollution which endangers human health and welfare.
That misreads the statutory text. As we explained above in regard to
ABT, section 202(a)(1)'s focus on regulating emissions from ``class or
classes'' indicates that Congress was concerned by the air pollution
problem generated by a class of vehicles, as opposed to from individual
vehicles. Accordingly, Congress authorized EPA to regulate classes of
vehicles, and EPA has concluded that the classes of passenger cars,
light-duty trucks, and medium and heavy-duty trucks, cause or
contribute to dangerous pollution. As noted, the classes of these
vehicles include BEVs,
[[Page 27902]]
along with ICE and hybrid vehicles. And EPA has consistently viewed
passenger cars, light-duty trucks, and medium and heavy-duty trucks as
classes of motor vehicles for regulatory purposes, including in our
prior GHG rules. As discussed in section III.B.1 of the preamble, in
designing its emissions standards, EPA has reasonably further
subcategorized vehicles within the class based on weight and
functionality to recognize real-world variations in emission control
technology, ensure consumer access to a wide variety of vehicles to
meet their mobility needs, and secure continued emissions reductions
for all vehicle types.
These commenters also misunderstand the broader statutory scheme.
Congress directed EPA to apply the standards to vehicles whether they
are designed as complete systems or incorporate devices to prevent or
control pollution. Thus, Congress understood that the standards may be
premised on and lead to technologies that prevent pollution in the
first place. It would be perverse to conclude that in a scheme intended
to control the emissions of dangerous pollution, Congress would have
prohibited EPA from premising its standards on controls that completely
prevent pollution, while also permitting the agency to premise them on
a technology that reduces 99 percent of pollution. Such a nonsensical
reading of the statute would mean that the availability of technology
that can reduce 99 percent of pollution could serve as the basis for
highly protective standards, while the availability of a technology
that completely prevents the pollution could not be relied on to set
emission standards at all. Such a reading would also create a perverse
safe harbor allowing polluting vehicles to be perpetually produced,
resulting in harmful emissions and adverse impacts on public health,
even where available technology permits the complete prevention of such
emissions and adverse impacts at a reasonable cost. That result cannot
be squared with section 202(a)(1)'s purpose to reduce emissions that
``cause or contribute to air pollution which may reasonably be
anticipated to endanger public health or welfare,'' \537\ or with the
statutory directive to not only ``control'' but also ``prevent''
pollution.
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\537\ See also Coal. for Responsible Regulation, 684 F. 3d at
122 (explaining that the statutory purpose is to prevent reasonably
anticipated endangerment from maturing into concrete harm).
---------------------------------------------------------------------------
Commenters' suggestion that EPA define the class to exclude BEVs
would also be unreasonable and unworkable. Ex ante, EPA does not know
which vehicles a manufacturer may produce and, without technological
controls including add-on devices and complete systems, all of the
vehicles have the potential to emit dangerous pollution.\538\
Therefore, EPA establishes standards for the entire class of vehicles,
based upon its consideration of all available technologies. It is only
after the manufacturers have applied those technologies to vehicles in
actual production that the pollution is prevented or controlled. To put
it differently, even hypothetically assuming EPA could not set
standards for vehicles that manufacturers intend to build as electric
vehicles--a proposition which we do not agree with--EPA could still
regulate vehicles manufacturers intend not to build as electric
vehicles and that would emit dangerous pollution in the absence of EPA
regulation.\539\ When regulating those vehicles, Congress explicitly
authorized EPA to premise its standards for those vehicles on a
``complete system'' technology that prevents pollution entirely, like
BEV technologies.
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\538\ As noted above, manufacturers in some cases choose to
offer different models of the same vehicle with different levels of
electrification. And it is the manufacturer who decides whether a
given vehicle will be manufactured to produce no emissions, low
emissions, or higher emissions controlled by add-on technology.
\539\ In other words, the additional BEVs EPA projecs in the
modeled central case analysis exist in the baseline case as
pollutant-emitting vehicles with ICE. We further note that it would
be odd for EPA to have authority to regulate a given class of motor
vehicles so long as those vehicles emit air pollution at the
tailpipe, but to lose its authority to regulate those very same
vehicles should they install emission control devices to limit such
pollution or be designed to prevent the endangering polution in the
first place.
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Finally, the commenters' argument is factually flawed. All
vehicles, including BEVs, do in fact produce vehicle emissions. For
example, all BEVs produce emissions from brake and tire wear, as
discussed in RIA Chapter 7.2.1.4. Furthermore, BEVs have air
conditioning units, which may produce GHG emissions from leakages, and
these emissions are subject to regulation under the Act, for instance,
as described in section III.C.5 of the preamble. Indeed, EPA has
consistently regulated GHG emissions from LD vehicle refrigerants since
2010 through A/C credits. Thus, even under the commenter's reading of
the statute, BEVs would be part of the class for regulation.\540\ We
further address this issue in RTC section 2, where we also discuss the
related contention that BEVs cannot be part of the same class because
electric and ICE powertrains are fundamentally different.
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\540\ Moreover, as already explained, manufacturers do not have
to produce any additional BEVs to comply with the final standards.
EPA's modeling of the alternate compliance pathway in Section IV of
the preamble demonstrates that manufacturers could meet the standard
using solely advanced technologies with ICEs.
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C. GHG Standards for Model Years 2027 and Later
1. Overview
This section III.C of this preamble provides details regarding
EPA's GHG standards and related program provisions under this
rulemaking.
For light-duty vehicles, EPA is finalizing standards that land at
the same footprint target CO2 levels as our proposal in MY
2032 but have a more linear ramp rate of standards stringency from MYs
2027-2032 (via slower increases in stringency in the earlier years).
Specifically, the final standards are consistent with the proposal's
Alternative 3 footprint standards curves. The final standards also
include extensions of the phase-down for off-cycle credits and air
conditioning leakage credits, which provide further flexibility for
manufacturers to meet the standards, especially in earlier years of the
program. The final standards were developed in response to public
comments, including those from the auto industry and labor groups which
expressed concern that the proposed standards were challenging
especially in the early years of the program. For example, many
automakers expressed concern that more lead time was necessary in MYs
2027-2029 to allow for the necessary scale up of battery supply chains
and PEV manufacturing. The changes from the proposal address this
concern by providing significant additional lead time. Section III.C.2
of this preamble provides details regarding the structure and level of
the light-duty vehicle standards.
For medium-duty vehicles, EPA is finalizing work factor-based GHG
standards that land at the same stringency as the proposal in MY 2032,
but which have a more gradual rate of stringency increase from MYs
2027-2031 than the proposed standards in order to provide additional
lead time for compliance. EPA is also phasing in a work factor upper
cutpoint at or above 5,500 lb work factor, coinciding with the removal
of the proposed 22,000 lb maximum GCWR cap used in the calculation of
the work factor. These changes are responsive to concerns from
manufacturers over inadequate lead time and comments addressing the
targets for the higher capability vehicles. Section III.C.3 of this
preamble provides
[[Page 27903]]
details regarding EPA's GHG standards for MDVs.
For light-duty vehicles, the final standards will further reduce
the fleet average GHG emissions target levels by nearly 50 percent from
the MY 2026 standards. For MDVs, the standards represent a reduction of
44 percent compared to the current MY 2026 standards, which is the
final year for Phase 2 standards applying to Class 2b and Class 3
vehicles now that we are finalizing a revised MY 2027 MDV GHG standard.
Additional GHG program provisions are discussed in sections
III.C.4-III.C.9 of this preamble, including averaging, banking, and
trading, air conditioning system requirements, phase out of off-cycle
credits, treatment of PEVs and FCEVs in the GHG fleet average, and
interim alternative standards for small volume manufacturers.
While the final standards are more stringent than the prior
standards, EPA applied numerous conservative approaches throughout our
analysis (as identified in sections III and IV of this preamble and
throughout the RIA) and the final standards additionally are less
stringent than those proposed during the first several years of
implementation leading to MY 2032. The Administrator concludes that
this approach is appropriate based on his evaluation of the record and
within the discretion provided under and consistent with the text and
purpose of CAA section 202(a)(1)-(2).
2. Light-Duty Vehicle GHG Standards
i. Structure of the Light-Duty Vehicle CO2 Standards
Since MY 2012, EPA has adopted attribute-based standards for
passenger cars and light trucks. The CAA has no requirement to
promulgate attribute-based standards, though in past rules EPA has
relied on both universal and attribute-based standards (e.g., for
nonroad engines, EPA uses the attribute of horsepower). However, given
the advantages of using attribute-based standards,\541\ from MY 2012
onward EPA has adopted and maintained vehicle footprint as the
attribute for the GHG standards. Footprint is defined as a vehicle's
wheelbase multiplied by its track width--in other words, the area
enclosed by the points at which the wheels meet the ground.
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\541\ See 75 FR 25324, 25354-25355 (May 7, 2010).
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EPA has implemented footprint-based standards since MY 2012 by
establishing two kinds of standards-- fleet average standards
determined by a manufacturer's fleet makeup, and in-use standards that
will apply to the individual vehicles that make up the manufacturer's
fleet. Under the footprint-based standards, each manufacturer has a
CO2 emissions performance target unique to its fleet,
depending on the footprints of the vehicles produced by that
manufacturer. While a manufacturer's fleet average standard could be
estimated before and throughout the model year based on projected
production volume of its vehicle fleet, the fleet average standard to
which the manufacturer must comply is based on its final model year
production figures. Each vehicle in the fleet has a compliance value
which is used to calculate both the in-use standard applicable to that
vehicle and the fleet average emissions. A manufacturer's calculation
of fleet average emissions at the end of the model year will thus be
based on the production-weighted average emissions of each vehicle in
its fleet. EPA did not reopen the footprint-based structure for the
standards.
Each manufacturer has separate footprint-based standards for cars
and for trucks. EPA did not reopen the provision for separate standard
curves for cars and trucks. EPA also did not reopen the existing
regulatory definitions of passenger cars and light trucks; we will
continue to reference the NHTSA regulatory class definitions as EPA has
done since the inception of the GHG program.
ii. How did EPA determine the slopes and relative stringencies of the
car and truck footprint standards curves?
In the proposal, EPA requested comment on its methodology for
establishing the slopes for the car and truck curves. As discussed
further below, upon evaluating the comments, EPA is finalizing our
proposed approach of establishing the car and truck footprint curve
slopes, as well as the offset between the car and truck footprint
standards curves.
In the NPRM, we discussed a methodology for determining the shape
of the footprint-based curves for cars and for trucks (a more detailed
description of the truck curve as it relates to the car curve, and a
discussion of the empirical and modeling data used in developing these
offsets is presented in RIA Chapter 1.1.3.2). In general, the slopes of
the car and truck curve were reduced for the proposed standards and the
alternatives along with a decreased offset between the car and truck
curves. We proposed these changes based on our evaluation of updated
data, finding that reduced slopes were consistent with manufacturers'
increased adoption of more advanced emissions control technologies to
meet more stringent standards, as well as our policy goal that
manufacturers comply with the emissions standards by adopting advanced
emission control technologies as contemplated by the statute, as
opposed to engaging in intentional upsizing or downsizing of their
fleets.
EPA received a range of comments on the proposed slopes of the car
and truck curves.\542\ Some individual auto manufacturers directionally
supported EPA's rationale for the derivation of the curves and slopes.
While noting that the proposed approach was a significant change from
prior rulemakings, the Alliance for Automotive Innovation did not
object to EPA's methodology. Some commenters (such as ICCT) preferred a
single curve approach, which would essentially eliminate separate
regulatory classes for cars vs. trucks (an issue that EPA did not
reopen in the proposal \543\) but believed that the proposed approach
of deriving the truck curve from the car curve was generally sound.
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\542\ See Section 3.2.1 of the RTC.
\543\ Further discussion for why EPA is maintaining separate car
and truck curves was provided in a Memo to Docket, ID No. EPA-HQ-
OAR-2022-0829 titled ``Fleet and Vehicle Attribute Analysis for the
Development of Standard Curves.''
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In its comments, NADA expressed opposition to EPA's consideration
of electric vehicles in the derivation of the flatter footprint curve
slopes. In contrast, many commenters recommended flattening the curves
or setting a flat (zero slope) curve for both cars and trucks. ICCT
suggested that EPA should establish an even flatter and ``neutral''
slope that does not incentivize upsizing. As we explain further below,
the proposal and our final decision to flatten the footprint curves is
not dependent on any manufacturer adopting BEVs or any other electric
vehicle technologies. Rather, vehicles with more advanced control
technologies of any kind to meet more stringent emission standards will
inherently show less sensitivity of CO2 emissions to
footprint. The more effective the vehicle is at controlling emissions,
the less sensitivity its emissions will have to footprint, with
vehicles that produce no tailpipe emissions having no sensitivity to
footprint. Conversely, retaining the existing curve slopes in light of
more advanced control technologies would provide a significant perverse
incentive for manufacturers to adopt upsizing--as opposed to more
effective emissions control technologies--as a compliance strategy.
Comments related to the magnitude of the truck offset were also
mixed. The
[[Page 27904]]
truck offset consists of two separate offsets: one for all-wheel drive
(AWD), and one for the additional utility associated with towing and
hauling capabilities. The truck offset recognizes that these
characteristics tend to increase emissions while also providing
additional mobility and utility benefits for the consumer. EPA received
only a few comments on the AWD offset, which were generally supportive
although some commenters requested that the offset be scaled down based
on the proportion of AWD vehicles in the light truck fleet.\544\ We
also received varied feedback on EPA's assumptions used to calculate
the utility-based offset in the derivation of the truck slope. Some
commenters suggested the utility offset should be increased as they
believed tow rates are higher than EPA's assumptions. Other commenters
suggested the offset should be reduced as they believed actual in-use
towing rates are lower than EPA's assumptions; these commenters also
believed the offset should be scaling down proportionally across truck
footprints.
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\544\ Trucks over 6000 lbs. GVWR including many full-size
utility vehicles and pickup trucks, do not require AWD to meet
NHTSA's definition of a Light Truck. 49 CFR 523.5.
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The intent of the proposed AWD offset was to separately and
explicitly account for the tailpipe CO2 difference between
otherwise identical 2WD and AWD vehicles, with the value of the offset
intended to be representative of an average increase observed over
current models. While commenters expressed views on EPA's assumptions
for deriving the utility offset (and one OEM provided technical
suggestions), they did not submit additional data to support their
views. EPA's assessment is that the data used to derive the utility
offset (as described in RIA Chapter 1.1.3) continues to be the best
available data upon which to determine the utility offset. EPA is
therefore finalizing its proposed utility offset for the truck curve.
EPA believes the overall truck offset provides a difference in
CO2 targets between cars and trucks of similar footprint
that appropriately accounts for differences in utility.
Taking all of these comments into consideration, and for the
reasons explained above (and in the RTC), EPA considers the proposed
approach for determination of the slope of the car and truck curves,
appropriate. Therefore, we are finalizing the shape of the footprint
curves as proposed, and as discussed in further detail below.
When setting GHG standards, EPA recognizes the current diversity
and distribution of vehicles in the market and that Americans have
widely varying preferences in vehicles and that GHG control technology
is feasible for a wide variety of vehicles. This is one of the primary
reasons for adopting attribute-based standards and is also an important
consideration in choosing specific attribute-based standards (i.e., the
footprint curves). Over time, vehicle footprint sizes have steadily
increased.\545\ This has partially offset gains in fuel economy and
reductions in emissions. For example, in MY 2021, average fuel economy
and emissions were essentially flat (despite improvements in emissions
for all classes of vehicles) because of increases in the sizes of
vehicles purchased. In developing footprint curves for this rule, EPA's
intent was to establish slopes that would not (of their own accord)
initiate overall fleet upsizing \546\ or downsizing as a compliance
strategy. We have updated the slopes accordingly, recognizing that a
slope too flat would incentivize overall fleet downsizing, while a
slope too steep would foster upsizing. Fuller details on the analysis
that was used to determine the revised slope determination is provided
in RIA Chapter 1.1.3.
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\545\ The 2022 EPA Automotive Trends Report, https://www.epa.gov/system/files/documents/2022-12/420r22029.pdf.
\546\ EPA notes that section 202(a)'s purpose is to reduce
vehicular emissions through the development and application of
emissions control technologies. The regulatory scheme should
therefore induce manufacturer action that actually reduces
pollution. By contrast, a footprint curve that permits manufacturers
to achieve compliance significantly through producing larger
vehicles that produce more pollution would not be appropriate.
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The slopes in the latter years of this rulemaking period are
flatter than those of prior standards. This is by design and reflects a
continuation of the proportional reduction in targets that has been a
fundamental feature of EPA's prior footprint standards, in which as
program stringency is increased year over year, the g/mile change is
greater for larger footprints than for smaller footprints.\547\ If this
were not the case, vehicles with different footprints could be subject
to inconsistent and possibly nonsensical targets as the standard curves
become progressively lower. Consider that for the 2012 rule, the
footprint-based curves were originally developed for a fleet that was
completely made up of internal combustion engine (ICE) vehicles. From a
physics perspective, a positive footprint slope for ICE vehicles makes
sense because as a vehicle's size increases, its mass, road loads, and
required power (and corresponding tailpipe CO2 emissions)
will increase accordingly. When emissions reducing technology is
applied, such as advanced ICE, or HEV or PHEV or BEV electrification
technologies, the relationship between increased footprint and tailpipe
emissions is reduced. This is because the emissions measured for
certification arise primarily from overcoming loads of the drive
cycles,\548\ and thus will scale with increases or decreases in the
loads associated with changes in footprint. In other words, there is a
physical rationale for why the increasing adoption of more effective
emissions reducing technologies should cause the slope of the footprint
curve to become flatter. Moreover, as the emissions control technology
becomes increasingly more effective, the relationship between tailpipe
emissions and footprint decreases proportionally; in the limiting case
of vehicles with 0 g/mile tailpipe emissions such as BEVs, there is no
relationship at all between tailpipe emissions and footprint.
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\547\ See 75 FR 25324, 25333-38 (2010 Rule discussion of
footprint standards).
\548\ As opposed to emissions that arise from idling or
accessory losses during the certification tests.
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Having discussed our rationale for the flatter slopes, we turn now
to change in the truck offset. As noted above, the truck offset
consists of both an AWD and a utility offset (which we consider here to
include towing and hauling capability). All-wheel drive (AWD) is one of
the defining features for crossover vehicles (typically, small to mid-
size CUVs, e.g., the Ford Escape, Chevy Equinox, Honda CR-V, etc) to be
classified as light trucks,\549\ and for this reason the offset in
tailpipe emissions targets (i.e., between the car and truck regulatory
classes) for these vehicles should be appropriately set. The design
differences for many crossover vehicle models that are offered in both
a two-wheel drive (2WD) and an AWD version (aside from their driveline)
are difficult to detect. They often have the same engine, similar curb
weight (except for the additional weight of an AWD system), and similar
operating features (although AWD versions might be offered at a premium
trim level that is not required of the drivetrain). EPA analyzed
empirical data (reference Figure 1-6 in Chapter 1.1.3 of the RIA) for
models that were offered in both 2WD and AWD versions to quantify the
average increase in tailpipe emissions due to addition of AWD for an
otherwise identical vehicle model.
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\549\ We use the term AWD to include all types of four-wheel
drive systems, consistent with SAE standard J1952.
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[[Page 27905]]
The light truck classification consists of crossovers (ranging from
compact up through large crossovers), sport utility vehicles and pickup
trucks. Many crossover vehicles and SUVs exhibit similar towing
capability between their 2WD and AWD versions (there are some
exceptions in cases where AWD is packaged with a larger more powerful
engine than the base 2WD version). However, full size pickup trucks are
the light-duty market segment with the most towing and hauling
capability.
As proposed, EPA is finalizing that the truck curve be based on the
car curve (to represent the base utility across all vehicles for
carrying people and their light cargo), but with the additional
allowance of increased utility (including AWD) that distinguishes these
vehicles used for more work-like activity. EPA determined a
relationship between gross combined weight rating (GCWR) (which
combines the cumulative utility for hauling and towing to a vehicle's
curb weight) and required engine torque. EPA then used its ALPHA model
to predict how the tailpipe emissions at equivalent test weight (ETW)
(curb weight + 300 pounds) would increase as a function of increased
utility (GCWR) based on required engine torque and assumed modest
increases in vehicle weight and road loads commensurate with a more
tow-capable vehicle.
EPA also assessed the relative magnitude of tow rating across the
light truck fleet as a function of footprint. Vehicles with the
greatest utility are full size pickup trucks, while light trucks with
the least utility tend to be the smaller crossovers, with an increased
tow or haul rating near zero. As a result, EPA is finalizing an offset
for the truck curve, compared to the car curve, that increases with
footprint. That is, as the footprint of the truck increases, we expect
that on average its utility would increase proportionally, and
therefore the truck curve has a steeper slope than the car curve.
Figure 1-9 in RIA Chapter 1 shows the general trend of increased tow
rating with increasing footprint. Put more simply, bigger trucks
generally have more utility than smaller trucks, so bigger trucks get a
bigger utility offset.
In summary, the truck curve is, mathematically, the sum of the
scaled AWD and utility-based offsets to the car curve. A more thorough
description of the truck curve as it relates to the car curve, and a
discussion of the empirical and modeling data used in developing these
offsets is presented in RIA Chapter 1.1.3.2.
iii. How did EPA determine the cutpoints for the footprint standards
curves?
The cutpoints are defined as the footprint boundaries (low and
high) within which the sloped portion of the footprint curve resides.
Above the high, and below the low, cutpoints, the curves are flat. The
rationale for the setting of the original cutpoints for the MYs 2017-
2025 standards was based on analysis of the distribution of vehicle
footprint for the 2008 fleet and is discussed in the 2012 proposal
\550\ and the Technical Support Document (TSD).\551\
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\550\ See Section II.C.6 of the preamble.
\551\ 2017-2025 TSD.
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EPA is finalizing, as proposed, an increase to the lower cutpoint
for the car curve by 1 square foot per year from MY 2027 through MY
2030 from 41 to 45 square feet. This will provide relatively slightly
less stringent targets for the smallest vehicles (compared to the
structure of the MY 2023-2026 footprint targets), which we believe is
important so as not to disincentivize manufacturers from offering these
smallest vehicles which are among the cleanest vehicles. EPA received
only supportive comments for the increase of the car lower cutpoint;
one commenter requested this change to be immediate. The upper cutpoint
for cars (56 feet) will remain unchanged.
EPA also is finalizing, as proposed, a change in the upper cutpoint
for trucks. This cutpoint is 74 square feet for the MYs 2023-2026
standards, and under this final rule will decrease by 1.0 square foot
per year from MYs 2027 through MY 2030, to a level of 70.0 square feet
for MY 2030 and later. EPA is making this change in upper truck
cutpoint to ensure no loss of emissions reductions in the future
through continued upsizing of the truck fleet. EPA reviewed sales data
from recent model years comparing the average footprint of full-size
pickup trucks with the upper truck cutpoint. As the upper cutpoint for
trucks increased (under past rules) from 66.0 square feet in MY 2016 to
69.0 square feet in MYs 2020-2021, we have observed the average
footprint of full-size pickup trucks increasing similarly. The truck
size trend and its relationship to the upper cutpoint is detailed in
RIA Chapter 1.1.3.4. Because we have observed the trend of trucks
upsizing up to the cutpoint, our goal is to bring the upper cutpoint
back down to a level that represents a balance between setting an
appropriate CO2 emissions target recognizing the utility of
the largest trucks, while at the same time preventing the potential
loss in emissions reductions that could result from truck upsizing.
We consider the MY 2030 and beyond upper truck cutpoint of 70.0
square feet to be appropriate. EPA's assessment is that it is feasible
for trucks greater than 70.0 square feet to meet the CO2
targets of the footprint curves at 70.0 square feet (i.e., the upper
flat part of the footprint curve). This cutpoint of 70.0 square feet is
consistent with the sales-weighted average footprint of current full-
size pickups.
Some automakers were opposed to the reduction in the upper cutpoint
for the truck footprint curve, although several NGOs supported the
change in helping to counter the observed trend in upsizing and the
associated increase in emissions. EPA agrees that a reduction in the
cutpoint (more accurately, returning it close to the current level)
should help mitigate the incentive for continued upsizing as a
compliance mechanism. EPA notes that the final cutpoint value does not
prevent any manufacturer from producing vehicles that have a larger
footprint to satisfy customer demand. Rather, it simply ensures that
the standards themselves do not incentivize manufacturers to upsize
vehicles larger than the upper cutpoint as a compliance strategy.
Moreover, as with any CO2 target along the footprint
standards curves, the CO2 target level that is defined by
the upper cutpoint does not necessarily need to be met by the
individual vehicles with footprints above that cutpoint.
Based on the review of the comments related to cutpoints for car
and truck curves, EPA is finalizing as proposed the changes to the
lower car cutpoint and the upper truck cutpoint. We are implementing
the revised cutpoints in a gradual manner over four years to allow
manufacturers time to adjust to changes in the relative stringency of
CO2 target levels for vehicles with footprints impacted by
the changes in cutpoints.
iv. What are the light-duty vehicle CO2 standards?
a. What CO2 footprint standards curves is EPA establishing?
EPA is setting separate car and light truck standards--that is,
vehicles defined as passenger vehicles (``cars'') have one set of
footprint-based standards curves, and vehicles defined as light trucks
have a different set.\552\ In general, for a given footprint, the
CO2 g/
[[Page 27906]]
mile target \553\ for trucks is higher than the target for a car with
the same footprint. The curves are described mathematically in EPA's
regulations by a family of piecewise linear functions (with respect to
vehicle footprint) that gradually and continually ramp down from the MY
2026 curves established in the 2021 rule. EPA's minimum and maximum
footprint targets and the corresponding cutpoints are provided for cars
and trucks, respectively, in Table 17 and Table 18 for MYs 2027-2032
along with the slope and intercept defining the linear function for
footprints falling between the minimum and maximum footprint values.
For footprints falling between the minimum and maximum, the targets are
calculated as follows: Slope x Footprint + Intercept = Target.
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\552\ See 49 CFR part 523. Gernally, passenger cars include cars
and smaller crossovers and SUVs, while the truck category includes
larger corssovers and SUVs, minivans, and pickup trucks.
\553\ Because compliance is based on a sales-weighting of the
full range of vehicles in a manufacturer's car and truck fleets, the
footprint-based CO2 emission levels of specific vehicles
within the fleet are referred to as targets, rather than standards.
Table 17--Footprint-Based Standard Curve Coefficients for Cars: Final Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
--------------------------------------------------------------------------------------------------------------------------------------------------------
MIN CO2 (g/mile)........................................ 135.9 123.8 110.6 98.2 85.3 71.8
MAX CO2 (g/mile)........................................ 145.2 131.6 117.0 103.4 89.8 75.6
Slope (g/mile/ft2)...................................... 0.66 0.60 0.54 0.47 0.41 0.35
Intercept (g/mile)...................................... 108.0 97.9 87.0 76.9 66.8 56.2
MIN footprint (ft2)..................................... 42 43 44 45 45 45
MAX footprint (ft2)..................................... 56 56 56 56 56 56
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 18--Footprint-Based Standard Curve Coefficients for Light Trucks: Final Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
--------------------------------------------------------------------------------------------------------------------------------------------------------
MIN CO2 (g/mile)........................................ 150.3 136.8 122.7 108.8 91.8 75.7
MAX CO2 (g/mile)........................................ 239.9 211.7 184.0 158.3 133.5 110.1
Slope (g/mile/ft2)...................................... 2.89 2.58 2.27 1.98 1.67 1.38
Intercept (g/mile)...................................... 28.9 25.8 22.7 19.8 16.7 13.8
MIN footprint (ft2)..................................... 42 43 44 45 45 45
MAX footprint (ft2)..................................... 73.0 72.0 71.0 70.0 70.0 70.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Figure 7 and Figure 8 show the finalized car and truck curves,
respectively, for MY 2027 through MY 2032. Included for reference is
the current MY 2026 (No Action) curve for each.\554\
---------------------------------------------------------------------------
\554\ We have removed the 2026 adjusted curve that was included
in Figure 8 and 9 from the NPRM. It was intended to show the effect
of removal of flexibilities in the proposed standards between 2026
and 2027. With the more gradual phase-out of flexibilities in the
final and alternative standards, we now present fleet average
adjusted target values in section III.F of this preamble.
---------------------------------------------------------------------------
BILLING CODE 6560-50-P
[GRAPHIC] [TIFF OMITTED] TR18AP24.006
Figure 7: Final Standards for Cars, MY 2027-2032
[[Page 27907]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.007
Figure 8: Final Standards for Trucks, MY 2027-2032
BILLING CODE 6560-50-C
As discussed in section III.C.2.ii of the preamble, the slope of
the car curve is significantly flatter in 2027 and continues to flatten
progressively each year through 2032. The truck curve, largely driven
by the allowance for towing utility, has a similar shape as in past
rulemakings although its slope also flattens progressively each year
from 2027 through 2032.
b. What fleet-wide CO2 emissions levels correspond to the
standards?
EPA is finalizing more stringent standards for MYs 2027-2032 that
are projected to result in an industry-wide average target for the
light-duty fleet of 85 g/mile of CO2 in MY 2032. The
projected average annual decrease in combined industry average targets
from the current standards in MY 2026 to the new standards in MY 2032
is nearly 11 percent per year. Compared to past GHG rulemakings, the
annual percentage reductions are higher. These reductions are justified
by our feasibility assessment, which we discuss briefly below and at
length in section IV of this preamble.
Since the first GHG rule in 2010, EPA's feasibility assessments
have consistently considered the full range of technologies available
to reduce GHG emissions.\555\ The range of technologies that were
available even in 2010 to reduce GHG emissions was quite wide--from low
rolling resistance tires, low friction lubricants and improved
electrical accessories, to new and improved transmission technologies
(including turbo/downsizing, gasoline direct injection and dual clutch
transmissions), to stop-start, hybrid and electric vehicles. Since
then, there have been significant advancements in further developing
and deploying technologies to reduce GHGs. Manufacturers have augmented
GHG reductions from advanced gasoline engines with more use of
electrification, including more hybrids, more PHEVs and more BEVs.
Greater use of electrification technology (including the increasing
feasibility of PHEVs and BEVs) has changed the magnitude of the
emissions reductions that will be achievable during the timeframe of
this rulemaking compared to prior rules. These market changes are
already occuring, and we expect the trend toward greater
electrification to continue. The combination of economic incentives
provided in the IRA and the auto manufacturers' stated plans for
producing significant volumes of zero and near-zero emission vehicles
in the timeframe of this rule supports EPA's ability to finalize
standards at a level of stringency greater than was feasible in past
rules. While tailpipe emissions controls for criteria pollutants from
ICE-based vehicles can have effectiveness values greater than 90
percent under certain circumstances, electrification provides 100
percent effectiveness under all operating and environmental conditions.
This is nearly two orders of magnitude more effective than the
historical improvements in GHG emission reductions.
---------------------------------------------------------------------------
\555\ See e.g., 75 FR 25324, 25448-25450 (May 7, 2010), 77 FR
62624, 62846-62852; see also Draft TAR.
---------------------------------------------------------------------------
As in our past GHG rules, EPA has analyzed the feasibility of
achieving the final CO2 standards, accounting for
projections of available technology to reduce emissions of
CO2, the projected penetration of such technologies, the
normal redesign process for cars and trucks, and the effectiveness and
costs of such technology. The results of these analyses are discussed
in detail in section IV of this preamble and in Chapter 12 of the RIA.
EPA notes that the technologies needed for compliance with these
standards have already been developed and deployed in the on-road fleet
in a wide variety of vehicle types. Moreover, although EPA has done
extensive modeling to support its conclusion that the standards are
feasible taking into account the cost of the technology and the
available lead time, EPA notes that its primary compliance path
modeling simply represents one possible approach the industry could
take in achieving compliance with the standards at a reasonable cost,
and that even within that modeling EPA anticipates different
manufacturers will adopt different compliance strategies. EPA has also
modeled a number of other potential compliance paths for manufacturers,
reflecting potential differences in strategies, costs, consumer
acceptance of BEVs, higher battery costs, etc. The standards are
performance-based and do
[[Page 27908]]
not dictate any particular compliance strategy for manufacturers. EPA
also presents the overall estimated costs and benefits of the final car
and truck CO2 standards in section VIII of this preamble.
The derivation of the 85 g/mile estimated industry-wide target for
MY 2032 noted in the previous paragraph is based on EPA's updated fleet
mix projections for MY 2032 (approximately 30 percent cars and 70
percent trucks, based on AEO 2023), and is described further in section
IV.D of this preamble. EPA aggregated the estimates for individual
manufacturers based on projected production volumes into the fleet-wide
averages for cars, trucks, and the entire fleet.\556\ As is the nature
of attribute-based standards, the final fleet average standards for
each manufacturer ultimately will depend on each manufacturer's actual
rather than projected production in each MY from MY 2027 to MY 2032
under the sales-weighted footprint-based standard curves for the car
and truck regulatory classes.
---------------------------------------------------------------------------
\556\ Due to rounding during calculations, the estimated fleet-
wide CO2 levels may vary by plus or minus 1 gram.
---------------------------------------------------------------------------
Table 19 shows the overall fleet average target levels for both
cars and light trucks that are projected for the final standards. A
more detailed breakdown of how each manufacturer could potentially
choose to achieve the projected CO2 targets and achieved
levels is provided in RIA Chapter 12. The actual fleet-wide average g/
mile level that will be achieved in any year for cars and trucks will
depend on the actual production of vehicles for that year, as well as
the use of the various optional credit and averaging, banking, and
trading provisions. For example, in any year, manufacturers will be
able to generate credits from cars and use them for compliance with the
truck standard, or vice versa. In RIA Chapter 8.6, EPA discusses the
year-by-year estimate of GHG emissions reductions that are projected to
be achieved by the final standards.
EPA has estimated the overall fleet-wide CO2 emission
levels that correspond with the attribute-based footprint standards,
based on projections of the composition of each manufacturer's fleet in
each year of the program. As shown in Table 19, for passenger cars, the
MY 2032 standards are projected to result in CO2 fleet-
average levels of 72 g/mile in MY 2032, which is 53 percent lower than
that of the MY 2026 standards. For trucks, the projected MY 2032 fleet
average CO2 target is 90 g/mile which is 54 percent lower
than that of the MY 2026 standards. The projected MY 2032 combined
fleet target of 85 g/mile is 49 percent lower than that of the MY 2026
standards.
Table 19--Projected Fleet-Wide CO2 Targets Corresponding to the Final Standards \a\ \b\
----------------------------------------------------------------------------------------------------------------
Total fleet
Model year Cars CO2 (g/ Trucks CO2 (g/ CO2 (g/mile)
mile) mile)
----------------------------------------------------------------------------------------------------------------
2026............................................................ 131 184 168
2027............................................................ 139 184 170
2028............................................................ 125 165 153
2029............................................................ 112 146 136
2030............................................................ 99 128 119
2031............................................................ 86 109 102
2032 and later.................................................. 73 90 85
----------------------------------------------------------------------------------------------------------------
\a\ MY 2026 targets are provided for reference. This table does not reflect changes in credit flexibilities such
as the phase-out of available off-cycle and A/C credits as finalized for MY 2027.
\b\ Fleet CO2 targets are calculated based on projected car and truck share. Truck share for the fleet is
expected to increase to 69 percent by MY 2026 (up from 64 percent in MY 2022) and to 70 percent by MY 2030 and
later.
EPA is finalizing standards that set increasingly stringent levels
of CO2 emissions control from MY 2027 through MY 2032.
Applying the CO2 footprint curves applicable in each MY to
the vehicles (and their footprint distributions) expected to be sold in
each MY produces progressively lower levels of fleetwide CO2
emissions. EPA believes manufacturers can achieve the standards'
important CO2 emissions reductions through the application
of available control technology at reasonable cost, as well as the use
of program averaging, credit banking and trading, and optional off-
cycle credits, air conditioning leakage credits, and air conditioning
efficiency credits, as available.
One important change between the proposed standards and the final
standards is related to the phaseout of two optional credit
flexibilities: off-cycle credits and A/C leakage credits. As discussed
in section III.C.5-6 of this preamble, EPA is finalizing a phase-down
of A/C refrigerant-based credits from MY 2027-2030, and thereafter (for
MY 2031 and beyond), we are retaining a small optional A/C leakage
credit. EPA is finalizing a phase-out of the off-cycle credits which is
slower than what we proposed. EPA also is finalizing its proposal to
eliminate off-cycle credits and A/C efficiency credits for BEVs
beginning in MY 2027.\557\ Table 20 shows the total off-cycle and A/C
credits available to manufacturers under the final standards and Table
21 shows available credits under the No Action case. These tables
represent the maximum credits attainable in each category. Credits
marked with an asterisk in Table 20 are not eligible for BEVs starting
in MY 2027.
---------------------------------------------------------------------------
\557\ As explained below in Sections III.C.5 and III.C.6 of the
preamble, these credits were intended to incentivize efficiency
gains that reduce emissions produced by an ICE and the value of such
credits was based on the amount of ICE emissions. Because BEVs do
not produce any engine emissions, such credits are not necessary or
appropriate.
Table 20--Total Available Credits to Manufacturers, Final Standards, Expressed in CO2 g/mile
[*Not eligible for BEVs starting in MY 2027]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Off-cycle * A/C efficiency * A/C leakage Total possible
MY --------------------------------------------------------------------------------------------------------------------
Fleet Car Truck Car Truck Car (ICE) Car (BEV) Truck (ICE) Truck (BEV)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2026............................... 15.0 5.0 7.2 13.8 17.2 33.8 33.8 39.4 39.4
[[Page 27909]]
2027............................... 10.0 5.0 7.2 11.0 13.8 26.0 11.0 31.0 13.8
2028............................... 10.0 5.0 7.2 8.3 10.3 23.3 8.3 27.5 10.3
2029............................... 10.0 5.0 7.2 5.5 6.9 20.5 5.5 24.1 6.9
2030............................... 10.0 5.0 7.2 2.8 3.4 17.8 2.8 20.6 3.4
2031............................... 8.0 5.0 7.2 1.6 2.0 14.6 1.6 17.2 2.0
2032............................... 6.0 5.0 7.2 1.6 2.0 12.6 1.6 15.2 2.0
2033............................... 0.0 5.0 7.2 1.6 2.0 6.6 1.6 9.2 2.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 21--Total Available Credits for Manufacturers, No Action Case, Expressed in CO2 g/mile
--------------------------------------------------------------------------------------------------------------------------------------------------------
Off-cycle A/C efficiency A/C leakage Total possible
MY ------------------------------------------------------------------------------------------
Fleet Car Truck Car Truck Car Truck
--------------------------------------------------------------------------------------------------------------------------------------------------------
2026......................................................... 15.0 5.0 7.2 13.8 17.2 33.8 39.4
2027......................................................... 10.0 5.0 7.2 13.8 17.2 28.8 34.4
2028......................................................... 10.0 5.0 7.2 13.8 17.2 28.8 34.4
2029......................................................... 10.0 5.0 7.2 13.8 17.2 28.8 34.4
2030......................................................... 10.0 5.0 7.2 13.8 17.2 28.8 34.4
2031......................................................... 10.0 5.0 7.2 13.8 17.2 28.8 34.4
2032......................................................... 10.0 5.0 7.2 13.8 17.2 28.8 34.4
2033......................................................... 10.0 5.0 7.2 13.8 17.2 28.8 34.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
As with prior rulemakings, our consideration of the level of the
standards is based in part on EPA's projection of average industry-wide
CO2-equivalent emission reductions from A/C and off-cycle improvements.
This approach results in footprint curves that are numerically lower
than they would otherwise be without consideration of these
improvements. As described above, the final standards and No Action
case have different provisions for the allowable A/C and off-cycle
credits. In order to compare the stringencies of these two different
policy cases on an equivalent basis, we show adjusted targets that are
calculated by adding projected credits to the unadjusted targets.
Figure 9 shows these adjusted industry-average CO2 targets for the
final standards and the No Action Case through MY 2032, compared to the
unadjusted targets.
[GRAPHIC] [TIFF OMITTED] TR18AP24.008
[[Page 27910]]
Figure 9: Projected Industry Average Targets Under the Final 2027-2032
Standards Compared to the Current MY 2026 Standards. Adjusted Targets
Include Effects of Projected Off-Cycle, A/C Efficiency and A/C Leakage
Credits
Table 22 shows the adjusted targets for cars and trucks based on
our modeling of the final standards.
Table 22--Projected Adjusted Fleet-Wide CO2 Targets Corresponding to the Final Standards
----------------------------------------------------------------------------------------------------------------
Total fleet
Model year Cars CO2 (g/ Trucks CO2 (g/ CO2 (g/mile)
mile) mile)
----------------------------------------------------------------------------------------------------------------
2026............................................................ 161 220 201
2027............................................................ 158 209 193
2028............................................................ 142 186 172
2029............................................................ 125 163 151
2030............................................................ 108 141 131
2031............................................................ 93 118 111
2032 and later.................................................. 78 98 92
----------------------------------------------------------------------------------------------------------------
In general, the structure of the final standards allows an
incremental phase-in to the MY 2032 level and reflects consideration of
the appropriate lead time for manufacturers to take actions necessary
to meet the standards. The technical feasibility of the standards is
discussed in section IV.A of this preamble and in the RIA Chapter 3.6.
Note that MY 2032 is the final MY in which the CO2 standards
would become more stringent. The MY 2032 standards will remain in place
for later MYs, unless and until revised by EPA in a future rulemaking.
c. Timeframe of the Standards and Alternate Pathway Concepts
In the NPRM, EPA requested comment on two additional issues
regarding the structure of the program: (1) whether the timeframe for
the standards should extend beyond MY 2032, and (2) whether there is
merit to considering alternative pathways for compliance with the EPA
program. This section discusses EPA's consideration of the public
comments received on these two topics.
EPA requested comment on whether the trajectory (i.e., the levels
of year-over-year stringency rates) of the standards for MYs 2027
through 2032 should be extended through MYs 2033, 2034 or 2035, or
whether EPA should consider additional approaches to the trajectory of
any standards that were to continue increasing in stringency beyond MY
2032.
A few commenters supported setting standards through MY 2035 as
part of this rulemaking. These commenters believed standards through
2035 would set a clear market signal that would provide certainty to
manufacturers in their long-term emissions reduction targets. Such
commenters also believed that EPA should set standards that achieve
zero emissions by 2035 and pointed to consistency with the ACC II
program which has been adopted by California and several other states.
Other commenters believed that EPA ultimately should set standards
beyond MY 2032, but that it should be done as part of a separate future
rulemaking effort. Some commenters believed that EPA should not set
standards through MY 2035 as part of this rule, but it was important to
them that the final standards are sufficiently stringent through MY
2032 to ensure that the U.S. is on track to reach a zero emissions
target by 2035.
Most commenters did not support extending standards beyond MY 2032
at this time. Many of these commenters pointed to the lack of certainty
in how the EV market and supporting conditions (like infrastructure)
will develop beyond MY 2032. Other commenters suggested that if
standards were extended beyond MY 2032, that some form of a mid-course
review might be necessary given what they perceived as significant
uncertainty in that longer time frame. Other commenters believed that
EPA's standards through MY 2032 were important in establishing a
trajectory of emission reductions upon which EPA could come back with a
future rule to establish appropriate standards for MYs 2033 and beyond.
EPA understands commenters' concerns about uncertainty out to the MY
2035 timeframe, and believes it is appropriate to consider standards
for MY 2033 and beyond in a future rulemaking. Thus, after considering
all of these comments, EPA is finalizing standards for MYs 2027 through
MY 2032 for both light-duty and medium-duty vehicles.
While EPA believes the standards are appropriate for light-duty
vehicle manufacturers on an overall industry basis, we recognize that
some companies today only sell BEVs and others have made public
announcements for plans for various advanced technologies, including
near-zero and zero-emission vehicle product launches (as discussed in
section I.A.2.ii of this preamble) that may lead to CO2
emissions even lower than those projected under the final standards.
The program's existing averaging, banking, and trading provisions allow
manufacturers to earn credits for overcompliance with the standards
that can be banked for the company's future use (up to five model
years) or traded to other companies (as discussed further in section
III.C.4 of this preamble). EPA did not reopen these provisions.
EPA sought public comments on whether there might be merit in
establishing additional ways in which the program could provide for
alternative compliance pathways that could encourage manufacturers to
achieve even lower CO2 emissions than required by EPA
standards. EPA received comment on such an approach from the
Environmental Defense Fund (EDF), which suggested that EPA adopt a
voluntary alternative ``leadership pathway'' that allows manufacturers
to comply with EPA's standards by meeting California's ACC II standards
nationwide. GM also commented in support of such a concept, suggesting
that a leadership pathway would exceed the criteria pollutant and GHG
emissions goals and reward automakers that are accelerating the
transition to
[[Page 27911]]
zero-emission vehicles with less complexity and with fewer
certification requirements. The commenters did not, however, provide
details on how such a concept could be constructed including the many
implementation provisions that would need to be developed. EPA
appreciates the spirit of these suggestions and the interest of certain
stakeholders in exploring such alternative compliance pathways that
might incentivize manufacturers to reduce emissions even sooner than
required under our final program and considering the relationship to
state programs. However, at this time, we believe that such concepts
would need additional exploration and assessment. Although we are not
finalizing such an alternate pathway in this rulemaking, EPA is open to
continued dialog with all stakeholders on how such concepts might be
structured for a potential future action.
d. Useful Life Standards and Test Procedures
The current program includes additional provisions that we did not
reopen and so will continue to be implemented during the timeframe of
this rule. We describe them briefly here for informational purposes.
Consistent with the requirement of CAA section 202(a)(1) that
standards be applicable to vehicles ``for their useful life,'' the MY
2027-2032 vehicle standards will apply for the useful life of the
vehicle.\558\
---------------------------------------------------------------------------
\558\ The GHG emission standards apply for a useful life of 10
years or 120,000 miles for LDVs and LLDTs and 11 years or 120,000
miles for HLDTs and MDPVs. See 40 CFR 86.1805-17.
---------------------------------------------------------------------------
The existing program also requires certain test procedures over
which emissions are measured and weighted to determine compliance with
the GHG standards. These procedures are the Federal Test Procedure (FTP
or ``city'' test) and the Highway Fuel Economy Test (HFET or
``highway'' test). EPA is making only minor changes to the GHG test
procedures in this rulemaking. Namely, EPA will require manufacturers
to use the same Tier 3 test fuel already specified for demonstrating
compliance with criteria pollutant standards, as described in the next
section. We are also revising the fleet utility factor for plug-in
hybrid electric vehicles as described in section III.B.8 of the
preamble and referencing an updated version of SAE J1711 to reflect the
latest developments in measurement procedures for all types of hybrid
electric vehicles as described in section IX.I of the preamble.
e. What test fuel is EPA finalizing?
Within the structure of the footprint-based GHG standards, EPA is
also finalizing that gasoline powered vehicle compliance with the
standards be demonstrated on Tier 3 test fuel. The previous GHG
standards for light-duty gasoline vehicles are set on the required use
of Indolene, or Tier 2 test fuel. Tier 3 test fuel more closely
represents the typical market fuel available to consumers in that it
contains 10 percent ethanol. EPA had previously proposed an adjustment
factor to allow demonstration of compliance with the existing GHG
standards using Tier 3 test fuel but did not adopt those changes (85 FR
28564, May 13, 2020). This rule does not require an adjustment factor
for tailpipe GHG emissions, but rather requires manufacturers to test
on Tier 3 test fuel and use the resultant tailpipe emissions directly
in their compliance calculation. Such an adjustment factor is not
required because the technology penetrations, feasibility, and cost
estimates in this rule are based on compliance using Tier 3 test fuel.
Both the Tier 3 and these Tier 4 criteria pollutant standards were
based on vehicle performance with Tier 3 test fuel; as a result,
manufacturers currently use two different test fuels to demonstrate
compliance with GHG and criteria pollutant standards. Setting new GHG
standards based on Tier 3 test fuel is intended to address concerns
regarding test burden related to using two different test fuels and
using a test fuel which is dissimilar to market fuels. Accordingly, we
expect this change to streamline manufacturer testing and reduce the
costs of demonstrating compliance with the final rule.
The difference in GHG emissions between the two fuels is small but
significant. EPA estimates that testing on Tier 3 test fuel will result
in about 1.66 percent lower CO2 emissions.\559\ Because this
difference in GHG emissions between the two fuels is significant in the
context of measuring compliance with previous GHG standards, but small
relative to the change in stringency of the finalized GHG standards in
this rule, and because the cost of compliance on Tier 3 test fuel is
reflected in this analysis for this rule, EPA believes that this
rulemaking and the associated new GHG standards create an opportune
time to shift compliance to Tier 3 fuel.
---------------------------------------------------------------------------
\559\ EPA-420-R-18-004, ``Tier 3 Certification Fuel Impacts Test
Program,'' January 2018.
---------------------------------------------------------------------------
EPA is applying the change from Indolene to Tier 3 test fuel for
demonstrating compliance with GHG standards starting in model year
2027. This is the same year as the new standards in this final rule
begin, and we expect this model year alignment will facilitate a smooth
transition for manufacturers. We accordingly allow manufacturers to
continue to rely on the interim provisions adopted in 40 CFR 600.117
through model year 2026. These interim provisions address various
testing concerns related to the arrangement for using different test
fuels for different purposes. At the same time, we recognize that
transitioning to a new test fuel is a change from how things have
worked in the past, so we are providing additional flexibilities during
the early years of the transition. Namely, manufacturers may optionally
carry-over Indolene-based test results for model years 2027 through
2029.
For manufacturers that rely on Indolene-based test results in model
years 2027 through 2029, we require a downward adjustment by 1.66
percent to GHG emission test results (i.e., Tier 3 value = Tier 2 value
/ 1.0166)) as a correction to correlate with test results that will be
expected when testing with Tier 3 test fuel.
We separately proposed to apply an analogous correction for the
opposite arrangement--testing with Tier 3 test fuel to demonstrate
compliance with a GHG standard referenced to Indolene test fuel (85 FR
28564, May 13, 2020). We did not separately finalize the provisions in
that proposed rule, and there is no longer a need to consider that
provision now that vehicles are to be tested with the Tier 3 test fuel
to demonstrate compliance with GHG standards.
Similar considerations apply for measuring fuel economy, both to
meet Corporate Average Fuel Economy (CAFE) requirements and to
determine values for fuel economy labeling. In this case, EPA is
applying the calculation adjustments described in the 2020 proposal.
This is necessary because fuel economy standards are set through a
different regulatory process that has not been updated to accommodate
the change to Tier 3 test fuel. These adjustments include: (1) New test
methods for specific gravity and carbon mass (or weight) fraction of
Tier 3 test fuel to calculate emissions in a way that accounts for
ethanol blending while also remaining consistent with the calculations
used to establish the CAFE standards, (2) a revised equation for
calculating fuel economy that uses an ``R-factor'' of 0.81 to account
for the difference in engine performance between Tier 3 and Tier 2 test
fuels, and (3) amended instructions for calculating fuel economy label
values based on 5-cycle values and derived 5-cycle values.
[[Page 27912]]
Our overall goal is for manufacturers to transition to fuel economy
testing with Tier 3 test fuel on the same schedule as described for
demonstrating compliance with GHG standards in the preceding
paragraphs.
To reiterate, for the GHG compliance program, we are evaluating GHG
compliance with standards that are set using Tier 3 fuel starting in MY
2027; therefore, any vehicles that continue to be tested on Indolene,
will need to have the results adjusted to be consistent with results on
Tier 3 fuel. For the CAFE standards, we are continuing to evaluate fuel
economy compliance with standards that are established on Indolene;
therefore, any vehicles that are tested on Tier 3 fuel will need to
have the results adjusted to be consistent with results on Indolene.
Similar to the CAFE fuel economy standards, we are keeping the fuel
economy label consistent with the current program; therefore, any
vehicles that are tested on Tier 3 fuel will need to have the results
adjusted to be consistent with results on Indolene.
EPA is adopting the following (Table 23) to address fuel-related
testing and certification requirements through the transition to the
new standards. As noted above, for both GHG and fuel economy standards,
vehicle manufacturers may choose to test their vehicles with either
Indolene or Tier 3 test fuel through MY 2026. Manufacturers must
certify all vehicles to GHG standards using Tier 3 test fuel starting
in MY 2027; however, manufacturers may continue to meet fuel economy
requirements through MY 2029 for any appropriate vehicles based on
carryover data from testing performed before MY 2027.
The Alliance for Automotive Innovation requested EPA continue to
allow automakers the option to retest on E0 for the litmus assessment
\560\ to determine whether to use the 5-cycle or 2-cycle testing
methodology until the implications of the new E10 test fuel on the
complex 5-cycle and litmus methodology can be fully examined and
addressed. EPA will allow testing for determining the fuel economy
label calculation method under 40 CFR 600.115-11 using either Tier 2
(Indolene) or Tier 3 test fuel provided that the same test fuel must be
used for all 5 cycles until such time that EPA updates the 5-cycle
adjustment factors through guidance, at which point Tier 3 test fuel
must be used.
---------------------------------------------------------------------------
\560\ The ``Litmus test'' is the commonly known term used to
describe the criteria for determining the fuel economy label
calculation method (mpg based derived 5-cycle method or vehicle
specific 5-cycle method or the modified 5-cycle method) for 2011 and
later model year vehicles, as outlined in 40 CFR 600.115-08.
Table 23--Final Fuel-Related Testing and Certification Requirements
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
GHG standards Fuel economy standards Criteria for determining the fuel Fuel cconomy and environment label values
---------------------------------------------------------------------------------------------------------------- economy label calculation method -----------------------------------------------------
``litmus test''
Test fuel MY 2030 and ------------------------------------ MY 2030 and
Pre-MY 2027 MY 2027-2029 MY 2030 and later Pre-MY 2027 MY 2027-2029 later MY 2027 and Pre-MY 2027 MY 2027-2029 later
Pre-MY 2027 later \a\
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Indolene...................... No CO2 adjustment Carry-over test Not allowed...... No adjustment Carry-over Not allowed..... Optional: No Optional: No No adjustment Carry-over Not allowed.
required. results only; required. results only; adjustment adjustment required. results only;
Divide CO2 test No adjustment required **. required \b\. No CO2
results by required. adjustment
1.0166. required.
Tier 3........................ Apply proposed No CO2 adjustment required
CO2 adjustment
(multiply test
results by
1.0166).
Apply revised FE equation proposed in 2020 rule
Apply revised FE equation proposed
in 2020 rule
Apply revised FE equation proposed in 2020 rule; Apply
proposed CO2 adjustment (multiply test results by
1.0166).\a\
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Until EPA updates the 5-cycle adjustment factors through guidance.
\b\ When performing testing for determining the fuel economy label calculation method under Sec. 600.115-11, the same test fuel must be used for all 5 cycles.
The Alliance for Automotive Innovation (AAI) submitted comments
that are nearly identical to the comments they submitted for the
original 2020 Tier 3 Test Fuel NPRM. AAI submitted five specific
comments on this rulemaking, each of which we have addressed in this
FRM:
Do Not Adjust the Tailpipe CO2 Value for E10:
EPA has addressed this comment in this FRM by not adjusting
CO2 values when vehicles are tested using Tier 3 test fuel.
The GHG standards finalized in this FRM reflect the use of Tier 3 test
fuel as does the feasibility analysis supporting this rule. No
adjustment is required when testing on Tier 3 fuel.
Set the R-Factor Equal to 1.0 for CAFE Performance on E10:
EPA is finalizing an R-Factor of 0.81 based on the technical analysis
provided in the 2020 Tier 3 Test Fuel NPRM.
Delay E10 Phase-in, Allow Optional E0 Testing and
Carryover of E0 Data and Revisit Any Adjustment as a Part of the Next
CAFE/GHG Rulemaking: EPA accepted AAI's recommendation and is
finalizing the Tier 3 test fuel change as part of this GHG standard
setting rulemaking. In addition, this FRM includes provisions for
phase-in of Tier 3 test fuel and the carry-over of data during the
phase-in.
Address the Impact of the E10 Transition on 5-cycle
Testing and Litmus Test: EPA accepted this recommendation and has
included provisions for addressing 5-cycle testing and the litmus test
in this FRM.
Consider Fuel Economy and Environmental Performance
Labeling Impacts: EPA has considered impacts to the label and has
included specific provisions in this FRM to address the use of E10 for
vehicle testing and the resultant label values.
Several other commenters advised that adjusting CO2
measurements from Tier 3 test fuel upward by 1.6 percent is improper
since E10 test fuel represents market fuel. They also suggest that the
proposed adjusted R-value of 0.81 is too low, stating that
[[Page 27913]]
values around 0.9 have been published in recent literature, and that a
value of 1.0 would be optimal as it avoids penalizing ethanol blends.
One commenter explained that the computation of the test fuel's heating
value and carbon mass fraction should be done using the original ASTM
methods used in characterizing the historical reference fuel rather
than the more modern methods we proposed, and that those values should
account for sulfur and water content.
See section 6.3 of the RTC for a more detailed discussion of
comments related to test fuel for fuel economy measurements.
3. Medium-Duty Vehicle GHG Standards
i. What CO2 standards curves is EPA finalizing?
Medium-duty vehicles (8,501 to 14,000 pounds GVWR) that are not
categorized as MDPVs utilize a ``work-factor'' metric for determining
GHG targets. Unlike the light-duty attribute metric of footprint, which
is oriented around a vehicle's usage for personal transportation, the
work-factor metric is designed around work potential for commercially
oriented vehicles and accounts for a combination of payload, towing and
4-wheel drive equipment.
We received comments from the Alliance for Automotive Innovation
(Alliance), GM, Ford, and Stellantis that opposed changes to the work
factor definition that capped GCWR within the WF calculation to no
greater than 22,000 pounds. Both the Alliance and Stellantis opposed
the GHG standards for MDV, stating that were too stringent and with
Stellantis further characterizing the standards as ``infeasible''. The
Alliance and Stellantis specifically cited a 37 percent reduction in
GHG from MY 2028 through MY 2032 as too stringent, and that the
assumption of 98 percent electrification of van applications within the
technology feasibility analysis for the proposal was too high.
Stellantis requested that the Agency include PHEV technology for MDVs
within its analysis for the final rule. Conversely, ICCT and ACEEE
commented that too few MDV BEVs were included within the analysis and
argued for more stringent GHG standards for MDV.
Taking all of these comments into consideration, and for the
reasons explained below (and in the RTC), we are finalizing the
coefficients of the 2032 GHG standards as proposed for work factors
less than 5,500 pounds, and we are finalizing the following changes
relative to the proposal:
1. We have eliminated the proposed GCWR cap within the work factor
equation and have returned to a definition and equation for work factor
identical to the one used chassis-certified Class 2b and 3 vehicles
under the Heavy-duty Phase 2 GHG Program. Instead, we modified the
structure of the MDV GHG standards directly and introduced a flattening
of standards above specific work factor set-points.
2. We are finalizing a more gradual and evenly-spaced change in GHG
stringency from MY 2027 through 2031.
3. The flattening of standards above specific work factor set-
points is phased-in gradually from MY 2028 through 2030.
Our GHG standards for MDVs continue to be entirely chassis-
dynamometer based and continue to be work-factor-based as with the
previous Heavy-duty Phase 2 standards. We are not finalizing our
proposed 22,000-pound GCWR limit within the work factor equation. EPA
had proposed this provision with the goal of preventing increases in
the GHG emissions not fully captured within the loads and operation
reflected during chassis dynamometer GHG emissions testing. Automaker
commenters expressed concern that the proposal would disrupt vehicle
categories, particularly when taking into consideration updates to the
MDPV definition (see section III.E of this preamble). In response to
comments, we are finalizing changes to the CO2 targets which
flatten the standards in the following manner:
At or above a work factor of 8,000 pounds in 2028.
At or above a work factor of 6,800 pounds in 2029.
At or above a work factor of 5,500 pounds for model years
2030 and later.
The final standards will continue to use the same work factor (WF)
and GHG target definitions (81 FR 73478, October 25, 2016). The testing
methodology does not directly incorporate any GCWR (i.e., trailer
towing) related direct load or weight increases, however, flattening
the standards above a 5,500-pound work factor upper cutpoint addresses
concerns of potential windfall compliance credits for higher GCWR
ratings and approximately reflects a GCWR of 22,000 pounds. Thus we are
finalizing both a CO2 target equation and WF equation for
determining GHG standards that are identical to those used in the
heavy-duty Phase 2 GHG program, except with updated coefficients: \561\
---------------------------------------------------------------------------
\561\ Note: There is no 22,000-pound GCWR cap within the WF
equation.
CO2 Target (g/mile) = [a x WF] + b
WF = [0.75 x (Payload Capacity + xwd)] + [0.25 x Towing Capacity]
Payload Capacity = GVWR (pounds)-Curb Weight (pounds)
xwd = 500 pounds for 4wd, 0 lbs. for 2wd
Towing Capacity = GCWR (pounds)-GVWR (pounds)
Final MDV GHG standards for model years 2027 and later are shown in
Table 24 and Table 25.
Table 24--Final Coefficients for MDV GHG Standards
------------------------------------------------------------------------
Model year a b
------------------------------------------------------------------------
2027.................................... 0.0348 268
2028 \a\................................ 0.0339 270
2029 \b\................................ 0.0310 246
2030 \c\................................ 0.0280 220
2031 \c\................................ 0.0251 195
2032 \c\................................ 0.0221 170
------------------------------------------------------------------------
Applicable WF Thresholds:
\a\ Only applicable at WF <8,000 pounds.
\b\ Only applicable at WF <6,800 pounds.
\c\ Only applicable at WF <5,500 pounds.
Table 25--Final MDV GHG Standards Above WF Thresholds Referenced in
Table 24
------------------------------------------------------------------------
GHG standards,
Model year WF threshold g CO2/mi
------------------------------------------------------------------------
2028.............................. WF >=8,000 lbs...... 541
2029.............................. WF >=6,800 lbs...... 457
2030.............................. WF >=5,500 lbs...... 374
2031.............................. WF >=5,500 lbs...... 333
2032.............................. WF >=5,500 lbs...... 292
------------------------------------------------------------------------
The MDV target GHG standards are compared to the previous Heavy-
duty (HD) Phase 2 gasoline standards in Figure 10. For MY 2027, we are
finalizing a revision to the HD Phase 2 standards under which gasoline
MDVs are subject to fuel-neutral standards identical to the HD Phase 2
diesel standards. MY 2027 standards for diesel MDV remain identical to
HD Phase 2. EPA believes the revised MY 2027 MDV standard for gasoline
MDV is reasonable given the significant advances in clean vehicle
technology since our assessment at the time of the HD Phase 2 rule in
2016. In our assessment conducted during the development of HD Phase 2,
we found only one manufacturer had certified HD BEVs through MY 2016,
and we projected limited adoption of electric vehicles into the market
for MYs 2021 through 2027. However, as discussed in section IV.C.1 of
this preamble and RIA Chapter 3.1, there are now a wider range of
feasible technology options for manufacturers to apply to the MDV
fleet. In addition to ICE-based technologies, manufacturers are
actively increasing their PHEV and BEV vehicle offerings in the MDV
[[Page 27914]]
segment, which are supported through the IRA tax credits, and we expect
this growth to continue through the remaining timeframe for the HD GHG
Phase 2 program and into the timeframe of this program. Based on this
new information, we believe the revised gasoline MDV standard for MY
2027 is feasible, considering costs and lead time.
We further believe that the revised MY 2027 standard is feasible on
a fuel neutral basis, compared to the prior standards under the HD
Phase 2 program that established separate standards for gasoline and
diesel MDVs, with diesel MDVs subject to a more stringent standard than
gasoline. This is consistent with the approach that we have taken
within the LD program, where GHG standards are fuel neutral and include
BEVs. Improvements in ICE technology, in particular HEV and PHEV
technology and the use of dedicated hybrid engines in those
applications, have narrowed the differences between gasoline and diesel
GHG for both MDV and LD. This fuel-neutral approach also extends to our
treatment of MDV BEVs. We anticipate that manufacturers will comply
with MDV GHG standards in part through increased averaging of BEV MDV
as their sales increase over the timeframe of our rule.
We are finalizing standards in MY 2032 comparable to what was
proposed except with the previously noted differences in calculating
work factor and CO2 targets. We are also finalizing
standards that are less stringent than the proposal for model years
2028 through 2031 to allow additional manufacturer lead time. Note that
all of the standards in Figure 10 continue beyond the data markers
shown. The range of WF shown within the figure reflect the approximate
transition from light-duty trucks to MDVs at a WF of approximately
3,000 pounds. Also note that a GCWR of 22,000 pounds corresponds with a
work factor of approximately 5,500 pounds, above which the GHG
standards flatten for MY 2030 and later. We consider these standards
feasible taking into consideration the opportunities for increasing
penetration of advanced technologies, within both the van and MD pickup
segments, as discussed further in section IV.C.1 of the preamble.
[GRAPHIC] [TIFF OMITTED] TR18AP24.009
Figure 10: Final GHG Standards for Medium-Duty Vehicles
ii. What fleet-wide CO2 emissions levels correspond to the
standards?
Table 26 shows overall fleet average target levels for both medium-
duty vans and pickup trucks that are projected for the standards. A
more detailed break-down of the projected CO2 targets and
achieved levels is provided in RIA Chapter 12. The actual fleet-wide
average g/mile level that would be achieved in any year for medium-duty
vans and pickup trucks will depend on the actual production of vehicles
for that year, as well as the use of the credit averaging, banking, and
trading provisions.
Table 26--Projected Targets for Final Medium-Duty GHG Standards, by Body Style
----------------------------------------------------------------------------------------------------------------
Pickups CO2 (g/ Total fleet
Model year Vans CO2 (g/ mile) CO2 (g/mile)
mile)
----------------------------------------------------------------------------------------------------------------
2027............................................................ 392 497 461
[[Page 27915]]
2028............................................................ 391 486 453
2029............................................................ 355 437 408
2030............................................................ 317 371 353
2031............................................................ 281 331 314
2032 and later.................................................. 245 290 274
----------------------------------------------------------------------------------------------------------------
iii. MDV Incentive Multipliers
For the Heavy-duty (HD) GHG Phase 2 rule, EPA adopted credit
multipliers through MY 2027 for vehicles that qualified as ``advanced
technology'' (i.e., PHEV, BEV and FCEV) based on the administrative
record at that time. In the proposal for this rule (88 FR at 29243), we
described the HD GHG Phase 2 advanced technology credit multipliers as
representing a tradeoff between incentivizing new advanced technologies
that could have significant emissions benefits and providing credits
that could allow higher emissions from credit-using engines and
vehicles. At the time we finalized the HD GHG Phase 2 program in 2016,
we estimated that there would be very little market penetration of
PHEV, BEV, and FCEV in the heavy-duty market in the MY 2021 to MY 2027
timeframe when the advanced technology credit multipliers would be in
effect. Additionally, the technology packages in our technical basis of
the feasibility of the HD GHG Phase 2 standards did not include any of
these advanced technologies.
Table 27--Advanced Technology Multipliers in HD GHG Phase 2--The 2016
Final Rule Applied These Multipliers to MYs 2021 Through 2027
------------------------------------------------------------------------
Technology Multiplier
------------------------------------------------------------------------
Plug-in hybrid electric vehicles........................ 3.5
All-electric vehicles................................... 4.5
Fuel cell electric vehicles............................. 5.5
------------------------------------------------------------------------
In our assessment conducted during the development of HD GHG Phase
2, we found only one manufacturer had certified HD BEVs through MY
2016, and we projected ``limited adoption of all-electric vehicles into
the market'' for MYs 2021 through 2027.\562\ At low adoption levels,
the benefits of encouraging additional utilization of these
technologies outweighed negative emissions impacts of multipliers.
However, as discussed in section IV of the preamble, manufacturers are
now actively increasing their use of PHEV and BEV technologies in the
medium-duty segment with further support through the IRA and other
actions, and we expect this growth to continue through the remaining
timeframe for the HD GHG Phase 2 program and into the timeframe for
this medium-duty program.
---------------------------------------------------------------------------
\562\ 81 FR 73818 (October 25, 2016).
---------------------------------------------------------------------------
While we did anticipate that some growth in development of these
technologies would occur due to the credit incentives in the HD GHG
Phase 2 final rule, we did not expect the level of innovation observed
since we finalized the rule in 2016, the IRA or BIL incentives, or that
California would adopt the Advanced Clean Trucks (ACT) rule at the same
time these advanced technology multipliers were in effect. We therefore
proposed phasing out multipliers for PHEV, BEV and FCEV technologies
one year earlier than provided in the Phase 2 rule such that the
multipliers would be eliminated in MY 2027.
EPA received comments both in support of and in opposition to its
proposal to eliminate MDV multiplier incentives for MY 2027 vehicles.
Some auto industry commenters opposed the elimination of the
multipliers for MY 2027 as they believed the multipliers are important
to address market uncertainties and that changes in the multipliers
could be disruptive to manufacturers' planning and development cycles
already underway. Other commenters supported EPA's proposal to remove
multipliers for MY 2027 believing that multipliers are no longer
necessary given the rapid advancement of BEVs in the MDV market and
given their concern that multipliers erode the emissions benefits of
the program and could result in emissions backsliding.
EPA has considered these comments (as discussed further in section
3.1.8 of the RTC). We believe that, if left as is, the MY 2027 MDV
multiplier credits may allow for backsliding of emission reductions
expected from non-advanced technology vehicles for some manufacturers
in the near term (i.e., the generation of excess credits which could
delay the introduction of technology in the near or mid-term) as sales
of advanced technology MDVs that can generate the incentive credit
continue to increase. In light of the current existence of, and
expected continued rapid increase in, adoption of advanced technologies
(including zero-emission technologies) in the MDV market, EPA is, as
proposed, removing the BEV, PHEV, and FCEV multipliers for MY 2027.
In the proposal, EPA also requested comment on phasing down the MDV
multipliers for MYs 2025 and 2026. Upon considering public comments, we
have decided not to make any changes to the multiplier levels for MYs
2025-2026. While one auto manufacturer supported a phase-down of the MY
2025-2026 multipliers, another manufacturer raised the concern that
changes to the multipliers in MY 2025-2026 would not provide sufficient
lead time for manufacturers who have been planning to utilize the
multipliers in their compliance plans for those model years. Given that
MY 2025 has already begun and that MY 2026 begins as early as nine
months from this final rule, EPA believes it would not be appropriate
to change the MY 2025 or 2026 multipliers. Therefore, the MDV MY 2025-
2026 multipliers will remain in effect as established under the Phase 2
rule.
4. Averaging, Banking, and Trading Provisions for GHG Standards
Averaging, banking, and trading (ABT) is an important compliance
flexibility that has long been built into various highway engine and
vehicle programs (and nonroad engine and equipment programs) to support
emissions standards that, through the introduction and application of
new technologies, result in reductions in air pollution. EPA is
explaining the ABT provisions of the GHG program as background
information, as we did not reopen the existing provisions in 40 CFR
86.1865-12.
EPA's first mobile source program to feature averaging was issued
in 1983
[[Page 27916]]
and included averaging for diesel light-duty vehicles to provide
flexibility in meeting new PM standards.\563\ EPA introduced
NOX and PM averaging for highway heavy-duty vehicles in
1985.\564\ EPA introduced credit banking and trading in 1990 with new
more stringent highway heavy-duty NOX and PM standards to
provide additional compliance flexibility for manufacturers.\565\ Since
those early rules, EPA has included ABT in many programs across a wide
range of mobile sources.\566\ For light-duty vehicles, EPA has included
ABT in several criteria pollutant emissions standards rules including
in the National Low Emissions Vehicle (NLEV) program,\567\ the Tier 2
standards,\568\ and the Tier 3 standards.\569\ ABT has also been a key
feature of all GHG rules for both light-duty and heavy-duty
vehicles.\570\
---------------------------------------------------------------------------
\563\ 48 FR 33456, July 21, 1983.
\564\ 50 FR 30584, March 15, 1985.
\565\ 55 FR 30584, July 26, 1990.
\566\ We note that in upholding the first HD final rule that
included averaging, the D.C. Circuit rejected petitioner's challenge
that Congress meant to prohibit averaging in standards promulgated
under section 202(a). NRDC v. Thomas, 805 F.2d 410, 425 (D.C. Cir.
1986). In the 1990 Clean Act Amendments, Congress, noting NRDC v.
Thomas, opted to let the existing law ``remain in effect,''
reflecting that ``[t]he intention was to retain the status quo,''
i.e., EPA's existing authority to allow averaging for standards
under section 202(a). 136 Cong. Rec. 36,713, 1990 WL 1222468 at
*1,136 Cong. Rec. 35,367, 1990 WL 1222469 at *1.
\567\ 62 FR 31192, June 6, 1997.
\568\ 65 FR 6698, February 10, 2000.
\569\ 79 FR 23414, April 28, 2014.
\570\ The Federal Register citations for previous vehicle GHG
rules are provided in section III.A.2 of this preamble.
---------------------------------------------------------------------------
ABT can help to address issues of technological feasibility and
lead time, as well as considerations of cost. In many cases, ABT
supports the ability of automakers to comply with standards in a manner
that is more economically efficient and possibly with less lead time.
This provides important environmental benefits and at the same time it
increases flexibility and reduces costs for the regulated industry.
Furthermore, by encouraging automakers to exceed minimum requirements
where possible, the ABT program encourages technological innovation,
which makes further reductions in fleetwide emissions possible. The
light-duty ABT program for GHG standards includes existing provisions
initially established in the 2010 rule for how credits may be generated
and used within the program. The ABT provisions of 40 CFR 86.1865-12
include credit carry-forward, credit carry-back (also called deficit
carry-forward), credit transfers (within a manufacturer), and credit
trading (across manufacturers). The MDV GHG program includes similar
ABT provisions. EPA received comments from vehicle manufacturers and
environmental organizations generally supporting the continuation of
the ABT provisions to allow a wide array of vehicles to be produced
providing that no particular technologies are forced.
Credit carry-forward refers to banking (saving) credits for future
use, after satisfying any needs to offset prior MY debits within a
vehicle category (car fleet or truck fleet). Credit carry-back refers
to using credits to offset any deficit in meeting the fleet average
standards that had accrued in a prior MY. The regulation at 40 CFR
86.1865-12 allows a manufacturer to have a deficit at the end of a MY
(after averaging across its fleet using credit transfers between cars
and trucks)--that is, a manufacturer's fleet average emissions level
may fail to meet the manufacturer's required fleet average standard for
the MY, for a limited number of model years. The CAA does not specify
or limit the duration of such credit provisions. In previous rules, EPA
chose to generally adopt 5-year credit carry-forward and 3-year credit
carry-back provisions \571\ as a reasonable approach that maintained
consistency between EPA's GHG and NHTSA CAFE regulatory
provisions.\572\ These provisions continue to apply during the
timeframe for compliance with this rule, and as noted above, EPA did
not reopen the GHG ABT program.
---------------------------------------------------------------------------
\571\ Although the existing credit carry-forward and carry-back
provisions generally remained in place for MY 2017 and later
standards, EPA finalized provisions in the 2012 rule allowing all
unused (banked) credits generated in MYs 2010-2015 (but not MY 2009
early credits) to be carried forward through MY 2021. See 77 FR
62788. In addition, in the 2021 rule, EPA adopted a targeted one-
year extension (6 years total carry-forward) of credit carry-forward
for MY 2017 and 2018 credits. See 86 FR 74453.
\572\ The EPCA/EISA statutory framework for the CAFE program
limits credit carry-forward to 5 years and credit carry-back to 3
years.
---------------------------------------------------------------------------
Transferring credits in the GHG program under 40 CFR 86.1865-12
refers to exchanging credits between the two averaging sets--passenger
cars and light trucks--within a manufacturer. For example, credits
accrued by overcompliance with a manufacturer's car fleet average
standard can be used to offset debits accrued due to that manufacturer
not meeting the truck fleet average standard in a given model
year.\573\ Except as described in section III.D.2.v of the preamble,
MDVs are a separate averaging set and credits are not allowed to be
transferred between vehicles meeting the light- and medium-duty GHG
standards due to the very different standards structure, vehicle
testing differences (e.g., MDVs are tested at an adjusted loaded
vehicle weight of vehicle curb weight plus half payload whereas light-
duty vehicles are tested at an estimated test weight of curb weight
plus 300 pounds) and marketplace competitiveness issues. This
prohibition includes traded credits such that, once traded, credits may
not be transferred between the light- and medium-duty fleets. Finally,
40 CFR 86.1865-12 allows accumulated credits to be traded to another
manufacturer. Credit trading has occurred on a regular basis in EPA's
light-duty vehicle program.\574\ Manufacturers acquiring credits may
offset credit shortfalls and bank credits for use toward future
compliance within the carry-forward constraints of the program.
---------------------------------------------------------------------------
\573\ There is a VMT factor included in the credit calculations
such that light trucks generate and use more credits than passenger
cars based on higher lifetime VMT projections for light trucks
compared to passenger cars. The lifetime VMT used for passenger cars
and light trucks are 195,264 and 225,865, respectively.
\574\ EPA provides general information on credit trades annually
as part of its annual Automotive Trends and GHG Compliance Report.
The latest report is available at: https://www.epa.gov/automotive-trends and in the docket for this rulemaking.
---------------------------------------------------------------------------
The ABT provisions are an integral part of the vehicle GHG program,
and the agency expects that manufacturers will continue to utilize
these provisions into the future, as they give manufacturers an
important tool to resolve any potential lead time and cost issues.
EPA's annual Automotive Trends Report provides details on the use of
these provisions in the GHG program.\575\ EPA did not reopen the GHG
program ABT provisions in this rulemaking.
---------------------------------------------------------------------------
\575\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029, December 2022.
---------------------------------------------------------------------------
5. Vehicle Air Conditioning System Related Provisions
Vehicle air conditioning (A/C) contributes to vehicle emissions in
two ways. The first is indirect emissions of GHG exhaust emissions
resulting from the increase in fuel consumption needed to operate an AC
system. The second is direct emissions of hydrofluorocarbon (HFC)
greenhouse gases of refrigerant via leakage from the A/C system. EPA
has addressed the first mechanism through the use of credits to
encourage manufacturers to make efficiency improvements to their A/C
systems to reduce fuel consumption and the associated GHG emissions.
EPA has also addressed the second mechanism through a credit provision,
providing manufacturers credits for using lower
[[Page 27917]]
global warming potential (GWP) HFC refrigerants and/or reducing the
leakage of A/C systems. EPA has included air conditioning (A/C) system
credits in its light-duty GHG program since the initial program adopted
in the 2010 rule. Although the use of A/C credits has been voluntary,
EPA in past rules has adjusted the level of the CO2
standards downward, making them more stringent, to reflect the
availability of technology to mitigate these two emission sources (and
the associated availability of credits). Manufacturers opting not to
adopt technologies that improve A/C efficiency or reduce refrigerant
leakage emissions and earn A/C credits, meet the vehicle GHG standards
through additional tailpipe CO2 emission reductions. In this
FRM, EPA is revising the A/C credits program for light-duty vehicles in
two ways. First, for A/C system efficiency, as proposed, EPA is
limiting the eligibility for voluntary credits for tailpipe
CO2 emissions control to ICE vehicles starting in MY 2027
(i.e., BEVs would not earn A/C efficiency credits). Second, for A/C
refrigerant leakage control, EPA is phasing down the credit from MYs
2027-2030 and retaining a small permanent credit for MYs 2031 and
later.
i. Background on A/C Emissions in Previous Programs
As noted above, there are two mechanisms by which A/C systems
contribute to the emissions of GHGs: through leakage of
hydrofluorocarbon (HFC) refrigerants into the atmosphere (sometimes
called ``direct emissions'') and through the consumption of fuel to
provide mechanical power to the A/C system (sometimes called ``indirect
emissions'').\576\ Since the first GHG standards in 2010, EPA has
regulated the emissions of HFCs from vehicles by identifying control
strategies for reducing refrigerant leakage (and for reducing the
climate impacts of GHG leakage on a CO2e basis), offering
credits for adopting those strategies, and then setting the stringency
of the tailpipe emissions standards based on the feasibility of
adopting technologies that mitigate emissions from air conditioning,
with the final level of the standards reflecting the level of the
credits a manufacturer could earn. Thus, since 2010, the tailpipe
standards have been intentionally set to achieve control of HFCs. This
program has been successful; since the 2010 rule, manufacturers have
reduced the impacts of refrigerant leakage significantly by using
systems that incorporate leak-tight components and by using
refrigerants with a lower global warming potential. When EPA
established the light-duty refrigerant credits in the 2010 rule, the
most common refrigerant was HFC 134a which has a global warming
potential of 1430. The high global warming potential of HFC-134a, means
that leakage of a gram of HFC134(a) would have 1430 times the global
warming potential of a gram of CO2. Manufacturers have
steadily increased their use of low GWP refrigerant HFO-1234yf which
has a GWP of 1, much lower than the GWP of the HFC refrigerant it
replaces. The A/C system also contributes to increased tailpipe
CO2 emissions through the additional work required to
operate the compressor, fans, and blowers. This additional power demand
is ultimately met by using additional fuel, which is converted into
CO2 by the engine during combustion and exhausted through
the tailpipe. These emissions can be reduced by increasing the overall
efficiency of an A/C system, thus reducing the additional load on the
engine from A/C operation, which in turn means a reduction in fuel
consumption and a commensurate reduction in CO2 emissions.
---------------------------------------------------------------------------
\576\ 40 CFR 1867-12 and 40 CFR 86.1868-12.
---------------------------------------------------------------------------
In past rules, EPA adjusted the stringency of the light-duty
CO2 footprint curves to reflect the expected adoption of
technologies that reduce A/C emissions (and the associated A/C credits)
by shifting the footprint curves downward. In the 2010 rule and again
in subsequent rules, EPA increased the stringency of the footprint
curves for cars and trucks to reflect the expected adoption of
technologies that reduce A/C emissions and the associated and
relatively low-cost A/C credits earned.
For MDVs, EPA adopted a somewhat different approach to address A/C
refrigerant emissions. In the Phase 1 rule, rather than indirectly
regulating HFCs through offering a credit, EPA directly regulated HFCs
through a refrigerant leakage standard.\577\ This approach eliminated
the need to adjust the CO2 work factor-based standards to
account for the availability of adoption of lower GWP refrigerants, as
EPA did in setting the prior light-duty standards. EPA projected that
manufacturers would meet the leakage standard either through the use of
leak tight components or through the use of alternative refrigerants.
In the Phase 2 rule, EPA revised the refrigerant leakage standard to be
refrigerant neutral, meaning that regardless of the type of refrigerant
used, the loss of refrigerant cannot exceed the standard of 11 g/year
or a percentage leakage rate greater than 1.5 percent per year.\578\
The MDV program does not include A/C efficiency related credits or
requirements.\579\
---------------------------------------------------------------------------
\577\ 76 FR 57194 and 73525.
\578\ Under the Phase 2 program, loss of refrigerant from air
conditioning systems may not exceed a total leakage rate of 11.0
grams per year or a percent leakage rate of 1.50 percent per year,
whichever is greater. See 81 FR 73742 and 40 CFR 1037.115(e).
\579\ In the previous heavy-duty GHG rules, EPA discussed but
did not propose or finalize A/C efficiency credits for MDVs. For
further discussion see 76 FR 57196 and 81 FR 73742.
---------------------------------------------------------------------------
ii. Modifications to the A/C Efficiency Credits
The previous light-duty vehicle A/C indirect emissions reduction
credits in 40 CFR 86.1868-12, which EPA also commonly refers to as A/C
efficiency credits, are based on a technology menu with a testing
component to confirm that the technologies provide emissions reductions
when installed as a system on vehicles. The menu includes credits for
improved system components and air recirculation settings designed to
reduce the A/C load on the IC engine.\580\ The A/C efficiency credits
are capped at 5.0 g/mile for passenger cars and 7.2 g/mile for light
trucks. In addition, a limited amount of vehicle tailpipe testing
(i.e., the ``AC17'' test) is required for manufacturers claiming
credits to verify anticipated emissions reductions are occurring. The
credits have been effective in incentivizing A/C efficiency
improvements since the program's inception, and manufacturers' use of
A/C menu credits has steadily increased over time. In MY 2022, 20 of 22
manufacturers reported efficiency credits resulting in an average
credit of 5.8 g/mile.\581\
---------------------------------------------------------------------------
\580\ Joint Technical Support Document, Final Rulemaking for
2017-2025 Light-Duty Vehicle Greenhouse Gas Emission Standards and
Corporate Average Fuel Economy Standards, EPA-420-R-12-901, August
2012.
\581\ ``The 2023 EPA Automotive Trends Report, Greenhouse Gas
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-23-
033, December 2023.
---------------------------------------------------------------------------
EPA is finalizing its proposal that beginning with MY 2027, A/C
efficiency credits are eligible only for vehicles equipped with IC
engines. Thus, BEVs will no longer be eligible for A/C efficiency
credits after MY 2026.
The Alliance for Automotive Innovation (AAI) and some vehicle
manufacturers provided comments opposing the elimination of A/C
efficiency credits for BEVs. Some of these commenters noted the
importance of more efficient A/C systems for BEVs in improving overall
BEV efficiency. Other commenters including NGOs supported EPA's
proposal and specifically supported the decision not to apply A/C
efficiency credits to BEVs
[[Page 27918]]
given that BEVs have a zero grams per mile compliance value.
The A/C efficiency credits are based on emissions reductions from
ICE vehicles. They correspond to motor vehicle emissions reductions
that occur when the A/C systems on ICE vehicles are operated more
efficiently, which in turn reduces their use of electricity produced by
the alternator and engine, and which in turn reduces pollution emitted
by the motor vehicle engine. The credits provided an incentive for
manufacturers to increase the efficiency of their A/C systems and in
turn reduce the pollution emitted by the vehicle engine. The amount of
the credits was determined based on our technical analysis of the
emissions produced by an ICE engine and how A/C efficiency improvements
could reduce such emissions. In turn, while the credits were optional,
EPA established the GHG standards accounting for the level of credits
that manufacturers could potentially obtain.
Currently, BEVs are generating credits even though the credits are
based solely on improvements to ICE vehicles, and not representative of
emissions reductions for BEVs. That is, BEVs completely prevent engine
emissions. Thus, improving A/C efficiency does not and is not needed to
further decrease vehicle engine emissions. Moreover, the amount of the
credits EPA previously determined based on ICE vehicle emissions has no
real-world correlation to BEVs. Allowing BEVs to generate A/C
efficiency credits is therefore not technically sound as it is
unrelated to controlling emissions from the vehicle. Instead, they are
receiving a windfall of credits that fails to correspond to any real-
world reduction in vehicle emissions, a problem which increases in
significance as the manufacturers choose to produce an increasing
number of BEVs.
When EPA first established A/C efficiency credits in the 2010 rule,
BEV sales were relatively small, and EPA anticipated that BEVs would be
required eventually to reflect a portion of carbon emissions from
upstream electricity generation in compliance results. However, as
discussed in section III.C.7 of this preamble, EPA has concluded it is
appropriate to measure compliance with vehicle emissions standards
solely by reference to vehicle emissions and is thus removing the MY
2027 date previously specified in the regulations for including
upstream emissions in compliance calculations for BEVs. In addition,
the ability of BEVs to generate A/C credits has contributed to
manufacturers reporting BEV emissions as less than zero, which is not
representative of actual vehicle emissions and can be a source of
confusion. For example, in the latest Trends report, Tesla, which sells
only BEVs, reported a fleet average performance value of negative 23 g/
mile including 18.2 g/mile of A/C credits.\579\ Initially, when BEV
sales were very low, these issues and their impacts were small, and the
A/C efficiency credits in turn provided some amount of incentive for
more efficient BEVs overall and resulting upstream emission reductions.
However, EPA has reconsidered the appropriateness of applying A/C
efficiency credits to BEVs in light of the increasing level of BEVs
that we anticipate manufacturers will choose to produce in future model
years and our final rule provision to indefinitely exclude upstream
emissions from BEV compliance calculations. For all these reasons, EPA
believes limiting eligibility for A/C efficiency credits to only ICE
vehicles beginning in MY 2027 is appropriate. As described for off-
cycle credits in section III.C.6.i of this preamble, the final rule
also restricts the applicability of A/C efficiency credits for PHEVs to
the portion of vehicle operation when the engine is running, based on
the vehicle's utility factor. Similar to the preceding discussion of
BEVs and A/C efficiency credits, this calculation adjustment is
appropriate to associate A/C efficiency credits only with ICE operation
beginning in MY 2027.
EPA notes that its approaches for A/C efficiency credits and off-
cycle credits, discussed in detail in section III.C.6 of this preamble,
differ even though the types of emissions the credits are designed to
address (i.e., emissions not considered on the 2-cycle compliance test
cycles) are similar. As discussed in section III.C.6 of this preamble,
while EPA is phasing out the off-cycle credits entirely after MY 2032,
EPA is not phasing out A/C efficiency credits for ICE vehicles because
the A/C efficiency credits program is more robust as it includes a
check of vehicle emissions performance through AC17 testing. EPA
established the AC17 testing requirements as part of the 2012 rule to
provide an assurance that the A/C systems earning credits were
providing anticipated emissions reductions. As established in the 2012
rule, the AC17 test is mandatory for MYs 2017 and later (with the
exception that manufacturers are not required to test BEVs).\582\ The
off-cycle credits program includes no such mechanism to check
performance. EPA did not reopen the existing AC17 testing provisions as
part of this rule; therefore, the AC17 testing requirements of
manufacturers earning A/C efficiency credits will remain in effect
under the MY 2027 and later program.
---------------------------------------------------------------------------
\582\ 77 FR 62722.
---------------------------------------------------------------------------
EPA's MDV GHG work factor-based program does not include A/C system
efficiency provisions,\583\ and EPA did not reopen this issue for this
rule.
---------------------------------------------------------------------------
\583\ See 81 FR 73742, October 25, 2016.
---------------------------------------------------------------------------
iii. Phase-Down of A/C Credits for Reduced Refrigerant Leakage
The previous light-duty vehicle A/C credits program in 40 CFR
86.1867-12 that was adopted in the 2012 rule also included credits for
low refrigerant leakage systems and/or the use of alternative low
global warming potential (GWP) refrigerants rather than
hydrofluorocarbons (HFCs). Under the prior program, the potential
available A/C leakage credits are larger than the A/C efficiency
credits. The prior program caps refrigerant related credits for
passenger cars and light trucks, respectively, at 13.8 and 17.2 g/mile
when an alternative refrigerant is used and 6.3 and 7.8 g/mile in cases
where an alternative refrigerant is not used. Although the credits
program has been voluntary since its inception, the standards were
adjusted to reflect the anticipated use of the credits and the program
has been effective in achieving its goal of increasing the use of low
GWP refrigerants and low leak technologies. Since EPA established the
refrigerant-based credits, low GWP refrigerant HFO-1234yf has been
successfully used by many manufacturers to claim the full refrigerant
replacement credits. As of MY 2022, 97 percent of new vehicles used the
low GWP refrigerant.\584\ EPA adopted a different approach for MDVs by
including in the program a refrigerant leakage standard rather than a
credit.\585\
---------------------------------------------------------------------------
\584\ ``The 2023 EPA Automotive Trends Report, Greenhouse Gas
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-23-
033, December 2023. See Figure 5.5 in page 97.
\585\ See 40 CFR 1037.115(e) and 81 FR 73726, October 25, 2016.
---------------------------------------------------------------------------
In December 2020, the American Innovation and Manufacturing (AIM)
Act (42 U.S.C. 7675) was enacted. The AIM Act, among other things,
authorizes EPA to phase down production and consumption of HFCs in
specific sectors and subsectors, including their use in vehicle A/C
systems. The AIM Act has sent a strong signal to all vehicle
manufacturers that there is no future for using high GWP refrigerants
in new vehicles. In October 2023, in response to the AIM Act, EPA
finalized the Technology Transitions Rule which
[[Page 27919]]
restricts the use of high GWP refrigerants such as HFCs in vehicle
applications.\586\ The new restriction on refrigerant use is effective
in MY 2025 for light-duty vehicles and MY 2028 for MDVs.\587\ Auto
manufacturers have already successfully developed and employed HFO-
1234-yf low GWP refrigerants across the large majority of the fleet and
there is no reason at this time to believe that manufacturers would
redesign those systems again under the AIM Act, in the absence of EPA
vehicle-based credits, to develop and use systems equipped with a
higher GWP refrigerant. In light of the Agency's phase out of high GWP
refrigerants pursuant to the AIM Act, EPA proposed sunsetting the
voluntary refrigerant-related credits in MY 2027 for light-duty
vehicles. Based on significant public comments on this issue, EPA is
finalizing an approach that provides a phase-down of the current A/C
leakage credits from MYs 2027-2030, and establishes a small A/C leakage
credit for MY 2031 and later, as described in detail below.
---------------------------------------------------------------------------
\586\ 88 FR 73098, October 24, 2023.
\587\ EPA did not reopen the refrigerant-based credits for MYs
2025-2026. In EPA's judgment, such an action (which we did not take)
would appropriately be accompanied by a proposal to revise the
stringency of the footprint curves for those model years,
established in the 2021 rule, to account for the absence of the
availability of refrigerant-based credits. EPA did not revisit the
standards it established for MYs 2023-2026.
---------------------------------------------------------------------------
Some commenters, including NGOs and states, were generally
supportive of the proposal to eliminate A/C leakage credits given the
AIM Act's provisions on phasing out high GWP refrigerants, although
some of these commenters also supported regulatory changes to support
the continued use of low leak technologies. Other comments from auto
manufacturers expressed concerns with the proposal to end A/C leakage
credits altogether in MY 2027, as they believed this change would have
a significant impact on the effective stringency of the standards. Some
auto manufacturers who supported the proposal's Alternative 3 (linear
ramp rate) stringency as the right direction also commented that in
order to address concerns about lead time in the early years, the
program should also slow the phase-down of both off-cycle and A/C
leakage credits. Some auto manufacturers also recommended that EPA
should retain A/C leakage credits in the program as a way to continue
to incentivize the lowest GWP refrigerants below the threshold
established in the EPA Technology Transitions Rule.
EPA has carefully considered these public comments and reconsidered
its proposal for A/C leakage credits in the context of our updated
technical analysis. We are retaining a small credit to further
incentivize vehicle refrigerants below the threshold established in the
EPA Technology Transitions Rule which prohibits refrigerants above a
GWP of 150. Since much of the light-duty vehicle fleet is already using
the HFO-1234yf refrigerant which has a GWP of 1, EPA also believes this
credit will provide an incentive for manufacturers to not backslide,
for example, by moving in the future to a GWP that approaches the
Technology Transitions Rule threshold. In addition, EPA believes this
credit will continue to incentivize low leak systems along with the use
of very low GWP refrigerants. EPA has scaled back its existing A/C
leakage credits to capture a credit value that represents the use of
vehicle A/C refrigerants of less than 150 GWP. Specifically, for MY
2031 and beyond, manufacturers may earn A/C leakage credits of up to
1.6 g/mile for cars and 2.0 g/mile for light trucks. EPA's calculation
methodology for these A/C credits can be found in RIA Chapter 3.6.
We also agree with auto industry commenters that it is important to
provide additional lead time in the early years of the program.
Therefore, we are finalizing a phase-down of A/C leakage credits from
MY 2027-2031. Specifically, the available A/C leakage credits will
phase down as shown in Table 28.
Table 28--A/C Leakage Credits Available to Manufacturers, Final Program
[CO2 g/mile]
------------------------------------------------------------------------
MY Car Truck
------------------------------------------------------------------------
2026.................................................... 13.8 17.2
2027.................................................... 11.0 13.8
2028.................................................... 8.3 10.3
2029.................................................... 5.5 6.9
2030.................................................... 2.8 3.4
2031.................................................... 1.6 2.0
2032 and later.......................................... 1.6 2.0
------------------------------------------------------------------------
For MDVs, EPA had proposed to eliminate the MDV leakage standard in
MY 2027. EPA received comments from some stakeholders, including the
California Air Resources Board, that the MDV leakage standard should be
retained as it provides additional GHG reductions. While recognizing
that the Agency's Technology Transitions Rule will provide significant
climate benefits by phasing out refrigerants above a GWP of 150, CARB
pointed out that there are still benefits that the MDV leakage standard
can achieve to ensure low leak systems regardless of the refrigerant
used. In response to these comments, and for the reasons described
above on the importance of a continued role for preventing emissions
from A/C equipment in the vehicle program (recognizing that both LD and
HD vehicles are subject to regulations to control leaks), EPA is
retaining the existing MDV refrigerant leakage standard that was
established under the Phase 2 program. The current MDV leakage standard
requires that loss of refrigerant from A/C systems may not exceed a
total leakage rate of 11.0 grams per year or a percent leakage rate of
1.50 percent per year, whichever is greater. This leakage standard
applies regardless of the refrigerant used in the A/C system. (See 81
FR 73742, October 25, 2016 and 40 CFR 86.1819-14(h)).
6. Off-Cycle Credits Program
i. Background on the Off-Cycle Credits Program
Starting with MY 2008, EPA started employing a ``five-cycle'' test
methodology to measure fuel economy for purposes of new car window
stickers (labels) to give consumers better information on the fuel
economy they could more reasonably expect under real-world driving
conditions.\588\ However, for GHG compliance, EPA continues to use the
established ``two-cycle'' (city and highway test cycles, also known as
the FTP and HFET) test methodology.\589\ As learned through development
of the ``five-cycle'' methodology and prior rulemakings, there are
technologies that provide real-world GHG emissions improvements, but
whose improvements are not fully reflected on the ``two-cycle'' test.
EPA established the off-cycle credit program in 40 CFR 86.1869-12 to
provide an appropriate level of CO2 credit for technologies
that achieve CO2 reductions but may not otherwise be chosen
as a GHG control strategy, as their GHG benefits are not measured on
the specified 2-cycle test. For example, high efficiency lighting is
not measured on EPA's 2-cycle tests because lighting is not turned on
as part of the test procedure, but this technology reduces
CO2 emissions by decreasing the electrical load on the
alternator and engine. Both light-duty and medium-
[[Page 27920]]
duty vehicles may generate off-cycle credits, but the program is much
more limited in the medium-duty work factor-based program.
---------------------------------------------------------------------------
\588\ https://www.epa.gov/vehicle-and-fuel-emissions-testing/dynamometer-drive-schedules. See also 75 FR 25439 for a discussion
of 5-cycle testing.
\589\ The city and highway test cycles, commonly referred to
together as the ``2-cycle tests'' are laboratory compliance tests
that are effectively required by law for CAFE, and also used for
determining compliance with the GHG standards. 49 U.S.C. 32904(c).
---------------------------------------------------------------------------
Under EPA's regulations through MY 2026, there are three pathways
by which a manufacturer may accrue light-duty vehicle off-cycle
technology credits.\590\ The first pathway is a predetermined list or
``menu'' of credit values for specific off-cycle technologies that has
been effective since MY 2014.\591\ This pathway allows manufacturers to
use credit values established by EPA for a wide range of off-cycle
technologies, with minimal or no data submittal or testing
requirements. The menu includes a fleetwide cap on credits to address
the uncertainty of a one-size-fits-all credit level for all vehicles
and the limitations of the data and analysis used as the basis of the
menu credits. The menu cap is 10 g/mile except for a temporary
increased cap of 15 g/mile available only for MYs 2023-2026, adopted by
EPA in the 2021 rule.\592\ The existing menu technologies and
associated credits are summarized in Table 29 and Table 30.\593\
---------------------------------------------------------------------------
\590\ ``The 2023 EPA Automotive Trends Report, Greenhouse Gas
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-23-
033, December 2023, for information regarding the use of each
pathway by manufacturers.
\591\ See 40 CFR 86.1869-12(b).
\592\ See 86 FR 74465.
\593\ See 40 CFR 86.1869-12(b). See also ``Joint Technical
Support Document: Final Rulemaking for 2017-2025 Light-duty Vehicle
Greenhouse Gas Emission Standards and Corporate Average Fuel Economy
Standards for the Final Rule,'' EPA-420-R-12-901, August 2012, for
further information on the definitions and derivation of the credit
values.
Table 29--Existing Off-Cycle Technologies and Credits for Cars and Light
Trucks
------------------------------------------------------------------------
Credit for cars Credit for light
Technology (g/mile) trucks (g/mile)
------------------------------------------------------------------------
High Efficiency Alternator (at 1.0 1.0
73%; scalable)...................
High Efficiency Exterior Lighting 1.0 1.0
(at 100W)........................
Waste Heat Recovery (at 100W; 0.7 0.7
scalable)........................
Solar Roof Panels (for 75W, 3.3 3.3
battery charging only)...........
Solar Roof Panels (for 75W, active 2.5 2.5
cabin ventilation plus battery
charging)........................
Active Aerodynamic Improvements 0.6 1.0
(scalable).......................
Engine Idle Start-Stop with heater 2.5 4.4
circulation system...............
Engine Idle Start-Stop without 1.5 2.9
heater circulation system........
Active Transmission Warm-Up....... 1.5 3.2
Active Engine Warm-Up............. 1.5 3.2
Solar/Thermal Control............. Up to 3.0 Up to 4.3
------------------------------------------------------------------------
Table 30--Existing Off-Cycle Technologies and Credits for Solar/Thermal
Control Technologies for Cars and Light Trucks
------------------------------------------------------------------------
Car credit (g/ Truck credit
Thermal control technology mile) (g/mile)
------------------------------------------------------------------------
Glass or Glazing........................ Up to 2.9 Up to 3.9
Active Seat Ventilation................. 1.0 1.3
Solar Reflective Paint.................. 0.4 0.5
Passive Cabin Ventilation............... 1.7 2.3
Active Cabin Ventilation................ 2.1 2.8
------------------------------------------------------------------------
A second pathway allows manufacturers of light-duty vehicles to use
5-cycle testing to demonstrate and justify off-cycle CO2
credits.\594\ The additional emissions tests allow emission benefits to
be demonstrated over some elements of real-world driving not captured
by the GHG compliance tests, including high speeds, rapid
accelerations, and cold temperatures. Under this pathway, manufacturers
submit test data to EPA, and EPA determines whether there is sufficient
technical basis to approve the off-cycle credits. The third pathway
allows manufacturers to seek EPA approval, through a notice and comment
process, to use an alternative methodology other than the menu or 5-
cycle methodology for determining the off-cycle technology
CO2 credits.\595\ This option is only available if the
benefit of the technology cannot be adequately demonstrated using the
5-cycle methodology. For MDVs, the manufacturers may use the public
process or 5-cycle pathways for generating credits.\596\ There is no
off-cycle credits menu for MDVs.
---------------------------------------------------------------------------
\594\ See 40 CFR 86.1869-12(c).
\595\ See 40 CFR 86.1869-12(d).
\596\ See 40 CFR 86.1819-14(d)(13).
---------------------------------------------------------------------------
EPA designed the off-cycle program to provide an incentive for new
and innovative technologies that reduce real world CO2
emissions primarily outside of the 2-cycle test procedures (i.e., off-
cycle) such that most of the emissions reductions are not reflected or
``captured'' during certification testing. The program also provides
flexibility to manufacturers since off-cycle credits may be used to
meet their emissions reduction obligations.
Since MY 2012, the program has successfully encouraged the
introduction and use of a variety of off-cycle technologies, especially
menu technologies under the light-duty program. The use of several menu
technologies has steadily increased over time, including engine stop-
start, active aerodynamics, high efficiency alternators, high
efficiency lighting, and thermal controls that reduce A/C energy
demand. The program has allowed manufacturers to reduce emissions by
applying off-cycle technologies, at lower overall costs, compared to
the technologies that would have otherwise been used to provide
reductions over the 2-cycle test, consistent with the intent of the
program. Since MY 2012, the quantity of off-cycle credits generated by
manufacturers steadily increased over time. In MY 2022, the industry
averaged 9.2 g/mile of credits with more than 95 percent of those
[[Page 27921]]
credits based on the menu.\597\ Seven manufacturers (BMW, Ford, GM,
Honda, Jaguar Land Rover, Stellantis, and VW) claimed the maximum menu
credit available of 10 g/mile.\579\ Most manufacturers used at least
some off-cycle technologies on 60-100 percent of vehicles.\598\
---------------------------------------------------------------------------
\597\ The 2023 EPA Automotive Trends Report (EPA-420-R-23-033),
December 2023. See Tables 5.3 and 5.4.
\598\ Ibid. Figure 5.8.
---------------------------------------------------------------------------
The program has had mixed results for 5-cycle and public process
pathways. There have been few 5-cycle credit demonstrations, and the
public process pathway has been challenging due to the complexity of
demonstrating real-world emissions reductions for technologies not
listed on the menu. The public process pathway was used successfully by
several manufacturers for high efficiency alternators, resulting in EPA
adding this technology to the off-cycle menu beginning in MY 2021.\599\
The program has resulted in a number of concepts for potential off-
cycle technologies over the years, but few have been implemented, at
least partly due to the difficulty in demonstrating the quantifiable
real-world emissions reductions associated with using the technology.
Many credits sought by manufacturers have been relatively small (less
than 1 g/mile). Over the past several years, manufacturers have
commented that the process takes too long, but the length of time is
often associated with the need for additional data and information or
issues regarding whether a technology is eligible for credits.
---------------------------------------------------------------------------
\599\ 85 FR 25236.
---------------------------------------------------------------------------
ii. Phase Out of Off-Cycle Credits
EPA proposed a phase-out of the off-cycle program for light-duty
vehicles as follows: (1) by setting a declining menu cap starting with
the 10 g/mile cap currently in place for MY 2027 and then phasing down
to 8.0/6.0/3.0/0.0 g/mile over MYs 2028-2031 such that MY 2030 would be
the last year manufacturers could generate credits; (2) by eliminating
the 5-cycle and public process pathways starting in MY 2027; and (3) by
limiting eligibility for off-cycle credits to vehicles with tailpipe
emissions greater than zero (i.e., vehicles equipped with IC engines)
starting in MY 2027.
EPA received a range of comments on the off-cycle program proposal.
Comments received from environmental NGOs, consumer groups, and many
states were generally supportive of the proposed phase-out of the off-
cycle credits program, and many of these commenters expressed concerns
that the off-cycle credits are not achieving the real-world reductions
reflected by the current menu values. Comments received from auto
manufacturers expressed concern about the phase-out of the off-cycle
credit program as they believe the off-cycle program provides an
important additional pathway for vehicle technologies that they believe
reflect real-world CO2 emissions reductions. Different auto
manufacturers provided various suggestions on how the off-cycle program
should be retained, and many suggested that any phase-out of the menu
credits should be slowed down and extended for additional model years.
Specifically, several auto manufacturers believed that, at a minimum,
any phase-down of the off-cycle credits program, like the A/C leakage
credits program, should be slowed down in the early years of the
program as an additional means of providing necessary lead time for the
revised standards. Manufacturers stated that they view the off-cycle
credits as a potential tool for addressing uncertainties in meeting the
level of stringency of the standards especially in the early years of
the program, as the credits provide an additional means to ensure the
emissions targets are met. Auto industry commenters also noted that
manufacturers have made investments in off-cycle technologies which are
included as part of their compliance plans and noted that off-cycle
technologies are among the lowest cost means to reduce emissions.
Upon considering this range of public comments, EPA is finalizing a
phase-out of off-cycle menu credits over the MY 2030-2033 timeframe as
a reasonable way to bring the program to an end. Specifically, EPA is
extending the phase-out of off-cycle menu credits, compared to our
proposal, to provide a longer transition period. As discussed in the
proposal (section III.B.6 of the draft preamble) and above, the off-
cycle credit program was originally designed both to give an incentive
for new and innovative technologies, and to provide additional
flexibility for manufacturers in meeting the standards. Moreover, as
with AC credits, the level of the standards was determined in light of
the availability of these credits.
EPA now finds that the off-cycle program has achieved its goal of
incentivizing the adoption of innovative technologies for ICE-based
vehicles to reduce emissions that might otherwise not have been
adopted. EPA also recognizes that, as some commenters argue, the credit
values for implementing specific technologies are outdated and may no
longer be reflective of the real-world emissions impact of the off-
cycle technologies. These concerns are only heightened by the increase
of BEVs in the market and the increased stringency of the standards
(which makes off-cycle credits a greater proportion of compliance). For
these reasons, and as explained further below, EPA finds it appropriate
to phase out the off-cycle program, including finalizing its proposal
to eliminate the 5-cycle and the public process pathways for off-cycle
credits beginning in MY 2027 for both light-duty and medium-duty
vehicles.
At the same time, EPA recognizes that there will be a substantial
number of ICE-based vehicles sold under these standards which would
benefit from off-cycle technologies that reduce emissions and we
recognize that manufacturers may have made substantial use of off-cycle
credits in their planned compliance strategies, a concern which is
heightened by the increase in stringency of the standards. For these
reasons, and consistent with our past practice of taking the
availability of credits into account in determining the appropriate
level of the standards, we judge that it is appropriate to adopt a
slower phase-out of the off-cycle credits to provide a smoother
transition and reduce concerns about lead time for the early years of
the program. Specifically, instead of the proposed menu cap phase-out
of 10/8/6/3/0 g/mile in MYs 2027-2031, EPA is finalizing provisions
that retain the 10 g/mile menu cap through MY 2030, with a phase-out of
8/6/0 g/mile in MYs 2031-2033. The final phase-out of the menu cap is
shown in Table 31.
Table 31--Off-Cycle Menu Credit Cap Phase Down, Final Program, Expressed
in CO2 g/mile
------------------------------------------------------------------------
Off-cycle menu
MY credit cap
(CO2 g/mile)
------------------------------------------------------------------------
2027.................................................... 10
2028.................................................... 10
2029.................................................... 10
2030.................................................... 10
2031.................................................... 8.0
2032.................................................... 6.0
2033 and later.......................................... 0.0
------------------------------------------------------------------------
EPA is also finalizing its proposal to limit eligibility of off-
cycle credits to vehicles equipped with an IC engine beginning in MY
2027; thus, BEVs will no longer be eligible for off-cycle credits
beginning in MY 2027. The off-cycle menu credits were established based
on
[[Page 27922]]
potential emissions reductions from ICE vehicles and are not
representative of emissions reductions from BEVs. As with A/C
efficiency credits, there is no technical basis for providing BEVs with
off-cycle credits to reflect technologies that decrease vehicle engine
emissions because BEVs completely prevent engine emissions.
Previously, the cap was applied to individual manufacturers by
dividing the credits generated by a manufacturer's entire vehicle
production to determine an average credit level for the model year. As
was proposed, EPA is finalizing that starting in MY 2027, the
denominator will include only eligible vehicles (i.e., vehicles
equipped with an IC engine) rather than all vehicles produced by the
manufacturer.
Also, as discussed in detail in section III.C.8 of this preamble,
EPA is revising the utility factor for PHEVs. While PHEVs will remain
eligible for off-cycle credits under EPA's eligibility criteria, EPA is
finalizing, as a reasonable approach for addressing off-cycle credits
for PHEVs, to scale the calculated credit value for PHEVs based on the
vehicle's assigned utility factor. For example, if a PHEV has a utility
factor of 0.3, meaning the vehicle is estimated to operate as an ICE
vehicle 70 percent of the vehicle's VMT, the PHEV will earn an off-
cycle credit that is 70 percent of the full value to properly account
for the value of the off-cycle credit corresponding to expected engine
operation. This calculation methodology corrects errors in the way we
described how to apply a utility factor correction for PHEV off-cycle
credits in the proposed rule. As was the case in the previous program,
individual vehicles can generate more credits than the fleetwide cap
value but the fleet average credits must remain at or below the
applicable menu cap.
EPA believes that phasing out the off-cycle program is generally
consistent with EPA's standards and the direction it appears the
industry is headed in changing their vehicle mix toward vehicle
electrification technologies. EPA originally created the off-cycle
program both to provide flexibility to manufacturers and to encourage
the development of new and innovative technologies that might not
otherwise be used because their benefits were not captured on the 2-
cycle test. EPA believes the off-cycle credits program has successfully
served these purposes. However, the credits were based on estimated
emissions improvements for ICE vehicles which at the time accounted for
the vast majority of vehicles produced. Now with the industry focusing
most R&D resources on vehicle electrification technology development
and increasing production, as discussed in auto industry comments (see
RTC section 3.3) and sections I.A.2 and IV.C.1 of this
preamble,600 601 602 the development of additional
technologies that might potentially generate off-cycle credits is not
likely to be a key area of focus for manufacturers. In addition, EPA
believes that it is not likely that manufacturers would invest
resources on off-cycle technology in the future for their ICE vehicle
fleet that is likely to become a smaller part of their overall vehicle
mix over the next several years. For example, in MY 2021, credits per
technology generated under the public process pathways were all well
below 1 g/mile \603\ and there is little reason to expect the program
to drive significant new innovation in the future. The public process
pathway has been in place since the 2010 rule and manufacturers have
had ample opportunity to consider potential off-cycle technologies. The
5-cycle process pathway has been seldom utilized; this pathway has been
used by only one manufacturer and for only one technology applied to
several vehicles through MY 2017.\604\ Also, since most manufacturers
have stated their future product plans will focus on electrifications,
manufacturers would be recouping any investment in off-cycle
technologies, with relatively small emission reductions, over a
decreasing number of ICE vehicles in their fleets.
---------------------------------------------------------------------------
\600\ Reuters, ``A Reuters analysis of 37 global automakers
found that they plan to invest nearly $1.2 trillion in electric
vehicles and batteries through 2030,'' October 21, 2022. Accessed on
November 4, 2022 at https://graphics.reuters.com/AUTOS-INVESTMENT/ELECTRIC/akpeqgzqypr/.
\601\ Reuters, ``Exclusive: Automakers to double spending on
EVs, batteries to $1.2 trillion by 2030,'' October 25, 2022.
Accessed on November 4, 2022 at https://www.reuters.com/technology/exclusive-automakers-double-spending-evs-batteries-12-trillion-by-2030-2022-10-21/.
\602\ Center for Automotive Research, ``Automakers Invest
Billions in North American EV and Battery Manufacturing
Facilities,'' July 21, 2022. Retrieved on November 10, 2022 at
https://www.cargroup.org/automakers-invest-billions-in-north-american-ev-and-battery-manufacturing-facilities/.
\603\ ``The 2023 EPA Automotive Trends Report: Greenhouse Gas
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-23-
033, December 2023. Table 5.4.
\604\ Ibid. Section 5.B, page 107.
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In addition, the off-cycle credits were initially small relative to
the average fleet emissions and standards. For example, in the 2012
rule, EPA established menu credits of up to 10 g/mile, a relatively
small value compared to a projected fleet-wide average compliance value
of about 243 g/mile in MY 2016 phasing down to 163 g/mile in MY
2025.\605\ Across the MY 2016-2025 program, therefore, EPA projected
menu credits would be about 4 percent to 6 percent of the standard.
Now, EPA is finalizing standards that will reduce fleet average
emissions to a projected 85 g/mile and therefore off-cycle credits
would become an outsized portion (e.g., up to 12 percent) of the
program if they were retained in their current form. One concern is
that there is not currently a mechanism to check that off-cycle
technologies provide emissions reductions in use commensurate with the
level of the credits the menu provides. This is becoming more of a
concern as vehicles become less polluting overall. The menu credits are
based on MY 2008 vintage engine and vehicle baseline technologies
(assessed during the 2012 rule) and therefore the credit levels are
potentially becoming less representative of the emissions reductions
provided by the off-cycle technologies as vehicle emissions are
reduced. Some stakeholders have also become increasingly concerned that
the emissions reductions reflected in the off-cycle credits may not be
being achieved, as also expressed by some stakeholders in the public
comments on the proposal.\606\ Also, details such as the synergistic
effects and overlap among off-cycle technologies take on more
importance as the credits represent a larger portion of the emissions
reductions. During the 2021 rulemaking to revise the MY 2023-2026
standards, EPA received comments that due to the potential for loss of
GHG emissions reductions, the off-cycle program should be further
constrained, or discontinued, or that a significantly more robust
mechanism be implemented for verifying purported emissions reductions
of off-cycle technologies. The potential for a loss of GHG emissions
reductions could become further exacerbated as the standards become
more stringent.\604\
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\605\ 77 FR 62641.
\606\ ``Revised 2023 and Later Model Year Light-Duty Vehicle
Greenhouse Gas Emission Standards: Response to Comments,'' Chapter
8, EPA-420-R-21-027, December 2021.
---------------------------------------------------------------------------
Initially, EPA addressed the uncertainty surrounding the precise
emissions reductions from equipping vehicle models with off-cycle
technologies by making the initial credit values conservative, but the
values may no longer be conservative, and may even provide more credits
than appropriate for later MY vehicles. Because off-cycle credits
effectively displace two-cycle emissions reductions, EPA has long
strived to ensure that off-cycle credits are based on real-world
reductions and do not result in a loss of emissions reductions overall.
EPA received
[[Page 27923]]
comments in past rules that it should revise the program to better
ensure real-world emissions reductions.\604\ However, EPA has learned
through its experience with the program to date that such
demonstrations can be exceedingly challenging. At this time, EPA has
not identified a single robust methodology that can provide sufficient
assurance across potential off-cycle technologies due to the wide
variety of off-cycle real world conditions over which a potential
technology may reduce emissions. EPA does not have a methodology that
would provide such assurance across a range of technologies, nor did
commenters provide suggestions on such a methodology. Finally, while
the off-cycle program provides an incentive for off-cycle emissions
reduction technologies, it does not include full accounting of off-
cycle emissions. Vehicle equipment such as remote start and even roof
racks added at the dealership may well increase off-cycle emissions.
For all of these reasons, EPA's final rule de-emphasizes the role of
off-cycle credits in the future and the credits will be phased out over
time, with the program ending altogether in MY 2033 as described above.
7. Treatment of PEVs and FCEVs in the Fleet Average
In the 2010 rule, for MYs 2012-2016, EPA measured compliance based
on tailpipe emissions for the electric-only portion of operation of
BEVs/PHEVs/FCEVs up to a per-company cumulative production cap.\607\ As
originally envisioned in the 2012 rule, starting with MY 2022, the
compliance value for BEVs, FCEVs, and the electric portion of PHEVs in
excess of individual automaker cumulative production caps would be
based in part on net upstream emissions accounting (i.e., EPA would
attribute a pro rata share of national CO2 emissions from
electricity generation to each mile driven under electric power minus a
pro rata share of upstream emissions associated with from gasoline
production). The 2012 rule would have required net upstream emissions
accounting for all MY 2022 and later electrified vehicles. However, in
the 2020 rule, prior to upstream accounting taking effect for any
automaker, EPA revised its regulations to extend the practice of basing
compliance on tailpipe emissions for all vehicle and fuel types through
MY 2026 with no production cap.
---------------------------------------------------------------------------
\607\ 75 FR 25234 (May 7, 2010). As discussed elsewhere in this
preamble, in addition to measuring tailpipe emissions for
compliance, EPA has adopted credit programs for ``off-cycle'' and A/
C, which reflect emissions that are not captured on the compliance
test cycles.
---------------------------------------------------------------------------
In this rule, EPA is making the current treatment of PEVs and FCEVs
through MY 2026 permanent, as proposed. EPA is including only emissions
measured directly from the vehicle in the vehicle GHG program for MYs
2027 and later, consistent with the treatment of all other vehicles.
For purposes of measuring compliance with tailpipe emissions standards,
emissions from electric vehicle operation will be measured based on
tailpipe emissions. Vehicles with no IC engine (i.e., BEVs and FCEVs)
will be counted as 0 g/mile in compliance calculations, while PHEVs
will apply the 0 g/mile factor to electric-only vehicle operation (see
also section III.C.8 of the preamble for EPA's treatment of
PHEVs).\608\ The program has now been in place for a decade, since MY
2012, with no upstream adjustments to tailpipe compliance calculations.
EPA originally proposed using upstream emissions in PEV compliance
calculations at a time when there was little if any regulation of
stationary sources for GHGs, and noted at the time this was a departure
from its usual practice of relying on stationary source programs to
address pollution risks from stationary sources.\609\ In the 2020 rule,
EPA extended 0 g/mile in part because power sector emissions were
declining and the trend was projected to continue and stated ``EPA
agrees that, at this time, manufacturers should not account for
upstream utility emissions.'' \610\ As noted elsewhere, power sector
emissions are expected to decline significantly in the future. EPA
continues to believe that it is appropriate for any vehicle which has
zero tailpipe emissions to use 0 g/mile as its compliance value.\611\
This approach of looking only at vehicle emissions and letting
stationary source GHG emissions be addressed by separate stationary
source programs is consistent with how the compliance value for every
other motor vehicle is calculated. EPA notes that emissions from
stationary sources under CAA title I are regulated under an entirely
different statutory scheme than mobile sources under CAA title II and
the upstream adjustment EPA originally adopted would make the
compliance test results of BEVs depend in part on factors entirely
beyond the control of BEV manufacturers (i.e., the carbon emissions and
transmission efficiency of the electricity grid, as compared to
emissions of the refinery sector). Moreover, if EPA deviated from this
tailpipe emissions approach by including upstream accounting, it is
unclear why it would be appropriate to do so for BEV but not for all
vehicles, including gasoline-fueled vehicles. Put more concretely, EPA
does not think it is appropriate to subject vehicle manufacturers to a
compliance scheme that effectively requires them to account for
emissions arising from factors as diverse as the extraction of coal,
natural gas, and crude oil; crude oil refining; electricity generation;
electricity transmission; and wholesale and retail distribution of
gasoline. These factors reinforce EPA's conclusion that the appropriate
basis for measuring compliance with engine and vehicle standards
promulgated under CAA 202 are emissions from vehicles and engines. EPA
notes that while upstream emissions are not included in vehicle
compliance determinations, which are based on direct vehicle emissions,
upstream emissions impacts from fuel production at refineries and
electricity generating units are considered in EPA's analysis of
overall estimated emissions impacts and projected benefits, as detailed
in section VIII of this preamble.
---------------------------------------------------------------------------
\608\ EPA notes that in our regulations governing the emissions
testing of light-duty vehicles there is a statement that
manufacturers of BEVs need not submit test data, and ``[t]ailpipe
emissions of regulated pollutants from vehicles powered solely by
electricity are deemed to be zero.'' 40 CFR 86.1829-15(f). EPA
adopted this provision in recognition of the fact that requiring BEV
manufacturers to undertake emissions testing of their vehicles would
be an unreasonable burden, precisely because it is well-established
that every BEV will have zero tailpipe emissions.
\609\ 75 FR 25434.
\610\ 85 FR 25208.
\611\ See Section IV.C.3 of this preamble for a full discussion
of power sector emissions projections.
---------------------------------------------------------------------------
8. PHEV Utility Factor
i. Final Fleet Utility Factor
A fleet utility factor provides a means of accounting for a PHEV's
operation using electricity, known as the charge depleting mode, with
respect to the total mileage that a PHEV travels. The distance traveled
by a PHEV driver in charge depleting mode is dependent on two
significant factors. The first is the size or capacity of the battery.
Typically, a PHEV with a larger battery will have greater charge
depleting range, all other vehicle attributes equal. The second
important factor is the driver's propensity to charge the battery. SAE
J2841 states explicitly that the UF represented in the SAE standard
assumes that a PHEV is fully charged at least once per day. Recent data
and literature have identified that the current utility factor curves
overestimate the fraction of driving that occurs in charge depleting
operation. Vehicle operators are not charging their
[[Page 27924]]
vehicles often enough, and/or are operating them in a manner that
results in substantially less charge depleting operation and greater
CO2 emissions as compared to the current PHEV compliance
procedure. This literature also concludes that vehicles with lower
charge depleting ranges have even greater discrepancy between the
compliance procedure and actual CO2 emissions.
EPA is finalizing its proposed change to the light-duty vehicle
PHEV Fleet Utility Factor (FUF) curve used in CO2 compliance
calculations for PHEVs but delaying its implementation in recognition
of the benefits of providing additional lead time for manufacturers to
adjust to this change. The current SAE J2841 FUF curve and the
finalized FUF curve are shown in Figure 11.
[GRAPHIC] [TIFF OMITTED] TR18AP24.010
Figure 11: SAE J2841 FUF and Finalized FUF (Fleet Utility Factor) for
PHEV Compliance
EPA received many comments regarding the proposed change to the
PHEV fleet utility factor (FUF). Many NGOs and state air organizations
supported a change to the fleet utility factor based on the available
data, third party analyses, and EPA's analysis. These commenters noted
that the current SAE J2841-based utility factor provides too much
credit because actual CO2 emissions from PHEVs are much
higher than estimated in the current compliance calculation. The NGOs
also believe that the continued application of the SAE UF could result
in inaccurate and lower accounting of CO2 emissions for
PHEVs than in-use data indicates, thereby allowing manufacturers to
delay application of additional CO2-reducing technologies.
These commenters also noted that the current PHEV data supports a
utility factor much lower than that proposed. Several NGOs and the
California Air Resources Board recommended that EPA adopt a lower
utility factor than the one proposed, based on the available data.
In contrast, the Alliance for Automotive Innovation (AAI) and
several of its member companies recommended that EPA retain the current
SAE J2841-based utility factor. The comments from industry noted the
importance of PHEVs as a bridge technology to BEVs. These commenters
hypothesized that future PHEVs would be operated in a manner better
reflected by the SAE-based UF, based on their projections that future
PHEVs will have increased range and power, as the result of the CARB's
ACC II requirements, and that future expansions of charging
infrastructure and increasing consumer familiarity with PHEVs will lead
to consumers charging PHEVs more frequently. In addition, AAI and some
of the vehicle manufacturers commented on the quality of the data used
to support the proposed PHEV FUF, the California Bureau of Automotive
Repair (BAR) data, and the analytical methods that EPA applied, for
example, stating the data set was not statistically significant and not
a valid representation of current or future PHEV activity. Industry and
academic commenters also commented that the data set was skewed towards
vehicles that had recently relocated to the state of California that
had potentially been operated over long distances without charging.
Several commenters also believed that the proposed FUF was not a better
representation of the PHEV FUF as compared to the SAE J2841-based FUF
and should therefore not be finalized. Finally, AAI, vehicle
manufacturers and an academic coalition recommend that if a new FUF is
appropriate, then instead of finalizing a revised FUF in this rule, EPA
should work collaboratively with the Department of Transportation,
Department of Energy, Society of Automotive Engineers, and vehicle
manufacturers to develop an alternative.
EPA carefully considered all the comments we received in response
to the proposed revised FUF. In addition, and as noted below, we have
received an updated set of data from BAR representing an additional
year of PHEV activity. Also, in response to comments received, we
duplicated and expanded the statistical analysis of all the available
data to address the technical analysis concerns raised in comments.
EPA agrees with commenters on the importance of PHEVs as a
technology that might be best suited to meet the needs of some
consumers, particularly over the timeframe of this rulemaking. PHEVs
have the potential to reduce vehicle GHG emissions, but the degree to
which that potential is realized depends on whether they are charged
[[Page 27925]]
and operating on electricity. EPA's goal is to apply a fleet utility
factor which accurately accounts for PHEV greenhouse gas emissions. SAE
J2841 states explicitly that the UF represented in SAE standard assumes
that a PHEV is fully charged at least once per day. Recent literature
\612\ and data have identified that the current utility factor curves
overestimate the fraction of driving that occurs in charge depleting
operation. This literature also concludes that vehicles with lower
charge depleting ranges have even greater discrepancy in CO2
emissions.
---------------------------------------------------------------------------
\612\ Aaron Isenstadt, Zifei Yang, Stephanie Searle, John
German. 2022. ``Real world usage of plug-in hybrid vehicles in the
United States,'' https://theicct.org/publication/real-world-phev-us-dec22/, ICCT.
---------------------------------------------------------------------------
While EPA used BAR data from October 2022 \613\ for the NPRM, an
additional year of data was available to inform this FRM. In November
2023 \614\ OBD datasets were made available for EPA to analyze. EPA
found that the expanded data set confirms that, on average, there are
more charge sustaining miles traveled and more gasoline miles traveled
than are predicted by the current SAE J2841 FUF (Fleet Utility Factor)
curves.\615\ The BAR OBD data enables the evaluation of real-world PHEV
distances traveled in various operational modes; these include charge-
depleting engine-off distance, charge-depleting engine-on distance,
charge-sustaining engine-on distance, total distance traveled, odometer
readings, total fuel consumed, and total grid energy inputs and outputs
of the battery pack. These fields allow us to filter the BAR OBD data
and calculate real-world driving FUFs (ratios of charge depleting
distance to total distance) and to then compare to the existing SAE
J2841 FUFs as calculated and applied in EPA's GHG emissions
certification using the 2-cycle charge depleting range values.\616\
Although we have reached a similar conclusion to other studies that
have been conducted to evaluate PHEV utility, the BAR data has allowed
EPA to analyze PHEV utility specifically on distance traveled in each
mode as recorded by the vehicle itself, using recording strategies
required by CARB and implemented by the vehicle manufacturers. In
addition, the integrity of the data recorded by the vehicles is subject
to CARB's regulatory enforcement. Other studies 617 618
regarding PHEV utility have attempted to calculate distance traveled in
each mode using energy and fuel consumption or the labeled values.
Because energy and fuel consumption can vary greatly based on operating
and environmental conditions distance calculations can also vary, EPA
did not rely on these types of analyses to inform this final rule.
---------------------------------------------------------------------------
\613\ California Air Resource Board [OBD data records]. 2022.
October. https://www.bar.ca.gov/records-requests.
\614\ California Air Resource Board [OBD data records]. 2023.
November. https://www.bar.ca.gov/records-requests.
\615\ EPA finds that the additional data provides confirmation
that the current UF is overstating CD miles.
\616\ The existing regulatory FUFs are separate city and highway
curves, and the charge depleting ranges that are used with the city
and highway FUF curves are 2-cycle range.
\617\ Patrick Pl[ouml]tz et al, ``From lab-to-road: real-world
fuel consumption and CO2 emissions of plug-in hybrid electric
vehicles,'' 2021 Environ. Res. Lett. 16 054078.
\618\ Patrick Pl[ouml]tz et al 2023, ``Corrigendum: From lab-to-
road: real-world fuel consumption and CO2 emissions of plug-in
hybrid electric vehicles (2021 Environ. Res. Lett.16054078),''
Environ. Res. Lett. 18 099502.
[GRAPHIC] [TIFF OMITTED] TR18AP24.011
Figure 12: FUF Finalized, and SAE J2841 FUF Curves on 2-Cycle Combined
GHG Emission-Certified CD Range
Figure 12 shows an overlay of points from the BAR data,
representing individual vehicle models, together with the current and
final FUF curves from Figure 11, labeled ``SAE J2841 FUF'' and ``FUF
finalized'', respectively. The finalized FUF curve represents a modest
change of about 11 percent from SAE J2841 FUF curve.
EPA's assessment of the updated BAR data, consistent with our
analysis of the BAR data used for the NPRM, is that the current FUF
based on SAE J2841 lies above the vast majority of charge depleting
operation of current PHEV models and associated activity. While it may
be that an even lower curve than we are finalizing might more
appropriately reflect current real-world usage, based on our updated
analysis and comments received, EPA is
[[Page 27926]]
finalizing the proposed curve to reflect anticipated usage patterns in
future model years. Our updated analysis, summary of the comments
received, and how EPA considered those comments is outlined below.
First, the agency determined that a curve shape with a generally
increasing slope and which asymptotically approaches its upper limit is
appropriate. Specifically, the BAR data clearly supports EPA's, and
SAE's, conclusion that the potential for greater charge depleting
operation increases as a function of a PHEV's estimated charge
depleting range. At the same time, it is reasonable to conclude that
increases in FUF should diminish continuously as range increases in
value (i.e. approaches an upper asymptote), since any other assumption
would result in FUF values eventually exceeding the physical limit of
FUF equal to 1. For these reasons, EPA has chosen to maintain the basic
form of the SAE J2841 equation to define the final FUF curve.
Second, having determined the appropriate shape of the curve, EPA
has chosen a position of the curve (along the FUF-axis, vertically)
that appropriately balances the evidence from the typical use of PHEV's
today with the consideration of factors that are expected to increase
charge depleting operation in the future. Several vehicle manufacturers
and the Alliance for Automotive Innovation (AAI) asserted that ``growth
in charging infrastructure coupled with higher capability PHEVs means
that the current utility factor will be representative for future PHEVs
and should remain unchanged.'' \619\ In addition, AAI noted that
``EPA's proposed PHEV cold start requirement encourages more all-
electric operation. Further CARB requires a minimum 70-mile combined
city and highway and 40-mile US06 all-electric range starting in MY
2029. These requirements force all new PHEVs under development to be
highly capable.'' \620\ While EPA disagrees that there is any
compelling evidence that typical PHEVs in the future will reach the SAE
J2841 level of charge depleting operation, we do see evidence in the
BAR data where PHEVs with higher charge depleting driving capability
and power tend to have higher FUF than typical PHEVs in use today. EPA
observed that vehicles with higher demonstrated charge depleting
operation in the BAR data tended to also have higher electric drive
capability. The shaded points in Figure 12 represent vehicles that are
more likely typical of future PHEV designs and strongly influenced
EPA's determination of the position of the final curve. As noted below,
this conclusion is supported by comments received.
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\619\ Comments of Alliance for Automotive Innovation at 107
(Docket ID EPA-HQ-OAR-2022-0829-0701).
\620\ California Air Resource Board, ``Advanced Clean Cars II,''
Accessed on February 16, 2024 at https://ww2.arb.ca.gov/our-work/programs/advanced-clean-cars-program/advanced-clean-cars-ii.
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EPA also recognizes that charging infrastructure is expected to
become more widely available, and vehicle manufacturers can have a
significant influence on PHEV operation through increased customer
understanding of PHEV technology, supportive infrastructure, such as
assistance in home charging installation and manufacturer provided
charging cables, advertising which focuses on PHEV technology and
internet resources, such as instructional videos and FAQ's, that help
their customers maximize their vehicle's all electric operation and
reduce GHG emissions. Because the current SAE utility factor assumes
that PHEVs are fully charged once per day, manufacturers may have had
less motivation to ensure that their customers were completely familiar
with PHEV technology or that the customers had access to the
appropriate infrastructure. While the data on current PHEV activity
could support further revisions to the fleet utility factor, EPA is
setting a FUF for future model years based on our expectations about
charging and PHEV performance that will occur in those future years. We
are also taking into consideration the views of automakers that the
improvements they anticipate in product design (such as range),
consumer education and awareness, and charging convenience with
expanded infrastructure will result in PHEV activity that is similar to
the finalized FUF. In light of manufacturer plans to improve PHEV
technology and the potential for improved customer knowledge and
infrastructure, EPA is finalizing the PHEV fleet utility factor as
proposed.
At the same time, EPA is committed to an ongoing evaluation of
future PHEV FUF data to assess whether the revised FUF is in fact
adequately representative of future PHEV operation, as a result of
future PHEV designs and consumer charging behavior, or if there is
merit in further adjusting the FUF. EPA will take a multipronged
approach to monitor, assess and, if warranted, potentially adjust the
FUF through a future rulemaking action. First, EPA will continue to
gather and monitor publicly available data such as that made available
by California BAR. EPA will also collect, and monitor data extracted
from available in-use PHEV testing and may further supplement the data
set through other data gathering mechanisms, such as work done by the
Department of Energy or independent contractors and researchers.
Although vehicle manufacturers chose not to submit data as part of
their public comments, EPA believes that with additional time it is
reasonable to project that vehicle manufacturers can gather the same
type of data, and in greater quantities, on their own PHEV models than
available to EPA through the California BAR; we encourage auto
manufacturers to share such data with EPA to inform this future
assessment. Thus, second, EPA encourages researchers and other
stakeholders, including manufacturers, to supplement the publicly
available data by providing data directly to EPA for inclusion in an
updated analysis. These first and second steps will form the basis for
an assessment of how well future PHEV activity is represented by the
FUF established in this final rule, and whether there is merit for
proposing adjustments through a future rulemaking. Finally, EPA will
engage with stakeholders to share results of our assessments, and to
hear from stakeholders who may have their own data and analysis to
share, for example, through public forums. If EPA determines that
changes to the FUF are warranted, we will engage with stakeholders on
technical details such as the shape of the FUF curve and the
appropriate timing for its implementation. Stakeholders will also be
encouraged to independently assess the publicly available data and
provide individual conclusions. This process could also be an
opportunity for stakeholders to provide input on changes to additional
future program elements (for example, the possibility for manufacturers
to submit data directly to EPA as part of the compliance process to a
inform model level specific FUF). If such evaluation were to support a
proposed revision to the FUF, EPA could initiate a future rulemaking to
revise the FUF for MY 2031.
Furthermore, at the time of this final rule, MY 2025 vehicle
production has already commenced. This means that manufacturers have
approximately two years of lead time to address the revised standards
and provisions finalized in this final rule. While lead time is
addressed in many ways throughout this rulemaking, such as the year
over year change in emission standard stringency and extensions of the
phase-down of off-cycle and air conditioning leakage
[[Page 27927]]
credits, we recognize that a fundamental change to the compliance
methodology for any single technology in as little as two years could
be significantly disruptive to some vehicle manufacturers' current
compliance plans. Several auto manufacturers commented that the
proposed revised PHEV utility factor would impact product planning and
the overall emission reductions projected for their fleets to meet the
standards. We also understand that several vehicle manufacturers have
already made significant investments in PHEV technology and are relying
on PHEVs as an important portion of their GHG compliance strategy.
Without adequate time to adjust their product plans to the revised
compliance values for PHEVs under the revised utility factor, and to
plan for additional GHG-reducing technologies to ensure adequate
additional emissions reductions to meet the standards, the revised FUF
may disproportionately impact those manufacturers planning large
volumes of PHEVs as compared to manufacturers who are not relying as
heavily on PHEV technology. To mitigate such a potential impact and to
address concerns about adequacy of lead time for the early years of the
program, we are delaying the application of the revised FUF until MY
2031. EPA believes that the revising the FUF in MY 2031 will provide
vehicle manufacturers adequate lead time for product development and
product plan adjustments, given that the average vehicle redesign cycle
is approximately five years.
ii. Consideration of CARB ACC II PHEV Provisions
CARB recently set minimum performance requirements for PHEVs in
their ACC II program. These requirements include performance over the
US06 test cycle and a minimum range and are meant to set qualifications
for PHEVs to be included in a manufacturer's ZEV compliance. EPA
received comments that it should adopt ACC II for PHEVs. ACC II is a
suite of emissions standards that includes a ZEV mandate and other
tools EPA is not using in this rule and it would not be appropriate to
take only the PHEV portions of ACC II. EPA is not adopting the range
and US06 performance requirements or fleet penetration limits that are
included in the CARB ACC II ZEV provisions. EPA agrees that PHEVs
meeting the performance provisions required by CARB in ACC II have the
potential to provide greater environmental benefits as compared to
other PHEVs that are less capable. However, unlike the ACC II program,
the GHG program in this rulemaking is performance-based and not a ZEV
mandate. In that regard, EPA believes that it is appropriate to have a
robust GHG compliance program for PHEVs that properly accounts for
their GHG emissions independent of a PHEV's range or capability over
the US06 test cycle. We are addressing the issue of ensuring
appropriate GHG compliance values for PHEVs through the revised PHEV
fleet utility factor as described in section III.C.8 of this preamble;
EPA is not adopting design requirements for PHEVs, that is, we are not
adopting minimum range requirements or specifying minimum capability
over any prescribed test cycles.
9. Small Volume Manufacturer GHG Standards
EPA's prior light-duty GHG program included unique provisions for
small volume manufacturers (SVMs), defined as manufacturers with annual
U.S. sales of less than 5,000 vehicles per year. In the 2012 rule, EPA
adopted regulations allowing SVMs to petition EPA for alternative
standards, recognizing the unique challenges SVMs could face in meeting
the primary program standards in the timeframe of the MY 2017-2025
standards. There are currently four SVMs who have applied for, and been
approved, less stringent, alternative standards: Aston Martin, Ferrari,
Lotus, and McLaren.\621\
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\621\ See 85 FR 39561, July 1, 2020.
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EPA believes it is appropriate to transition away from unique SVM
standards and bring SVMs into the primary program. Although in the 2012
rule EPA provided SVMs with the opportunity to comply with
manufacturer-specific standards which are substantially less stringent
than the primary program, in EPA's judgment, developments in both the
vehicles market and the market for credits warrants a transition for
these manufacturers to the primary compliance program. When EPA
established the SVM alternative standards option in the 2012 rule,
certain legacy ICE technologies were the primary CO2 control
technologies and there was limited access to more advanced control
technologies, particularly for luxury, high-performance, and certain
other lower production volume vehicles. As discussed in the proposal,
the landscape has fundamentally changed. Today, many larger
manufacturers are already implementing more advanced technologies,
including electrification technologies, across many vehicle types
including both luxury and high-performance vehicles by larger
manufacturers, and EPA expects this trend to continue. EPA believes
that meeting the CO2 standards is becoming less a
feasibility issue and more a lead time issue for SVMs. Also, the credit
trading market has become more robust since we initially established
the SVM unique standards provisions. Now that it has, we would expect
SVMs to be able to seek credit purchases as a compliance strategy
option should they elect to do so.\622\ As electrification technologies
become more widespread and commonly used, EPA believes there is no
reason SVMs cannot adopt similar technological approaches with enough
lead time (or purchase credits or technology from other OEMs).\623\
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\622\ ``The 2022 EPA Automotive Trends Report, Greenhouse Gas
Emissions, Fuel Economy, and Technology since 1975,'' EPA-420-R-22-
029, December 2022.
\623\ https://ir.lucidmotors.com/news-releases/news-release-details/lucids-world-leading-electric-powertrain-technology-propels.
---------------------------------------------------------------------------
As a reasonable way to transition SVMs into the primary program,
EPA is finalizing a phase-in schedule over MYs 2027 to 2031 that will
require SVMs to comply with primary program standards, but with
additional years of lead time compared to larger volume manufacturers
and compared to the proposed schedule for SVMs.\624\ After this phase-
in schedule, for MYs 2032 and later, SVMs will meet the primary program
standards--that is, the same standards that apply to larger volume
OEMs. EPA had proposed to have the phase-in to the primary program
standards start with MY 2025, with the MY 2023 primary program standard
applying for MYs 2025 and 2026. SVMs commented expressing concerns that
beginning the phase-in to primary program standards in MYs 2025-2026
did not provide sufficient lead time. EPA acknowledges that MY 2025 may
have already begun, and that MY 2026 may begin as early as January 2,
2025, approximately 9 months from the date of this final rule. In
response to these comments, EPA believes it is appropriate to extend
the SVM alternative standards established in MY 2021 through MY 2026,
instead of through MY 2024 as proposed. Specifically, EPA is finalizing
that SVM alternative standards established for MY 2021 will apply
through MY 2026 to provide the requested stability for SVMs so that
SVMs have an opportunity to reduce their GHG emissions in future years.
This schedule provides a total of an additional five years of stability
for the SVMs to transition from their
[[Page 27928]]
existing MY 2021 standards into delayed primary program standards after
MY 2026. Starting in MY 2027, SVMs will meet primary program standards
albeit with additional lead-time. As shown in Table 32, EPA is
finalizing that SVMs will meet the primary program standards for MY
2025 in MY 2027, providing an additional two years of lead time as
compared to larger volume manufacturers. EPA is also establishing a
period of stability (keeping the standards at MY 2021 levels for MY
2021 through MY 2026) rather than year-over-year incremental reductions
in the standards levels for SVMs which was 3 percent per year in their
previous individual standards for MY 2017 to MY 2021. SVMs have fewer
vehicle models over which to average, and EPA believes a staggered
phase down in standards with a period of stability, and the opportunity
to generate additional credits, between the steps is reasonable. As
shown in Table 32, EPA is establishing a delayed schedule for SVMs to
meet the primary program standards, until SVMs are required to meet the
final MY 2032 standards in MY 2032. EPA did not reopen the eligibility
requirements for the SVM standards currently in the regulations for SVM
alternative standards and SVMs will need to remain eligible to use
these provisions.\625\
---------------------------------------------------------------------------
\624\ See 40 CFR 86.1818-12(h) for the primary program standards
through MY 2026.
\625\ See 40 CFR 86.1818-12(g).
Table 32--Additional Lead Time for SVM Standards Under the Primary
Program
------------------------------------------------------------------------
Primary
program Years of
Model year standards additional
that apply lead time
------------------------------------------------------------------------
2027.................................... 2025 2
2028.................................... 2025 3
2029.................................... 2027 2
2030.................................... 2028 2
2031.................................... 2030 1
2032 and later.......................... 2032 0
------------------------------------------------------------------------
This additional lead time approach is similar to the approach EPA
used in the 2012 rule to provide additional lead time to intermediate
volume manufacturers.\626\ As with the intermediate volume manufacturer
temporary lead time flexibility, EPA believes that the additional lead
time for SVMs will be sufficient to ease the transition to more
stringent standards in the early years of the program that could
otherwise present a difficult hurdle for them to overcome. The
alternative phase-in will provide additional lead time for SVMs to
better plan and implement the incorporation of CO2 reducing
technologies and/or provide time needed to seek and secure credits from
other manufacturers, if they so choose, to bring them into compliance
with the primary standards.
---------------------------------------------------------------------------
\626\ 77 FR 62795.
---------------------------------------------------------------------------
Importantly, SVMs will continue to remain eligible to use the ABT
5-year credit carry-forward provisions, allowing SVMs to bank credits
in these intermediate years to further help smooth the transition from
one step change in the standards to the next. EPA is, however,
prohibiting any SVM opting to use the additional lead time allowance
from trading credits generated under the additional lead time standards
to another manufacturer. These credit provisions are already in place
as part of the current SVM alternative standards, and EPA did not
reopen them in this rulemaking. EPA believes that credit banking along
with the staggered phase down of the standards will help SVMs meet the
standards, recognizing that they have limited product lines. As with
the SVM alternative standards, SVMs will have the option of following
the additional lead time pathway with credit trading restrictions or
opt into the primary program with no such restrictions. Once opted into
the primary program, however, manufacturers will no longer be eligible
for the alternative standards.
Environmental and public health organizations commented in support
of our approach for phasing the SVMs into the primary program. They
agreed with EPA's conclusions that transitioning SVMs into the primary
program is consistent with the recent announcements and developments in
the business models of the SVMs who have previously been approved less
stringent standards.
EPA received comments from the SVMs opposing changes to the
alternative standards approach, based on what they view as challenges
in their ability to average across limited product lines, access to
technology, limited volumes, and their position in the market compared
to larger OEMs. EPA has carefully considered these comments and has
concluded that it is appropriate to provide SVMs an extended phase in
before meeting the standards of the primary program.
SVMs commented that they would not be able to comply without the
purchase of credits and that they felt there was uncertainty in
purchasing credits and that it was unfair to have a standard that, in
their view, required the purchase of credits. EPA notes that it has
modeled reasonable compliance paths for the SVMs. EPA has also modeled
a ``no credit trading'' scenario which identifies a reasonable
compliance path for the SVMs even if no automaker is willing to sell
credits, a situation which we consider very unlikely to occur
(especially in light of the surplus credits generated by EV-only
manufacturers). EPA views these modeling results as confirmatory of,
but not necessary to, our judgment that the standards are feasible and
appropriate for SVMs, and we also note that these compliance paths were
modeled under the conservative assumption that SVMs must meet the final
standards without any additional lead time allowance. EPA also notes
that the current regulatory structure offers SVMs substantial
compliance flexibilities. SVMs have alternative standards for MY 2021
of between 308 and 377 g/mile, well above the primary program
standards.\627\ In addition, EPA is maintaining the MY 2021 alternative
standards for 5 years to enable SVMs to bank credits. EPA notes the
increasing market for luxury and high-performance vehicles with more
advanced control technologies, including the electrified technologies
already applied by some manufacturers, and judges that that the final
standards are feasible and appropriate for SVMs in light of the
combination of additional lead time, the
[[Page 27929]]
opportunity to bank additional credits as compared to the alternative
standards and, if necessary, the opportunity to purchase credits.
History has shown that SVMs can purchase credits when needed, as EPA's
compliance data confirms that such transactions have occurred. As
discussed elsewhere in this preamble, GHG credit trading is also
currently happening between large OEMs, and the existence of BEV-only
manufacturers, with anticipated increased future BEV volumes, provides
further assurance that the market is available, if needed.
---------------------------------------------------------------------------
\627\ See 85 FR 39561, July 1, 2020. For comparison, the maximum
footprint target for any passenger car in MY 2021 under the primary
program is 215 g/mile.
---------------------------------------------------------------------------
D. Criteria Pollutant Emissions Standards
EPA anticipates that internal combustion engine (ICE) vehicles will
be a significant part of new vehicle sales for years to come. As the
vehicle fleet ages, ICE-based vehicles will remain in-use throughout
the analysis period for this final rule with an estimated 84 percent of
the light- and medium-duty fleet continuing to burn fossil fuel in
calendar year 2032 (see Chapter 8.2 of the RIA). EPA intends for its
criteria pollutant emissions standards program to continue to obtain
feasible and significant reductions in criteria pollutant \628\
emissions and mobile source air toxics, while also ensuring that
vehicles do not backslide on existing emissions control achievements.
---------------------------------------------------------------------------
\628\ In this notice, EPA is using ``criteria pollutants'' to
refer generally to criteria pollutants and their precursors,
including tailpipe NMOG, NOX, PM, and CO, as well as
evaporative and refueling HC.
---------------------------------------------------------------------------
EPA is finalizing changes to criteria pollutant emissions standards
for both light-duty vehicles and medium-duty vehicles \629\ (MDV).
These criteria pollutant standards are referred to as Tier 4 standards
below. The light-duty vehicle standards apply to LDV, light-duty trucks
(LDT), and medium-duty passenger vehicles (MDPV) \630\, while the MDV
standards apply to class 2b and 3 vehicles. For both light-duty
vehicles and MDV, NMOG+NOX bin structure, -7[deg]C
NMOG+NOX, PM, CO, formaldehyde (HCHO), -7[deg]C CO, and
NMOG+NOX provisions aligned with the CARB Advanced Clean
Cars II program phase-in over a period of time. The phase-in structure
is described in section III.D.1 of this preamble.
---------------------------------------------------------------------------
\629\ Although we have established light-duty and medium-duty
vehicle programs, according to size, weight and function of
vehicles, we recognize that all vehicles with weight over 6,000 lb
are considered ``heavy-duty vehicles'' for purposes of section
202(a)(3), and we have revised the criteria pollutant standards for
these vehicles consistent with that provision.
\630\ MDPV have GVWR of MDV (8501 to 14,000 pounds) but are
designed primarily for the transportation of people and follow
light-duty vehicle standards. See Section III.E of the preamble for
the Tier 4 definition of MDPV.
---------------------------------------------------------------------------
For light-duty vehicles, EPA is finalizing more protective
NMOG+NOX standards in the form of a MY 2027-2032 declining
fleet average for LDV and LDT1-2, the same declining fleet average for
LDT3-4 and MPDV in the ``early'' compliance program, or alternatively,
a single step down in MY 2030 for LDT3-4 and MPV in the ``default''
program. The revisions also include the elimination of higher
certification bins, a requirement for the same fleet average emissions
standard to be met across four test cycles (25[deg]C FTP, HFET, US06,
SC03), a change from a fleet average NMHC standard to a fleet average
NMOG+NOX standard in the -7[deg]C FTP test, and three
NMOG+NOX provisions aligned with the CARB Advanced Clean
Cars II program. Details are discussed in sections III.D.2 and III.D.7
of this preamble.
NMOG+NOX changes for MDV include a fleet average that
steps down in MY 2031 in the default program or declines from MYs 2027-
2033 in the early compliance program, the elimination of higher
certification bins, a requirement for the same fleet average emissions
standard to be met across four test cycles (25[deg]C FTP, HFET, US06,
SC03), and a new fleet average NMOG+NOX standard in the -
7[deg]C FTP. EPA is also finalizing in-use standards for spark ignition
and compression ignition MDV with GCWR above 22,000 pounds that are
consistent with MY 2031 and later California chassis-certified MDV in-
use emissions standards.\631\ NMOG+NOX standards and other
related provisions are discussed in sections III.D.2 and III.D.5 of
this preamble.
---------------------------------------------------------------------------
\631\ California Environmental Protection Agency, Air Resources
Board. Part 1, Section I.4. California Provisions: Certification and
In-Use testing requirements for chassis certified Medium-Duty
Vehicles (MDV) with a Gross Combination Weight Rating (GCWR) greater
than 14,000 pounds, using the Moving Average Window (MAW).
``California 2026 and Subsequent Model Year Criteria Pollutant
Exhaust Emission Standards and Test Procedures for Passenger Cars,
Light-Duty Trucks, and Medium-Duty Vehicles.'' August 25, 2022.
---------------------------------------------------------------------------
EPA is finalizing a PM standard of 0.5 mg/mile for light-duty
vehicles and MDV that must be met across three test cycles (-7[deg]C
FTP, 25[deg]C FTP, US06), a requirement for PM certification tests at
the test group level, and a requirement that every in-use vehicle
program (IUVP) test vehicle is tested for PM. The 0.5 mg/mile standard
is a per-vehicle cap, not a fleet average. (Note that EPA discusses
later in this section the background and history of per-vehicle cap
standards and fleet-average standards). There are some differences in
the final program from what was originally proposed, including the
provision of additional lead time through a more gradual phase-in.
Details are provided in section III.D.3 of this preamble.
EPA is finalizing CO and HCHO emissions requirement changes for
light-duty vehicles and MDVs including transitioning to emissions caps
(as opposed to bin-specific standards), a requirement that CO emissions
caps be met across four test cycles (25[deg]C FTP, HFET, US06, SC03),
and a CO emissions cap for the -7[deg]C FTP that is the same for all
light-duty vehicles and MDVs. There are changes to the requirements
from what was proposed. Details are provided in section III.D.4 of this
preamble.
The Agency received significant comments on proposed programmatic
elements related to high GCWR MDVs. Significant changes were made in
response to comments. The Agency is finalizing proposed Alternative 2
in order to address emissions from high GCWR MDVs. Please refer to
section III.D.5 of the preamble for a summary of comments, summary of
the proposed alternatives, and a detailed description of the final
program.
EPA is finalizing a refueling standards change to require
incomplete MDVs to have the same on-board refueling vapor recovery
standards as complete MDVs. See section III.E.6 of this preamble.
EPA is not finalizing new requirements for the control of
enrichment on gasoline vehicles. The agency will continue to gather
data on the circumstances under which vehicles use enrichment in the
real world, as well as estimates of the impact on emissions inventories
due to command enrichment. In addition, we will continue to review AECD
applications to ensure that the AECD process is being used
appropriately. EPA may revisit additional enrichment controls in a
future rulemaking. Additional discussion is found in section III.E.8 of
this preamble.
The final standards allow light-duty vehicle 25[deg]C FTP
NMOG+NOX credits and -7[deg]C FTP NMHC credits (converting
to NMOG+NOX credits) to be carried into the new program. It
only allows MDV 25[deg]C FTP NMOG+NOX credits to be carried
into the new program if a manufacturer selects the early compliance
pathway. New credits may be generated, banked and traded within the new
program to provide manufacturers with flexibilities in developing
compliance strategies. Details are shown in section III.D.2.v of the
preamble.
[[Page 27930]]
EPA is finalizing the same criteria pollutant emissions standards
for small volume manufacturers (SVM) as for large manufacturers but
with a delayed phase-in to provide additional lead time to implement
the standards. See section III.E.10 of this preamble for details.
Useful life standards for light-duty vehicles and MDV are described
in 40 CFR 86.1805-17.
EPA's initial emission standards were established as per vehicle
(``cap'') standards, with new standards often phased in as an
increasing percentage of the fleet over time, to allow for gradual
deployment of new technologies. Over the last two decades, EPA has
found that fleetwide average standards can also be an effective
approach for reducing emissions. Fleetwide average standards enable and
encourage manufacturers to develop and deploy a variety of new
technologies which may be more appropriate for specific segments of
their fleet. As with ABT generally, fleetwide averaging allows greater
flexibility and can incentivize overcompliance in some segments, which
can benefit manufacturers, consumers and the environment (as new
technologies are developed and deployed). However, fleetwide average
standards may require additional testing requirements, since the
specific level of emissions is important, not merely the meeting of a
per vehicle standard. EPA has historically used cap standards for PM
and CO, while it has historically used fleet average standards for
NMOG+NOX and GHG.\632\ EPA is continuing this approach
because it will be less disruptive to manufacturer's compliance
planning and because EPA finds that the fleet average approach is more
appropriate for NMOG+NOX and GHG because those standards
offer more useful opportunities for varying the deployment of
compliance strategies across a manufacturer's product lines, whereas
the additional testing burden to establish precise emissions levels is
less warranted for PM and CO emissions.\633\
---------------------------------------------------------------------------
\632\ NMOG standards were fleet average standards under the NLEV
program, while NOX standards were fleet average standards
beginning with Tier 2. In Tier 3, EPA adopted NMOG+NOX
standards as fleet average standards. GHG standards have been fleet
average standards since they were adopted in 2010, in part to
harmonize with the NHTSA fuel economy program.
\633\ For example, if EPA were to adopt fleet averaging for PM,
the variability of PM measurements would become increasingly
important. While EPA finds that there is strong technical basis to
measure and certify PM below 0.5 mg/mile, we conclude it is
appropriate to gain additional experience with measuring PM at these
levels before requiring the use of new measurement procedures for
averaging purposes.
---------------------------------------------------------------------------
EPA received a wide range of comments from a broad spectrum of
stakeholders regarding the scope and stringency of the proposed
criteria pollutant standards. NGOs, states, public health
organizations, suppliers and a supplier trade association were strongly
supportive of EPA finalizing the most protective criteria pollutant
standards possible while vehicle manufacturers and their trade
association, the Alliance for Automotive Innovation (AAI), voiced
concerns regarding the stringency of the standards, the lack of need
for additional emissions reductions, lack of alignment with CARB ACC
II, phase-in timing and feasibility. Support for the revised standards
included references to the significant public health impacts stemming
from vehicle emissions, especially in communities with environmental
justice concerns, and references to the need for assistance in
attaining the NAAQS. Vehicle manufacturers stated that more stringent
criteria pollutant standards would be a distraction from their efforts
to electrify the light- and medium-duty fleets. Vehicle manufacturers
also commented that they had extensive collaboration with the
California Air Resources Board (CARB) during the development of CARB's
recently finalized Advanced Clean Car II (ACC II) standards and
industry broadly recommended that EPA adopt the ACC II program in lieu
of our proposed standards.
1. Phase-In of Criteria Pollutant Standards
i. Light-Duty Vehicle Phase-In
The phase-in of the revised criteria pollutant standards is an
important facet of our program. EPA received comments from many states,
NGOs, and suppliers to finalize the most stringent standards at the
earliest opportunity, while auto manufacturers generally commented that
additional lead time was necessary. EPA addressed these comments for
the final program as described below.
The criteria pollutant phase-in for light-duty vehicles applies to
the NMOG+NOX bin structure, PM, -7[deg]C
NMOG+NOX, CO, HCHO, -7[deg]C CO, and three provisions
aligned with CARB ACC II (PHEV high power cold starts, early driveaway,
intermediate soak mid-temperature starts). We are finalizing an
extended phase-in for small volume manufacturers to provide additional
lead time, as described below. The light-duty vehicle
NMOG+NOX declining fleet average has its own timeline
described in section III.D.2 of the preamble.
Light-duty vehicle criteria pollutant phase-in schedules are shown
in Table 33. Manufacturers comply with phase-in scenarios based on the
projected number of vehicles sold or produced for sale in the United
States in a given model year. LDV and LDT1-2 (GVWR <= 6000 lb) vehicles
follow a 20, 40, 60, 100 percent phase-in schedule. LDT3-4 (GVWR 6001-
8500 lb) and MDPV may follow either a default phase-in that steps to
100 percent in MY 2030 that provides a full four years of lead time as
required by CAA section 202(a)(3)(C), or they may choose to follow an
early phase-in schedule that ramps from 20 percent to 100 percent from
MY 2027 to 2030. If a manufacturer chooses the early phase-in schedule,
its LDV, LDT1-2, LDT3-4, and MDPV fleets are averaged together as one
group. This scenario could be advantageous for a manufacturer as it
allows lower emitting vehicles from one category to help with
compliance in another. Credits from Tier 3 and new credits earned in
Tier 4 are described in section III.D.2.v of the preamble.
Table 33--Tier 4 Light-Duty Vehicle Criteria Pollutant Phase-In Schedules
----------------------------------------------------------------------------------------------------------------
LDT3-4 (GVWR 6001-8500 lb),
LDV, LDT1-2 MDPV
Model year (GVWR <= 6000 lb) -------------------------------
(%) default (%) early (%)
----------------------------------------------------------------------------------------------------------------
2027......................................................... 20 0 20
2028......................................................... 40 0 40
2029......................................................... 60 0 60
2030......................................................... 100 100 100
----------------------------------------------------------------------------------------------------------------
[[Page 27931]]
Vehicles that are not part of the phase-in percentages are
considered interim vehicles, which must continue to demonstrate
compliance with all Tier 3 regulations with the exception that all
vehicles (interim and those that are part of the phase-in percentages)
contribute to the Tier 4 light-duty vehicle NMOG+NOX
declining fleet average described in section III.D.2 of the preamble.
For small vehicle manufacturers (SVM),\634\ we are establishing a
schedule that provides additional lead time in meeting the light-duty
vehicle criteria pollutant standards. The SVMs schedule steps from 0
percent to 100 percent in MY 2032 and is shown in Table 34. Before MY
2032, SVMs must comply with all Tier 3 standards and all Tier 3 bins
remain available to them.
---------------------------------------------------------------------------
\634\ Small vehicle manufacturers (SVM) are defined in 40 CFR
86.1838-01(a).
Table 34--Tier 4 Light-Duty Vehicle Criteria Pollutant Phase-In Schedules for Small Volume Manufacturers
----------------------------------------------------------------------------------------------------------------
LDV, LDT1-2 (GVWR <= 6000 LDT3-4 (GVWR 6001-8500 lb),
Model year lb) (%) MDPV (%)
----------------------------------------------------------------------------------------------------------------
2027................................................ 0 0
2028................................................ 0 0
2029................................................ 0 0
2030................................................ 0 0
2031................................................ 0 0
2032................................................ 100 100
----------------------------------------------------------------------------------------------------------------
EPA received comments from the Alliance for Automotive Innovation
(AAI) as well as some of its members regarding the proposed phase-in.
AAI noted that had EPA adopted the CARB ACC II program, the proposed
phase-in would have been more acceptable, however, because EPA had
proposed new standards and test procedures the risk to a manufacturer's
compliance planning is higher. AAI and manufacturers also commented
that the agency should provide more time to meet the new standards.
EPA continues to believe that the proposed criteria pollutant
program is feasible and appropriate and has chosen not to adopt the
CARB ACC II criteria pollutant program. With respect to phase-in, we
have provided an additional year of phase-in in response to
manufacturer concerns. As we elaborate further below in our discussion
of specific requirements and in the RTC, we have separately assessed
the reasonableness of this phase-in schedules for each of the
requirements subject to it and found the schedule to be reasonable. For
example, most vehicle manufacturers have considerable experience with
additional PM controls, and some are already installing GPFs in the
United States for sale outside of the country. Regarding alignment or
full-scale adoption of the ACC II criteria pollutant program, although
the goals of CARB's ACC II program are generally similar to the goals
of EPA's NMOG+NOX program, the requirements in the CARB ACC
II criteria pollutant program are uniquely structured to fit within the
broader ACC II framework and would not be an appropriate solution in
the context of EPA's performance-based criteria pollutant program.
Under the CARB ACC II program, criteria pollutant emissions are
guaranteed to be reduced with increasing ZEV penetrations and the
remaining ICE-based vehicles are held at the current LEV III standards
to prevent backsliding. EPA's performance-based standards, for both GHG
and criteria pollutant emissions, provide the manufacturers with the
ability to comply with a variety of technology pathways. This requires
provisions in this final rule which are different from the CARB ACC II
program to achieve similar emissions reductions, independent of the
technology choices manufactures make and to prevent backsliding on ICE-
based powertrains for manufacturers with high BEV penetrations. In
addition to providing an additional year of phase-in, EPA has been
responsive to comments concerned about lead time for the revised
standards by continuing to allow manufacturers to carry over Tier 3
credits for vehicles less than 8,500 pounds GVWR.
ii. Medium-Duty Vehicle Phase-In
The MDV phase-in for criteria pollutant standards, including the
NMOG+NOX bin structure, PM, -7[deg]C NMOG+NOX,
CO, HCHO, -7[deg]C CO standards, and standards for MDV with GCWR above
22,000 pounds is described in this section.
Default compliance phase in is required in a single step in MY 2031
for these final criteria pollutant standards. Under default compliance,
MDV may not carry forward Tier 3 NMOG+NOX credits (as
allowed by the early phase-in schedule). An optional early compliance
phase-in for MDV is shown in Table 35. Only manufacturers opting for
the early compliance phase-in may carry forward Tier 3 credits into
this program. Any MDVs that are not part of the phase-in percentages
are considered Interim Tier 4 vehicles, which must continue to
demonstrate compliance with all Tier 3 regulations with the exception
that all vehicles (interim and those that are part of the phase-in
percentages) contribute to the Tier 4 MDV NMOG+NOX declining
fleet average, which has its own separate timeline (see section
III.E.2.iv of the preamble).
Finalized refueling standards for incomplete vehicles phase in on a
different schedule as described in section III.D.6 of this preamble.
The in-use standards for high GCWR MDV begin in MY 2031 regardless of
whether or not a manufacturer opts for early compliance.
[[Page 27932]]
Table 35--Tier 4 MDV Criteria Pollutant Phase-In Schedules
------------------------------------------------------------------------
MDV
Model year -------------------------------
default (%) early (%)
------------------------------------------------------------------------
2027.................................... 0 20
2028.................................... 0 40
2029.................................... 0 60
2030.................................... 0 80
2031.................................... 100 100
------------------------------------------------------------------------
2. NMOG+NOX Standards
EPA is finalizing new NMOG+NOX standards for MY 2027 and
later. The standards are structured to account for the potential for
significant emission reductions as the result of improving emissions
control technologies for new light-duty vehicles and MDVs that is
projected to occur over the next decade. Notably, while in our central
case we project that these standards can be achieved by manufacturers
choosing to increase electrification of their vehicle fleets, EPA
projects that the standards are also feasible with the deployment of
technologies to reduce emissions from ICE-based vehicles. Furthermore,
absent the revised standards, we are concerned that the market shift
towards greater electrification in the fleet could result in
manufacturers deciding to increase the emissions relative to the status
quo from their ICE vehicles to reduce cost.\635\ At the same time, as
we explain below, manufacturers have considerable choice in how they
meet the NMOG+NOX standards, including through the
application of a range of technologies, such as electrification and
improved ICE engine and exhaust aftertreatment designs.
---------------------------------------------------------------------------
\635\ Tier 3 standards include a Bin 0, which allows zero
emissions vehicles to be averaged with ICE-based vehicles. In the
absence of the final NMOG+NOX standards, as sales of ZEVs
increase, there would be an opportunity for the ICE portions of the
light-duty and MDV fleets to reduce emission control system content
and cost and comply with less stringent NMOG+NOX bins
under Tier 3, typically referred to as ``backsliding''. If this were
to occur, it would have the effect of increasing NMOG+NOX
emissions from the ICE portion of the light-duty vehicle and MDV
fleet and delay the overall fleet emission reductions of
NMOG+NOX that would have otherwise occurred.
---------------------------------------------------------------------------
The previous Tier 3 fleet average NMOG+NOX emissions
standards were fully phased-in for light-duty vehicles (LDV, LDT, and
MDPV) in MY 2025 to a 30 mg/mile fleet average standard and were fully
phased-in for MDV (Class 2b and 3) in MY 2022 at 178 and 247 mg/mile,
respectively.
EPA is finalizing light-duty vehicle and MDV fleet average
NMOG+NOX standards which are more stringent than Tier 3,
based on our consideration of all available vehicle and engine
technologies, including ICE-based, hybrid, and zero emission vehicles,
in a manufacturer's compliance pathway. This approach is consistent
with Tier 3 NMOG+NOX standards. Given the cost-effectiveness
of BEVs for compliance with both criteria pollutant and GHG standards,
EPA anticipates that many automakers will choose to include BEVs in
their compliance strategies to minimize costs. However, the final
NMOG+NOX standards continue to be performance-based fleet
average standards with multiple feasible paths to compliance, depending
on choices manufacturers make about deployment of emissions control
technologies for ICE as well as electrification and credit trading.
For instance, the final NMOG+NOX standards could be met
by producing (A) a larger number of additional BEVs together with a
smaller number of ICE-based vehicles with higher NMOG+NOX
than final Tier 3 allowed, (B) a mix of BEVs together with ICE-based
vehicles with NMOG+NOX similar to what final Tier 3 allowed,
or (C) no BEVs and solely ICE-based vehicles with improved emissions
controls relative to what was required by final Tier 3. BEVs, as well
as these improved ICE-based emissions control technologies are
available today. EPA notes that many ICE-based light-duty vehicles
including hybrids and PHEVs are being certified below 15 mg/mile today,
as shown in Chapter 3.2.5 of the RIA. Specific technologies available
to reduce light-duty ICE-based emissions to below 15 mg/mile and to
reduce MDV ICE-based emissions to below 75 mg/mile are described in
Chapter 3.2.5.1 if the RIA.
i. NMOG+ NOX Bin Structure for Light-Duty Vehicles and
Medium-Duty Vehicles
The final bin structure for light-duty vehicles and MDVs set in
this rule is shown in Table 36. The upper six bins (Bin 75 to Bin 170)
are only available to MDV. For light-duty vehicles, the final bin
structure removes the two highest Tier 3 bins (Bin 160 and Bin 125) and
adds new bins such that the bins increase in 5 mg/mile increments from
Bin 0 to Bin 70. The highest two bins are removed to remove the
dirtiest vehicles from the future fleet and including bins from 0 to 70
in increments of 5 mg/mile offers manufacturers more resolution in
meeting the fleet-average standard. For MDV, the final bin structure
also moves away from separate bins for Class 2b and Class 3 vehicles,
adopting light-duty vehicle bins along with higher bins only available
to MDV. In part due to comments received from MDV manufacturers, the
final MDV-only bins have been harmonized with bins used for compliance
with California chassis-certified MDV standards with the exception of
elimination of any bins higher than Bin 170. The highest bin was also
changed from Bin 160 to Bin 170 to better align with the California ACC
II program and to serve as a cap on MDV emissions.
Bins are used to meet in the NMOG+NOX fleet average
standards described in section III.D.2.iii-iv of the preamble and the
NMOG+NOX provisions aligned with the CARB ACC II program
described in section III.D.7 of the preamble.
Vehicles that are not part of the phase-in percentages described in
section III.D.1 of the preamble are considered Interim Tier 4 vehicles
and may only use Tier 3 bins, or in the case of MDV, may also use Tier
3 bins and transitional Tier 4 MDV bins defined in 40 CFR 86.1816-18
(bin 175 and 150 for Class 3 vehicles, and bin 125, 100, 85, 75 for all
medium-duty vehicles). Note that transitional Tier 4 MDV bins apply
only to Interim Tier 4 vehicles in model years 2027 through 2030, and
not to fully phased in Tier 4 vehicles.
Table 36--Light-Duty Vehicle and MDV NMOG+NOX Bin Structure
------------------------------------------------------------------------
NMOG+ NOX (mg/
Bin mi)
------------------------------------------------------------------------
Bin 170 \a\............................................. 170
Bin 150\a\.............................................. 150
Bin 125 \a\............................................. 125
[[Page 27933]]
Bin 100 \a\............................................. 100
Bin 85 \a\.............................................. 85
Bin 75 \a\.............................................. 75
Bin 70.................................................. 70
Bin 65.................................................. 65
Bin 60.................................................. 60
Bin 55.................................................. 55
Bin 50.................................................. 50
Bin 45.................................................. 45
Bin 40.................................................. 40
Bin 35.................................................. 35
Bin 30.................................................. 30
Bin 25.................................................. 25
Bin 20.................................................. 20
Bin 15.................................................. 15
Bin 10.................................................. 10
Bin 5................................................... 5
Bin 0................................................... 0
------------------------------------------------------------------------
\a\ MDV only.
EPA received comments on bin structure. The Alliance for Automotive
Innovation (AAI) and GM commented that EPA should align its bin
structure with CARB's ACC II program. AAI also recommended adding bins
35, 45 and 90. Small volume manufacturers requested that Bin 125 remain
available to them until MY 2035.
In response to these comments EPA is finalizing a bin structure
that adopts a full suite of bins from 0 to 70 for light-duty vehicles
and MDV, and bins 75, 85, 100, 125, 150, and 170 for MDV. EPA's
response to the bin-related SVMs comments can be found in section
III.D.10 of the preamble.
ii. Smog Scores for the Fuel Economy and Environment Label
EPA is updating the smog scores used on the Fuel Economy and
Environment Label \636\ (see 40 CFR 600.311-12(g)), to work with the
new Tier 4 bin structure, shown in Table 37. We sought comment on
fitting the new Tier 4 bins and California LEV IV bins \637\ into the
existing MY 2025 Tier 3 smog score structure for the Tier 4 phase-in
period (MY 2027-2029), as the Tier 4 program is phased in, and we also
sought comment on a new Tier 4 and LEV IV smog score structure for MY
2030 and later. For both ratings schedules, it is important to avoid
having any bin assigned to a higher score in a newer model year than it
was assigned in an older model year (no ``backsliding'' for smog score
ratings).
---------------------------------------------------------------------------
\636\ The Fuel Economy and Environment label provisions apply to
``automobiles'' (passenger automobiles and light trucks) and medium-
duty passenger vehicles as described in 40 CFR 600.001 and 600.002.
\637\ See Section 1961.4, Title 13, California Code of
Regulations. Final Regulation Order. Exhaust Emission Standards and
Test Procedures--2026 and Subsequent Model Year Passenger Cars,
Light-Duty Trucks, and Medium-Duty Vehicles.
---------------------------------------------------------------------------
We received no comments on the proposal for smog scores, and we are
finalizing structures that are consistent with the proposal but also
reflect the fact that we are finalizing almost twice as many Tier 4
NMOG+NOX bins as were in the proposal.
For MY 2027-2029, EPA is finalizing a smog score schedule that
aligns with the Tier 3 smog score schedule starting with MY 2025. This
will allow the Tier 3 and Tier 4 bin structures to work together during
the Tier 4 phase-in period, during which there will be a mix of Tier 3
and interim Tier 4 vehicles. Table 37 shows the MY 2025 and forward
Tier 3 Smog Scores and Tier 3/LEV III bins in the first two columns,
and the MY 2027-2029 Tier 4 Smog Scores and Tier 4/LEV IV bins are
shown in the last two columns.
For MY 2030 and later, we are maintaining the smog ratings from MY
2027-2029 for bin 40/ULEV 40 and lower bins and distributing the higher
bins evenly through a smog score of 2. The interim LEV IV Bin 125 will
be assigned a smog score of 1. Table 38 shows the smog score rating
schedule for MY 2030 and later.
We selected MY 2030 as the time to shift the smog scores because
that is the final year for phasing in the Tier 4 criteria standards in
40 CFR 86.1811-27 for vehicles subject to fuel economy labeling
requirements. An exception applies for small volume manufacturers,
which may continue to meet Tier 3 standards through model year 2031.
This leaves the possibility that small volume manufacturers will
certify their vehicles to bin standards that are higher than the bin
standards specified for MY 2030 and later. As described in 40 CFR
600.311(g), manufacturers that certify vehicles to bin standards that
are higher than any values we specify automatically apply a smog score
of 1 for those vehicles. As a result, small volume manufacturers
certifying their vehicles to Bin 125 or Bin 160 in model years 2030 and
2031 will apply a smog score of 1 for those vehicles. If they certify
their vehicles to any other bins, the smog scores apply as described in
Table 38. Note as an example that all manufacturers certifying to Bin
70 standards in MY 2030 and 2031 would use a smog score of 2, whether
they are meeting Tier 3 Bin 70 standards or Tier 4 Bin 70 standards,
and all manufacturers certifying to Bin 50 standards in MY 2030 and
2031 would use a smog score of 4, whether they are meeting Tier 3 Bin
50 standards or Tier 4 Bin 50 standards.
Table 37--MY 2025--MY 2029 Smog Scores
------------------------------------------------------------------------
Tier 3 and tier 4 LEV III and LEV IV
Smog scores bins bins
------------------------------------------------------------------------
1............................... Bin 160........... LEV 160.
2............................... Bin 125........... ULEV 125.
4............................... Bin 55 through Bin ULEV 60 or ULEV
70. 70.
5............................... Bin 35 through Bin ULEV 40 or ULEV
50. 50.
6............................... Bin 25 or Bin 30.. SULEV 25 or SULEV
30.
7............................... Bin 15 or Bin 20.. SULEV 15 or SULEV
20.
8............................... Bin 10............
9............................... Bin 5.............
10.............................. Bin 0............. ZEV
------------------------------------------------------------------------
Table 38--MY 2030+ Smog Scores
------------------------------------------------------------------------
MY 2030+ smog scores EPA and CARB bins
------------------------------------------------------------------------
1.................................... ULEV 125.
2.................................... Bin 65, Bin 70/ULEV 70.
[[Page 27934]]
3.................................... Bin 55, Bin 60/ULEV 60.
4.................................... Bin 45, Bin 50/ULEV 50.
5.................................... Bin 35, Bin 40/ULEV 40.
6.................................... Bin 25, Bin 30/SULEV 25, SULEV
30.
7.................................... Bin 15, Bin 20/SULEV 15, SULEV
20.
8.................................... Bin 10.
9.................................... Bin 5.
10................................... Bin 0/ZEV.
------------------------------------------------------------------------
iii. NMOG+NOX Standards and Test Cycles for Light-Duty
Vehicles
EPA is establishing NMOG+NOX standards for light-duty
vehicles with GVWR at or below 6,000 lb pursuant to its authority in
section 202(a)(1)-(2), which directs EPA to set standards to take
effect with sufficient lead time ``to permit the development and
application of the requisite technology, giving appropriate
consideration to the cost of compliance within such period.'' For
light-duty vehicles above GVWR 6,000 lb, EPA is further governed in
setting standards for NMOG+NOX by section 202(a)(3), which
mandates ``standards which reflect the greatest degree of emission
reduction achievable through the application of technology which the
Administrator determines will be available for the model year to which
such standards apply, giving appropriate consideration to cost, energy,
and safety factors associated with the application of such technology''
and also meets specific lead time and stability requirements. As
discussed in section V of the preamble, EPA finds that the standards in
this final rule satisfy the requirement for ``greatest degree of
emission reduction achievable'' for vehicles above 6,000 lb GVWR, and
has adopted a default compliance schedule to ensure adequate lead time
and stability for these vehicles, as well as an optional compliance
schedule. Section III.D.2.iv of the preamble describes how we meet
these same statutory requirements for medium-duty vehicles.
The final NMOG+NOX fleet average standards for MY 2027
and later light-duty vehicles are shown in Table 39. EPA is finalizing
our proposal that the same bin-specific numerical standard be met
across four test cycles: 25[deg]C FTP,\638\ HFET,\639\ US06 \640\ and
SC03.\641\ This means that a manufacturer certifying a vehicle to
comply with Bin 30 NMOG+NOX standards will be required to
meet the Bin 30 emissions standards for all four test cycles. Meeting
the same NMOG+NOX standards across four cycles is an
increase in stringency from Tier 3, which had one standard for the
higher of FTP and HFET, and a less stringent composite based standard
for the SFTP (weighted average of 0.35xFTP + 0.28xUS06 + 0.37xSC03).
Present-day engine, transmission, and exhaust aftertreatment control
technologies allow closed-loop air-to-fuel (A/F) ratio control and good
exhaust catalyst performance throughout the US06 and SC03 cycles. As a
result, higher emissions standards for NMOG+NOX over these
cycles are no longer necessary. Approximately 60 percent of the test
group/vehicle model certifications from MY 2021 have higher
NMOG+NOX emissions over the FTP cycle as compared to the
US06 cycle, supporting the conclusion that the US06 cycle does not
require a higher standard than the FTP cycle does.
---------------------------------------------------------------------------
\638\ 40 CFR 1066.801(c)(1)(i) and 1066.815.
\639\ 40 CFR 1066.840.
\640\ 40 CFR 1066.831.
\641\ 40 CFR 1066.835.
---------------------------------------------------------------------------
For LDV and LDT1-2 (GVWR <=6,000 lb), the NMOG+NOX
standard is a declining fleet average that brings the Tier 3 standard
of 30 mg/mile down to 15 mg/mile in 2032 (as shown on the left side of
Table 39). The declining fleet average reflects EPA's judgment about
feasible further reductions in NMOG+NOX as a result of the
application of technologies (whether the manufacturer chooses, for
instance, further electrification, further improvements in internal
combustion engine design and controls, or further improvements in
exhaust aftertreatment). EPA judges that the standards could be met by
a mix of these technologies, such as additional PHEVs with additional
improvements in exhaust aftertreatment. For example, if the industry
introduces BEVs into these vehicle classes at the rate projected by our
central case modeling and if ICE vehicles remain at 30 mg/mile (Tier
3), the declining fleet average standard provides approximately 30
percent additional compliance headroom for emissions of
NMOG+NOX from these vehicles in 2032. With BEV penetrations
as low as 35 percent (e.g., as projected in our No Additional BEVs
sensitivity) and considering many existing ICE vehicles already emit
below 30 mg/mile, manufacturers would comply with the
NMOG+NOX standard with minimal aftertreatment improvements
for their remaining ICE vehicles. The additional compliance headroom
provided by the final 15 mg/mile standard ensures the standards are
feasible under a wide range of compliance paths (e.g., if manufacturers
produce significantly fewer BEVs than is expected). Manufacturers with
Tier 3 NMOG+NOX credits may carry their credits into Tier 4
when Tier 3 is closed out, up to the end of the Tier 3 five-year credit
life.
For LDT3-4 (GVWR 6001-8500 lb) and MDPV, the NMOG+ standard offers
manufacturers two alternative schedules shown on the right side of
Table 39. The default schedule steps down from 30 mg/mile to 15 mg/mile
in 2030 and provides 4 years of lead time and 3 years of standards
stability, as required by the Clean Air Act (CAA) for heavy-duty
vehicles. For lead time and standards stability, LDT3-4 and MDPV (as
well as MDV) are considered heavy-duty vehicles. As with LDV, the final
standards reflect EPA's judgment that about the feasibility of
significant further reductions of NMOG+NOX through
deployment of a range of emissions control technologies, taking into
consideration the lead time available between now and 2030.
The second alternative is an optional ``early'' schedule that
declines from 30 mg/mile in 2026 (Tier 3) to 15 mg/mile in 2032,
matching the schedule required for LDV and LDT1-2. The declining fleet
average reflects the likelihood of increased electrification in the
fleet over that time period. For example, if the industry introduces
BEVs into these vehicle classes at the rate projected by our central
case modeling and if ICE vehicles remain at 30 mg/mile (Tier 3), the
declining fleet average standard provides approximately 10 percent
additional compliance margin for emissions of NMOG+NOX from
these vehicles in 2032. Manufacturers that choose the early phase-in
schedule
[[Page 27935]]
average together their LDV, LDT1-2, LDT3-4, and MDPV vehicles. This
scenario may be advantageous for manufacturers as it allows lower
emitting vehicles from one category to help with compliance in another.
Manufacturers with Tier 3 NMOG+NOX credits may carry their
credits into Tier 4 when Tier 3 is closed out, up to the end of the
Tier 3 five-year credit life, regardless of whether the default or
early schedule is selected.
Vehicles that are not part of the phase-in percentages described in
section III.D.1 of the preamble are considered interim vehicles, which
must continue to demonstrate compliance with all Tier 3 regulations
with the exception that all vehicles (interim and those that are part
of the phase-in percentages) contribute to the Tier 4 light-duty
vehicle NMOG+NOX declining fleet average described shown in
Table 39.
There are two incentives for choosing the early schedule: The first
incentive is that the manufacturer has until 2032 to reach 15 mg/mile
instead of 2030. The second incentive is that NMOG+NOX
emissions from LDV, LDT and MDPV are calculated as one group, allowing
lower emitting sales in one sub-group shown in Table 39 to help meet
the manufacturers overall NMOG+ standard. From a public health and
environmental perspective, these incentives are justified by the early
adoption of more stringent standards.
Table 39--LDV, LDT, and MDPV Fleet Average NMOG+NOX Standards for 25 [deg]C FTP, HFET, US06 and SC03
----------------------------------------------------------------------------------------------------------------
LDV, LDT1-2 LDT3-4 (GVWR 6001-8500 lb) and
(GVWR <=6000 MDPV NMOG+NOX (mg/mi)
Model year lb) NMOG+NOX -------------------------------
(mg/mi)
default early
----------------------------------------------------------------------------------------------------------------
2026 \a\........................................................ \a\ 30 \a\ 30 \a\ 30
2027............................................................ 25 \a\ 30 25
2028............................................................ 23 \a\ 30 23
2029............................................................ 21 \a\ 30 21
2030............................................................ 19 15 19
2031............................................................ 17 15 17
2032 and later.................................................. 15 15 15
----------------------------------------------------------------------------------------------------------------
\a\ Tier 3 standards provided for reference.
For small vehicle manufacturers (SVM), we are finalizing an
NMOG+NOX declining fleet average that provides additional
lead time in meeting light-duty vehicle standards as shown in Table 40.
The SVMs light-duty vehicle NMOG+NOX declining fleet average
steps down from 51 mg/mile to 30 mg/mile in 2028, concurrent with Tier
3 requirements for SVMs and representing no change for SVMs. The SVMs
light-duty vehicle NMOG+NOX declining fleet average then
steps down from 30 mg/mile to 15 mg/mile in 2032, matching the
requirements for the larger manufacturers.
Table 40--Light-Duty Vehicle Fleet Average NMOG+NOX Standards for 25
[deg]C FTP, HFET, US06, and SC03 for Small Vehicle Manufacturers (SVM)
Criteria
------------------------------------------------------------------------
LDV, LDT1-2 LDT3-4 (GVWR
(GVWR <=6000 6001-8500 lb)
Model year lb) NMOG+NOX and MDPV
(mg/mi) NMOG+NOX (mg/
mi)
------------------------------------------------------------------------
2026 \a\................................ \a\ 51 \a\ 51
2027.................................... 51 51
2028.................................... 30 30
2029.................................... 30 30
2030.................................... 30 30
2031.................................... 30 30
2032 and later.......................... 15 15
------------------------------------------------------------------------
\a\ Tier 3 standards provided for reference.
EPA received comments from many stakeholders with a wide range of
inputs including supportive comments for the proposed standards and
recommendations for program modifications for the final rule. NGOs such
as the Environmental Defense Fund (EDF), American Lung Association and
others provided strong support for the proposed NMOG+NOX
standards as well as replacing the SFTP with a standard that applies
across four test cycles (FTP, HFET, US06, SC03). The NGOs commented on
the need to reduce emissions that contribute to poor air quality and
negatively impact human health. The Alliance for Automotive Innovation
(AAI) reiterated their recommendation to adopt CARB's ACC II program in
lieu of the proposed NMOG+NOX declining fleet average that
comingles ZEVs and ICE vehicles and instead set an ICE-only fleet
average equal to the final Tier 3 fleet average of 30 mg/mile. AAI
stated that the lack of certainty in BEV penetrations could result in
compliance difficulties for some manufacturers. AAI also recommended
that if EPA were to finalize the proposed approach, the final fleet
average should not be overly reliant on BEV volumes. AAI also
recommended that PHEV criteria
[[Page 27936]]
pollutant emissions should be discounted based on their all-electric
range and utility factor, similar to how PHEV GHG compliance values are
calculated. Stellantis also commented that the ``structure of the fleet
average NMOG+NOX standard [is] acting like a de facto ZEV
mandate.''
EPA has responded to these comments by setting a higher (less
stringent) final fleet average. The higher fleet average is informed by
several factors, including the adoption of somewhat less stringent GHG
standards as compared to the proposal, the inclusion of PHEVs in the
projected compliance GHG pathway, and the potential for vehicle
manufacturers to make improvements to their ICE powertrains in addition
to electrification. EPA has decided to not discount PHEV emissions
based on their estimated all electric range. While the determination of
the utility factor for PHEVs is covered in section III.C.8 of the
preamble, it is clear to EPA that there is considerably more engine on
operation in charge depleting mode in the real world for current PHEVs
than is captured on-cycle. In other words, as the result of vehicle
design, operating conditions and/or environmental conditions, many
current PHEVs demonstrate engine operation that is not captured in PHEV
UF. While the utility factor may be appropriate for crediting a PHEV
for GHG compliance, we have concluded it is not appropriate for PHEVs
for several reasons. First, we know that criteria pollutants emission
levels are influenced by more factors that GHG emissions, depending not
only on whether the engine is on or off, but also the operating and
environmental conditions under which the engine starts and runs. The
existing and proposed PHEV UF does not adequately capture or reflect
the specific operating conditions under which the engine starts or the
environmental conditions, both of which have significant impact on
criteria pollutant emissions. In addition, we note that criteria
pollutant standards are orders of magnitude more stringent than GHG
standards and as a result accuracy in the utility factor down to the
milligram per mile becomes important. It may be possible in the future
to have sufficiently accurate information about PHEV operation to
adjust criteria pollutant emissions performance to reflect CD
operation, and PHEV operation may change in the future as more PHEVs
become ACC II compliant, but at this time EPA has decided not to
discount emissions based on utility factor, although as noted we have
adopted a less stringent final fleet average standard in part due to
including PHEVs as a potential compliance pathway.
Since technologies are available to further reduce
NMOG+NOX emissions from internal combustion engines and
vehicles relative to the current fleet, and since more than 20 percent
of MY 2021 Bin 30 vehicle certifications already had an FTP
certification value under 15 mg/mile NMOG+NOX, achieving
reduced NMOG+NOX emissions through improved ICE technologies
is feasible and reasonable. Regardless of the compliance strategy
chosen, whether through electrification or cleaner ICE vehicles,
overall, the fleet will become significantly cleaner.
The final NMOG+NOX standards for the 25 [deg]C FTP,
HFET, US06, SC03 and the associated declining fleet average, achieve
significant reductions in NMOG+NOX. Our compliance modeling
for the central case shows that these reductions can be achieved by
deployment of BEV technology at levels consistent with the projected
penetrations rates discussed for the GHG requirements. At the same
time, this final rule continues to apply performance-based standards
for both GHG and criteria pollutant emissions, and manufacturers are
free to adopt any mix of technologies for different vehicles that
achieve the levels of the final standards. EPA has reassessed the
proposed standards in light of public comments and additional data and
concluded that adjustments are warranted to the final
NMOG+NOX fleet average standard to allow additional lead
time for deploying advanced control technologies, whether BEVs, PHEVs,
or further improvements to ICE vehicles. While EPA does not agree with
commenters who suggested setting an ICE-only fleet average standard for
NMOG+NOX, we continue to believe that the availability of
clean ICE vehicles, as demonstrated by their current performance, as
well as BEVs, support the feasibility of the final 15 mg/mile
NMOG+NOX fleet average. Additional discussion on the
feasibility of the final standards can be found in RIA Chapter 3.2.5.
The final 25 [deg]C FTP NMOG+NOX standard applies
equally at high-altitude conditions (1520-1720 meters) as at low-
altitude conditions (0-549 meters). Modern engine management systems
can use idle speed, engine spark timing, valve timing, and other
controls to offset the effect of lower air density on exhaust catalyst
performance at high altitude conditions. The requirement that the same
standard applies equally at high-altitude and low-altitude conditions
extends to 25 [deg]C FTP NMOG+NOX, 25 [deg]C FTP PM, 25
[deg]C FTP CO, 25 [deg]C FTP HCHO, and -7 [deg]C FTP CO standards.
EPA is finalizing a requirement that manufacturers submit an
engineering evaluation indicating that common calibration approaches
are utilized at high and low altitudes for -7 [deg]C FTP
NMOG+NOX. The same engineering evaluation requirement also
applies to the -7 [deg]C FTP PM standard.
EPA is replacing the existing -7 [deg]C FTP NMHC fleet average
standard of 300 mg/mile for gasoline-fueled LDV and LDT1, and 500 mg/
mile fleet average standard for LDT2-4 and MDPV, with a single
NMOG+NOX fleet average standard of 300 mg/mile for gasoline-
fueled LDV, LDT1-4 and MDPV to harmonize with the combined
NMOG+NOX approach adopted in Tier 3 for all other cycles.
NMOG should be determined as explained in 40 CFR 1066.635. EPA has
historically not included BEVs in the calculation of fleet average -7
[deg]C FTP NMHC emissions and EPA is taking the same approach for the
calculation of fleet average -7 [deg]C FTP NMOG+NOX. EPA
emissions testing at -7 [deg]C FTP showed that a 300 mg/mile standard
is feasible with a large compliance margin for NMOG+NOX.
Diesel-fueled LDV, LDT1-4, and MDPV are exempt from the -7 [deg]C FTP
NMOG+NOX standard but EPA is requiring manufacturers to
report results from this test cycle in their certifications.
Since -7 [deg]C FTP and 25 [deg]C FTP are both cold soak tests that
include TWC operation during light-off and hot running operating, EPA
is finalizing the application of Tier 3 25 [deg]C FTP
NMOG+NOX useful life to -7 [deg]C FTP NMOG+NOX
standards.
EPA is finalizing that -7 [deg]C FTP NMOG+NOX emissions
be certified with at least one Emissions Data Vehicle (EDV) per test
group for light-duty vehicles certifying to the 300 mg/mile standard
instead of one EDV per durability group as in Tier 3.
iv. NMOG+NOX Standards and Test Cycles for Medium-Duty
Vehicles
The final MDV NMOG+NOX standards are shown in Table 41
for optional early compliance and in Table 42 for default compliance.
The CAA requires 4 years of lead time and 3 years of standards
stability for heavy-duty vehicles when establishing emissions standards
for certain pollutants, including NOX and hydrocarbons. MDV
fall under the CAA definition for heavy-duty vehicles with respect to
standards stability and lead time. Under default compliance, MDVs will
continue to meet Tier 3 standards through the end
[[Page 27937]]
of MY 2030 and then MDVs will proceed to meeting a 75 mg/mile
NMOG+NOX standard in a single step in MY 2031 (Table 42).
This compliance schedule complies with CAA provisions for lead time and
stability. Under default compliance, MDV may not carry forward Tier 3
NMOG+NOX credits into the Tier 4 program. The optional early
compliance path has declining NMOG+NOX standards that
gradually phase-in from MY 2027 through MY 2033. MDV manufacturers
opting for early compliance may carry forward Tier 3
NMOG+NOX credits into the Tier 4 program when Tier 3 is
closed out, up to the end of the Tier 3 five-year credit life (Table
41).
Note that the phase-in percentages from section III.D.1.ii of this
preamble also apply. MDV that are not part of the phase-in percentages
summarized in section III.D.1.ii of the preamble are considered interim
vehicles, which must continue to demonstrate compliance with all Tier 3
standards and regulations with the exception that all vehicles (interim
and those that are part of the phase-in percentages) contribute to the
Tier 4 MDV NMOG+NOX declining fleet average.
Certification data show that for MY 2022-2023, 75 percent of sales-
weighted Class 2b/3 gasoline vehicle certifications were below 120 mg/
mile in FTP and US06 tests (see RIA Chapter 3.2.5). Diesel-powered MDVs
designed for high towing capability (i.e., GCWR above 22,000 pounds)
had higher emissions; however 75 percent were still below 180 mg/mile
NMOG+ NOX. The year-over-year fleet average FTP standards
for MDV are presented below. The rationale for the manufacturer's
choice of early compliance and default compliance pathways is described
in section III.D.1.ii of this preamble. For further discussion of MDV
NMOG+NOX feasibility, please refer to Chapter 3.2.5 of the
RIA.
The final MDV NMOG+NOX standards are based on EPA's
judgment as to the greatest degree of emissions reduction that is
feasible applying existing light-duty vehicle technologies, including
ICE and advanced ICE technologies and electrification, to MDV.\642\ As
with the light-duty vehicle categories, EPA anticipates that there will
be multiple compliance pathways, such as increased electrification of
vans together with achieving 120 mg/mile NMOG+NOX for ICE-
power MDV. Present-day MDV engine and aftertreatment technology allows
fast catalyst light-off after cold-start followed by closed-loop A/F
control and excellent exhaust catalyst emission control on MDV, even at
the adjusted loaded vehicle weight, ALVW [(curb + GVWR)/2] test weight,
which is higher than loaded vehicle weight, LVW (curb + 300 pounds)
used for testing light-duty vehicles. Diesel MDV are adopting more
advanced SCR systems for NOX emissions control that
incorporate dual-injection systems for urea-based reductant similar to
SCR systems that have been developed to meet more stringent
NOX standards for MY 2024 and later heavy-duty engine
standards in California and federal MY 2027 and later heavy-duty engine
standards.643 644 Under the default compliance pathway, the
final MDV standards begin to take effect beginning in MY 2031. While
the originally proposed date of 2030 for default compliance was fully
consistent with the CAA section 202(a)(3)(C) lead time requirement for
these vehicles, EPA delayed implementation in the final rule to provide
additional lead time based in part on comments received from auto
manufacturers concerning the need for additional lead time for
compliance. Similarly, the early compliance pathway was delayed by one
year relative to our proposal.
---------------------------------------------------------------------------
\642\ Further discussion of the statutory factors of costs of
compliance is found in Section IV of the preamble. Discussion of
safety, and energy is found in VIII.
\643\ California Air Resources Board. Heavy-duty Omnibus
Regulation. https://ww2.arb.ca.gov/rulemaking/2020/hdomnibuslowno.
\644\ 88 FR 4296. Control of Air Pollution From New Motor
Vehicles: Heavy-Duty Engine and Vehicle Standards. January 24, 2023.
Table 41--MDV Fleet Average NMOG+NOX Standards Under the Early
Compliance Pathway \a\
------------------------------------------------------------------------
NMOG+ NOX (mg/mi)
Model year -------------------------------
Class 2b Class 3
------------------------------------------------------------------------
2026.................................... \b\ 178 \b\ 247
-------------------------------
2027.................................... 175
2028.................................... 160
2029.................................... 140
2030.................................... 120
2031 \c\................................ 100
2032 \c\................................ 80
2033 and later \c\...................... 75
------------------------------------------------------------------------
\a\ Please refer to section III.D.1 of the preamble for further
discussion of the early compliance and default compliance pathways.
\b\ Tier 3 FTP fleet average standards provided for reference.
\c\ MDV with a GCWR greater than 22,000 pounds must also comply with
additional moving average window (MAW) in-use testing requirements.
Table 42--MDV Fleet Average NMOG+NOX Standards Under the Default
Compliance Pathway \a\
------------------------------------------------------------------------
MDV NMOG+ NOX (mg/mi)
Model year -------------------------------
Class 2b Class 3
------------------------------------------------------------------------
2026.................................... \b\ 178 \b\ 247
2027.................................... \b\ 178 \b\ 247
2028.................................... \b\ 178 \b\ 247
2029.................................... \b\ 178 \b\ 247
2030.................................... \b\ 178 \b\ 247
-------------------------------
2031 \c\................................ \a\75
2032 \c\................................ \a\ 75
2033 and later.......................... \a\ 75
------------------------------------------------------------------------
\a\ Please refer to section III.D.1 of the preamble for further
discussion of the early compliance and default compliance pathways.
\b\ Tier 3 FTP fleet average standards provided for reference.
\c\ MDV with a GCWR greater than 22,000 pounds must also comply with
additional moving average window (MAW) in-use testing requirements.
EPA is not finalizing SVM MDV standards that differ from large
manufacturer MDV standards.
If a manufacturer has a fleet mix with relatively high sales of MDV
BEV, that will ease compliance with MDV NMOG+NOX fleet
average standards for MDV ICE-powered vehicles. We have also finalized
an interim provision allowing credits generated by MY 2027 through 2032
BEVs qualifying as MDPV to be used for complying with the Tier 4 MDV
fleet average NMOG+NOX standards in order to help
manufacturers transition to meeting the Tier 4 MDV NMOG+NOX
fleet average standards (see section III.D.2.iv). An option also
remains for manufacturers of high GCWR MDV to choose engine-
certification as a light-heavy-duty engine as an additional compliance
flexibility. This would allow some manufacturers to choose the option
of moving vehicles with the highest towing capability out of the fleet-
average chassis-certified standards and into the heavy-duty engine
program. If a manufacturer has a fleet mix with relatively low BEV
sales, then improvements in NMOG+NOX emissions control for
ICE-powered vehicles would be required to meet the fleet average
standards and/or more capable high GCWR MDV could be moved into the
heavy-duty engine program and/or credits could be used from qualifying
MDPV BEVs. Improvements to NMOG+NOX emissions from ICE-
powered vehicles are feasible with available engine, aftertreatment,
and sensor technology, and has been shown within an analysis of MY
2022-2023 MDV certification
[[Page 27938]]
data (see RIA Chapter 3.2.5). Under the final standards, fleet average
NMOG+NOX will continue to decline to well below the final
Tier 3 NMOG+NOX standards of 178 mg/mile and 247 mg/mile for
Class 2b and 3 vehicles, respectively.
The final standards require the same MDV numerical standards be met
across all four test cycles, the 25 [deg]C FTP, HFET, US06 and SC03,
consistent with the approach for light-duty vehicles described in
section III.D.2.iii of the preamble. This would mean that a
manufacturer certifying a vehicle to bin 75 would be required to meet
the bin 75 emissions standards for all four cycles.
Meeting the same NMOG+NOX standard across four cycles is
an increase in stringency from Tier 3, which had one standard over the
FTP and less stringent bin standards for the HD-SFTP (weighted average
of 0.35xFTP + 0.28xHDSIM + 0.37xSC03, where HDSIM is the driving
schedule specified in 40 CFR 86.1816-18(b)(1)(ii)). Existing MDV
control technologies allow closed-loop A/F control and high exhaust
catalyst emissions conversion throughout the US06 and SC03 cycles, so
compliance with higher numerical emissions standards over these cycles
is no longer needed. Manufacturer submitted certification data and EPA
testing show that Tier 3 MDV typically have similar NMOG+NOX
emissions in US06 and 25 [deg]C FTP cycles, and NMOG+NOX
from the HFET and SC03 are typically much lower. Testing of a 2022 F250
7.3L at EPA showed average NMOG+NOX emissions of 56 mg/mile
in the 25 [deg]C FTP and 48 mg/mile in the US06. Manufacturer-submitted
certifications show that MY 2021+2022 gasoline Class 2b trucks
achieved, on average, 69 mg/mile in the FTP, 75 mg/mile in the US06,
and 18 mg/mile in the SC03. MY 2021+2022 gasoline Class 3 trucks
achieved, on average, 87 mg/mile in the FTP and 25 mg/mile in the SC03.
Several Tier 3 provisions will end with the elimination of the HD-
SFTP and the combining of bins for Class 2b and class 3 vehicles.
First, Class 2b vehicles with power-to-weight ratios at or below 0.024
hp/pound may no longer replace the full US06 component of the SFTP with
the second of three sampling bags from the US06. Second, Class 3
vehicles may no longer use the LA-92 cycle in the HD-SFTP calculation
but will instead have to meet the NMOG+NOX standard in each
of four test cycles (25 [deg]C FTP, HFET, US06 and SC03). Third, the
SC03 may no longer be replaced with the FTP in the SFTP calculation.
The final MDV 25 [deg]C FTP NMOG+NOX standard applies
equally at high altitude conditions (1520-1720 m) as at low-altitude
conditions (0-549 m), rather than continuing compliance relief
provisions from Tier 3 for certification at high altitude conditions.
Modern engine management systems can use idle speed, engine spark
timing, valve timing, and other controls to offset the effect of lower
air density on exhaust catalyst performance at high altitude
conditions.
EPA is also setting a new -7 [deg]C FTP NMOG+NOX fleet
average standard of 300 mg/mile for gasoline-fueled MDV. NMOG should be
determined as explained in 40 CFR 1066.635. EPA testing has
demonstrated the feasibility of a single fleet average -7 [deg]C FTP
NMOG+NOX standard of 300 mg/mile across light-duty vehicles
and MDV. Consistent with the proposal, our technical assessment for the
standards, and the approach in Tier 3 to assessing compliance with the
-7 [deg]C FTP NMHC standards, BEVs and other zero emission vehicles are
not included and not averaged into the fleet average -7 [deg]C FTP
NMOG+NOX standards. Diesel-fueled MDV are exempt from the -7
[deg]C FTP NMOG+NOX standard but EPA is requiring
manufacturers to report results from this test cycle in their
certifications.
For Tier 3 certification of -7 [deg]C FTP NMHC, manufacturers must
submit an engineering evaluation indicating that common calibration
approaches are utilized at high and low altitudes. For Tier 4
certification, this requirement continues for -7 [deg]C FTP
NMOG+NOX.
Since -7 [deg]C FTP and 25 [deg]C FTP are both cold soak tests that
include TWC operation during light-off and hot running operating, EPA
is finalizing the application of Tier 3 25 [deg]C FTP
NMOG+NOX useful life to -7 [deg]C FTP and
NMOG+NOX standards.
EPA is finalizing that -7 [deg]C FTP NMOG+NOX emissions
be certified with at least one Emissions Data Vehicle (EDV) per test
group for MDV certifying to the 300 mg/mile standard instead of one EDV
per durability group as in Tier 3.
Additional discussion on the feasibility of the proposed standards
can be found in RIA Chapter 3.2.
v. Averaging, Banking, and Trading Provisions
Similar to the existing criteria pollutant program,
NMOG+NOX credits may be generated, banked, and traded within
the Tier 4 program to provide manufacturers with flexibilities in
developing compliance strategies. EPA did not reopen or solicit comment
on the ABT program for criteria pollutants,\645\ with the sole
exceptions of discrete changes relating to the transition between Tier
3 and Tier 4 for certain NMOG+NOX credits and expanding the
credit program for -7 [deg]C FTP testing to apply for
NMOG+NOX emissions for light-duty and medium-duty vehicles
(rather than only NMHC emissions for light-duty vehicles). We proposed
and are finalizing these discrete changes, which we describe below.
---------------------------------------------------------------------------
\645\ ABT credit provisions for the GHG program are described in
Section III.C.4 of the preamble. As noted in that section, EPA did
not reopen any GHG ABT provisions.
---------------------------------------------------------------------------
EPA is allowing light-duty vehicle (LDV, LDT, MDPV) 25 [deg]C FTP
NMOG+NOX credits to be transferred into the Tier 4 program
when Tier 3 is closed out (i.e., when all of a manufacturers' test
groups within a certification category are Tier 4 compliant), up to the
end of the Tier 3 five-year credit life.\646\ In the separate program
for light-duty vehicle -7 [deg]C FTP testing, NMHC credits may be
transferred into the Tier 4 program on a 1:1 basis for -7 [deg]C FTP
NMOG+NOX credits when Tier 3 is closed out, up to the end of
the five-year credit life.
---------------------------------------------------------------------------
\646\ We mention the length of the credit life here for
informational purposes but note that EPA did not reopen the
provisions governing the five-year length of the credit life.
---------------------------------------------------------------------------
EPA is allowing MDV (Class 2b and 3 vehicles) 25 [deg]C FTP
NMOG+NOX credits to be transferred into the Tier 4 program
only if a manufacturer selects the early compliance phase-in for MDV.
If the MDV early compliance phase-in is selected, MDV credits may be
transferred into Tier 4 when Tier 3 is closed out, up to the end of the
Tier 3 five-year credit life. There were no -7 [deg]C FTP NMHC or -7
[deg]C NMOG+NOX standards for MDV before the Tier 4
standards adopted in this rule so there are no MDV -7 [deg]C FTP
credits to transfer.
As noted in section III.E of this preamble, EPA is broadening the
definition of MDPV to include passenger vehicles that could potentially
fall outside the prior definition, especially as a result of increased
weight from electrification. We have concluded that the newly
designated MDPVs should be included in the light-duty program
considering their size and function, but we recognize that this
recategorization may reduce the number of electric vehicles that would
otherwise have been available to factor into each manufacturer's
strategy for meeting MDV standards. To help manufacturers transition to
meeting the Tier 4 MDV
[[Page 27939]]
NMOG+NOX standards for 25 [deg]C testing, we are adopting an
interim provision allowing credits generated by MY 2027 through 2032
battery electric (BEV) and fuel cell vehicles (FCEV) qualifying as MDPV
to be used for complying with the Tier 4 MDV fleet average
NMOG+NOX standard for 25 [deg]C testing. See 40 CFR 86.1861-
17(b)(6). Manufacturers may use these credits starting in MY 2031 under
the default phase-in, and starting in MY 2027 under the early
compliance phase-in. Since this interim provision is addressing a
potential issue arising from changes in an individual manufacturer's
fleet mix of MDPV and MDV, we are not including an option to buy or
sell these credits for a different company to use for certifying its
MDV. Except as described here, all the other provisions for calculating
and using credits apply as specified in 40 CFR part 86, subpart S. Note
that this interim provision does not apply for NMOG+NOX
standards for -7 [deg]C testing because electric vehicles are not
subject to those standards.
3. PM Standard
i. PM Standard and Test Cycles for Light-Duty and Medium-Duty Vehicles
EPA is finalizing changes to the current Tier 3 p.m. standards and
requirements. These changes include a more protective standard for the
25 [deg]C FTP and US06 test cycles, and the addition of a cold PM
standard for the existing cold temperature test (-7 [deg]C FTP)
presently used for CO and NMHC (40 CFR 1066.710). As proposed, the same
numerical standard of 0.5 mg/mile and the same certification test
cycles are being finalized for light-duty vehicles (LDV, LDT, and MDPV)
and MDV, as shown in Table 43 for light-duty vehicles and Table 44 for
MDV. The standard for -7 [deg]C testing applies only to gasoline-fueled
and diesel-fueled vehicles.\647\ Comparisons to current Tier 3 p.m.
standards are provided for reference. EPA is finalizing that the same
Tier 3 25 [deg]C FTP useful life standard applies to all three PM test
cycles.
---------------------------------------------------------------------------
\647\ See 40 CFR 1066.710(d)(2) for -7 [deg]C FTP gasoline and
diesel test fuel specifications.
Table 43--Light-Duty Vehicle (LDV, LDT, MDPV) PM Standards
------------------------------------------------------------------------
Final PM
Test cycle Tier 3 standards (mg/ standard (mg/
mi) mi)
------------------------------------------------------------------------
25 [deg]C FTP..................... 3................... 0.5
US06.............................. 6................... 0.5
-7 [deg]C FTP..................... Not applicable...... 0.5
------------------------------------------------------------------------
Table 44--MDV (Class 2b and 3) PM Standards
------------------------------------------------------------------------
Final PM
Test cycle Tier 3 standards (mg/ standard (mg/
mi) mi)
------------------------------------------------------------------------
25 [deg]C FTP..................... 8/10 for 2b/3 0.5
vehicles.
US06.............................. 10/7 for 2b/3 0.5
vehicle on SFTP.
-7 [deg]C FTP..................... Not applicable...... 0.5
------------------------------------------------------------------------
As with NMOG+NOX, EPA notes that the Administrator is
setting standards for vehicles under 6,000 lb GVWR pursuant to CAA
section 202(a)(1)-(2), and is subject to the requirements of CAA
202(a)(3) for heavier vehicles, including the requirement that
standards reflect the greatest degree of emissions reduction
achievable, giving appropriate consideration to cost, energy and safety
and requirements for lead time and stability. As discussed in section V
of the preamble, EPA finds these standards are appropriate and
consistent with these requirements, and will reduce PM emissions over
the broadest range of vehicle operating and environmental conditions.
Specifically, we find that the final PM standards are feasible and
appropriate under section 202(a)(1)-(2) for LDV and LDT1-2 for each
model year between MY 2027-32 and take effect after such period as the
Administrator finds necessary to permit the development and application
of the requisite technology to control PM emissions, giving appropriate
consideration to the cost of compliance within such period. For LDT3-4
and MDV, we find that the final PM standards, as required by section
202(a)(3)(A), reflect the greatest degree of emission reduction
achievable through the application of technology to control PM
emissions which the Administrator determined will be available for each
model year to which such standards apply, giving appropriate
consideration to cost, energy, and safety factors associated with the
application of such technology. We discuss feasibility, lead time, and
costs, of the technology for controlling PM emissions in various
subsections in this section III.D.3 of the preamble and in Chapter
3.2.6 of the RIA. Discussion of energy (as reflected in impact on
CO2 emissions), safety, and other factors we considered in
establishing the PM standards are found in RIA Chapter 3.2.6. The
complete rationale for the PM standard is presented in sections II,
III.D.3, V, VII of the preamble and Chapter 3.2.6 of the RIA.
The current Tier 3 p.m. standards capture only a portion of vehicle
operation and a narrow and benign set of environmental conditions. EPA
has observed that PM emissions increase dramatically during cold
temperature cold-starts and high engine power conditions not captured
by Tier 3 p.m. test cycles. While several vehicles in the current fleet
demonstrate emissions performance that could comply with the standards
at 25 [deg]C, EPA projects that to meet the -7 [deg]C PM standard
manufacturers will choose to adopt a combination of Gasoline
Particulate Filters (GPF) and BEVs as the most practical and cost-
effective means to control PM emissions.
GPF is a mature and cost-effective technology and current GPF
designs (e.g., MY 2022 GPFs) have high filtration efficiency even
without ash or soot loading. GPFs are being widely used in Europe and
China and at least six vehicle manufacturers are
[[Page 27940]]
assembling GPF-equipped vehicles in the United States for export and
sale in other countries.
In support of the final PM standards, EPA conducted robust and
detailed characterizations of GPF performance. EPA quantified PM,
elemental carbon (EC) and polyaromatic hydrocarbon (PAH) emissions,
with and without the GPF installed, and assessed GPF impact on GHG
emissions and vehicle performance. EPA demonstrated no measurable GPF
influence on GHG emissions and only slight impact on vehicle
performance with a properly sized GPF. PM emissions were typically
reduced by over 95 percent, EC emissions were typically reduced by over
98 percent, and filter-collected PAH emissions were typically reduced
by over 99 percent. The detailed characterization of GPF benefits is
discussed Chapter 3.2.6.2 of the RIA.
The final numerical standard (0.5 mg/mi) and the three applicable
test cycles (25 [deg]C FTP, US06, -7 [deg]C FTP) are the same as
proposed in the NPRM. The phase-in of the standard, however, is more
gradual, as discussed in the section III.D.1 of the preamble.
Commenters expressed opposing views on the stringency, feasibility
and need of the proposed PM standard. NGOs, EJ groups, and states urged
the strongest possible standards given the significant health benefits,
especially important for near-roadway exposures and in communities
overburdened by air pollution, and the need for reductions to attain
the PM NAAQS. A 2023 remote sensing study by ICCT shows that while
gaseous emissions decreased, per-vehicle PM emissions decreased and
then increased from 2005 to 2022, likely due to more vehicles using GDI
(gasoline direct injection) technology in recent years. Automotive
suppliers provided strong support for the proposal, noting the maturity
of GPF technology and the current manufacturing of GPF-equipped
vehicles in the U.S. for export to meet strict PM standards in Europe
and China. Suppliers attested to having sufficient production capacity.
The United Steelworkers commented that GPFs can easily and affordably
be applied to light-duty vehicles and MDV in the U.S. and supported
requiring this technology. An analysis from the Manufacturers of
Emissions Control Association (MECA), a supplier trade association,
shows that a regulatory control strategy that includes a combination of
electric vehicle penetration and best available exhaust controls for PM
(i.e., GPF) on the remaining ICE vehicles results in approximately
double the PM2.5 reduction achievable than electrification
alone, during the period from 2025 to 2060.
The Alliance for Automotive Innovation (AAI) and several vehicle
manufacturers argued that the proposed PM standard would divert
investments from electrification and urged adoption of a less stringent
standard, specifically CARB's ACC II LEV IV standard of 1 mg/mile.
Vehicle manufacturers commented that they had worked closely with CARB
in the development of the 1 mg/mile standard and that EPA had not
appropriately justified why a lower standard than that adopted by CARB
is required. However, a few major OEMs supported the standard but asked
for more lead time for application of GPFs across various models
considering the level of effort needed to meet the collective sets of
standards of this multipollutant rulemaking. Several OEMs raised
concerns about measuring tailpipe PM emissions below 0.5 mg/mile,
especially at -7 [deg]C.
As we outlined in section II of the preamble, we are setting more
stringent PM standards because of the health and environmental effects
associated with exposure to PM2.5. Several commenters noted
that the PM2.5 reductions from the proposal were needed for
them to attain the PM2.5 NAAQS.\648\ In addition, other key
factors informed the Agency's decision to finalize the 0.5 mg/mile PM
standard. First, cost effective technology that is already being
applied by most, if not all manufacturers already exists and
demonstrates a potential to reduce harmful PM emissions by over 95
percent in virtually all operating and environmental conditions. GPFs
are a feasible, safe, mature, and prolific technology with tens of
millions of filters already installed on light-duty vehicles in
operation worldwide. Secondly, over 100 million new ICE vehicles will
likely be produced over the coming decades and these ICE vehicles will
be used on roadways for 20 or more years after their manufacture. EPA
has an obligation under the Clean Air Act to establish standards that
protect public health and welfare based on feasible technologies that
will be available considering costs and lead time. For vehicles over
6,000 lb EPA is obligated, as required by CAA section 202(a)(3), to set
standards that reflect the greatest degree of emission reduction
achievable through the application of available technology (considering
costs, energy, and safety). Finally, EPA recognizes that GPFs are not a
drop-in technology and that vehicle manufacturers will require lead
time to adopt the technology for U.S. applications. OEMs' lead time
concerns are addressed by lengthening the phase-in schedule described
in section III.D.3.ii and more generally in section III.D.1 of the
preamble.
---------------------------------------------------------------------------
\648\ On February 7, 2024, EPA finalized a rule to revise the
primary annual PM2.5 standard from 12 ug/m\3\ to 9 ug/
m\3\. https://www.epa.gov/pm-pollution/national-ambient-air-quality-standards-naaqs-pm accessed on March 7, 2024.
---------------------------------------------------------------------------
EPA considered industry comments recommending adoption of CARB's 1
mg/mile standard instead of our proposed 0.5 mg/mile standard. CARB
adopted the 1 mg/mile standard as part of their 2013 LEV III program
and set a phase-in starting in MY 2025. The 1 mg/mile PM standard was
confirmed as part of CARB's recently finalized LEV IV program. In the
time since the original 1 mg/mile standard was adopted by CARB there
have been several important developments. The first is the development
and proliferation of GPFs. At the time LEV III was finalized, GPFs were
not in installed in significant numbers of vehicles and the technology
was in relative infancy. Since that time, it is estimated that nearly
100 million GPFs have been installed in vehicles as the result of
stringent PM standards in other countries. The feasibility of meeting
more stringent PM standards has increased significantly since CARB
originally adopted their 1 mg/mile standard. At the same time that CARB
confirmed their PM standard for MY 2025 and beyond, they also
established a ZEV mandate which will result in additional significant
and guaranteed PM reductions. EPA is maintaining performance based GHG
standards, and as such, cannot expect the same national PM reductions
expected by California from the whole of its ACC II program absent a
more stringent federal PM program.
Several commenters recommended that EPA adopt additional fuel
controls in lieu of setting more stringent PM standards. The commenters
noted that a change in fuel properties could provide PM emissions
reductions from the entire gasoline vehicle in-use fleet. EPA agrees
that adjusted fuel properties can provide widespread and important PM
reductions and for this reason solicited comment on a possible
additional future approach for reducing PM through new fuel controls
(see section IX of the preamble in the NPRM, ``Consideration of
Potential Fuels Controls for a Future Rulemaking''). However, EPA does
not consider these strategies as interchangeable alternatives. As noted
in the proposal and in RTC section 19, the CAA has a separate and
distinct set of requirements for engaging in fuels regulations. Indeed,
section 211(c)(2)(A) provides that fuel may not be regulated
[[Page 27941]]
to control harmful air pollution except after ``consideration of other
technologically or economically feasible means of achieving emissions
standards under section [202].'' Thus, it is entirely appropriate (if
not required) for the Administrator to take the technologically and
economically feasible steps of this rule before undertaking further
controls on fuels to address emissions reduction. Furthermore, while
achieving PM emissions reduction from the in-use fleet is important,
reductions through fuel properties alone would not achieve the same
level of PM reductions that are possible through the use of GPFs on new
vehicles.
Furthermore, EPA's authority to adopt fuel controls involves a
distinct provision of the CAA with its own technical and legal
requirements. As we noted in the NPRM (88 FR 29397), changes to fuel
controls are beyond the scope of this rulemaking. EPA does however
recognize the potential benefits of fuel property changes to reduce
emissions from the in-use fleet and we will consider the information we
received in response to our solicitation of comments on this topic in
the context of possible future regulatory action.
ii. Phase-In for Light-Duty and Medium-Duty Vehicles
The final PM standard phases in with the finalized criteria
pollutant phase-in schedule described in section III.D.1 of the
preamble. The finalized phase-in is more gradual than proposed to
address manufacturer lead time concerns about applying GPFs across ICE
product lines, and the need to install PM sampling equipment into some
cold test facilities. The finalized phase-in reaches 100 percent in
2030 for LDV and LDT1-2 vehicle categories, 2030 for LDT3-4 and MDPV,
and 2031 for MDV. Section III.D.1 of the preamble provides phase-in
percentages, including default and optional early phase-in schedules.
Commentors submitted opposing views on phase-in. For LDV and LDT1-
2, EPA proposed a phase-in of 40/80/100 percent in 2027/2028/2029 and
requested comment on accelerating the phase-in for PM relative to other
criteria pollutants because of the availability of GPF technology.
Automotive suppliers urged a faster phase-in than proposed,
attesting to the maturity of GPF technology, abundant manufacturing
capacity, widespread use of GPF in other markets (2017 in Europe, 2020
in China, and 2023 in India), and manufacturers building GPF vehicles
in the U.S. for export to other countries. MECA, Advanced Engine
Systems Institute (AESI), and Alliance for Vehicle Efficiency (AVE)
recommended a phase in of 60/90/100 percent in 2027/2028/2029 for LDV
and LDT1/2.
Most manufacturers asked for either a longer phase-in schedule than
proposed, arguing that it takes time to integrate GPFs into various
product lines, or adopting CARB's 1 mg/mile standard without -7 [deg]C
testing through the ACC II phase-in. Some U.S. market trucks and SUVs
do not have similar versions in other markets where GPFs are in
widespread use, which would require additional engineering effort to
apply GPFs to these vehicles. Also, some manufacturers noted that their
cold test laboratories are not presently equipped with PM sampling
equipment.
EPA is finalizing a more gradual criteria pollutant phase-in
(including PM) than proposed to provide manufacturers with additional
lead time, but less time than some manufacturers recommended in their
comments. Although larger U.S. vehicles may not have similar versions
in other countries that use GPF technology, these vehicles tend to have
the most packaging space available for a GPF, somewhat mitigating the
need for additional lead time. We also note that BEVs are an
alternative technology for complying with the standards and in light of
our projections for BEV penetration (even under the No Action
scenario), some manufacturers may find that BEV technology is
sufficient to satisfy the phase-in for LDV and LDT1-2, at least in
2027. Under the default phase-in scenario, manufacturers have until
2030 to comply with the final PM standard for LDT3-4 and MDPV, and
until 2031 to comply with the final PM standard for MDV. EPA decided
not to adopt CARB's PM standard through the ACC II phase-in because EPA
is not adopting a ZEV mandate as the CARB standards use, because the
0.5 mg/mile PM standard is feasible at reasonable cost, and because
controlling PM in cold temperatures and other off-cycle operation
important.
iii. Feasibility of the PM Standard and Selection of Test Cycles
The PM standard that EPA is finalizing will require vehicle
manufacturers to produce vehicles that emit PM at or below GPF-equipped
levels of PM. The final rule does not require that GPF hardware be used
on ICE vehicles, but rather reflects EPA's judgement that it is
feasible and appropriate to achieve the final PM standard considering
the availability of this technology. EPA projects that manufacturers
will choose to employ a combination of GPF technology on ICE vehicles
and BEV technology as the most practical and cost-effective pathways
for meeting the standard, especially in -7 [deg]C FTP and US06 test
cycles.
To establish the level of the PM standard, EPA conducted a test
program that included multiple ICE vehicle types, powertrain
technologies, and GPF technologies. Much like other emissions controls,
GPFs have seen considerable development since their initial
introduction and have provided significantly improved effectiveness.
EPA evaluated available technologies with respect to the emissions
benefits, including two generations of GPF technology.
A PM test program was conducted using five chassis dynamometer test
cells at EPA, Environment and Climate Change Canada (ECCC), and FEV
North America Inc., and five test vehicles (2011 F150 Ecoboost, 2019
F150 5.0L, 2021 F150 Powerboost HEV, 2021 Corolla 2.0L, 2022 F250 7.3L)
tested in stock and GPF configurations. These test vehicles include a
passenger car, three Class 2a trucks, and one Class 2b truck. The two
generations of GPFs include series production MY 2019 and series
production MY 2022 models, catalyzed and bare substrates, and close-
coupled and underfloor GPF installations. Details of the vehicles and
test procedures are described in Chapter 3.2.6.2.1 of the RIA. Results
from the test program are summarized in Figure 13. The study
demonstrates that internal combustion engine-based light-duty vehicles
and MDV equipped with GPFs currently in series production in Europe and
China (i.e., MY 2022 GPF) can easily meet the final standard of 0.5 mg/
mile in all three test cycles with a large compliance margin. BEVs
would of course comply as well since they do not have tailpipe
emissions.
In Figure 13, tests without GPFs are shown in black, tests with MY
2019 GPFs are shown in gray, and tests performed with MY 2022 GPFs are
shown in stripes. The top of each bar represents the highest
measurement set mean of one vehicle in one laboratory and the bottom of
each bar represents the lowest measurement set mean. The tops of the
black bars are off scale in this figure, but their values are indicated
with numbers above the bars.
The striped bars include PM measurements from two vehicles: A 2021
F150 Powerboost HEV (Class 2a vehicle) retrofit with a MY 2022 bare GPF
in the underfloor location, and a 2022 F250 7.3L (Class 2b vehicle)
retrofit with two MY 2022 bare GPFs, one for each engine bank, in the
underfloor location.
[[Page 27942]]
Results in Figure 13 show that vehicles equipped with MY 2022 GPFs
met the 0.5 mg/mile standard in all three test cycles with a very
significant compliance margin. The MY 2022 GPFs showed high filtration
efficiencies generally over 95 percent. The mean of test sets with MY
2022 GPF are over 95 percent lower than the mean of non-GPF test sets
in each of the three test cycles. The results show some non-GPF
vehicles could meet the 0.5 mg/mile standard without GPF on the 25
[deg]C FTP and US06 cycles, but no non-GPF vehicles could meet the
standard in the -7 [deg]C FTP test cycle. All vehicles with GPF met the
standard for all test cycles except the MY 2019 GPFs failed to meet the
standard in the US06 because passive GPF regeneration occurred as a
result of high exhaust gas temperatures (GPF inlet gas temperature
greater than 600 [deg]C) and these older generation GPFs rely on stored
soot for high filtration efficiency. GPF regeneration oxidizes stored
soot and reduces GPF filtration efficiency during and immediately after
the regeneration, especially on the older generation GPFs. The results
support the conclusion that a 0.5 mg/mile PM standard over the -7
[deg]C FTP, 25 [deg]C FTP, and US06 test cycles is feasible and
appropriate.
The -7 [deg]C FTP test cycle is crucial to the final PM standard
because it addresses uncontrolled cold PM emissions in Tier 3 vehicles,
and absent the -7 [deg]C FTP test, vehicles would not achieve PM
reductions commensurate with what GPF technology offers across a wide
range of operating conditions. This is illustrated by the bottoms of
the black bars in Figure 13 that show some vehicles without GPFs
satisfy the 0.5 mg/mile standard in the 25 [deg]C FTP and US06 cycles,
but fail dramatically at -7 [deg]C (an important real-world
temperature), with the same being true at other important off-cycle
vehicle operation. Without the -7 [deg]C FTP test cycle, vehicles would
not have low PM under all operating conditions.
The US06 cycle is a similarly crucial part of the final PM standard
because it induces passive GPF regeneration in all vehicle-GPF
combinations (i.e., light-duty vehicles and MDV, naturally aspirated
and turbocharged engines, close-coupled and underfloor GPF
installations, bare and catalyzed GPFs), and GPF regeneration is an
important mode of operation with respect to emissions and frequently
occurs in real world use. GPF regeneration does not occur in the -7
[deg]C FTP, 25 [deg]C FTP, and LA-92 (used instead of the US06 for some
MDV in Tier 3) across vehicle and exhaust system combinations.
Including a certification test in which passive GPF regeneration occurs
is important because it ensures that vehicles have good PM control
during and immediately after GPF regenerations, which occur during high
load operation, including road grades, towing, and driving at higher
speeds.
Older GPF technology does not exhibit high PM filtration during and
immediately after GPF regeneration. Older GPF technology can have
filtration efficiency as low as 50 percent, as opposed to generally
more than 95 percent demonstrated by the MY 2022 GPFs shown in Figure
13. Without the US06 test cycle, manufacturers could employ older GPF
technology with poor PM control during high load operation. Average
US06 p.m. from the MY 2019 GPFs is 15 times higher than average US06
p.m. from the MY 2022 GPFs from the data shown in Figure 13.
[GRAPHIC] [TIFF OMITTED] TR18AP24.012
[[Page 27943]]
Figure 13: Results from a Five-Lab Five-Vehicle Test Program
Illustrating the Effectiveness of Series Production MY 2019 GPFs and
Series Production MY 2022 GPFs in Meeting the 0.5 mg/mile PM Standard
in -7 [deg]C FTP, 25 [deg]C FTP, and US06 Test Cycles. The Top of Each
Bar Represents the Highest Measurement Set Mean of One Vehicle in One
Laboratory and the Bottom of Each Bar Represents the Lowest Measurement
Set Mean
MDVs are certified at higher test weights and road load
coefficients than light-duty vehicles, but measurements show that
series production MY 2022 GPF technology enables meeting the 0.5 mg/
mile standard equally well on MDV as light-duty vehicles, with
compliance margins of over 100 percent. Measurements comparing PM from
a Class 2b vehicle with a current technology GPF (MDV MY 2022 F250 7.3L
with MY 2022 GPF) to a Class 2a vehicle with a current technology GPF
(LDV MY 2021 F150 Powerboost HEV with a MY 2022 GPF) are shown in
Figure 14. Further measurements support the same conclusion for Class 3
vehicles.
[GRAPHIC] [TIFF OMITTED] TR18AP24.013
Figure 14: PM Measurements Comparing PM From a Class 2a Vehicle to a
Class 2b Vehicle, Both With MY 2022 GPFs, in -7 [deg]C FTP, 25 [deg]C
FTP, and US06 Test Cycles
As was the case for light-duty vehicles, the -7 [deg]C FTP test
cycle is crucial to the final PM standard because it addresses
uncontrolled cold PM emissions in Tier 3, and absent the -7 [deg]C FTP
test, MDV would not achieve PM reductions commensurate with what MY
2022 GPF technology offers across a wide range of operating conditions.
Without the -7 [deg]C FTP test cycle, MDV would not have low PM under
all operating conditions.
Furthermore, as was the case for light-duty vehicles, the US06
cycle is a similarly crucial part of the PM standard. High load
operation, which is common on MDVs, induces passive GPF regeneration
and GPF regeneration can cause elevated emissions if MY 2022 GPF
technology is not used. The full US06 cycle results in GPF regeneration
across different vehicle-GPF combinations. The LA-92 cycle, which was
used instead of the US06 cycle for certification of Tier 3 Class 3
vehicles, usually does not induce GPF regeneration. Therefore, to
capture high load operation and passive GPF regeneration in a test
cycle, the full US06 cycle is required for all light-duty vehicles and
MDV in the final PM standard.
GPF inlet gas temperatures measured on the MY 2022 F250 7.3L during
sampled US06, sampled hot LA-92, and -7 [deg]C FTP test cycles, are
shown in Figure 15. Fast soot oxidation begins in a GPF around 600
[deg]C.\649\ The US06 is the only cycle where GPF inlet gas temperature
of the MY 2022 F250 exceeded 600 [deg]C and it exceeded it for a
significant amount of time (265 seconds), illustrating the importance
of the US06 cycle in the finalized PM standard. Peak inlet gas
temperature was 674 [deg]C in the US06. In contrast, GPF inlet gas
temperature never exceeded 600 [deg]C in the LA-92 and only exceeded
500 [deg]C for a limited period of time. Peak GPF inlet gas temperature
in the LA-92 (566 [deg]C) was closer to the -7 [deg]C FTP (493 [deg]C)
than the US06 (674 [deg]C).
---------------------------------------------------------------------------
\649\ Achleitner, E., Frenzel, H., Grimm, J., Maiwald, O.,
R[ouml]sel, G., Senft, P., Zhang, H., ``System approach for a
vehicle with gasoline direct injection and particulate filter for
RDE,'' 39th International Vienna Motor Symposium, Vienna, April 26-
27, 2018.
---------------------------------------------------------------------------
Additional tests performed with the MY 2022 F250 with MY 2022 GPFs
using test weight and road load coefficients from a MY 2022 F350 Class
3 vehicle show that even with the higher test weight and road load, the
GPFs did not undergo substantial regeneration in the LA-92 cycle.
Without requiring the US06 as a certification cycle for MDV, the GPF
may not undergo GPF regeneration and as a result, low PM emissions,
which new GPF technology offers, would not be ensured during high load
operation,
[[Page 27944]]
including trailer towing, road grades, or high speeds.
[GRAPHIC] [TIFF OMITTED] TR18AP24.014
Figure 15: GPF Inlet Gas Temperatures Measured on MY 2022 F250 7.3L
Left Engine Bank GPF During Sampled US06, Sampled Hot LA-92, and -7
[deg]C FTP Test Cycles
Under the final standards, Class 2b vehicles with power-to-weight
ratios at or below 0.024 hp/pound will no longer replace the full US06
component of the SFTP with the second of three phases (the highway
phase) of the US06 for PM certification. Class 2b vehicles with low
power-to-weight ratios will now use the full US06 test cycle, which
represents high load operation in urban and highway use. If a vehicle
is unable to follow the trace, it should use maximum accelerator
command to follow the trace as best it can, and doing so will not
result in a voided test. This procedure mimics how vehicles with low
power-to-weight tend to be driven in the real world.
Also, Class 3 vehicles will not use the LA-92 for PM certification,
as they did in Tier 3. Instead, Class 3 vehicles will have to meet the
0.5 mg/mile PM standard across the same three test cycles as light-duty
vehicles and other MDV: -7 [deg]C FTP, 25 [deg]C FTP, and US06.
GPF technology is both mature and cost effective. In this
rulemaking, unlike some prior vehicle emissions standards including
those adopted in the Clean Air Act of 1970, the technology necessary to
achieve the standards has already been demonstrated in production
vehicles. It has been used in series production on all new pure
gasoline direct injection (GDI) vehicle models in Europe since 2017
(WLTC and RDE test cycles) and on all pure GDI vehicles in Europe since
first registration of 2019 (WLTC and RDE test cycles) to meet Europe's
emissions standards. All gasoline vehicles (GDI and PFI) in China have
had to meet similar standards in the WLTC since 2020, and in the WLTC
and RDE starting in 2023. All pure GDI vehicles in India have also had
to meet similar GPF-forcing standards starting in 2023. GPFs like the
MY 2022 GPFs described by Figure 13 and Figure 14 are being used in
series production by U.S., European, and Asian manufacturers, and
several manufacturers currently assemble vehicles equipped with GPF in
the U.S. for export to other markets. While EPA believes that the
prolific application of GPFs outside of the United States supports our
feasibility assessment of GPF technology, we are not adopting more
stringent PM standards to mimic other countries, but rather for the
well documented health and environmental benefits from reduced PM
emissions. In addition, while some commenters interpreted EPA's
reference to GPF technology in other countries as implying a reduced
level of effort to adapt the technology to U.S. applications, once
again, EPA only means to show that the technology is in widespread use
in other areas of the world, which demonstrates a high degree of
technical feasibility.
Further details and discussion of test vehicles, GPFs, test
procedures, and results are provided in the RIA Chapter 3.2.6.
AAI and several manufacturers requested removal of the -7 [deg]C
FTP PM standard, exemption of GPF-equipped vehicles from the -7 [deg]C
FTP PM standard, or the option to attest to meeting the -7 [deg]C FTP
PM standard in lieu of test data. After consideration, EPA is not
finalizing the three recommendations.
EPA is requiring the -7 [deg]C FTP test cycle because it is a
crucial part of the PM standard that addresses uncontrolled cold PM
emissions in Tier 3, and absent the -7 [deg]C FTP test, vehicles would
not achieve appropriate and feasible PM reductions across a wide range
of operating conditions. For example, the 2021 Corolla in the EPA test
program emits 0.1 mg/mile in the 25 [deg]C FTP and 3.5 mg/mile in the -
7 [deg]C FTP.
EPA decided against exempting GPF-equipped vehicles from the -7
[deg]C FTP PM standard because the purpose of the standard is to
require low tailpipe emissions, not to force a certain device onto
vehicles. If a poor GPF design were added to a non-GPF vehicle with low
PM emissions in the 25 [deg]C FTP and US06, it could still easily fail
the -7 [deg]C FTP and other operating conditions. Poor GPF designs can
have very low filtration efficiencies (e.g., 50 percent) and simply not
be effective. Allowing GPF-equipped vehicles to be exempt
[[Page 27945]]
from the -7 [deg]C FTP PM standard would be analogous to allowing
three-way catalyst-equipped vehicles to be exempt from gaseous criteria
pollutant standards.
The decision not to allow indefinite attestation to the -7 [deg]C
FTP PM standard was made because of the critical importance of this
test in ensuring that vehicles achieve appropriate and feasible PM
emissions reductions across a wide range of operating conditions. Based
on manufacturer comments, however, EPA is finalizing an option for
manufacturers to attest to meeting the -7 [deg]C FTP PM standard for MY
2027 and MY 2028 vehicles. This option applies to vehicles at or below
6000 lb GVWR, early phase-in schedule vehicles between 6001-8500 lb
GVWR, and early phase-in schedule vehicles between 8501-14,000 lb GVWR,
and provides manufacturers with extra time to integrate PM samplers
into their cold test cells if they do not already have them.
Manufacturers are still responsible for ensuring that vehicles comply
with the -7 [deg]C FTP PM standard, and EPA may conduct testing to
confirm whether vehicles meet the standard, so manufacturers must have
confidence in their attestation.
Although EPA decided against removing the -7 [deg]C FTP PM
standard, exempting GPF-equipped vehicles from the -7 [deg]C FTP PM
standard, and allowing indefinite attestation, it is finalizing PM
relief in several areas: (1) The finalized criteria pollutant phase-in
is more gradual than proposed (section III.D.3.ii of the preamble); (2)
manufacturers do not have to perform -7 [deg]C FTP PM testing for IUVP,
although EPA may check that vehicles meet the standard (section
III.D.3.vi of the preamble); (3) all GPF OBD requirements proposed in
the NPRM were dropped in favor harmonizing with the CARB approach to
GPF OBD (section III.D.3.vii of the preamble); (4) temporary relief is
provided on the criteria that trigger an IUCP (in-use confirmatory
testing program, section III.G.4.ii of the preamble); and (5)
manufacturers may attest to meeting the -7 [deg]C FTP PM standard for
MY 2027 and MY 2028 vehicles, although EPA may check that vehicles meet
the standard (above paragraph, section III.D.3.iii of the preamble). We
adopted these relief provisions after consideration of comments and we
believe that with these provisions, the PM standard represents a
feasible and appropriate means of reducing PM emissions from light-duty
and medium-duty vehicles.
iv. PM Measurement Considerations
EPA did not propose and is not finalizing changes to PM test
procedures because the Agency does not believe that test procedure
changes are required to measure PM for the final PM standard. Current
test procedures outlined in 40 CFR parts 1065 and 1066 allow robust
gravimetric PM measurements well below the PM standard of 0.5 mg/mile,
as demonstrated by EPA and other laboratories.
Repeat measurements in EPA laboratories at different levels of PM
below 0.5 mg/mile are shown in Figure 16 for vehicles (dark bars), a
spark aerosol generator (stiped bar), and tunnel blanks (light bars).
The size of the error bars, which represent plus/minus one standard
deviation, relative to the measurement averages at and below 0.5 mg/
mile demonstrates that the current measurement methodology is
sufficiently precise to support a 0.5 mg/mile standard. No changes to
40 CFR part 1065 and 1066 procedures are required, but it is important
to use good engineering judgment when transitioning to measuring PM
below 0.5 mg/mile. This includes consideration of filter media
selection, removal of static charge from filter media, dilution factor,
filter media flow rate, using a single filter for all phases of a test
cycle, robotic weighing, and minimizing contamination from filter
handling, filter screens and cassettes.
[GRAPHIC] [TIFF OMITTED] TR18AP24.015
[[Page 27946]]
Figure 16: Example of Test-to-Test Repeatability of PM Measurements
From Vehicles Without and With GPF, an Aerosol Generator, and Tunnel
Blanks From Two EPA Test Cells
EPA also notes that many manufacturers have submitted, and
certified the validity of, PM test data below 0.5 g/mile to date. Over
20 percent of MY 2021-2024 light-duty vehicle federal PM certification
test results are below 0.5 mg/mile. We recognize that test-to-test
variability may be of greater concern to manufacturers for the revised
standard, but based on the round robin test results described in
III.D.3.iv of the preamble and RIA Chapter 3.2.6, and the test-to-test
repeatability results shown in Figure 16, we conclude that should not
be a significant issue for certification.
Some manufacturers raised concerns over the ability to reliably
measure PM below 0.5 mg/mile. EPA engaged with several manufacturers in
technical discussions on PM measurement capability during the
development of this rule and will continue to assist and advise
manufacturers on best practices for measuring PM at low levels. As a
result of these conversations, EPA recognizes that current manufacturer
PM test capability is commensurate with the Tier 3 level of the
standards, but in some labs, changes may be needed to reliably measure
PM below 0.5 mg/mile. Manufacturers may want to consider using power-
free gloves, avoiding clothing that sheds lint or dust, not leaning
over exposed filters on workbenches, using sticky pads in clean room
entranceways, wearing shoe covers to reduce dirt being tracked into the
clean room, and regular clean room cleaning. Other elements may be less
obvious, like grounding technicians while they handle filters,
grounding work benches, etc. These practices are important not just in
the PM clean room, but anywhere that filters are handled, such as when
they are loaded and unloaded into PM sampling equipment.
EPA's discussions with manufacturers focused on the importance of
using PTFE membrane sample filters with FEP (fluorinated ethylene
propylene), PMP (polymethyl pentene) or similar support rings (40 CFR
1065.170). Such filters minimize gas-phase artifact but require good
static charge removal during weighing using alpha-emitter static charge
removal or other techniques with similar effectiveness (40 CFR
1065.190). Discussions with manufacturers included improving signal-to-
noise ratio by using the lower half of the allowable dilution factor
range (40 CFR 1066.110), elevating filter face velocity (FFV) to a
velocity approaching the maximum allowable 140 cm/s, and loading one
filter per test instead of one filter per phase (40 CFR 1066.815).
Further elements of good measurement procedure include control of
temperature, dewpoint, grounding, using HEPA-filtered dilution air,
using an effective coarse particle separator (40 CFR 1065.145) and good
filter handing procedures (40 CFR 1065.140 and 1065.190). Laboratories
may also consider using robotic auto-handling for weighing (40 CFR
1065.190) and background correction (40 CFR 1066.110), although the
tests demonstrating the ability to measure below 0.5 mg/mile in the
test program summarized in section III.D.3.iii of the preamble did not
use background correction and only one of three organizations used
robotic auto-handling. EPA welcomes additional industry interaction as
manufacturers prepare their facilities to measure PM at the final
standard and will be happy to share best practices and help improve PM
measurement capability. Further discussion of PM measurement below 0.5
mg/mile is detailed in Chapter 3.2.6 of the RIA.
v. Pre-Production Certification
EPA is finalizing that PM emissions be certified over -7 [deg]C
FTP, 25 [deg]C FTP, and US06 cycles with at least one Emissions Data
Vehicle (EDV) per test group for light-duty vehicles and MDV certifying
to the new 0.5 mg/mile standard. As described toward the end of section
III.D.3.iii of this preamble, EPA is finalizing an option for
manufacturers to attest to meeting the -7 [deg]C FTP PM standard for MY
2027 and MY 2028 vehicles. Also, since BEVs do not have tailpipe
emissions, they are not subject to the tailpipe PM standard being
finalized.
This level of PM certification testing matches the requirement to
certify gaseous criteria emissions at the test group level and ensures
that the final PM standard of 0.5 mg/mile is met across a wide range of
ICE technologies. The requirement to certify PM emissions at the test
group level is an increase in testing requirements relative to Tier 3,
where PM emissions were certified at the durability group level.
EPA is updating the instructions to select a worst-case Tier 4 test
vehicle from each test group by considering -7 [deg]C FTP testing along
with the other test cycles (40 CFR 86.1828-01). This contrasts with the
Tier 3 approach where manufacturers selected worst-case test vehicles
separate from -7 [deg]C FTP testing and then selected a test vehicle
for -7 [deg]C FTP testing from those test vehicles included in the same
durability group. The change in selecting a worst-case test vehicle
from each test group is being made because concern for emissions from -
7 [deg]C FTP testing is on par with concern for emissions from other
test cycles. As a practical matter, it becomes possible to include
consideration of emissions from -7 [deg]C FTP testing because we are
amending 40 CFR 86.1829-15 to require manufacturers to submit emission
data for PM and other pollutants from -7 [deg]C FTP testing for each
test group.
EPA solicited comment on whether to revert to pre-production PM
certification at the durability group level in 2030 for light-duty
vehicles and in 2031 for MDV after PM control technologies have been
demonstrated across a range of ICE technology and AAI was supportive of
this concept. After consideration, EPA decided that it would be
appropriate to review PM certification relief if it were part of a
comprehensive review of certification test burden for all criteria
pollutants. Such a review would appropriately consider how to select
worst-case vehicles for certification testing if manufacturers
demonstrate compliance based on testing vehicles from every test group
for some standards and testing vehicles only based on the durability
group for other standards. EPA has not begun such a comprehensive
review at this time but will consider whether and when such a review
would be appropriate to undertake.
The final 25 [deg]C FTP PM standard applies equally at high-
altitude conditions (1520-1720 meters) as at low-altitude conditions
(0-549 meters). Modern engine management systems can use idle speed,
engine spark timing, valve timing, and other controls to offset the
effect of lower air density on exhaust catalyst performance at high
altitude conditions and GPF filtration of elemental carbon does not
diminish at high altitude conditions.
EPA is finalizing a requirement that manufacturers submit an
engineering evaluation indicating that common calibration approaches
are utilized at high and low altitude conditions for -7 [deg]C FTP PM.
Since EPA is finalizing that SVMs must meet the same criteria
pollutant emissions standards as large manufacturers, although with a
delayed phase-in, SVMs must provide PM test data when certifying to the
Tier 4 p.m. standard.
vi. In-Use Compliance Testing
In addition to pre-production certification, the final PM standard
[[Page 27947]]
requires in-use compliance testing as part of the in-use vehicle
program (IUVP). Each test vehicle must be tested in 25 [deg]C FTP and
US06 cycles and meet the 0.5 mg/mile PM standard. This is a change from
Tier 3, where only 50 percent of in-use test vehicles had to be tested
for PM. The final PM standard also requires in-use vehicles to comply
with the 0.5 mg/mile PM standard in the -7 [deg]C FTP cycle but
manufacturers are not required to test using this cycle as part of
IUVP. However, EPA may test in-use vehicles using -7 [deg]C FTP, 25
[deg]C FTP, and US06 cycles to ensure compliance. IUVP test vehicles
are not required to be tested in the -7 [deg]C FTP to reduce
manufacturer testing burden. This testing relief is based on the
reasoning that if a vehicle demonstrates compliance across all three
test cycles at pre-production and demonstrates in-use compliance in 25
[deg]C FTP and US06 cycles, then the vehicle design can be expected to
also comply with the in-use -7 [deg]C FTP test cycle. The same in-use
requirements apply to SVMs as to large manufacturers, although SVMs
have a delayed phase-in.
vii. OBD Monitoring and Warranty
Since GPF technology is a key enabler for meeting the final PM
standard in vehicles with an internal combustion engine, OBD monitoring
of GPFs is important. If a vehicle uses a GPF, the OBD system must
detect GPF-related malfunctions, store trouble codes related to
detected malfunctions, and alert operators appropriately.
EPA is finalizing that manufacturers follow the latest CARB OBD
requirements, which at this time are the California 2022 OBD-II
requirements in Title 13, section 1968.2 of the California Code of
Regulations, finalized on November 22, 2022. Following section
1968.2(e)(17), manufacturers propose GPF OBD plans and CARB reviews the
manufacturer plans on a case-by-case basis. This provides flexibility
relative to diesel PM trap (DPF) monitoring requirements described in
section 1968.2(e)(15).
EPA had proposed GPF OBD requirements unique from those of CARB,
but manufacturers commented that certain aspects of the EPA OBD
requirements were difficult to achieve and that manufacturers had
already certified GPF diagnostics with CARB. Harmonizing with CARB's
current requirements resolves potential conflicts of having two sets of
GPF OBD requirements and addresses manufacturer concerns about the
difficulty of achieving the EPA-proposed diagnostics. Therefore, EPA is
not finalizing our proposed GPF OBD requirements, and instead is
finalizing that manufacturers follow the latest CARB GPF OBD
requirements. EPA plans to continue to work with CARB on developing
increasingly robust OBD for GPFs. Broader discussion of OBD system
requirements is found in section III.H of this preamble.
As proposed, EPA is designating the GPF as a specified major
emission control component, which brings with it a warranty period of 8
years or 80,000 miles of use (whichever first occurs), as detailed in
section III.G.6 of the preamble.
viii. GPF Cost
GPF direct manufacturing cost (DMC) is estimated using an updated
cost model described in RIA Chapter 3.2.6.4. The cost model estimates
DMC of bare GPF(s) in their own enclosures (cans) installed downstream
of the TWC(s). This configuration results in a similar or slightly
higher system cost as compared to an aftertreatment system that uses
catalyzed GPF(s) to replace TWC(s) in the close-coupled position just
downstream of the first TWC(s). The updated GPF DMC model is used in
FRM OMEGA analyses. Indirect costs including R&D and markup are
calculated separately by OMEGA.
The updated GPF DMC model is based on the model used in the NPRM
but uses a larger GPF swept volume ratio (GPF volume to engine
displacement volume) of 0.80 instead of 0.55 in the NPRM, and uses 2022
dollars instead of 2021 dollars. The larger swept volume ratio is based
on an expanded GPF/vehicle database, input from a GPF supplier, and an
ICCT PM/GPF fact sheet released in November 2023.\650\ Details are
provided in RIA Chapter 3.2.6.4. The updated model estimates GPF DMC of
$87, $131, $176 for engines with displacements of 2.0L, 4.0L, and 6.0L,
respectively.
---------------------------------------------------------------------------
\650\ Isenstadt, A., ``What EPA's New Multi-Pollutant Emissions
Proposal Means for PM Emissions and GPFs,'' ICCT Fact Sheet,
November 2023. https://www.theicct.org accessed on March 7, 2024.
---------------------------------------------------------------------------
AAI and several manufacturers raised the issue of GPF cost,
including the cost to re-design vehicles to accommodate GPFs. In
response to these comments, the Agency updated the NPRM GPF cost model
to estimate GPF cost as accurately as possible using the latest
available information. The Agency is also finalizing a more gradual
criteria phase-in to provide manufacturers with additional time to add
GPFs to existing designs and in some cases add them together with
vehicle re-design or the introduction of new models. We believe the
updated GPF cost information and the more gradual phase-in supports
that the final PM standard can be met at a reasonable cost.
4. CO and Formaldehyde (HCHO) Standards
i. CO and HCHO Standards for Light-Duty Vehicles
EPA is finalizing the light-duty vehicle CO and formaldehyde (HCHO)
per vehicle emissions standards (caps) shown in Table 45. The CO caps
are 1.7 g/mile in the 25 [deg]C FTP, HFET, and SC03 test cycles, 9.6 g/
mile in the US06, and 10.0 g/mile in the -7 [deg]C FTP. The HCHO cap is
4 mg/mile in the 25 [deg]C FTP. EPA is finalizing that the same Tier 3
25 [deg]C FTP useful life standard applies to all the emissions caps
shown in Table 45.
The final standards contrast with Tier 3 bin-specific standards for
the FTP (1.0 g/mile for Bins 20 and 30, 1.7 g/mile for Bins 50 and 70,
2.1 g/mile for Bin 125, and 4.2 g/mile for Bin 160), a 4.2 g/mile
standard for the SFTP, a 10.0 g/mile -7 [deg]C FTP CO cap for LDV and
LDT1, a 12.5 g/mile -7 [deg]C FTP CO cap for LDT2-4 and MDPV, and a 4
mg/mile FTP HCHO bin-specific standard for Bin 20 through Bin 160. In
Tier 3 the -7 [deg]C FTP CO caps applied only to gasoline-fueled
vehicles, while the 10.0 g/mile cap being finalized applies to
gasoline-fueled and diesel-fueled vehicles.
The majority of the CO and HCHO standards in Table 45 are the same
as those EPA proposed with the exception of the level of the US06
standard, which has been increased from 1.7 g/mile to 9.6 g/mile.
Table 45--Light-Duty Vehicle CO and HCHO Emissions Caps
------------------------------------------------------------------------
------------------------------------------------------------------------
CO cap for 25 [deg]C FTP, HFET, SC03 (g/mi)..................... 1.7
CO cap for US06 (g/mi).......................................... 9.6
CO cap for -7 [deg]C FTP (g/mi)................................. 10.0
HCHO cap for 25 [deg]C FTP (mg/mi).............................. 4
------------------------------------------------------------------------
The 1.7 g/mile CO cap for the 25 [deg]C FTP is less stringent than
the Tier 3 25 [deg]C FTP bin specific standard for Bin 20 and Bin 30,
but overall, the 1.7 g/mile CO cap is somewhat more stringent than Tier
3 because it applies to three cycles instead of one, and because it is
more stringent than the Tier 3 25 [deg]C FTP bin specific standard for
Bin 125 and Bin 160.
The 1.7 g/mile CO cap for the 25 [deg]C FTP, HFET, and SC03 cycles
is feasible because most current production light-duty vehicles already
meet the cap and existing aftertreatment technology can be applied to
the remaining light-duty vehicles that do not already meet the standard
during the phase-in period described in section III.D.1.i of the
[[Page 27948]]
preamble. EPA did not receive adverse comments on the feasibility of
the 1.7 g/mile standard for the 25 [deg]C FTP, HFET, and SC03 test
cycles.
The final US06 cap was increased from the proposed value of 1.7 g/
mile to 9.6 g/mile for several reasons. While EPA recognizes that CO is
a pollutant with significant health risks, the United States does not
currently have any nonattainment areas for CO. EPA also considered the
current Tier 3 SFTP CO standards. The current Tier 3 US06 CO emissions
are captured as part of the Supplemental Federal Test Procedure (SFTP).
The SFTP is a composite standard which is the numerically weighted
result of CO emissions from the FTP, SC03 and US06 tests.\651\ The
current Tier 3 SFTP CO cap is 4.2 g/mile for LDVs. Because the Tier 3
US06 CO requirements are captured within the SFTP CO cap, Tier 3 allows
higher US06 CO emissions with lower FTP and SC03 CO emissions. In their
ACC II program, CARB also eliminated their SFTP standards and
established a 9.6 g/mile stand-alone US06 CO standard as well as
separate SC03 CO standards that were identical to the FTP CO standards.
EPA confirmed that 9.6 g/mile on the US06 is commensurate with the Tier
3 Bin 125 CO standard and is a more stringent standard for cleaner
bins, as compared to the current Tier 3 SFTP structure.\652\ The
implicit US06 limit under Tier 3 for a vehicle meeting 1.7 g/mile for
SCO3 and FTP (as is required for all vehicles in Tier 4) would be 10.6
g/mile. Additional detail can be found in RIA Chapter 3.2.3.
---------------------------------------------------------------------------
\651\ SFTP (g/mi) = 0.35 x FTP + 0.28 x US06 + 0.37 x SC03.
\652\ Tier 3 FTP Bin 125 has a CO standard of 2.1 g/mile. Given
the Tier 3 SFTP cap of 4.2 g/mile, and assuming FTP CO = SC03 CO
emissions, 4.2 g/mile = (0.35*2.1) + (0.28*2.1) + (0.37*US06) yields
a US06 implicit limit of 9.6 g/mile. Substituting 1.7 g/mile CO (for
Tier 3 FTP Bins 70 and 50) allows US06 CO to increase to 10.6 g/
mile.
---------------------------------------------------------------------------
In addition, several vehicle manufacturers, and the Alliance for
Automotive Innovation (AAI) expressed significant concern in meeting
the 1.7 g/mile standard over the US06 test cycle. Commenters noted that
test-to-test variability may be higher in the US06 than in other
cycles, and the proposed US06 CO standard would most likely require
significant engine and aftertreatment redesign and/or substantially
reduced use of enrichment. Industry commenters recommended that EPA
finalize a US06 CO standard of 9.6 g/mile aligned with current Tier 3
standards and the California ACC II standard. The International Council
for Clean Transportation (ICCT) noted in their comments the steady
historical decline in CO emissions in the United States as the result
of previous emissions standards.
With consideration of the current air quality needs, current Tier 3
standards, and the comments received, EPA has concluded that it is
appropriate to eliminate the SFTP structure but adopt 25 [deg]C FTP,
HFET, SC03 standards of 1.7 g/mile, and a US06 CO standard of 9.6 g/
mile. This US06 standard is less stringent than proposed but more
stringent than the current implicit US06 limits under Tier 3 SFTP
standards for vehicles meeting 1.7 g/mile on the FTP and SC03.
The final 25 [deg]C FTP CO standard applies equally at high-
altitude conditions (1520-1720 meters) as at low-altitude conditions
(0-549 meters). Modern engine management systems can use idle speed,
engine spark timing, valve timing, and other controls to offset the
effect of lower air density on exhaust catalyst performance at high
altitude conditions.
EPA is finalizing a minor increase in stringency in the -7 [deg]C
FTP CO standard in that all light-duty vehicles will have to meet a
10.0 g/mile cap instead of 10.0 g/mile for LDV and LDT1 and a 12.5 g/
mile cap for LDT2-4 and MDPV. All light-duty vehicle and MDPV MYs 2022-
2024 certifications already meet the finalized 10.0 g/mile cap with at
least a 40 percent compliance margin, demonstrating the feasibility of
this final standard. Additionally, -7 [deg]C FTP CO testing at EPA
using a MY 2019 Ford F150 5.0L and a MYs 2021 Toyota Corolla 2.0L show
these vehicles also meet the final standard by large compliance
margins, so there is no question about the feasibility of this
standard.
The final -7 [deg]C FTP CO standard applies equally at high-
altitude conditions as at low-altitude conditions. Modern engine
management systems can use idle speed, engine spark timing, valve
timing, and other controls to offset the effect of lower air density on
exhaust catalyst performance at high altitude conditions.
EPA is finalizing that -7 [deg]C FTP CO emissions be certified with
at least one Emissions Data Vehicle (EDV) per test group for light-duty
vehicles certifying to the 10.0 g/mile standard instead of one EDV per
durability group as in Tier 3.
EPA is finalizing a HCHO cap of 4 mg/mile in the 25 [deg]C FTP,
which has the same stringency as the Tier 3 bin-specific 4 mg/mile
standard for Bin 20 through Bin 160, (i.e., all current light-duty
vehicles and MDPV already meet the HCHO cap being finalized).
The final 25 [deg]C FTP HCHO standard applies equally at high-
altitude conditions (1520-1720 m) as at low-altitude conditions.
ii. CO and HCHO Standards for Medium-Duty Vehicles
EPA is finalizing the MDV CO and formaldehyde (HCHO) per vehicle
emissions standards (caps) shown in Table 46. The CO caps are 3.2 g/
mile in the 25 [deg]C FTP, HFET, and SC03 test cycles, 25 g/mile in the
US06 (i.e., identical to California MDV standards over the entire US06
cycle), and 10.0 g/mile in the -7 [deg]C FTP. The HCHO cap is 6 mg/mile
in the 25 [deg]C FTP. EPA is finalizing that the same Tier 3 25 [deg]C
FTP useful life standard applies to all the emissions caps shown in
Table 46.
This contrasts with Tier 3 bin-specific standards for the FTP (3.2-
7.3 g/mile depending on bin and class), bin-specific standards for the
HD-SFTP (4.0-22.0 g/mile depending on bin and class), no -7 [deg]C FTP
standard, and a 6 mg/mile FTP HCHO bin-specific standard for all bins
over bin 0. The 10.0 g/mile cap at -7 [deg]C applies to gasoline-fueled
and diesel-fueled vehicles.
The majority of the final MDV standards for CO and HCHO shown in
Table 46 are the same as what EPA proposed with the exception of the
US06 standard, which has been increased from 3.2 g/mile to 25 g/mile.
Table 46--MDV CO and HCHO Emissions Caps
------------------------------------------------------------------------
------------------------------------------------------------------------
CO cap for 25 [deg]C FTP, HFET, SC03 (g/mi)..................... 3.2
CO cap for US06 (g/mi).......................................... 25
CO cap for -7 [deg]C FTP (g/mi)................................. 10.0
HCHO cap for 25 [deg]C FTP (mg/mi).............................. 6
------------------------------------------------------------------------
The 3.2 g/mile CO cap for the 25 [deg]C FTP is equal to the
stringency of some Tier 3 bins and more stringent than others. EPA did
not receive adverse comments on the feasibility of the 3.2 g/mile
standard for the 25 [deg]C FTP, HFET, and SC03 test cycles.
The MDV US06 cap was increased from the proposed value of 3.2 g/
mile to 25 g/mile for similar reasons identified above for light-duty
vehicles. While EPA recognizes that CO is a pollutant with significant
health risks, the United States does not currently have any non-
attainment areas for CO. The current Tier 3 US06 CO emissions are
captured as part of the Supplemental Federal Test Procedure (SFTP). The
SFTP is a composite standard which is the numerically weighted result
of CO emissions from the FTP, SC03 and US06 tests. The current Tier 3
SFTP CO cap is 12 g/mile. Because the Tier 3 US06
[[Page 27949]]
CO requirements are captured within the SFTP CO cap, Tier 3 allows
higher US06 CO emissions with lower FTP and SC03 CO emissions. EPA has
determined that 25 g/mile is marginally more stringent that the current
Tier 3 MDV CO standard and is a lower standard for the cleaner bins
(including those that are equivalent to the Tier 4 standards), as
compared to the current Tier 3 SFTP structure.\653\ Additional detail
can be found in RIA Chapter 3.2.3.
---------------------------------------------------------------------------
\653\ For example, given the Tier 3 SFTP cap of 12 g/mile, and
assuming a vehicle is meeting 3.2 g/mile for both FTP and SC03 CO
emissions (i.e., Tier 4 levels), 12 g/mile = (0.35*3.2) + (0.28*3.2)
+ (0.37*US06) yields a US06 implicit limit of 27 g/mile.
---------------------------------------------------------------------------
EPA received comments from several vehicle manufacturers and AAI
expressing significant concern in meeting the 3.2 g/mile standard over
US06 test cycle. Commenters noted that test-to-test variability may be
higher in the US06 than in other cycles, and the proposed US06 CO
standard would most likely require significant engine and
aftertreatment redesign and/or substantially reduced use of enrichment.
Industry commenters recommended that EPA finalize a US06 CO standard of
25 g/mile to better align with current Tier 3 standards and the
California ACC II standard.
With consideration of the current air quality needs, current Tier 3
standards and the comments received, EPA has concluded that it is
appropriate to set a US06 CO standard that is more stringent than the
current Tier 3 SFTP standards for cleaner bins, albeit, under the
revised program structure of eliminating SFTP requirements.
The final 25 [deg]C FTP CO standard applies equally at high-
altitude conditions (1520-1720 meters) as at low-altitude conditions
(0-549 meters). Modern engine management systems can use idle speed,
engine spark timing, valve timing, and other controls to offset the
effect of lower air density on exhaust catalyst performance at high
altitude conditions.
EPA is finalizing a new 10.0 g/mile MDV CO cap for the -7 [deg]C
FTP because CO emissions increase in cold temperatures but there were
no MDV cold CO standards included in Tier 3 . Testing of a 2022 F250
7.3L in the -7 [deg]C FTP at EPA showed average CO emissions of 2.7 g/
mile CO, demonstrating that a 10.0 g/mile standard is feasible for MDV.
Present-day MDV gasoline engine aftertreatment technology allows fast
catalyst light-off followed by closed-loop A/F control and excellent
emissions conversion on Class 2b and 3 vehicles.
The final -7 [deg]C FTP CO standard applies equally at high-
altitude conditions as at low-altitude conditions. Modern engine
management systems can use idle speed, engine spark timing, valve
timing, and other controls to offset the effect of lower air density on
exhaust catalyst performance at high altitude conditions.
EPA is finalizing that -7 [deg]C FTP CO emissions be certified with
at least one Emissions Data Vehicle (EDV) per test group for MDV
certifying to the 10.0 g/mile standard instead of one EDV per
durability group as in Tier 3.
EPA is finalizing a HCHO cap of 6 mg/mile in the 25 [deg]C FTP,
which has the same stringency as the Tier 3 FTP HCHO 6 mg/mile bin-
specific standard for all bins over bin 0.
The final 25 [deg]C FTP HCHO standard applies equally at high-
altitude conditions (1520-1720 meters) as at low-altitude conditions
(0-549 meters).
5. Requirements for Medium-Duty Vehicles With High GCWR
The Agency proposed requiring high GCWR MDVs, defined as MDV with a
gross combination weight rating (GCWR) above 22,000 pounds, to be
subject to heavy-duty engine certification instead of chassis-
certification for criteria air pollutant standards. Within the proposed
rule, the Agency asked for comment on three alternatives to engine
certification of high GCWR MDV:
MDV above 22,000 pounds GCWR would comply with the MDV
chassis dynamometer standards with the introduction of additional
engine-dynamometer-based standards over the Supplemental Emissions Test
as finalized within the Heavy-duty 2027 and later standards;
MDV above 22,000 pounds GCWR would comply with the MDV
chassis dynamometer standards with additional in-use testing and
standards comparable to those used within the California ACC II;
Introduction of other test procedures for demonstration of
effective criteria pollutant emissions control under the sustained
high-load conditions encountered during operation above 22,000 pounds
GCWR.
We received comments from the Alliance for Automotive Innovation
supporting implementation of Alternative 2 for MDV in the final rule.
Similarly, Stellantis requested that MDV comply with California ACC II
provisions in lieu of engine certification. Alternative 2 fully
addresses the Agency's concern that NOX emissions controls
be designed to adequately control NOX emissions under the
high load conditions encountered by high GCWR MDV, and thus the Agency
is adopting Alternative 2 for the final rule. Alternative 2 includes
PEMS-based moving-average-window in-use standards that are comparable
to California in-use standards for chassis-certified MDV and include
options that facilitate 50-state certification of high GCWR MDV. The
Agency is not finalizing mandatory engine certification for compliance
with criteria pollutant emissions standards for high GCWR MDV; however,
there is still an option that allows manufacturers to choose compliance
with light-heavy-duty engine standards for high GCWR MDV in lieu of
compliance with MDV test procedures and standards.
i. Background on California ACC II/LEV IV Medium-Duty Vehicle In-Use
Standards
As part of ACC II and LEV IV programs, California established in-
use testing requirements for chassis certified LEV IV MDV with a GCWR
greater than 14,000 pounds using PEMS-based moving average window (MAW)
in-use standards.\654\ California's in-use test procedures and
standards for chassis-certified MDV are based upon California's MAW in-
use test procedures and standards for heavy-duty engines. Under
California's program, chassis-certified diesel MDV with a GCWR greater
than 14,000 pounds meet NOX, NHMC, CO, and PM in-use
emissions standards over a three-bin MAW (3B-MAW) with bins
representing idle operation (less than or equal to 6 percent engine
load), low-load operation (above 6 percent engine load and less than or
equal to 20 percent engine load) and medium-high operation (above 20
percent engine load) at up to GCWR.\655\ Chassis-certified gasoline MDV
with a GCWR greater than 14,000 pounds attest to meeting
NOX, NHMC, CO, and PM in-use emissions standards over a
single MAW (1B-MAW) at up to GCWR.\653\ Note that under these
provisions,
[[Page 27950]]
chassis certified MDV with a GCWR greater than 14,000 pounds are
required to meet g/bhp-hr MAW standards instead of g/mile MAW standards
and use a FTP CO2 family certification level (FCL)
calculated either from chassis dynamometer test results or engine
dynamometer test results.\656\ The chassis dynamometer FCL definition
uses OBD torque data collection together with CO2 emissions
measurement during chassis-dynamometer testing. The California MDV in-
use standards also include a conformity factor (CF) for in-use
compliance that is multiplied by each emissions standard. The CF is set
to 2.0 for MYs 2027 through 2029. The CF is set to 1.5 for MY 2030 and
subsequent model year vehicles.
---------------------------------------------------------------------------
\654\ California 2026 And Subsequent Model Year Criteria
Pollutant Exhaust Emission Standards and Test Procedures for
Passenger Cars, Light Duty Trucks, and Medium-Duty Vehicles; Part 1,
section I.4. ``California Provisions: Certification and In-Use
testing requirements for chassis certified Medium-Duty Vehicles
(MDV) with a Gross Combination Weight Rating (GCWR) greater than
14,000 pounds, using the Moving Average Window (MAW).'' August 25,
2022.
\655\ California 2026 And Subsequent Model Year Criteria
Pollutant Exhaust Emission Standards and Test Procedures for
Passenger Cars, Light Duty Trucks, and Medium-Duty Vehicles; Part 1,
section I.4.1 ``Test Procedures for Three Binned Moving Average
Window (3B-MAW) and Moving Average Window (MAW). Applies to 2027 and
subsequent model year diesel and Otto-cycle vehicles.'' August 25,
2022.
\656\ California 2026 And Subsequent Model Year Criteria
Pollutant Exhaust Emission Standards and Test Procedures for
Passenger Cars, Light Duty Trucks, and Medium-Duty Vehicles; Part 1,
section I.4.1.14. August 25, 2022.
---------------------------------------------------------------------------
ii. Background on Federal MAW Standards and Procedures for Light-Heavy-
Duty Engines and California Harmonization With Federal Standards
In January 2023, the Agency finalized MAW in-use test procedures
and NOX, PM, HC and CO in-use standards for heavy-duty
diesel engines based upon a two-bin moving average window (2B-MAW)
instead of California's 3B-MAW.657 658 The Federal 2B-MAW
standards also applied a separate temperature correction to light-
heavy-duty diesel engine (LHDDE) NOX standards than the
temperature correction used for medium- and heavy-heavy-duty diesel
engines. The Agency established 1B-MAW test procedures for gasoline
heavy-duty engines comparable to the California procedures, however the
Agency did not establish 1B-MAW standards for heavy-duty gasoline
engines.
---------------------------------------------------------------------------
\657\ 88 FR 4296, January 24, 2023.
\658\ 40 CFR 1036.104, and 1036.530 and 40 CFR part 1036,
subpart E.
---------------------------------------------------------------------------
The Federal 2B-MAW procedures for diesel engines are based upon two
300-second moving average window (MAW) operational bins. Bin 1
represents extended idle operation and other very low (<=6 percent)
load operation where exhaust temperatures may drop below the optimal
temperature for aftertreatment function. Bin 2 represents higher load
operation (>6 percent). The California 3B-MAW procedures differ chiefly
by dividing Bin 2 into Bin 2 and Bin 3, with Bin 2 representing
operation from 6 percent to 20 percent load and Bin 3 having operation
at greater than 20 percent load.
Within the Federal in-use procedures, CO2 emissions
rates normalized to the maximum CO2 rate of the engine are
used as a surrogate for engine power within the bin definitions. The
maximum CO2 rate is defined as the engine's rated maximum
power multiplied by the engine's CO2 family certification
level (FCL) for the FTP certification cycle.\659\
---------------------------------------------------------------------------
\659\ 40 CFR 1036.530(e).
---------------------------------------------------------------------------
In June 2023, a final agreement was signed by representatives of
the California Air Resources Board (CARB), the Truck and Engine
Manufacturers Association, Cummins, Daimler Truck, General Motors,
Hino, Isuzu, Navistar, PACCAR, Stellantis, and Volvo.\660\ As part of
this agreement, CARB proposed adopting the Federal 2B-MAW test
procedures and standards from 40 CFR part 1036 for diesel heavy-duty
engines with no changes to California's 1B-MAW standards and procedures
for gasoline heavy-duty engines. California has previously maintained
consistent MAW standards and procedures between their in-use medium-
duty chassis-certified Tier IV program and their medium-duty engine-
certified program.
---------------------------------------------------------------------------
\660\ Final Agreement between Carb and EMA, 6-27-2023. https://ww2.arb.ca.gov/sites/default/files/2023-07/Final%20Agreement%20between%20CARB%20and%20EMA%202023_06_27.pdf.
---------------------------------------------------------------------------
iii. In-Use Testing Requirements for Chassis-Certified High GCWR
Medium-Duty Vehicles Using the Moving Average Window (MAW)
The agency is not finalizing the proposed provisions for requiring
MY 2030 engine-certification to light-heavy-duty engine standards under
40 CFR part 1036 for high GCWR MDV (GCWR above 22,000 pounds), however
the final rule retains engine certification as an option for high GCWR
MDV. See section III.D.5.iv of the preamble for further description of
the option to certify engines under 40 CFR part 1036. The remainder of
this section describes the in-use provisions required for high-GCWR MDV
chassis certification 40 CFR part 86, subpart S, and 40 CFR part 1036,
subparts B, E, and F.
The agency is finalizing in-use standards for MY 2031 and later
high GCWR MDVs consistent with the California provisions for
certification and in-use standards for chassis certified medium-duty
vehicles (MDV) based on moving average windows (i.e., Alternative 2 in
the proposal). The timing of the standards is simultaneous with default
compliance with other criteria pollutant standards (see section
III.D.1.ii of the preamble) and one year after the fully phase-in of
California's in-use program. Consistent with the proposal, note that
this differs from the California program with respect to applicability.
The Federal in-use standards only apply for MDV with a GCWR greater
than 22,000 pounds whereas the California program applies above 14,000
pounds GCWR.
The applicability and feasibility of 2B-MAW standards to high GCWR
diesel MDV is based upon EPA's previous analysis of in-use 2B-MAW
standards for MY 2027 and later light-heavy-duty diesel engines.\661\
EPA is also allowing optional certification of high GCWR diesel MDV to
3B-MAW standards; however, this has been included solely as a
flexibility to facilitate 50-state certification of high GCWR MDV.
There remains a degree of uncertainty with respect to California's
anticipated adoption of 2B-MAW standards for diesel chassis-certified
MDV in place of California's current 3B-MAW, and thus we will allow
manufacturers of high GCWR diesel MDV to choose between compliance with
2B-MAW standards or 3B-MAW standards. The levels of the 2B-MAW
emissions standards for MY 2031 and later high GCWR MDV are identical
to those of current 2B-MAW standards applicable to MY 2027 and later
compression-ignition light heavy-duty engines. The levels of the 3B-MAW
emissions standards for high GCWR MDV are consistent with MY 2030 and
later California standards for chassis-certified MDV.
---------------------------------------------------------------------------
\661\ U.S. EPA. Chapter 2.2--Manufacturer-Run Off-Cycle Field
Testing Program for Compression-Ignition Engines. Control of Air
Pollution from New Motor Vehicles: Heavy-Duty Engine and Vehicle
Standards--Regulatory Impact Analysis. EPA-420-R-22-035, December
2022.
---------------------------------------------------------------------------
The final in-use test procedures and standards for high GCWR MDV
are based upon Federal heavy-duty in-use test procedures and standards
for light-heavy-duty engines with changes that include:
Optionally allow FCL to be derived entirely from chassis
dynamometer testing, emissions measurement and OBD data collection.
Addition of optional 3B-MAW standards, procedures
calculations for high GCWR diesel MDV. Note that Federal 3B-MAW
standards incorporate California's full-phase-in CF of 1.5.
Addition of 1B-MAW standards for high GCWR gasoline MDV.
The high GCWR gasoline MDV standards are summarized in Table 47.
High GCWR diesel 3B-MAW standards and off-cycle bin definitions are
summarized in Table 48 and Table 49. High GCWR diesel 2B-MAW standards
and off-cycle bin definitions are
[[Page 27951]]
summarized in Table 50 and Table 51. Note that, identical to standards
for light-heavy-duty diesel engines, the 2B-MAW standards for high GCWR
diesel MDV also include PEMS accuracy margins (Table 52). The 2B-MAW
and 3B-MAW NOX standards, including any applicable accuracy
margins and temperature corrections, are compared in Figure 17 and
Figure 18. Note that while the 2B-MAW NOX standards are
somewhat less stringent the corresponding 3B-MAW standards, the level
of the 2B-MAW NOX standards together with the accuracy
margins and temperature corrections to those standards represent what
we consider to be feasible with current and near-term urea SCR
NOX controls and are consistent with data previously
generated in support of the MY 2027 and later heavy-duty engine
standards.\662\ See 40 CFR 86.1811-27 for further details regarding the
finalized high GCWR MDV in-use standards and see 40 CFR 86.1845-04(h)
for further details regarding the finalized high GCWR MDV in-use test
procedures. These regulatory provisions include extensive references to
40 CFR part 1036.
---------------------------------------------------------------------------
\662\ U.S. EPA. Chapter 2.2--Manufacturer-Run Off-Cycle Field
Testing Program for Compression-Ignition Engines. Control of Air
Pollution from New Motor Vehicles: Heavy-Duty Engine and Vehicle
Standards--Regulatory Impact Analysis. EPA-420-R-22-035, December,
2022.
Table 47--MY 2031 and Later Spark-Ignition Standards for Off-Cycle
Testing of High GCWR MDV \a\ \b\
------------------------------------------------------------------------
NOX mg/ HC mg/ PM mg/ CO g/
hp[middot]hr hp[middot]hr \c\ hp[middot]hr hp[middot]hr
------------------------------------------------------------------------
30 210 7.5 21.6
------------------------------------------------------------------------
\a\ Standards already include a conformity factor of 1.5 and Accuracy
Margins do not apply.
\b\ In-use standards for spark-ignition vehicles are not divided into
separate operation bins.
\c\ There is no applicable temperature condition, Tiamb, for spark-
ignition vehicles certifying to moving average window standards.
Table 48--Model Year 2031 and Later Compression-Ignition Standards for Off-Cycle Testing of High GCWR MDV Over
the 3B-MAW Procedures \a\ \b\
----------------------------------------------------------------------------------------------------------------
HC mg/ PM mg/ CO g/
Off-cycle Bin a b c NOX \c\ hp[middot]hr hp[middot]hr hp[middot]hr
----------------------------------------------------------------------------------------------------------------
Bin 1................................. 7.5 g/hr................ .............. .............. ..............
Bin 2................................. 75 mg/hp[middot]hr...... 21 7.5 23.25
Bin 3................................. 30 mg/hp[middot]hr...... 21 7.5 23.25
----------------------------------------------------------------------------------------------------------------
\a\ Vehicles optionally certifying to 3-bin moving average window standards.
\b\ Standards already include a conformity factor of 1.5 and Accuracy Margins do not apply.
\c\ There is no applicable temperature condition, Tiamb, for vehicles certifying to 3-bin moving average window
standards.
Table 49--Criteria for 3B-MAW Off-Cycle Bins
------------------------------------------------------------------------
Normalized CO2 emission mass over the 300
Bin second test interval
------------------------------------------------------------------------
Bin 1........................ mCO2,norm,testinterval <= 6.00%.
Bin 2........................ 6.00% < mCO2,norm,testinterval <= 20.00%.
Bin 3........................ mCO2,norm,testinterval > 20.00%.
------------------------------------------------------------------------
Table 50--Model Year 2031 and Later Compression-Ignition Standards for Off-Cycle Testing Over the 2B-MAW
----------------------------------------------------------------------------------------------------------------
Temperature HC mg/ PM mg/ CO g/
Off-cycle Bin \a\ NOX \b\ adjustment \c\ hp[middot]hr hp[middot]hr hp[middot]hr
----------------------------------------------------------------------------------------------------------------
Bin 1........................ 10.0 g/hr....... (25.0-Tiamb) .............. .............. ..............
[middot] 0.25.
Bin 2........................ 58 mg/ (25.0-Tiamb) 120 7.5 9
hp[middot]hr. [middot] 2.2.
----------------------------------------------------------------------------------------------------------------
\a\ Vehicles and engines certifying to 2-bin moving average window standards.
\b\ Use Accuracy Margins from 40 CFR 1036.420(a).
\c\ Tiamb is the mean ambient temperature over a shift-day, or equivalent. Adjust the off-cycle NOX standard for
Tiamb below 25.0 [deg]C by adding the calculated temperature adjustment to the specified NOX standard.
Table 51--Criteria for 2B-MAW Off-Cycle Bins
------------------------------------------------------------------------
Normalized CO2 emission mass
Bin over the 300 second test
interval
------------------------------------------------------------------------
Bin 1.................................. mCO2,norm,testinterval <=
6.00%.
Bin 2.................................. mCO2,norm,testinterval > 6.00%.
------------------------------------------------------------------------
Table 52--Accuracy Margins for In-Use Testing Over the 2B-MAW
----------------------------------------------------------------------------------------------------------------
NOX HC PM CO
----------------------------------------------------------------------------------------------------------------
Bin 1......................... 0.4 g/hr.........
[[Page 27952]]
Bin 2......................... 5 mg/hp[middot]hr 10 mg/ 6 mg/ 0.025 g/hp[middot]hr.
hp[middot]hr. hp[middot]hr.
----------------------------------------------------------------------------------------------------------------
[GRAPHIC] [TIFF OMITTED] TR18AP24.016
Figure 17: 2B-MAW Bin 1 In-Use NOX Standard With Ambient Temperature
Correction and PEMS Accuracy Margin Compared to 3B-MAW Bin 1 In-Use NOX
Standard
[GRAPHIC] [TIFF OMITTED] TR18AP24.017
[[Page 27953]]
Figure 18: 2B-MAW Bin 2 In-Use NOX Standard With Ambient Temperature
Correction and PEMS Accuracy Margin Compared to 3B-MAW Bin 2 and Bin 3
In-Use NOX Standard
iv. Optional High GCWR Medium-Duty Vehicles Engine Certification
The final rule includes the option for engine-based certification
to emission standards for both spark-ignition and compression-ignition
(diesel) engines, and complete and incomplete vehicles (see 40 CFR
1036.635). Engine certification would require compliance with all the
same engine certification criteria pollutant requirements and standards
as for MY 2027 and later engines installed in heavy-duty vehicles above
14,000 pounds GVWR, including the 2023 rule's NOX, HC, PM,
and CO standards, useful life, warranty and in-use requirements (88 FR
4296, January 24, 2023). Complete MDVs would still require chassis
dynamometer testing for demonstrating compliance with GHG standards as
described in section III.D.3 of the preamble and are included within
the fleet average MDV GHG emissions standards along with the other
MDVs. Manufacturers would have the option to certify incomplete MDVs to
GHG standards under 40 CFR 86.1819 or 40 CFR parts 1036 and 1037. Note
that existing regulations at 40 CFR 1037.150(l) already allow a similar
dual-testing methodology, which utilizes engine dynamometer
certification for demonstration of compliance with criteria pollutant
emissions standards while maintaining chassis dynamometer certification
for demonstration of compliance with GHG emissions standards under 40
CFR 86.1819.
6. Refueling Standards for Incomplete Spark-Ignition Vehicles
Spark-ignition medium-duty vehicles generally operate with volatile
liquid fuel (such as gasoline or ethanol) or gaseous fuel (such as
natural gas or liquefied petroleum gas) which have the potential to
release high levels of evaporative and refueling hydrocarbon (HC)
emissions. As a result, EPA has established evaporative emission
standards at 40 CFR 86.1813-17 that apply to vehicles operated on these
fuels. Refueling emissions are evaporative emissions that result when
the pumped liquid fuel displaces the vapor in the vehicle tank. Without
refueling emission controls, most of those vapors are released into the
ambient air. The HCs emitted are a function of ambient temperature,
fuel temperature, and fuel volatility.\663\ The emission control
technology that collects and stores the vapor generated during
refueling events is the Onboard Refueling Vapor Recovery (ORVR) system.
---------------------------------------------------------------------------
\663\ E.M. Liston, American Petroleum Institute, and Stanford
Research Institute. A Study of Variables that Effect the Amount of
Vapor Emitted During the Refueling of Automobiles. Available online:
http://books.google.com/books?id=KW2IGwAACAAJ, 1975.
---------------------------------------------------------------------------
Light-duty vehicles, light-duty trucks, and chassis-certified
complete medium-duty vehicles at or below 14,000 pounds GVWR have been
meeting evaporative and refueling requirements for many years. ORVR
requirements for light-duty vehicles started phasing in as part of
EPA's National Low Emission Vehicle (NLEV) and Clean Fuel Vehicle (CFV)
programs in 1998.\664\ In EPA's Tier 2 vehicle program, all complete
vehicles with a GVWR of 8,501 to 14,000 pounds were required to phase-
in ORVR requirements between 2004 and 2006 model years.\665\ In the
Tier 3 rulemaking, EPA adopted a more stringent standard of 0.20 grams
of HC per gallon of gasoline dispensed, with implementation in model
year 2022 (see 40 CFR 86.1813-17(b)).\666\ The 2023 final rule to set
standards for model year 2027 and later heavy-duty engines also
established refueling standards for incomplete heavy-duty vehicles over
14,000 pounds GVWR (88 FR 4296, January 24, 2023). This left incomplete
medium-duty spark-ignition engine powered vehicles 8,501 to 14,000
pounds GVWR as the only SI vehicles not required to meet refueling
standards.
---------------------------------------------------------------------------
\664\ 62 FR 31192 (June 6, 1997) and 63 FR 926 (January 7,
1998).
\665\ 65 FR 6698 (February 10, 2000).
\666\ 79 FR 23414 (April 28, 2014) and 80 FR 0978 (February 19,
2015).
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As proposed, the agency is requiring that incomplete medium-duty
vehicles meet the same on-board refueling vapor recovery (ORVR)
standards as complete vehicles. Incomplete medium-duty vehicles have
not been required to comply with the ORVR requirements to date because
of the potential complexity of their fuel systems, primarily the filler
neck and fuel tank.\667\ Unlike complete vehicles, which have permanent
fuel system designs that are fully integrated into the vehicle
structure at time of original construction by manufacturers, it was
previously believed that for incomplete vehicles, manufacturers may
need to change or modify some fuel system components during finishing
assembly. For this reason, it was previously determined that ORVR might
introduce complexity for the upfitters that is unnecessarily
burdensome.
---------------------------------------------------------------------------
\667\ Incomplete light-duty trucks are already subject to
refueling emission standards. The proposed rule mistakenly requested
comment on applying refueling emission standards for those vehicles.
---------------------------------------------------------------------------
Since then, the agency has newly assessed both current ORVR-
equipped vehicles and their incomplete versions. Based on our updated
assessment, the agency believes that the fuel system designs are almost
identical, with only the ORVR components removed for the incomplete
version. The complete and incomplete vehicles appear to share the same
fuel tanks, lines, and filler tubes. The original thought that
extensive differences between the original manufacturer's designs and
the upfitter modifications to the fuel system would be required have
not been observed. Therefore, the agency believes that all incomplete
vehicles can comply with the same ORVR standards as complete vehicles
with the addition of the same ORVR components on the incomplete
vehicles to match the complete vehicles. Commenters uniformly affirmed
the appropriateness of adopting the proposed refueling standards.
We are finalizing, as proposed, a new refueling emission standard
for incomplete vehicles 8,501 to 14,000 pounds GVWR, along with
corresponding testing and certification procedures. The new standard is
0.20 grams HC per gallon of dispensed fuel (0.15 grams for gaseous-
fueled vehicles), which is the same as the existing refueling standards
for other vehicles.\668\ These refueling emission standards will apply
to all liquid-fueled and gaseous-fueled spark-ignition medium-duty
vehicles, including gasoline and ethanol blends.\669\ These standards
will apply over a useful life of 15 years or 150,000 miles, whichever
occurs first, consistent with existing evaporative emission standards
for these vehicles and for complete versions.
---------------------------------------------------------------------------
\668\ 40 CFR 86.1813-17.
\669\ Refueling requirements for incomplete medium-duty vehicles
that are fueled by CNG or LNG will be the same as the current
complete gaseous-fueled Spark-ignition medium-duty vehicle
requirements.
---------------------------------------------------------------------------
We are applying the refueling standards for new incomplete vehicles
starting with model year 2030. This meets the statutory obligation to
allow four years of lead time for new emissions standards for criteria
pollutants for vehicles above 6,000 pounds GVWR. This schedule also
complements the optional alternative phase-in provisions adopted in our
final rule setting these same standards for vehicles above 14,000
pounds GVWR (88 FR 4296, January 24, 2023). Those alternative phase-in
provisions allowed
[[Page 27954]]
for manufacturers to phase in certification of all their incomplete
medium-duty and heavy-duty vehicles to the new standards from 2026
through 2030. In the alternative phase-in, manufacturers would certify
all their incomplete heavy-duty vehicles above and below 14,000 pounds
GVWR to the refueling standards, starting with 40 percent of vehicles
in 2026 and 2027, followed by 80 percent of vehicles in 2028 and 2029
before reaching 100 percent of vehicles in 2030.
See the preamble to the proposed rule \670\ and RIA Chapter 3.2.7
for a description of ORVR technology and costs, along with a discussion
of the feasibility of meeting the new standards.
---------------------------------------------------------------------------
\670\ 88 FR 29271-29275.
---------------------------------------------------------------------------
The proposed rule requested comment on amendments that would
account for fuel vapors vented to evaporative or refueling canisters
from vehicles with pressurized tanks just prior to fuel cap removal for
a refueling event. Most commenters suggested that we follow the
approach used by California ARB to require an engineering evaluation to
demonstrate that refueling canisters have enough capacity to handle
these ``puff losses'' in addition to the vapor directed to the
refueling canister during the refueling emission test. Two commenters
recommended changing the measurement procedure for refueling emissions
as the most effective way to ensure that vehicles with pressurized fuel
tanks would not have increased emissions resulting from puff losses.
See the section 7.4 of the Response to Comments for a detailed
discussion of the comments.
The existing refueling test procedures require vehicle
stabilization with no fuel tank pressure before the vehicle enters the
Sealed Housing for Evaporative Determination (SHED) for emission
measurement. In contrast, the regulation includes a partial refueling
test in which EPA may test a vehicle using a streamlined procedure. The
partial refueling test requires driving followed by stabilizing the
vehicle for one to six hours before the refueling test, without
removing the fuel cap. The partial refueling test calls for the fuel
cap removal (and tank depressurizing, as applicable) within two minutes
of sealing the SHED for the refueling test. This approach includes the
canister loading from puff losses, though it does not include SHED
measurement to ensure that vapors from depressurizing are vented to the
canister. Nevertheless, EPA testing using the existing partial
refueling test can confirm with testing that refueling canisters are
properly sized to control refueling emissions from vehicles with
pressurized fuel tanks.
We are adopting a requirement for manufacturers to attest in their
application for certification that their vehicles with pressurized fuel
tanks will meet emission standards when tested over the partial
refueling emission test. We would expect manufacturers to use their
engineering analysis from certifying their vehicles for California ARB
to meet this requirement.
The running loss test at 40 CFR 86.134-96(g)(1)(xvi) describes how
manufacturers may rely on pressurized fuel tanks as a design strategy.
We are amending those provisions to align with the conclusions
described in the preceding paragraphs to ensure sufficient canister
capacity for pressurized systems.
The amendments described in this section apply on the effective
date of this rule. These changes do not require additional lead time
because standards already apply for testing with partial refueling
test, and California ARB already requires manufacturers to make the
demonstration we are adding in this final rule. We also want to adopt
the provision related to pressurized fuel tanks without delay to
correspond with industry practice for certain vehicles. The requirement
to vent puff losses to the canister has been the industry practice for
several years, not least because California ARB has adopted this same
requirement.
A commenter requested that we address an ambiguity regarding the
fuel specifications for testing flexible fuel vehicles, both medium-
duty vehicles and heavy-duty vehicles above 14,000 pounds GVWR. The
commenter also suggested that we revisit the specification for light-
duty vehicles, which is for the test fuel to be based on splash
blending ethanol with 9 psi RVP neat gasoline. We recognize that
flexible fuel vehicles today will be refueled with some combination of
E10 gasoline and a high-level ethanol fuel. The scenario of splash
blending ethanol with an E0 fuel is no longer something that in-use
vehicles will experience. We are therefore revising the refueling test
fuel specification for flexible fuel vehicles to align with the test
fuel specification for evaporative emission testing at 40 CFR 86.1810-
17(h). The refueling test fuel will instead be Tier 3 gasoline (E10
with RVP at 9 psi). This same conclusion applies for refueling tests
with heavy-duty vehicles subject to standards under 40 CFR 1037.103.
7. Light-Duty Vehicle Provisions Aligned With CARB ACC II Program
EPA is finalizing three NMOG+NOX provisions for light-
duty vehicles (LDV, LDT, MDPV) aligned with the California ACC II
program. The provisions follow the phase-in schedules described in
section III.D.1.i of the preamble. Vehicles outside of the phase-in
schedules (interim Tier 4 vehicles) do not have to meet the three
NMOG+NOX provisions aligned with ACC II. Each provision
addresses a frequently encountered vehicle operating condition that was
not previously captured in EPA test procedures and produces significant
criteria pollutant emissions. The operating conditions are high power
cold starts in plug-in hybrid vehicles, early drive-away (i.e., drive-
away times shorter than in the FTP), and mid-temperature engine starts.
The rationale and technical assessment performed by CARB applies not
only for vehicles sold in California but for products sold across the
country, so EPA is adopting CARB's rational and technology assessment
\671\ for these three provisions. The phase-in for the three CARB ACC
II program provisions follows the criteria pollutant phase-in described
in section III.D.1 of the preamble but note that the PHEV high power
cold starts provision has two steps with separate start dates. EPA
requires vehicle manufacturers to provide data demonstrating compliance
with each provision.
---------------------------------------------------------------------------
\671\ CARB Public Hearing to Consider the Proposed Advanced
Clean Cars II Regulations, Staff Report: Initial Statement of
Reasons, April 12, 2022.
---------------------------------------------------------------------------
i. PHEV High Power Cold Starts
EPA is finalizing NMOG+NOX emissions standards for PHEV
high power cold starts (HPCS), which is when a driver demands more
torque than the battery and electric motor can supply and the IC engine
is started and immediately produces high torque while also working to
light off the catalyst. NMOG+NOX emissions are measured over
the Cold Start US06 Charge-Depleting Emission Test, as described in, 40
CFR 1066.801(c)(10), which references ``California Test Procedures for
2026 and Subsequent Model Year Zero-Emission Vehicles and Plug-in
Hybrid Electric Vehicles, in the Passenger Car, Light-Duty Truck and
Medium-Duty Vehicle Classes,'' adopted August 25th, 2022.
EPA's final bin-specific standards are shown in Table 53. The bins
are somewhat different than the ACC II bins. EPA is not finalizing Bin
125 (that is part of CARB ACC II) to be consistent with EPA's Tier 4
bin structure
[[Page 27955]]
described in section III.D.2.i of the preamble. Also, EPA is finalizing
bins from 0 to 70 in increments of 5 to offer additional resolution to
manufacturers. EPA is finalizing Step 1 of this provision to start with
MY 2027, one year later than CARB, and is finalizing Step 2 of this
provision to start in MY 2030, which is also one year later than CARB.
Since all three provisions follow the phase-in schedules described in
section III.D.1.i of the preamble, LDT3-4 and MDPV may follow the
default phase-in schedule and not adopt these provisions until MY 2030.
Table 53--High Power Cold Start Standards
----------------------------------------------------------------------------------------------------------------
NMOG+NOX (g/mi)
---------------------------------------
Vehicle emissions category Step 1: 2027 to
2029 MY Step 2: 2030+ MY
----------------------------------------------------------------------------------------------------------------
Bin 70.................................................................. 0.320 0.200
Bin 65.................................................................. 0.300 0.188
Bin 60.................................................................. 0.280 0.175
Bin 55.................................................................. 0.260 0.163
Bin 50.................................................................. 0.240 0.150
Bin 45.................................................................. 0.220 0.138
Bin 40.................................................................. 0.200 0.125
Bin 35.................................................................. 0.175 0.113
Bin 30.................................................................. 0.150 0.100
Bin 25.................................................................. 0.125 0.084
Bin 20.................................................................. 0.100 0.067
Bin 15.................................................................. 0.075 0.051
Bin 10.................................................................. 0.050 0.034
Bin 5................................................................... 0.025 0.017
----------------------------------------------------------------------------------------------------------------
For Step 1, PHEVs with Cold Start US06 all-electric range of at
least 10 miles are exempt from the standard. For Step 2, PHEVs with
Cold Start US06 all-electric range of at least 40 miles are exempt from
the standard.
CARB testing identified several existing PHEVs that started on the
US06 and met the PHEV HPCS standard by a small margin, demonstrating
the feasibility of the standard.
In response to manufacturer comments, EPA is finalizing more bins
to provide additional resolution to manufacturers. AAI recommended that
EPA extend Step 1 requirements for larger vehicles through MY 2032 and
not adopt Step 2. A major manufacturer also requested that EPA not
adopt Step 2 for vehicles above 6000 lb GVWR. AAI recommended that
manufacturers be allowed to attest to the standard to reduce test
burden.
After considering the recommendations, EPA is going forward with
both Step 1 and Step 2 and is requiring manufacturers to provide data
demonstrating compliance with the standard because according to our
modeling of the future fleet and input from AAI and manufacturers,
PHEVs may play a significant role in the future vehicle fleet and that
would make PHEV HPCS an important operating mode. However, the Agency
is providing manufacturers with an extra year to comply with Step 1 and
Step 2, relative to the CARB program, to give manufacturers more time
to implement design changes necessary to meet the standard.
ii. Early Driveaway
EPA is finalizing NMOG+NOX standards that address
emissions from earlier gear engagement (i.e., moving the shift lever
from park to drive in a vehicle with an automatic transmission) and
driveaway (i.e., when the vehicle begins to move for the first time
after being started) as described by the CARB ACC II program.\672\ In a
regular 25 [deg]C FTP, gear engagement happens at 15 seconds and
driveaway happens at 20 seconds, but studies have shown many drivers
begin driving earlier than this. Vehicle manufacturers have
historically designed their aftertreatment systems and controls to meet
emissions standards based on the timing of the FTP driveaway. However,
given the existing field data regarding the propensity of drivers to
drive off sooner than the delay represented in the FTP and that vehicle
manufacturers have demonstrated that they are able to reduce the
emissions associated with this event, it is appropriate to require
vehicle manufacturers to reduce emissions from early driveaway.
---------------------------------------------------------------------------
\672\ CARB Title 16, Section 1961.4. Final Regulation Order.
Exhaust Emission Standards and Test Procedures 2026 and Subsequent
Model Year Passenger Cars, Light-Duty Trucks, and Medium-Duty
Vehicles.
---------------------------------------------------------------------------
EPA is finalizing an early driveaway standard that is derived from
the CARB ACC II program.\673\ The standard uses an early driveaway test
described by 40 CFR 1066.801(c)(9) and involves measuring phase 1 NMOG+
NOX emissions from a modified 25 [deg]C FTP test where gear
engagement happens at 6 seconds and driveaway happens at 8 seconds
(instead of 15 and 20 seconds) and combining this phase 1 result with
results from the other phases of a normal FTP using regular FTP phase
weighting. The result must meet the NMOG+NOX bin standard
shown in Table 54 below. For each bin, the early driveaway
NMOG+NOX standard is 12 mg/mile higher than the bin name;
for example, the early drive away standard for Bin 30 is 30+12=42 mg/
mile.
---------------------------------------------------------------------------
\673\ CARB Title 16, Section 1961.4. Final Regulation Order.
Exhaust Emission Standards and Test Procedures 2026 and Subsequent
Model Year Passenger Cars, Light-Duty Trucks, and Medium-Duty
Vehicles.
---------------------------------------------------------------------------
The bins that EPA is finalizing are slightly different than the ACC
II bins. Specifically, EPA is not finalizing Bin 125 as found in CARB
ACC II and is finalizing bins from 0 to 70 in increments of 5 to
provide manufacturers with additional resolution in certifying test
groups to meet the standard.
Table 54--Early Driveaway Standards
------------------------------------------------------------------------
NMOG+NOX (g/
Vehicle emissions category mi)
------------------------------------------------------------------------
Bin 70.................................................... 0.082
Bin 65.................................................... 0.077
Bin 60.................................................... 0.072
Bin 55.................................................... 0.067
Bin 50.................................................... 0.062
Bin 45.................................................... 0.057
Bin 40.................................................... 0.052
Bin 35.................................................... 0.047
Bin 30.................................................... 0.042
Bin 25.................................................... 0.037
Bin 20.................................................... 0.032
[[Page 27956]]
Bin 15.................................................... 0.027
Bin 10.................................................... 0.022
Bin 5..................................................... 0.017
------------------------------------------------------------------------
The modified 25 [deg]C FTP phase 1 is being finalized with tighter
speed tolerances than proposed in response to a concern from AAI that
without a tighter speed tolerance, a test driver may drive off sooner
than the 8 seconds and to ensure the vehicle is fully stopped while the
transmission is placed into gear. The speed tolerance of a regular 25
[deg]C FTP test is 2 mph beyond the lowest or highest point
on the trace within 1.0 second of the given time, as described in Part
1066.425(b)(4)(i). For an early driveaway test, EPA is finalizing that
vehicle speed may not exceed 0.0 mph until 7.0 seconds and vehicle
speed between 7.0 and 7.9 seconds may not exceed 2.0 mph. This reduces
the possibility of a test driver driving off significantly earlier than
8 seconds without setting unrealistic requirements on the test driver
and doesn't significantly skew the trace to drive-off times larger than
8 seconds. Table 55 below illustrates how the tighter speed tolerance
impacts allowable vehicle speed.
Table 55--Tighter Speed Tolerance for Early Driveaway Test
----------------------------------------------------------------------------------------------------------------
Min/max speed in
Trace speed Min/max speed in early driveaway
Time (s) (mph) regular FTP with tighter
(mph) tolerances (mph)
----------------------------------------------------------------------------------------------------------------
6.0................................................... 0.0 0.0-2.0 0.0
7.0................................................... 0.0 0.0-5.0 0.0-2.0
8.0................................................... 3.0 0.0-7.9 0.0-7.9
9.0................................................... 5.9 1.0-10.6 1.0-10.6
----------------------------------------------------------------------------------------------------------------
Vehicles are exempt from the early driveaway bin standards if the
vehicle prevents engine starting during the first 20 seconds of a
standard 25 [deg]C FTP test and the vehicle does not use technology
(e.g., electrically heated catalyst) that would cause the engine or
emission controls to be preconditioned such that NMOG+NOX
emissions would be higher during the first 505 seconds of the early
driveaway emission test compared to the emissions during the first 505
seconds of the standard FTP emission test.
AAI requested the option to attest to the early drive away
provision and recommended a tightening of the speed tolerance during
the first seven seconds. EPA is requiring certification test data on
the dearly driveaway standard because of the importance of this
condition in real-world operation. EPA is finalizing the tighter speed
tolerance described above in response to AAI's comment.
iii. Intermediate Soak Mid-Temperature Starts
EPA is finalizing a third provision defined by the CARB ACC II
program that addresses NMOG+NOX emissions from intermediate
soak mid-temperature starts.\674\ Previous EPA test procedures capture
emissions from vehicle cold start and vehicle hot start. However,
vehicles in actual operation often experience starts after an
intermediate time (i.e., soak times between 10 minutes and 12 hours).
Vehicle manufacturers have not been required to control the emissions
associated with these mid-temperature starts to the same degree that
they manage cold and hot starts, although vehicle manufacturers have
demonstrated they are able to address and reduce emissions from
intermediate soak mid-temperature starts.
---------------------------------------------------------------------------
\674\ CARB Title 16, Section 1961.4. Final Regulation Order.
Exhaust Emission Standards and Test Procedures 2026 and Subsequent
Model Year Passenger Cars, Light-Duty Trucks, and Medium-Duty
Vehicles.
---------------------------------------------------------------------------
Tier 3 vehicles achieve low start emissions when soak times are
short because the engine and aftertreatment are still hot from prior
operation. Start emissions after long soak periods are addressed by the
12+ hour soak of the 25 [deg]C FTP, which requires vehicles to quickly
heat the catalyst and sensors from an engine at ambient temperature.
The mid-temperature intermediate soak provision addresses emissions
from intermediate soak times where the engine and aftertreatment have
cooled but may still be warmer than ambient temperature.
The intermediate soak mid-temperature starts standards being
finalized by EPA are shown in Table 56. EPA is finalizing bins that are
closely aligned with ACC II bins. EPA is finalizing a bin structure
that includes all CARB ACC II bins except Bin 125 and includes bins
from 0 to 70 in increments of 5. EPA is not finalizing Bin 125 because
EPA is eliminating this bin from the list of bins available to light-
duty vehicles (section III.D.2.i of the preamble). The inclusion of
bins from 0 to 70 is to provide manufacturers with additional
resolution in certifying test groups to meet the standard.
EPA is requiring manufacturers to submit data for the 40-minute
soak requirement that is taken between 39-41 minutes and is allowing
manufacturers to attest to meeting the standards at all other soak
times using linear interpolation between 10 minutes and 12 hours.
----------------------------------------------------------------------------------------------------------------
10-minute soak 40-minute soak 3-12 hour soak
Vehicle Emissions Category NMOG+NOX (g/mi) NMOG+NOX (g/mi) NMOG+NOX (g/mi)
----------------------------------------------------------------------------------------------------------------
Bin 70.............................................. 0.035 0.054 0.070
Bin 65.............................................. 0.033 0.050 0.065
Bin 60.............................................. 0.030 0.046 0.060
Bin 55.............................................. 0.028 0.042 0.055
Bin 50.............................................. 0.025 0.038 0.050
Bin 45.............................................. 0.023 0.035 0.045
[[Page 27957]]
Bin 40.............................................. 0.020 0.031 0.040
Bin 35.............................................. 0.018 0.027 0.035
Bin 30.............................................. 0.015 0.023 0.030
Bin 25.............................................. 0.013 0.019 0.025
Bin 20.............................................. 0.010 0.015 0.020
Bin 15.............................................. 0.008 0.012 0.015
Bin 10.............................................. 0.005 0.008 0.010
Bin 5............................................... 0.003 0.004 0.005
----------------------------------------------------------------------------------------------------------------
8. Limitation of Commanded Enrichment for Power or Component Protection
At this time, EPA is not finalizing new requirements for the
control of enrichment on gasoline vehicles. While we recognize the
potential for increases in some vehicle emissions during enriched
operation, we also are cognizant of the substantial engineering effort
that it would take some manufacturers to eliminate enrichment at all
engine speeds and operating conditions, in the same time frame as
meeting the other criteria pollutant and GHG requirements of this final
program. In light of our recognition of both the potential emissions
reductions and engineering effort, the agency plans to continue to
investigate this issue and may decide to revisit enrichment controls in
a future rulemaking. EPA plans to take a multipronged approach to
inform a potential future regulatory action. The agency will continue
to gather data on the circumstances under which vehicles use enrichment
in the real world. This will include additional EPA-conducted test
programs as well as the potential for manufacturer-provided data. EPA
also plans to assess the frequency of vehicle activity that results in
enrichment, such as trailer towing and other high load, high speed
operation. Based on our assessment of measured emissions increases, the
circumstances under which enrichment occurs, and the frequency of
enrichment, EPA will update our estimates of the impact on emissions
inventories due to command enrichment. As part of this process, EPA
will also engage with the auto manufacturers and other stakeholders to
continue to assess the technologies available to eliminate enrichment
under the broadest area of vehicle operation, as well as powertrain
development effort, emissions control technology options, lead time and
costs. In addition, EPA will continue to review AECD applications to
ensure that the AECD process is being used in the manner it was
intended. EPA plans to initiate this technical work and stakeholder
outreach soon after the release of this final rule, and based on this
technical work the Agency may initiate a new rulemaking related to this
issue within the next two to three years.
Commenters expressed opposing views on the proposed elimination of
the allowance of the use of commanded enrichment. NACAA (National
Association of Clean Air Agencies) supported the proposed elimination
of enrichment for its health benefits. MECA (Manufacturers of Emissions
Control Association) attested to the readiness of technology to support
the proposed elimination. While several manufacturers supported the
proposal, other OEMs also voiced strong concern with a prohibition on
enrichment. Some OEMs argued that eliminating enrichment would require
significant powertrain revisions, divert investment from
electrification, and/or result in a substantial reduction in engine
power.
EPA had proposed a prohibition of commanded enrichment because
enrichment results in highly elevated engine-out emissions and reduced
effectiveness of the aftertreatment system, causing elevated emissions
of carbon monoxide, hydrocarbons, PM, and air toxics including ammonia
and PAH, during this operation.
9. Small Volume Manufacturer Criteria Pollutant Emissions Standards
EPA is finalizing the identical criteria pollutant emissions
standards for small volume manufacturers (SVMs) as for large
manufacturers but is delaying the phase-in of the standards for SVM
until 2032 to provide additional lead time to implement the standards.
The phase-in schedule of criteria pollutant standards for SVMs and
large manufacturers is discussed in section III.D.1 of the preamble.
The criteria pollutant phase-in applies to NMOG+NOX bin
structure, PM, -7 [deg]C NMOG+NOX, CO, HCHO, -7[deg]C CO,
and three provisions aligned with CARB ACC II (PHEV high power cold
starts, early driveaway, intermediate soak mid-temperature starts). The
SVMs light-duty vehicle (LDV, LDT, MDPV) phase-in steps to 100 percent
in 2032.
Declining fleet average NMOG+NOX standards for SVMs and
large manufacturers are discussed in section III.D.2 of the preamble.
SVMs light-duty vehicle NMOG+NOX declining fleet averages
step from 30 mg/mile to 15 mg/mile in 2032. However, SVMs encounter two
fleet average steps between 2027 and 2032 because they were allowed
additional time to meet Tier 3 standards. The first step occurs in MY
2028, when SVMs step down from 51 mg/mile to the Tier 3 final fleet
average of 30 mg/mile. The first step is aligned with the current Tier
3 requirements and represents no change for the SVMs.\675\ The second
step is the result of this final rule and will require SVMs to meet an
NMOG+NOX fleet average of 15 mg/mile in MY 2032. 15 mg/mile
is the same fleet average requirement as the remainder of the LDV
fleet. Implementing the 15 mg/mile standard in MY 2032 provides SVMs
with additional lead time to begin compliance with the Tier 4 program.
---------------------------------------------------------------------------
\675\ EPA did not reopen this step in this rulemaking; rather,
as noted in the text, this step was finalized in the Tier 3 final
rule.
---------------------------------------------------------------------------
Since EPA is finalizing a requirement that SVMs must meet the same
criteria pollutant emissions standards as large manufacturers, although
with a delayed phase-in, in Tier 4 SVMs must provide PM test data, and
other criteria pollutant test data, for certification.
EPA is not finalizing SVM MDV standards that differ from large
manufacturer MDV standards.
EPA received comments from several stakeholders regarding the
proposed criteria pollutant standards. Vehicle manufacturers, including
those formally identified as SVMs noted that EPA had traditionally
provided more time to meet the final standards and that the same on-
going challenges remain for them, including challenges such as limited
product lines with which to fleet average, infrequent vehicle
redesigns, and lower priority support from the supplier base.
In the Tier 3 rulemaking, EPA established provisions for small
volume manufacturers and for those small
[[Page 27958]]
business manufacturers and operationally independent small volume
manufacturers with average annual nationwide sales of 5,000 units or
less. As in previous vehicle emissions rulemakings in which we have
provided such flexibilities, our reason for doing so is that these
entities generally have more implementation difficulty than larger
companies. Small companies generally have more limited resources to
carry out necessary research and development; they can be a lower
priority for emission control technology suppliers than larger
companies; they have lower vehicle production volumes over which to
spread compliance costs; and they have a limited diversity of product
lines, which limits their ability to take advantage of the phase-in and
averaging provisions that are major elements of the Tier 3 program. For
this FRM, EPA has decided based on the justification used in the Tier 3
to delay SVMs requirements for NMOG+NOX and for other
criteria pollutants until MY 2032.
E. Modifications to the Medium-Duty Passenger Vehicle (MDPV) Definition
EPA is finalizing two modifications to the MDPV definition starting
in MY 2027 to address passenger vehicles that could potentially fall
outside the prior definition. First, EPA is including in the MDPV
definition any pickup at or below 14,000 pounds GVWR with a work factor
at or below 4,500 pounds except for pickups with a fixed interior
length cargo area of eight feet or larger which would continue to be
excluded from the MDPV category.\676\ This modification addresses new
BEVs that are primarily passenger vehicles but fall above the current
10,000 pound MDPV threshold primarily due to battery pack weight
increasing the vehicle's GVWR. EPA believes these vehicles should be in
the light-duty vehicle program because they are primarily passenger
vehicles and would likely displace the purchase of other passenger
vehicles rather than a medium-duty vehicle due to their relatively low
utility. In selecting the 4,500-pound work factor cut point, EPA
reviewed current vehicle offerings and comments received; based on this
evaluation, we believe these thresholds are reasonable and will not
pull into the MDPV category work vans or work trucks. Previously, the
MDPV category generally included pickups below 10,000 pounds GVWR with
a fixed interior length cargo area of less than six feet (72.0 inches).
---------------------------------------------------------------------------
\676\ In the regulatory text, EPA is finalizing that pickups
with an open bed interior length of 94 inches or greater will be
excluded, which will exclude pickups with eight-foot open beds (96
inches) with a 2-inch allowance for vehicle design variability. This
also applies for the second change to the MDPV definition.
---------------------------------------------------------------------------
The second updated MDPV definition modification is to include in
the MDPV category any pickups with a GVWR below 9,500 pounds and a
fixed interior length cargo area of less than eight feet regardless of
whether the vehicle work factor is above 4,500 pounds. Pickups at or
above 9,500 pounds up to 14,000 pounds GVWR with a work factor above
4,500 pounds are included as MDPVs only if their fixed interior length
cargo area is less than six feet.
Historically, there has been a clear distinction between pickups in
the light-duty vehicle category and those in the medium-duty category.
Light-duty pickups were those pickups with a GVWR at or below 8,500
pounds and they generally had a GVWR below 8,000 pounds. MD pickups
were those pickups that were at or above 8,501 pounds and all such
vehicles currently have a GVWR above 9,900 pounds.\677\ The changes to
the MDPV definition are intended to account for any new pickup
offerings that would fall into the GVWR ``space'' at or above 8,501
pounds but below 9,500 pounds, as well as light-duty pickups that whose
GVWR exceeds 8,500 pounds as the result of electrification. In
addition, the fixed interior length cargo area and work factor
requirements have been added to limit the revised MDPV definition to
vehicles with their primary utility being passenger transportation and
limited cargo, including vehicles up to 14,000 pounds GVWR. EPA is also
concerned that differences between the light-duty and medium-duty
pickups could become blurred if manufacturers were to offer somewhat
more capable pickups with GVWR just above 8,500 pounds to gain access
to less stringent emission standards. If EPA were not finalizing these
changes to the MDPV definition, manufacturers could, in essence, move
their light-duty pickups up into the medium-duty category through
relatively minor vehicle modifications, to gain access to less
stringent standards. EPA believes it is appropriate to address this
possibility given that the light-duty vehicle footprint standards, as
finalized, will be more stringent compared to the work factor-based
standards for MDVs and could otherwise provide an unintended incentive
for manufacturers to take such an approach.
---------------------------------------------------------------------------
\677\ Currently, these pickups are covered by HDV standards in
40 CFR 86.1816-18.
---------------------------------------------------------------------------
Comments regarding the change in MDPV definition were received from
the three manufacturers that have significant product offerings in this
space: Ford, GM and Stellantis, as well as the Alliance for Automotive
Innovation. Comments included suggested changes to the GVWR and work
factor thresholds. EPA adopted two specific recommended changes to the
work factor and GVWR thresholds, which are reflected above in the final
definition values. In addition, commenters made recommendations for the
implementation timing of the definition change, suggesting
implementation should be delayed to MY 2030 or that manufacturers
should be allowed to opt into the new definition, as well as some
specific regulatory text change to provide further clarification for
the definition change, such as how the cargo area length should be
measured.
Table 57 summarizes the revised MDPV definition in terms of what
vehicles will not be covered as MDPVs under EPA's changes to the
qualifying criteria.
Table 57--Summary of Exclusions for the Revised MDPV Definition
------------------------------------------------------------------------
A vehicle would be an MDV and not an MDPV if:
-------------------------------------------------------------------------
WF <= 4,500 lb WF > 4,500 lb
------------------------------------------------------------------------
GVWR <= 9,500 lb............ Cargo area fixed Cargo area fixed
interior length >= interior length >=
94.0 inches. 94.0 inches.
9,500 lb < GVWR <= 14,000 lb Cargo area fixed Cargo area fixed
interior length >= interior length >=
94.0 inches. 72.0 inches.
------------------------------------------------------------------------
[[Page 27959]]
EPA is also clarifying that MDPVs will include only vehicles with
seating behind the driver's seat such that vehicles like cargo vans and
regular cab pickups with no rear seating will remain in the MDV
category and subject to work factor-based standards regardless of the
changes to the MDPV definition.
As described in section III.D.2.v of the preamble, we are also
adopting an interim provision allowing manufacturers to use credits
generated by MY 2027 through 2032 battery electric vehicle (BEV) or
fuel cell electric vehicles (FCEV), qualifying as MDPVs, to be used for
certifying MDV to the NMOG+NOX standard for 25[deg]C
testing. We are adopting the same interim provision for GHG credits.
Manufacturers may use these GHG credits for certifying MDV starting in
MY 2027. See 40 CFR 86.1865-12(k)(10).
Prior to MY 2027, a manufacturer may optionally place vehicles that
are brought into the MDPV category by the updated MDPV definition
revisions into the light-duty vehicles program rather than have those
vehicles remain in the MDV program. EPA is finalizing the definition
change to be effective starting with MY 2027. However, to ensure the
program is compliant with applicable CAA lead time and stability
requirements, manufacturers that are building MDPVs that are captured
by the expanded definition and are opting for the default schedule will
continue to be subject to Tier 3 standards through model year 2030.
Details for the final Tier 4 criteria pollutant phase-in are discussed
in section III.D.1. In the meantime, manufacturers will continue to
certify those vehicles to the Tier 3 standards for medium-duty vehicles
in 40 CFR 86.1816-18.
EPA's historic regulatory structure for pickup trucks has been
firmly grounded in the products available to consumers and the utility
that the vehicles manufacturers have produced. Light-duty pickup GVWRs
have been significantly less than the 8,500 pound threshold for LDVs
and class 2b and 3 pickups have been built with GVWR's well above 9,000
pounds. In addition, consumers without the need for the additional
utility offered by medium-duty pickups, have sound reasons for buying
the light-duty versions. Medium-duty pickups, as compared to their
light-duty counterparts, tend to be higher priced, less fuel efficient,
less maneuverable, and may also have a harsher ride when unloaded due
to more capable suspensions. The emissions regulatory structure
promulgated by EPA has recognized the substantially different utility
offered by these two historically different regulatory classes.
However, there are two distinct changes that precipitating EPA's
decision to expand the MDPV definition. First, EPA recognizes that
light-duty pickup trucks that are electrified could exceed the 8,500
pound threshold, but do not have the same utility traditionally
provided by this regulatory class. Secondly, EPA believes that there is
the possibility that the pickup market could shift from light-duty
versions to medium-duty versions of pickups due to consumer preference
for ICE-based pickups. To meet this consumer demand, manufacturers may
be inclined to produce pickups which, much like the EV's, exceed the
8,500 pound GCWR threshold, but do not offer the same utility as
traditional vehicles in the higher weight class. At this time, EPA is
not finalizing fundamental changes to its program that will result a
large portion of medium-duty pickups into the light-duty program to
address this possibility due to the potential disruption such an
approach would have both for the vehicle industry and for consumers
needing highly capable work vehicles. EPA plans to monitor vehicle
market trends over the next several years to identify any new trends
that could potentially lead to the loss of emissions reductions, and if
so, to explore appropriate ways to address such a situation.
In an effort to illustrate and quantify the design-related GHG
emissions impacts of medium-duty pickups compared to their light-duty
counterparts, EPA generated emissions test data for a Ford F-150 and an
F-250. For this example, the medium-duty F-250 emitted 170 g/mile more
than the light-duty F-150 when operating at similar speeds and loads
(RIA Chapter 1.2.1). The GHG emission difference observed in the data
indicates that light to medium load operation results in much higher
CO2 emissions in the medium-duty pickup under similar
passenger or payload conditions. The medium-duty pickup is designed
primarily for regular towing and therefore may have higher emissions
under other operating conditions compared to light-duty pickups
designed more for transportation of passengers or cargo in the bed.
F. What alternatives did EPA consider?
In the NPRM, EPA sought comment on alternatives for the light- and
medium-duty GHG standards levels, as well as the phase-ins. For light-
duty GHG standards, we sought comment on a range of light-duty GHG
stringency alternatives in addition to the proposed standards. We
sought comment on the medium-duty GHG standards for different model
years and other aspects of the MDV standards structure. In addition, we
sought comment on alternative phase-in schedules for criteria pollutant
standards. EPA received comments suggesting alternative levels of
stringency and phase-in schedules for the light- and medium-duty
standards, for GHG and criteria pollutants. EPA discusses how we
assessed comment on these issues and arrived at the final standards and
phase-in schedules in sections III.C, III.D, and V of this preamble.
EPA further considered comments on alternatives to the level and phase-
in scheduled for the standards, which we discuss in RTC section 3.3
(GHG) and section 4.1(criteria pollutants). In the following
discussion, we principally discuss the alternatives we considered for
the light-duty GHG standards.
For the light-duty GHG standards, EPA sought comment on three
alternatives. The proposal's alternatives included a more stringent
alternative (Alternative 1), a less stringent alternative (Alternative
2), and an alternative (Alternative 3) that ended at the same level as
the proposed standards in 2032, but provided a more linear ramp rate in
the standards with the least stringent standards across all
alternatives for MYs 2027-2029. As discussed in section III.C.2 of this
preamble, based on our updated analysis and in consideration of the
public comments, EPA is basing its final standards on the proposal's
Alternative 3, and we are also extending the phase-down of certain
credit flexibilities to address lead time concerns.
In considering the appropriate light-duty GHG standards for this
final rule, EPA has also considered two alternatives, one more
stringent (Alternative A) and one less stringent (Alternative B).\678\
Alternative A is based on the proposed standards, and compared to the
final standards, includes a higher rate of stringency increase in the
earlier years (MYs 2027-2029), a more accelerated phase-out of off-
cycle credits, and the complete elimination of A/C leakage credits in
MY 2027 instead of a gradual ramp-down to a lower value. Alternative A
and the final standards both reach the
[[Page 27960]]
same level of footprint CO2 targets in MY 2032. Alternative
B's trajectory is the same as the final standards through 2030, but it
ends at a less stringent level than the final standards in MY 2032.
These light-duty vehicle alternatives were selected to identify a range
of stringencies we believe are appropriate to consider because they
represent a range of standards that are anticipated to be feasible
considering the public record and our updated analysis and protective
of human health and the environment.
---------------------------------------------------------------------------
\678\ EPA used the Alternative B nomenclature for this final
rule analysis to distinguish it from the NPRM's less stringent
alternative (Alternative 2). Alternative B differs from the NPRM
Alternative 2: while Alternative B's MY 2032 stringency is similar
to that of Alternative 2, Alternative B has a more gradual
trajectory and less stringent standards for 2027-2030 (which matches
that of the final standards) compared to the NPRM Alternative 2.
---------------------------------------------------------------------------
The final standards will result in an industry-wide average
emissions target of 85 g/mile of CO2 in MY 2032,
representing a nearly 50 percent reduction in average emissions levels
from the existing MY 2026 standards \679\ established in 2021.
Alternative A (based on the proposed standards) is also projected to
result in an industry-wide average target for the light-duty fleet of
85 g/mile of CO2 in MY 2032. Alternative B is projected to
result in an industry-wide average target of 95 g/mile of
CO2 in MY 2032, or 10 g/mile higher (less stringent) than
the final standards, representing a 43 percent reduction in projected
fleet average GHG emissions target levels from the existing MY 2026
standards. Table 58, Table 59, and Table 60 compare the projected
targets for the final standards and the alternatives for cars, trucks,
and the combined fleet, respectively.
---------------------------------------------------------------------------
\679\ The projected 2026 target has increased to 168 g/mile due
to a projected increase in truck share of the fleet.
Table 58--Comparison of Projected Car Targets for the Final Standards and Alternatives
----------------------------------------------------------------------------------------------------------------
Final
standards CO2 Alternative A Alternative B
Model year (g/mile) CO2 (g/mile) CO2 (g/mile)
----------------------------------------------------------------------------------------------------------------
2026............................................................ 131 131 131
2027............................................................ 139 134 139
2028............................................................ 125 116 125
2029............................................................ 112 98 112
2030............................................................ 99 90 99
2031............................................................ 86 82 91
2032 and later.................................................. 73 73 82
----------------------------------------------------------------------------------------------------------------
Table 59--Comparison of Projected Truck Targets for the Final Standards and Alternatives
----------------------------------------------------------------------------------------------------------------
Final
standards CO2 Alternative A Alternative B
Model year (g/mile) CO2 (g/mile) CO2 (g/mile)
----------------------------------------------------------------------------------------------------------------
2026............................................................ 184 184 184
2027............................................................ 184 164 184
2028............................................................ 165 143 165
2029............................................................ 146 121 146
2030............................................................ 128 112 128
2031............................................................ 109 102 114
2032 and later.................................................. 90 90 100
----------------------------------------------------------------------------------------------------------------
Table 60--Comparison of Projected Combined Fleet Targets for the Final Standards and Alternatives
----------------------------------------------------------------------------------------------------------------
Final
standards CO2 Alternative A Alternative B
Model year (g/mile) CO2 (g/mile) CO2 (g/mile)
----------------------------------------------------------------------------------------------------------------
2026............................................................ 168 168 168
2027............................................................ 170 155 170
2028............................................................ 153 135 153
2029............................................................ 136 114 136
2030............................................................ 119 105 119
2031............................................................ 102 96 107
2032 and later.................................................. 85 85 95
----------------------------------------------------------------------------------------------------------------
Figure 19 compares the projected targets for the final standards
and Alternatives A and B with the MY 2026 standard (labeled as the No
Action case).
[[Page 27961]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.018
Figure 19: Comparison of Light-Duty Vehicle Projected Fleetwide CO2
Targets for Alternatives, the Final Standards and the No Action Case.
(Note: For 2027-2030, Targets for the Final Standards and Alternative B
Are Identical)
For Alternative B, consistent with the final standards, EPA applied
different flexibility provisions than under the proposed standards
(Alternative A) based on public comments of concerns about lead time
for model years 2027-2029. Specially, we revised the proposal's phase-
out of two flexibilities: air conditioning (A/C) HFC leakage credits
and off-cycle credits. From MY 2026 allowable levels, maximum A/C
leakage credits will phase down starting in MY 2027 to a value of 1.6
g/mile for cars and 2.0 g/mile trucks for MY 2031 and later. The cap
for off-cycle menu credits will phase down over three model years from
the 10 g/mile maximum (for ICE vehicles only) in 2030 to 0 g/mile in
2033. Alternative A maintains the phase-out of HFC leakage credits and
off-cycle credits as originally proposed in the NPRM.
Below, we compare the targets again, but in this case we have
adjusted (upward) the targets to account for credit flexibilities
available to manufacturers. These adjusted targets are meant to provide
a common basis for comparing program stringencies between alternatives
that have differing levels of credit flexibilities. It should be noted
that in EPA's technical assessment, we assume that manufactures will
take advantage of credit flexibilities that are cost-effective, and the
availability of flexibilities can influence projected compliance costs
and technology penetrations even when the footprint target
CO2 curves are the same. As a result, these adjusted targets
are more indicative of the industry's overall 2-cycle tailpipe
CO2 targets based on achieving the fleet average levels of
off-cycle credits and A/C leakage and efficiency credits (in g/mi)
projected in our compliance modeling. Any difference in adjusted
targets between years, or between alternatives within a year, is
indicative of how much additional emissions reducing technology is
needed to meet the targets, independent of credit flexibilities. Table
61, Table 62 and Table 63 show the adjusted targets for cars, trucks
and the combined fleet for the final standards, the alternatives and
the No Action case:
Table 61--Projected Car Targets for the Final Standards, Alternatives and No Action Case
[Adjusted]
----------------------------------------------------------------------------------------------------------------
Final
standards CO2 Alternative A Alternative B No action case
Model year (g/mile) CO2 (g/mile) CO2 (g/mile) CO2 (g/mile)
----------------------------------------------------------------------------------------------------------------
2026............................................ 161 161 161 161
2027............................................ 158 144 160 158
2028............................................ 142 125 144 158
2029............................................ 125 105 127 158
2030............................................ 108 95 111 158
2031............................................ 93 85 101 159
[[Page 27962]]
2032 and later.................................. 78 76 92 159
----------------------------------------------------------------------------------------------------------------
Table 62--Projected Truck Targets for the Final Standards, Alternatives and No Action Case
[Adjusted]
----------------------------------------------------------------------------------------------------------------
Final
standards CO2 Alternative A Alternative B No Action case
Model year (g/mile) CO2 (g/mile) CO2 (g/mile) CO2 (g/mile)
----------------------------------------------------------------------------------------------------------------
2026............................................ 220 220 220 220
2027............................................ 209 176 210 216
2028............................................ 186 154 188 216
2029............................................ 163 131 165 217
2030............................................ 141 119 144 218
2031............................................ 118 107 128 219
2032 and later.................................. 98 96 114 220
----------------------------------------------------------------------------------------------------------------
Table 63--Projected Combined Targes for the Final Standards, Alternatives and No Action Case
----------------------------------------------------------------------------------------------------------------
Final
standards CO2 Alternative A Alternative B No action case
Model year (g/mile) CO2 (g/mile) CO2 (g/mile) CO2 (g/mile)
----------------------------------------------------------------------------------------------------------------
2026............................................ 201 201 201 201
2027............................................ 193 166 195 198
2028............................................ 172 145 174 198
2029............................................ 151 123 154 199
2030............................................ 131 112 134 200
2031............................................ 111 101 120 201
2032 and later.................................. 92 90 107 202
----------------------------------------------------------------------------------------------------------------
Figure 20 compares the adjusted targets for the final standards and
Alternatives A and B with the MY 2026 standard (labeled as the No
Action case), consistent with the values reflected in Table 63 in which
we have shifted the fleet average footprint targets upward to account
for the expected application of compliance flexibilities (off-cycle, A/
C efficiency and A/C leakage credits). Compared to Alternative A (the
proposed standards), the adjusted CO2 target of the final
standards decreases more gradually through 2029 before it arrives at
the same level of stringency in MY 2032. Further analysis of the
alternatives is provided in section IV.G of the preamble and in
Chapters 9 and 12 of the RIA. In section V of the preamble, we
summarize our rationale for why EPA is adopting the final standards in
lieu of any of the alternatives.
[[Page 27963]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.019
Figure 20: Comparison of Industry Average Adjusted CO2 Targets for
Alternatives, the Final Standards and the No Action Case. Adjusted
Targets Include Effects of Expected Off-Cycle, A/C Efficiency and A/C
Leakage Credits
EPA considered criteria pollutant standards alternatives within the
context of the GHG alternatives outlined above. For each potential set
of GHG standards and associated projected technology application, the
agency considered if a vehicle manufacturer could comply with both the
GHG standards and the final criteria pollutant standards, given a
projected mix of technologies. First, as noted in section II.D.2 of the
preamble, the agency is finalizing a numerically higher (less
stringent) final NMOG+NOX fleet average. This higher fleet
average recognizes both the final GHG standards and our estimates of
potential pathways for projected in PHEV technology penetration. In
addition, EPA recognizes that vehicle manufacturers have a wide range
of emission control technologies available to them which could be
adopted, including technologies specific to hybrid and plug-in hybrid
vehicles, which would result in substantially lower criteria pollutant
emissions. These technologies are outlined in RIA Chapter 3.2.5. As a
result of the change to the final NMOG+NOX fleet average,
multiple technology pathways for compliance and the recognition that
substantial emission control technologies are available to the
manufacturers, across a variety of powertrain architectures, the agency
has concluded that each of the GHG alternatives discussed in this
section are also feasible for manufacturers to comply with the final
criteria pollutant program standards.
G. Certification, Compliance, and Enforcement Provisions
1. Electric Vehicle Test Procedures
Several changes to electric vehicle test procedures are implemented
with this rule. This section reviews the general testing requirements
that continue to apply to BEVs and PHEVs, and then describes specific
changes to these requirements.
To comply with EPA labeling requirements, manufacturers and EPA
perform testing of light-duty BEVs to determine miles per gallon
equivalent (MPGe) and electric driving range. PHEVs are also tested to
determine charge-depleting range. The results of these tests are used
to generate range and fuel economy values published on the fuel economy
label.
BEV testing consists of performing a full charge-depleting test
using the multi-cycle test (MCT) outlined in the 2017 version of SAE
standard J1634, Battery Electric Vehicle Energy Consumption and Range
Test Procedure. The multi-cycle test consists of 8 cycles: Four urban
dynamometer driving schedule (UDDS) cycles, two highway fuel economy
test (HFET) cycles, and two constant speed cycles (CSCs).\680\ The test
is used to determine the vehicle's usable battery energy (UBE) in DC
Watt-hours, cycle energy consumption in Watt-hours per mile (Wh/mi),
and A/C recharge energy in A/C watt-hours. These results are used to
determine the BEV's unadjusted range and MPGe.
---------------------------------------------------------------------------
\680\ The MCT consists of 8 cycles and the test results are used
to determine city and highway test results. The highway result is
determined by averaging the 2 HFET cycles from the MCT; the city
result is determined by averaging the 4 UDDS cycles from the MCT.
When discussing fuel economy labeling, the city and highway test
results are generally referred to as 2-cycle test results.
---------------------------------------------------------------------------
The MCT generates unadjusted city (UDDS) and highway (HFET) two-
cycle test results. These results are adjusted to 5-cycle values which
are then published on the fuel economy label. EPA regulations allow
manufacturers to multiply their two-cycle test results using a defined
0.7 adjustment factor or determine a BEV 5-cycle adjustment factor by
running all of the EPA 5-cycle tests (FTP, HFET, US06, SC03, and 20
[deg]F FTP). This adjustment is performed to account for the
differences between vehicle operation observed on the two-cycle tests
and vehicle operation
[[Page 27964]]
occurring at higher speeds and loads along with hot and cold ambient
temperatures not seen on the UDDS or HFET cycles.
PHEVs include both an internal combustion engine and an electric
motor and can be powered by the battery or engine or a combination of
both power devices. Charge depleting operation is when the electric
motor is primarily propelling the vehicle with energy from the battery.
Charge sustaining operation is when the internal combustion engine is
contributing energy to power the vehicle and maintain a specific state
of charge. PHEVs are tested in both charge depleting and charge
sustaining operation to determine the electrical range capability of
the vehicle and the charge sustaining fuel economy.
PHEV charge depletion testing consists of performing a single cycle
charge depleting UDDS test and a single cycle charge depleting HFET
test. These tests are specified in the 2010 version of SAE Standard
J1711, Recommended Practice for Measuring the Exhaust Emissions and
Fuel Economy of Hybrid-Electric Vehicles, Including Plug-In Hybrid
Vehicles. The result of these tests is the actual charge depleting
distance the vehicle can drive. The actual charge depleting distance is
multiplied by a 0.7 adjustment factor to determine the 5-cycle charge
depleting range. The UDDS and HFET distances are averaged to determine
an estimated all-electric range for the vehicle. Unlike SAE Standard
J1634 which is applied to BEVs, SAE Standard J1711 does not specify a
methodology for determining UBE when performing charge depleting tests
on PHEVs.
As proposed, EPA is making several changes to the testing
requirements to support new battery durability and warranty
requirements for light-duty and medium-duty BEVs and PHEVs (see section
III.G.2 of the preamble).
Compliance with battery durability requirements will require
additional testing of BEVs and PHEVs by manufacturers to be performed
during the vehicle's useful life and will require additional reporting
to demonstrate that the vehicles are meeting the durability standard.
Manufacturers of BEVs and PHEVs will be required to develop and
implement an on-board battery state-of-health monitor and demonstrate
its accuracy through in-use vehicle testing. For this testing, the
tests will be based on the currently used charge depletion tests
performed for range and fuel economy labeling of light-duty BEVs and
PHEVs, with the addition of the recording of the vehicle monitor value
and comparison of the results from the charge depleting test to the
monitor value reported by the vehicle. Specifically, light-duty and
Class 2b and 3 BEVs will be tested according to the MCT to determine
the vehicle's UBE and range. PHEVs will be tested according to the
single cycle UDDS and HFET test to determine the vehicle's charge
depleting UBE and range. Class 2b and 3 BEVs and PHEVs will be tested
at adjusted loaded vehicle weight (ALVW),\681\ consistent with the
testing required for measuring criteria and GHG emissions. These
testing requirements are described in more detail in section III.G.2 of
the preamble.
---------------------------------------------------------------------------
\681\ ALVW is the numerical average of vehicle curb weight and
gross vehicle weight rating.
---------------------------------------------------------------------------
Manufacturers also will be required to demonstrate that the
vehicles are meeting the durability requirements at certain points
during their useful life. For this purpose, manufacturers will collect
and report onboard state-of-health monitor values from a large sample
of in-use vehicles, as described further in section III.G.2 of this
preamble. This will not involve additional dynamometer testing but only
acquisition of monitor data from in-use vehicles.
Due to the lack of a UBE calculation in SAE J1711, to determine UBE
for PHEVs, an additional calculation is performed after completion of
the PHEV charge depleting test. Under PHEV charge depletion testing,
net ampere-hours are measured to determine when the vehicle is no
longer depleting the battery, indicating that the vehicle has switched
to a mode in which it is maintaining rather than depleting the battery
charge. This event marks the conclusion of the charge depletion test
but does not result in determination of UBE. To determine UBE for a
PHEV, manufacturers will measure the DC discharge energy of the PHEV's
rechargeable energy storage system (RESS, i.e., the high-voltage
battery) by measuring the change in state-of-charge in ampere-hours
over each cycle and the average voltage of each cycle as required by
SAE J1711. The measured DC discharge energy in watt-hours for each
cycle will be determined by using the methodology to determine the Net
Energy Change of the propulsion battery. The DC discharge energy is
added for all the charge depleting cycles including the transition
cycles used to determine the charge depleting cycle range,
Rcdc as defined in SAE J1711.
In the proposal, EPA sought comment regarding this methodology for
determining UBE for PHEVs. EPA received comments from the Alliance for
Automotive Innovation regarding the use of the 2010 version of J1711
for determining the net energy change during PHEV charge depletion
testing. The Alliance recommended EPA update the referenced SAE
Standard from the 2010 version to the 2023 version of J1711. After
reviewing the revisions to J1711, EPA concurs with the Alliance and
agrees that the J1711 reference should be updated from the 2010 to the
2023 version. The 2023 version of J1711 has updated the measurements
and calculation methodology to determine the Net Energy Change (NEC)
for the propulsion battery. These changes address the concerns raised
by commentors regarding using only the average voltage measured at the
beginning and end of each charge depleting cycle. The updated J1711
standard includes specifications for measuring the DC discharge energy
of the propulsion battery or logging the propulsion battery voltage
over a vehicle communication network.
EPA also sought comment regarding use of the method described for
light-duty vehicles with SAE J1711 for determining UBE for Class 2b and
3 PHEVs. EPA did not receive any comments regarding using SAE J1711 for
determining UBE for Class 2b and 3 PHEVs. As EPA has concluded the
updated 2023 version of SAE J1711 is appropriate for use for LDVs and
LDTs, EPA is also adopting this standard for testing PHEVs to determine
the UBE for Class 2b and 3 PHEVs.
EPA also sought comment on whether to perform the tests on Class 2b
and 3 PHEVs at ALVW as proposed, or at loaded vehicle weight (LVW),
which is curb weight plus 300 pounds. EPA also did not receive any
comments regarding testing Class 2b and 3 PHEVs at ALVW and as such is
finalizing the agency's proposal to test Class 2b and 3 PHEVs at ALVW
when performing charge depletion tests to determine battery UBE and
calculate SOCE.
EPA also sought comment regarding the proposed use of the 2017
version of SAE J1634 for determining UBE for class 2b and 3 BEVs. EPA
received comments from Mercedes-Benz AG, Rivian, and the Alliance
regarding the use of the 2017 version of SAE J1634. Mercedes-Benz AG
and the Alliance suggested EPA update to the 2021 version of SAE J1634
from the 2017 version. Rivian submitted comments noting they generally
support EPA's proposed approach to EV test procedures, including the
proposed use of the 2017 version of SAE J1634 for determining UBE for
Class 2b and 3 BEVs. Mercedes-Benz and the Alliance are concerned with
the time required to perform MCT
[[Page 27965]]
tests. Both the Alliance and Mercedes-Benz suggested allowing the use
of the 2021 version of SAE J1634 and the shortened MCT (SMCT) and
shortened MCT plus (SMCT+) to reduce the time required to determine UBE
for BEVs.
In January 2023, EPA updated the BEV 5-cycle test procedures and
updated the SAE J1634 reference from the 2012 version to the 2017
version of SAE J1634.\682\ At the time the NPRM was published, the 2021
version of J1634 had been completed and published. The Alliance
provided comments requesting that EPA update SAE J1634 to the 2021
version. The Alliance reiterated their previous comments regarding
their preference for EPA to adopt the 2021 version of J1634 which
introduces two new test procedures (SMCT and SMCT+) and includes pre-
heating of the battery and cabin for SC03 and -7 [deg]C FTP testing.
EPA is still not prepared to adopt the 2021 version of SAE J1634 and
will continue to use the 2017 version of SAE J1634. EPA has not
determined whether the SMCT and SMCT+ produce results equivalent to
those generated using the MCT which is used to determine UBE. The SC03
test and the -7 [deg]C FTP, consisting of 2 UDDS cycles performed with
a 10 minute soak between cycles, are used for BEV 5-cycle testing and
are not used to determine UBE, nor is UBE measured during these test
procedures. Testing to demonstrate compliance with battery durability
only requires MCT testing and does not require SC03 or -7 [deg]C FTP
testing, therefore requests to revise the SC03 test and the -7 [deg]C
FTP are outside of the scope of what is being adopted for this
rulemaking.
---------------------------------------------------------------------------
\682\ 88 FR 4455.
---------------------------------------------------------------------------
EPA also sought comment on whether to perform charge depleting
tests on Class 2b and 3 BEVs at ALVW as proposed, or at loaded vehicle
weight (LVW), which is curb weight plus 300 pounds. Rivian provided
comments supportive of testing Class 2b and 3 BEVs at ALVW using the
2017 version of J1634. EPA is finalizing our proposal to test Class 2b
& 3 BEVs on the MCT at ALVW using the 2017 version of J1634 to
determine UBE.
2. Battery Durability and Warranty
This section describes the battery durability monitoring and
performance requirements and the warranty requirements we are
finalizing for BEVs and PHEVs. As we explained in the proposal, BEVs
and PHEVs are playing an increasing role in vehicle manufacturers'
compliance strategies to control emissions from LD and MD vehicles. The
battery durability and warranty requirements support BEV and PHEV
battery durability and thus support achieving the GHG and
NMOG+NOX emissions reductions projected for the final
standards. Further, these requirements support the integrity of the GHG
and NMOG+NOX emissions credit calculations under the ABT
program as these calculations are based on mileage over a vehicle's
full useful life.\683\
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\683\ These two rationales are separate and independent
justifications for the requirements.
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At the outset we note that some commenters, including the Alliance
for Automotive Innovation (``the Alliance'') questioned EPA's authority
to adopt durability and warranty requirements for batteries in
BEVs.\684\ The Alliance, however, also agreed that battery degradation
monitors and performance requirements are important tools for battery
operation and state of health, and provided recommendations for
modifying the program. Before describing the final rule provisions
relating to durability and warranty, we first address the threshold
issue of legal authority.
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\684\ The Alliance does not challenge the agency's authority to
adopt durability and warranty requirements for PHEVs.
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The regulation of battery durability is clearly within the Agency's
authority. EPA's authority to set and enforce durability requirements
for emission-related components like batteries is an integral part of
its Title II authority. Durability requirements ensure that vehicle
manufacturers and the vehicles they produce will continue to comply
with emissions standards set under 202(a) over the course of those
vehicles' useful lives. Such authority arises both out of section
202(a)(1) and 202(d) (relating to a vehicle's useful life) and section
206(a)(1) and 206(b)(1) (relating to certification requirements for
compliance). As is described in detail in the following section, EPA
has exercised its authority to set emission durability requirements
across a variety of emission-related components for decades.
Similarly, EPA also has clear statutory authority to set warranty
standards for BEVs and PHEVs. Section 207(a) and (i) provide clear
statutory authority for the warranty requirements. In fact, EPA has
already set emission warranty requirements under section 207(a) in 2010
for all components that are used to obtain GHG credits that allow the
manufacturer to comply with GHG standards, which includes BEV, PHEV,
and hybrid batteries.\685\ EPA was not challenged on those
requirements. To the extent the Alliance's comment challenges EPA's
ability to set warranty requirements generally for any component that
is used to obtain GHG credits that allow the manufacturer to comply
with GHG standards, it is not timely or cognizant of this already
established practice.
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\685\ See 75 FR 25486.
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In general, BEV batteries, just like batteries in PHEVs and other
hybrid vehicles, are emission-related components for two reasons, thus
providing EPA authority to set durability and warranty requirements
applicable to them. First, they are emission-related by their nature.
Durability and warranty requirements for batteries are not, to use the
Alliance's analogy, like requiring a warranty for a vehicle component
like a vehicle's ``infotainment system'' that has no relevance to a
vehicle's emissions. Integrity of a battery in a vehicle with these
powertrains is vital to the vehicle's emission performance; integrity
of its ``infotainment system'' is not. It is wrong to say that the very
component that allows a vehicle to operate entirely without emissions
is not emission-related.
Second, for warranty and durability purposes, EPA has historically
implemented requirements based on an understanding that ``emission-
related'' refers to a manufacturer's ability to comply with emissions
standards, regardless of the form of those standards. For standards to
be meaningfully applicable across a vehicle's useful life, EPA's
assessment of compliance with such standards necessarily includes an
evaluation of the performance of the emissions control systems, which
for BEVs (and PHEVs) includes the battery system both when the vehicle
is new and across its useful life. This is particularly true given the
averaging form of standards that EPA uses for GHG and
NMOG+NOX emissions (and which the Alliance continues to
support), and which most manufacturers choose for demonstrating
compliance. Given the fleet average nature of the standards, the Agency
needs to have confidence that the emissions reductions--and thus
credits generated --by each BEV and PHEV introduced into the fleet are
reflective of the real world. Ensuring that BEVs and PHEVs contain
durable batteries is important to assuring the integrity of the
averaging process: vehicles will perform in fact for the useful life
mileage reflected in any credits they may generate. Put another way,
durable batteries are a significant factor in vindicating the averaging
form of the standard: that the standard is met per vehicle, and on
average per fleet throughout the vehicles' useful life. The
[[Page 27966]]
battery durability and warranty provisions finalized in this rulemaking
allow for greater confidence that the batteries installed by vehicle
manufacturers are durable and thus support the standards.
In addition to EPA's general authority to promulgate durability
requirements under sections 202 and 206, EPA has additional separate
and specific authority to require on-board monitoring systems capable
of ``accurately identifying for the vehicle's useful life as
established under [section 202], emission-related systems deterioration
or malfunction.'' Section 202(m)(1)(A).\686\ As we discuss at length in
this section, EV batteries are ``emission-related systems,'' and thus
EPA has the authority to set durability monitoring requirements for
such systems over the course of a vehicle's useful life.
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\686\ Section 202(m)(1)(A) specifically applies to light-duty
vehicles and light-duty trucks, but section 202(m)(1) allows EPA to
``promulgate regulations requiring manufacturers to install such
onboard diagnostic systems on heavy-duty vehicles and engines,''
which provides concurrent authority for the MDV battery monitoring
requirements discussed in this section.
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The Alliance suggests that EPA does not have authority to set
durability or warranty requirements because BEV batteries are not
emission-related for two reasons. First, the Alliance argues that
because BEVs do not themselves emit, EPA does not have authority to set
vehicle specific standards for them, and EPA's warranty and durability
authorities rely on EPA's ability to set vehicle specific standards.
But EPA does have the authority to set standards for BEVs as they are
part of the ``class'' of regulated vehicles. See section III.B.1 of the
preamble and RTC section 2 for EPA's full analysis of the relevant
statutory provisions. In addition, EPA has traditionally set vehicle-
specific standards for BEVs. For instance, LD BEVs, like other LD
vehicles, are subject to vehicle-specific, in-use GHG standards. And LD
BEVs, like other LD vehicles, also certify to a vehicles-specific bin
for NMOG+NOX compliance, with the BEVs certifying to a Bin
0. MD BEVs are also subject to vehicle-specific standards and MDVs have
a similar compliance situation as that applied to LDVs. MDV compliance
historically also includes a Bin 0 to accommodate zero emission
vehicles. We note that these vehicle-specific standards have applied
for many years. For example, EPA established the framework for setting
vehicle-specific in-use GHG standards for LD vehicles in the original
LD GHG rule in 2010, and we established a separate bin for zero-
emitting vehicles in the 2000 Tier 2 criteria pollutant rule.
The Alliance argues second that a component only counts as
emission-related if its failure would allow the vehicle to continue
operating, but with higher emissions. But nothing in the statute
imposes such a limitation. Moreover, while it is true that the failure
of a battery would cause the vehicle to stop operating, the same is
true for some other vehicle components that have also historically been
subject to durability requirements. For instance, EPA has set
durability requirements for diesel engines (see 40 CFR 86.1823-08(c)),
failure of which could cause the vehicle to stop operating. Similarly,
Congress explicitly provided that electronic control modules (ECMs)
(described in the statute as ``electronic emissions control units'')
are ``specified major emissions control component[s]'' for warranty
purposes per section 207(i)(2); failure of ECMs can also cause the
vehicle to stop operating, and not necessarily increase the emissions
of the vehicle.
The Alliance is also mistaken in suggesting that there is no way
for EPA to require an emission-less vehicle \687\ to warrant at time of
sale that it is ``designed, built, and equipped so as to conform, at
time of sale with applicable regulations under [section 202(a)(1) . . .
.)] and . . . for its useful life, as determined under [section
202(d)].'') Section 207(a)(1). In fact, automakers warrant at the time
of sale that each new vehicle is designed to comply with all applicable
emission standards and will be free from defects that may cause
noncompliance. They do so with respect to all emission-related
components in the manufacturer's application for certification, which
include batteries. The final rule's provisions comport entirely with
section 207 of the Act.\688\
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\687\ We note that BEVs can in fact produce vehicle emissions,
such as through air conditioning leakages.
\688\ The Alliance's comment argues in passing that EPA does not
have the authority to designate a BEV battery as a ``specified major
emission control component'' with an 8 year or 80,000 mile warranty
because it is not a ``pollution control device or component.'' That
term is not defined in the Act; for the reasons described in this
section, EPA believes that BEV batteries are ``pollution control
device or component[s]'' for the same reasons they are ``emission
related components.''
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We intend for the battery durability and warranty requirements
finalized in this rule to be entirely separate and severable from the
revised emissions standards and other varied components of this rule,
and also severable from each other. EPA has considered and adopted
battery durability requirements, battery warranty requirements, and the
remaining portions of the final rule independently, and each is
severable should there be judicial review. If a court were to
invalidate any one of these elements of the final rule, as discussed
further below, we intend the remainder of this action to remain
effective, as we have designed the program to function even if one part
of the rule is set aside. For example, if a reviewing court were to
invalidate the battery durability requirements, we intend the other
components of the rule, including the GHG and NMOG+NOX
standards, to remain effective.
As we explain above, for manufacturers who choose to produce PEVs,
durable batteries are important to ensuring that the manufacturer's
overall compliance with fleet emissions standards would continue
throughout the useful life of the vehicle. The battery durability and
warranty provisions EPA is finalizing help assure this outcome. At the
same time, we expect that, even if not strictly required, the majority
of vehicle manufacturers would still produce vehicles containing
durable batteries given their effect on vehicle performance and the
competitive nature of the industry. Available data indicates that
manufacturers are already providing warranty coverage similar to what
is required by the final durability and warranty
requirements.689 690 691 692 693 Given the competitive
nature of the PEV market, we anticipate that manufacturers will
continue to do so, regardless of EPA's final rule.
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\689\ United Nations Economic Commission for Europe Informal
Working Group on Electric Vehicles and the Environment (UN ECE EVE),
``Battery Durability: Review of EVE 34 discussion,'' May 19, 2020,
p. 12. Available at https://wiki.unece.org/download/attachments/101555222/EVE-35-03e.pdf?api=v2.
\690\ UK Department of Transport, ``Commercial electric vehicle
battery warranty analysis,'' April 25, 2023. Available at https://wiki.unece.org/download/attachments/192840855/EVE-61-08e%20-%20UK%20warranty%20analysis.pdf?api=v2.
\691\ CarEdge.com, ``The Best Electric Vehicle Battery
Warranties in 2024,'' January 9, 2024. Accessed on February 16, 2024
at https://caredge.com/guides/ev-battery-warranties.
\692\ California Air Resources Board, ``Cars and Light-Trucks
are Going Zero--Frequently Asked Questions.'' Accessed on February
16, 2024 at https://ww2.arb.ca.gov/resources/documents/cars-and-light-trucks-are-going-zero-frequently-asked-questions.
\693\ Forbes, ``By The Numbers: Comparing Electric Car
Warranties,'' October 31, 2022. Accessed on February 16, 2024 at
https://www.forbes.com/sites/jimgorzelany/2022/10/31/by-the-numbers-comparing-electric-car-warranties/?sh=2ed7a5243fd7.
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Moreover generally, the battery durability and warranty
requirements resemble many other compliance provisions that facilitate
manufacturers'
[[Page 27967]]
ability to comply with the standards, as well as EPA's ability to
assure and enforce that compliance. Were a reviewing court to
invalidate any compliance provision, that would preclude the agency
from applying that particular provision to assure compliance, but it
would not mean that the entire regulatory framework should fall with
it. Specifically, were a reviewing court to invalidate the final
durability and warranty requirements, EPA would continue to have
numerous tools at its disposal to assure and enforce compliance of the
final standards, including the entire panoply of certification
requirements, in-use testing requirements, administrative and judicial
enforcement, and so forth, so as to achieve significant emissions
reductions. Therefore, EPA is adopting and is capable of implementing
final standards entirely separate from the battery durability and
warranty requirements. The contrapositive is also true: EPA is adopting
and capable of implementing the battery durability and warranty
requirements entirely separate from the standards. For example, even
without the final standards, we believe the enhanced battery durability
and warranty requirements would serve to facilitate compliance with the
existing GHG standards established by the 2021 rule. We further discuss
the severability of various provisions in this rule in section IX.M of
the preamble.
i. Battery Durability
Substantially as proposed, this rulemaking implements battery
durability monitoring and performance requirements for light-duty BEVs
and PHEVs, and battery durability monitoring requirements for Class 2b
and 3 BEVs and PHEVs, beginning with MY 2027.
As described in the proposal and in the introductory section above,
EPA is introducing battery durability requirements for several reasons
and in accordance with its authority under the Clean Air Act. As
required under CAA section 202(a)(1) (``Such standards shall be
applicable to such vehicles and engines for their useful life''), EPA
emissions standards are applicable for the full useful life of the
vehicle. Accordingly, EPA has historically required manufacturers to
demonstrate the durability of engines and emission control systems on
vehicles with ICE engines and has also specified minimum warranty
requirements for ICE emission control components. Without durability
demonstration requirements, EPA would not be able to assess whether
manufacturers producing vehicles originally in compliance with relevant
emissions standards would remain in compliance over the course of the
useful life of those vehicles.
For decades, EPA has required vehicle manufacturers to demonstrate
that their vehicles will continue to comply with any relevant emissions
standards over the course of their useful life.\694\ In the 2010 rule,
EPA applied the same framework to CO2 emissions as
previously applied for criteria emissions.\695\ Consistent with our
historical practice, the 2010 rule also recognized that the performance
of different emissions-related technologies deteriorates in different
ways, and that different technologies warranted differing durability
requirements. Given the most common technologies in use at the time,
the Agency anticipated that most vehicle models would not have
increasing difficulty in complying with CO2 emissions
standards over time. That is, unlike some criteria emissions-related
technologies (such as catalytic converters in ICE vehicles) which
deteriorate in their ability to reduce criteria emissions over time,
EPA determined that as a technical matter, CO2 emissions
from these vehicles would be relatively consistent over time, so that
durability requirements specifically related to CO2
emissions from these vehicles were not needed. However, EPA did
anticipate that there would be technologies in the future that would
deteriorate in their ability to reduce CO2 emissions over
time and therefore benefit from specific durability requirements.\696\
For example, HEVs have both a catalyst that controls criteria
pollutants and a high-voltage battery that is integral to its
CO2-related performance, and manufacturers are required to
account not only for the effect of catalyst degradation on criteria
emissions compliance but also for the effect of battery deterioration
on CO2 compliance.
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\694\ See, e.g., 71 FR 2810 (Jan. 17, 2006).
\695\ 75 FR 25324, 25474 (May 7, 2010) (``EPA requires
manufacturers to demonstrate at the time of certification that the
new vehicles being certified will continue to meet emission
standards throughout their useful life.'').
\696\ Id.
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EPA has already identified the high-voltage battery in hybrid
vehicles as a technology warranting specific durability requirements.
Specifically, EPA's regulations already require manufacturers of HEVs
and PHEVs to account for potential battery degradation that could
result in an increase in CO2 emissions, either due to
increased fuel consumption or, specifically for PHEVs, the effect of a
reduced electric driving range on the PHEV utility factor value. 40 CFR
86.1823-08(m)(1)(iii) lays out these specific durability requirements
for batteries in PHEVs to ensure that PHEVs continue to meet emissions
standards over the course of their useful life.\697\ The fact that
durability requirements already exist for hybrid and PHEV batteries
highlights that EPA's action setting requirements for BEV batteries
outlined in this final rule is an incremental addition to the scope of
EPA's durability requirements writ large.
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\697\ While the requirements that currently appear in 40 CFR
86.1823-08(m)(1)(iii) applied to vehicles like PHEVs since the 2010
rule, it was amended to explicitly apply to PHEVs in the HD 2027
Rule. 88 FR 4296, 4459 (January 24, 2023).
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Today's final rule continues EPA's longstanding policy of ensuring
durability for emissions control components and builds upon the
existing durability requirements for batteries. Recognizing that PEVs,
including both PHEVs and BEVs, are playing an increasing role in
automakers' compliance strategies, and that emissions credit
calculations are based on mileage over a vehicle's full useful life,
EPA similarly has the authority to set requirements ensuring that
manufacturers with PEVs in their fleet will continue to comply with
relevant emissions standards over the course of those PEVs' useful
lives. Under 40 CFR 86.1865-12(k), credits are calculated by
determining the grams/mile each vehicle achieves beyond the standard
and multiplying that by the number of such vehicles and a lifetime
mileage attributed to each vehicle (e.g., 195,264 miles for passenger
automobiles and 225,865 miles for light trucks). Having a lifetime
mileage figure for each vehicle is integral to calculating the credits
attributable to that vehicle, whether those credits are used for
calculating compliance with fleet average standards, or for banking or
trading. Compliance with fleet average standards depends on all
vehicles in the fleet achieving their certified level of emissions
performance throughout their useful life. Durability requirements
applicable to PEVs assure a certain standard of performance over the
entire useful life of the vehicles and thus support the continuation of
a manufacturer's overall compliance with fleet emissions standards
throughout that useful life. Similarly, EPA would have less confidence
that the emissions reductions projected to be achieved by a given set
of standards would in fact be realized over the course of the program.
Generally, credits generated by PEVs will offset debits generated by
vehicles
[[Page 27968]]
with higher emissions. For the environmental benefits that are credited
to PEVs to be fully realized under this structure, it is important that
their potential to achieve a similar mileage during their lifetime be
comparable to that of other vehicles, and this depends in part on the
life of the battery. In particular, and especially for BEVs and PHEVs
with shorter driving ranges, loss of too large a portion of the
original driving range capability as the vehicle ages could reduce its
total lifetime mileage, and this lost mileage might be replaced by
mileage from other vehicles that have higher emissions. PHEVs
specifically could also experience higher fuel consumption and
increased tailpipe emissions. While the battery durability requirements
were not specifically designed with reference to the full lifetime
mileages assumed in the credit calculations, EPA considers the
establishment of specific battery durability requirements in line with
other programs to be a critical step in recognizing and addressing the
importance of PEV durability to the integrity of the credit program as
the presence of PEVs continues to increase in the fleet. EPA
anticipates that modifications to the durability requirements may be
appropriate as more data becomes available regarding the durability of
PEV batteries in the field over time.
For instance, although lithium-ion battery technology has been
shown to be effective and durable in currently manufactured BEVs and
PHEVs, it is also well known that the energy capacity of a battery will
naturally degrade to some degree with time and usage. This degradation
can result in some reduction in electric driving range as the vehicle
ages. Excessive battery degradation in a PHEV could lead to higher fuel
consumption and increased criteria pollutant tailpipe emissions, while
a degraded battery in a BEV could impact its ability to deliver the
lifetime mileage expected. This effectively becomes an issue of
durability if it reduces the utility of the vehicle or its useful life,
and EPA will closely track developments in this area and propose
modifications as they become necessary.
The importance of battery durability in the context of zero- and
near-zero emission vehicles, such as BEVs and PHEVs, has been cited by
several authorities in recent years. In their 2021 Phase 3 report,\698\
the National Academies of Science (NAS) identified battery durability
as an important issue with the rise of electrification.\699\ Several
rulemaking bodies have also recognized the importance of battery
durability in a world with rapidly increasing numbers of zero-emission
vehicles. In 2015 the United Nations Economic Commission for Europe (UN
ECE) began studying the need for a Global Technical Regulation (GTR)
governing battery durability in light-duty vehicles. In April 2022 it
published United Nations Global Technical Regulation No. 22, ``In-
Vehicle Battery Durability for Electrified Vehicles,'' \700\ or GTR No.
22, which provides a regulatory structure for contracting parties to
set standards for battery durability in light-duty BEVs and PHEVs.\701\
The European Commission and other contracting parties have also
recognized the importance of durability provisions and are working to
adopt the GTR standards in their local regulatory structures. In
addition, the California Air Resources Board, as part of the Advanced
Clean Cars II (ACC II) program, has also included battery durability
\702\ and warranty \703\ requirements as part of a suite of customer
assurance provisions designed to ensure that zero-emission vehicles
maintain similar standards for usability, useful life, and maintenance
as for ICE vehicles. Additional background on UN GTR No. 22 and the
California Air Resources Board battery durability and warranty
requirements may be found in RIA Chapter 1.3.
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\698\ National Academies of Sciences, Engineering, and Medicine
2021. ``Assessment of Technologies for Improving Light-Duty Vehicle
Fuel Economy 2025-2035''. Washington, DC: The National Academies
Press. https://doi.org/10.17226/26092.
\699\ Among the findings outlined in that report, NAS noted
that: ``battery capacity degradation is considered a barrier for
market penetration of BEVs,'' (p. 5-114), and that ``[knowledge of]
real-world battery lifetime could have implications on R&D
priorities, warranty provision, consumer confidence and acceptance,
and role of electrification in fuel economy policy.'' (p. 5-115).
NAS also noted that ``life prediction guides battery sizing,
warranty, and resale value [and repurposing and recycling]'' (p. 5-
115), and discussed at length the complexities of SOH estimation,
life-cycle prediction, and testing for battery degradation (p. 5-113
to 5-115).
\700\ United Nations Economic Commission for Europe, Addendum
22: United Nations Global Technical Regulation No. 22, United
Nations Global Technical Regulation on In-vehicle Battery Durability
for Electrified Vehicles, April 14, 2022. Available at: https://unece.org/sites/default/files/2022-04/ECE_TRANS_180a22e.pdf.
\701\ EPA representatives chaired the informal working group
that developed this GTR and worked closely with global regulatory
agencies and industry partners to complete its development in a form
that could be adopted in various regions of the world, including
potentially the United States.
\702\ State of California, California Code of Regulations, title
13, section 1962.4.
\703\ State of California, California Code of Regulations, title
13, section 1962.8.
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EPA concurs with the emerging consensus that battery durability is
an important issue. The ability of a zero-emission vehicle to achieve
the expected emission reductions during its lifetime depends in part on
the ability of the battery to maintain sufficient driving range,
capacity, power, and general operability for a period of use comparable
to that of any other vehicle. Durable and reliable electrified vehicles
are therefore critical to ensuring that projected emissions reductions
are achieved by this program.
GTR No. 22 was developed with extensive input, leadership, and
participation from EPA and thus it reflects what EPA considers to be an
appropriate framework and set of requirements for ensuring battery
durability. EPA therefore considers its integration into the context of
this rulemaking to be an appropriate pathway to establishing needed
durability standards. In the absence of GTR No. 22, EPA would find it
appropriate to adopt a very similar (if not identical) battery
durability program, but we also recognize the value for U.S. automakers
in adopting requirements that are consistent with international market
requirements. Thus, the requirements and general framework of the
battery durability program under this rule are largely identical to
those outlined in GTR No. 22 and broadly parallel the GTR in terms of
the minimum performance requirements, as well as the hardware,
monitoring and compliance requirements, the associated statistical
methods and metrics that apply to determination of compliance, and
criteria for establishing battery durability and monitor families. EPA
is incorporating the April 14, 2022, version of GTR No. 22 by
reference, except for some naming conventions and procedural changes
required to adapt the GTR to EPA-based testing and compliance
demonstration, and modification of some specific provisions (for
example, not requiring an SOCR monitor).
EPA requested comment on all aspects of the proposed battery
durability program, particularly with respect to: The minimum
performance requirements, the testing and compliance requirements for
Part A and Part B, and the possibility of adopting more stringent or
less stringent battery durability standards. EPA has carefully
considered the public comments in finalizing the requirements of the
durability program.
Several commenters, including several proponents or manufacturers
of zero-emission vehicles, expressed support for the provisions and
their intent of promoting battery durability. For example, Tesla stated
that durability
[[Page 27969]]
monitoring can be useful to ensure emission reduction benefits are met,
and to provide integrity to credit trading.
Some commenters, such as the Alliance for Automotive Innovation
(``the Alliance''), questioned EPA's authority to establish battery
durability and warranty requirements. The Alliance, however, also
agreed that battery degradation monitors and performance requirements
are important tools for battery operation and state of health, and
provided recommendations for modifying the program. Comments relating
to authority are addressed in the introductory section above.
Positions varied regarding how the proposed durability and warranty
program based on GTR No. 22 should exist alongside the California Air
Resources Board (CARB) ACC II durability and warranty program (referred
to here as the ``CARB program''). Some commenters stressed the
differences between the proposed durability program and the CARB
program and stated that it would be difficult for OEMs to comply with
two different sets of requirements. Commenters within this group
suggested a variety of solutions, including: aligning certain aspects
of the proposed program with the CARB program; adopting the CARB
program instead of the proposed program; or accepting compliance with
the CARB program in lieu of compliance with the proposed program.
Volkswagen, Volvo, and the Southern Environmental Law Center strongly
encouraged EPA to fully harmonize with CARB, while similarly, BMW
recommended adopting a single national approach. In contrast, Nissan
and a coalition of environmental NGOs supported adoption of GTR No. 22
as proposed. The Alliance for Automotive Innovation stated that both
CARB and EPA should align with global best practices. Mercedes, several
environmental NGOs and state organizations recommended that EPA should
align with the CARB regulation to avoid conflicting regulatory
requirements; Mercedes specifically recommended that EPA allow
voluntary compliance with CARB's durability program in lieu of EPA's
program. CARB recommended adopting the CARB durability provisions as
well as the full suite of consumer assurance provisions under ACC II.
Others more generally recommended that EPA work with CARB to modify
aspects of the CARB program.
Regarding comments that EPA should work with CARB to modify aspects
of the CARB program, EPA considers modification of the CARB program to
be outside the scope of this rulemaking. Regarding recommendations that
EPA should adopt certain specific provisions of the CARB program (for
example, inclusion of a battery reserve capacity declaration, phase-in
of monitor accuracy tolerance, exempting shorter-range BEVs or PHEVs
from requirements, number of decimal places for the monitor, OBD
requirements and data parameters, basis on percentage points vs.
percent, etc.), EPA believes that the CARB program and the proposed
program based on GTR No. 22, in their entirety, are similarly
effective, but that each program achieves that effectiveness by
operating as a whole, and taking an a la carte approach of moving
specific requirements from the context of one program into the context
of another would compromise the integrity of either program. For this
reason, EPA is generally not taking an approach of adopting specific
individual elements of the CARB program at this time.
However, EPA agrees with commenters' concerns that complying with
both CARB and EPA durability programs may require more effort than
complying with only one. Some commenters suggested that a solution to
many of the issues regarding harmonization with the CARB program could
be solved if EPA were to accept compliance with the CARB program in
lieu of the federal program. EPA continues to believe that it is
possible for manufacturers to comply with both programs simultaneously,
as manufacturers that sell in California and so have to comply with the
CARB program will often also have to comply with GTR No. 22 in other
international jurisdictions, which is very similar to the EPA program.
However, EPA also considers the CARB durability program, when viewed in
its entirety with its metrics and performance requirements, to be no
less effective than the EPA durability program.
Accordingly, EPA will accept manufacturer compliance with the
entirety of the CARB ACC II durability program in lieu of the EPA
durability program. To utilize this optional pathway, manufacturers
must declare their intention to do so, in which case their compliance
with the CARB durability program will be deemed as compliance with the
EPA durability program. Regardless of whether a manufacturer chooses to
follow the CARB or the EPA program for the purpose of satisfying EPA
battery durability requirements, failure to comply with the chosen
program will result in the same credit loss penalty as under the EPA
program. EPA considers the addition of the option to comply with the
CARB durability program in lieu of the EPA durability program to be
responsive to the various requests to adopt certain specific elements
of the CARB program.
EPA also requested comment on the inclusion of a requirement for an
SOCR monitor and associated reporting requirements as specified in GTR
No. 22. Automakers expressed general support for basing the MPR on a
metric of usable energy, or SOCE, as specified in GTR No. 22. Several
expressed specific opposition to a range-based metric or SOCR, while
some NGOs encouraged use of both SOCE and SOCR. EPA continues to assess
that SOCE is sufficient at this time as a basis for the MPR, and notes
that at this time GTR No. 22 requires only that an SOCR monitor be
implemented and does not use it for enforcement of the MPR. EPA
continues to consider the addition of an SOCR monitor in a future
rulemaking but at this time is electing not to include this requirement
in the final standard, as proposed.
Some commenters expressed uncertainty over whether the EPA program
includes the virtual mileage provision of GTR No. 22, which accounts
for use of the battery for purposes other than propulsion of the
vehicle (e.g., vehicle-to-building (V2B) or vehicle-to-grid (V2G)
applications), as we did not specifically mention it in the proposal.
EPA clarifies that under the EPA program, virtual mileage is applicable
to the mileage used for determining compliance with the durability
provisions, as defined in GTR No. 22. However, GTR No. 22 does not
include warranty provisions, and so the mileage used for warranty under
the EPA program does not include virtual mileage. More discussion may
be found where we discuss the warranty portion of the EPA durability
and warranty program in section III.G.2.ii of the preamble.
A variety of comments were received regarding minimum performance
requirements (MPR) and their enforcement. Some commenters considered
the requirements to be too stringent, while others suggested that they
could be more stringent. VW recommended that EPA should adopt a single
performance requirement of 70 percent at 8 years/100k miles. Tesla
supported the proposed MPR as reasonable and achievable, while also
advocating for a flexible approach allowing the manufacturer to use
good engineering judgment in determining the statistically adequate and
representative use of vehicle data. Tesla also supported the decision
not to implement an MPR for MDVs.
[[Page 27970]]
In response to comments suggesting that the minimum performance
requirement (MPR) is too stringent and/or will add significant cost to
the vehicle, EPA disagrees. As noted and cited previously, the MPR is
very similar to warranty coverage already provided by vehicle
manufacturers, indicating that the MPR described in the proposal is
already largely being achieved and can continue to be achieved. In
developing GTR No. 22, some stakeholders noted that a performance
standard that is appropriate in the context of warranty may not
necessarily be appropriate in the context of durability requirements,
because the corrective action for a warranty failure is limited to the
individual vehicles that fail, while the corrective action for a
durability failure would involve every vehicle in a durability group.
That is, a warranty performance standard is typically determined and
remedied on an individual vehicle basis while a durability performance
standard is determined and remedied on a durability group basis.
However, EPA notes that (a) in the context of failure to meet the
battery durability requirement, it is not requiring recall and repair
of every battery in a failed durability group, and (b) the GTR
specifies that a durability group meets the durability standard even
when up to 10 percent of the vehicles in a durability group sample fail
the Part B durability determination, without requiring recall and
replacement of the battery in those vehicles. Thus, a given performance
requirement in the context of the final durability program only becomes
more binding than the same standard in the context of warranty if more
than 10 percent of vehicles are failing the standard. Given the cost of
battery repair and replacement, EPA expects that manufacturers would
consider such a high warranty replacement rate to be unacceptable and
so are designing batteries to avoid that outcome. EPA therefore
continues to consider the durability performance standard to be
appropriate and is not modifying the MPR at this time.
Some commenters recommended that EPA adopt only the 8-year, 100,000
mile requirement of the MPR, and not the 5 year, 62,000 mile
requirement. EPA acknowledges that GTR No. 22 allows the possibility of
local jurisdictions adopting either or both of the requirements. EPA
agrees that requiring only the later requirement may reduce test
burden. However, EPA also expects that the 5 year requirement will
promote battery designs that degrade in a more or less linear fashion
over their useful life (as opposed to a battery design that degrades
more rapidly in earlier years, which would tend to increase the
potential impact of lost range capacity on the total mileage the
vehicle can attain over its life). Also, the 5-year requirement allows
for an earlier compliance decision if a vehicle is on track to fail the
8-year standard. In EPA's view, these substantial compliance benefits
outweigh the added burdens of additional testing. For these reasons we
are retaining the 5-year requirement in the program.
The Alliance recommended that, in section 86.1815 of the regulatory
text, that we replace the term ``electric vehicles'' with ``BEVs and
PHEVs'' to exclude FCEVs from monitoring and durability requirements.
Fuel cell vehicles were not included within the technical analysis or
scope of GTR No. 22 and EPA has not as yet determined that the
monitoring and durability requirements developed under GTR No. 22 are
appropriate for FCEVs. Accordingly, EPA has made the requested change
to section 86.1815.
The Alliance also requested clarification on whether or not the
durability and monitoring requirements are tied to the Tier 4 phase-in
per section 86.1815. EPA clarifies that the battery durability and
warranty standards for light-duty vehicles under 6,000 pounds begin in
model year 2027 and for medium-duty vehicles begin when first certified
for Tier 4. See section 86.1815.
Regarding the durability test sample of at least 500 vehicles under
Part B of the EPA program, the Alliance noted that distribution of some
durability groups of PEVs across the U.S. may be insufficient to
support the proposed sample characteristics, and proposed to keep the
current sample size of 500 vehicles, but require that no more than 50
percent of the vehicles in the sample be registered in the same region.
EPA agrees that, particularly in the early years of the program, some
durability groups may be unevenly distributed across the U.S. and is
modifying the sample requirements per this suggestion.
The SAVE Coalition recommended that we revise section 86.1815(a) to
specify that the monitor should be viewable by the owner of the
vehicle, as specified in GTR No. 22, rather than the customer, as
specified in section 86.1815(a), to accommodate situations such as
autonomous transportation services, where the customer of the
autonomous service is not the owner of the vehicle. EPA agrees that
``customer'' may be ambiguous in this application; however, we also
believe that using the term ``owner'' might be interpreted as excluding
lessees or other parties with a legitimate interest in the state of
health of the battery. EPA is clarifying the regulatory text by
changing ``customer-accessible'' to ``operator-accessible.'' As the
customer of a fully autonomous transport service is not an operator,
EPA believes that this modification addresses the commenter's concern.
Some commenters requested clarification as to whether the removal
of compliance credits earned by vehicles that fail the durability
requirement applies only to GHG credits earned, or also to
NMOG+NOX credits earned. In the proposal, EPA stated that in
the case of failure to meet the durability requirements,
``manufacturers would have to adjust their credit balance to remove
compliance credits previously earned by those vehicles,'' and the
regulatory text stated ``the manufacturer must adjust all credit
balances to account for the nonconformity.'' EPA clarifies that in the
case of BEVs, the credits affected include GHG and NMOG+NOX
credits. For PHEVs, although PHEVs earn both GHG and
NMOG+NOX credits, the credits affected include only GHG
credits. PHEV credits for NMOG+NOX would not need to be
forfeited because testing to determine compliance with
NMOG+NOX standards is based on charge-sustaining mode when
the engine is operating, and NMOG+NOX emissions in this mode
are not generally impacted by the amount of grid energy that can be
stored in the battery. EPA also clarifies that credit removal for
failing the durability requirement, specifically the Minimum
Performance Requirement, only applies to LD BEVs and PHEVs.
EPA also clarifies that Annex 3 of GTR No. 22 applies only in
jurisdictions where WLTP is used. The quantities that represent
UBEmeasured and UBEcertified for the purpose of
part 6.3.2 of GTR No. 22 in the context of this rule are specified in
the regulatory text.
As finalized, the battery durability requirements consist of two
primary components as shown in Table 64. The first component is a
requirement for manufacturers to provide a customer-readable battery
state-of-health (SOH) monitor for both light-duty and Class 2b and 3
BEVs and PHEVs. The second component is the definition of a minimum
performance requirement (MPR) for the SOH of the high voltage battery,
applicable only to light-duty BEVs and PHEVs. HEVs and FCEVs are not
included in the scope of GTR No. 22 or the durability program.
[[Page 27971]]
Table 64--Applicability of Battery Durability Requirements to Light-Duty
and Class 2b/3 Vehicles
------------------------------------------------------------------------
Light-duty BEVs Class 2b and 3
Requirement and PHEVs BEVs and PHEVs
------------------------------------------------------------------------
Battery State of Health (SOH) Yes............... Yes.
Monitor.
Monitor accuracy requirement.... Yes............... Yes.
Minimum Performance Requirement Yes............... No.
(MPR).
------------------------------------------------------------------------
Manufacturers will be required to install a battery SOH monitor
which estimates, monitors, and communicates the vehicle's state of
certified energy (SOCE) as defined in GTR No. 22, and which can be read
by the vehicle operator. This requires manufacturers to implement
onboard algorithms to estimate the current state of certified energy of
the battery, in terms of its current usable battery energy (UBE)
expressed as a percentage of the original UBE when the vehicle was new.
The state of certified range (SOCR) monitor defined in GTR No. 22 will
not be required.
For light-duty BEVs and PHEVs, the information provided by this
monitor will be used for demonstrating compliance with a minimum
performance requirement (MPR) which specifies a minimum percentage
retention of the original UBE when the vehicle was new. As shown in
Table 65, under the final rule, light-duty BEV and PHEV batteries will
be subject to an MPR that requires them to retain no less than 80
percent of their original UBE at 5 years or 62,000 miles, and no less
than 70 percent at 8 years or 100,000 miles.
Table 65--Minimum Performance Requirements
------------------------------------------------------------------------
Light-duty BEVs Class 2b and 3
Years or mileage and PHEVs BEVs and PHEVs
------------------------------------------------------------------------
5 years or 62,000 miles......... 80 percent SOCE... N/A.
8 years or 100,000 miles........ 70 percent SOCE... N/A.
------------------------------------------------------------------------
In alignment with GTR No. 22, which does not currently subject UN
ECE Category N vehicles of Category 2 (work vehicles that primarily
carry goods) to the MPR requirement, Class 2b and 3 PEVs will not be
subject to the MPR. The developers of GTR No. 22 chose not to set an
MPR for Category 2 PEVs at the time, largely because the early stage of
adoption of these vehicles meant that in-use data regarding battery
performance of these vehicles was not readily available. MPR
requirements for category 2 PEVs were therefore reserved for possible
inclusion in a future amendment to the GTR, but monitoring requirements
were retained to allow information on degradation to be collected from
these vehicles to help inform a future amendment. For similar reasons,
EPA is retaining the monitor requirement for Class 2b and 3 PEVs but is
not requiring the MPR.
Compliance with the new battery durability requirements will
require manufacturers to perform testing beyond what is currently
required. Previously, light-duty vehicle manufacturers were required to
perform range testing on BEVs and PHEVs only to provide information to
inform the EPA fuel economy label, and not for vehicle certification.
Class 2b and 3 vehicles did not have the labeling requirement and
therefore often did not undergo this testing. Under the new program (as
described more fully in section III.G.1 and below), manufacturers of
both light-duty and Class 2b and 3 BEVs and PHEVs will perform testing
to determine and report the vehicle's UBE when new. In addition, at
points during the useful life of the vehicle, manufacturers will
demonstrate through in-use vehicle testing that the SOCE monitor meets
an accuracy standard.
Manufacturers will group the PEVs that they manufacture into
monitor families and battery durability families as defined in GTR No.
22 (and described in more detail in section III.G.3 of this preamble).
As described further below, monitor families must comply with a monitor
accuracy requirement, and battery durability families must comply with
the applicable MPR. Because determination of compliance in either case
depends on reference to a certified UBE value, this value must be
determined at time of certification. Since the testing program that is
currently performed for fuel economy labeling purposes does not
necessarily determine such a value for all vehicle configurations that
would need it for durability compliance purposes, additional testing of
vehicles that would not otherwise need to be tested for labeling
purposes may need to be performed at time of certification.
For both light-duty and medium-duty vehicles, as described in the
``Part A'' monitor accuracy provisions outlined in GTR No. 22,
manufacturers will be required to meet a standard for accuracy of their
on-board SOCE monitors. To determine the accuracy of the monitors,
vehicles from each monitor family shall be recruited and procured in-
use at each of 2 years and 4 years after the end of production of that
monitor family for a model year. The onboard monitor values for SOCE
shall be recorded, and each vehicle shall then be tested to determine
actual (measured) UBE capability of the battery. As described in
section III.G.1 of the preamble, for this testing EPA will require the
2017 version of SAE Standard J1634 for determining UBE for BEVs, and
the 2023 version of SAE J1711 for determining UBE for PHEVs. The UBE
measured by the test will be used to calculate the measured SOCE of the
battery, as the measured UBE divided by the certified UBE. The measured
SOCE shall be compared to the value reported by the SOCE monitor prior
to the test. The accuracy of the SOCE monitor must not be in error more
than 5 percent above the measured SOCE, as defined and determined via
the Part A statistical method defined in GTR No. 22. See 40 CFR
86.1811-27, 86.1845-04(g) and 86.1839-01(c) for detailed
specifications.
For light-duty vehicles, in a similar manner to the ``Part B''
compliance provisions of GTR No. 22, once having demonstrated Part A
accuracy for the SOCE monitor of vehicles within a monitor family,
manufacturers shall demonstrate compliance with the MPR by collecting
the values of the onboard SOCE monitors of a statistically adequate and
representative sample of in-use vehicles, in general no less than 500
vehicles from each battery durability family that shares that monitor
family, and reporting the data and results to EPA. The manufacturer
shall use good engineering judgment in determining that the sample is
statistically adequate and representative of the in-use vehicles
comprising each durability family, subject to specific provisions in
the regulation and approval by EPA. Manufacturers may obtain this
sample by any appropriate method, for example by over-the-air data
collection or by other means. A battery durability family passes if 90
percent or more of the monitor values read from the sample are at or
above the MPR.
In the case that a monitor family fails the Part A accuracy
requirement, the manufacturer will be required to recall the vehicles
in the failing monitor family to bring the SOCE monitor into
compliance, as demonstrated by passing the Part A statistical test with
vehicles using the repaired monitor. In the case that a durability
family fails the Part B durability performance requirement, the
[[Page 27972]]
manufacturer's credit balance will be adjusted to remove compliance
credits previously earned by those vehicles. In the case of BEVs, the
credits affected include GHG and NMOG+NOX credits, as BEVs
do not earn credits for other pollutants. For PHEVs, the credits
affected include only GHG credits, as emissions performance for other
pollutants is largely independent of usable battery capacity.
For Part B, GTR No. 22 does not specify a means of data collection.
EPA anticipates that many manufacturers might collect this data via
means such as telematics (remote, wireless queries) which is becoming
increasingly present in new vehicles, or any other sampling technique
which accurately collects data from the number of vehicles outlined in
the GTR. For example, vehicle manufacturers may choose to physically
connect to the required number of vehicles and read the SOCE values
directly in lieu of remote, telematics-based data collection. The data
collection method used for Part B must identically report the same
quantities that were collected for the purpose of the monitor accuracy
test under Part A.
Unlike GTR No. 22, EPA is not requiring a state of certified range
(SOCR) monitor in addition to an SOCE monitor. In the proposal we noted
that some of the organizations and authorities that have examined the
issue of battery durability have recognized that monitoring the state
of a vehicle's full-charge driving range capability (instead of or in
addition to UBE capability) as an indicator of battery durability
performance may be an attractive option because driving range is a
metric that is more directly experienced and understood by the
consumer. GTR No. 22 requires manufacturers to install a state of
certified range (SOCR) monitor in addition to an SOCE monitor but it is
not required to be customer facing, and its information is collected
only for information gathering purposes. Additional discussion of the
decision to not include an SOCR monitor in the EPA program is provided
in RTC section 16.
Additional background on UN GTR No. 22 and the California Air
Resources Board battery durability and warranty requirements may be
found in RIA Chapter 1.3.
ii. Battery and Vehicle Component Warranty
EPA is also finalizing new warranty requirements for BEV and PHEV
batteries and associated electric powertrain components (e.g., electric
machines, inverters, and similar key electric powertrain components).
The new warranty requirements build on existing emissions control
warranty provisions by establishing specific new requirements tailored
to the emission control-related role of the high-voltage battery and
associated electric powertrain components in the durability and
emissions performance of PEVs.
For light-duty BEVs and PHEVs, EPA is designating the high-voltage
battery and associated electric powertrain components as specified
major emission control components according to our authority under CAA
section 207(i)(2), which assigns a warranty period of 8 years or 80,000
miles for components so designated.
For medium-duty (Class 2b and 3) BEVs and PHEVs, we are
establishing a warranty period of 8 years or 80,000 miles for the
battery and associated electric powertrain components on these
vehicles, according to our authority under CAA section 207(i)(1). The
program will provide warranty coverage for the emission control
components on Class 2b and 3 BEVs and PHEVs equal to that for the same
components on light-duty BEVs and PHEVs.
EPA believes that this practice of ensuring a minimum level of
warranty protection for emissions-related components on ICE vehicles
should be extended to the high-voltage battery and other electric
powertrain components of BEVs and PHEVs for multiple reasons.
Recognizing that BEVs and PHEVs are playing an increasing role in
manufacturers' compliance strategies, the high-voltage battery and the
powertrain components that depend on it are emission control devices
critical to the operation and emission performance of BEVs and PHEVs,
as they play a critical role in reducing the emissions of PHEVs and in
enabling BEVs to operate with zero tailpipe emissions as well as to
reduce fleet average emissions, as discussed earlier. Further, EPA
anticipates that compliance with the program is likely to be achieved
with larger penetrations of BEVs and PHEVs than under the previous
program. Although the projected emissions reductions are based on a
spectrum of control technologies, in light of the cost-effective
reductions achieved, especially by BEVs, EPA anticipates most if not
all automakers will include credits generated by BEVs and PHEVs as part
of their compliance strategies, even if those credits are obtained from
other manufacturers; thus this is a particular concern given that the
calculation of credits for averaging (as well as banking and trading)
depend on the battery and emission performance being maintained for the
full useful life of the vehicle. Additionally, warranty provisions are
a strong complement to the battery durability requirements described in
III.G.2. We believe that a component under warranty is more likely to
be properly maintained and repaired or replaced if it fails, which
would help ensure that credits granted for BEV and PHEV sales represent
real emission reductions achieved over the life of the vehicle.
In the proposal, EPA requested comment on all aspects of the
proposed warranty provisions for light-duty and medium-duty PEVs,
batteries, and associated electric powertrain components.
The Alliance commented that warranty requirements should remain at
the discretion of individual OEMs rather than be specified by
regulation, and that designation of BEV batteries and associated
components as specified major emission control components is not
consistent with the statute. The commenter asserted that BEVs do not
have emissions and therefore our inclusion of BEV components of any
kind under the Administrator's authority to specify warranty
requirements for emissions-related components is not appropriate. EPA's
response to any questions of authority to set durability or warranty
requirements for BEV batteries is in the introductory section. Below we
provide additional discussion of our authority to establish warranty
requirements specifically.
For light-duty vehicles, CAA section 207(i)(1) specifies that the
warranty period is 2 years or 24,000 miles of use (whichever first
occurs), except for specified major emission control components (SMECC)
described in 207(i)(2), for which the warranty period is 8 years or
80,000 miles of use (whichever first occurs). For all other vehicles,
which would include medium-duty vehicles (MDVs), CAA 207(i)(1)
specifies that the warranty period shall be the period established by
the Administrator. For both light-duty and medium-duty vehicles, the
Administrator is establishing a warranty period of 8 years and 80,000
miles.
For light-duty vehicles, 207(i)(2) specifically identifies
catalytic converters, electronic emissions control units, and onboard
emissions diagnostic devices as SMECC. Currently, BEV and PHEV battery
and electric powertrain components are not so specified, which limits
their coverage requirement to the 2 years or 24,000 miles of CAA
section 207(i)(1), a period which EPA believes is not sufficient, given
the importance of
[[Page 27973]]
these components to the operation and emissions performance of these
vehicles. As discussed in connection with battery durability, this is
of particular concern given that the calculation of fleet average
performance and of credits for banking and trading depend on the
battery and emissions performance being maintained for the full useful
life of the vehicle. However, to allow for designation of other
pollution control components as SMECC, CAA section 207(i)(2) provides
that the Administrator may so designate any other pollution control
device or component, subject to the conditions that the device or
component was not in general use on vehicles and engines manufactured
prior to the model year 1990 and that the retail cost (exclusive of
installation costs) of such device or component exceeds $200 (in 1989
dollars), adjusted for inflation or deflation as calculated by the
Administrator at the time of such determination.\704\ Adjusted for
inflation, the $200 retail cost threshold would be about $500 today. As
BEVs and PHEVs and thus their high-voltage battery systems and
associated powertrain components were not in general use prior to 1990,
and their high-voltage battery systems and associated powertrain
components exceed this cost threshold, the Administrator determines
that these emission control devices meet the criteria for designation
as specified major emission control components. Accordingly, the
Administrator designates these components as specified major emission
control components according to his authority under CAA section
207(i)(2).
---------------------------------------------------------------------------
\704\ See 42 U.S.C. 7541(i)(2).
---------------------------------------------------------------------------
Several environmental NGOs and supplier organizations indicated
support of PEV durability and warranty requirements, and referenced
statutory language supporting these measures. Tesla advocated for
warranty thresholds more consistent with the industry standard, and
adoption of a standard 8-year, 80,000 miles warranty with 70 percent
UBE. Lucid requested that EPA consider CARB's current battery warranty
under ACC II, which is 70 percent SoH for 8 years or 100,000 miles, and
aligns with EPA's proposed end point durability standard. In response,
the warranty standard is based on the statutory criterion of 8 years or
80,000 miles for SMECC components, which does not specify a failure
criterion for batteries. This standard matches Tesla's recommendation
but does not specify a UBE requirement as failure criterion, consistent
with past EPA practice regarding SMECC component warranty. In the
proposed regulatory text EPA had tied the battery warranty failure
criterion to the MPR criterion of 70 percent SOCE to provide clarity on
what constitutes the need for a warranty repair. However, in light of
comments received, additional research and consideration of existing
warranty-related provisions in the current regulations, EPA has
reconsidered the appropriateness of doing so at this time. EPA is not
tying the battery warranty failure criterion to the durability
performance requirement but will require manufacturers to specify the
warranted percentage SOCE and will require use of the SOCE monitor
value in determining a warranty claim, subject to the warranty claim
procedures in 40 CFR 85.2106. See the regulatory text and further
discussion in section 15.1 of the Response to Comments document. EPA
has not yet determined if it is appropriate to specify a warranty
failure criterion in this context and will continue to study the matter
for possible inclusion in a future rulemaking.
Some commenters raised the issue of whether or not virtual mileage
would be included in the mileage applicable to the warranty provisions,
with some suggesting that it should be included. However, commenters
did not clearly explain why virtual mileage should be extended to
warranty mileage simply because it exists in the context of durability.
EPA notes that the virtual mileage provision originates in EPA's
adoption of GTR No. 22, which developed a concept of virtual mileage
specifically for the context of battery durability. GTR No. 22 does not
consider or establish warranty provisions. EPA retained the virtual
mileage provision in the context of durability for the purpose of
maintaining consistency with the GTR design and structure, and not for
the purpose of potentially extending a virtual mileage concept to other
mileage-related aspects of our regulations.
As an alternative to the inclusion of virtual warranty mileage,
some commenters suggested that EPA should exclude vehicles that were
used for V2G or V2B from warranty coverage. EPA continues to assess
that these provisions are not necessary. We note that the warranty
mileage, which does not include virtual mileage, is only 80,000 miles
compared to the durability mileage of 100,000 miles. This reduced
stringency largely addresses commenters' concerns regarding warranty
mileage and likely levels of V2G or V2B usage. EPA also notes that V2G
usage may not necessarily imply a shorter battery life as is commonly
assumed. Recently, NREL found that a vehicle-to-grid control strategy
which lowered the battery's average state of charge (SOC) when parked--
while ensuring it was fully recharged in anticipation of the driver's
next need--could extend the life of the battery if continued over
time.\705\ Similarly, a study by Environment and Climate Change Canada,
NRC Canada and Transport Canada also found no significant difference in
usable battery energy between a vehicle that was used for bidirectional
V2G and one that was not, and identified an improved SOC profile
resulting from V2G activity as a possible factor.\706\
---------------------------------------------------------------------------
\705\ NREL. ``Electric Vehicles Play a Surprising Role in
Supporting Grid Resiliency,'' October 12, 2023. Accessed November 5,
2024 at https://www.nrel.gov/news/program/2023/evs-play-surprising-role-in-supporting-grid-resiliency.html.
\706\ Lapointe, A. et al., ``Effects of Bi-directional Charging
on the Battery Energy Capacity and Range of a 2018 Model Year
Battery Electric Vehicle,'' 36th International Electric Vehicle
Symposium and Exhibition (EVS36), June 11-14, 2023.
---------------------------------------------------------------------------
In the proposed regulatory text, EPA explicitly tied the warranty
performance criteria to the durability requirement, i.e. an individual
vehicle would be deemed as eligible for warranty battery repair if it
retains less than 80 percent SOCE at 5 years or 62,000 miles or 70
percent SOCE at 8 years or 80,000 miles. Some commenters stated that an
explicit connection between the two was inappropriate, because warranty
should be determined by the manufacturer and might legitimately vary
between different types of products.
CARB recommended that EPA adopt the CARB warranty provisions, and
that EPA explicitly tie battery warranty requirements to the durability
performance requirement. However, CARB pointed out that the ``proposal
appears to mistakenly tie all non-battery powertrain components to this
same battery durability performance requirement when defining failures
that merit warranty replacement. Such a connection renders the warranty
requirements meaningless for those components.'' CARB went on to
recommend that EPA adopt ``an appropriate failure metric(s) for
warranty coverage for non-battery components.''
In response to comments that EPA should not specify warranty
performance criteria, EPA continues to find that the proposed warranty
requirements are equivalent to those that EPA has the authority to
require and has historically applied to other specified major emission
control-related components for ICE vehicles under EPA's light-duty
vehicle regulations,
[[Page 27974]]
and are similarly implemented under the authority of CAA section 207.
However, we acknowledge that for analogous warranty requirements as
they have pertained to emissions-related ICE powertrain components
under the same statute, EPA has typically specified only the years and
mileage and not the exact failure criteria that would trigger a
warranty repair.\707\ Accordingly, at this time we are not tying the
battery warranty performance criteria to the durability performance
requirement. Instead, we are retaining the 8-year and 80,000 mile
warranty duration as specified by the statute, but are allowing the
manufacturer to specify the percentage SOCE that will trigger a
warranty repair, and also requiring the manufacturer to (a) clearly
disclose the warranted percentage SOCE to the customer in writing prior
to sale, and (b) establish, describe and disclose an evaluation method
that will be used by the manufacturer to determine whether that
percentage SOCE has fallen below the warranted percentage, and show to
EPA's satisfaction that it is accurate and reliable.
---------------------------------------------------------------------------
\707\ This has largely been possible because of the way OBD
requirements are integrated with the emissions rules, as a material
failure of an emission component to perform as designed would
typically result in increased emissions that would in turn activate
a malfunction indicator lamp (MIL).
---------------------------------------------------------------------------
In response to CARB's observation that the 70 percent SOCE
stipulation is technically not applicable to associated powertrain
components that are not batteries, the removal of the explicit
connection addresses this comment. For these components EPA is
specifying only the years and mileage terms and not specific failure
criteria.
In response to comments that we should clarify what is meant by
``associated powertrain components,'' EPA has revised 40 CFR
85.2103(d)(1)(v) of the regulatory text, which now clarifies that the
provision applies to ``all components needed to charge the system,
store energy, and transmit power to move the vehicle.''
Other comments are addressed in the RTC.
3. Definitions of Durability Group, Monitor Family, and Battery
Durability Family
EPA is revising the durability group definition for vehicles with
an IC engine, and adding two new grouping definitions, monitor family
and battery durability family, for BEVs and PHEVs.
i. Durability Group Revisions
EPA anticipates the adoption and use of gasoline particulate
filters (GPFs) to reduce PM emissions to the levels required with the
revised PM standard. Particulate filters are currently utilized on
diesel-powered vehicles to meet the existing Tier 3 p.m. standard.
EPA's durability group definition in 40 CFR 86.1820-01 includes a
catalyst grouping statistic based on the engine displacement and
catalyst volume and loading to define the acceptable range of designs
that may be combined into a single durability group. Previously, EPA
has not required manufacturers to consider PM filters in the
determination of the durability group.
PM filters can also be coated with precious metals resulting in the
particulate filter performing the functions of a three-way catalyst in
addition to reducing particulates. The Agency expects that
manufacturers may choose to adopt PM filters with three-way catalyst
coatings on some applications to reduce aftertreatment system cost by
not increasing the number of substrates. We are accordingly clarifying
that manufacturers need to include the volume and precious metal
loading of the PM filter along with the corresponding catalyst values
when calculating the catalyst grouping statistic. The volume of the PM
filter will not be included in the catalyst grouping statistic if the
PM filter does not include precious metals.
The durability group is used to specify groups of vehicles which
are expected to have similar emission deterioration and emission
component durability characteristics throughout their useful life. The
inclusion of a particulate filter on a gasoline-fueled vehicle
aftertreatment system can have an impact on the durability
characteristics of the aftertreatment system and as such the Agency is
finalizing its proposal that this device, or the lack of a PM filter in
the aftertreatment system, needs to be included in the durability group
determination for internal combustion engine aftertreatment systems.
Specifically, we are finalizing that vehicles may be included in the
same durability group only if all the vehicles have no particulate
filter, or if all the vehicles have non-catalyzed particulate filters,
or if all the vehicles have catalyzed particulate filters.
We are applying these updates to durability groups equally for both
gasoline and diesel applications. However, diesel vehicles certified
under 40 CFR part 86, subpart S, generally use a consistent
configuration with particulate filters, so the changes are not likely
to lead to changes in certification practices for those vehicles. The
Agency did not receive any comments on these proposed changes to the
durability group definition.
ii. BEV and PHEV Monitor Family
As described in section III.G.2.i of the preamble, EPA is
establishing battery durability requirements for BEVs and PHEVs. As
part of this durability standard, as proposed, the Agency is finalizing
two new groupings for BEVs and PHEVs, the battery monitor family and
the battery durability family.
As described in section III.G.2.i of the preamble, based on
comments received to the NPRM, EPA will accept manufacturer compliance
with the CARB ACC II durability program in lieu of the EPA durability
program. Allowing BEV manufacturers to comply with the ACC II
durability requirements has resulted in the need to revise the required
groupings for BEVs.
In the NPRM it was proposed that BEVs would have battery monitor
and battery durability families and would no longer require test group
or exhaust emission durability groups. As the California ACC II program
groups BEVs by test groups, EPA has concluded that BEVs will still
require the definition of an exhaust emission durability group and test
group for all BEVs.
In the NPRM it was proposed that PHEVs would have battery monitor
and battery durability families in addition to test group and exhaust
emission durability groups. PHEVs required keeping the test group and
exhaust emission durability groups as these definitions were created to
group vehicles based on their exhaust emission characteristics.
As finalized in this rulemaking BEVs and PHEVs which will comply
with the California ACC II requirements and will not comply with the
EPA requirements will only need to specify a durability family and a
test group for these vehicles. BEVs and PHEVs which comply with the EPA
requirements will need to specify a durability family, test group,
battery monitor family, and battery durability family for these
families.
To support the monitor accuracy evaluation requirements described
in section III.G.2 of the preamble, manufacturers must install a
battery SOH monitor which accurately estimates, monitors, and
communicates the SOCE of the high-voltage battery (as defined in GTR
No. 22 and described in section III.G.2 of the preamble) at the current
point in the vehicle's lifetime. To evaluate the accuracy of the
monitor during the life of the vehicle, manufacturers must procure and
test consumer vehicles in-use. The SOCE
[[Page 27975]]
monitor is subject to the accuracy standard.
Through the introduction of monitor families for BEVs and PHEVs,
EPA seeks to reduce test burden by recognizing that monitor accuracy
may be similar for vehicles with sufficiently similar design
characteristics that use the same monitor design. As described in GTR
No. 22, vehicles that are sufficiently similar in their characteristics
such that the monitor can be expected to perform with the same accuracy
may be assigned to the same monitor family. The criteria for inclusion
in the same monitor family includes characteristics such as the
algorithm used for SOCE monitoring, electrified vehicle type (BEV or
PHEV), sensor characteristics and sensor configuration, and battery
cell characteristics that would not be expected to influence SOCE
monitor accuracy.
In the NPRM, EPA proposed that for vehicles to be in the same
monitor family, the following conditions must be met: the SOCE
monitoring algorithm needs to utilize the same logic and have the same
value for all calibration variables used in the algorithm; the
algorithm used to determine UBE needs to utilize the same sampling and
integration periods and the same integration technique; the locations
of the sensor(s) (i.e. at the pack, module, or battery cell level) for
monitoring DC discharge energy need to be the same; and the accuracy of
the sensor(s) and the tolerance of the sensor(s) accuracy used for
monitoring energy and range need to be the same. EPA received comments
from the Alliance indicating their concern that the proposed
requirements are overly restrictive with respect to defining monitor
family. Having considered the Alliance's comment, the Agency has
decided to remove these requirements on the sensor locations and
algorithm requirements from the monitor family determination. The
Agency has concluded that the criteria for inclusion in the same
monitor family as defined in GTR No. 22 are sufficient. The Agency also
is finalizing the proposed requirement that BEVs and PHEVs cannot be
included in the same monitor family, as required by GTR No. 22 which is
being incorporated by reference.
If a manufacturer determines that additional vehicle
characteristics affect the accuracy of SOCE estimation, the
manufacturer can request the Administrator to allow the creation of
additional monitor families. To request additional monitor families,
the manufacturer may seek Agency approval and describe in their
application the factors which produce SOCE estimation errors and how
the monitor family will be divided to reduce the estimation errors.
Manufacturers can request that the Administrator include in the
same monitor family vehicles for which these characteristics would not
otherwise allow them to be in the same monitor family (except for
including BEVs and PHEVs in the same monitor family). When seeking
Agency approval, the manufacturer will need to include data
demonstrating that these differences do not cause errors in the
estimation of SOCE.
iii. BEV and PHEV Battery Durability Family
In introducing battery durability families for BEVs and PHEVs, EPA
seeks to reduce test burden by recognizing that the degradation of UBE
(as indicated by SOCE) may be similar for vehicles with sufficiently
similar design characteristics. As described in GTR No. 22, vehicles
that are sufficiently similar in their characteristics such that the
UBE may be expected to degrade in the same way may be assigned to the
same battery durability family. EPA is establishing provisions
requiring use of the following powertrain characteristics and design
features to determine battery durability families: maximum specified
charging power, method of battery thermal management, battery capacity,
battery (cathode) chemistry, and the net power of the electrical
machines. In addition, BEVs and PHEVs cannot be placed in the same
battery durability family.
EPA received comments from the Alliance requesting a number of
changes to the criteria used to determine battery durability families
for BEVs and PHEVs. The Alliance recommended removing the cathode
chemistry criteria and including all unique cathode chemistries in a
single Li-Ion family. Another commenter expressed uncertainty as to
whether variants within specific Li-Ion sub-chemistries, such as NMC or
LFP, would be considered the same or different chemistries. The
Alliance also suggested removing the maximum charging power criteria.
In addition, the Alliance recommended allowing batteries with
capacities within 20 percent to be included in the same battery
durability family. At this time, the Agency does not have sufficient
information to conclude that the revisions the Alliance is suggesting
will ensure that all vehicles within a durability family would be
expected to degrade in the same manner. For example, it is well known
that different lithium-ion chemistries, even within specific sub-
chemistries such as NMC or LFP, can exhibit significantly different
durability properties. As noted in this section and in the EPA
regulations, EPA is providing manufacturers with the option to include
in the same durability family vehicles for which these characteristics
would not otherwise allow them to be in the same battery durability
family. In order to make this inclusion, the manufacturer needs to
provide data demonstrating the vehicle differences being included will
age similarly and will degrade in an equivalent manner. The option to
provide data applies to all of the powertrain characteristics and
design features used to determine a battery durability family.
Therefore, the Agency is finalizing the requirement to specify battery
durability families based on the characteristics and design features
described in GTR No. 22 with the provision to allow variations based on
the submission of appropriate data demonstrating equivalent
degradation. With regard to specific sub-chemistries, EPA clarifies
that placement in the same battery durability family is not indicated
when chemistry differences exist that would be expected to influence
durability. Chemistry differences may include differences such as
proportional metal composition of the cathode (for example, NMC811,
NMC622, NMC333, etc.), composition of the anode (for example, graphite,
graphite with silicon, other forms of carbon), or differences in
particle size or morphology of cathode or anode active materials,
unless data is provided otherwise as described above.
Manufacturers can request that the Administrator include in the
same battery durability family vehicles for which the characteristics
and design features described in the above paragraphs would not
otherwise allow them to be in the same battery durability family
(except for including BEVs and PHEVs in the same battery durability
family). The manufacturer will need to include data with their request
that demonstrates that these differences do not impact the durability
of the vehicles with respect to maintaining UBE throughout the life of
the BEV or PHEV.
If a manufacturer determines that additional vehicle
characteristics result in durability differences which impact UBE, the
manufacturer can request the Administrator to allow the creation of
additional battery durability families. To request additional battery
durability families the manufacturer will need to seek Agency approval.
In their request for approval, the manufacturer must describe the
factors which produce differences in vehicle aging and how the
[[Page 27976]]
durability grouping will be divided to better capture the differences
in expected deterioration.
EPA also received comments from the California Air Resources Board
and the State of Colorado addressing EPA's proposed BEV durability
program. Both Colorado and the California Air Resources Board were
supportive of EPA's proposal and in both instances also asked EPA to
implement a BEV durability program based on California's durability
program adopted in their Advanced Clean Cars II regulation. The final
rule accordingly includes an option for manufacturers to demonstrate
compliance with battery durability requirements based on certification
to CARB's ACC II program. Detailed responses to these comments can be
found in the Response to Comments Document.
4. Light-Duty Program Improvements
i. GHG Compliance and Enforcement Requirements
EPA is finalizing its proposal to clarify the certification
compliance and enforcement requirements for GHG exhaust emission
standards found in 40 CFR 86.1865-12 to more accurately reflect the
intention of the 2010 light-duty vehicle GHG rule (75 FR 25324, May 7,
2010). In the 2010 rule, EPA set full useful life greenhouse gas
emissions standards with which each vehicle is required to comply. Each
vehicle has an individual full useful life greenhouse emission standard
which is based on the measured GHG emissions used for fuel economy
labeling purposes. Manufacturers determine compliance with the fleet
average greenhouse gas standard by combining the individual vehicle's
GHG emissions useful life values and comparing this result to the
manufacturers fleet average standard. The preamble to the 2010 rule
clearly explained that the CAA requires a vehicle to comply with
emission standards over its regulatory useful life and affords EPA
broad authority for the implementation of this requirement and that EPA
has authority to require a manufacturer to remedy any noncompliance
issues. EPA also explained that there may be cases where a repairable
defect could cause the non-compliance and in those cases a recall could
be the appropriate remedy. Alternatively, there may be scenarios in
which a GHG non-compliance exists with no repairable cause of the
exceedance. Therefore, the remedy can range from adjusting a
manufacturer's credit balance to the voluntary or mandatory recall of
noncompliant vehicles.
In the 2010 rule, EPA clearly intended to use its existing recall
authority to remedy greenhouse gas non-compliances through traditional
recalls when appropriate and to use the authority to correct the
greenhouse gas credit balance as a remedy when no practical repair for
in-use vehicles could be identified. See 75 FR 25474. However, the
regulations did not describe these in-use compliance provisions with as
much clarity as the preambular statements. Therefore, as proposed, EPA
is finalizing clarifications to 40 CFR 86.1865-12(j) to make clear that
EPA may use its existing recall authority to remedy greenhouse gas non-
compliances when appropriate and specifically may use such authority to
correct a manufacturer's greenhouse gas credit balance as a remedy when
no practical repair can be identified.
The Alliance for Automotive Innovation commented that they believe
such an approach is sensible. However, they stated that EPA does not
have authority under section 207 of the CAA to require it. EPA
disagrees; section 207 of the CAA clearly gives EPA the authority to
require recall of non-compliant vehicles, but does not specify a
precise form for such a recall. EPA responds to this comment in full in
the Response to Comments.
In the 2010 rule, EPA set vehicle in-use emissions standards for
carbon-related exhaust emission (CREE) to be 10 percent above the
vehicle-level emission test results or model-type value if no
subconfiguration test data are available. This 10 percent factor was
intended to account for test-to-test variability or production
variability within a subconfiguration or model type. EPA clearly did
not intend for this factor to be used as an allowance for manufacturers
to design and produce vehicles that generate CO2 emissions
up to 10 percent higher than the actual values they use to certify and
to calculate the year end fleet average. In fact, EPA expressed
concerns in the rulemaking that ``this in-use compliance factor could
be perceived as providing manufacturers with the ability to design
their fleets to generate CO2 emissions up to 10 percent
higher than the actual values they use to certify.'' See 75 FR 25476.
For the reasons that EPA articulated in the 2010 rulemaking, EPA
expects that some in-use vehicles may generate slightly more
CO2 than the certified values and some vehicles may emit
slightly less, but the average CO2 emissions of a
manufacturer's fleet and each model within it should be very close to
the levels reported to EPA and used to calculate overall fleet average.
The in-use data submitted over the last ten years largely supports this
expectation. Nevertheless, EPA believes it is important that
manufacturers understand their obligations under the in-use program and
that EPA has the appropriate tools to hold manufacturers responsible
should they fail to meet these obligations. EPA proposed two regulatory
options, either of which would align with our original intent in the
2010 rule.
The first option was to clarify the regulatory language to make it
clear that if a manufacturer's in-use data demonstrates that a
manufacturer's CO2 results are consistently higher than the
values used for calculation of the fleet average for any class or
category of vehicle, EPA may use its authority to correct a
manufacturer's greenhouse gas credit balance to ensure the
manufacturer's GHG fleet average is representative of the actual
vehicles it produces. This means that the credit balance post-
correction will reflect the actual in-use performance of the vehicles.
In other words, if the manufacturer reports a value of X g/mile in
calculating its fleet average, but its vehicles emit X+A g/mile in-use,
we may correct the manufacturer's balance by the entire discrepancy
(A).
The second option was to set the in-use standards at the vehicle-
level emission test results or model-type average value if no
subconfiguration test data are available in the GHG report. Under this
approach, manufacturers will have the option to voluntarily raise the
GHG values submitted in the GHG report if they wish to create an in-use
compliance margin. The proposed change in this second option would make
the GHG ABT program consistent with all other ABT programs used in the
light-duty program. In all other ABT programs (e.g., FTP
NMOG+NOX, MSAT, SFTP), manufacturers must choose a bin level
or Family Emissions Limit (FEL) in which to certify. Manufacturers
typically design their vehicle to emit well below the bin level or FEL
to establish a compliance margin; however, the fleet average emissions
are calculated based on the bin level or FEL, not the actual
certification level. In those cases, the fleet average emissions
calculated in the ABT report would be representative of the actual
fleet as long as the vehicles comply with the certified bin level or
FEL. Only the light-duty GHG ABT program allowed manufacturers to
calculate the fleet average emissions based on the certification level.
EPA allowed this with the expectation that vehicles in actual use would
not normally emit more CO2 than they did
[[Page 27977]]
at the time of certification (i.e., CO2 emissions are not
expected to increase with time or mileage).
The Alliance for Automotive Innovation commented that they opposed
the second option, stating that even with perfect in-use performance,
they would expect 50 percent of vehicles to exceed the original
certification test simply due to test-to-test variation. They
acknowledged that most test groups would avoid IUCP given the threshold
of 10 percent exceedance for 50 percent of the tested vehicles. They
commented that, it is not productive to have 50 percent of all initial
tests be identified as failures.
Kia commented that keeping the 10-percent in-use standard is
critical as EPA increases the stringency of criteria pollutants and GHG
emissions 10-fold. The Alliance for Automotive Innovation commented
that they support the first of the two options that maintains the 10
percent allowance.
BMW NA commented that they understand and support EPA in its
proposal to align with the intent of the 2010 light-duty GHG rule and
are in favor of the ``Option 1.'' However, they requested that EPA
updates the proposal to clarify what is meant by ``consistently
higher'' results with respect to GHG balance correction.
EPA is finalizing language in 40 CFR 86.1865-12 to make it clear
that if a manufacturer's in-use data demonstrates a substantial number
of vehicles fail to comply with the in-use GHG standards for any class
or category of vehicle, EPA may use its recall authority to remedy a
GHG noncompliance. In some cases, this remedy could be a repair of the
affected vehicles, and in other cases it could be an adjustment to the
GHG credit balance. In either case, the remedy must be adequate to
ensure the manufacturer's GHG fleet average is representative of the
actual vehicles it produced. This means that, in the case of a credit
adjustment, the credit balance post-correction will reflect the actual
in-use performance of the vehicles. In other words, if the manufacturer
reports a value of X g/mile in calculating its fleet average, but its
vehicles emit X+A g/mile in-use, the manufacturer's balance must be
adjusted by the entire discrepancy (A). In the case of a repair to the
affected vehicles, the remedy would also need to be sufficient such
that the repaired vehicles emit the same X g/mile.
The overarching principle of compliance to the fleet average
standards is that the calculated fleet average in the GHG report must
accurately represent the actual fleet of vehicles a manufacture
produced. If a manufacturer knowingly provides false or inaccurate data
as part of their GHG report, the manufacturer may be subject to
enforcement and EPA may void ab initio the certificates of conformity
which relied on that data. Vehicles are covered by a certificate of
conformity only if they are in all material respects as described in
the manufacturer's application for certification (Part I and Part II)
including the GHG report. If vehicles generate substantially more
CO2 emissions in actual use than what was reported, those
vehicles are not covered by the certificate of conformity. EPA is
finalizing a change to the regulatory language that is designed to
clarify the Agency's understanding of its authority to find that
vehicles were sold in violation of a condition of a certificate. EPA is
finalizing edits to 40 CFR 86.1848-10 to make it clearer that any
vehicles sold that fail to meet any condition upon which the
certificate was issued are not covered by the certificate and thus were
sold in violation of CAA 203(a)(1). EPA did receive adverse comments to
this change which are addressed in the RTC document.
EPA also proposed changes to 40 CFR 86.1850-01 to allow the Agency
to void ab initio a previously issued certificate of conformity in the
list of possible actions the agency may take if a manufacturer commits
any of the infractions listed in 40 CFR 86.1850-01(b), namely: if a
manufacturer submits false or incomplete information, renders
inaccurate any test data which it submits, or fails to make a good
engineering judgment. Specifically, EPA proposed removing the word
``knowingly'' from 40 CFR 86.1850-01(d). The Alliance for Automotive
Innovation commented that EPA failed to set forth a plausible rationale
for the proposed changes. Without taking a position on the substance of
the comment, EPA has decided not to finalize the changes to 40 CFR
86.1850-01 as proposed.
ii. In-Use Confirmatory Program (IUCP)
EPA's existing regulations require manufacturers to conduct in-use
testing as a condition of certification. Specifically, manufacturers
must commit to later procure and test privately-owned vehicles that
have been normally used and maintained. The vehicles are tested to
determine the in-use levels of criteria pollutants when they are in
their first and fourth years of service. This testing is referred to as
the In-Use Verification Program (IUVP) testing, which was first
implemented as part of EPA's Compliance Assurance Program (CAP) 2000
certification program.\708\
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\708\ 64 FR 23906, May 4, 1999.
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Another component of the CAP 2000 certification program is the In-
Use Confirmatory Program (IUCP). This is a manufacturer-conducted in-
use test program that can be used as the basis for EPA to order an
emission recall (although it is not the only potential basis for
recall). For vehicles tested in the IUVP to qualify for IUCP, there is
a threshold of 1.30 times the certification emission standard for
criteria emissions (e.g., NMOG+NOX, CO) and an additional
requirement that at least 50 percent of the test vehicles for the test
group fail for the same substance. If these criteria are met for a test
group, the manufacturer is required to test an additional 10 vehicles
which are screened for proper use and maintenance.
Since measuring PM below 0.5 mg/mile may require measurement
procedure adjustments in some laboratories, EPA is providing a
temporary increase in the criteria that trigger an IUCP (in-use
confirmatory testing program). The temporary criteria only apply to
test groups certifying to the Tier 4 PM standard (0.5 mg/mi) and only
extends through 2030 for LDV, LDT, MDPV, and through 2031 for MDV. The
temporary criteria consist of a mean test group PM equal to or greater
than 1.30 times the standard and the failure rate among vehicles in
that test group of 80 percent or higher. The criteria revert to 1.30
times the standard and a failure rate among vehicles in that test group
of 50 percent or higher starting in 2031 for LDV, LDT, MDPV, and
starting in 2032 for MDV.
The 2010 light-duty GHG rule set full useful life greenhouse gas
emissions standards for which each vehicle is required to comply and
required in-use testing under the In-Use Verification Program (IUVP)
testing provisions.\709\ At that time, EPA did not set criteria for In-
Use Confirmatory Program (IUCP) for GHG but indicated that IUCP will be
a valuable future tool for achieving compliance and that EPA would
reassess IUCP thresholds for GHG in a future rule when more data is
available.
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\709\ 75 FR 25475, May 7, 2010.
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Since the 2010 light-duty GHG rule, EPA has received in-use
greenhouse gas emissions test results from over 9,500 vehicles. EPA
believes there is now sufficient data to establish IUCP threshold
criteria based on greenhouse gas emissions and that doing so is
warranted.
The 2010 light-duty GHG rule established an in-use CO2
standard to be
[[Page 27978]]
10 percent above the vehicle-level emission test results or model-type
value if no subconfiguration test data are available. As discussed
above, EPA proposed two options for the in-use standard. The first
would retain the in-use standard including the 10 percent margin
established in the 2010 light-duty GHG rule and the second would
eliminate the 10 percent margin from the in-use standard and apply it
instead to the IUCP criteria. As discussed above, EPA is finalizing the
first option and retaining the 10 percent margin in the in-use
standard. Therefore, EPA is finalizing the threshold criteria to
trigger IUCP when at least 50 percent of the test vehicles for a test
group exceed the relevant in-use CO2 standard.
The Alliance for Automotive Innovation commented that EPA did not
adequately justify the decision to exclude a threshold such as the 1.3
factor used for criteria pollutants in combination with the 50 percent
trigger for IUCP testing. EPA disagrees with the comment. In the
proposal, EPA explained that EPA did not propose a threshold for the
average emissions of the test group (which is 1.3 times for criteria
emissions) for a number of reasons. First, unlike criteria pollutants
where the in-use standards are generally the same as the certification
standards, EPA setting a margin of 10 percent above the reported GHG
result for the in-use standard. Adding an additional multiplier on top
of that would be unnecessary, and EPA believes a 10 percent exceedance
threshold (either as a part of the in-use standard or as a threshold
criteria) is appropriate given the Agency's experience with GHG
compliance over the past decade. Second, unlike for criteria
pollutants, the CO2 emissions performance of vehicles is
generally not expected to deteriorate with age and mileage (see the
2010 light-duty GHG rule). Third, unlike with criteria pollutants, the
in-use GHG standards are not consistent within a test group and the
compliance level is not determined by the same emissions data vehicle.
GHG in-use standards can be different for each subconfiguration or
model type. Fourth, the review of the data supports 10 percent above
the reported GHG value as an appropriate criterion, because over 95
percent of the test results EPA received complied with this in-use
standard based on the 10 percent margin. The final IUCP criteria is
intended to capture vehicles with both unusually high increases in
CO2 emissions compared to the reported value and an
unusually high failure rate.
Therefore, consistent with our proposal, EPA is not establishing
additional criteria based on the average emissions of the test group.
iii. Part 2 Application Changes
As proposed, EPA is finalizing changes to 40 CFR 86.1844-01(e)
``Part 2 Application'' to make it clearer that the Part 2 application
must include the part numbers and descriptions of the GHG emissions
related parts, components, systems, software or elements of design, and
Auxiliary Emission Control Devices (AECDs) including those used to
qualify for GHG credits (e.g., air conditioning credits, off cycle
credits, advanced technology vehicle credits) as previously specified
in EPA guidance letter CD-14-19. These changes are not intended to
alter the existing reporting requirements, but rather to clarify the
existing requirement.
Also as proposed, EPA is finalizing changes to 40 CFR 85.2110 and
40 CFR 86.1844-01(e) ``Part 2 Application'' to no longer accept paper
copies of service manuals, Technical Service Bulletins (TSB), owner's
manuals, or warranty booklets. In response to the National Archives and
Records Administration (NARA) mandate and OMB's Memorandum for Heads of
Executive Departments and Agencies, M-19-21, Transition to Electronic
Records, EPA will no longer accept paper copies of these documents.
iv. Fuel Economy and In-Use Verification Test Procedure Streamlining
The ``Federal Test Procedure'' (FTP) defines the process for
measuring vehicle exhaust emissions, evaporative emissions, and fuel
economy and is outlined in 40 CFR 1066.801(e). The process includes
preconditioning steps to ensure the repeatability of the test results,
as described in 40 CFR 86.132-96. EPA is finalizing two changes,
consistent with our proposal, to the preconditioning process used for
testing of only fuel economy data vehicles (FEDVs) (not emission data
vehicles) in order reduce the testing burden while maintaining the
repeatability and improving the accuracy of the test results.\710\ The
changes are related to the fuel drain and refueling step and the
preconditioning of the evaporative canister. EPA is also removing one
fuel drain and refueling step for in-use surveillance vehicles. In
addition, we are finalizing our proposed changes to the fuel cap
placement during vehicle storage for all emission data and fuel economy
vehicles.
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\710\ See proposed regulations in 40 CFR 86.132-96 and
1066.801(e).
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Currently, all Fuel Economy Data Vehicles (FEDVs) must follow the
regulations for preconditioning before conducting the cold-start
portion of the test. Included in this preconditioning is the
requirement to drain and refuel the fuel tank twice. We are finalizing
our proposal to remove the second fuel drain step, which occurs after
running the Urban Dynamometer Driving Schedule (UDDS) preconditioning
cycle, but before the cold start test. The fuel drain and refuel step
was originally included in the test procedure because fresh fuel was
important for carbureted engines and could impact the test results.
However, with today's fuel injection systems, EPA's assessment is that
the refueling of the vehicle with fresh fuel does not impact the
measured fuel economy of the vehicle.\711\ Removing this step will save
a significant amount of fuel for each test run by the manufacturer or
by EPA and reduce the number of voided tests due to mis-fueling and
fueling time violations. It will also reduce the labor associated with
refueling the vehicle for each test. EPA is also removing this step for
in-use vehicle testing on vehicles tested under 40 CFR 86.1845-04
(verification testing). It is difficult to drain fuel from an in-use
vehicle because they normally do not have fuel drains. Removing this
step will save time and fuel from the in-use verification process as
well. EPA will still require this step for in-use confirmatory vehicles
tested under 40 CFR 86.1846-01.
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\711\ Memo to Docket. ``EPA FTP Streamlining Test Results.'' See
Docket EPA-HQ-OAR-2022-0829. March 2023.
---------------------------------------------------------------------------
EPA is also finalizing its proposal to remove the canister loading
and purging steps from the preconditioning for FEDVs. This will provide
the following benefits to manufacturers and EPA: the time to run the
test will be reduced, less butane will be consumed by the laboratories
which reduces the cost of running a test, and the fuel economy
measurement accuracy will improve. EPA conservatively estimates that at
least 88 kg of butane was consumed by manufacturers in the 2021
calendar year for the purposes of fuel economy testing, based on 909
fuel economy test submissions to EPA and assuming 97 grams of butane
per canister. The measurement accuracy will improve because the
calculations for fuel economy assume that 100 percent of the fuel
consumed during the testing has the carbon balance of the liquid fuel
in the tank. The butane vapor that is added
[[Page 27979]]
to the canister during preconditioning has a different carbon content,
and thus causes very small inaccuracies in the fuel economy results.
EPA's test program also shows that the canister loading does not have
any statistically significant effect on the fuel economy results from
the cold start and highway fuel economy tests.\712\
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\712\ Ibid.
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Finally, the regulations at 40 CFR 86.132-96(a) currently state
that fuel caps must be removed during any period when the vehicle is
parked outside awaiting testing but fuel caps may be in place while in
the test area. As proposed, EPA is amending the regulations to simply
require that vehicles be stored in a way that prevents fuel
contamination and preserves the integrity of the fuel system. At this
time EPA considers the possibility of contaminants getting into the
fuel system while the fuel cap is off to be more significant than any
possible canister loading. Modern vehicles purge the canister
sufficiently during the preconditioning cycles to ensure that tests
completed on vehicles that have been parked will not significantly
affect test results. Custodians of test vehicles should avoid parking
test vehicles outdoors during hot conditions.
EPA did not receive any adverse comments related to the proposed
test streamlining described in this section. Ingevity commented that
the streamlining steps seem acceptable as long as the full test
procedure specified in 40 CFR part 86, subpart B, remains primary for
EPA testing. The Agency notes that the appropriate test procedure steps
will be followed when testing vehicles to determine compliance with the
evaporative emission standards.
v. Miscellaneous Amendments
We are clarifying the pre-certification exemption in 40 CFR 85.1706
by amending the definition of ``pre-certification vehicle'' in 40 CFR
85.1702. The amended regulation limits the exemption to companies that
already hold a certificate showing that they meet EPA emission
standards. This has been a longstanding practice for highway and
nonroad engines and vehicles. Companies that are not certificate
holders may continue to request a testing exemption under 40 CFR
85.1705.
Also as proposed, we are updating the test procedures in 40 CFR
86.113-15 to reference test fuel specifications in 40 CFR part 1065 for
diesel fuel, natural gas, and LPG. We do not expect this change to
cause manufacturers to change the test fuels they use for
certification, or to prevent any manufacturer from using carryover data
to continue certifying vehicles in later model years. In the case of
diesel fuel, the two sets of specifications are very similar except
that 40 CFR 1065.703 takes a different approach for aromatic content of
the fuel by specifying a minimum aromatic content of 100 g/kg. We
expect current diesel test fuels to meet this specification. In the
case of natural gas, 40 CFR 1065.715 decreases the minimum methane
content from 89 to 87 percent, with corresponding adjustments in
allowable levels of nonmethane compounds. In this case too,
manufacturers will be able to continue meeting test fuel specifications
without changing their current practice. In the case of LPG, 40 CFR
86.113-94 directs manufacturers to ask EPA to approve a test fuel. The
final rule specifies, as proposed, that the fuel specifications already
published in 40 CFR 1065.720 are appropriate for testing vehicles
certified und 40 CFR part 86, subpart S.
The regulation currently requires manufacturers to include
information in the application for certification for fuel-fired heaters
(40 CFR 86.1844-01(d)(15)). The regulation also requires manufacturers
to account for fuel-fired heater emissions in credit calculations for
Tier 2 vehicles (40 CFR 86.1860-04(f)(4)). The Tier 3 regulation
inadvertently omitted the requirement related to credit calculations in
40 CFR 86.1860-17. As proposed, we are restoring the requirement to
account for emissions from fuel-fired heaters in credit calculations in
40 CFR 86.1844-01(d)(15).
This rule includes several structural changes that lead to a need
to make the following changes to the regulations for correct
terminology and appropriate organization:
We are replacing cold temperature NMHC standards with cold
temperature NMOG+NOX standards, and we are adding a cold
temperature PM standard. The rule includes updates to refer to cold
temperature standards generally, or to cold temperature
NMOG+NOX standards instead of, or in addition to, cold
temperature NMHC standards. The regulation also now includes references
to cold temperature testing as ``-7 [deg]C testing''. 40 CFR 86.1864-10
is similarly adjusted to refer to cold temperature fleet average
standards and cold temperature emission credits instead of referencing
NMHC credits.
We are setting separate emission standards for US06 and
SC03 driving schedules rather than setting standards based on a
composite calculation for the driving schedules that make up the
Supplemental FTP. As a result, we are generally adjusting terminology
for Tier 4 vehicles to refer to the specific cycles rather than the
Supplemental FTP.
The existing regulation includes several references to
Tier 3 standards (or Tier 3 emission credits, etc.). Those references
were generally written to say when regulatory provisions started to
apply. Some of those provisions need to continue into Tier 4, but not
all. The final rule includes new language in several places to clarify
whether or how those provisions apply for Tier 4 vehicles.
The Tier 4 standards apply nearly uniformly for both
light-duty and medium-duty vehicles. This contrasts with earlier
standards where many requirements and compliance provisions applied
differently for light-duty and medium-duty vehicles. For Tier 3, that
led us to adopt the light-duty standards in 40 CFR 86.1811-17 and the
medium-duty standards in 40 CFR 86.1816-18. As a result, because of the
extensive commonality for Tier 4 standards, we are finalizing the new
criteria exhaust emission standards for all these vehicles in 40 CFR
86.1811-27 rather than continuing to rely on 40 CFR 86.1816 for medium-
duty vehicles.
The rule includes several instances of removing regulatory text
that has been obsolete for several years. Removing obsolete text is
important to prevent people from making errors from thinking that
obsolete text continues to apply. The final rule includes additional
housekeeping amendments to remove obsolete text and to remove or update
cross references to obsolete or removed regulatory text.
The proposed rule identified labeling information that included
obsolete content for incomplete vehicles. We proposed to remove 40 CFR
86.1807-01(d), but are instead amending that paragraph for the final
rule to preserve the labeling information, but exclude the references
to obsolete regulatory provisions.
One case of obsolete text is related to special test procedures as
specified in 40 CFR 86.1840-01. Vehicle manufacturers have completed a
transition to following the exhaust test procedures specified in 40 CFR
part 1066, such that those new test procedures apply instead of the
test procedures in 40 CFR part 86, subpart B, starting with model year
2022. Since we address special test procedures in 40 CFR 1066.10(c),
which in turn relies on 40 CFR 1065.10(c)(2), we no longer need to rely
on 40 CFR 86.1840-01 for special test procedures. We note the following
aspects of the transition for special test
[[Page 27980]]
procedures, which we are finalizing as proposed:
We are applying the provisions for special procedures
equally to all vehicles certified under 40 CFR part 86, subpart S. The
special test procedures were written in a way that did not apply for
incomplete vehicles certified under 40 CFR part 86, subpart S. This is
very likely an artifact of the changing scope of the regulation since
2001.
We are keeping the reference to infrequently regenerating
aftertreatment devices in 40 CFR 86.1840-01 as an example of special
test procedures to clarify that we are not changing the way
manufacturers demonstrate compliance for vehicles with infrequently
regenerating aftertreatment devices. Specifically, we are not adopting
the measurement and reporting requirements that apply for heavy-duty
engines under 40 CFR 1065.680.
We are applying the provisions related to infrequently
regenerating aftertreatment devices equally to all vehicles certified
under 40 CFR part 86, subpart S. The provisions in 40 CFR 86.1840-01
were written in a way that they did not apply for medium-duty passenger
vehicles. This is very likely an artifact of the changing scope of the
regulation since 2001.
We are finalizing the following additional amendments, as proposed:
Section 85.1510(d): Waiving the requirement for
Independent Commercial Importers (ICI) to apply fuel economy labels to
electric vehicles. Performing the necessary measurements to determine
label values would generally require accessing high-voltage portions of
the vehicle's electrical system. Manufacturers can appropriately and
safely make these measurements as part of product development and
testing. These measurements can pose an unreasonable safety risk when
making these measurements on production vehicles. The benefit of
labeling information for these vehicles is not enough to outweigh the
safety risks of generating that information.
Section 86.1816-18: The published final rule to adopt the
Tier 3 exhaust emission standards for Class 2b and Class 3 vehicles
inadvertently increased the numerical value of those standards a
trillion-fold by identifying the units as Tg/mile. We are reverting to
g/mile as we intended by adopting the Tier 3 standards.
This rule includes expanded provisions for in-use testing under 40
CFR 86.1845-04 as described in sections III.D.5.iii. and III.G.2.i of
this preamble. In addition to those new testing requirements, we are
taking the opportunity for this final rule to clarify that the
provisions allowing manufacturers to request approval to test fewer
vehicles also includes an alternative of testing the required number of
vehicles by waiving the detailed specifications for test vehicles. For
example, if manufacturers are unable to procure the required number of
test vehicles meeting specifications for mileage, geographic
distribution, and altitude, they may ask for EPA approval to substitute
test vehicles that fall short of meeting all those specifications. As
always, EPA approval would depend on manufacturers taking all
reasonable steps to meet those requirements. We are also allowing for
EPA to approve extended deadlines for completing testing to recognize
that practical limitations sometimes prevent manufacturers from
finishing a test program within the specified time frame.
In reviewing material for the final rule, we realized that the
proposed rule did not describe clearly enough how ICIs would need to
manage per-vehicle compliance to certify vehicles relative to emission
standards that allow or require manufacturers to comply with an
averaging standard using emission credits. We are making the following
amendments to 40 CFR 85.1515 in the final rule, largely to apply
provisions that are consistent with certification practices for
manufacturers where appropriate, and that are consistent with the
practice of implementing standards for ICIs in recent years:
The Tier 4 standards apply for ICIs starting in 2032,
which is the first model year that small-volume manufacturers must
comply with all the Tier 4 standards for light-duty vehicles. ICIs
continue to be subject to Tier 3 standards through 2031.
For both Tier 3 and Tier 4, we are clarifying that each
imported vehicle is subject to the fleet average standard where
manufacturers are allowed or required to demonstrate compliance based
on emission credits. This applies for NMOG+NOX standards for
25 [deg]C testing, NMOG+NOX standards for -7 [deg]C testing,
and for evaporative emissions.
For both Tier 3 and Tier 4, we are clarifying that ICIs
may purchase emission credits to certify vehicles with emissions higher
than the specified standards for any of the averaging-based standards.
ICIs would need to purchase credits to enable importation of each
vehicle individually. Aside from applying emission credits to those
individual vehicles, ICIs would not be allowed to average, bank, or
trade emission credits. Using this per-vehicle approach, ICIs would
have no need to maintain an account with a balance of credits, and
would never be in a situation where deficit credit provisions would
apply.
Where manufacturers certify using emission credits, we
specify that the highest allowable emission level is the highest
available NMOG+NOX bin or the evaporative emissions FEL cap.
We are further clarifying that ICIs may not participate in
the averaging, banking, and trading program for GHG emission credits.
We are removing references to ``motor vehicle engines'' in
some places since the ICI provisions no longer apply for heavy-duty
engines.
We are adding OBD to the list of standards and
requirements for ICIs to certify vehicles. This is consistent with
longstanding guidance.\713\
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\713\ ``Guidance for Certification, Fuel Economy and Final Entry
of ICI Vehicles'', CCD-03-11 (ICI), November 25, 2003.
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5. Light- and Medium-Duty Emissions Warranty for Certain ICE Components
As proposed, EPA is designating several emission control components
of light-duty ICE vehicles as specified major emission control
components. These include components of the diesel Selective Reductant
Catalysts (SRC) system, components of the diesel Exhaust Gas
Recirculation (EGR) system, and diesel and gasoline particulate filters
(DPFs and GPFs). As the result of this designation, these components
have the same warranty requirements as other components that have been
established as specified major emission control components.
As described in section III.G.3 of the preamble, CAA section 207(i)
specifies that the warranty period for light-duty vehicles is 2 years
or 24,000 miles of use (whichever first occurs), except the warranty
period for specified major emission control components is 8 years or
80,000 miles of use (whichever first occurs). The Act defines the term
``specified major emission control component'' to mean only a catalytic
converter, an electronic emissions control unit, and an onboard
emissions diagnostic device, except that the Administrator may
designate any other pollution control device or component as a
specified major emission control component if--
(A) the device or component was not in general use on vehicles and
engines manufactured prior to the model year 1990; and
(B) the Administrator determines that the retail cost (exclusive of
installation costs) of such device or component exceeds $200 (in 1989
dollars),\714\
[[Page 27981]]
adjusted for inflation or deflation as calculated by the Administrator
at the time of such determination.
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\714\ Equivalent to approximately $500 today.
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EPA believes that GPFs meet the requirements set forth in CAA
section 207(i) and should be designated as specified major emission
control components. GPFs were not in general use prior to model year
1990 and their cost exceeds the threshold specified in the CAA. EPA
anticipates that manufacturers will choose to comply with the PM
standards in this rule through application of a GPF for certain
vehicles. In the event of a GPF failure, PM emissions will most likely
exceed the standards. It is imperative that a properly functioning GPF
be installed on a vehicle in order to achieve the environmental
benefits projected by this rulemaking.
In order to meet the current emissions standards, diesel vehicles
utilize Selective Reductant Catalysts (SRC) as the primary catalytic
converter for NOX emissions controls and well as a Diesel
Oxidation Catalyst (DOC) as the primary catalytic converter for CO and
hydrocarbons and a Diesel Particulate Filter (DPF) as the primary
catalytic converter to control particulate matter (PM). In the event
that any one of these components fail, EPA anticipates that the
relevant standard will be exceeded. The proper functioning of each of
these components is necessary for the relevant emissions benefits to be
achieved.
More specifically, the SCR catalytic converter relies on a system
of components needed to inject a liquid reductant called Diesel Exhaust
Fluid (DEF) into the catalytic converter. This system includes pumps,
injectors, NOX sensors, DEF level and quality sensors,
storage tanks, DEF heaters and other components that all must function
properly for the catalytic converter to work. These components meet the
criteria for designation as specified major emission control
components.
Vehicles with diesel engines do not rely solely on aftertreatment
to control emissions. Diesel engines utilize Exhaust Gas Recirculation
(EGR) to control engine out emissions as a critical element of the
emissions control system. Components of the EGR system such as
electronic EGR valves and EGR coolers meet the criteria for designation
as specified major emission control components.
The emission-related warranty period for heavy-duty engines and
vehicles under CAA section 207(i) is ``the period established by the
Administrator by regulation (promulgated prior to November 15, 1990)
for such purposes unless the Administrator subsequently modifies such
regulation.'' The regulations specify that the warranty period for
light heavy-duty vehicles under 40 CFR 1037.120 is 5 years or 50,000
miles of use (whichever first occurs). EPA is clarifying, as proposed,
that this same warranty period applies for medium-duty vehicles
certified under 40 CFR part 86, subpart S, except that a longer
warranty period of 8 years or 80,000 miles applies for engine-related
components described in this section as specified major emission
control components.
The warranty provisions in CAA section 207(i)(2) do not explicitly
apply to medium-duty passenger vehicles. However, as with the new
standards in this rule, we are applying, as proposed, warranty
requirements to medium-duty passenger vehicles in the same way that
they apply to light-duty vehicles. We did not receive substantive
comments regarding the proposed changes and clarifications for warranty
provisions described in this section.
6. Definition of Light-Duty Truck
EPA has had separate regulatory definitions for light truck for GHG
standards and light-duty truck for criteria pollutant standards. The
``light truck'' definition used for determining compliance with the
light-duty GHG emission standards (40 CFR 600.002) matches the
definition that NHTSA uses in determining compliance with their fuel
economy standards (49 CFR 523.5). This definition contains specific
vehicle design characteristics that must be met to qualify a vehicle as
a truck. The broader ``light-duty truck'' definition used for
certifying vehicles to the criteria pollutant standards (40 CFR
86.1803-01) has allowed for some SUVs to qualify as trucks even if the
specific vehicle does not contain the truck-like design attributes. The
definition also includes some ambiguity that requires the manufacturers
and EPA to apply judgment to determine the appropriate classification.
Historically this was not an issue because the car versus truck
distinction was clear. Nearly all vehicles were passenger cars or
pickup trucks with open cargo beds. The earliest sport utility vehicles
(SUVs) were primarily derived from pickup truck platforms and were
therefore considered light trucks. However, current versions of some of
these SUVs now have car-based platforms with car-like features. Current
differences between the two light-truck definitions leads to some SUVs
being certified to GHG standards as a truck and to criteria pollutant
standards as a car. To address this concern, as proposed, we are
transitioning to a single definition of light-duty truck with the
implementation of the Tier 4 criteria pollutant emission standards
starting in model year 2027.
We are revising the definition of light-duty truck used in the
criteria pollutant standards to match the definition of light-truck
used in the GHG standards. This change will eliminate any confusion and
simplify reporting for manufacturers because each vehicle will be
treated consistently as either a car or a truck for all standards and
reporting requirements.
Commenters pointed out that the revised definition would cause some
vehicle models to become subject to the more stringent evaporative
emission standards that apply for light-duty vehicles. We did not
intend for the revised definition to cause a change in evaporative
emission standards. At the same time, we are aware that the less
stringent standards for light-duty trucks were originally intended to
reflect differences in fuel tank volumes and other vehicle
characteristics related to controlling evaporative emissions. It is
apparent that vehicles affected by the changing definition of ``light-
duty truck'' are not differentiated from light-duty vehicles based on
such vehicle parameters related to evaporative emission control. From
that perspective, the revised definition is likely to have the effect
of accomplishing the original intent of applying standards
corresponding to vehicles with expected evaporative-related
characteristics for light-duty vehicles.
To address the concern expressed in the comments, we are therefore
adding a provision for the final rule to allow manufacturers to
continue to meet the standard for light-duty trucks even if their
vehicles are recategorized as light-duty vehicles based on the change
in the definition, provided that those vehicle models continue to
qualify for carryover certification. With this approach, manufacturers
would do new testing to meet the more stringent standard only if they
already need to do new testing to certify to the evaporative emission
standards. To avoid extending this provision indefinitely, we are
including a requirement for manufacturers to meet the more stringent
evaporative emission standards for such vehicles starting in model year
2032, even if they would otherwise qualify for carryover certification.
Meeting the more stringent standards will likely involve modestly
increasing canister volume and upgrading various design features and
parameters in line with the technology solutions used for other light-
duty vehicles. The several years of lead time will allow manufacturers
to plan for making those changes.
[[Page 27982]]
H. On-Board Diagnostics Program Updates
EPA regulations state that onboard diagnostics (OBD) systems must
generally detect malfunctions in the emission control system, store
trouble codes corresponding to detected malfunctions, and alert
operators appropriately. EPA adopted at 40 CFR 86.1806-17 a requirement
for manufacturers to meet the 2013 California Air Resources Board
(CARB) OBD regulation as a requirement for an EPA certificate, with
certain additional provisions, clarifications and exceptions, in the
Tier 3 Motor Vehicle Emission and Fuel Standards final rulemaking (79
FR 23414, April 28, 2014). Since that time, CARB has made several
updates to their OBD regulations and continues to consider changes
periodically. In this rule, EPA is updating to the latest version of
the CARB OBD regulation (California's 2022 OBD-II requirements that are
part of title 13, section 1968.2 of the California Code of Regulations,
approved on November 30, 2022). This is accomplished by adding a new 40
CFR 86.1806-27 for model year 2027 and later vehicles. EPA had proposed
adding a new monitoring requirement for gasoline particulate filters
(GPFs) because the CARB regulation didn't include a specific
requirement for them. In follow-up meetings, manufacturers explained
they had already certified GPF diagnostics, and comments on the
proposed rule recommended relying on CARB regulation as being
sufficient for proper diagnostics to be created. Commenters also
suggested that adding a separate requirement from EPA would be
confusing. EPA has therefore decided to not finalize the proposed GPF
monitoring requirements and instead rely on the GPF-related
requirements already included in the CARB regulation.
See RTC section 5 for a more detailed discussion of comments
related to OBD.
I. Coordination With Federal and State Partners
Executive Order 14037 directs EPA and the Department of
Transportation (DOT) to coordinate, as appropriate and consistent with
applicable law, during consideration of this rulemaking. EPA has
coordinated and consulted with DOT/National Highway Traffic Safety
Administration (NHTSA), both on a bilateral level during the
development of this rule as well as through the interagency review of
the EPA rule led by the Office of Management and Budget. EPA has set
some previous light-duty vehicle GHG emission standards in joint
rulemakings where NHTSA also established CAFE standards. Most recently,
in establishing standards for model year 2023-2026, EPA and NHTSA
concluded that it was appropriate to coordinate and consult but not to
engage in joint rulemaking. EPA has similarly concluded that it is not
necessary for this EPA rule to be issued in a joint action with NHTSA.
In reaching this conclusion, EPA notes there is no statutory
requirement for joint rulemaking and that the agencies have different
statutory mandates and their respective programs have always reflected
those differences. As the Supreme Court has noted ``EPA has been
charged with protecting the public's 'health' and 'welfare,' a
statutory obligation wholly independent of DOT's mandate to promote
energy efficiency.'' \715\ Although there is no statutory requirement
for EPA to consult with NHTSA, EPA has consulted significantly with
NHTSA in the development of this rule. For example, staff of the two
agencies met frequently to discuss various technical issues including
modeling inputs and assumptions, shared technical information, and
shared views related to the assessments conducted for each rule.
Further technical collaboration between EPA and NHTSA, along with the
Department of Energy and National Laboratories, on a wide range to
technical topics, is further described below.
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\715\ Massachusetts v. EPA, 549 U.S. at 532.
---------------------------------------------------------------------------
EPA also has consulted with analysts from other Federal agencies in
developing this rule and the heavy-duty vehicles Phase 3 rulemaking,
including the Federal Energy Regulatory Commission (FERC), the Joint
Office for Energy and Transportation (which helps coordinate and
leverage expertise between the U.S. Department of Energy and the U.S.
Department of Transportation to further progress on zero-emission
transportation infrastructure), the Department of State, the Department
of Labor, the Department of Energy and several National Laboratories.
EPA consulted with FERC on this rulemaking regarding potential impacts
of these rulemakings on bulk power system reliability and related
issues.\716\ EPA consulted with the Department of Labor on issues
related to employment impacts and worker training. We consulted with
the Department of State on critical materials and supply chains. EPA
collaborated together with NHTSA, DOE and several National Laboratories
on a wide range of topics to support this rulemaking. EPA collaborated
with DOE and Argonne National Laboratory on battery cost analyses and
critical materials forecasting. EPA, National Renewable Energy
Laboratory (NREL), and DOE collaborated on forecasting the development
of a national charging infrastructure and projecting regional charging
demand for input into EPA's power sector modeling. EPA also coordinated
with the Joint Office of Energy and Transportation on charging
infrastructure. EPA and the Lawrence Berkeley National Laboratory
collaborated on issues of consumer acceptance of plug-in electric
vehicles. EPA and the Oak Ridge National Laboratory collaborated on
energy security issues. EPA also participated in the Federal Consortium
for Advanced Batteries led by DOE and the Joint Office of Energy and
Transportation. EPA and DOE also have entered into a Joint Memorandum
of Understanding to provide a framework for interagency cooperation and
consultation on electric sector resource adequacy and operational
reliability.\717\
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\716\ Although not a Federal agency, EPA also consulted with the
North American Electric Reliability Corporation (NERC). NERC is the
Electric Reliability Organization for North America, subject to
oversight by FERC.
\717\ Joint Memorandum on Interagency Communication and
Consultation on Electric Reliability, U.S. Department of Energy and
U.S. Environmental Protection Agency, March 8, 2023.
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E.O. 14037 also directs EPA to coordinate with California and other
states that are leading the way in reducing vehicle emissions. EPA has
engaged with the California Air Resources Board on technical issues in
developing this rule. EPA has considered certain aspects of the CARB
Advanced Clean Cars II program, adopted in August 2022, as discussed
elsewhere in this notice. We also have engaged with other states,
including members of the National Association of Clean Air Agencies,
Northeast States for Coordinated Air Use Management, and the Ozone
Transport Commission. In addition, EPA received public comments from
numerous states and state agencies, including the organizations noted
above, various coalitions of state and local government Attorneys
General, as well as several individual states and state/local
environmental protection agencies. These comments and EPA's responses
to them are found in the Response to Comments document.
J. Stakeholder Engagement
EPA has conducted extensive engagement with a diverse range of
interested stakeholders in developing this rule. We have engaged with
those
[[Page 27983]]
groups with whom E.O. 14037 specifically directs EPA to engage,
including labor unions, states, industry, environmental justice
organizations and public health experts. In addition, we have engaged
with NGOs representing environmental, public health and consumer
interests, automotive manufacturers, suppliers, dealers, utilities,
charging providers, local governments, Tribal governments, alternative
fuels industries, and other organizations.
IV. Technical Assessment of the Standards
A. What approach did EPA use in analyzing the standards?
1. Modeling Approach and Analytical Tools
EPA has conducted an updated technical assessment that extends and
improves upon the analysis conducted for the proposal. Where
applicable, we have incorporated the most recent and best available
data, and revised and updated our inputs, assumptions, and methods in
consideration of comments received during the public comment period. In
addition to an analysis of the final standards, the updated analysis
also includes an assessment of two alternatives that were considered,
as well as a revised set of sensitivity cases.\718\
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\718\ EPA's modeling results are presented in multiple locations
throughout the rulemaking documents for convenience and clarity.
Although every effort has been made to ensure numerical values
appear consistently throughout the preamble, RIA and RTC, to the
extent there are any inconsistencies in discussion of modeling
results, the results presented in the RIA tables and figures take
precedence.
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The overall approach used for this final rule is consistent with
that of the proposal, as well as our prior rulemakings for GHG and
criteria pollutants for light- and medium-duty vehicles. We continue to
refer to the extensive body of prior technical work that has
underpinned those rules, and incorporated updated tools, models and
data, subjected to peer review where appropriate, in conducting this
assessment, based on the best available information and the public
record. EPA conducted peer review \719\ in accordance with OMB's Final
Information Quality Bulletin for Peer Review on six analyses supporting
this final rule: (1) Optimization Model for reducing Emissions of
Greenhouse gases from Automobiles (OMEGA 2.0), (2) Advanced Light-duty
Powertrain and Hybrid Analysis (ALPHA3), (3) Motor Vehicle Emission
Simulator (MOVES), (4) The Effects of New-Vehicle Price Changes on New-
and Used-Vehicle Markets and Scrappage; (5) Literature Review on U.S.
Consumer Acceptance of New Personally Owned Light-Duty Plug-in Electric
Vehicles; (6) Cost and Technology Evaluation, Conventional Powertrain
Vehicle Compared to an Electrified Powertrain Vehicle, Same Vehicle
Class and OEM. Additional information on the peer reviews for these
analyses is discussed later in this section as well as the RIA.
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\719\ The peer review reports for each analysis are in the
docket for this action and at EPA's Science Inventory (https://cfpub.epa.gov/si/).
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As in the proposal, some of the areas of particular focus are
related to the significant developments in vehicle electrification that
have continued to occur since the 2021 rule. Vehicle manufacturers have
continued to introduce PEV products in increased volumes and new market
segments, improving the ability to characterize the cost and
performance of best-practice designs. Key legislation such as the IRA
and the BIL continues to provide significant incentives for both the
manufacture and purchase of PEVs, and for the expansion of charging
infrastructure. Additionally, in light of public comments received, as
well as the levels of electrification that continue to be anticipated
under the final standards, EPA's new technical assessment contains
additional discussion and updated assessments of battery costs,
critical minerals, supply chain development, battery manufacturing
capacity, impact of the IRA incentives, PEV charging infrastructure,
and impacts on the electric grid.
Our modeling can be broadly divided into two categories. The first
category is compliance modeling for the vehicle manufacturers, which
includes the potential design and technology application decisions to
achieve compliance under the modeled standard. The second category is
effects modeling, which is intended to capture how changes in vehicle
design and use will impact emissions, fuel consumption, public health
and welfare, and other factors that are relevant to a societal
benefits-costs analysis.
As in the proposal, EPA is using a significantly updated and peer-
reviewed version of the Optimization Model for reducing Emissions of
Greenhouse gases from Automobiles (OMEGA) to model vehicle manufacturer
compliance with GHG standards. The updates include several provisions
which the agency feels improve our overall fleet projection
capabilities. In particular, the updated version of OMEGA extends the
prior version's projections of cost-effective manufacturer compliance
decisions by also accounting for the relationship between manufacturer
compliance decisions and consumer demand and including important
constraints on technology adoption. As discussed in the proposal, OMEGA
is designed specifically around EPA's regulatory program under the
Clean Air Act. In addition to modeling of the influence EPA's GHG
standards, the updated OMEGA also allows for evaluation of other
policies, such as state-level ZEV policies. These features make this
updated version of OMEGA well-suited for analyzing standards in a
market where PEVs may account for a steadily increasing share of new
vehicle sales. EPA has utilized the OMEGA model in evaluating the
effects of not only the GHG program but the criteria pollutant
emissions program as well.
OMEGA takes as inputs detailed information about existing vehicles,
technologies, costs, and definitions of the policies under
consideration. From these inputs, the model projects the stock of
vehicles and vehicle attributes, and their use over the analysis
period. The updated version of the OMEGA model better accounts for the
significant evolution over the past decade in vehicle markets,
technologies, and mobility services. In particular, recent advancements
in PEVs and their introduction into the full range of market segments
provides strong evidence that increased vehicle electrification can
play an important role in achieving greater levels of emissions
reduction in the future. Among the key new features of OMEGA is the
representation of consumer-producer interactions when modeling
compliance pathways and the associated technology penetration into the
vehicle fleet. This capability allows us to project the impacts of the
producer and consumer incentives contained in the IRA and BIL
legislation. It also allows us to model the rate of consumer acceptance
of novel technologies.
EPA received a large number of public comments and recommendations
for how to revise the NPRM's OMEGA modeling for this final rulemaking.
The vast majority of comments were related to EPA's specific modeling
inputs and assumptions and were not, for example, recommending a
different modeling approach overall. A summary of updates made to our
technical assessment since the NPRM is provided in section IV.A.2 of
this preamble. One especially notable update for this final rule is the
added capability for OMEGA to consider PHEVs as a compliance
technology. OMEGA is described in detail in RIA Chapter 2.2.
[[Page 27984]]
EPA also uses its ALPHA vehicle simulation model to estimate
emissions, energy rates, and other relevant vehicle performance
estimates. The ALPHA model is described in more detail in Chapter 2 of
the RIA. ALPHA simulation results create the inputs to the OMEGA model
for the range of technologies considered in this rulemaking. To support
both the proposal and the final rule analyses, we built upon our
existing library of benchmarked engines and transmissions used in
previous rulemakings by adding several new technologies for ICE-based
powertrains, and newly refined models of BEV powertrains. For the final
rule analysis we added PHEVs to ALPHA, which include both charge-
depleting and charge-sustaining models. We also adopted an updated
approach for representing the ALPHA simulation results in OMEGA, using
`response surfaces' of emissions and energy rates. These continuous
technology representations can be applied across vehicles of different
size, weight, and performance characteristics without requiring that
vehicles be binned into discrete vehicle classes. The response surface
approach also simplifies the model validation process, since the
absolute values of absolute emissions and energy rates that are
produced can be readily checked against actual vehicle test data. This
is in contrast to the validation process needed for the incremental
effectiveness values that were estimated in previous rulemakings using
either a `lumped parameter model' or direct table lookup of
effectiveness. The modeling in ALPHA and generation of response
surfaces is described in RIA Chapter 2.4.
As in the proposal, the technology cost estimates used in this
final rule assessment are from both new and previously referenced
sources, including some values used in recent rulemakings where those
remain the best available estimates. For this final rule assessment,
EPA has incorporated findings from several ongoing research efforts
that were previously described in the proposal.
We have updated many of our PEV non-battery and ICE technology
costs based on a detailed study from FEV, a large engineering firm with
considerable experience in the analysis of vehicle technologies which
the agency has cited regularly in previous rulemakings. As EPA has
historically considered vehicle teardown studies as an important source
of detailed cost estimates, this new study included a teardown of two
comparable ICE and BEV vehicles, and a review of ICE and PEV component
costs from similar teardowns previously conducted by the same firm. The
latter work in particular improved on our estimates of technology costs
and how they should be scaled depending on engine size, vehicle type,
electric motor power, etc.\720\ We discuss this study in more detail
and present our non-battery and ICE technology costs and scaling
approaches in Chapter 2 of the RIA.
---------------------------------------------------------------------------
\720\ FEV Report and Docket Memo: ``Cost and Technology
Evaluation, Conventional & Electrical Powertrain Vehicles, Same
Vehicle Class and OEM''.
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Battery costs are an important component of PEV costs. Consistent
with prior rulemakings, our battery cost inputs are derived from costs
modeled by Argonne National Laboratory's (ANL) BatPaC model. As also
indicated in the proposal, and as requested by commenters, we updated
our battery cost inputs, by working with ANL to conduct a more detailed
analysis of battery costs in which ANL utilized the current version of
BatPaC to estimate future battery pack costs by taking into account
mineral price forecasts from leading analyst firms, and a technology
roadmap of production and chemistry improvements likely to occur over
the time frame of the rule.\721\ Our use of the battery costs provided
by this study result in an increase, compared to the proposal, in our
battery cost inputs to OMEGA by between 19 and 34 percent (averaging 24
percent between 2023 and 2035) depending on the year and the size of
the battery. These updates to our battery pack cost estimates are also
responsive to comments from stakeholders, some of whom considered our
costs in the NPRM to be low in comparison to more conservative
estimates in the publicly available literature (see Response to
Comments document for details). The costing approaches and assumptions
are described in more detail in RIA Chapter 2.5.
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\721\ Argonne National Laboratory, ``Cost Analysis and
Projections for U.S.-Manufactured Automotive Lithium-ion
Batteries,'' ANL/CSE-24/1, January 2024.
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The main function of the OMEGA compliance modeling is to show how a
manufacturer can meet future GHG standards through the application of
technologies. Among the many potential pathways that exist for
achieving compliance, OMEGA aims to find a pathway that minimizes costs
for the manufacturer given a set of inputs that includes technology
costs and emissions rates. For any single run with its associated
inputs, OMEGA produces merely one possible compliance path to provide
information about the feasibility and potential costs of a set of
standards. However, manufacturers remain free to adopt very different
compliance paths, depending on their assessment of technologies and the
vehicle market.
The compliance modeling for this rulemaking also includes
constraints on new vehicle production and sales informed by our
assessment of manufacturer and consumer decisions, and in some cases
account for factors that were not included in the technical assessments
in our prior rulemakings. EPA consulted and considered data and
forecasts from government agencies, analyst firms, and industry in
order to assess capacity for battery production and to thereby
establish appropriate constraints on PEV battery production (in terms
of gigawatt-hours (GWh) in a given year) during the time frame of the
rule.\722\ These constraints effectively act as an upper limit on PEV
production, particularly during the earlier years of the analysis, and
represent, for example, considerations such as availability of critical
minerals and the lead time required to construct battery production
facilities. For this final rule analysis, we also considered new and
updated work provided by the Department of Energy that estimates growth
in battery manufacturing capacity and critical mineral production
during the time frame of the rule. The development of the battery GWh
constraint and the sources considered are described in detail in RIA
Chapter 3.1.5.
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\722\ Sources included, among others, Wood Mackenzie proprietary
forecasts of battery manufacturing capacity, battery costs, and
critical mineral availability; Department of Energy analyses and
forecasts of critical mineral availability and battery manufacturing
capacity; and other public sources. See RIA Chapters 3.1.4 and 3.1.5
and section IV.C.7 of this preamble for a description of these
sources and how they were used.
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Consistent with compliance modeling for past rulemakings, the OMEGA
model also limits the rate at which new vehicle designs can be
introduced by applying redesign cycle constraints (RIA Chapter 2.6).
EPA has evaluated historic vehicle data (e.g., the rate of product
redesigns) to ensure that the technology production pace in the
modeling is feasible. In addition to vehicle production constraints,
market assumptions and limits on manufacturer pricing cross-
subsidization have been implemented to constrain the number of PEVs
that can enter the fleet. EPA has evaluated market projections from
both public and proprietary sources to calibrate OMEGA's representation
of the consumer market's ICE-PHEV-BEV share response. A detailed
discussion of the constraints used in EPA's compliance modeling is
provided in RIA Chapter 2.7.
[[Page 27985]]
As in prior rulemakings, this assessment is a projection of the
future, and is subject to a range of uncertainties. We have assessed a
number of sensitivity cases for key assumptions in order to evaluate
how they would impact the results.
2. Analytical Updates Between the Proposal and Final Rule
EPA received numerous public comments addressing our technical
record. In response to these comments, and consistent with our general
approach to update data when practicable, EPA has reassessed all
aspects of our technical analysis based on the public record and the
best available data and information. In Table 66, we summarize the
major updates made to our technical analyses between the proposal and
this final rule. These updates have resulted in a more robust technical
analysis that is responsive to numerous public comments.
Table 66--Major Updates to Technical Analysis Between the Proposal and
Final Rule
------------------------------------------------------------------------
-------------------------------------------------------------------------
Added PHEVs as a technology option within OMEGA.
Updated light-duty vehicle fleet base year from MY 2019 to MY 2022.
Updated from AEO 2022 to AEO 2023 \a\.
Updated BEV efficiency.
Updated technology cost inputs.
Updated battery costs per DOE study \b\.
Revised battery cost learning approach for consistency with DOE study
\b\.
Updated OMEGA to not allow GHG backsliding for ICE vehicles.
Updated IRA assumptions.
Updated infrastructure assumptions and analysis.
Updated electric grid assumptions and analysis.
Updated analysis to include lower discount rate (2%).
Updated benefits analysis to latest social cost of GHG measures.
Updated dollar year from 2020 to 2022.
Updated refinery inventory calculation methodology.
Updated estimated impact on domestic refining due to reduced domestic
liquid fuel demand.
Updated repair cost methodology for medium-duty vehicles.
Updated refueling time estimates and costs associated with mid-trip
charging for BEVs.
Added insurance costs and state sales taxes to the effects calculations.
------------------------------------------------------------------------
\a\ OMEGA uses AEO for projected car/truck share in future years. AEO
2023 forecasts 70 percent trucks by 2032, which is an increase from
AEO 2022 (which had forecast 60 percent trucks in 2032).
\b\ Argonne National Laboratory, ``Cost Analysis and Projections for
U.S.-Manufactured Automotive Lithium-ion Batteries,'' ANL/CSE-24/1,
January 2024.
B. EPA's Approach to Considering the No Action Case and Sensitivities
EPA has assessed the effects of this rule with respect to a No
Action case for the final standards and the two alternatives
considered. The Office of Management and Budget (OMB) provides guidance
for regulatory analysis through Circular A-4.\723\ Circular A-4
describes, in general, how a regulatory agency should conduct an
analysis in support of a future regulation and includes a requirement
for assessing the baseline, or ``No Action,'' condition: ``what the
world will be like if the rule were not adopted.'' In addition,
Circular A-4 provides that the regulating agency may also consider
``alternative baselines,'' which EPA has considered via several
sensitivities for this final rule, similar to the approach used in the
proposal. In the development of a No Action case, EPA also considers
existing finalized rulemakings. For this rule, the finalized rules
considered in the No Action case include the 2014 Tier 3 criteria
pollutant regulation, the 2016 Phase 2 GHG standards for medium-duty
vehicles, and the 2021 light-duty GHG standards for MYs 2023-2026.
---------------------------------------------------------------------------
\723\ Note that Circular A-4 has been updated, with final
updated guidance being published on November 10, 2023. EPA is
continually improving our analytical methods, including working to
incorporate this updated guidance, however, the updates to Circular
A-4 are not effective for final rules, such as this one, that are
submitted to OMB before January 1, 2025, and this updated guidance
may not be fully reflected in this analysis. See https://www.whitehouse.gov/omb/briefing-room/2023/11/09/biden-harris-administration-releases-final-guidance-to-improve-regulatory-analysis/ for more information.
---------------------------------------------------------------------------
EPA recognizes that, even prior to this rule, the industry and
market have already developed considerable momentum toward continuing
increases in PEV uptake (as discussed at length throughout this
preamble). This dynamic raises an important question about what the
projected market penetration for PEVs would be in the absence of these
final standards and thus reflected in the No Action case. EPA also
recognizes there are many projections from third parties and various
stakeholders, all showing increased PEV penetration in the future.
There are a range of assumptions that vary across such projections such
as consumer adoption, state level policies, financial incentives,
manufacturing capacity and vehicle price. Vehicle price is also
impacted by range and efficiency assumptions (more efficient EVs
require smaller batteries to travel the same distance and smaller
batteries cost less). Depending on what specific assumptions regarding
the future are made, there can be significant variation in future PEV
projections. Increasingly favorable consumer sentiment towards PEVs,
decreasing costs (either through a reduction in manufacturing costs or
through financial incentives), and a broadening number of PEV product
offerings all support a projected higher number of new PEV sales in the
future, independent of additional regulatory action. As described in
section I.A.2.ii of this preamble, EPA reviewed several recent reports
and studies containing PEV projections all of which include the IRA.
Altogether, these studies project PEVs spanning a range from 42 to 68
percent of new vehicle sales in 2030. The mid-range projections of PEV
sales from these studies, to which we compare our No Action case, range
from 48 to 58 percent in 2030.724 725 726 727 728 729
---------------------------------------------------------------------------
\724\ Cole, Cassandra, Michael Droste, Christopher Knittel,
Shanjun Li, and James H. Stock. 2023. ``Policies for Electrifying
the Light-Duty Fleet in the United States.'' AEA Papers and
Proceedings 113: 316-322. doi:https://doi.org/10.1257/pandp.20231063.
\725\ IEA. 2023. ``Global EV Outlook 2023: Catching up with
climate ambitions.'' International Energy Agency.
\726\ Forsythe, Connor R., Kenneth T. Gillingham, Jeremy J.
Michalek, and Kate S. Whitefoot. 2023. ``Technology advancement is
driving electric vehicle adoption.'' PNAS 120 (23). doi:https://doi.org/10.1073/pnas.2219396120.
\727\ Bloomberg NEF. 2023. ``Electric Vehicle Outlook 2023.''
\728\ U.S. Department of Energy, Office of Policy. 2023.
``Investing in American Energy: Significant Impacts of the Inflation
Reduction Act and Bipartisan Infrastructure Law on the U.S. Energy
Economy and Emissions Reductions.''
\729\ Slowik, Peter, Stephanie Searle, Hussein Basma, Josh
Miller, Yuanrong Zhou, Felipe Rodriguez, Claire Buysse, et al. 2023.
``Analyzing the Impact of the Inflation Reduction Act on Electric
Vehicle Uptake in the United States.'' International Council on
Clean Transportation and Energy Innovation Policy & Technology LLC.
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[[Page 27986]]
EPA notes that in our compliance modeling of the No Action case in
OMEGA, the same technical, economic, and consumer inputs and
assumptions are used as for the associated Action case. The only
difference between the No Action and Action cases for a given central
or sensitivity analysis is in the policy definition itself. The concept
of an `analysis context', within which policies are evaluated, is
discussed further in RIA Chapter 2. EPA has considered a similar set of
factors in our analysis context as those studies conducted by other
stakeholders. This includes detailed vehicle and battery cost analyses,
impacts of consumer and manufacturing financial incentives (such as
those provided by the Inflation Reduction Act), consumer acceptance
studies, vehicle performance modeling and technology applications, and
battery manufacturing assessments.
The No Action case in our central analysis reaches 39 percent PEVs
in 2030, shown in Table 76. We note that the PEV share of new vehicle
sales was 7.5 percent in MY 2022, and will likely reach about 12
percent for MY 2023.\730\ This projected PEV increase in the No Action
case is driven by EPA's projections of the availability of economic
incentives for electric vehicles for both manufacturers and consumers
provided by the IRA, cost learning for PEV technology over time, an
increase in consumer interest and acceptance over that period, and the
ongoing effect of the 2021 rule and the associated standards stringency
increases in MYs 2023 through 2026. In the absence of this rulemaking,
the MY 2026 standards would carry forward indefinitely into future
years and define the No Action policy case for this analysis. Notably,
the No Action case projections do not include announcements made by
manufacturers about their future plans and corporate goals, or state
laws that have recently been adopted or are likely to be adopted in the
next decade. While our projected PEV penetrations in the No Action case
show a substantial increase over time, the 39 percent value in MY 2030
is lower than the mid-range third-party projections described above, as
well as some manufacturer announcements.\731\ For example, the
International Energy Agency (IEA) synthesized industry announcements
and concluded that for the U.S. market, OEM targets for light-duty
electric vehicle sales match or exceed 50 percent by 2030. The same IEA
analysis found that without consideration of these announcements, the
projects can also be used to help effect of all existing policies and
measures such as IRA and BIL legislation would similarly lead to 50
percent of new light-duty vehicle sales being electric vehicles by
2030.\732\
---------------------------------------------------------------------------
\730\ 2023 EPA Automotive Trends Report, EPA-420-R-23-033,
December 2023.
\731\ A summary of industry announcements and third-party
projections of PEV penetrations is provided in Section I.A.2 of the
preamble.
\732\ International Energy Agency, ``Global EV Outlook 2023,''
p. 117 and p. 121, April 2023. Accessed on August 15, 2023 at
https://www.iea.org/reports/global-ev-outlook-2023.
---------------------------------------------------------------------------
While we consider manufacturer announcements as additional evidence
that high levels of PEV penetration are feasible, for purposes of this
analysis we have not integrated manufacturer announcements directly
into our modeling of the No Action baseline. Although PEV penetrations
in our No Action case may appear conservative, we provide two key
reasons why our central No Action case projections of PEV penetration
for this rulemaking are lower than announcements from some
manufacturers and the mid-range third party projections. First, our
analysis is based on the assumption that manufacturers follow a purely
cost-minimizing compliance strategy. We do not account for strategic
business decisions or corporate policies that might cause a
manufacturer to pursue a higher-PEV strategy such as the numerous
manufacturer announcements and published corporate goals that suggest
this approach may underestimate the rate of PEV adoption in a No Action
scenario. Second, our analysis does not include the effect of state-
level policies whereas projections from other sources may include those
policies. We did not include these policies because many are still not
in effect; however, we do anticipate that in the next decade, state-
level policies may play an important role in driving PEV penetration.
For this reason, we have included a sensitivity No Action case, which
includes the ZEV requirements of the California Advanced Clean Car
(ACC) II program for California and other participating states.
As a way to explore the impact that alternative assumptions would
have on the future PEV penetrations under the No Action case, the
agency has also conducted a range of sensitivities in addition to a
central No Action case. As described further in section IV.F of this
preamble, the sensitivity cases include states' adoption of the
California Advanced Clean Cars II (ACC II) program,\733\ higher and
lower battery costs, faster and slower paces of consumer acceptance of
PEVs, no trading of credits between manufacturers, and reduced levels
of BEV production (the Alternative Manufacturer Pathways, described in
section IV.F.5).\734\ Across the sensitivity analyses, No Action case
PEV projections for MY 2030 range from 31 to 57 percent, spanning the
39 percent central case value. Our projections through MY 2032 for PEV
penetrations in the No Action case are shown in Figure 21.
---------------------------------------------------------------------------
\733\ EPA has not at this time approved the waiver that would
allow California to follow the ACC II program.
\734\ While unlikely, for purposes of illustration we also
provide an extreme scenario in which no future BEV models are
allowed to be sold beyond those already in production in 2022 MY.
For this to occur, it would require a 50 percent reduction from 2022
BEV production in our first analysis year, 2023 MY.
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[[Page 27987]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.020
Figure 21: No Action Projections of Light-Duty PEV Penetrations for
Central and Sensitivity Cases
We acknowledge the range of possible assumptions, and that EPA's
central No Action case is more conservative than other projections that
include state-level policies and/or manufacturer announced plans. We
believe that our approach of assessing multiple potential No Action
cases provides a technically robust method of determining the
feasibility and costs associated with the emissions reductions required
by the standards.
C. How did EPA Consider Technology Feasibility and Related Issues?
1. Light- and Medium-Duty Technology Feasibility
The standards established by this rule continue EPA's longstanding
approach of setting performance-based emissions standards that result
in an appropriate and achievable trajectory of emissions reductions.
EPA sets emission standards based on consideration of available and
projected technologies, consistent with the factors EPA must consider
when establishing standards under the Clean Air Act. As with prior
rules, as part of the development of this rulemaking EPA has assessed
the feasibility of the standards in light of current and anticipated
progress by automakers in developing and deploying emissions-reducing
technologies.
Compliance with EPA GHG and criteria pollutant standards over the
past decade has been achieved predominantly through the application of
advanced technologies and improved aftertreatment systems to internal
combustion engine (ICE) vehicles. For example, in the development of
the 2012 GHG rule, a significant portion of EPA's analysis included an
assessment of technologies available to manufacturers for achieving
compliance with the standards, and ICE technologies were identified as
playing a major role in manufacturer compliance with the emission
reductions required by that rule.
In that same time frame, as EPA standards have increased in
stringency, automakers have relied to an increasing degree on a range
of electrification technologies, including hybrid electric vehicles
(HEVs) and, in recent years, plug-in hybrid electric vehicles (PHEVs)
and battery-electric vehicles (BEVs). This trend in technology
application is evidence of a continuing recognition of electrification
as an effective technology for both criteria pollutant and GHG
compliance. As many ICE technologies have now reached high penetrations
across the breadth of manufacturers' product lines, electrification
technology has become increasingly attractive as a cost-effective
pathway to further emission reductions.
The advantages of powertrain electrification are evident along a
continuum of technologies, starting with HEV vehicle architectures,
which have provided vehicle manufacturers with a powerful technology
path for reducing both GHG and criteria pollutant emissions. For
example, the blending of ICE and electric power allows manufacturers to
control the engine for optimal efficiency and operating conditions to
reduce criteria pollutants, and the higher voltage battery provides the
opportunity to preheat the catalyst to reduce cold start emissions.
HEVs continue to play an important and potentially increasing role in
reducing emissions. In addition to Toyota's Prius line which has sold
millions of units in the U.S. since its introduction to the U.S. in MY
2001, Toyota and other OEMs have brought HEV architectures to other
sedans as well as crossovers, SUVs and pickups. For example, Ford has
said that 10 percent of its F-150 pickup buyers and 56 percent its
Maverick pickup buyers choose the hybrid powertrain option over the ICE
version, and that hybrid options will soon be added across its model
[[Page 27988]]
lineup.\735\ Reports indicate that HEVs are beginning to experience
increased interest and in 2023 were on pace to comprise more than 8
percent of U.S. car sales.\736\ While the potential for reductions in
tailpipe emissions by HEVs is not as great as for PEVs and BEVs, HEVs
on the market today often offer a lower price point and for some
manufacturers are playing an important role in compliance with the
current standards.
---------------------------------------------------------------------------
\735\ Motley Fool, ``Ford Motor Company (F) Q2 2023 Earnings
Call Transcript,'' July 28, 2023. Accessed on February 16, 2024 at
https://www.fool.com/earnings/call-transcripts/2023/07/28/ford-motor-company-f-q2-2023-earnings-call-transcr/.
\736\ CNBC, ``Why automakers are turning to hybrids in the
middle of the industry's EV transition,'' December 8, 2023. Accessed
on February 16, 2024 at https://www.cnbc.com/2023/12/08/automakers-turn-to-hybrids-ev-transition.html.
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As ICE and HEV technologies have progressed over the past two
decades, and as battery costs continued to decline, automakers also
began including PHEVs and BEVs (together referred to as PEVs or plug-in
electric vehicles) in their product lines, and today there is a rapidly
increasing diversity of these vehicles already on the market and
planned for production. In EPA's 2021 rule that set GHG emission
standards for MYs 2023 through 2026, we projected (as one example
pathway) that manufacturers could comply with the 2026 standards with
about 17 percent PEVs at the industry-wide level, reflecting the
increased cost-effectiveness of PEV technologies in achieving
compliance with increasingly stringent emissions standards. In light of
subsequent developments including the BIL and IRA, we now project that
manufacturers will sell 27 percent PEVs in 2026 under the standards
that are currently in place.
These developments are also driven by the need to compete in a
diverse market, as transportation policies to control pollution
continue to be implemented across the U.S. and across the world. An
increasing number of U.S. states have taken actions to shift the light-
duty fleet toward zero-emissions technology. In 2022, California
finalized the Advanced Clean Cars II (ACC II) rule 737 738
that specifies, by 2035, all new light-duty vehicles sold in the state
are to be zero-emission vehicles.\739\ Twelve additional states have
adopted all or most of the zero-emission vehicle phase-in requirements
under ACC II, including Colorado,\740\ Delaware,\741\ Maryland,\742\
Massachusetts,743 744 New Jersey,\745\ New Mexico,\746\ New
York,747 748 Oregon,\749\ Rhode Island,\750\ Vermont,\751\
Virginia,\752\ and Washington.\753\
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\737\ EPA has not at this time approved the waiver that would
allow California to follow the ACC II program.
\738\ California Air Resources Board, ``California moves to
accelerate to 100% new zero-emission vehicle sales by 2035,'' Press
Release, August 25, 2022. Accessed on Nov. 3, 2022 at https://ww2.arb.ca.gov/news/california-moves-accelerate-100-new-zero-emission-vehicle-sales-2035.
\739\ State of California Office of the Governor, ``Governor
Newsom Announces California Will Phase Out Gasoline-Powered Cars &
Drastically Reduce Demand for Fossil Fuel in California's Fight
Against Climate Change,'' Press Release, September 23, 2020.
\740\ State of Colorado, ``Colorado accelerates access to clean
cars to improve air quality, grow economy, and increase vehicle
options for Coloradans,'' Press Release, October 20, 2023. Accessed
on January 1, 2024 at https://cdphe.colorado.gov/press-release/colorado-accelerates-access-to-clean-cars-to-improve-air-quality-grow-economy-and.
\741\ State of Delaware, '' DNREC Finalizes Clean Car
Regulations,'' November 29, 2023. Accessed on January 1, 2024 at
https://news.delaware.gov/2023/11/29/dnrec-finalizes-clean-car-regulations/.
\742\ Maryland Department of the Environment, ``Advanced Clean
Cars II.'' Accessed on January 1, 2024 at https://mde.maryland.gov/programs/air/MobileSources/Pages/Clean-Energy-and-Cars.aspx.
\743\ Boston.com, ``Following California's lead, state will
likely ban all sales of new gas-powered cars by 2035,'' August 27,
2022. Accessed November 3, 2022 at https://www.boston.com/news/local-news/2022/08/27/following-californias-lead-state-will-likely-ban-all-sales-of-new-gas-powered-cars-by-2035/.
\744\ Commonwealth of Massachusetts, ``Request for Comment on
Clean Energy and Climate Plan for 2030,'' December 30, 2020.
\745\ New Jersey Office of the Governor, ``Murphy Administration
Adopts Zero-Emission Vehicle Standards to Improve Air Quality, Fight
Climate Change, and Promote Clean Vehicle Choice,'' November 21,
2023. Accessed on January 1, 2024 at https://www.nj.gov/governor/news/news/562023/20231121a.shtml.
\746\ https://www.env.nm.gov/transportation/.
\747\ New York State Senate, Senate Bill S2758, 2021-2022
Legislative Session. January 25, 2021.
\748\ Governor of New York Press Office, ``In Advance of Climate
Week 2021, Governor Hochul Announces New Actions to Make New York's
Transportation Sector Greener, Reduce Climate-Altering Emissions,''
September 8, 2021. Accessed on September 16, 2021 at https://www.governor.ny.gov/news/advance-climate-week-2021-governor-hochul-announces-new-actions-make-new-yorks-transportation.
\749\ https://www.oregon.gov/deq/rulemaking/pages/cleancarsii.aspx.
\750\ https://dem.ri.gov/environmental-protection-bureau/air-resources/advanced-clean-cars-ii-advanced-clean-trucks.
\751\ https://dec.vermont.gov/air-quality/laws/recent-regs.
\752\ Commonwealth of Virginia State Air Pollution Control
Board, 9VAC5 Chapter 95, Regulation for Low Emissions and Zero
Emissions Vehicle Standards. Accessed on November 3, 2023 at https://www.deq.virginia.gov/home/showpublisheddocument/14793/638043628046200000.
\753\ Washington Department of Ecology, ``Washington sets path
to phase out gas vehicles by 2035,'' Press Release, Sept. 7, 2022.
Accessed on Nov. 3, 2022 at https://ecology.wa.gov/About-us/Who-we-are/News/2022/Sept-7-Clean-Vehicles-Public-Comment.
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[[Page 27989]]
In addition to the U.S., auto manufacturers also compete in a
global market that is becoming increasingly electrified. Globally, at
least 20 countries, as well as numerous local jurisdictions, have
announced targets for shifting all new passenger car sales to zero-
emission vehicles in the coming years, including Norway (2025);
Austria, the Netherlands, Denmark, Iceland, India, Ireland, Israel,
Scotland, Singapore, Sweden, and Slovenia (2030); Canada, Chile,
Germany, Thailand, and the United Kingdom (2035); and France, Spain,
and Sri Lanka (2040).754 755 756 757 758 759 In addition, in
March 2023 the European Union approved a measure to phase out sales of
ICE passenger vehicles in its 27 member countries by
2035.760 761 762 Many of these announcements extend to light
commercial vehicles as well, and several also target a shift to 100
percent all-electric medium- and heavy-duty vehicle sales (Norway
targeting 2030, Austria 2035, and Canada and the United Kingdom 2040).
Together, about half of annual global light-duty sales are in countries
with various levels of zero-emission vehicle targets by 2035,\763\ up
from about 25 percent in 2022.\764\ As of late 2023, 17 automotive
brands globally had announced corporate targets for phasing out ICE
technology, representing 32 percent of the global automotive
market.\765\ In 2023, 22 percent of new car registrations in the
European Union were either BEVs or PHEVs,\766\ led by Norway which
reached about 80 percent BEV and 89 percent combined BEV and PHEV
sales.
---------------------------------------------------------------------------
\754\ Environment and Climate Change Canada, ``Achieving a Zero-
Emission Future for Light-Duty Vehicles: Stakeholder Engagement
Discussion Document December 17,'' EC21255, December 17, 2021.
Accessed on February 13, 2023 at https://www.canada.ca/content/dam/eccc/documents/pdf/cepa/achieving-zero-emission-future-light-duty-vehicles.pdf.
\755\ International Council on Clean Transportation, ``Update on
the global transition to electric vehicles through 2019,'' July
2020.
\756\ International Council on Clean Transportation, ``Growing
momentum: Global overview of government targets for phasing out new
internal combustion engine vehicles,'' posted 11 November 2020,
accessed April 28, 2021 at https://theicct.org/blog/staff/global-ice-phaseout-nov2020.
\757\ United Kingdom Department for Transport, ``Government sets
out path to zero emission vehicles by 2035,'' September 28, 2023.
Accessed on December 1, 2023 at https://www.gov.uk/government/news/government-sets-out-path-to-zero-emission-vehicles-by-2035.
\758\ Government of Canada, ``Proposed regulated sales targets
for zero-emission vehicles,'' December 21, 2022. Accessed on
December 1, 2023 at https://www.canada.ca/en/environment-climate-change/news/2022/12/proposed-regulated-sales-targets-for-zero-emission-vehicles.html.
\759\ Reuters, ``Canada to ban sale of new fuel-powered cars and
light trucks from 2035,'' June 29, 2021. Accessed July 1, 2021 from
https://www.reuters.com/world/americas/canada-ban-sale-new-fuel-powered-cars-light-trucks-2035-2021-06-29/.
\760\ Reuters, ``EU approves effective ban on new fossil fuel
cars from 2035,'' October 28, 2022. Accessed on Nov. 2, 2022 at
https://www.reuters.com/markets/europe/eu-approves-effective-ban-new-fossil-fuel-cars-2035-2022-10-27/.
\761\ European Commission, ``Fit for 55: EU reaches new
milestone to make all new cars and vans zero-emission from 2035,''
March 28, 2023. Accessed on January 1, 2024 at https://climate.ec.europa.eu/news-your-voice/news/fit-55-eu-reaches-new-milestone-make-all-new-cars-and-vans-zero-emission-2035-2023-03-28-_en.
\762\ Reuters, ``EU lawmakers approve effective 2035 ban on new
fossil fuel cars,'' February 14, 2023. Accessed on February 26, 2023
at https://www.reuters.com/business/autos-transportation/eu-lawmakers-approve-effective-2035-ban-new-fossil-fuel-cars-2023-02-14/.
\763\ International Energy Agency, ``Global EV Outlook 2023,''
p. 65, May 2023. Accessed on November 28, 2023 at https://iea.blob.core.windows.net/assets/dacf14d2-eabc-498a-8263-9f97fd5dc327/GEVO2023.pdf.
\764\ International Energy Agency, ``Global EV Outlook 2022,''
p. 57, May 2022. Accessed on November 18, 2022 at https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf.
\765\ BloombergNEF, ``Zero-Emission Vehicles Factbook: A
BloombergNEF special report prepared for COP28, December 2023, p.
52.
\766\ European Automobile Manufacturers' Association (ACEA), ''
New car registrations: +13.9% in 2023; battery electric 14.6% market
share,'' January 18, 2024. Accessed on February 15, 2024 at https://www.acea.auto/pc-registrations/new-car-registrations-13-9-in-2023-battery-electric-14-6-market-share/.
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These trends echo an ongoing global shift toward electrification.
Global light-duty passenger PEV sales surpassed 10 million in 2022, up
from 6.6 million in 2021, bringing the total number of PEVs on the road
to more than 26 million globally.767 768 For fully-electric
BEVs, global sales rose to 7.8 million in 2022, an increase of about 68
percent from the previous year and representing about 10 percent of the
new global light-duty passenger vehicle market.769 770
Leading sales forecasts predict that PEV sales will continue to
accelerate globally in the years to come. For example, in June 2023,
Bloomberg New Energy Finance reported that global PEV sales were 10.5
million in 2022 and forecasted that annual sales will rise to 27
million in 2026 (implying an annual growth rate of about 27 percent
from 2022), with total global PEV stock rising from 27 million in 2022
to more than 100 million by 2026.\771\
---------------------------------------------------------------------------
\767\ International Energy Agency, ``Global EV Outlook 2022,''
p. 107, May 2022. Accessed on November 18, 2022 at https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf.
\768\ International Energy Agency, ``Trends in electric light-
duty vehicles.'' Accessed on November 28, 2023 at https://www.iea.org/reports/global-ev-outlook-2023/trends-in-electric-light-duty-vehicles.
\769\ Boston, W., ``EVs Made Up 10% of All New Cars Sold Last
Year,'' Wall Street Journal, January 16, 2023.
\770\ Colias, M., ``U.S. EV Sales Jolted Higher in 2022 as
Newcomers Target Tesla,'' Wall Street Journal, January 6, 2023.
\771\ Bloomberg NEF. 2023. ``Electric Vehicle Outlook 2023.''
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While ICE vehicles and HEVs together retain the largest share of
the market, the year-over-year growth in U.S. PEV sales suggests that
an increasing share of new vehicle buyers are concluding that a PEV is
the best vehicle to meet their needs. Many PEVs already on the market
today cost less to operate than ICE vehicles, offer improved
performance and handling, have a driving range similar to that of ICE
vehicles, and can be charged at a growing network of public chargers as
well as at home.772 773 774 775 776 777 PEV owners often
describe these advantages as key factors motivating their
purchase.\778\ A 2022 survey by Consumer Reports shows that more than
one-third of Americans would either seriously consider or definitely
buy or lease a BEV today, if they were in the market for a
vehicle.\779\ Given that acceptance grows with familiarity as noted in
the survey article, and most consumers are currently much less familiar
with BEVs than with ICE vehicles, this share is expected to rapidly
grow as familiarity increases in
[[Page 27990]]
response to increasing numbers of BEVs on the road and growing
visibility of charging infrastructure. Most PEV owners who purchase a
subsequent vehicle choose another PEV, and often express resistance to
returning to an ICE vehicle after experiencing PEV
ownership.780 781
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\772\ Department of Energy Vehicle Technologies Office,
Transportation Analysis Fact of the Week #1186, ``The National
Average Cost of Fuel for an Electric Vehicle is about 60% Less than
for a Gasoline Vehicle,'' May 17, 2021.
\773\ Department of Energy Vehicle Technologies Office,
Transportation Analysis Fact of the Week #1190, ``Battery-Electric
Vehicles Have Lower Scheduled Maintenance Costs than Other Light-
Duty Vehicles,'' June 14, 2021.
\774\ International Council on Clean Transportation,
``Assessment of Light-Duty Electric Vehicle Costs and Consumer
Benefits in the United States in the 2022-2035 Time Frame,'' October
2022.
\775\ Consumer Reports, ``Electric Cars 101: The Answers to All
Your EV Questions,'' November 5, 2020. Accessed June 8, 2021 at
https://www.consumerreports.org/hybrids-evs/electric-cars-101-the-answers-to-all-your-ev-questions/.
\776\ Department of Energy Vehicle Technologies Office,
Transportation Analysis Fact of the Week #1253, ``Fourteen Model
Year 2022 Light-Duty Electric Vehicle Models Have a Driving Range of
300 Miles or Greater,'' August 29, 2022.
\777\ Department of Energy Alternative Fuels Data Center,
Electric Vehicle Charging Station Locations. Accessed on May 19,
2021 at https://afdc.energy.gov/fuels/electricity_locations.html#/find/nearest?fuel=ELEC.
\778\ Hardman, S., and Tal, G., ``Understanding discontinuance
among California's electric vehicle owners,'' Nature Energy, v.538
n.6, May 2021 (pp. 538-545).
\779\ Consumer Reports, ``More Americans Would Buy an Electric
Vehicle, and Some Consumers Would Use Low-Carbon Fuels, Survey
Shows,'' July 7, 2022. Accessed on March 8, 2023 at https://www.consumerreports.org/hybrids-evs/interest-in-electric-vehicles-and-low-carbon-fuels-survey-a8457332578/.
\780\ Muller, J., ``Most electric car buyers don't switch back
to gas,'' Axios.com. Accessed on February 24, 2023 at https://www.axios.com/2022/10/05/ev-adoption-loyalty-electric-cars.
\781\ Hardman, S., and Tal, G., ``Understanding discontinuance
among California's electric vehicle owners,'' Nature Energy, v.538
n.6, May 2021 (pp. 538-545).
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In addition to the light-duty vehicle sector, the medium-duty
sector is also experiencing a shift toward electrification in several
important market segments. As described in section I.A.2 of this
preamble, numerous commitments to produce all-electric medium-duty
delivery vans have been announced by large fleet-operating businesses
in partnerships with various OEMs. This rapid shift to BEVs in a fleet
that is currently predominantly gasoline- and diesel-fueled suggests
that the operators of these fleets consider BEV delivery vans the best
available and most cost-effective technology for meeting their needs.
Owing to the large size of these vehicle fleets, this segment alone is
likely to represent a significant portion of the future electrification
of the medium-duty vehicle fleet.
EPA believes the PHEV architecture may also lend itself well to
future pickup truck and large SUV applications, which may also include
some MDV pickup truck applications. A PHEV pickup or large SUV
architecture would provide several benefits: some amount of zero-
emission electric range (depending on battery size); increased total
vehicle range during heavy towing and hauling operations using both
charge depleting and charge sustaining modes (depending on ICE-
powertrain sizing); job-site utility with auxiliary power capabilities
similar to portable worksite generators, and the efficiency
improvements normally associated with strong hybrids that provide
regenerative braking, extended engine idle-off, and launch assist for
high torque demand applications. Depending on the vehicle architecture,
PHEVs used in pickup truck applications may also offer additional
capabilities, similar to BEV pickups, with respect to torque control
and/or torque vectoring to reduce wheel slip during launch in very
heavy trailer towing applications. In addition, PHEVs may help provide
a bridge for consumers that may not be ready to adopt a fully electric
vehicle.
One major manufacturer, Stellantis, recently announced a new PHEV
pickup truck, the 2025 Ram 1500 Ramcharger.\782\ Specifications include
a 92-kWh battery pack, a 135-kW generator, over 490 kW of drive system
power, an estimated 14,000-pound tow capability and a 2,625-pound
payload capacity. Press reports estimate all-electric range of
approximately 145 miles.\783\
---------------------------------------------------------------------------
\782\ https://www.ramtrucks.com/revolution/ram-1500-ramcharger.html, accessed 12/12/2023.
\783\ ``2025 Ram 1500 Ramcharger Avoids the Range Anxiety of EV
Trucks''. Car and Dirver, 11/7/2023, https://www.caranddriver.com/news/a45734742/2025-ram-1500-ramcharger-revealed/, accessed 12/12/
2023.
---------------------------------------------------------------------------
The MY 2023 Jeep Grand Cherokee 4xe PHEV with the Trailhawk package
is a current-production example of a large SUV with significant tow
capability. The vehicle has a 6,125-pound GVWR and a 12,125-pound GCWR
using a combination of a 270-bhp turbocharged GDI engine with P2 and P0
electric machines of 100kW and 33kW, respectively. The vehicle also
uses a 17.3 kWh battery pack that provides 25 miles of all-electric
range. The MY 2023 Jeep Wrangler 4xe uses a similar powertrain and
battery pack. The Wrangler 4xe equipped with the ``Rubicon'' package
has a 6,400-pound GVWR and a 9,200-pound GCWR.
PHEV light-duty and MDV pickup trucks also show considerable
promise for reducing CO2 emissions. A study conducted by
EPA, Southwest Research Institute, and Argonne National Laboratory
\784\ that modeled PHEV light-duty and MDV pickup truck configurations
with significant all-electric ranged showed approximately 80 percent
reductions in CO2 emissions could be achieved when taking
into account fully-phased-in 2031 fleet utility factors (see section
III.C.8.i) for plug-in hybrids in the U.S. The modeling also simulated
the SAE J2807 towing performance standard, which includes trailer
towing up the Davis Dam grade on Arizona State Route 68. The modeling
results showed that a GCWR 19,500 pounds (trailer weight of 13,000
pounds) could be maintained for the modeled LDT4 pickup truck PHEV
configuration and that a GCWR of 29,500 pounds (trailer weight of
approximately 20,000 pounds) could be maintained for the modeled PHEV
MDV pickup truck during blended or charge-sustaining operation.
---------------------------------------------------------------------------
\784\ Bhattacharjya, S., Chambon, P., Conway, G., et al. 2024.
``Heavy-light-duty and Medium-duty Range-extended Electric Truck
Study--Final Report''. Report submitted to Docket EPA-HQ-OAR-2022-
0829.
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These trends in light- and medium-duty vehicle technology suggest
that electrification is already poised to play a rapidly increasing
role in the on-road fleet and provides further evidence that BEV and
PHEV technologies are increasingly seen as an effective and feasible
set of vehicle technologies that are available to manufacturers to
achieve further emissions reductions.
Recent literature indicates that consumer affinity for PEVs is
strong. A recent study utilizing data from all new light-duty vehicles
sold in the U.S. between 2014 and 2020 focused on comparisons of BEVs
with their closest ICE counterparts, and found that BEVs are preferred
to the ICE counterpart in some vehicle segments.\785\ In addition, when
comparing all BEV sales with sales of the closest ICE counterparts,
BEVs attain a market share of over 30 percent, which is significantly
greater than the BEV market share among all vehicles.\786\ This
suggests that the share of PEVs in the marketplace is, at least
partially, constrained due to the lack of offerings needed to convert
existing demand into market share.\787\ However, the number and
diversity of electrified vehicle models is rapidly increasing.\788\ For
example, the number of PEV models available for sale in the U.S. has
grown from about 24 in MY 2015 to about 60 in MY 2021 and over 180 in
MY 2023, with offerings in a growing range of vehicle segments.\789\
Data from JD Power and Associates shows that MY 2023 BEVs and PHEVs are
now available as sedans, sport utility vehicles, and pickup trucks. In
addition, the greatest offering of PEVs is in the popular crossover/SUV
segment.\790\
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\785\ Gillingham, K.T., A.A. van Benthem, S. Weber, M.A. Saafi,
and X. He. 2023. ``Has Consumer Acceptance of Electric Vehicles Been
Increasing: Evidence from Microdata on Every New Vehicle Sale in the
United States.'' AEA Papers and Proceedings, 113:329-35.
\786\ Id.
\787\ Id.
\788\ Muratori et al., ``The rise of electric vehicles--2020
status and future expectations,'' Progress in Energy v3n2 (2021),
March 25, 2021. Accessed July 15, 2021 at https://iopscience.iop.org/article/10.1088/2516-1083/abe0ad.
\789\ Fueleconomy.gov, 2015 Fuel Economy Guide, 2021 Fuel
Economy Guide, and 2023 Fuel Economy Guide.
\790\ Taylor, M., Fujita, K.S., Campbell, N., 2024, ``The False
Dichotomies of Plug-in Electric Vehicle Markets'' Lawrence Berkeley
National Laboratory.
---------------------------------------------------------------------------
According to the U.S. Bureau of Labor Statistics, growing consumer
demand and growing automaker commitments to electrification are
important factors in the growth of PEV sales and that growth will be
further supported by policy measures including the BIL and the
IRA.\791\ As the presence of PEVs in the
[[Page 27991]]
fleet increases, consumers are encountering PEVs more often in their
daily experience. Many analysts believe that as PEVs continue to
increase in market share, PEV ownership will continue to broaden its
appeal as consumers gain more exposure and experience with the
technology and with the benefits of PEV ownership,\792\ with some
analysts suggesting that rapidly accelerating PEV adoption may then
result.793 794 795
---------------------------------------------------------------------------
\791\ U.S. Bureau of Labor Statistics, ``Charging into the
future: the transition to electric vehicles,'' Beyond the Numbers
v12 n4, February 2023. Available at: https://www.bls.gov/opub/btn/volume-12/charging-into-the-future-the-transition-to-electric-vehicles.htm.
\792\ Jackman, D. K., K. S. Fujita (LBNL), H. C. Yang (LBNL),
AND M. Taylor (LBNL). Literature Review of U.S. Consumer Acceptance
of New Personally Owned Light-Duty (LD) Plug-in Electric Vehicles
(PEVs). U.S. Environmental Protection Agency, Washington, DC
Available at: https://cfpub.epa.gov/si/si_public_record_report.cfm?dirEntryId=353465.
\793\ Car and Driver, ``Electric Cars' Turning Point May Be
Happening as U.S. Sales Numbers Start Climb,'' August 8, 2022.
Accessed on February 24, 2023 at https://www.caranddriver.com/news/a39998609/electric-car-sales-usa/.
\794\ Randall, T., ``US Crosses the Electric-Car Tipping Point
for Mass Adoption,'' Bloomberg.com, July 9, 2022. Accessed on
February 24, 2023 at https://www.bloomberg.com/news/articles/2022-07-09/us-electric-car-sales-reach-key-milestone.
\795\ Romano, P., ``EV adoption has reached a tipping point.
Here's how today's electric fleets will shape the future of
mobility,'' Fortune, October 11, 2022. Accessed on February 24, 2023
at https://fortune.com/2022/10/11/ev-adoption-tesla-semi-tipping-point-electric-fleets-future-mobility-pasquale-romano/.
---------------------------------------------------------------------------
While PEVs are typically offered at a higher price than comparable
ICE vehicles at this time, the price difference for BEVs, which have
only an electric powertrain, is widely expected to narrow or disappear
as the cost of batteries and other components fall in the coming
years.\796\ Among the many studies that address cost parity of BEVs vs.
ICE vehicles, an emerging consensus suggests that purchase price parity
is likely to begin occurring by the mid- to late-2020s for some vehicle
segments and models, and for a broader segment of the market on a total
cost of ownership (TCO) basis.797 798 By some accounts, a
compact car with a relatively small battery (for example, a 40
kilowatt-hour (kWh) battery and approximately 150 miles of range) may
already be possible to produce and sell for the same price as a compact
ICE vehicle.\799\ For larger vehicles and/or those with a longer range
(either of which necessitate a larger battery), many analysts expect
examples of price parity to increasingly appear over the mid- to late-
2020s. Assessments of price parity often do not include the effect of
various state and Federal purchase incentives. For example, the 30D
Clean Vehicle Credit under the IRA provides a purchase incentive of up
to $7,500, effectively making some BEVs more affordable to buy today
than comparable ICE vehicles. Additionally, the Commercial Clean
Vehicle Credit under the IRA permits commercial purchasers of light-
duty PEVs to receive a credit equivalent to the incremental cost of the
PEV versus a comparable ICE vehicle, up to $7,500, allowing this
savings to be reflected in the lease terms offered to consumer
lessees.\800\ Many expect TCO parity to precede price parity by several
years, as it accounts for the reduced cost of operation and maintenance
for BEVs.801 802 For example, Kelley Blue Book already
estimates that the vehicle with lowest TCO in both the full-size pickup
and luxury car classes of vehicle is a BEV.803 804 Based on
average annual mileage, BloombergNEF states that in the U.S., electric
SUVs have already achieved lower TCO than similar ICE vehicles, and for
higher mileages, BEVs have lower TCO than similar small, medium, and
large ICE vehicles.\805\ Because businesses tend to pay close attention
to TCO of business property, TCO parity of BEVs is likely to be of
particular interest to commercial and fleet operators.
---------------------------------------------------------------------------
\796\ International Council on Clean Transportation,
``Assessment of Light-Duty Electric Vehicle Costs and Consumer
Benefits in the United States in the 2022-2035 Time Frame,'' October
2022.
\797\ International Council on Clean Transportation,
``Assessment of Light-Duty Electric Vehicle Costs and Consumer
Benefits in the United States in the 2022-2035 Time Frame,'' October
2022.
\798\ Environmental Defense Fund and ERM, ``Electric Vehicle
Market Update: Manufacturer Commitments and Public Policy
Initiatives Supporting Electric Mobility in the U.S. and
Worldwide,'' September 2022.
\799\ Walton, R., ``Electric vehicle models expected to triple
in 4 years as declining battery costs boost adoption,''
UtilityDive.com, December 14, 2020.
\800\ Internal Revenue Service, ``Frequently asked questions
about the New, Previously-Owned and Qualified Commercial Clean
Vehicles Credit,'' December 26, 2023 at https://www.irs.gov/newsroom/frequently-asked-questions-about-the-new-previously-owned-and-qualified-commercial-clean-vehicles-credit.
\801\ International Council on Clean Transportation,
``Assessment of Light-Duty Electric Vehicle Costs and Consumer
Benefits in the United States in the 2022-2035 Time Frame,'' October
2022.
\802\ Environmental Defense Fund and ERM, ``Electric Vehicle
Market Update: Manufacturer Commitments and Public Policy
Initiatives Supporting Electric Mobility in the U.S. and
Worldwide,'' September 2022.
\803\ Kelley Blue Book, ``What is 5-Year Cost to Own?'', Full-
size Pickup Truck selected (Ford F-150 Lighting is lowest TCO).
Accessed on February 28, 2023 at https://www.kbb.com/new-cars/total-cost-of-ownership/.
\804\ Kelley Blue Book, ``What is 5-Year Cost to Own?'', Luxury
Car selected (Polestar 2 and Tesla Model 3 are lowest TCO). Accessed
on February 28, 2023 at https://www.kbb.com/new-cars/total-cost-of-ownership/.
\805\ BloombergNEF, ``Zero-Emission Vehicles Factbook,''
December 2023, p. 36. Accessed on February 4, 2024 at https://assets.bbhub.io/professional/sites/24/2023-COP28-ZEV-Factbook.pdf.
\806\ Environmental Defense Fund and ERM, ``Electric Vehicle
Market Update: Manufacturer & Commercial Fleet Electrification
Commitments Supporting Electric Mobility in the United States,''
April 2023, p. 7.
---------------------------------------------------------------------------
Figure 22, taken from work by the Environmental Defense Fund, shows
how the number of PHEV and BEV models available in the U.S. has
steadily grown, and many public model announcements by manufacturers
indicate further growth will occur in the years to come.
[[Page 27992]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.021
Figure 22: Projection of Total Light-Duty PHEV and BEV U.S. Models
Available by Year (EDF 2023)806
Globally and domestically, these ongoing announcements indicate a
strong industry momentum toward electrification that is common to every
major manufacturer. Given the breadth of these announcements, it is
informative to consider the penetrations of PEVs that they imply when
taken collectively.
Table 67 compiles public announcements of U.S. and global
electrification targets to date by major manufacturers. Assuming that
the MY 2022 U.S. sales shares for each manufacturer were to persist in
2030, these targets would collectively imply a U.S. PEV sales share of
nearly 50 percent in 2030, consisting primarily of BEVs. A version of
this table with supporting citations for each automaker announcement,
and the raw data with additional tabulations, are available in the
Docket.\807\
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\807\ See Memo to Docket ID No. EPA-HQ-OAR-2022-0829 titled
``Electrification Announcements and Implied PEV Penetration by
2030.''
Table 67--Example of U.S. Electrified New Sales Percentages Implied by OEM Announcements for 2030 or Before
----------------------------------------------------------------------------------------------------------------
Implied OEM
Share of total Stated PEV contribution to
2022 U.S. Sales Rank OEM 2022 U.S. share in 2030 Powertrain \3\ 2030 total PEV
sales \1\ % \2\ % market share %
----------------------------------------------------------------------------------------------------------------
1................... General Motors... 16.4 50 PEV 8.2
2................... Toyota........... 15.4 33 \4\ BEV 5.1
3................... Ford............. 13.1 50 BEV 6.5
4................... Stellantis....... 11.2 50 BEV 5.6
5................... Honda............ 7.2 40 BEV 2.9
6................... Hyundai.......... 5.7 50 BEV 2.8
7................... Nissan........... 5.3 40 BEV 2.1
8................... Kia.............. 5.0 45 BEV 2.3
9................... Subaru........... 4.1 50 BEV 2.0%
10.................. Volkswagen, Audi. 3.6 50 BEV 1.8
11.................. Tesla............ 3.4 100 BEV 3.4
12.................. Mercedes-Benz.... 2.6 50 PEV 1.3
13.................. BMW.............. 2.6 50 BEV 1.3
14.................. Mazda............ 2.1 25 BEV 0.5
15.................. Volvo............ 0.8 100 BEV 0.8
16.................. Mitsubishi....... 0.6 50 PEV \5\ 0.3
17.................. Porsche.......... 0.5 80 BEV 0.4
18.................. Land Rover....... 0.4 60 BEV 0.3
19.................. Jaguar........... 0.07 100 BEV 0.07
20.................. Lucid............ 0.02 100 BEV 0.02
------------------------------------------------------------------------
Total............ 100.0 .............. .................... 47.7
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ 2022 U.S. sales shares based on data from Ward's Automotive Intelligence.
\2\ Where a U.S. target was not specified, the global target was assumed for the U.S.
\3\ PEV comprises both BEV and PHEV. In addition, PEV and BEV may include fuel cell electric vehicles (FCEV).
\4\ Based on announced goal of 3.5 million BEVs globally in 2030, divided by 10.5 million vehicles sold in 2022.
\5\ Announcement includes unspecified amount of HEVs.
[[Page 27993]]
EPA understands that manufacturer announcements such as these are
not binding, and often are conditioned as forward-looking projections
that are subject to uncertainty. However, the breadth and scale of
these announcements across the entire industry signals that
manufacturers are confident in the suitability and attractiveness of
PEV technology to serve the needs of a large portion of light-duty
vehicle buyers.
As seen in Figure 23, an analysis by the International Energy
Agency (IEA) similarly concludes that the 2030 U.S. zero-emission
vehicle sales share collectively implied by such announcements (``range
of OEM declarations'') would amount to nearly 50 percent if not more,
far exceeding the 20 percent that IEA considers sufficient to meet pre-
IRA U.S. policies and regulations (``Stated Policies'' scenario).\808\
---------------------------------------------------------------------------
\808\ International Energy Agency, ``Global EV Outlook 2022,''
p. 107, May 2022. Accessed on November 18, 2022 at https://iea.blob.core.windows.net/assets/e0d2081d-487d-4818-8c59-69b638969f9e/GlobalElectricVehicleOutlook2022.pdf.
[GRAPHIC] [TIFF OMITTED] TR18AP24.214
Figure 23: Estimated Zero-Emission Vehicle Sales Shares Resulting From
OEM Announcements Compared to Stated and Potential Policies (IEA 2022)
These announcements and others like them continue a pattern over
the past several years in which most major manufacturers have taken
steps to significantly invest in zero-emission technologies and reduce
their reliance on the internal-combustion engine in various markets
around the globe,809 810 including allocating large amounts
of new investment to electrification technologies.
---------------------------------------------------------------------------
\809\ Environmental Defense Fund and M.J. Bradley & Associates,
``Electric Vehicle Market Status--Update, Manufacturer Commitments
to Future Electric Mobility in the U.S. and Worldwide,'' April 2021.
\810\ International Council on Clean Transportation, ``The end
of the road? An overview of combustion-engine car phase-out
announcements across Europe,'' May 10, 2020.
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A 2021 analysis by the Center for Automotive Research showed that a
significant shift in North American investment was already occurring
toward electrification technologies, with $36 billion of about $38
billion in total automaker manufacturing facility investments announced
in 2021 being slated for electrification-related manufacturing in North
America, with a similar proportion and amount expected for 2022.\811\
For example, in September 2021, Toyota announced large new investments
in battery production and development to support an increasing focus on
electrification,\812\ and in December 2021, announced plans to increase
this investment.\813\ In December 2021, Hyundai closed its engine
development division at its research and development center in Namyang,
South Korea in order to refocus on BEV development.\814\ By October
2022, another analysis indicated that 37 of the world's automakers had
announced plans to invest a total of almost $1.2 trillion by 2030
toward electrification,\815\ a large portion of which would be used for
construction of manufacturing facilities for vehicles, battery cells
and packs, and materials, supporting up to 5.8 terawatt-hours of
battery production and 54 million BEVs per year globally.\816\ For
example, in summer 2022, Hyundai announced an investment of $5.5
billion
[[Page 27994]]
to fund new battery and electric vehicle manufacturing facilities in
Georgia, and recently announced a $1.9 billion joint venture with SK
Innovation to fund additional battery manufacturing in the
U.S.817 818 And in 2023, Ford announced plans for a new
battery plant in Michigan, part of $17.6 billion in investments in
electrification announced by Ford and its partners since
2019.819 820 By mid-2023 the International Energy Agency
indicated that as of the previous March, major manufacturers had
announced post-IRA investments in North American supply chains totaling
at least $52 billion, mostly in battery manufacturing, battery
components and vehicle assembly.\821\ By January 2024, a White House
accounting of BIL and IRA investments indicated that the total had
increased to at least $155 billion.\822\ The U.S. Department of Energy
indicates this represents over $120 billion in over 200 new or expanded
minerals, materials processing, and manufacturing facilities and over
$35 billion in over 140 new or expanded sites for EV assembly, EV
component, or charger manufacturing.\823\
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\811\ Center for Automotive Research, ``Automakers Invest
Billions in North American EV and Battery Manufacturing
Facilities,'' July 21, 2022. Retrieved on November 10, 2022 at
https://www.cargroup.org/automakers-invest-billions-in-north-american-ev-and-battery-manufacturing-facilities/.
\812\ Toyota Motor Corporation, ``Video: Media briefing &
Investors briefing on batteries and carbon neutrality''
(transcript), September 7, 2021. Accessed on September 16, 2021 at
https://global.toyota/en/newsroom/corporate/35971839.html#presentation.
\813\ Toyota Motor Corporation, ``Video: Media Briefing on
Battery EV Strategies,'' Press Release, December 14, 2021. Accessed
on December 14, 2021 at https://global.toyota/en/newsroom/corporate/36428993.html.
\814\ Do, Byung-Uk, Kim, Il-Gue, ``Hyundai Motor closes engine
development division'', The Korea Economic Daily, December 23, 2021.
Accessed on November 29, 2022 at https://www.kedglobal.com/electric-vehicles/newsView/ked202112230013.
\815\ Reuters, ``A Reuters analysis of 37 global automakers
found that they plan to invest nearly $1.2 trillion in electric
vehicles and batteries through 2030,'' October 21, 2022. Accessed on
November 4, 2022 at https://graphics.reuters.com/AUTOS-INVESTMENT/ELECTRIC/akpeqgzqypr/.
\816\ Reuters, ``Exclusive: Automakers to double spending on
EVs, batteries to $1.2 trillion by 2030,'' October 25, 2022.
Accessed on November 4, 2022 at https://www.reuters.com/technology/exclusive-automakers-double-spending-evs-batteries-12-trillion-by-2030-2022-10-21/.
\817\ Velez, C. ``Hyundai and SK On to bring even more EV
battery plants to U.S.'' CBT News, November 29, 2022. Accessed on
November 29, 2022 at https://www.cbtnews.com/hyundai-and-sk-on-to-bring-even-more-ev-battery-plants-to-u-s/.
\818\ Lee, J., Yang, H. ``Hyundai Motor, SK On sign EV battery
supply pact for N. America'', Reuters, November 29, 2022. Accessed
on November 29, 2022 at https://www.reuters.com/business/autos-transportation/hyundai-motor-group-sk-ev-battery-supply-pact-n-america-2022-11-29/.
\819\ Ford Motor Company, ``Ford Taps Michigan for new LFP
Battery Plant; New Battery Chemistry Offers Customers Value,
Durability, Fast Charging, Creates 2,500 More New American Jobs,''
Press Release, February 13, 2023. https://media.ford.com/content/fordmedia/fna/us/en/news/2023/02/13/ford-taps-michigan-for-new-lfp-battery-plant--new-battery-chemis.html.
\820\ New York Times, ``Ford Resumes Work on E.V. Battery Plant
in Michigan, at Reduced Scale,'' November 21, 2023.
\821\ International Energy Agency, ``Global EV Outlook 2023,''
p. 12, May 2023. Accessed on November 28, 2023 at https://iea.blob.core.windows.net/assets/dacf14d2-eabc-498a-8263-9f97fd5dc327/GEVO2023.pdf.
\822\ U.S. Department of Energy, '' Building America's Clean
Energy Future,'' at https://www.whitehouse.gov/invest/. Accessed on
February 16, 2024.
\823\ U.S. Department of Energy, ``Building America's Clean
Energy Future,'' at https://www.energy.gov/invest. Accessed February
4, 2024.
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In the proposal for this rulemaking, EPA did not specifically model
the adoption of PHEV architectures, although the agency acknowledged
that PHEVs could provide significant reductions in GHG emissions, and
that some vehicle manufacturers may choose to utilize this technology
as part of their technology offering portfolio. For example, PHEVs may
be effective at meeting specific types of customer needs and may
provide manufacturers with an additional technology option with which
to meet emissions standards (as some firms are already doing today). We
also indicated that we were considering adding PHEVs as a technology
option in the analysis for the final rule, and asked for comment on
this possibility, and on technology costs and configurations we
presented at the time.
Several commenters criticized the lack of PHEVs as a technology
option in the analysis of the proposed standards. Commenters on this
topic universally supported the addition of PHEVs in the compliance
modeling for the final rulemaking analysis. As indicated in the
proposal, and in response to comments received during the public
comment period, EPA has updated its analysis to include PHEVs as a
technology option for both light-duty and medium-duty vehicles.
Many commenters suggested that due to their smaller battery packs,
PHEVs could reduce the demand for critical minerals and provide a
viable pathway to GHG compliance should critical mineral supplies be
less than projected. In response to commenters' concerns about
potential limits on availability of critical minerals, EPA shows
technologically feasible paths to compliance that rely more on PHEVs,
resulting in much lower battery demand than in the central case.
In its comments, Auto Innovators requested that EPA include PHEVs
such that they comprise at least 20 percent of PEVs in the compliance
results. While that could be a potential outcome, the OMEGA model is
designed to identify lowest-cost compliance pathways to performance-
based standards, based on all technology options available in the
model. EPA did not find any rationale for setting a minimum PHEV to BEV
ratio (for example, as an input constraint). However, in modeling
results for the 2030-2032 timeframe, PHEVs do account for over 10
percent of the total PEVs in the final standards analysis.
ICCT suggested that adding more technologies, including PHEVs,
could reduce costs of compliance. EPA agrees that the inclusion of more
technology choices should generally offer more cost-effective pathways
to compliance. While we did not evaluate the impact of each update in
data and assumptions for this final rulemaking analysis individually,
it is likely that an analysis that excluded PHEVs would have higher
costs.
EPA also requested comment on the types of PHEV architectures that
EPA should consider in this final rulemaking analysis, including
whether or not EPA should explicitly model PHEVs in light-duty and MDV
pickup applications. In the proposal, EPA described ongoing contract
work with Southwest Research Institute (SwRI) to investigate likely
technology architectures of both PHEV and internal combustion engine
range-extended electric light-duty and MDV pickup trucks to support
analysis for the final rule. EPA also requested any relevant
performance or utility data that may help inform our modeling and
analyses.
In their comments, Auto Innovators and Toyota both recommended that
EPA include the more capable strong-PHEV designs that meet US06 high
power cold starts, as well as the range-extending architecture that EPA
has modeled through its contract with SwRI. Toyota commented that PHEVs
could apply to all light-duty vehicles; accordingly, EPA has included
PHEVs as a technology option across all body styles. Stellantis
highlighted the high-capability pickup truck segment as a key area
where PHEVs would be beneficial. In this analysis, EPA has made the
simplifying technical assumption that PHEVs will meet basic all-
electric range requirements to qualify as ZEVs under ACC II \824\ and
ACT \825\ for light-duty and medium-duty vehicles, respectively, as we
think it is reasonable to assume that manufacturers will design PHEVs
as nationwide products. For a more detailed description of EPA's PHEV
model architectures, including battery and motor sizing as well as cost
assumptions, please refer to RIA Chapter 2.6.1.4.
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\824\ California Air Resources Board, ``California moves to
accelerate to 100% new zero-emission vehicle sales by 2035,'' Press
Release, August 25, 2022. Accessed on Nov. 3, 2022 at https://ww2.arb.ca.gov/news/california-moves-accelerate-100-new-zero-emission-vehicle-sales-2035.
\825\ California Air Resources Board, Advanced Clean Trucks
Regulation, Final Statement of Reasons, March 2021. Accessed on Jan
8, 2024 at https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fsor.pdf.
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As stated in the proposal, EPA conducted contract work with SwRI to
investigate likely technology architectures of both PHEV and ICE range-
extended electric light-duty and MDV pickup trucks that we anticipated
would provide data informative to the final rule. We have included
modeling of PHEV architectures comparable to those included in SwRI's
final report within our analysis. For more information, please refer to
RIA Chapter 3.5. In addition, within the proposal's DRIA Chapter
2.6.1.4 ``PHEV Powertrain Costs,'' EPA provided component technology
descriptions and cost
[[Page 27995]]
estimates that include the major components needed to manufacture a
PHEV, including batteries, e-motors, power electronics, and other
ancillary systems. We requested comment on these PHEV cost estimates
and noted that in the final rule we may rely upon the estimates and
other information gathered through the public comment process and our
ongoing technical work.
In the proposal, we noted that many light- and medium-duty PHEVs
purchased for commercial use would be eligible for the Commercial Clean
Vehicle Credit (45W), which provides a credit of up to $7,500 for
qualified vehicles with gross vehicle weight ratings (GVWRs) of under
14,000 pounds.\826\ As the amount of the credit depends on the GVWR and
the incremental cost of the vehicle relative to a comparable ICE
vehicle, EPA requested comment on estimating the amount of the credit
that will on average apply to commercial MDV PHEVs, such as PHEV
pickups, and other commercial PHEVs and BEVs. We did not receive
comment on this topic.
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\826\ Up to $40,000 for qualified Class 4 and higher vehicles
above 14,000 pounds GVWR.
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In addition to the inclusion of PHEVs as a technology option, EPA
also updated its characterization of other ICE and HEV vehicle
technologies in its ALPHA modeling (see RIA Chapter 2.4). These updates
included new hybrid architectures such as a series-parallel P4 hybrid
for light-duty trucks, a range-extending PHEV configuration for medium-
duty trucks, and new engines for medium-duty diesels, including a large
bore gasoline PFI engine and an updated map for its diesel engine.
ALPHA engine maps and motor maps for HEV, PHEV and BEV technologies are
presented in RIA Chapter 3.5.
In RIA Chapter 3.1, we provide discussion of recent trends and
feasibility of light-duty and medium-duty vehicle technologies that
manufacturers have available to meet the standards. Other aspects of
PEV feasibility, such as technology costs, consumer acceptance,
charging infrastructure accessibility, supply chain security,
manufacturing capacity, critical mineral availability, and effects of
BEV penetration on upstream emissions are discussed in the respective
chapters of the RIA.
EPA received comments from automotive suppliers and some
environmental NGOs that suggested we should model continued advances in
ICE technology in both light-duty and medium-duty vehicles. Some
commenters (e.g., ACEEE and ICCT) recommended that EPA should include
in its modeling additional advanced ICE technology for medium-duty
vehicles, especially MD pickups.
EPA agrees that there is a potential for continued GHG reductions
in ICE engine designs and manufacturers may choose to improve the
efficiency of their ICE powertrains as part of their pathway for
compliance. EPA's experience with modeling ICE powertrain technologies
is that improvements are often targeting common loss mechanisms:
reductions in pumping losses, reduction of friction and parasitics,
improved combustion, broader and higher thermal efficiency, and on-
cycle optimization of engine operation. In our modeling, one technology
can often be used as a surrogate to reflect a range of technologies
that address similar levels of improvements. For example, EPA has
observed that an ``advanced gasoline engine'' could represent
technologies ranging from Atkinson cycle engines to turbo downsized
engines with the overall reduction in GHG emissions and costs of
similar magnitude. While we do not model every unique technology
combination that could potentially be implemented by manufacturers, our
modeling of ICE powertrains should generally represent the emissions
reduction potential and costs of advanced engine technologies.
Nevertheless, we acknowledge that there are a wide range of possible
ICE powertrain combinations available to manufacturers, beyond those
included in EPA modeling, and that some of these technology
implementations may outperform EPA's assessment of potential GHG
reductions.
As evidenced by their public announcements, manufacturers have
signaled a clear shift to focus on the development of electrified
powertrains. Through conversations with OEMs, several companies have
indicated that they are diverting their R&D budgets towards development
of electric vehicles, and others have publicly indicated that the
upcoming generation of internal combustion engines will be the last new
designs.827 828 Accordingly, ICE engineering departments at
automakers are being reallocated to electric vehicle design,
development, and integration functions, or are contracting commensurate
with the reductions in new internal combustion engine programs.
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\827\ https://www.motor1.com/news/660320/vw-passat-tiguan-last-ice/.
\828\ https://www.reuters.com/business/autos-transportation/mercedes-benz-launches-e-class-its-last-new-combustion-engine-model-2023-04-25/.
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This shift towards significantly greater adoption and deployment of
electrification technologies makes it possible for manufacturers to
achieve significantly greater emissions reductions than would be
feasible relying solely on improved efficiencies of internal combustion
engines. Accordingly, EPA focused its modeling efforts on those
technologies which we anticipate OEMs will likely choose to adopt in
support of these standards. EPA's analysis projects that manufacturers
will use electrification as their primary compliance pathway, given the
significantly more favorable cost effectiveness of electrified
powertrains in achieving more stringent GHG standards.
Our assessment of technology generally represents the potential for
cost-effective improvements and parallels the increased manufacturer
focus on electrification. For these reasons, EPA has prioritized its
modeling updates towards electrified technologies, rather than
continued ICE advances. However, by maintaining performance-based GHG
standards, the agency keeps in place a compliance architecture which
fully recognizes all available technologies that result in reduced GHG
emissions. Table 4 of the executive summary highlights three potential
pathways which show a range of technology penetrations, and the
sensitivities described in section IV.F of this preamble illustrate
additional pathways to compliance.
2. Approach to Estimating Electrification Technology Costs
Costs for electrification technologies, such as batteries and other
electrified vehicle components, are an important input to the
feasibility analysis. This section provides a general review of how
battery and other electrification component costs were updated for this
final rule analysis. A more detailed discussion of the electrification
cost estimates and the sources we considered may be found in RIA
Chapter 2. EPA responses to all of the comments on this topic may be
found in RTC section 12.2.
Our battery costs for the final rule analysis are higher than in
the proposal, due to a number of factors that we took into
consideration, both from the public comments and from the completion of
ongoing and additional research that we described in the proposal.
For the proposal, EPA used Argonne National Laboratory's (ANL)
BatPaC model version 5.0 (then current) to generate base year (2022)
direct manufacturing cost estimates for battery packs at an annual
production volume of 250,000 packs. To estimate battery cost in future
years, the proposal applied an annual cost reduction by
[[Page 27996]]
means of a learning equation that included the effect of cumulative
production of batteries (in GWh) under each modeled compliance
scenario. To validate these results, we compared them to industry
forecasts and other literature regarding expected costs for BEV battery
packs in future years.
Forecasting of future battery costs is a very active research area,
particularly at this time of rapidly increasing demand in an actively
evolving industry. In the proposal, we noted that the battery costs we
were using in the proposal analysis were nominally lower than the
average pack cost that was reported in a late-breaking Bloomberg New
Energy Finance (BNEF) report released on December 6, 2022. This annual
battery price survey by BNEF indicated that after years of steady
decline, the global average price for lithium-ion battery packs
(volume-weighted across the passenger, commercial, bus, and stationary
markets) had climbed by about 7 percent in 2022.829 830 For
passenger vehicle BEV batteries the average price paid was reported to
be $138 per kWh. We noted that there was uncertainty in comparing the
BNEF survey costs to the modeled costs in our analysis due to possible
differences in pack size, construction, or application. Since that
time, the 2023 BNEF survey has reported that pack costs across the
industry fell by 14 percent in 2023, with an average of $128 per kWh
for passenger BEVs. This further illustrates the dynamic nature of the
battery market and of battery price projections.
---------------------------------------------------------------------------
\829\ Bloomberg New Energy Finance, ``Rising Battery Prices
Threaten to Derail the Arrival of Affordable EVs,'' December 6,
2022. Accessed on December 6, 2022 at: https://www.bloomberg.com/news/articles/2022-12-06/rising-battery-prices-threaten-to-derail-the-arrival-of-affordable-evs.
\830\ Bloomberg New Energy Finance, ``Lithium-ion Battery Pack
Prices Rise for First Time to an Average of $151/kWh,'' December 6,
2022. Accessed on December 6, 2022 at: https://about.bnef.com/blog/lithium-ion-battery-pack-prices-rise-for-first-time-to-an-average-of-151-kwh/.
---------------------------------------------------------------------------
In light of the 2022 BNEF report, we noted that we would consider
this and any other new forecasts of battery cost or similar
information, as they became available and to the extent possible, for
the final rule analysis. We also noted that we would be working with
ANL to continue updating our estimates of battery cost by considering
adjustments to key inputs to the BatPaC model to represent expected
improvements to production processes, forecasts of future mineral
costs, and design improvements.
In the proposal, EPA requested comment on all aspects of the
battery and non-battery costs used in the NPRM analysis, including base
year battery costs, future battery costs, electric vehicle driving
range, and similar issues that would affect how battery and non-battery
costs should be modeled. We received a variety of comments relating to
current and future battery pack costs, and partly in response to these
comments we have made significant updates to our battery cost
assumptions.
Some commenters, primarily from environmental NGOs, electric
vehicle manufacturers, and the electrification industry, stated that
the battery costs in the proposal were either appropriate or too high.
Other commenters, primarily representing major automakers, the fuels
industry, and various advocacy groups, stated that the costs were too
low. Many of those who felt that the costs were too low referred to
uncertainty surrounding near-term and long-term mineral costs and cited
(among other references) the aforementioned December 2022 BNEF survey
as evidence that our base year battery costs were too low. These
commenters also referred to volatility of mineral and component prices
that might be expected during a time of rapid increase in demand and
suggested that we should consider scenarios in which battery costs
decline at a slower rate than we had assumed, or do not decline at all.
Some specifically suggested that we consider a paper by Mauler et
al.\831\ that outlined the impact of future mineral costs on cell
manufacturing costs under several pricing scenarios and set our battery
costs and/or our battery cost sensitivities using the results of that
paper. These commenters also criticized specific assumptions that they
felt caused our battery costs to be too low, including too high a
production volume in the base year, too high a learning rate in future
years, use of cumulative GWh of battery production as an input to the
battery cost learning equation, too low a labor rate, and a number of
specific engineering considerations that they contend are exerting
pressure to keep battery costs high independent of manufacturing cost
improvements.
---------------------------------------------------------------------------
\831\ Mauler et al., ``Technological innovation vs. tightening
raw material markets: falling battery costs put at risk,'' Energy
Advances, v.1, pp. 136-145 (2022).
---------------------------------------------------------------------------
Other commenters stated that our use of nickel-based cathode
chemistry (NMC) did not recognize the potentially lower cost of
lithium-iron phosphate (LFP) cathode chemistry, and that this chemistry
has less exposure to uncertainties related to critical minerals.
Regarding PHEVs, we also received comment advocating for inclusion
of longer-range PHEVs in the analysis, and that these vehicles could
use the same batteries as BEVs, owing to the relatively large size of
the battery.
To update our estimate of current and future battery pack costs,
and as mentioned in the proposal, we worked with the Department of
Energy and Argonne National Laboratory to develop a year-by-year
projection of battery costs from 2023 to 2035, using specific inputs
that represent ANL's expert view of the current state-of-the-art and of
the path of future battery chemistries and the battery manufacturing
industry.\832\ By default, BatPaC estimates only a current-year battery
production cost and does not support the specification of a future year
for cost estimation purposes. However, some parameters can be modified
within BatPaC to represent anticipated improvements in specific aspects
of cell and pack production. For example, cell yield is controlled by
an input parameter that can be modified to represent higher cell yields
likely to result from learning-by-doing and improved manufacturing
processes. ANL identified several parameters that could similarly
represent future improvements. This allowed ANL to estimate future pack
costs in each of several specific future years from 2023 to 2035,
allowing cost trends over time to be characterized by a mathematical
regression.
---------------------------------------------------------------------------
\832\ Argonne National Laboratory, ``Cost Analysis and
Projections for U.S.-Manufactured Automotive Lithium-ion
Batteries,'' ANL/CSE-24/1, January 2024.
---------------------------------------------------------------------------
A major element of the approach was to select BatPaC input
parameters to reflect current and future technology advances and
calculate the cost of batteries for different classes of vehicles at
their anticipated production volumes. Material cost inputs to the
BatPaC simulations were based on forecasted material prices by
Benchmark Mineral Intelligence. That is, pack costs were estimated from
current and anticipated future battery materials, cell and pack design
parameters, and market prices and vehicle penetration. Pack cost
improvements in future years were represented at three levels:
manufacturing (increasing cell yield and plant capacity), pack
(reducing cell and module numbers and increasing cell capacity), and
cell (changing active material compositions and increasing electrode
thickness). The simulations yielded battery pack cost estimates that
can be represented by correlations for model years 2023 to 2035.
As with the pack designs modeled by EPA for the proposal, the pack
designs modeled by ANL follow recent trends in PEV battery design and
configuration in high-production PEV models. Pack
[[Page 27997]]
topologies, cell sizes, and chemistry are consistent with those seen in
emerging high-production battery platforms, such as for example the GM
Ultium battery platform, the VW MEB vehicle platform, and the Hyundai
E-GMP vehicle platform. ANL then considered the potential for continued
improvements in chemistry and manufacturing over the time frame of the
rule.
The ANL analysis provided EPA with several equations for battery
pack direct manufacturing costs as a function of model year and battery
capacity (kWh), for both nickel-based (NMC) chemistry and iron-
phosphate based (LFP) chemistry. We have incorporated these costs into
the analysis in place of the costs that were used for the proposal.
As a result of this updated work, and as seen in Figure 24, our
updated battery direct manufacturing costs for the final rule are
significantly higher than in the proposal. Using an example of a 100-
kWh battery, Figure 24 compares the updated FRM battery costs (central
case and sensitivities) to the costs and sensitivities used in the
proposal.
[GRAPHIC] [TIFF OMITTED] TR18AP24.022
Figure 24: Comparison of OMEGA Input Costs for a 100-kWh Battery, NPRM
to FRM
As seen in Table 68, our battery cost inputs (example shown for a
100 kWh battery) have increased by an average of 26 percent compared to
the proposal, ranging from about 21 percent higher in the early years
to about 36 percent higher in the later years.
Table 68--Difference in Battery Cost per kWh From NPRM to FRM, 100-kWh Battery Example
----------------------------------------------------------------------------------------------------------------
Year NPRM FRM Difference (%)
----------------------------------------------------------------------------------------------------------------
2023............................................................ 114 138 21
2024............................................................ 114 138 21
2025............................................................ 113 137 21
2026............................................................ 111 120 8
2027............................................................ 99 115 16
2028............................................................ 89 110 24
2029............................................................ 83 106 27
2030............................................................ 77 101 31
2031............................................................ 73 97 33
2032............................................................ 69 94 36
2033............................................................ 66 90 36
2034............................................................ 64 87 35
2035............................................................ 62 83 34
----------------------------------------------------------------------------------------------------------------
The increase in cost is largely a product of the most recent trends
and forecasts of future mineral costs being now explicitly represented
via the ANL work,\833\ and also are an outcome of basing the future
costs on a specific set of technology pathways instead of applying a
year-over-year cost reduction rate. Most other forecasts of future
battery costs, including some of those that we cited in the proposal,
are based largely on application of a historical cost reduction rate
(i.e., learning rate), without reference to the specific technology
pathways that might lead to those cost reductions. ANL's approach is
consistent with that of the Mauler
[[Page 27998]]
paper,\834\ which also identified and modeled a specific set of
technology pathways. EPA acknowledges one potential criticism of such
an approach is that it may lead to conservative results, because it
excludes the potential effect of currently unanticipated or highly
uncertain developments that may nonetheless come to fruition. On the
other hand, basing the costs on specific high confidence pathways
allows the basis of the projections to have greater transparency.
---------------------------------------------------------------------------
\833\ Id.
\834\ Mauler et al., ``Technological innovation vs. tightening
raw material markets: falling battery costs put at risk,'' Energy
Advances, 2022, v. 1, pp. 136-145.
---------------------------------------------------------------------------
Accordingly, these updated battery costs are responsive to many of
the comments. First, the ANL work accounts more explicitly for the
potential effect of critical mineral prices on the cost of batteries
over time. We worked with ANL to make available medium- and long-term
mineral price forecasts from Benchmark Mineral Intelligence, a leading
minerals analysis firm. These were then used to estimate electrode
material prices over the years of the ANL analysis. This is one factor
contributing to the higher battery costs used in our updated analysis.
Second, as one outcome of this update, in the early years of the
program, our battery cost inputs are now in closer agreement with the
2022 BNEF battery price survey, which commenters widely mentioned.
Finally, the generally higher costs are responsive to general comments
stating the position that our assumptions for current and future
battery costs were too low. Because it allowed us to account for the
most recent trends and developments, in particular by more fully
considering the potential impact of mineral demand and the specific
impact of anticipated advancements in lithium-ion technology and
manufacturing, our use of the costs forecast by ANL is responsive to
these comments.
As another way to account for commenter concerns about uncertainty
in near-term battery costs, we have retained a plateau in costs between
2023 and 2025, in which our battery cost assumptions do not decline as
would be indicated by the ANL equations for 2024 and 2025, but instead
stay at the cost indicated by the ANL equations for 2023. Because the
ANL cost equations account for the effect of projected mineral prices
and do not indicate that battery costs will remain elevated at 2023
levels for 2024 and 2025, our retention of the plateau is a
conservative assumption.
Some commenters raised the possibility that batteries manufactured
in the U.S. (in order to capture the various IRA incentives) would
experience higher labor rates. We also recognized the fact that, during
the comment period and afterward, several major U.S. automakers were
negotiating new labor contracts, with an emphasis on electrification.
To represent higher labor costs, the ANL equations that EPA used are
based on a $50 per hour labor cost ($70 per hour including variable
overhead/benefits), which represents the assumption that U.S. battery
plants will largely operate under the same labor agreements as major
automotive plants. In comparison to the battery costs used in the NPRM
analysis, which were based on the default value in BatPaC of $25 per
hour ($35 including variable overhead/benefits), the higher labor cost
resulted in an increase in pack cost per kWh of about two to three
percent. It is well understood in the industry, and confirmed by BatPaC
modeling, that labor is a relatively small portion of battery cost in
comparison to material costs. The two to three percent increase is also
generally consistent with recent remarks by General Motors that their
new contract with the United Auto Workers would increase battery cell
prices by about $3 per kWh.\835\
---------------------------------------------------------------------------
\835\ LaReau, J.L., ``GM labor contracts will add $1.5 billion
to costs, but here's how GM expects to offset it,'' Detroit Free
Press, November 29, 2023.
---------------------------------------------------------------------------
In response to comments regarding the ability of longer-range PHEVs
to use BEV batteries, we note that the ANL battery cost equations were
developed with consideration of higher power-to-energy ratios at the
lower end of their kWh capacity range, making those battery sizes
applicable to either BEVs or PHEVs. In the updated analysis, only
longer-range PHEVs \836\ are placed into the fleet, and their battery
costs are derived from the same equations as BEVs.
---------------------------------------------------------------------------
\836\ In OMEGA, EPA assumed that light-duty vehicle PHEV
batteries would be sized for 40 miles of all-electric range over the
US06 cycle, while medium-duty PHEVs would be sized to drive 75 miles
over the UDDS while tested at ALVW.
---------------------------------------------------------------------------
Our consideration of the public comments led to another update to
our method of accounting for future learning. In the proposal, EPA
introduced a method of accounting for learning-by-doing by considering
cumulative production of batteries (in GWh) resulting from various
policy scenarios modeled by OMEGA. When the OMEGA model generated a
compliant fleet in a given future year of the analysis, battery costs
for BEVs in that year were determined dynamically, by applying a
learning cost reduction factor to the base year cost. The learning
factor was calculated in part based on the cumulative GWh of battery
production necessary to supply the number of BEVs that OMEGA had thus
far placed in the analysis fleet, up to that analysis year. This
approach was consistent with ``learning by doing,'' a standard basis
for representing cost reductions due to learning in which a specific
percentage cost reduction occurs with each doubling of cumulative
production over time. This dynamic method of assigning a cost reduction
due to learning meant that different OMEGA runs that result in
different cumulative battery production levels would project somewhat
different battery costs. In the proposal, EPA requested comment on our
use of cumulative GWh as a determinant of learning effects, and
evidence and data related to the potential use of global battery
production volumes instead of domestic volumes in that context, and/or
the use of battery production volumes in related sectors.
For several reasons, in the current analysis we chose to return to
our previous practice of representing future battery cost reductions as
a function of time rather than a function of cumulative GWh produced.
Some commenters stated that the proposal's method was new with respect
to previous analyses and lacked sufficient documentation; that it
failed to establish a baseline that included global production; and
that it should have been based on cumulative global production rather
than only cumulative domestic production.
In light of these comments, we make several observations here.
Because OMEGA does not model global demand for batteries, considering
global demand is difficult in the context of this analysis. Also, the
establishment of a baseline would require data on historical production
of batteries both domestic and globally, which itself would be subject
to uncertainty. We also note that some commenters stated the importance
of alignment of EPA standards with those of the NHTSA CAFE proposal,
which is consistent with the use of similar battery costs. Unlike the
EPA compliance model, NHTSA's compliance model does not support the use
of the cumulative GWh production approach, meaning that alignment on
battery costs would be difficult if EPA were to continue using the
proposal approach. Another relevant factor is both agencies' use of the
ANL battery cost study, which promotes such alignment. The future
battery cost equations provided by ANL incorporate fixed assumptions
for battery cost
[[Page 27999]]
reductions over time and do not support cumulative GWh of battery
production as an input. We also found that the use of cumulative GWh as
a factor in the cost of batteries made it difficult to communicate the
battery costs that were used in the analysis, because under this
approach the battery costs would vary with each compliance scenario due
to differences in projected PEV penetration among the scenarios.
Although we continue to believe that a battery cost learning method
based on cumulative production can offer the advantage of allowing
battery costs in a given compliance scenario to be properly responsive
to large differences in battery demand and production among the
scenarios, we have decided not to continue the use of this method at
this time.
For 2023 to 2035, we use the battery cost equations developed by
ANL for our battery cost assumptions, and because these are based on
application of specific technology pathways, we no longer develop costs
for those years by means of a time-based cost reduction factor. For
years after 2035, where the ANL equations no longer apply, a cost
reduction factor remains necessary, and for those years we implemented
a 1.5 percent year-over-year cost reduction. Our use of 1.5 percent
results in a rate of cost reduction within the range of long-term
reductions commonly encountered in the literature. Moreover, we
selected this specific figure because it is consistent with preventing
projected battery costs in the far future from declining to levels that
have not commonly found support in the literature. A 1.5 percent year
over year cost reduction would limit battery cost from declining lower
than about $60 per kWh in 2055, a figure that is similar to or
conservative with respect to a number of long-range forecasts found in
the literature. For example, this is generally consistent with
projections found in a review of battery cost forecasting methods by
Mauler et al.,\837\ which describes a comprehensive survey of battery
cost projections that average to a projection of $70 per kWh in 2050
(which at the rate of cost reduction implied in the paper, would be
equivalent to $63 per kWh in 2055).
---------------------------------------------------------------------------
\837\ Mauler et al., ``Battery cost forecasting: a review of
methods and results with an outlook to 2050,'' Energy Environ. Sci,
v.14, pp. 4712-4739 (2021).
---------------------------------------------------------------------------
In response to comments and updated work from ANL, EPA also updated
the OMEGA inputs for specific energy of HEV, PHEV and BEV battery
packs. The ANL battery cost study included projections of the future
specific energy of NMC and LFP battery packs, as provided by the BatPaC
model that also determined their cost. This has resulted in somewhat
lighter batteries over time than assumed in the NPRM analysis, where
improvements in specific energy were not modeled.
In response to comments recommending inclusion of LFP chemistries,
our updated battery costs are now a weighted average of ANL's cost
equations for LFP and NMC batteries, with a weighting derived from
forecasts of LFP cathode or battery production likely to be present in
the U.S. PEV market. LFP is already present in a small portion of
light-duty PEVs and its share is expected to increase in the future,
due to its lower cost and absence of the critical minerals such as
cobalt, manganese, and nickel. LFP chemistry is also potentially
applicable to some medium-duty vehicles such as delivery vans, whose
larger size may better accommodate the lower energy density of this
chemistry. The weighting ranges from 8 percent LFP in 2023, 16 percent
in 2025 and leveling off at 19 percent in 2028. For more discussion of
the LFP weighting, see RIA Chapter 2.
We also received comment on the upper and lower battery cost
sensitivities that we considered in the proposal, where we included
sensitivities for battery pack costs that were 25 percent higher and 15
percent lower (on a $/kWh basis) than the battery pack costs in the
central case. Some commenters who felt that our battery costs were too
low and/or our learning rates were too high disagreed with the basis of
the upper and lower sensitivity percentages as being arbitrary and/or
insufficient, particularly on the high side. Some commenters
specifically felt that EPA should have used an upper sensitivity of
greater than 25 percent, or not limited to a fixed percentage over
time, in order to capture what they believe is a more appropriate range
of uncertainty. In particular, some commenters indicated that we should
have considered Mauler et al. (2022) in setting the high sensitivity.
EPA continues to believe that a fixed percentage above and below
the central case can be an appropriate way to establish upper and lower
bounds for a sensitivity, if the resulting band can be shown to
adequately cover a range of reasonably plausible outcomes for future
battery costs. For the updated analysis, we examined the
appropriateness of the plus 25 percent and minus 15 percent range as
applied to the updated central case battery costs which are
significantly higher than in the proposal. We also examined the Mauler
et al. paper and compared the range of scenarios expressed there to the
band of costs that would be defined by this range.\838\
---------------------------------------------------------------------------
\838\ While the Mauler paper reported cell costs instead of pack
costs, we converted the Mauler cell cost to pack cost by dividing
the Mauler cell cost by 0.8, as suggested by the Alliance comments
that examined the Mauler paper. We also note that pack costs tend to
decline with pack size, and Mauler's cell costs are by definition
independent of pack size. Therefore, our choice of a 100-kWh pack
for comparison to Mauler's converted cell costs may be conservative,
as our depicted costs would be higher for a smaller pack.
---------------------------------------------------------------------------
Figure 25 shows, for an example 100 kWh battery pack, how this band
of sensitivities compares to the Mauler scenarios (which extend only to
the year 2030). It shows that retaining the 25 and 15 percent
sensitivities around the updated central case costs establishes a band
that largely includes the Mauler scenarios, including almost all of the
highest Mauler scenario, in which costs do not decline at all. The
highest Mauler scenario, although not defined by the authors past 2030,
presumably would continue its elevated price scenario indefinitely if
it were so extended. However, such a scenario of perpetually elevated
cost does not appear to be widely supported among analysts and is not
consistent with the most recent forecasts of mineral prices through the
same time frame, which indicate generally declining or flat costs for
virtually every battery critical mineral.839 840
---------------------------------------------------------------------------
\839\ Wood Mackenzie, ``Electric Vehicle & Battery Supply Chain
Short-term outlook January 2024'', slide 29, February 2, 2024
(filename: evbsc-short-term-outlook-january-2024.pdf). Available to
subscribers.
\840\ Wood Mackenzie, ``Global cathode and precursor short-term
outlook January 2024,'' slide 5, January 2024 (filename: global-
cathode-and-precursor-market-short-term-outlook-january-2024.pdf).
Available to subscribers.
---------------------------------------------------------------------------
Regarding the lower case sensitivity, we note that the most recent
annual BNEF battery price survey, which was released in November 2023,
indicates that battery prices fell by 14 percent since the 2022 survey
was published, and forecasts costs of $113 per kWh in 2025 and $80 per
kWh in 2030.\841\ This contrasts sharply with the 7 percent increase
that was reported in the 2022 survey, strongly suggesting that battery
costs have begun to resume their historical downward trend, and
reinforcing our expectation that the highest Mauler scenario is
unlikely. This is also another factor that supports our
characterization of our updated battery costs as conservative. BNEF's
projections for 2026 and 2030 align well
[[Page 28000]]
with our minus 15 percent lower sensitivity, as seen in Figure 25.
---------------------------------------------------------------------------
\841\ BloombergNEF, ``Lithium-Ion Battery Pack Prices Hit Record
Low of $139/kWh,'' November 27, 2023. Accessed on December 6, 2023
at https://about.bnef.com/blog/lithium-ion-battery-pack-prices-hit-record-low-of-139-kwh/.
---------------------------------------------------------------------------
Because the range of sensitivities largely includes the extremes
represented by the Mauler et al. paper (which was specifically cited by
commenters), as well as the latest BNEF forecast for 2026 and 2030, EPA
considers the plus 25 percent and minus 15 percent sensitivities in the
updated analysis to be responsive to commenters' concerns. Specifically
for 2023 to 2025, we truncated the high sensitivity at $150 per
kWh,\842\ based on EPA's assessment of current battery costs as already
lower than $150 per kWh and near-term trends not indicative of an
increase, as described in this section.
---------------------------------------------------------------------------
\842\ The computed +25% values that were reduced to $150/kWh are
represented by the line labeled ``Truncated'' in Figure 25.
[GRAPHIC] [TIFF OMITTED] TR18AP24.023
Figure 25: Battery Cost Sensitivity Ranges in the Updated Analysis
In light of the updates described above and consideration of public
comment, EPA considers the updated battery direct manufacturing cost
estimates and the sensitivities to be reasonable and conservative,
based on the record and best available information at this time. In
particular, considering recent forecasts for falling mineral prices
during the next several years, and the trend of falling battery prices
recently indicated by the 2023 BNEF battery price survey, we consider
it more likely that the central case may prove to be an overestimate
than an underestimate. We also note that the battery costs in the lower
sensitivity case are similar to the trajectory of the BNEF forecast,
suggesting that the program costs may be more similar to that indicated
by the lower battery cost sensitivity if the BNEF forecast proves
accurate. A more detailed discussion of the development of the battery
cost estimates used in this final rule and the sources we considered
may be found in RIA Chapter 2.
The battery cost estimates discussed thus far do not include the
effect of tax credits available to battery manufacturers under the
Inflation Reduction Act. These include the cell and module production
tax credit of up to $45 per kWh available to manufacturers under IRC
45X, and the additional tax credit for 10 percent of the production
cost of (a) critical minerals and (b) electrode active materials
available to manufacturers under 45X.
In the proposal, EPA estimated potential future uptake of the IRA
credits and how they would impact manufacturing costs for batteries
over the time frame of the rule. We requested comment on all aspects of
our accounting for the IRA credits, including not only the values used
for the credits but also whether or not we should also account for the
additional 10 percent provisions for electrode active materials and
critical mineral production, which we did not estimate for the
proposal.
The 45X cell and module credit provides a $35 per kWh tax credit
for U.S. manufacture of battery cells, and an additional $10 per kWh
for U.S. manufacture of battery modules. 45X also provides a credit
equal to 10 percent of the manufacturing cost of electrode active
materials and another 10 percent for the manufacturing cost of critical
minerals if produced in the U.S. The credits phase out from 2030 to
2032 (with the exception of the 10 percent for critical minerals, which
continues indefinitely).
In the proposal, we assumed that manufacturer ability to take
advantage of the $35 cell credit and the $10 module credit would ramp
up linearly from 60 percent of total cells and modules in 2023 (based
on the approximate percentage of U.S.-based battery and cell
manufacturing likely to be eligible today for the credit)
843 844 845 to 100 percent in 2027, and then ramping down by
25 percent per year as the credit phases out from 2030 (75
[[Page 28001]]
percent) through 2033 (zero percent). In making these assumptions we
noted that many large U.S. battery production facilities were being
actively developed by OEMs and their suppliers and their announced or
expected capacities appeared sufficient to meet U.S. demand for
batteries as projected by OMEGA.
---------------------------------------------------------------------------
\843\ U.S. Department of Energy, ``FOTW #1192, June 28, 2021:
Most U.S. Light-Duty Plug-In Electric Vehicle Battery Cells and
Packs Produced Domestically from 2018 to 2020,'' June 28, 2021.
https://www.energy.gov/eere/vehicles/articles/fotw-1192-june-28-2021-most-us-light-duty-plug-electric-vehicle-battery.
\844\ Argonne National Laboratory, ``Lithium-Ion Battery Supply
Chain for E-Drive Vehicles in the United States: 2010-2020,'' ANL/
ESD-21/3, March 2021.
\845\ U.S. Department of Energy, ``Vehicle Technologies Office
Transportation Analysis Fact of the Week #1278, Most Battery Cells
and Battery Packs in Plug-in Vehicles Sold in the United States From
2010 to 2021 Were Domestically Produced,'' February 20, 2023.
---------------------------------------------------------------------------
We received comment on a variety of aspects of our modeling of 45X.
Common themes included: questioning the ability of U.S. battery
manufacturing facilities currently planned or under construction to
ramp up quickly enough; the lack of accounting for the 10 percent
electrode active material and critical mineral credit; the ability for
imported vehicles to benefit from the credit in accounting for their
battery cost; and the assumption that all of the value of the 45X
credit would be realized as a cost reduction by OEMs when purchasing
cells or packs from suppliers.
Comments received on our modeling of the 45X cell and module credit
led us to further investigate our inputs for the phase-in schedule and
average amount realized. This included working with the Department of
Energy and Argonne National Lab (ANL) to update our assessment of U.S.
battery manufacturing facilities and to account for gradual ramp-up of
these facilities over time. As discussed in section IV.C.7 of this
preamble, the updated analysis largely confirmed the previous
assessment that currently planned U.S. battery cell manufacturing
capacity is poised to meet projected U.S. demand during the time frame
of the rule, even after explicitly accounting for a typical ramp-up
period as assessed by DOE and ANL.
Regarding the ability of imported PEVs to benefit from 45X, some
commenters stated that imported PEVs are likely to continue to comprise
some portion of the market in the future, and because they arrive fully
assembled including the battery, this portion of the PEV market is
unlikely to benefit from the 45X cell and module credit. EPA agrees
that imported vehicles are likely to continue to comprise some portion
of the future PEV market. We also note, however, that even foreign
manufacturers might in some cases be able to benefit from a reduced
battery cost by purchasing cells or battery packs from U.S. suppliers
that are able to claim the credit. Even if this possibility is not
widely utilized, imported PEVs must compete with the presence of
domestic PEVs that do benefit from the credit and may become a smaller
part of the fleet over time due to this factor. For example, European
battery maker Northvolt's CEO Peter Carlsson has said that with the IRA
incentives available in the U.S., ``it is basically impossible to
operate in the North American market from anywhere else,'' and has been
actively pursuing opportunities to build plants in the U.S. as a
result.\846\ It is also becoming apparent that foreign manufacturers
will often be able to benefit from local incentives in their country of
origin that act to reduce the cost of their batteries. Programs offered
to battery manufacturers in other countries have already begun to
compete with the IRA to provide a similar competitive cost advantage
for their own manufacturers. As an example, European battery maker
Northvolt was recently awarded a 700 million Euro direct grant and a
202 million Euro guarantee for a 60 GWh plant in Germany that the
company says prevented a move to the U.S.,\847\ and the company also
received a support package in Canada for a multi-billion dollar plant
in Quebec for which the Canadian government, Ottawa, and Quebec will
provide up to $2.7 billion for construction as well as ``production
support to match the Inflation Reduction Act's Advanced Manufacturing
Production Credit and value of the 45X tax credit.'' \848\
---------------------------------------------------------------------------
\846\ Automotive News Europe, ``VW, BMW battery supplier
Northvolt could reap billions from Biden's EV bill,'' February 15,
2023. Accessed on February 2, 2024 at https://europe.autonews.com/automakers/northvolt-could-reap-billions-us-green-tax-incentives.
\847\ Power Technology, ``Northvolt secures [euro]902m to build
EV battery plant in Germany over US,'' January 10, 2024. Accessed on
February 2, 2024 at https://www.power-technology.com/news/northvolt-ev-battery-plant-germany-us/?cf-view&cf-closed.
\848\ CBC News, ``EV battery giant Northvolt to build
multibillion-dollar plant in Quebec,'' September 28, 2023. Accessed
on February 2, 2024 at https://www.cbc.ca/news/canada/montreal/quebec-northvolt-ev-battery-factory-1.6980767.
---------------------------------------------------------------------------
Regarding the passing of 45X credit savings realized by cell and
module suppliers to OEMs via the selling price of the cells or modules,
we continue to expect that many suppliers and OEMs will work closely
together as they currently do through contractual agreements and
partnerships and that these close connections will promote fair pricing
arrangements. The large U.S. production capacity that is projected for
the time frame of the rule also suggests that the market will be
competitive and that suppliers will be motivated to pass credit savings
along to customers in order to compete on price. OEMs that vertically
integrate will not be subject to these variables and should be able to
realize the full amount of the credit through their integrated
operations.
Although EPA believes that these factors are likely to counteract
commenters' concerns about these issues, EPA also acknowledges that at
this early stage of the IRA credit availability, some uncertainty
remains about the average amount of the available 45X cell and module
credit that will in fact be realized across the U.S. PEV fleet. For
example, if cells or modules are exported from the U.S. for use in
vehicles that are then imported to the U.S., the value of the 45X
credit, even if passed along to the purchaser of the cells or modules,
would be offset to some degree by logistics and transportation costs.
While local subsidies may exist in many jurisdictions to rival the 45X
credit, there is no assurance that they will have the same value. We
also note that ANL projections of U.S. battery cell manufacturing
capacity prior to the time frame of the rule through 2025 (see section
IV.C.7 of this preamble, at Figure 36) is roughly 50 percent of
projected demand under the compliance scenarios, suggesting that only
about half of PEV batteries may be claiming the 45X cell and module
credit in those years preceding the rule. Accordingly to help account
for uncertainties including (a) imported vehicles not necessarily
having access to the credit, (b) the possibility that U.S. cell
manufacturing facilities will not ramp up as quickly as announced, and
(c) ANL's reduced projection of U.S. cell plant capacity from 2023
through 2025, we have conservatively reduced our estimates for the
average value of the 45X cell and module credits from 2023.
Specifically we have modified the yearly average amount as shown in
Table 69. In general, we reduced the 2023 value to 50 percent of the
available $45 (from 60 percent in the NPRM), and ramped up the value
more slowly, to 75 percent in 2030. By 2030, we expect that enough lead
time will have occurred (primarily, for manufacturers to secure 45X-
qualifying battery supply and increase share of PEVs assembled in North
America rather than imported), to gradually rejoin our original
estimate of 100 percent of the available credit (now phased down by
statute to $11.25) by 2032.
EPA considers these updated values to be responsive to the comments
and to be a reasonable and conservative estimate of the 45X cell and
module credit across the industry, reflecting current uncertainties.
Over time, we expect that the impact of 45X on OEM battery
manufacturing cost will become more evident and could turn out to be
higher. For our low battery cost sensitivity case, we have retained the
NPRM assumptions for 45X. We note
[[Page 28002]]
that many commenters supported our NPRM assumptions for 45X, and we
continue to consider those values to represent a fully reasonable
future outcome although we have chosen to use lower and more
conservative values in the central case.
Table 69--Updates to 45X cell and module production tax credits, average value across PEV fleet ($/kWh) in OMEGA
----------------------------------------------------------------------------------------------------------------
FRM % of maximum
Year NPRM FRM available credit
----------------------------------------------------------------------------------------------------------------
2023......................................................... $27 $22.50 50.0
2024......................................................... 31.50 24.11 53.6
2025......................................................... 36 25.71 57.1
2026......................................................... 40.50 27.32 60.7
2027......................................................... 45 28.93 64.3
2028......................................................... 45 30.54 67.9
2029......................................................... 45 32.14 71.4
2030......................................................... 33.75 25.31 75
2031......................................................... 22.50 19.69 87.5
2032......................................................... 11.25 11.25 100
2033......................................................... 0 0 .................
----------------------------------------------------------------------------------------------------------------
We also received comment that the 10 percent credit for electrode
active materials and critical minerals under 45X could be significant,
and therefore should be included in the analysis. To investigate this
possibility, we consulted with the Department of Energy and Argonne
National Laboratory to characterize the potential value of the 10
percent provisions of 45X on a dollar per kWh basis. ANL determined
that the maximum value of the credits would change over time, as
critical minerals become a larger share of battery manufacturing cost
due to efficiencies in other material and manufacturing costs. As shown
in Table 70, the maximum value for the electrode active materials (EAM)
credit, or both the EAM credit and the critical minerals (CM) credit,
would range from $5.60 to $10.70 per kWh in 2026 and decline to $3.50
to $7.60 per kWh in 2030, depending on chemistry. The decline is a
result of ANL's projection that the amount (and hence manufacturing
cost) of critical mineral content will decline over time due to
improved cell chemistries for which minerals comprise a diminishing
portion of total cost.
Table 70--Potential Value of 45X 10 Percent CM and EAM Credits for a 75-kWh Battery
----------------------------------------------------------------------------------------------------------------
High performance (Ni/Mn) Low Cost (LFP)
-----------------------------------------------------------------------------
2026 2030 2035 2026 2030 2035
----------------------------------------------------------------------------------------------------------------
EAM only, [Delta] $/kWh........... 7.2 4.5 ........... 5.6 3.5 ...........
EAM + CM, [Delta] $/kWh........... 10.7 7.6 1.8 7.2 4.9 1.4
----------------------------------------------------------------------------------------------------------------
While these tax credits will be significant to manufacturers that
produce EAM and CM in the U.S., their effect on average battery
manufacturing cost across the fleet depends on the degree to which the
average battery uses U.S.-produced EAM and CM. Because qualifying
production of CM and EAM is unlikely to be sufficient to supply all
U.S. PEV batteries based on announcements quantified at the time of
ANL's analysis, the average value of the credit on a per kWh basis will
be less than the figures above. Because of the uncertainty in
predicting the degree of utilization across the industry, and the
relatively small average value of the resulting credit, we have chosen
to not include an estimate of the 10 percent credits in this analysis.
Because some manufacturers will likely be in a position to qualify for
some portion of the credit, this is a conservative assumption.
As we did in the proposal, we applied the 45X credits after the RPE
markup. Because RPE is meant to be a multiplier against the direct
manufacturing cost, and the 45X credit does not reduce the actual
direct manufacturing cost at the factory but only compensates the cost
after the fact, it was most appropriate to apply the 45X credit to the
marked-up cost. The 45X cell and module credits per kWh were applied by
first marking up the direct manufacturing cost by the 1.5 RPE factor to
determine the indirect cost (i.e., 50 percent of the manufacturing
cost), then deducting the credit amount from the marked-up cost to
create a post-credit marked-up cost. The post-credit direct
manufacturing cost would then become the post-credit marked-up cost
minus the indirect cost. Details on the application of the 45X credit
in OMEGA can be found in RIA Chapter 2.5.2.1.4 and 2.6.8.
The IRA also includes consumer purchase incentives, which do not
affect battery manufacturing cost, but reduce vehicle purchase cost to
consumers. A substantial Clean Vehicle Credit (IRC 30D) of up to $7,500
is available to eligible buyers of eligible PEVs, subject to a number
of requirements such as location of final assembly (in North America),
critical minerals and battery component origin, vehicle retail price,
and buyer income. Similarly, a Commercial Clean Vehicle Credit (IRC
45W) of up to $7,500 is available for light-duty vehicles purchased for
commercial use. Consistent with the statutory text of the IRA and
longstanding tax rules regarding leasing, vehicles leased to consumers
(rather than sold) are commercial vehicles and can qualify for the
credit to be paid to the lessor, equal to the excess of the purchase
price for such vehicle over the price of a comparable internal
[[Page 28003]]
combustion engine vehicle.\849\ EPA recognizes that this guidance could
lead to increased relevance of 45W for vehicles and buyers that would
not otherwise be eligible for the 30D. Relevant considerations in
quantifying the extent to which the 45W may influence cost of PEVs to
consumers would include factors such as the degree to which the value
of the 45W credit (paid to lessor) would be represented in reduced
payments to the lessee, and the degree to which manufacturers and
dealers that currently sell vehicles outright choose to adopt a leasing
model.
---------------------------------------------------------------------------
\849\ Internal Revenue Service, ``Topic G--Frequently Asked
Questions About Qualified Commercial Clean Vehicles Credit,''
February 3, 2023. https://www.irs.gov/newsroom/topic-g-frequently-asked-questions-about-qualified-commercial-clean-vehicles-credit.
---------------------------------------------------------------------------
Because of the sourcing and eligibility requirements of the 30D
credit and the uncertainties regarding relative utilization of the 45W
credit, EPA did not assume in the proposal that all BEV sales would
qualify for the full $7,500 30D or 45W credit. However, we did
acknowledge that some portion of the market that is unable to capture
the 30D credit may be capable of utilizing the 45W credit. For these
reasons, in the analysis for the proposal, we applied only a portion of
the $7,500 maximum from either incentive. For 2023, in the proposal, we
estimated that an average credit amount (across all PEV purchases) of
$3,750 per vehicle could reasonably be expected to be realized through
a combination of the 30D and 45W tax credits. For later years, we
recognized that the attractiveness of the credits to manufacturers and
consumers would likely increase eligibility over time. To reflect this,
we ramped the value linearly to $6,000 by 2032, the last year of the
credits. The proposal analysis did not ramp to the full theoretical
value of $7,500, in expectation that not all purchases will qualify for
30D due to MSRP or income requirements, and that not all PEVs are
likely to enter the market through leasing.
We received a number of comments regarding our estimation of the
30D and 45W credits in the proposal. Commenters that emphasized the
potential for IRA consumer incentives such as 30D and 45W to reduce
vehicle cost to the consumer expressed broad support for EPA's
inclusion of the credits in the analysis and did not disagree with
EPA's year by year estimates of the average realized value of 30D and
45W credits. A variety of other commenters expressed the view that our
estimates may have been too optimistic for various reasons. These
reasons centered around their views regarding: the ability of U.S.
battery manufacturing facilities and mineral mining and processing to
ramp up rapidly enough to provide the critical minerals and battery
components necessary to claim the credit; the ability of the domestic
battery supply chain to grow fast enough to fulfill the increasing
requirements for domestic sourcing for 30D eligibility; that the basis
for the chosen values was unclear; that the impact of critical mineral
and component sourcing requirements, and income and MSRP limits, was
not quantified; and uncertainty surrounding the then-unreleased
Treasury guidance regarding specific requirements for sourcing,
particularly the Foreign Entity of Concern (FEOC) requirement. Some
commenters also expressed skepticism that leasing rates under the 45W
provision would increase sufficiently to achieve the modeled
assumptions for 30D and 45W combined.
These comments led us to revisit our assumptions for the combined
effect of the 30D and 45W credits over the time frame of the rule. We
requested the Department of Energy to perform an independent assessment
\850\ of the potential for average combined realization of 30D and 45W
across the fleet for each year of the rule, taking into account the
various eligibility constraints, trends in leasing, and rate of growth
in U.S. battery manufacturing facilities including an accounting for
gradual ramp-up over time. The assessment was performed by DOE analysts
across multiple offices and National Laboratories using the latest
market data at the automaker level including data on critical minerals,
battery components, status of the automotive supply chain, and PEV
adoption. This work resulted in a set of year-by-year estimates of
fleet-average credit values for the combined effect of 30D and 45W,
shown in Table 71.
---------------------------------------------------------------------------
\850\ Department of Energy, ``Estimating Federal Tax Incentives
for Heavy Duty Electric Vehicle Infrastructure and for Acquiring
Electric Vehicles Weighing Less Than 14,000 Pounds,'' Memorandum,
March 11, 2024.
---------------------------------------------------------------------------
DOE projected that the market-weighted average PEV can receive
around $3,900 per vehicle in 2023 between the 30D and 45W credits,
increasing to $6,000 in 2032. The figures are very close to the those
that EPA used in the proposal.
Table 71--DOE Estimates for 30D and 45W Clean Vehicle Credit
----------------------------------------------------------------------------------------------------------------
Model year NPRM DOE Difference
----------------------------------------------------------------------------------------------------------------
2022............................................................ $0 $0 ..............
2023............................................................ 3750 3900 +150
2024............................................................ 4000 4300 +300
2025............................................................ 4250 4400 +150
2026............................................................ 4500 4400 -100
2027............................................................ 4750 4800 +50
2028............................................................ 5000 5000 ..............
2029............................................................ 5250 5200 -50
2030............................................................ 5500 5500 ..............
2031............................................................ 5750 5800 +50
2032............................................................ 6000 6000 ..............
2033............................................................ 0 0 ..............
----------------------------------------------------------------------------------------------------------------
Data sources underlying these projections include: PEV penetration
rates based on EPA's projections from its 2021 rule for MYs 2023-2026
standards and the proposed standards for MYs 2027-2032; OEM production
shares as of MY 2021 from the EPA Automotive Trends Database; share of
cars and light trucks from the U.S. Energy Information Administration's
Annual Energy Outlook 2023; shares of U.S. PEV sales and MSRPs derived
from the Argonne National Laboratory E-Drive Sales Database, shares of
North American final assembly compiled from
[[Page 28004]]
Wards Auto data by Oak Ridge National Laboratory, and public sources
describing the establishment of new electric vehicle assembly lines
collected by the Department of Energy; share of U.S. EV sales that meet
the applicable percentages of critical minerals and battery components,
estimated using expert analysis from several DOE offices considering
several public and proprietary critical mineral and battery component
supply chain datasets (including automaker-reported information to the
U.S. Treasury and Internal Revenue Service tracking vehicles qualified
for 30D as reported on FuelEconomy.gov); and share of U.S. PEV sales
that exclude suppliers that are FEOCs (estimated by DOE using
deliberative information during the pre-rulemaking phase of
implementing the FEOC restriction in IRC 30D).\851\ DOE was further
informed by confidential discussions with OEMs regarding supplier plans
held throughout 2023. Lease rates were estimated using the latest data
available from J.D. Power for light-duty electric vehicles. Additional
detail and references can be found in the memorandum document cited
above.
---------------------------------------------------------------------------
\851\ Forthcoming final FEOC criteria could lead to average
credit values being higher or lower than projected through the
Excluded Entities provision.
---------------------------------------------------------------------------
We also received comment that there is no guarantee that the full
value of the 30D/45W credits will be passed on to the vehicle buyer but
instead could be captured as profit by the vehicle manufacturer.
However, we project that manufacturers will choose to produce PEVs as a
means to comply with the standards. In this situation, we believe that
manufacturers will be incentivized to compete with one another on a
pricing basis. If a vehicle OEM were to capture a large portion of the
credit as additional profit, this would conflict with the
manufacturer's ability to sell the vehicles, which manufacturers are
motivated to do as one of the lowest cost pathways to meeting the
standards. In this final rule analysis, EPA continues to apply the full
estimated average value of the 30D/45W credit toward the purchase price
seen by the consumer. The 30D/45W credit amount is modeled in OMEGA as
a direct reduction to the consumer purchase costs,\852\ and therefore
has an influence on the shares of BEVs demanded by consumers within the
model. The purchase incentive is assumed to be realized entirely by the
consumer and does not impact the vehicle production costs for the
producer.
---------------------------------------------------------------------------
\852\ As described in Chapter 4.1 of the RIA, the modeling of
consumer demand for ICE and BEV vehicles considers purchase and
ownership costs as components of a ``consumer generalized cost'' for
the ICE and BEV options. The purchase cost reflects the vehicle
purchase price and any assumed purchase incentives under 30D or 45W
of the IRA.
---------------------------------------------------------------------------
However, EPA also acknowledges that the relative newness of the 30D
and 45W credits, as well as the content requirements for 30D and
outstanding Treasury guidance that has not been finalized at the time
of this writing, contribute to uncertainty at the present time
regarding the average combined credit value that will ultimately be
realized across the fleet and across the diversity of future PEV
models. For example, specific guidance has not been finalized on the
transition rule for non-traceable battery materials and excluded entity
provision under 30D.\853\ We also note that DOE was unable to
incorporate into its modeling several features of the 30D and 45W tax
credits that may affect eligibility, and which have been specifically
raised by some commenters, including modified adjusted gross income
(MAGI) of future buyers, the possibility that the credit may exceed the
tax liability of some future buyers, the effect of future trends in
vehicle prices on average MSRPs over time, lower than expected
receptiveness to leasing, or the effect of future inflation on MAGI.
Commenters also raised concerns about U.S. manufacturers securing IRA-
compliant content, particularly in light of outstanding final Treasury
guidance that could affect details of 30D, and particularly in the near
term (for example, uncertainty about qualifying sources of graphite,
and more broadly which minerals or other inputs would ultimately fall
under the transition rule).
---------------------------------------------------------------------------
\853\ Federal Register Vol. 88, No. 231, p. 84098, ``Section 30
Excluded Entities,'' December 4, 2023.
---------------------------------------------------------------------------
EPA considers the DOE analysis to represent the best accounting of
potential future 30D/45W credits that is possible at this time.
However, to further respond to uncertainties raised by commenters, EPA
has revised the DOE figures downward for use in the OMEGA compliance
analysis in order to remain conservative with respect to these
uncertainties. As shown in Table 72, for 2023 through 2030, EPA has
discounted the DOE estimates by 25 percent, and then ramped up to the
DOE estimate between 2030 and 2032.
EPA considers this to be a reasonable accounting for the possible
effect of these uncertainties which are not precisely quantifiable at
this time but are not likely to have a large effect. DOE states that
the impacts of the 30D MAGI limit ``are likely to be limited,'' stating
further that ``IRS tax statistics indicate that 9% of the 2022 tax
filers would be MAGI-limited.'' Further, DOE expects that the buyers
excluded on an income basis would largely coincide with lessees (who
remain eligible to benefit from 45W) and with the modeled 20 percent of
vehicles that receive no credit in the DOE analysis.\854\ Similarly, we
expect the effect of inflation on MSRP eligibility and the effect of
limited tax liability to be small, as OEMs have considerable leeway to
adjust MSRP (especially when a relatively small change can capture such
a large credit), and EPA is aware of no specific data that indicates
that new vehicle buyers are frequently unable to claim the full
eligible credit due to limited or no tax liability. Since January 2024,
buyers who take the 30D credit at the point of sale are not subject to
a tax liability limitation.\855\ According to auto industry analyst
firm Cox Automotive, the average income of new car buyers in 2023 was
$115,000,\856\ and according to the IRS, average total income tax in
tax year 2020 (the latest data available) for filers between $75,000
and $100,000 was $7,363 and for filers between $100,000 and $200,000
was $15,093.857 858
---------------------------------------------------------------------------
\854\ Department of Energy, ``Estimating Federal Tax Incentives
for Heavy Duty Electric Vehicle Infrastructure and for Acquiring
Electric Vehicles Weighing Less Than 14,000 Pounds,'' Memorandum,
March 11, 2024.
\855\ Internal Revenue Service, ``IRS updates frequently asked
questions related to New, Previously Owned, and Qualified Commercial
Clean Vehicle Credits,'' FS-2023-29, December 2023. ``The amount of
the credit that the electing taxpayer elects to transfer to the
eligible entity may exceed the electing taxpayer's regular tax
liability for the taxable year in which the sale occurs, and the
excess, if any, is not subject to recapture from the dealer or the
buyer.''
\856\ Cox Automotive, ``Cox Automotive's Car Buyer Journey Study
Shows Satisfaction With Car Buying Improved in 2023 After Two Years
of Declines,'' January 17, 2024. Accessed on March 5, 2024 at
https://www.coxautoinc.com/market-insights/2023-car-buyer-journey-study.
\857\ Internal Revenue Service, Publication 1304 (Rev. 11-2022),
continuation of Table 3.3 on p. 219, dividing column 61 (total
income tax, thousands) by column 60 (number of returns), for the
rows ``$75,000 under $100,000'' and ``$100,000 under $200,000.''
\858\ Internal Revenue Service, ``SOI Tax Stats--Individual
Income Tax Returns Complete Report (Publication 1304),'' website,
located at https://www.irs.gov/statistics/soi-tax-stats-individual-income-tax-returns-complete-report-publication-1304.
---------------------------------------------------------------------------
After 2030, we gradually phase down the 25 percent discounting of
the DOE figures, and rejoin the DOE-determined estimate of a combined
$6,000 in 2032. This reflects likely trends in 30D and 45W over time,
namely, decreasing uncertainty about material supply and diminished
influence of 45W compared to 30D. Specifically, as time passes,
uncertainty about mineral supply decreases; that is, vehicle
eligibility for
[[Page 28005]]
the 30D content requirements would be expected to increase as
manufacturers increasingly have the lead time needed to maximize
eligibility of their vehicles for 30D by securing 30D-compliant content
and increasingly manufacturing in the U.S. EPA expects that sufficient
lead time will have occurred by 2031 to 2032 to resolve many of the
uncertainties acknowledged previously, for example, securing 30D-
compliant graphite as well as other content. In addition, the relative
influence of 45W compared to 30D would be expected to decline over time
if, as generally expected, PEV prices also decline relative to ICE
vehicles, because the amount of the 45W credit depends on the price
differential between a PEV and a comparable ICE vehicle. DOE included
an estimate of this effect in their analysis. Also, if 45W is having
less influence over time, uncertainty about leasing rates is becoming
less important as well.
Table 72--Updates to 30D and 45W Clean Vehicle Credit in OMEGA
----------------------------------------------------------------------------------------------------------------
FRM % of maximum
Model year NPRM FRM available credit
----------------------------------------------------------------------------------------------------------------
2023............................................................... $3,750 $2,925 39
2024............................................................... 4,000 3,225 43
2025............................................................... 4,250 3,300 44
2026............................................................... 4,500 3,300 44
2027............................................................... 4,750 3,600 48
2028............................................................... 5,000 3,750 50
2029............................................................... 5,250 3,900 52
2030............................................................... 5,500 4,125 55
2031............................................................... 5,750 5,075 68
2032............................................................... 6,000 6,000 80
2033............................................................... 0 0 .................
----------------------------------------------------------------------------------------------------------------
After furthering considering the DOE analysis in light of comments
on this topic, EPA concludes these updated values are responsive to the
comments and represent a conservative but reasonable estimate of the
average effective impact of 30D and 45W on PEV acquisition cost by
consumers across the PEV fleet, reflecting current uncertainties. Over
time, we expect that the impact of 30D and 45W will become more evident
as additional data is collected by industry observers and may well turn
out to be higher. Because our discounted estimates are conservative, we
did not discount the DOE estimates in our low battery cost sensitivity
case. Although 30D/45W does not directly factor into battery
manufacturing cost, it does impact PEV cost as seen by the consumer and
this sensitivity is intended to show a case in which PEV cost is
generally more optimistic than in the central case. We note that many
commenters supported our NPRM assumptions for 30D/45W, which were very
close to the DOE estimates, and we continue to consider those values to
represent another reasonable possibility for a future outcome although
we have chosen to use lower and more conservative values in the central
case. In addition, we conducted additional sensitivity analysis
regarding the IRA tax credit assumptions in a memo to the docket.\859\
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\859\ U.S. EPA. 2024. Sensitivity Analysis of IRA Tax Credit
Assumptions, Memorandum to Docket EPA-HQ-OAR-2022-0829, March 13,
2024. EPA considered the costs and lead time associated with this
and other sensitivity analyses as part of our consideration of the
feasibility and appropriateness of this rule, and as we explain in
section V.B of the preamble, we find that the final standards are
feasible and the costs of this rule are reasonable.
---------------------------------------------------------------------------
EPA also considered potential impacts on battery manufacturing cost
that might result from the battery durability and warranty requirements
described in sections III.G.2 and III.G.3 of this preamble. We received
comments stating the position that the existence of durability and
warranty requirements would increase the cost of PEV batteries, and
that we should account for this increased cost. However, commenters did
not provide supporting data regarding cost increases that might result
from these requirements. Because the durability minimum performance
requirement and the minimum battery warranty are similar to currently
observed industry practices regarding durability performance and
warranty terms, EPA continues to expect that these requirements will
not result in a significant increase in battery manufacturing costs.
In the proposal, EPA also updated the non-battery powertrain costs
that were used to determine the direct manufacturing cost of
electrified powertrains. We referred to a variety of industry and
academic sources, focusing primarily on teardowns of components and
vehicles conducted by leading engineering firms. These included the
2017 teardown of the Chevy Bolt conducted by Munro and Associates for
UBS; \860\ a 2018 teardown of several electrified vehicle components
conducted by Ricardo for the California Air Resources Board; \861\ a
set of commercial teardown reports published in 2019 and 2020 by Munro
& Associates; 862 863 864 865 866 867 and the 2021 NAS Phase
3 report.\868\ Throughout the process of compiling the results of these
studies, we collaborated with technical experts from the California Air
Resources Board and NHTSA.
---------------------------------------------------------------------------
\860\ UBS AG, ``Q-Series: UBS Evidence Lab Electric Car
Teardown--Disruption Ahead?'' UBS Evidence Lab, May 18, 2017.
\861\ California Air Resources Board, ``Advanced Strong Hybrid
and Plug-In Hybrid Engineering Evaluation and Cost Analysis,'' CARB
Agreement 15CAR018, prepared for CARB and California EPA by Munro &
Associates, Inc. and Ricardo Strategic Consulting, April 21, 2017.
\862\ Munro and Associates, ``Twelve Motor Side-by-Side
Analysis,'' provided November 2020.
\863\ Munro and Associates, ``6 Inverter Side-by-Side
Analysis,'' provided January 2021.
\864\ Munro and Associates, ``3 Inverter Side-by-Side
Analysis,'' provided November 2020.
\865\ Munro and Associates, ``BMW i3 Cost Analysis,'' dated
January 2016, provided November 2020.
\866\ Munro and Associates, ``2020 Tesla Model Y Cost
Analysis,'' provided November 2020.
\867\ Munro and Associates, ``2017 Tesla Model 3 Cost
Analysis,'' dated 2018, provided November 12, 2020.
\868\ National Academies of Sciences, Engineering, and Medicine
2021. ``Assessment of Technologies for Improving Light-Duty Vehicle
Fuel Economy 2025-2035''. Washington, DC: The National Academies
Press. https://doi.org/10.17226/26092.
---------------------------------------------------------------------------
In the proposal, we described a new full-vehicle teardown study
comparing a gasoline-fueled VW Tiguan to the battery-electric VW ID.4,
conducted for
[[Page 28006]]
EPA by FEV of America.\869\ The study was designed to compare the
manufacturing cost and assembly labor requirements for two comparable
vehicles, one an ICE vehicle and one a BEV, both of which were built on
respective dedicated-ICE \870\ and dedicated-BEV \871\ platforms by the
same manufacturer. The teardown applies a bill-of-materials approach to
both vehicles and derives cost and assembly labor estimates for each
component. An additional task under this work assignment was for FEV to
review the non-battery electric powertrain costs EPA had described in
Chapter 2.6.1 of the DRIA, with respect to the cost values used and the
method of scaling these costs across different vehicle performance
characteristics and vehicle classes, and to suggest alternative values
or scalings where applicable. More details about the goals of the
teardown study can be found in RIA Chapter 2.5.2.2.3. The complete
teardown report, the associated bill-of-materials data worksheets, and
the FEV review of non-battery costs and scaling were available in the
docket during the comment period 872 873 and updated report
material has been posted since.\874\
---------------------------------------------------------------------------
\869\ FEV Consulting Inc., ``Cost and Technology Evaluation,
Conventional Powertrain Vehicle Compared to an Electrified
Powertrain Vehicle, Same Vehicle Class and OEM,'' prepared for
Environmental Protection Agency, EPA Contract No. 68HERC19D00008,
February 2023.
\870\ VW MQB A2 (``Modularer Querbaukasten'' or ``Modular
Transversal Toolkit'', version A2) global vehicle platform.
\871\ VW MEB (``Modularer E-Antriebs Baukasten'' or ``modular
electric-drive toolkit) global vehicle platform.
\872\ Memo to Docket ID No. EPA-HQ-OAR-2022-0829, titled ``Cost
and Technology Evaluation, Conventional Powertrain Vehicle Compared
to an Electrified Powertrain Vehicle, Same Vehicle Class and OEM.''
\873\ Memo to Docket ID No. EPA-HQ-OAR-2022-0829, titled ``EV
Non-Battery Cost Review by FEV.''
\874\ Memo to Docket ID No. EPA-HQ-OAR-2022-0829, titled ``FEV
Cost and Technology Evaluation.''
---------------------------------------------------------------------------
We also indicated in the proposal that we may rely on the
information from this work for the final rule. For example, we
indicated that component costs for the BEV and ICE vehicle might be
used to support or update our battery or non-battery costs for
electrified vehicles, or our costs for ICE vehicles; assembly labor
data might be used to further inform the employment analysis; and any
other qualitative or quantitative information that could be drawn from
the report might be used in the analysis.
The project report was delivered to EPA in February 2023 and
underwent a contractor-managed peer review process that has now been
completed.\875\
---------------------------------------------------------------------------
\875\ Memo to Docket ID No. EPA-HQ-OAR-2022-0829, titled
``External Peer Review of Cost and Technology Evaluation,
Conventional Powertrain Vehicle Compared to an Electrified
Powertrain Vehicle, Same Vehicle Class and OEM.''
---------------------------------------------------------------------------
Concurrently with this contracted teardown project, EPA also
contracted FEV to conduct a scaling exercise to develop up-to-date
powertrain cost curves that could be used as inputs to OMEGA, using not
only the teardown results of this project but also teardown results
from FEV's extensive database of previous teardowns it has conducted
for a wide variety of vehicles and components. As a result of that
effort, we have updated our powertrain costs, including the non-battery
technologies used in BEV, PHEV, and HEV powertrains. Chapter 2.6.1 of
the RIA presents all of those updated powertrain cost curves. In
general, the updated cost curves result in lower powertrain costs for
nearly all powertrain technologies, with ICE powertrain costs being
reduced somewhat more than those for electrified powertrains. As a
result, the incremental costs when moving from ICE-only to any
electrified powertrain have increased somewhat since the NPRM.
Importantly, the scaling effort provided ICE, HEV, PHEV, and BEV
powertrain costs that were generated using the same methodology. We
consider the updated costs to represent the strongest and most up to
date data available.
Some commenters encouraged EPA to conduct a teardown analysis of a
relatively long-range PHEV, or to conduct a comparative analysis on
PHEV and BEV costs with involvement of stakeholders such as car and
truck makers. It was also noted that a PHEV may not need as strong a
chassis as a BEV due to the lighter weight of the battery, and that
this savings should be accounted for in PHEV cost. Given the time frame
of the analysis, it was not possible to conduct a new teardown analysis
of a long-range PHEV. Given the scope of the FEV teardown and the
similarity of electrical components between the BEV that was analyzed
and a long-range PHEV, it is unlikely that the results of a teardown of
a long-range PHEV would provide significantly different costs
estimates. While it may be possible that a PHEV could have less
structural content owing to the smaller size and weight of the battery,
it is unlikely that such cost savings could be generalized across the
entire class of vehicles from the analysis of a single vehicle. For
these reasons we did not conduct these additional analyses.
More discussion of the technical basis for the non-battery
electrified vehicle cost estimates used in the final rule analysis may
be found in RIA Chapter 2.
3. Analysis of Power Sector Emissions
As PEVs are anticipated to represent a significant share of the
future U.S. light- and medium-duty vehicle fleet, EPA has continued to
develop approaches to estimate the upstream emissions (i.e., from
electricity generation and transmission) of increased PEV charging
demand as part of the assessment of the standards.\876\ For this final
rule, electric generation was modeled utilizing ``EPA's Power Sector
Modeling Platform Post-IRA 2022 Reference Case using the Integrated
Planing Model (IPM)'' in a similar manner to the analysis for the
proposal.\877\ IPM provides projections of least-cost capacity
expansion, electricity dispatch, and emission control strategies for
meeting energy demand and environmental, transmission, dispatch, and
reliability constraints represented within 67 regions of the 48
contiguous U.S.
---------------------------------------------------------------------------
\876\ EPA also estimates certain upstream emissions associated
with gasoline and diesel fuel production. See RIA Chapter 7.2.
\877\ https://www.epa.gov/power-sector-modeling/post-ira-2022-reference-case.
---------------------------------------------------------------------------
As with the analysis for the proposal, charge demand from scenarios
modeled within the OMEGA compliance model were regionalized into the 67
IPM regions using the EVI-X modeling suite of electric vehicle charging
infrastructure analysis tools developed by the National Renewable
Energy Laboratory (NREL) combined with a PEV likely adopter model.
Chapter 5 of the RIA contains a detailed description of the analysis of
PEV charging demand, electric generation and the resulting emissions
and cost for different projected vehicle electrification scenarios. One
update made within the power sector analysis for the final rule was the
inclusion of heavy-duty charge demand based on an interim scenario
developed from the Greenhouse Gas Emissions Standards for Heavy-Duty
Vehicles--Phase 3 Proposed Rule.\878\ We combined this heavy-duty power
sector demand together with demand for charging light- and medium-duty
PEVs to improve forecasting of both electricity rates and power sector
emissions factors used within the analysis of costs and benefits for
the final rule.
---------------------------------------------------------------------------
\878\ 88 FR 25926, April 27, 2023.
---------------------------------------------------------------------------
Power sector modeling results of generation and grid mix from 2030
to 2050 and CO2 emissions from 2028 to 2050 for the
contiguous United States (CONUS) are shown in Figure 26. Power sector
CO2 emissions for the final rule are compared to a No Action
case in Figure 27. Power sector modeling results are summarized in more
detail
[[Page 28007]]
within Chapter 5 of the RIA. The results show significant continued
year-over-year growth in both total generation and the use of
renewables for electric generation (Figure 26) and year-over-year
reductions in CO2 emissions (Figure 27). Relative to a No
Action case, the final light- and medium-duty standards are anticipated
to increase generation by less than 1 percent in 2030 and by
approximately 7.6 percent by 2050 relative to no action. When combined
with anticipated demand from heavy-duty applications, generation is
anticipated to increase by 11.6 percent relative to no action (Figure
26). The impact of the light- and medium-duty standards combined
together with the anticipated impacts due to heavy-duty on EGU
emissions are shown in Figure 27 through Figure 30. EGU emissions of
NOX (Figure 28), SO2 (Figure 29),
PM2.5 (Figure 30) and other emissions followed similar
general trends to the CO2 emissions results. Emissions trend
downwards year over year through 2050 for both the no action and the
policy case analyses. The policy case (final standards) analysis showed
an approximately 13.4 percent increase in EGU CO2 emissions
in 2050 for the light- and medium-duty final rule when combined with
anticipated heavy-duty standards. An increase of 8.8 percent in EGU
CO2 emissions in 2050 is estimated for light- and medium-
duty vehicle charging alone. Note that the increased CO2
emissions from EGUs are more than offset by reductions in tailpipe
emissions from the projected vehicle fleet under the final standards.
Criteria pollutant emissions from EGUs follow similar trends to those
of the EGU CO2 emissions, with similar year-over-year
emissions declines for both the policy case and no action power sector
modeling, and with small increases in EGU emissions for the policy case
relative to no action. Again, it should be noted that this represents
EGU emissions only and does not include emissions reductions from
vehicle tailpipe or refinery emissions. Additional details on EGU
emissions from our power sector modeling are summarized in Chapter
5.2.3 of the RIA. Combined impacts of EGU and other upstream emissions
are summarized in Chapter 9 of the RIA.
Power sector modeling results showed that the increased use of
renewables will largely displace coal and (to a lesser extent) natural
gas EGUs and will primarily be driven by provisions of the IRA. By
2035, power sector modeling results also showed that non-hydroelectric
renewables (primarily wind and solar) will be the largest source of
electric generation (approximately 45 percent of total generation), and
would account for more than 75 percent of generation by 2050. This
displacement of coal EGUs by renewables was also the primary factor in
the year-over-year reductions in CO2, NOX,
SO2, PM2.5, and other EGU emissions. Impacts on
EGU GHG and criteria pollutant emissions due to grid-related IRA
provisions were substantially larger than the impact of increased
electricity demand due to projected increased electrification of light-
and medium-duty vehicles under this rule and anticipated electricity
demand under the proposed heavy-duty standards. As EGU emissions
continue to decrease between 2028 and 2050 due to increasing use of
renewables, the power sector GHG and criteria pollutant emissions
associated with light- and medium-duty vehicle operation will continue
to decrease, even as the number and proportion of electric vehicles
increase over that timeframe.
Power sector modeling also showed a significant increase in the use
of batteries for grid storage, which is expected to be increasingly
important for generation, transmission and distribution of electricity.
When modeling PEV charge demand for both the final rule and for a No
Action case, grid battery storage capacity increased from approximately
zero capacity in 2020 to approximately 53 GW in 2030 and 150 GW in
2050, representing the equivalent of approximately 105 GWh and 326 GWh
of annual generation, respectively. The increase in grid battery
storage was primarily due to modeling of incentives under the IRA.
[[Page 28008]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.024
Figure 26: 2030-2050 Power Sector Generation and Grid Mix for the No
Action Case (Left Side of Each Pair of Bars Representing Each Year)
Compared to the Final Rule (Right Side of Each Pair of Bars)
[[Page 28009]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.025
Figure 27: 2028 Through 2050 CONUS CO2 Emissions From
Electricity Generation for the Final Rule Policy Case (Gray Line)
Compared to a No Action Case (Black Dashed Line)
[[Page 28010]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.026
Figure 28: 2028 Through 2050 CONUS NOX Emissions From
Electricity Generation for the Final Rule Policy Case (Gray Line)
Compared to a No Action Case (Black Dashed Line)
[[Page 28011]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.027
Figure 29: 2028 Through 2050 CONUS SO2 Emissions From
Electricity Generation for the Final Rule Policy Case (Gray Line)
Compared to a No Action Case (Black Dashed Line)
[[Page 28012]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.028
Figure 30: 2028 Through 2050 CONUS PM2.5 Emissions From
Electricity Generation for the Final Rule Policy Case (Gray Line)
Compared to a No Action Case (Black Dashed Line)
4. PEV Charging Infrastructure Considerations
We received many comments regarding future charging infrastructure
needs. Vehicle manufacturers, dealers, and representatives of the fuels
industry, among others, raised concerns stating that charging
infrastructure is inadequate today and that the pace of deployment is
not on track to meet levels needed if the proposed standards are
finalized. Commenters noted particular challenges for those who can't
charge at home, as well as for rural areas. Manufacturers and others
said customers won't buy PEVs if reliable charging infrastructure is
not available. While they recognized the importance of the BIL and the
IRA in supporting buildout of charging infrastructure, commenters
expressed concerns that far more funding would be needed with some
commenters characterizing BIL funds as a `good downpayment'. We also
received comments from states, non-governmental organizations,
electrification groups, electric vehicle manufacturers, and utilities
highlighting the many public and private investments in charging
infrastructure that have been announced or are already underway, along
with a new analysis submitted by EDF.\879\ The analysis found that,
taken together, these investments are putting us on track to meet
public charging infrastructure needed in 2030 if the proposed standards
were finalized. Several commenters noted that EPA finalizing stringent
standards would provide certainty to vehicle manufacturers, charging
equipment providers, and others, and would spur further investments in
charging infrastructure.
---------------------------------------------------------------------------
\879\ Environmental Defense Fund and WSP, ``U.S. Public Electric
Vehicle (EV) Charging Infrastructure Deployment Industry Investment
Briefing,'' July 2023. Accessed December 18, 2023, at: https://www.edf.org/sites/default/files/2023-07/WSP%20US%20Public%20EV%20Charging%20Infrastrcuture%20Deployment%20July%202023.pdf.
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As an initial matter, EPA notes that it anticipates automakers will
employ a wide variety of control technologies, applied to ICE, hybrid,
and electric powertrains, to meet the final standards and will continue
to offer a diverse variety of vehicles for the duration of these
standards and beyond. For example, under our central case modeling
(which is only one estimate of a possible compliance path for the
industry), in MY 2032, 29 percent of new vehicle sales would be non-
hybrid ICE vehicles (with an additional 3 percent hybrid
vehicles).\880\ We anticipate that the flexibilities offered by the
final rule will enable manufacturers who choose to meet the final rule
through producing more PEVs to deploy PEVs in areas and at volumes that
meet consumer demand. At the same time, EPA agrees that continued
expansion of reliable charging infrastructure is important for higher
rates of PEV adoption.
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\880\ These figures include both advanced (21%) and base (8%)
ICE vehicles, strong (2%) and mild (1%) hybrids.
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Public charging has been growing rapidly in the past few years.
There are over 60,000 charging stations in the U.S. today with more
than 160,000 electric vehicle supply equipment (EVSE)
ports.881 882 This is more than double the number of public
EVSE ports as of the
[[Page 28013]]
end of 2019.\883\ Estimates for future infrastructure needs vary widely
in the literature based on assumptions about driving and charging
behavior, residential charging access, and the mix of EVSE by power
levels, among other factors. A recent national assessment by NREL (Wood
et al. 2023) estimated that to support 33 million PEVs in 2030, about
1.25 million public EVSE ports (including 182,000 DC fast charging
(DCFC) ports) would be needed, along with 26.8 million private ports
(most at single family homes, but also at multi-family homes and
workplaces).\884\ That yields a ratio of one public EVSE port needed
per 26 PEVs. This fits well within a range of other recent studies
examining public infrastructure needs. An ICCT report looking across a
dozen studies published between 2018 to 2021 found that two-thirds of
the estimates (including its own) fell between 20 and 40 PEVs per
public EVSE port.\885\ A new report conducted by ICF for the
Coordinating Research Council, which assessed infrastructure needs for
the level of PEV adoption in the proposed rule, found one public EVSE
port would be needed for every 34 light-duty PEVs.\886\ There was
approximately one public EVSE port for every 26 PEVs on the road as of
the second quarter of 2023,\887\ suggesting public charging
infrastructure is generally keeping pace with PEV adoption. For
additional discussion on this topic, see RIA Chapter 5 and RTC section
17.
---------------------------------------------------------------------------
\881\ As described in RIA Chapter 5.3, each station may have one
or more EVSE ports that provide electricity to a vehicle. The number
of vehicles that can simultaneously charge at the station is equal
to the number of EVSE ports.
\882\ U.S. DOE Alternative Fuels Data Center, ``U.S. Public
Electric Vehicle Charging Infrastructure.'' Accessed January 10,
2023, at https://afdc.energy.gov/data/10972. U.S. DOE Alternative
Fuels Data Center, ``Alternative Fueling Station Locator.'' Accessed
January 10, 2024, at https://afdc.energy.gov/stations/#/analyze?country=US&fuel=ELEC.
\883\ Ibid.
\884\ Wood et al., ``The 2030 National Charging Network:
Estimating U.S. Light-Duty Demand for Electric Vehicle
Infrastructure,'' 2023. Accessed December 18, 2023, at https://driveelectric.gov/files/2030-charging-network.pdf.
\885\ Bauer et al., ``Charging Up America: Assessing the Growing
Need for U.S. Charging Infrastructure through 2030,'' 2021. Accessed
November 5, 2023, at https://theicct.org/wp-content/uploads/2021/12/charging-up-america-jul2021.pdf. Note: The full range of studies
spanned 12 to 129 PEVs per public charger though all but two were
between 20 and 56.
\886\ Coordinating Research Council, ``Assess the Battery Re-
charging and Hydrogen Re-fueling Infrastructure Needs, Costs, and
Timelines Required to Support Regulatory Requirements for Light-,
Medium-, and Heavy-Duty Zero Emission Vehicles,'' September 2023.
Accessed December 18, 2023, at https://crcao.org/wp-content/uploads/2023/09/CRC_Infrastructure_Assessment_Report_ICF_09282023_Final-Report.pdf. (Note: The study assessed infrastructure needs
associated with ZEV adoption in the proposed rule, the proposed
Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles-Phase 3,
as well as California policies including Advanced Clean Cars II
rule.)
\887\ Brown, A. et al., ``Electric Vehicle Charging
Infrastructure Trends from the Alternative Fueling Station Locator:
Third Quarter 2023,'' 2024. Accessed March 10, 2024, at: https://www.nrel.gov/docs/fy24osti/88223.pdf. Note: Estimated from
approximately 4.16 million EVs and 160,000 public EVSE ports.
---------------------------------------------------------------------------
We agree with commenters that keeping up with charging needs as PEV
adoption grows will require continued investments in charging
infrastructure. The NREL study discussed above estimated that between
$31 billion and $55 billion would be needed by 2030 for public charging
infrastructure, noting that $24 billion in investments from public and
private sources had already been announced as of March 2023.\888\ The
White House estimates that as of January 2024 total investments to
expand the U.S. charging network had grown to over $25 billion.\889\
Considering 2030 is still six years away, and that (as commenters
noted) the standards themselves will spur additional investments,
charging infrastructure investments in the U.S. appear to be on track
to support the PEV adoption anticipated under the final standards.
Furthermore, as described below, there are many public and private
parties investing in charging infrastructure, including federal, state
and local governments, automakers, utilities, charging companies, and
retailers among others. These parties are already responding to the
market that is developing for infrastructure, and we see no reason to
believe they won't continue to meet infrastructure demand as the PEV
market grows.
---------------------------------------------------------------------------
\888\ Wood et al., ``The 2030 National Charging Network:
Estimating U.S. Light-Duty Demand for Electric Vehicle
Infrastructure,'' 2023. Accessed December 18, 2023, at https://driveelectric.gov/files/2030-charging-network.pdf.
\889\ The White House, ``FACT SHEET: Biden-Harris Administration
Announces New Actions to Cut Electric Vehicle Costs for Americans
and Continue Building Out a Convenient, Reliable, Made-in-America EV
Charging Network'', January 19, 2024. Accessed at https://www.whitehouse.gov/briefing-room/statements-releases/2024/01/19/fact-sheet-biden-harris-administration-announces-new-actions-to-cut-electric-vehicle-costs-for-americans-and-continue-building-out-a-convenient-reliable-made-in-america-ev-charging-network/.
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The Bipartisan Infrastructure Law (BIL) provides up to $7.5 billion
over five years to build out a national PEV charging network.\890\ Two-
thirds of this funding is for the National Electric Vehicle
Infrastructure (NEVI) Formula Program with the remaining $2.5 billion
for the Charging and Fueling Infrastructure (CFI) Discretionary Grant
Program. Both programs are administered under the Federal Highway
Administration with support from the Joint Office of Energy and
Transportation (JOET). The first phase of NEVI funding--a formula
program for states--was launched in 2022 with initial plans for all 50
states, DC, and Puerto Rico approved in September 2023.\891\ In total,
the initial $1.5 billion of investments in the first round will help
deploy or expand charging infrastructure on about 75,000 miles of
highway.\892\ Ohio was the first state to open a NEVI-funded station
near Columbus in December 2023.\893\ New York and Pennsylvania followed
with stations in Kingston \894\ and Pittston, respectively.\895\
Another 30 states are soliciting proposals and making awards.\896\ An
additional $885 million is available for state plans in FY 2024.\897\
In September 2023, JOET announced that up to $100 million in NEVI
funding would available to increase reliability of the existing
charging infrastructure network with funds going to repair or replace
EVSE ports.\898\ This will complement efforts of the National Charging
Experience (ChargeX) Consortium. Launched in May 2023 by JOET and led
by U.S. DOE labs, the ChargeX Consortium will develop solutions and
identify best practices for common problems related to the consumer
experience, e.g., payment processing and user interface, vehicle-
charger communication, and diagnostic data sharing.\899\ Relatedly, in
January 2024, JOET announced $46.5 million in federal funding to
support 30 projects to increase charging access, reliability,
resiliency, and workforce development.\900\ This includes projects
[[Page 28014]]
to increase the commercial capacity for testing and certification of
high-power electric vehicle chargers, which will accelerate the
deployment of interoperable, safe, and efficient electric vehicle and
charger systems.\901\ Also in January 2024, over $600 million in grants
under the CFI Program was announced to deploy PEV charging and
alternative fueling infrastructure in communities and along corridors
in 22 states.\902\ This first round of CFI grants is expected to fund
about 7,500 EVSE ports.
---------------------------------------------------------------------------
\890\ Enacted as the Infrastructure Investment and Jobs Act,
Public Law 117-58. 2021. Accessed January 10, 2023, at https://www.congress.gov/bill/117th-congress/house-bill/3684.
\891\ U.S. DOT, FHWA, ``Historic Step: All Fifty States Plus DC
and Puerto Rico Greenlit to Move EV Charging Networks Forward,
Covering 75,000 Miles of Highway,'' September 27, 2022. Accessed
January 10, 2023, at https://highways.dot.gov/newsroom/historic-step-all-fifty-states-plus-dc-and-puerto-rico-greenlit-move-ev-charging-networks.
\892\ Ibid.
\893\ JOET, ``First Public EV Charging Station Funded by NEVI
Open in America,'' December 13, 2023. Accessed December 18, 2023,
at: https://driveelectric.gov/news/first-nevi-funded-stations-open.
\894\ JOET, ``New York Continues NEVI Charging Station
Momentum,'' December 15, 2023. Accessed December 18, 2023, at:
https://driveelectric.gov/news/new-york-NEVI-charging-station-momentum.
\895\ JOET, ``Pennsylvania Continues Shift Toward Thriving
Electric Transportation Sector,'' January 23, 2024. Accessed
February 24, 2024, at https://driveelectric.gov/news/new-pennsylvania-nevi-station.
\896\ JOET, ``2024 Q1 NEVI Progress Update,'' February 16, 2024.
Accessed February 24, 2024, at: https://driveelectric.gov/news/nevi-update-q1.
\897\ JOET, ``State Plans for Electric Vehicle Charging.'' 2023.
Accessed December 18, 2023, at: https://driveelectric.gov/state-plans.
\898\ JOET, ``Biden-Harris Administration to Invest $100 Million
for EV Charger Reliability,'' September 2023. Accessed December 18,
2023, at: https://driveelectric.gov/news/ev-reliability-funding-opportunity.
\899\ JOET, ``Joint Office Announces National Charging
Experience Consortium,'' May 18, 2023. Accessed March 12, 2024, at:
https://driveelectric.gov/news/chargex-consortium.
\900\ JOET, ``New Funding Enhances EV Charging Resiliency,
Reliability, Equity, and Workforce Development,'' January 19, 2024.
Accessed February 24, 2024, at: https://driveelectric.gov/news/workforce-development-ev-projects.
\901\ JOET, ``FY23 Ride and Drive FOA DE-FOA-0002881.'' Accessed
February 25, 2024, at: https://driveelectric.gov/files/ride-and-drive-foa.pdf.
\902\ JOET, ``Biden-Harris Administration Bolsters Electric
Vehicle Future with More than $600 Million in New Funding,'' January
11, 2024, https://driveelectric.gov/news/new-cfi-funding.
---------------------------------------------------------------------------
Ensuring equitable access to charging is one of the stated goals of
these infrastructure funds. Accordingly, FHWA instructed states to
incorporate public engagement in their planning process for the NEVI
Formula Program, including reaching out to Tribes and rural,
underserved, and disadvantaged communities.\903\ Both the formula
funding and discretionary grant program are subject to the Justice40
Initiative target that 40 percent of the overall benefits of certain
covered federal investments go to disadvantaged communities. Other
programs with funding authorizations under the BIL that could be used
in part to support charging infrastructure installations include the
Congestion Mitigation & Air Quality Improvement Program, National
Highway Performance Program, and Surface Transportation Block Grant
Program among others.\904\
---------------------------------------------------------------------------
\903\ U.S. DOT, FHWA, ``The National Electric Vehicle
Infrastructure (NEVI) Formula Program Guidance.'' February 10.
Accessed January 10, 2023. https://www.fhwa.dot.gov/environment/alternative_fuel_corridors/nominations/90d_nevi_formula_program_guidance.pdf.
\904\ Ibid.
---------------------------------------------------------------------------
The Inflation Reduction Act (IRA), signed into law on August 16,
2022, will also help reduce the costs for deploying
infrastructure.\905\ The IRA extends the Internal Revenue Code 30C
Alternative Fuel Refueling Property Tax Credit (section 13404) through
Dec 31, 2032, with modifications. Under the new provisions, residents
in low-income or non-urban areas, representing around two-thirds of
Americans, are eligible for a 30 percent credit for the cost of
installing residential charging equipment up to a $1,000 cap.\906\
Businesses, including existing charging and fueling stations, are
eligible for up to 30 percent of the costs associated with purchasing
and installing charging equipment in these areas (subject to a $100,000
cap per item) if prevailing wage and apprenticeship requirements are
met, and up to 6 percent otherwise.\907\ ANL estimates that nearly
three-quarters of existing gas stations are located in census tracts
that qualify for the 30C tax credit, suggesting that a similarly high
share of future charging stations could qualify as charging
infrastructure buildout continues to expand across the
country.908 909
---------------------------------------------------------------------------
\905\ Inflation Reduction Act of 2022, Public Law 117-169, 2022.
Accessed December 2, 2022, at https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf.
\906\ The White House, ``FACT SHEET: Biden-Harris Administration
Announces New Actions to Cut Electric Vehicle Costs for Americans
and Continue Building Out a Convenient, Reliable, Made-in-America EV
Charging Network,'' January 19, 2024. Accessed February 24, 2024,
at: https://www.whitehouse.gov/briefing-room/statements-releases/2024/01/19/fact-sheet-biden-harris-administration-announces-new-actions-to-cut-electric-vehicle-costs-for-americans-and-continue-building-out-a-convenient-reliable-made-in-america-ev-charging-network/.
\907\ According to the Department of Energy, the IRS's ``good
faith effort'' clause applicable to the apprenticeship requirement
suggests that businesses will generally be able to meet it and take
advantage of the full 30 percent tax credit, if otherwise eligible.
See U.S. DOE, ``Estimating Federal Tax Incentives for Heavy Duty
Electric Vehicle Infrastructure and for Acquiring Electric Vehicles
Weighing Less Than 14,000 Pounds,'' Memorandum, March 2024.
\908\ ANL's assessment found that 60 percent of existing DCFC
stations and 51 percent of public L2 stations are located in
qualifying census tracts, but notes that current PEV owners are more
likely to live in urban areas compared to the overall light-duty
vehicle population. As PEV adoption continues to expand and
infrastructure corridors are built out, more charging station will
be needed in low-income and non-urban census tracts where the 30C
tax credit can help reduce capital costs for station developers.
\909\ Gohlke, David, Zhou, Yan, and Wu, Xinyi. 2024. ``Refueling
Infrastructure Deployment in Low-Income and Non-Urban Communities''.
United States. Accessed March 12, 2024, at: https://www.osti.gov/servlets/purl/2318956.
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States, utilities, charging network providers, and others are also
investing in and supporting PEV charging infrastructure deployment.
California announced plans to invest $1.9 billion in state funds
through 2027 for charging and hydrogen refueling infrastructure serving
light-, medium-, and heavy-duty vehicles (and related activities),
which it estimates could support 40,000 new EVSE ports.\910\ The New
York Power Authority is investing $250 million to support up to 400
DCFC stations.\911\ Several states including New Jersey and Utah offer
partial rebates for residential, workplace, or public charging while
others such as Georgia and DC offer tax credits.\912\ Other programs
will increase charging access at multi-unit dwellings. For example, the
municipal utility in Burlington, Vermont, in partnership with EVmatch,
offers rebates for EVSE installations at these properties with an
additional $300 incentive provided if owners make charging equipment
available for public use during the day to further extend charging
access.\913\ The NC Clean Energy Technology Center identified more than
200 actions taken across 38 states and DC related to providing
financial incentives for electric vehicles and/or charging
infrastructure in 2022, a four-fold increase over the number of actions
in 2017.\914\ The Edison Electric Institute estimates that electric
companies are investing $5.2 billion in infrastructure and other
transportation electrification efforts in 35 states and the District of
Columbia.\915\ And over 60 electric companies and cooperatives serving
customers in 48 states and the District of Columbia have joined
together to advance fast charging through the National Electric Highway
Coalition.\916\
---------------------------------------------------------------------------
\910\ California Energy Commission, ``CEC Approves $1.9 Billion
Plan to Expand Zero-Emission Transportation Infrastructure, February
14, 2024. Accessed March 10, 2024, at: https://www.energy.ca.gov/news/2024-02/cec-approves-19-billion-plan-expand-zero-emission-transportation-infrastructure.
\911\ New York Power Authority, ``EVolve NY's Mission: A Fast
Electric Charging Station Near You,'' 2023. Accessed December 18,
2023, at https://evolveny.nypa.gov/about-evolve-new-york.
\912\ Details on eligibility, qualifying expenses, and rebate or
tax credit amounts vary by state. See DOE Alternative Fuels Data
Center, State Laws and Incentives. Accessed January 11, 2023, at
https://afdc.energy.gov/laws/state.
\913\ Darya Oreizi, ``Burlington Electric Department Launches
New Program with EVmatch to Expand EV Charging at Multi-family
Properties'' September 30, 2022. Available at: https://evmatch.com/
blog/burlington-electric-department-launches-new-program-with-
evmatch-to-expand-ev-charging-at-multi-family-properties/
#:~:text=Burlington%20Electric%20Department%20(BED)%20recently,statio
ns%20at%20multi%2Dfamily%20properties.
\914\ Apadula, E. et al., ``50 States of Electric Vehicles Q4
2022 Quarterly Report & 2022 Annual Review Executive Summary,''
February 2023, NC Clean Energy Technology Center. Accessed March 8,
2023, at https://nccleantech.ncsu.edu/wp-content/uploads/2023/02/Q4-22_EV_execsummary_Final.pdf. Note: Includes actions by states and
investor-owned utilities.
\915\ EEI, ``Electric Transportation Biannual State Regulatory
Update,'' December 2023. Accessed December 18, 2023, at: https://www.eei.org/-/media/Project/EEI/Documents/Issues-and-Policy/Electric-Transportation/ET-Biannual-State-Regulatory-Update.pdf.
Note: The $5.2 billion total reflects approved filings for
infrastructure deployments and other customer programs to advance
transportation electrification.
\916\ EEI, ``Issues & Policy: National Electric Highway
Coalition''. Accessed January 11, 2023, at https://www.eei.org/issues-and-policy/national-electric-highway-coalition.
---------------------------------------------------------------------------
In July 2023, seven automakers--BMW, GM, Honda, Hyundai, Kia,
Mercedes-Benz, and Stellantis--announced that they would jointly deploy
30,000 EVSE ports in North
[[Page 28015]]
America.\917\ GM is also partnering with charging provider EVgo to
deploy over 2,700 DCFC ports \918\ and charging provider FLO to deploy
as many as 40,000 Level 2 ports (with a focus on deployments in rural
areas).\919\ Ford has agreements with several charging providers to
make it easier for their customers to charge and pay across different
networks \920\ and plans to install publicly accessible DCFC ports at
many of its dealerships.\921\ Mercedes-Benz recently announced that it
is planning to build 2,500 charging points in North America by
2027.\922\ Tesla has its own network with nearly 24,000 DCFC ports and
nearly 10,000 L2 ports in the United States.\923\ Tesla announced that
by 2024, 7,500 or more existing and new ports (including 3,500 DCFC)
would be open to all PEVs, and that it would double the size of its
DCFC network.\924\ All major auto manufacturers have announced that
they will offer the NACS standard developed by Tesla on future
production models in order to access the Tesla
network.925 926 Auto manufacturers are also providing
support to customers. Volkswagen, Hyundai, and Kia all offer customers
complimentary charging at Electrify America's public charging stations
(subject to time limits or caps) in conjunction with the purchase of
select new EV models.\927\
---------------------------------------------------------------------------
\917\ Camila Domonoske, ``Big carmakers unite to build a
charging network and reassure reluctant EV buyers.'' July 2023, NPR.
Accessed December 18, 2023, at: https://www.npr.org/2023/07/26/1190188838/ev-chargers-network-range-anxiety-bmw-gm-honda-hyundai-kia-mercedes-stellantis.
\918\ GM, ``To Put `Everybody In' an Electric Vehicle, GM
introduces Ultium Charge 360,'' Accessed January 11, 2023, at
https://media.gm.com/media/us/en/gm/home.detail.html/content/Pages/news/us/en/2021/apr/0428-ultium-charge-360.html.
\919\ Peter Valdes-Dapena, ``GM to put thousands of electric
vehicle chargers in rural America,'' December 7, 2022, https://www.cnn.com/2022/12/07/business/gm-chargers/index.html.
\920\ Ford, ``Ford Introduces North America's Largest Electric
Vehicle Charging Network, Helping Customers Confidently Switch to an
All-Electric Lifestyle,'' October 17, 2019. Accessed January 11,
2023, at https://media.ford.com/content/fordmedia/fna/us/en/news/2019/10/17/ford-introduces-north-americas-largest-electric-vehicle-charting-network.html.
\921\ JOET, ``Private Sector Continues to Play Key Part in
Accelerating Buildout of EV Charging Networks,'' February 15, 2023.
Accessed March 6, 2023, at https://driveelectric.gov/news/#private-investment.
\922\ Reuters, ``Mercedes to launch vehicle-charging network,
starting in North America,'' January 6, 2023. Accessed January 11,
2023, at https://www.reuters.com/business/autos-transportation/mercedes-launch-vehicle-charging-network-starting-north-america-2023-01-05/.
\923\ U.S. DOE Alternative Fuels Data Center, ``Alternative
Fueling Station Locator.'' Accessed January 10, 2024, at https://afdc.energy.gov/stations/#/analyze?country=US&fuel=ELEC.
\924\ The White House, ``Fact Sheet: Biden-Harris Administration
Announces New Standards and Major Progress for a Made-in-America
National Network of EV Chargers,'' February 15, 2023. Available at:
https://www.whitehouse.gov/briefing-room/statements-releases/2023/02/15/fact-sheet-biden-harris-administration-announces-new-standards-and-major-progress-for-a-made-in-america-national-network-of-electric-vehicle-chargers.
\925\ Reuters, ``More automakers plug into Tesla's EV charging
network,'' Nov 1, 2023. Available at: https://www.reuters.com/business/autos-transportation/more-automakers-plug-into-teslas-ev-charging-network-2023-10-05.
\926\ Wired, ``Tesla Wins EV Charing! Now What?'' February 12,
2024. Accessed on March 12, 2024, at: https://www.wired.com/story/tesla-wins-ev-charging-now-what.
\927\ Details of complimentary charging and eligible vehicle
models vary by auto manufacturer. See: https://www.vw.com/en/models/id-4.html, https://www.hyundaiusa.com/us/en/electrified/charging,
and https://owners.kia.com/content/owners/en/kia-electrify.html.
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Other charging networks are also expanding. Francis Energy, which
has fewer than 1,000 EVSE ports today,\928\ aims to deploy over 50,000
by the end of the decade.\929\ Electrify America, a subsidiary of VW
that is implementing the $2 billion investment required as part of a
2016 Clean Air Act settlement,\930\ plans to more than double its
network size \931\ to 10,000 fast charging ports across 1,800 U.S. and
Canadian stations by 2026. This is supported in part by a $450 million
investment from Siemens and Volkswagen Group.\932\ Blink plans to
invest over $60 million to grow its network over the next decade.\933\
Charging companies are also partnering with major retailers,
restaurants, and other businesses to make charging available to
customers and the public. For example, EVgo is deploying DCFC at
certain Meijer locations, CBL properties, and Wawa. Volta is installing
DCFC and L2 ports at select Giant Food, Kroger, and Stop and Shop
stores, while ChargePoint and Volvo Cars are partnering with Starbucks
to make charging available at select Starbucks locations.\934\ Walmart
recently announced plans to expand their network of DCFCs from fewer
than 300 locations to thousands of Walmart and Sam's Club facilities by
2030.\935\ Other efforts will expand charging access along major
highways, including at up to 500 Pilot and Flying J travel centers
(through a partnership between Pilot, GM, and EVgo) and 200
TravelCenters of America and Petro locations (through a partnership
between TravelCenters of America and Electrify America).\936\ BP plans
to invest $1 billion toward charging infrastructure by the end of the
decade, including through a partnership to provide charging at various
Hertz locations across the country that could support rental and
ridesharing vehicles, taxis, and the general public.\937\ About forty
companies have announced over $500 million of investments in U.S.
facilities to construct charging equipment, with planned domestic
production capacity of more than 1,000,000 chargers (including 60,000
DCFCs) annually.938 939
---------------------------------------------------------------------------
\928\ DOE, Alternative Fuels Data Center, ``Electric Vehicle
Charging Station Locations''. Accessed March 6, 2023, at https://afdc.energy.gov/fuels/electricity_locations.html#/find/nearest?fuel=ELEC.
\929\ JOET, ``Private Sector Continues to Play Key Part in
Accelerating Buildout of EV Charging Networks,'' February 15, 2023.
Accessed March 6, 2023, at https://driveelectric.gov/news/#private-investment.
\930\ EPA, ``Volkswagen Clean Air Act Civil Settlement,'' 2023.
Accessed December 18, 2023, at: https://www.epa.gov/enforcement/volkswagen-clean-air-act-civil-settlement#investment. Note: The $2
billion investment is for charging or hydrogen refueling
infrastructure as well as other activities to advance ZEVs, e.g.,
education and public outreach.
\931\ DOE, Alternative Fuels Data Center, ``Electric Vehicle
Charging Station Locations''. Accessed March 6, 2023, at https://afdc.energy.gov/fuels/electricity_locations.html#/find/nearest?fuel=ELEC.
\932\ Electrify America, ``Electrify America Raises $450
Million--Siemens Becomes a Minority Shareholder; Company Intensifies
Commitment to Rapid Deployment of Ultra-Fast Charging,'' June 28,
2022, https://media.electrifyamerica.com/en-us/releases/190.
\933\ JOET, ``Private Sector Continues to Play Key Part in
Accelerating Buildout of EV Charging Networks,'' February 15, 2023.
Accessed March 6, 2023, at https://driveelectric.gov/news/#private-investment.
\934\ Ibid.
\935\ Walmart, ``Leading the Charge: Walmart Announces Plan to
Expand Electric Vehicle Charging Network,'' April 6, 2023. Accessed
December 18, 2023, at: https://www.wptv.com/walmart-plans-an-
expansion-of-its-electric-vehicle-charging-
services#:~:text=As%20part%20of%20a%20new,fast%20chargers%20at%20its%
20stores.
\936\ JOET, ``Private Sector Continues to Play Key Part in
Accelerating Buildout of EV Charging Networks,'' February 15, 2023.
Accessed March 6, 2023, at https://driveelectric.gov/news/#private-investment.
\937\ BP, ``bp plans to invest $1 billion in EV charging across
US by 2030, helping to meet demand from Hertz's expanding EV
rentals,'' February 15, 2023, https://www.bp.com/en_us/united-states/home/news/press-releases/bp-plans-to-invest-1-billion-in-ev-charging-across-us-by-2030-helping-to-meet-demand-from-hertzs-expanding-ev-rentals.html.
\938\ DOE, ``Building America's Clean Energy Future,'' January
11, 2024. Accessed February 24, 2024, at https://www.energy.gov/invest. Note: investment and production capacity totals include only
those available in public announcements, as reported by DOE, and may
not be comprehensive.
\939\ U.S. Department of Energy, Vehicle Technologies Office,
``FOTW #1314, October 30, 2023: Manufacturers Have Announced
Investments of Over $500 million in More Than 40 American-Made
Electric Vehicle Charger Plants.'' Available online: https://www.energy.gov/eere/vehicles/articles/fotw-1314-october-30-2023-manufacturers-have-announced-investments-over-500.
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We assess the infrastructure needs and the associated costs for
this final
[[Page 28016]]
rulemaking from 2027 to 2055.\940\ We start with estimates of
electricity demand for the PEV penetration levels under the Final rule
compared to those in the No Action case using the methodology described
in section IV.C.3 of this preamble. A suite of NREL models is used to
characterize the quantity and mix of EVSE ports that could meet this
demand, including EVI-Pro to simulate charging demand from typical
daily travel, EVI-RoadTrip to simulate demand from long-distance
travel, and EVI-OnDemand to simulate demand from ride-hailing
applications. EVSE ports are broken out by charging location (home,
depot, work, or public) and by charging type and power level: AC Level
1 (L1), AC Level 2 (L2), and DC fast charging with a maximum power of
150 kW, 250 kW, or 350 kW (DC-150, DC-250, and DC-350). We anticipate
that the highest number of ports will be needed at homes, growing from
under 16 million in 2027 to over 77 million in 2055 under the final
standards. This is followed by public charging, estimated to grow from
under 600,000 ports to over 7.8 million total EVSE ports in that
timeframe. The majority of these are L2 ports with only about 685,000
DCFC ports estimated to be needed by 2055. Depot and workplace charging
needs also increase to over 3.7 million and about 5.8 million EVSE
ports in 2055, respectively.\941\ Similar patterns are observed in the
No Action case though fewer total ports are needed than under the Final
rule due to the lower anticipated PEV demand. Figure 31 illustrates the
growth in charging network size needed under the final rule and in the
No Action case over select years.\942\ Most of the additional EVSE
ports needed to serve PEVs in the final rulemaking appear after 2030,
allowing years of lead time to build out an appropriate charging
network.
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\940\ The Final rule and No Action cases used throughout the PEV
charging infrastructure cost analysis were based on a preliminary
analysis compared to the final compliance modeling. While annual PEV
charging demand is generally higher in the compliance scenarios
relative to those in the preliminary analysis (with annual
differences of between plus and minus five percent), cumulative
electricity consumption associated with PEV charging from 2027 to
2055 in the Final rule compliance scenario is only four percent
higher for the action case (the final standards) and one percent
higher in the No Action case, compared to the preliminary analysis
used to assess PEV charging infrastructure needs and costs.
\941\ The number of EVSE ports needed to meet a given level of
electricity demand will vary based on assumptions about the mix of
charging ports, charging preferences, vehicle characteristics, and
other factors. See RIA Chapter 5 for a more detailed description of
the assumptions underlying the EVSE port counts shown here.
\942\ See RIA Chapter 5 for figures showing estimated port
counts for each year from 2027 to 2055.
[GRAPHIC] [TIFF OMITTED] TR18AP24.029
Figure 31: EVSE Port Counts by Charging Location and Type for the No
Action Case (Left Side of Each Pair of Bars) and the Final Rule (Right
Side of Each Pair of Bars) for Select Years.
[[Page 28017]]
We estimate the costs to deploy the number of EVSE ports needed
each year (2027-2055) to achieve the modeled network sizes for the
Final rule and No Action case.\943\ There are many factors that can
impact equipment and installation costs, including whether a charging
unit has multiple EVSE ports, how many ports are installed per site, as
well as regional differences. Costs also vary in the literature. For
the proposal, we sourced costs for each EVSE port from several studies
and we requested comment on any additional estimates we should
consider. Several commenters flagged that our overall EVSE cost
estimates were lower than those in NREL's national charging network
assessment (Wood et al. 2023),\944\ which was published after the NPRM.
For the final rule analysis, we have updated our assumed upfront
hardware and installation costs for work and public EVSE ports to align
with Wood et al. 2023. Costs for home and depot charging are assigned
as follows. PEVs typically come with a charging cord that can be used
for L1 charging by plugging it into a standard 120 V outlet, and, in
some cases, for L2 charging by plugging into a 240 V outlet. We include
the cost for this cord as part of the vehicle costs described in RIA
Chapter 2, and therefore we do not include it here. Consistent with our
NPRM analysis, we make the simplifying assumption that PEV owners
opting for L1 home charging already have access to a 120 V outlet and
therefore do not incur installation costs and that half of those in
single-family homes opt to use the charging cord for L2 home charging
while the other half purchase and install a wall-mounted or other Level
2 charging unit.\945\ Costs for other home L2 charging are assigned
assuming it serves both residents of multi-family housing as well as
PEV owners without access to dedicated off-street parking who may use
curbside or other neighborhood EVSE ports. Lastly, depot L2 charging
applies to medium-duty PEVs \946\ and reflects charging at their home
base (i.e., the location they are regularly parked when not in use).
For some PEVs, this could be at a dedicated depot for commercial fleets
whereas other medium-duty PEVs could be parked overnight and charged at
the owner's home. Table 73 shows our final assumed costs per EVSE port.
---------------------------------------------------------------------------
\943\ We assume a 15-year equipment lifetime for EVSE ports. We
did not estimate costs for EVSE maintenance or repair though we note
that this may be able to extend equipment lifetimes. See discussion
in RIA Chapter 5.
\944\ Wood et al., ``The 2030 National Charging Network:
Estimating U.S. Light-Duty Demand for Electric Vehicle
Infrastructure,'' 2023. Accessed December 18, 2023, at https://driveelectric.gov/files/2030-charging-network.pdf.
\945\ For Level 2 single-family home charging, some PEV owners
may opt to simply install or upgrade to a 240 V outlet for use with
a charging cord while others may choose to purchase or install a
wall-mounted or other Level 2 charging unit. We assume an even split
for the costs shown in Table 8. Consistent with the proposal,
residential L2 EVSE costs are estimated from costs in an ICCT study:
Nicholas, Michael, ``Estimating electric vehicle charging
infrastructure costs across major U.S. metropolitan areas,'' 2019.
Accessed March 11, 2024, at: https://theicct.org/wp-content/uploads/2021/06/ICCT_EV_Charging_Cost_20190813.pdf.
\946\ Charging infrastructure needs for medium-duty PEVs were
not simulated for the NPRM due to timing constraints, and therefore
depot charging and other projected medium-duty PEV demands are new
additions for this analysis.
Table 73--Costs (Hardware and Installation) per EVSE Port
[2022 Dollars]
----------------------------------------------------------------------------------------------------------------
Single-family home Other home Depot Work Public
----------------------------------------------------------------------------------------------------------------
L1 L2 L2 L2 L2 L2 DC-150 DC-250 DC-350
----------------------------------------------------------------------------------------------------------------
$0 $1,280 $5,620 $6,150 $7,500 $7,500 $154,200 $193,450 $232,700
----------------------------------------------------------------------------------------------------------------
See RIA Chapter 5 for a more complete discussion of this analysis
including low and high sensitivities not shown here. The final PEV
charging infrastructure costs are presented in section VIII of this
preamble.
5. Electric Grid Impacts
EPA acknowledges that there may be additional infrastructure needs
and costs beyond those associated with charging equipment itself. As
vehicle electrification load increases, alongside other new loads from
data centers, industry, and building electrification, the grid will
accommodate higher loads, which may require generation, transmission,
and distribution system upgrades and additions. Our examination of the
record, informed by our consultations with DOE, FERC, and other power
sector stakeholders, is that the final standards of this rule, whether
considered separately or in combination with the Phase 3 HD vehicle
standards and upcoming power sector rules, are unlikely to adversely
affect the reliability of the electric grid, and widespread adoption of
PEVs could have significant benefits for the electric power
system.\947\ We also find that managed charging can reduce the impact
of PEVs on the grid, innovative charging solutions can accelerate the
integration of PEV loads, and the grid can be upgraded to accommodate
increased loads from the transportation as well as other sectors.
Further, we find that the final rule provides regulatory certainty to
support increasing development of supporting electricity infrastructure
as well as increasing adoption of strategies to mitigate infrastructure
demands, such as managed charging and other innovative tools we
describe later in this section.
---------------------------------------------------------------------------
\947\ Many utility sector commenters supported EPA's assessment.
See, e.g., Comments of the Energy Strategy Coalition (``Members of
this coalition are already engaging in long-term planning to meet
the increased demand for electricity attributable to vehicle
electrification, and the LMDV Proposal will provide a regulatory
backstop supporting further investments in electrification and grid
reliability. Demand for electricity will increase under both the
LMDV Proposal and the recently-proposed Phase 3 Greenhouse Gas
Emissions Standards for Heavy-Duty Vehicles . . . but the
electricity grid is capable of planning for and accommodating such
demand growth and has previously experienced periods of significant
and sustained growth.''); Comments of Edison Electric Institute.
---------------------------------------------------------------------------
In the balance of this section, we first provide an overview of the
electric power system and grid reliability. We then discuss the impacts
of this rule on generation. We find that the final rule, together with
the Heavy-Duty Phase 3 GHG Proposed Rule, are associated with modest
increases in electricity demand. We also conducted an analysis of
resource adequacy, which is an important metric in North American
Electric Reliability Corporation's (NERC) long-term reliability
assessments. We find that the final rule, together with the HD Phase 3
Rule as well as other EPA rules that regulate the EGU sector, are
unlikely to adversely affect resource adequacy. We then discuss
transmission and find that the need for new transmission lines
[[Page 28018]]
associated with this rule and the HD Phase 3 rule between now and 2050
is projected to be very small, approximately one percent or less of
transmission, and that nearly all of the additional buildout overlaps
with existing transmission line right of ways. We find that this
increase can reasonably be managed by the utility sector and project
that transmission capacity will not constrain the increased demand for
electricity associated with the final rule. Finally, we discuss our
assessment of expected distribution system infrastructure needs. Our
assessment is based on our own analysis as well as a state-of-the-art
DOE Transportation Electrification Impacts Study (TEIS) conducted for
this rulemaking and the HD Phase 3 Rule. We find that the final rule
and the HD Phase 3 Rule are associated with a 3% increase in annual
distribution investments, a modest increase that utilities can capably
manage. The assessment also quantifies the significant benefits of
basic managed charging practices applied to increasing PEV use. Based
on the TEIS, EPA also quantified the impact on retail electric prices
associated with the rule, concluding that there is no difference in
retail electricity prices in 2030 and an increase of 2.5 percent in
2055, principally due to distribution-related costs.\948\ Overall, we
find that these relatively modest cost increases for distribution build
out and the associated electricity price increases are reasonable.
---------------------------------------------------------------------------
\948\ These figures compare the action case with basic managed
charging relative to the no action with unmanaged charging.
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i. Overview of the Electric Power System and Grid Reliability
The National Academy of Engineering ranks electrification as ``the
greatest engineering achievement of the 20th century.'' \949\ Comprised
of approximately 11,000 utility-scale electric power plants,\950\
697,000 circuit-miles of power lines (240,000 miles of which are high-
voltage transmission lines), 21,500 substations,\951\ 5.5 million miles
of low-voltage distribution lines,\952\ 180 million power poles,\953\
and serving 400 million consumers across North America,\954\ the U.S.
electric power sector is considered ``the world's biggest machine.''
\955\
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\949\ National Academy of Engineering. 2003. Greatest
Engineering Achievement of the 20th Century. (http://www.greatachievements.org/).
\950\ U.S. EPA. 2024. Electric Power Sector Basics. (https://
www.epa.gov/power-sector/electric-power-sector-
basics#:~:text=Discover%20programs,How%20Is%20Electricity%20Used%3F,m
iles%20of%20high%20voltage%20lines).
\951\ U.S. DOE. 2017. Transforming the Nation's Electricity
System: The Second Installment of the QER. Quadrennial Energy
Review. (https://www.energy.gov/sites/prod/files/2017/02/f34/
Appendix_Electricity%20System%20Overview.pdf).
\952\ U.S. DOE. 2024. U.S. Department of Energy Announces $34
Million to Improve the Reliability, Resiliency, and Security of
America's Power Grid. (https://arpa-e.energy.gov/news-and-media/
press-releases/us-department-energy-announces-34-million-improve-
reliability#:~:text=The%20electric%20power%20distribution%20system,in
%20the%20country%20each%20year).
\953\ Warwick WM, Hardy TD, Hoffman MG, Homer JS. 2016.
Electricity Distribution System Baseline Report (PNNL-25178).
Richland,WA: Pacific Northwest National-Laboratory.
\954\ Independent Electricity System Operator (2020). The
World's Largest Machine: The North American Power Grid. (https://
www.ieso.ca/en/Powering-Tomorrow/2020/The-Worlds-Largest-Machine-
The-North-American-Power-
Grid#:~:text=The%20North%20American%20power%20grid%20is%20a%20vast%2C
%20interconnected%20network,%E2%80%9Cthe%20world's%20largest%20machin
e.%E2%80%9D).
\955\ U.S. DOE. 2017. Keeping an Eye on the World's Largest
Machine: How Measurements are Modernizing the Electric Grid.
Richland,WA: Pacific Northwest National-Laboratory. (https://www.pnnl.gov/events/keeping-eye-worlds-largest-machine-how-measurements-are-modernizing-electric-grid).
---------------------------------------------------------------------------
Operating on a ``just in time'' basis, it is comprised of three
basic components: generation, transmission, and distribution systems.
While the forms of generation have varied--primarily from coal-fired
sources in the mid-2000s to renewable sources supplemented with natural
gas-fired generation, at present--the components of the system which
deliver electricity remain the same. These components are the
transmission and distribution systems, which have over time increased
in size and reliability to accommodate the overall economic growth of
the U.S. as well as the electricity demand associated with air
conditioning, data centers, building electrification, cryptocurrency
mining, and now vehicle electrification.
The electric power system in the U.S. has historically been a very
reliable system,\956\ with utilities, system planners, and reliability
coordinators working together to ensure an efficient and reliable grid
with adequate resources for supply to meet demand at all times, and we
anticipate that this will continue in the future under these standards.
---------------------------------------------------------------------------
\956\ NREL, '' Explained: Reliability of the Current Power
Grid'', NREL/FS-6A40-87297, January 2024 https://www.nrel.gov/docs/fy24osti/87297.pdf.
---------------------------------------------------------------------------
Power interruptions caused by extreme weather are the most-commonly
reported, naturally- occurring factors affecting grid reliability, with
the frequency of these severe weather events increasing significantly
over the past twenty years due to climate change.\957\ Conversely,
decreasing emissions of greenhouse gases can be expected to help reduce
future extreme weather events, which would serve to reduce the risks
for electric power sector reliability. Extreme weather events include
snowstorms, hurricanes, and wildfires. These power interruptions have
significant impact on economic activity, with associated costs in the
U.S. estimated to be $44 billion annually.\958\ By requiring
significant reductions in GHGs from new motor vehicles, this rule
mitigates the harmful impacts of climate change, including the
increased incidence of extreme weather events that affect grid
reliability.
---------------------------------------------------------------------------
\957\ DOE, Electric Disturbance Events (OE-417) Annual Summaries
for 2000 to 2023, https://www.oe.netl.doe.gov/OE417_annual_summary.aspx.
\958\ LaCommare, K. H., Eto, J. H., & Caswell, H. C. (2018,
June). Distinguishing Among the Sources of Electric Service
Interruptions. In 2018 IEEE International Conference on
Probabilistic Methods Applied to Power Systems (PMAPS) (pp. 1-6).
IEEE.
---------------------------------------------------------------------------
The average duration of annual electric power interruptions in the
U.S., approximately two hours, decreased slightly from 2013 to 2021,
when extreme weather events associated with climate change are excluded
from reliability statistics. When extreme weather events associated
with climate change are not excluded from reliability statistics, the
national average length of annual electric power interruptions
increased to about seven hours.\959\
---------------------------------------------------------------------------
\959\ EIA, U.S. electricity customers averaged seven hours of
power interruptions in 2021, 2022, https://www.eia.gov/todayinenergy/detail.php?id=54639#.
---------------------------------------------------------------------------
Around 93 percent of all power interruptions in the U.S. occur at
the distribution-level, with the remaining fraction of interruptions
occurring at the transmission- and generation-levels.960 961
As new PEV models continue to enter the U.S. market, they are
demonstrating increasing capability for use as distributed grid energy
resources. As of January 2024, manufacturers have introduced, or plan
to introduce, 24 MYs 2024-2025 PEVs with bidirectional charging capable
of supporting two to three days of residential electricity consumption.
These PEVs have capability to discharge power on the order of 10 kW to
residential loads or limited commercial loads. Such a capability could
be used to provide limited backup power to service stations providing
petroleum
[[Page 28019]]
fuels to emergency vehicles in response to a local disruption in
electrical service.\962\
---------------------------------------------------------------------------
\960\ Eto, Joseph H, Kristina Hamachi LaCommare, Heidemarie C
Caswell, and David Till. ``Distribution system versus bulk power
system: identifying the source of electric service interruptions in
the US.'' IET Generation, Transmission & Distribution 13.5 (2019)
717-723.
\961\ Larsen, P. H., LaCommare, K. H., Eto, J. H., & Sweeney, J.
L. (2015). Assessing changes in the reliability of the US electric
power system.
\962\ Mulfati, Justin. dcBel, ``New year, new bidirectional
cars: 2024 edition'' January 15, 2024. Accessed March 10, 2024.
Available at: https://www.dcbel.energy/blog/2024/01/15/new-year-new-bidirectional-cars-2024-edition/.
---------------------------------------------------------------------------
According to FERC, grid reliability is based on two key elements;
\963\
---------------------------------------------------------------------------
\963\ FERC, Reliability Explainer, August 16, 2023 https://www.ferc.gov/reliability-explainer.
---------------------------------------------------------------------------
Reliable operation--A reliable power grid has the ability
to withstand sudden electric system disturbances that can lead to
blackouts.
Resource adequacy--Generally speaking, resource adequacy
is the ability of the electric system to meet the energy needs of
electricity consumers. This means having sufficient generation to meet
projected electric demand.
ii. Generation
We now turn to the impacts of this rule on generation and resource
adequacy. As discussed in section IV.C.3 of the preamble and as part of
our upstream analysis, we modeled changes to power generation due to
the increased electricity demand anticipated under the final standards.
Bulk generation and transmission system impacts are felt on a larger
scale, and thus tend to reflect smoother load growth and be more
predictable in nature. For a no action case, we project that generation
will increase by 4.2% between 2028 and 2030 and by 36% between 2030 and
2050. Further, we project the additional generation needed to meet the
projected demand of the light- and medium-duty PEVs under the final
standards combined with our estimate of PEV demand from the Heavy-duty
Phase 3 GHG proposed rule, to be relatively modest compared to a no
action case, ranging from 0.93 percent in 2030 to approximately 12
percent in 2050 for both actions combined. Of that increased
generation, approximately 84 percent in 2030 and approximately 66
percent in 2050 is due to light- and medium-duty PEVs, which are
projected to represent approximately 0.78 percent and 7.6 percent of
total U.S. generation in 2030 and 2050, respectively. Electric vehicle
charging associated with the Action case (light- and medium-duty
combined with heavy-duty) is expected to require 4 percent of the total
electricity generated in 2030, which is slightly more than the increase
in total U.S. electricity end-use consumption between 2021 and
2022.\964\ This is also roughly equal to the combined latest U.S.
annual electricity consumption estimates for data centers \965\ and
cryptocurrency mining operations,\966\ both industries which have grown
significantly in recent years and whose electricity demand the utility
sector has capably managed.\967\ EPA's assessment is that national
power generation will continue to be sufficient as demand increases
from electric vehicles associated with both this rule and the HD Phase
3 Rule.
---------------------------------------------------------------------------
\964\ U.S. Energy Information Agency, Use of Electricity,
December 18, 2023. https://www.eia.gov/energyexplained/electricity/
use-of-
electricity.php#:~:text=Total%20U.S.%20electricity%20end%2Duse,3.2%25
%20higher%20than%20in%202021.&text=In%202022%2C%20retail%20electricit
y%20sales,4.7%25%20higher%20than%20in%202021.
\965\ U.S. DOE Office of Energy Efficiency and Renewable Energy,
Data Centers and Servers https://www.energy.gov/eere/buildings/data-centers-and-servers.
\966\ U.S. Energy Information Agency, Tracking Electricity
Consumption From U.S. Cryptocurrency Mining Operations, February 1,
2024, https://www.eia.gov/todayinenergy/
detail.php?id=61364#:~:text=Our%20preliminary%20estimates%20suggest%2
0that,2.3%25%20of%20U.S.%20electricity%20consumption.&text=This%20add
itional%20electricity%20use%20has,cost%2C%20reliability%2C%20and%20em
issions.
\967\ As we noted at proposal, and as several commenters agreed,
U.S. electric power utilities routinely upgrade the nation's
electric power system to improve grid reliability and to meet new
electric power demands. For example, when confronted with rapid
adoption of air conditioners in the 1960s and 1970s, U.S. electric
power utilities maintained reliability and met the new demand for
electricity by planning and building upgrades to the electric power
distribution system.
---------------------------------------------------------------------------
Given the additional electricity demand associated with increasing
adoption of electric vehicles, some commenters raised concerns that the
additional demand associated with the rule could impact the reliability
of the power grid.\968\ To further assess the impacts of this rule on
grid reliability and resource adequacy, we conducted an additional grid
reliability assessment of the impacts of the rule and how projected
outcomes under the rule compare with projected baseline outcomes in the
presence of the IRA. Because we recognize that this rule is being
developed contemporaneously with the Greenhouse Gas Emissions Standards
for Heavy-Duty Vehicles--Phase 3 proposed rule, which also is
anticipated to increase demand for electricity, we analyzed the impacts
of these two rules (the ``Vehicle Rules'') on the grid together. EPA
also considered several recently proposed rules related to the grid
that may directly impact the EGU sector (which we refer to as ``Power
Sector Rules'' \969\).
---------------------------------------------------------------------------
\968\ EPA notes that manufacturers have a wide array of
compliance options, as discussed in Section IV of the preamble. For
example, manufacturers could produce significantly fewer BEVs than
in the central case, or even no BEVs beyond the no action baseline.
Were manufacturers to choose these compliance pathways, the
increasing in electricity demand associated with the rule would be
smaller.
\969\ The recently proposed rules that we considered because
they may impact the EGU sector (which we refer to as ``Power Sector
Rules'') include: the proposed Existing and Proposed Supplemental
Effluent Limitations Guidelines and Standards for the Steam Electric
Power Generation Point Source Category (88 FR 18824) (``ELG Rule''),
New Source Performance Standards for GHG Emissions from New,
Modified, and Reconstructed Fossil Fuel-Fired EGUs; Emission
Guidelines for GHG emissions from Existing Fossil Fuel-Fired EGUs
(88 FR 33240) (``111 EGU Rule''); and National Emissions Standards
for Hazardous Air Pollutants: Coal-and Oil-Fired Electric Utility
Steam Generating units Review of the Residual Risk and Technology
Review (88 FR 24854) (``MATS RTR Rule''). EPA also considered all
final rules affecting the EGU sector in the modeling for the Vehicle
Rules.
---------------------------------------------------------------------------
Specifically, we considered whether the Vehicles Rules alone and
combined with the Power Sector Rules would result in anticipated power
grid changes such that they (1) respect and remain within the confines
of key National Electric Reliability Corporation (NERC)
assumptions,\970\ (2) are consistent with historical trends and
empirical data, and (3) are consistent with goals, planning efforts and
Integrated Resource Plans (IRPs) of industry itself.\971\ We
demonstrate that the effects of EPA's vehicle and power sector rules do
not preclude the industry from meeting NERC resource adequacy criteria
or otherwise adversely affect resource adequacy. This demonstration
includes explicit modeling of the impacts of the Vehicle Rules, an
additional quantitative analysis of the cumulative impacts of the
Vehicles Rules and the Power Sector Rules, as well as a review of the
existing institutions that maintain
[[Page 28020]]
grid reliability and resource adequacy in the United States. We
conclude that the Vehicles Rules, whether alone or combined with the
Power Sector Rules, satisfy these criteria and are unlikely to
adversely affect the power sector's ability to maintain resource
adequacy or grid reliability.
---------------------------------------------------------------------------
\970\ NERC was designated by FERC as the Electric Reliability
Organization (ERO) in 2005 and, therefore, is responsible for
establishing and enforcing mandatory reliability standards for the
North American bulk power system. Resource Adequacy Primer for State
Regulators, 2021, National Association of Regulatory Utility
Commissioners (https://pubs.naruc.org/pub/752088A2-1866-DAAC-99FB-6EB5FEA73042).
\971\ Although this final rule was developed generally
contemporaneously with the HD Phase 3 rule, the two rulemakings are
separate and distinct. Since the Phase 3 rule has not yet been
finalized and was not complete as of the date of our analysis, we
have been required to make certain assumptions for the purposes of
this analysis to represent the results of the expected forthcoming
Phase 3 rulemaking, which we believe are sufficiently accurate for
purposes of this analysis. Our analysis of the proposed Power Sector
Rules is based on the modeling conducted for proposals. We believe
this analysis is a reasonable way of accounting for the cumulative
impacts of our rules affecting the EGU sector, including the
proposed Power Sector Rules, at this time. Our cumulative analysis
of the Vehicles and Power Sector Rules supports this final rule, and
it does not reopen any of the Power Sector Rules, which are the
subject of separate agency proceedings. Consistent with past
practice, as subsequent rules are finalized, EPA will perform
additional power sector modeling that accounts for the cumulative
impacts of the rule being finalized together with existing final
rules at that time.
---------------------------------------------------------------------------
Beginning with EPA's modeling of the Vehicle Rules, we used EPA's
Integrated Planning Model (IPM), a model with built-in NERC resource
adequacy constraints, to explicitly model the expected electric power
sector impacts associated with the two vehicle rules. IPM is a state-
of-the-art, peer-reviewed, multi-regional, dynamic, deterministic
linear programming model of the contiguous U.S. electric power sector.
It provides forecasts of least cost capacity expansion, electricity
dispatch, and emissions control strategies while meeting energy demand
and environmental, transmission, dispatch, and resource adequacy
constraints. IPM modeling we conducted for the Vehicle Rules includes
in the baseline all final rules that may directly impact the power
sector, including the final Good Neighbor Plan for the 2015 Ozone
National Ambient Air Quality Standards (NAAQS), 88 FR 36654.
EPA has used IPM for over two decades, including for prior
successfully implemented rulemakings, to better understand power sector
behavior under future business-as-usual conditions and to evaluate the
economic and emissions impacts of prospective environmental policies.
The model is designed to reflect electricity markets as accurately as
possible. EPA uses the best available information from utilities,
industry experts, gas and coal market experts, financial institutions,
and government statistics as the basis for the detailed power sector
modeling in IPM. The model documentation provides additional
information on the assumptions discussed here as well as all other
model assumptions and inputs. EPA relied on the same model platform at
final as it did at proposal, but made substantial updates to reflect
public comments. Of particular relevance, the model framework relies on
resource adequacy-related constraints that come directly from NERC.
This includes NERC target reserve margins for each region, NERC
Electricity Supply & Demand load factors, and the availability of each
generator to serve load across a given year as reported by the NERC
Generating Availability Data System. Note that unit-level availability
constraints in IPM are informed by the average planned/unplanned outage
hours for NERC Generating Availability Data System. Therefore, the
model projections for the Vehicle Rules are showing compliance pathways
respecting these NERC resource adequacy criteria. These NERC resource
adequacy criteria are standards by which FERC, NERC and the power
sector industry judge that the grid is capable of meeting demand. Thus,
we find that modeling results demonstrating that the grid will continue
to operate within those resource adequacy criteria supports the
conclusion that the rules will not have an adverse impact on resource
adequacy, which is an essential element of grid reliability.
EPA also considered the cumulative impacts of the Vehicle Rules
together with the Power Sector Rules, which as noted above are several
recent proposed rules regulating the EGU sector. In a given rulemaking,
EPA does not generally analyze the impacts of other proposed
rulemakings, because those rules are, by definition, not final and do
not bind any regulated entities, and because the agency does not want
to prejudge separate and ongoing rulemaking processes. However, some
commenters on this rule expressed concern regarding the cumulative
impacts of these rules when finalized, claiming that the agency's
failure to analyze the cumulative impacts of the Vehicle Rules and its
EGU-sector related rules rendered this rule arbitrary and capricious.
In particular, commenters argued that renewable energy could not come
online quickly enough to make up for generation lost due to fossil
sources that may retire, and that this together the increasing demand
associated with the Vehicle Rules would adversely affect resource
adequacy and grid reliability. EPA conducted additional analysis of
these cumulative impacts in response to these comments. Our analysis
finds that the cumulative impacts of the Vehicle Rules and Power Sector
Rules is associated with changes to the electric grid that are well
within the range of fleet conditions that respect resource adequacy, as
projected by multiple, highly respected peer-reviewed models. In other
words, taking into consideration a wide range of potential impacts on
the power sector as a result of the IRA and Power Sector Rules
(including the potential for much higher variable renewable
generation), as well the potential for increased demand for electricity
from both this rule and the Phase 3 Heavy Duty GHG rule, EPA found that
the Vehicle Rules and proposed Power Sector Rules are not expected to
adversely affect resource adequacy and that EPA's rules will not
inhibit the industry from its responsibility to maintain a grid capable
of meeting demand without disruption.
Finally, we note the numerous are existing and well-established
institutional guardrails at the federal- and state-level, as well as
non-governmental organizations, which we expect to continue to maintain
resource adequacy and grid reliability. These well-established
institutions--including the Federal Energy Regulatory Commission
(FERC), state Public Service Commissions (PSC), Public Utility
Commissions (PUC), and state energy offices, as well as NERC and
Regional Transmission Organization (RTO) and Independent System
Operator (ISO)--have been in place for decades, during which time they
have ensured the resource adequacy and reliability of the electric
power sector. As such, we expect these institutions will continue to
ensure that the electric power sector is safe and reliable, and that
utilities will proactively plan for electric load growth associated
with all future electricity demand, including those increases due to
our final rule. We also expect that utilities will continue to
collaborate with EGU owners to ensure that any EGU retirements will
occur in an orderly and coordinated manner. We also note that EPA's
proposed Power Sector rules include built-in flexibilities that
accommodate a variety of compliance pathways and timing pathways, all
of which helps to ensure the resource adequacy and grid reliability of
the electric power system.\972\ In sum, the power sector analysis
conducted in support of this rule indicates that the Vehicle Rules,
whether alone or combined with the Power Sector Rules, are unlikely to
affect the power sector's ability to maintain resource adequacy and
grid reliability.\973\
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\972\ As noted above, EPA is not prejudging the outcome of any
of the Power Sector Rules.
\973\ See RIA Chapter 5; ``Resource Adequacy Analysis Final Rule
Technical Memorandum for Multi-Pollutant Emissions Standards for
Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles, and
Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles--Phase
3,'' available in the docket for this rulemaking.
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iii. Transmission
The transmission system is another component of the electric power
system with unique grid reliability attributes. The need for new
transmission lines associated with the final rule and the HD Phase 3
Rule between now and 2050 is projected to be very small, approximately
one percent or less of transmission. Nearly all of the projected new
transmission builds appear to overlap with pre-existing transmission
[[Page 28021]]
line right of ways (ROW), which makes the permitting process simpler.
Approximately 41-percent of the potential new transmission line builds
projected by IPM have already been independently publicly proposed by
developers. The agency finds that the utility sector can reasonably
manage this very limited need for additional transmission.\974\
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\974\ See RIA Chapter 5.2.7.
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We also find that, the federal government has a role in improving
transmission system planning,\975\ and there are a myriad of programs
and efforts underway that will help support transmission improvements
to the grid and provide reliability benefits. While there is congestion
and delays in transmission buildout, utilities and other actors have
other ways to improve reliability, by deploying Grid Enhancing
Technologies (GET) and Storage As Transmission Asset (SATA).
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\975\ FERC regulates interstate regional transmission planning
and is currently finalizing a major rule to improve transmission
planning. The rule would require that transmission operators do long
term planning and would require transmission providers to work with
states to develop a cost allocation formula, among other changes.
The primary goal of the FERC rule is to align with long-term needs,
rather than focusing on short-term projects, which may lack capacity
required to address future transmission needs.
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For example, two 230-kV transmission lines used by PPL Electric
Utilities, in Pennsylvania, were found to be approaching their maximum
transmission capacity in 2020. As a result, the utility paid more than
$60 million in congestion fees in the winters of 2021-2022 and 2022-
2023. Rather than rebuilding or reconductoring the two transmission
lines, which would have cost tens of millions of dollars, the utility
spent under $300 thousand installing dynamic line rating (DLR) sensors,
which helped the utility to rebalance each of the two transmission
lines and allowed them to reliably carry an additional 18 percent of
power.\976\
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\976\ PPL's Dynamic Line Ratings Implementation: https://www.energypa.org/wp-content/uploads/2023/04/Dynamic-Line-Ratings-H-Lehmann-E-Rosenberger.pdf.
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DOE recently announced several programs and projects aimed at
helping to alleviate the interconnection queue backlog, including the
Grid Resilience and Innovation Partnerships (GRIP) program, with $10.5
billion in Bipartisan Infrastructure Law funding to develop and deploy
Grid Enhancing Technologies (GET); and the Interconnection Innovation
e-Xchange (i2X), which aims to increase data access and transparency,
improve process and timing, promote economic efficiency, and maintain
grid reliability.977 978 979 980 981 982 GRIP (among other
DOE funding programs) also provides funding to build new transmission
lines to unlock new clean generation sources.\983\ FERC has issued
various orders to address interconnection queue backlogs, improve
certainty, and prevent undue discrimination for new
technologies.984 985 FERC Order 2023 provides generator
interconnection procedures and agreements to address interconnection
queue backlogs, improve certainty, and prevent undue discrimination for
new technologies.
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\977\ Abboud, A. W., Gentle, J. P., Bukowski, E. E., Culler, M.
J., Meng, J. P., & Morash, S. (2022). A Guide to Case Studies of
Grid Enhancing Technologies (No. INL/MIS-22-69711-Rev000). Idaho
National Laboratory (INL), Idaho Falls, ID (United States).
\978\ DOE, Grid Deployment Office, Grid Resilience and
Innovation Partnerships (GRIP) Program, https://www.energy.gov/gdo/grid-resilience-and-innovation-partnerships-grip-program.
\979\ Federal Energy Regulatory Commission, Implementation of
Dynamic Line Ratings, Docket No. AD22-5-000 (February 24, 2022),
https://www.federalregister.gov/documents/2022/02/24/2022-03911/implementation-of-dynamic-line-ratings.
\980\ DOE, Dynamic Line Rating, 2019, https://www.energy.gov/oe/articles/dynamic-line-rating-report-congress-june-2019.
\981\ DOE, Advanced Transmission Technologies, 2020, https://www.energy.gov/oe/articles/advanced-transmission-technologies-report.
\982\ DOE, About the Interconnection Innovation e-Xchange (i2X),
2024, https://www.energy.gov/eere/i2x/about-interconnection-innovation-e-xchange-i2x.
\983\ DOE, 2024. Grid Resilience Utility and Industry Grants.
https://www.energy.gov/gdo/grid-resilience-and-innovation-partnerships-grip-program-projects.
\984\ Federal Energy Regulatory Commission, Improvements to
Generator Interconnection Procedures and Agreements, Docket No.
RM22-14-000; Order No. 2023 (July 28, 2023), https://www.ferc.gov/media/e-1-order-2023-rm22-14-000.
\985\ https://www.ferc.gov/news-events/news/staff-presentation-improvements-generator-interconnection-procedures-and.
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The capacity of existing electric power transmission lines can be
increased by a process known as reconductoring, in which existing
transmission lines, typically with steel cores, are replaced with
higher capacity composite conductors. Since the process makes use of
existing transmission towers, it typically does not require additional
rights of way. As such, new generation capacity can be rapidly added,
which serves to improve resource adequacy. For example, American
Electric Power, a Texas-based transmission utility, replaced the aging
conventional conductors of a 240 miles transmission line with advanced
composite core conductors from 2012-2015.\986\ The reconductoring
resulted in an approximate doubling of the previous transmission line
capacity and was accomplished while the 345-kilovolt transmission lines
remained energized.\987\
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\986\ Energized Reconductor Project in the Lower Rio Grande
Valley of Texas (https://www.aeptransmission.com/texas/RGVConductor/
).
\987\ American Electric Power--Energized Reconductoring Project
in the Lower Rio Grande Valley https://www.quantaenergized.com/project/574.
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Energy storage projects can also be used to help to reduce
transmission line congestion and are seen as alternatives to
transmission line construction in some cases.988 989 These
projects, known as Storage As Transmission Asset (SATA),\990\ can help
to reduce transmission line congestion, have smaller footprints, have
shorter development, permitting, and construction times, and can be
added incrementally, as required. Examples of SATA projects include the
ERCOT Presidio Project,\991\ a 4 MW battery system that improves power
quality and reducing momentary outages due to voltage fluctuations, the
APS Punkin Center,\992\ a 2 MW, 8 MWh battery system deployed in place
of upgrading 20 miles of transmission and distribution lines, the
National Grid Nantucket Project,\993\ a 6 MW, 48 MWh battery system
installed on Nantucket Island, MA, as a contingency to undersea
electric supply cables, and the Oakland Clean Energy Initiative
Projects,\994\ a 43.25 MW, 173 MWh energy storage project to replace
fossil generation in the Bay area.
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\988\ Federal Energy Regulatory Commission, Managing
Transmission Line Ratings, Docket No. RM20-16-000; Order No. 881
(December 16, 2021), https://www.ferc.gov/media/e-1-rm20-16-000.
\989\ Federal Energy Regulatory Commission, Staff Presentation
Final Order Regarding Managing Transmission Line Ratings FERC Order
881 (December 16, 2021), https://www.ferc.gov/news-events/news/staff-presentation-final-order-regarding-managing-transmission-line-ratings.
\990\ Nguyen, T. A., & Byrne, R. H. (2020). Evaluation of Energy
Storage As A Transmission Asset (No. SAND2020-9928C). Sandia
National Lab.(SNL-NM), Albuquerque, NM (United States).
\991\ http://www.ettexas.com/Content/documents/NaSBatteryOverview.pdf.
\992\ https://www.aps.com/-/media/APS/APSCOM-PDFs/About/Our-Company/Doing-business-with-us/Resource-Planning-and-Management/APS_IRP_2023_PUBLIC.ashx?la=en&hash=B0B8ED59F4698FE246386F3CD118DEC8.
\993\ Balducci, P. J., Alam, M. J. E., McDermott, T. E.,
Fotedar, V., Ma, X., Wu, D., . . . & Ganguli, S. (2019). Nantucket
island energy storage system assessment (No. PNNL-28941). Pacific
Northwest National Lab. (PNNL), Richland, WA (United States),
https://energystorage.pnnl.gov/pdf/PNNL-28941.pdf.
\994\ https://www.pgecurrents.com/articles/2799-pg-e-proposes-two-energy-storage-projects-oakland-clean-energy-initiative-cpuc.
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Through such efforts, the interconnection queues can be reduced in
length, transmission capacity on existing transmission lines can be
increased, additional generation assets
[[Page 28022]]
can be brought online, and electricity generated by existing assets
will be curtailed less often. These factors help to improve overall
grid reliability. We conclude that it is reasonable to anticipate that
transmission capacity will not constrain the increased demand for
electricity projected in our central case modeling.
iv. Distribution
We next discuss distribution infrastructure. We acknowledge that
increases in electric vehicle charging associated with the final rule
are likely to require additional distribution infrastructure. We first
review the literature regarding and tools to support distribution needs
associated with PEV charging, and then we discuss the TEIS, which
specifically analyzes the distribution needs associated with this rule
and the HD Phase 3 Rule.
Numerous tools are available to address and mitigate anticipated
distribution needs, including managed charging, time-of-use (TOU)
electric rates, distributed energy resources (DERs), Power Control
Systems (PCS), and others, which are discussed in greater detail below.
New technologies and solutions exist and are emerging to ensure that
new charging stations can be connected to the grid as quickly as
possible, without adversely affecting grid reliability. Utility hosting
capacity maps are one tool available that developers can use to
identify faster and lower cost locations to connect new EV chargers.
These maps can help charging station developers identify locations
where there is excess available grid capacity. Hosting capacity maps
provide greater transparency into the ability of the distribution grid
to host additional distributed energy resources (DERs) such as BEV
charging. In addition, hosting capacity maps can identify where DERs
can alleviate or aggravate grid constraints. Hosting capacity is
commonly defined as the additional injection or withdrawal of electric
power up to the limits where individual grid assets exceed their power
ratings or where a voltage violation would occur. Hosting capacity
maps, analyzed and created by the utility that owns the distribution
system, are usually color-coded lines or surface diagrams overlayed on
geographic maps, representing the conditions on the grid at the time
when the map is published or updated. The analysis is based on power
flow simulations of the distribution circuits given specific customers'
load profiles supplied by the electric circuit and the grid asset data
as managed by the utility. The hosting capacity is highly location
specific. A DOE review found that utilities have published 39 hosting
capacity maps in 24 states and the District of Columbia.\995\
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\995\ DOE, ``U.S. Atlas of Electric Distribution System Hosting
Capacity Maps,'' times to deploying BEVs. Available online: https://www.energy.gov/eere/us-atlas-electric-distribution-system-hosting-capacity-maps.
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Hosting capacity maps can help direct new EV charger deployment to
less constrained portions of the grid, giving utilities more lead time
to make distribution system upgrades. In tandem, new technologies and
power control protocols are helping connect new EV loads faster even
where there are grid capacity constraints. One approach is for
utilities to make non-firm capacity available immediately as they
construct distribution system upgrades. Southern California Edison, a
large electric utility in California, proposed a pilot to allow faster
connection of new EV loads in constrained areas by deploying Power
Control Systems (PCS).\996\ In addition to the anticipated build out of
charging infrastructure and electric distribution grids, innovative
charging solutions implemented by electric utilities have further
reduced lead times.
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\996\ In California, Southern California Edison (SCE) proposed a
two-year Automated Load Control Management Systems (LCMS) Pilot. The
program would use third-party owned LCMS equipment approved by SCE
to accelerate the connection of new loads, including new EVSE, while
``SCE completes necessary upgrades in areas with capacity
constraints.''1 SCE would use the LCMS to require new customers to
limit consumption during periods when the system is more
constrained, while providing those customers access to the
distribution system sooner than would otherwise be possible. Once
SCE completes required grid upgrades, the LCMS limits will be
removed, and participating customers will gain unrestricted
distribution service. SCE hopes to evaluate the extent to which LCMS
can be used to ``support distribution reliability and safety, reduce
grid upgrade costs, and reduce delays to customers obtaining
interconnection and utility power service.''1 SCE states that prior
CPUC decisions have expressed clear support for this technology and
SCE is commencing the LCMS Pilot immediately. This program was
approved by CPUC in January 2024.
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Plans like Southern California Edison's (SCE) to use load
constraint management systems (LCMS),\997\ which limits power that is
available for EV charging based upon capacity limits of the
distribution system, to connect new EV loads faster in constrained
sections of the grid are being bolstered by new standards for load
control technologies. UL, an organization that develops standards for
the electronics industry, published the UL 3141 Outline of
Investigation (OOI) for Power Control Systems (PCS) in January
2024.\998\ Manufacturers can now use this standard for developing
devices that utilities can use to limit the energy consumption of BEVs.
The OOI identifies five potential functions for PCS. One of these
functions is to serve as a Power Import Limit (PIL) or Power Export
Limit (PEL). In these use cases, the PCS controls the flow of power
between a local electric power system (local EPS, most often the
building wiring on a single premises) and a broader area electric power
system (area EPS, most often the utility's system). Critically, the
standardized PIL function will enable the interconnection of new BEV
charging stations faster by leveraging the flexibility of BEVs to
charge in coordination with other loads at the premise. With this
standard in place and manufacturer completion of conforming products,
utilities will have a clear technological framework available to use in
load control programs that accelerate charging infrastructure
deployment for their customers.
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\997\ Load Constraint Management Systems (LCMS) allow EV
chargers to temporarily connect to distribution systems in capacity
constrained areas by simultaneously managing the time of charging in
such a manner that accommodates other electricity demands before
electric utilities can install permanent distribution system
upgrades.
\998\ UL Standards and Engagement. January 11, 2024. UL 3141:
Outline of Investigation for Power Control Systems. https://www.shopulstandards.com/ProductDetail.aspx?productId=UL3141_1_O_20240111.
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In addition to the flexible interconnection enabled by PCS,
technologies including battery or generation backed charging and mobile
charging can facilitate rapid charging deployment, even before utility
connections can be upgraded. Mobile chargers can be deployed
immediately because they do not require an on-site grid connection.
They can be used as a temporary solution to bring additional charging
infrastructure to locations before a stationary, grid-connected charger
can be deployed. Mobile chargers can also help bring charging
infrastructure to locations where traditional charger deployments can
be more difficult, such as at multi-unit dwellings.\999\
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\999\ https://www.bloomberg.com/news/articles/2023-11-04/these-electric-vehicle-chargers-will-come-to-you.
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Battery-integrated charging is a promising solution to deploy DCFC
quickly and inexpensively in relatively constrained areas of the grid.
These chargers draw power from the grid slowly throughout the day and
use a battery to store that power and then use it to charge EVs at much
faster rates. A recent Argonne National Laboratory analysis found that
battery-integrated DCFC results in either lower or similar levelized
costs relative to non-battery-integrated DCFC in regions across the
[[Page 28023]]
country, while accelerating deployment.\1000\ Battery-integrated
chargers save money both upfront on grid distribution upgrade costs as
well as during operation by reducing the cost of utility demand charges
based on maximum site load. Avoiding distribution grid upgrades also
reduces the risk of interconnection-related delays, and thus speeds
deployment. The study found that in California, battery-integration can
reduce peak power demand of DCFC station by 60-90 percent. Battery-
integrated chargers are already being deployed across the US. In
several states, NEVI funding has been used to deploy battery-integrated
DCFC, including chargers made by Freewire and Jule.\1001\
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\1000\ Poudel, Sajag, Jeffrey Wang, Krishna Reddi, Amgad
Elgowainy, Joann Zhou. 2024. Innovative Charging Solutions for
Deploying the National Charging Network: Technoeconomic Analysis.
Argonne National Laboratory.
\1001\ Batter-integrated chargers from Freewire and Jule have
been selected for NEVI funding in Alaska, Colorado, Kentucky, Texas,
and Utah. For Freewire's announcements, see https://www.linkedin.com/posts/freewiretech_nevi-program-freewire-technologies-activity-7148020388294184961-2CNA. For Jule's
announcements, see https://www.julepower.com/resources/spotlight.
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Additional innovative charging solutions will further accelerate
charging deployment by optimizing the use of chargers that have already
been installed. Technologies are emerging to make the most of existing
charging infrastructure. Other companies are working on facilitating
the sharing of chargers between more drivers. One company, EVMatch,
developed a software platform for sharing, reserving, and renting EV
charging stations, which can allow owners of charging stations to earn
additional revenue while making their chargers available to more EV
drivers to maximize the benefit of each deployed charger. EVMatch is
also rolling out a new product called the EVMatch adapter in
partnership with Argonne National Laboratory. The EVMatch adapter is a
smart charging adapter that can turn any Level 1 or 2 EVSE into a smart
charger that can remotely monitor and control charging to enable even
more efficient utilization of existing chargers.\1002\ Innovative
charging models like these can be efficient ways to increase charging
access for EVs with a smaller amount of physical infrastructure.\1003\
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\1002\ Jeff Chenoweth, ``The EVmatch Adapter Will Transform And
Unify The Way You Monitor And Control Level 2 EV Chargers.'' March
2, 2023. Available at: https://evmatch.com/blog/the-evmatch-adapter-will-transform-and-unify-the-way-you-monitor-and-control-level-2-ev-chargers. Jason D. Harper, ``Electric Vehicle Smart Charge Adapter
TCF (ANL)''. July 7, 2021. Available at: https://www.energy.gov/sites/default/files/2021-07/elt271_harper_2021_p_5-17_908am_KF_ML.pdf.
\1003\ Argonne National Laboratory, 2024. Innovative Charging
Solutions for Deploying the National Charging Network:
Technoeconomic Analysis.
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It is not uncommon for the electric power system to have
additional, unutilized generation capacity at various times throughout
a given day. In a manner akin to load constraint management systems
(discussed above), grid operators can utilize this previously untapped
generation capacity by shifting the charging of electric vehicles to
times where excess underutilized generation capacity exists and/or
shift electric vehicle charging away from times where generation
capacity is less prevalent, without affecting the utility of electric
vehicles. This allows the grid operators to more effectively use
existing electric power system resources, which decreases overall
operative costs for all ratepayers. Prior research efforts
1004 1005 1006 have capitalized on the mismatch between
electric generation capacity and demand by demonstrating the ability to
shift up to 20 percent of electric vehicle charging load demand from
times of the day in which electricity supply is less-plentiful and/or
more-expensive to other times of the day, when electricity supply is
more-plentiful and/or less-expensive.\1007\ Conversely, the research
efforts also demonstrated the ability to increase electric vehicle
charging loads by up to 30 percent in a given hour of the day. By more
effectively utilizing existing electric power system assets, managed
electric vehicle charging can also help to further reduce overall
electricity costs by allowing for the deferral of electric power system
upgrades, with deferment potential of between 5 and 15 years over the
2021-2050 period.\1008\ While such deferrals reduce immediate capital
expenditures for electric power system operators, they also extend the
functional lifespan of these assets, provide electric utility planners
with additional time to consider cost-effective planning options, and
help to mitigate supply chain shortages for electric power system
components.
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\1004\ Kintner-Meyer, M., Davis, S., Sridhar, S., Bhatnagar, D.,
Mahserejian, S., & Ghosal, M. (2020). Electric vehicles at scale-
phase I analysis: High EV adoption impacts on the western US power
grid (No. PNNL-29894).
\1005\ Pless, Shanti, Amy Allen, Lissa Myers, David Goldwasser,
Andrew Meintz, Ben Polly, and Stephen Frank. 2020. Integrating
Electric Vehicle Charging Infrastructure into Commercial Buildings
and Mixed-Use Communities: Design, Modeling, and Control
Optimization Opportunities; Preprint. Golden, CO: National Renewable
Energy Laboratory. NREL/CP-5500-77438. https://www.nrel.gov/docs/fy20osti/77438.pdf.
\1006\ Satchwell, A., Carvallo, J. P., Cappers, P., Milford, J.,
& Eshraghi, H. (2023). Quantifying the Financial Impacts of Electric
Vehicles on Utility Ratepayers and Shareholders.
\1007\ Lipman, Timothy, Alissa Harrington, and Adam Langton.
2021. Total Charge Management of Electric Vehicles. California
Energy Commission. Publication Number: CEC-500-2021-055.
\1008\ Kintner-Meyer, M. C., Sridhar, S., Holland, C., Singhal,
A., Wolf, K. E., Larimer, C. J., . . . & Murali, R. E. (2022).
Electric Vehicles at Scale-Phase II-Distribution Systems Analysis
(No. PNNL-32460). Pacific Northwest National Lab. (PNNL), Richland,
WA (United States).
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Integration of electric vehicle charging into the power grid, by
means of vehicle-to-grid software and systems that allow management of
vehicle charging time and rate, has been found to create value for
electric vehicle drivers, electric grid operators, and
ratepayers.\1009\ The ability to shift and curtail electric power by
managing EV charging is a feature that can improve grid operations and,
therefore, grid reliability. Management of PEV charging can reduce
overall costs to utility ratepayers by delaying electric utility
customer rate increases associated with equipment upgrades and may
allow utilities to use electric vehicle charging as a resource to
manage intermittent renewables. When PEVs charge during hours when
existing grid infrastructure is underutilized, they can put downward
pressure on all customers' electric rates by spreading fixed grid
investment costs across greater electricity sales.\1010\ The
development of new electric utility tariffs, including those for
submetering for electric vehicles, will also help to facilitate the
management of electric vehicle charging and can help to reduce PEV
operating costs. When employed as distributed energy resources (DER),
PEVs can help to defer and/or replace the need for specific
transmission and distribution
[[Page 28024]]
system equipment upgrades. Recently, NREL found that a vehicle-to-grid
control strategy which lowered an EV battery's average state of charge
when parked--while ensuring it was fully recharged in anticipation of
the driver's next need--could extend the life of the battery if
continued over time.\1011\ Similarly, a study by Environment and
Climate Change Canada, NRC Canada and Transport Canada also found no
significant different in usable battery energy between a vehicle that
was used for bidirectional V2G and one that was not, and identified an
improved SOC profile resulting from V2G activity as a possible
factor.\1012\ Application programming interfaces have been developed by
industry in partnership with ANL to manage the exchange of energy
services contracts, enabling the dispatch of PEVs and other distributed
energy resources in to utility planning and operations territory-wide
or within a specific section of the distribution grid.\1013\ Further,
automakers including BMW, Ford, and Honda developed a joint venture
that promises to enable their EV customers to earn financial savings
from managed charging and energy-sharing services.\1014\ See section
IV.C.5.ii of this preamble for a discussion of DERs and their potential
benefits.
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\1009\ Chhaya, S., et al., ``Distribution System Constrained
Vehicle-to-Grid Services for Improved Grid Stability and
Reliability; Publication Number: CEC-500-2019-027, 2019. Accessed
December 13, 2022 at https://www.energy.ca.gov/sites/default/files/2021-06/CEC-500-2019-027.pdf.
\1010\ Satchwell, A., Carvallo, J. P., Cappers, P., Milford, J.,
& Eshraghi, H. (2023). Quantifying the Financial Impacts of Electric
Vehicles on Utility Ratepayers and Shareholders; Jones, et al. ``The
Future of Transportation Electrification.'' 2018. For more
information on how EVs might lower electricity rates, see Frost,
Jason, Melissa Whited, and Avi Allison. ``Electric Vehicles Are
Driving Electric Rates Down.'' Synapse Energy Economics, Inc. June
2019 https://www.synapse-energy.com/sites/default/files/EV-Impacts-June-2019-18-122.pdf, Electric Vehicles Are Driving Rates Down for
All Customer Update Dec 2023 (synapse-energy.com); California Public
Utilities Commission, Electricity Vehicles Rates and Cost of Fueling
https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/
infrastructure/transportation-electrification/electricity-rates-and-
cost-of-
fueling#:~:text=Electric%20Rates%20for%20EV%20Drivers,at%20a%20more%2
0reasonable%20price.
\1011\ NREL. ``Electric Vehicles Play a Surprising Role in
Supporting Grid Resiliency,'' October 12, 2023. Accessed November 5,
2024 at https://www.nrel.gov/news/program/2023/evs-play-surprising-role-in-supporting-grid-resiliency.html.
\1012\ Lapointe, A. et al., ``Effects of Bi-directional Charging
on the Battery Energy Capacity and Range of a 2018 Model Year
Battery Electric Vehicle,'' 36th International Electric Vehicle
Symposium and Exhibition (EVS36), June 11-14, 2023.
\1013\ Evoke Systems. ``https://www.prnewswire.com/news-releases/evoke-systems-announces-development-of-open-apis-for-managed-electric-vehicle-charging-301647906.html,'' October 12,
2022. Accessed November 5, 2024 at https://www.prnewswire.com/news-releases/evoke-systems-announces-development-of-open-apis-for-managed-electric-vehicle-charging-301647906.html.
\1014\ Honda, ``BMW, Ford and Honda Agree to Create ChargeScape,
a New Company Focused on Optimizing Electric Vehicle Grid
Services,'' September 12, 2023. Accessed February 5, 2024 at https://www.prnewswire.com/news-releases/bmw-ford-and-honda-agree-to-create-chargescape-a-new-company-focused-on-optimizing-electric-vehicle-grid-services-301924860.html.
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Managed EV charging provides several benefits to vehicle owners,
rate payers that do not operate electric vehicles, and the operators of
the electric power system, including lower costs and longer lifespans
for electric power system assets. Managed electric vehicle charging,
when coupled with time-of-use (TOU) electric rates, can help to further
reduce already low refueling costs of EVs by allowing vehicle operators
to charge when electric rates are most advantageous. Since low
electricity costs coincide with surpluses of electricity, such charging
reduces the overall costs of electricity generation and delivery to all
electricity rate payers, not just those charging electric vehicles.
Researchers at the Lawrence Berkeley National Laboratory (LBNL)
identified 136 active or approved EV-specific TOU electric utility
rates for U.S. investor-owned utilities in 37 states and the District
of Columbia.\1015\ Of the 136 active or approved EV-specific TOU
electric utility rates, 54 rates are for residential customers, 48
rates are for commercial customers, 27 rates are for utility-owned
facilities, four rates are for fleet operators, and the remaining three
rates are for mixed facilities. In sum, our assessment of the
literature and recent developments finds numerous tools to mitigate and
address distribution related needs. We expect that uptake of these
tools will likely vary and acknowledge that some are more readily
available than others. But given the significant benefits associated
with these tools and the rapid advances in their development, we expect
that increasing deployment of such tools is very likely, particularly
as PEV adoption increases, and the economic incentives associated with
applying such tools on a widespread scale also increases.\1016\
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\1015\ Cappers, P., Satchwell, A., Brooks, C., & Kozel, S.
(2023). A Snapshot of EV-Specific Rate Designs Among US Investor-
Owned Electric Utilities. Lawrence Berkeley National Lab. (LBNL),
Berkeley, CA (United States).
\1016\ In addition to the tools discussed that reduce the need
for upgrades, there will be increased supply of grid components
available for the situations in which some upgrades are still
needed. Please refer to ``DOE Actions to Unlock Transformer and Grid
Component Production'': https://www.energy.gov/policy/articles/doe-actions-unlock-transformer-and-grid-component-production.
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To better understand the potential impacts of the final rule on the
distribution system, EPA commissioned a study as part of an interagency
agreement with the U.S. Department of Energy entitled the
``Transportation Electrification Impact Study'' (TEIS) to estimate the
potential costs and benefits associated with electrical distribution
system upgrades that may be incurred as a result of this final rule in
addition to those of the Greenhouse Gas Emissions Standards for Heavy-
Duty Vehicles--Phase 3 Proposed Rule.\1017\ These costs and benefits
\1018\ include new or replacement substations, underground and overhead
distribution feeders, and service transformers, all in rural, suburban,
and urban locations, as well as along freight corridors. To do so, our
study builds upon the methodology developed by the California Public
Utility Commission (CPUC) for their Electrification Impacts Study Part
1.\1019\ The results of this study provide further support and
confirmation for our findings in the proposed rule that grid
reliability is not expected to be adversely affected by this rule and
the HD Phase 3 Rule.\1020\ Moreover, if PEV charging is managed
(through available tools such as TOU tariffs and hosting capacity
maps), there are likely to be net benefits from increased PEV
penetration for all electric power system participants (including
utilities and electricity consumers, whether they own PEVs or not).
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\1017\ National Renewable Energy Laboratory, Lawrence Berkeley
National Laboratory, Kevala Inc., and U.S. Department of Energy.
Multi-State Transportation Electrification Impact Study: Preparing
the Grid for Light-, Medium-, and Heavy-Duty Electric Vehicles. DOE/
EE-2818, U.S. Department of Energy, 2024.
\1018\ Benefits to non-EV owners include greater overall
distribution system reliability, more-effective asset utilization,
additional distribution system capacity, and decreasing retail
electricity costs, but we have not attempted to monetize these
benefits in our analysis.
\1019\ California Public Utilities Commission, Order Instituting
Rulemaking to Modernize the Electric Grid for a High Distributed
Energy Resources Future, R.21-06-017 (July 2, 2021), https://apps.cpuc.ca.gov/apex/f?p=401:56:0::NO:RP,57,RIR:P5_PROCEEDING_SELECT:R2106017.
\1020\ Grid reliability, broadly speaking, is dependent on
sufficient and reliable generation, transmission and distribution.
The TEIS study only addresses the question of potential reliability
impacts on distribution, but we also address potential impacts on
transmission and generation below.
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In the TEIS study, aggregate distribution system-level costs and
benefits were estimated for five states using parcel-level \1021\ load
profiles that were summed and applied to known utility infrastructure
elements (i.e., substations, distribution feeder lines, service
transformers, etc.) and combined with utility-specific cost
information. Using a full-scale distribution capacity expansion
approach from the bottom (parcel-level) up to the substation level, the
methodology employed identifies where and when the distribution grid
will need capacity enhancements under certain policy and charging
behavior scenarios consistent with this final rule.
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\1021\ ``Parcel-level'' in this context refers to buildings with
street addresses.
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Load profiles were analyzed using output from two analytical cases:
1. A no-action case that included modeling of electric vehicle
provisions from the IRA within the OMEGA compliance model and
compliance with 2023 and later GHG standards (86 FR 74434) with the
addition of heavy-duty vehicle (Class 4-8) charge demand estimated for
the California Advanced Clean Trucks (ACT) Program.
[[Page 28025]]
2. A final rule policy case based upon Alternative 3 from the
light- and medium-duty proposed rule with the addition of heavy-duty
vehicle charge demand based on an interim scenario developed from the
Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles--Phase 3
Proposed Rule (HDP3).
Of the scenarios modeled in IPM after the proposal, Alternative 3
is the closest scenario with respect to PEV charging demand to the
final rule and represents the final rule within the power sector
analysis. Alternative 3 differs from the finalized program by
forecasting higher PEV sales in 2027-2031 than finalized, and thus
higher PEV charging demand in earlier years and comparable PEV charging
demand after 2032. Thus, power sector impacts on emissions and cost
within the final rule analysis should be considered conservatively high
estimates. The load profiles from light-, medium- and heavy-duty are
distributed into IPM regions using NREL's EVI-X suite of models for
light-duty, LDVs, MDVs, and heavy-duty buses; and using LBNL's HEVI-
LOAD model for all other heavy-duty applications. The resulting
premise-level load profiles were aggregated up to electric utility
service territories. The system-level grid impacts and costs of
electricity service were determined based upon the profiles. Additional
scenarios were modeled to evaluate the impact of both unmanaged
charging and managed charging. In the unmanaged case, the study assumes
that EVs are charged immediately when the vehicle returns to a charger.
In contrast, managed charging spreads the charging out more evenly over
the period when the vehicle is parked at the charger; we note that the
managed charging scenario evaluated only the most basic and readily
available managed charging methods, a small subset of the numerous
tools to address distribution needs that we reviewed in our earlier
discussion. As a result, this study provides detailed modeling of
potential impacts of these vehicles rules at the neighborhood level of
electricity distribution.
This methodology is first applied to five states, which were
selected based upon their diversity in urban/rural population, utility
distribution grid composition, freight travel demands, and state EV
policies. The selected states are California, Oklahoma, Illinois,
Pennsylvania, and New York. The results from these five states are then
extrapolated to the 67 IPM regions that we use to represent the
remaining 48 contiguous states within our power sector analysis.
The TEIS national-level results found that the Action case, with
managed charging, provides significant distribution system benefits
relative to unmanaged charging both financially and in terms of the
ability to defer necessary distribution system upgrades. The TEIS also
found that the incremental grid upgrades needed in the Action cases
relative to the No Action cases are manageable and that benefits
outweigh costs.\1022\ Such deferment, provided by managed charging,
allows electric utilities to more effectively schedule and coordinate
needed distribution system upgrades, while providing greater
flexibility in accommodating potential supply chain shortfalls. The
study also found that the Action case, with managed charging, requires
significantly less electricity at peak times than the No Action case,
illustrating the electricity system benefits of employing grid
integration technologies and techniques. Note that the Action case
assumes the limited usage of Distributed Energy Resources (DER) based
on the TEIS, for example, vehicle to grid communication, which can
delay vehicle charging to off-peak times or can stagger the scheduling
of charge demand. Some implementations of DER also involve onsite
generation of electricity using photovoltaic cells or distribution-
level grid battery storage, however those were beyond the scope of the
TEIS and were not included in our Action case analysis of the FRM at
the distribution level. The TEIS provides further evidence that
implementing smart placements of charging infrastructure where grid
capacity is available and managed charging can more than offset the
impact of additional EV load projected under this final rulemaking (and
the HD Phase 3 rule) on the amount of distribution system investment
that will be needed through 2032.
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\1022\ Additionally, the TEIS found that: (1) the Action case
would require an incremental 3% annual growth in charging
infrastructure between 2027-2032 relative to the No Action case; (2)
Incremental distribution grid investment needs represent
approximately 3% of current annual utility investments in the
distribution system for scenarios consistent with the EPA proposals;
(3) Incremental distribution grid investment needs decrease by 30%
with basic managed charging techniques, illustrating the potential
for significant cost savings through optimizing PEV charging and
other loads at the local level; (4) Benefits of vehicle
electrification to consumers outweigh the estimated cost of charging
infrastructure and grid upgrades in scenarios consistent with the
EPA proposals.
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The study also found that the distribution costs associated with
increasing demand from the Vehicle Rules were quite small relative to
total distribution costs. Based on utility reports to the Federal
Energy Regulatory Commission, data from electric co-ops, and
extrapolation for the remaining utilities, the TEIS estimated that the
national investment in distribution systems exceeded $60 billion
annually as of 2021. A high-level approach for scaling the national
distribution system investment to the five states under study was
applied to estimate that $15 billion of distribution system investment
occurred in 2021. Through 2032, the TEIS estimated that the incremental
investment in distribution networks (to accommodate PEV growth due to
EPA's rulemaking) as an additional $1.6 billion of grid investment for
PEVs relative to a no action case when charging is managed and $2.3
billion when charging is unmanaged. Annualizing the latter number
(reflecting unmanaged charging) between 2027 and 2032 results in an
annual cost from the EPA light- and medium duty rule combined with the
heavy-duty phase 3 proposed rule of $0.4 billion across the five
states. Within the five states and extrapolated across the nation, this
amounts to approximately 3% of existing annual distribution
investments. We think this increase in distribution investment is
modest and reasonable. Moreover, this value is conservative as it is
inclusive of effects for both the light- and medium-duty vehicle
standards and the heavy-duty Phase 3 proposed rule standards and so
overstate the amount of grid investment associated with the final rule,
and as it does not reflect managed charging. Given the very significant
economic benefits of managed charging, we expect the market to adopt
managed charging particularly under the influence of additional PEV
adoption associated with the central case of the final rule, and that
would further decrease the investment, to roughly $0.3 billion per
year, or approximately 2% of annual distribution investments.
We also estimated the impact on retail electricity prices based on
the TEIS. The TEIS results were extrapolated to all IPM regions in
order to estimate impacts on electricity rates using the Retail Price
Model (see RIA Chapter 5). We modeled retail electricity rates in the
no action case with unmanaged charging compared to the action case with
managed charging. We think this is a reasonable approach for the reason
noted above: given the considerable economic benefits of managed
charging, particularly in light of the increased PEV adoption
associated with the central case of the final rule, there is an
extremely strong economic incentive for market actors to adopt managed
charging practices. Our analysis projects
[[Page 28026]]
that there is no difference in retail electricity prices in 2030 and
the difference in 2055 is only 2.5 percent.\1023\ We estimate that the
2.5 percent difference is primarily due to distribution-level costs.
Note also that this is comparable to the 2-3% increase in distribution-
level investments estimated for the 5 states within the TEIS noted
above. The net cost of distribution-level upgrades are included within
our analysis of costs and benefits for the final rule along with other
grid-related costs modeled by IPM, and is reflected in electricity
rates estimated using the Retail Price Model (see RIA Chapter 5).
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\1023\ We note that had we compared an unmanaged action scenario
with an unmanaged no-action scenario, or a managed action scenario
with a managed no-action scenario, we would expect only marginally
different electricity rates, given that distribution costs are a
very small part of total electricity costs.
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A 2-3 percent increase in distribution system build out correlates
to a small increase in manufacturing output so concerns regarding
supply chain timing and cost are minimal. The total costs are modest
both in and of themselves, as a percentage of grid investment even
without considering mitigation strategies, and in terms of effect on
electricity rates for users. EPA thus believes that the costs
associated with distributive grid buildout attributable to the rule are
reasonable.
Further discussion of the results of the TEIS study are included in
the RIA Chapter 5.4.2., and additional details can be found in the TEIS
report included in the docket for this final rule. Based on our review
of the record, including the TEIS and other studies and public
comments,\1024\ and our consultations with DOE, we conclude that it is
reasonable to anticipate the power sector can continue to manage and
improve the electricity distribution system to support greater
deployment of PEVs, such as those we model in our compliance pathways,
and in fact the power sector may benefit from the increased deployment
of PEVs.
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\1024\ We note that the Edison Electric Institute in its
comments also supported the ability of the power sector to meet
future anticipated needs, stating that ``[e]lectric companies can
accommodate localized power needs at the pace of customer demand,
provided appropriate customer engagement and enabling policies are
in place''. Docket EPA-HQ-OAR-2022-0829-0708.
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6. Consumer Acceptance
EPA carefully considered acceptance of light-duty vehicle
technologies, qualitatively and quantitatively, because we recognize
that consumer acceptance is an important factor for any innovation and
therefore relevant factor to the feasibility of PEVs as a significant
emissions control strategy.\1025\ When we speak of consumer acceptance,
we mean consumer acceptance of ICE vehicles, HEVs, BEVs, and PHEVs. We
define acceptance as a multifaceted, nonlinear process consisting of
awareness, access, approval, and adoption.\1026\ In other words,
``acceptance'' of a given vehicle technology, as we define it and model
it, is not the same thing as ``purchase'' of a given vehicle
technology. For example, high relative acceptance of BEVs may or may
not result in BEV purchase. Relative acceptance of vehicle technologies
influences the purchase outcome but does not necessarily determine the
outcome. In the language of models, relative acceptance of vehicle
technologies is an input (i.e., a numeric parameter) and purchase
behavior is an output (i.e., projected market shares of vehicle
technologies) that is based on acceptance as well as on other factors.
Finally, we emphasize that in our discussion and representations of
consumer acceptance of any one vehicle technology is only meaningful
relative to other vehicle technologies. We represent consumer
acceptance quantitatively in our modeling via parameterization of a
logit model. The logit model is the most common example of a random
utility discrete choice model and the dominant paradigm for modeling
consumer demand. In this preamble section, we continue by focusing on
consumer acceptance via a conceptual, non-numerical lens. See RIA
Chapter 4.1 for an expanded presentation of consumer acceptance, the
quantitative parameterization of consumer acceptance (i.e.,
shareweights), and modeling framework for vehicle technology choice
(i.e., the logit model).
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\1025\ EPA focused on light-duty vehicle acceptance among non-
commercial consumers. We acknowledge that light-duty, commercial
consumers and medium-duty purchasers are likely to have purchase
behavior that prioritize different criteria, for example, operating
costs or other vehicle attributes.
\1026\ EPA recognizes that others may not employ the same
definitions of acceptance and adoption that we do. We did not apply
our definitions when, for example, interpreting feedback received
via public comments. However, these distinctions and discipline in
adhering to these definitions are important to conceptual clarity of
and modeling consumer processes (e.g., decision making) and
observable behavior (e.g., purchase, sales, registration).
---------------------------------------------------------------------------
EPA recognized that an evidence-based definition and understanding
of consumer acceptance of PEVs was an important consideration for this
rulemaking. Thus, EPA in coordination with the Lawrence Berkeley
National Laboratory (LBNL), conducted a comprehensive review of the
scientific literature regarding consumer acceptance of PEVs. That
effort culminated in a peer-reviewed report on PEV acceptance in which
EPA and LBNL organize and summarize the enablers and obstacles of PEV
acceptance evident from the scientific literature.\1027\ The review
concluded that ``there is no evidence to suggest anything immutable
within consumers or inherent to PEVs that irremediably obstructs
acceptance.'' More simply put, the enablers of PEV acceptance are
external to the person. With the evolution of the environment in which
people make decisions (e.g., infrastructure, advertising, access) and
advancements in technology and vehicle attributes (e.g., range, body
style, price), widespread acceptance of PEVs is very likely to follow.
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\1027\ Jackman, D. K., K. S. Fujita (LBNL), H. C. Yang (LBNL),
and M. Taylor (LBNL). Literature Review of U.S. Consumer Acceptance
of New Personally Owned Light-Duty (LD) Plug-in Electric Vehicles
(PEVs). U.S. Environmental Protection Agency, Washington, DC
Available at: https://cfpub.epa.gov/si/si_public_record_report.cfm?dirEntryId=353465.
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Consumer Reports (CR) describes trends in PEV acceptance as a
virtuous cycle in which consumer demand for PEVs will continue to grow.
``As automakers deliver more volume, economies of scale and intensified
competition for customers will further feed cost declines, which will
feed back into the cycle, and lead to increased EV demand.'' \1028\
Consumer Reports also argues that we have already observed this effect.
``This is because the barriers to EV adoption identified in CR's 2022
survey of BEV and low carbon fuels awareness are being addressed:
purchase cost for EVs is declining, charging infrastructure is
expanding, consumers are gaining more experience with EVs, and
automakers are investing in new models and increased production.\1029\
These trends tend to reinforce one another in a virtuous cycle to
create even more demand for these vehicles.'' \1030\
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\1028\ EPA-HQ-OAR-2022-0829-0728, pp. 10-14.
\1029\ Battery Electric Vehicles & Low Carbon Fuels Survey,
Consumer Reports, April 2022, https://article.images.consumerreports.org/image/upload/v1657127210/prod/content/dam/CRO-Images-2022/Cars/07July/2022_Consumer_Reports_BEV_and_LCF_Survey_Report.pdf. Accessed on 02/
23/2024.
\1030\ EPA-HQ-OAR-2022-0829-0728, pp. 10-14.
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In other words, PEV acceptance enablers (and diminishing obstacles)
are part of a positive and robust feedback loop. Growth in PEV adoption
has already grown based on technology advancement alone,\1031\ and is
expected
[[Page 28027]]
to continue to grow. The continued introduction of more PEV models,
especially SUVs and pickups, has brought, and will continue to bring,
more new vehicle buyers into the PEV market. PEV purchase incentives
have led to more PEV purchases, a trend we expect will continue given
the substantial additional incentives offered through the IRA. Easy,
accessible residential charging has produced higher levels of PEV
satisfaction; higher satisfaction correlates with more purchases.\1032\
Forsythe et al. (2023) finds that ``with the assumed technological
innovations, even if all purchase incentives were entirely phased out,
BEVs could still have a market share of about 50 percent relative to
combustion vehicles by 2030, based on consumer choice alone.'' In
conclusion, the empirical evidence strongly suggests that while
enablers can enhance each other, the absence of any one of these
enablers does not appear to diminish the effect of the others. In
short, the system does not have to be perfect for PEV acceptance to
increase and expand.
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\1031\ Forsythe, Connor R., Kenneth T. Gillingham, Jeremy J.
Michalek, and Kate S. Whitefoot. 2023. ``Technology advancement is
driving electric vehicle adoption.'' PNAS 120 (23). doi:https://doi.org/10.1073/pnas.2219396120.
\1032\ Hardman, S., and Tal, G., ``Understanding discontinuance
among California's electric vehicle owners,'' Nature Energy, v.538
n.6, May 2021.
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EPA further substantiates these and other findings with additional
observations of key enablers of PEV acceptance, namely increasing
market presence, more model choices, expanding infrastructure, and
decreasing costs to consumers.\1033\ First, annual sales of light-duty
PEVs in the U.S. have grown robustly and are expected to continue to
grow. PEVs reached 9.8 percent of monthly sales in January 2024 and
were 9.3 percent of all light-duty vehicle sales in 2023, up from 6.8
percent in 2022.\1034\ This robust growth combined with vehicle
manufacturers' plans to expand PEV production strongly suggests that
PEV market share will continue to grow rapidly. Second, the number of
PEV models available to consumers is increasing, meeting consumers
demand for a variety of body styles and price points. Specifically, the
number of BEV and PHEV models available for sale in the U.S. has
increased from about 24 in MY 2015 to about 60 in MY 2021 and to over
180 in MY 2023, with offerings in a growing range of vehicle
segments.\1035\ Data from JD Power and Associates shows that MY 2023
BEVs and PHEVs are now available as sedans, sport utility vehicles, and
pickup trucks. In addition, the greatest offering of PEVs is in the
popular crossover/SUV segment.\1036\ Third, the expansion of charging
infrastructure has been keeping up with PEV adoption as discussed in
section IV.C.4 of the preamble. This trend is widely expected to
continue, particularly in light of very large public and private
investments. Fourth, while the initial purchase price of BEVs is
currently higher than for most ICE vehicles, the price difference is
likely to narrow or become insignificant as the cost of batteries fall
and PEV production rises in the coming years.\1037\ Among the many
studies that address cost parity, an emerging consensus suggests that
purchase price parity is likely to be achievable by the mid-2020s for
some vehicle segments and models.1038 1039 Specifically, the
International Council on Clean Transportation (ICCT) projects that
price parity with ICE vehicles will ``occur between 2024 and 2026 for
150- to 200-mile range BEVs, between 2027 and 2029 for 250- to 300-mile
range BEVs, and between 2029 and 2033 for 350- to 400-mile range BEVs''
\1040\ The Environmental Defense Fund notes that ``most industry
experts believe wide-spread price parity will happen around 2025.''
\1041\ Lastly, the Inflation Reduction Act provides a purchase
incentive of up to $7,500 for eligible light-duty vehicles and buyers,
which is expected to increase consumer uptake of zero emissions vehicle
technology.\1042\
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\1033\ Jackman, D K, K S Fujita, H C Yang, and M Taylor. 2023.
Literature Review of U.S. Consumer Acceptance of New Personally
Owned Light-duty Plug-in Electric Vehicles. Washington, DC: U.S.
Environmental Protection Agency.
\1034\ Argonne National Laboratory, Energy Systems and
Infrastructure Analysis. 2024. Light-duty Electric Drive Vehicles
Monthly Sales Updates. https://www.anl.gov/esia/light-duty-electric-drive-vehicles-monthly-sales-updates, accessed 02/21/2024.
\1035\ Fueleconomy.gov, 2015 Fuel Economy Guide, 2021 Fuel
Economy Guide, and 2023 Fuel Economy Guide.
\1036\ Taylor, M., Fujita, K.S., Campbell N., 2024, ``The False
Dichotomies of Plug-in Electric Vehicles,'' Lawrence Berkeley
National Laboratory.
\1037\ International Council on Clean Transportation,
``Assessment of Light-Duty Electric Vehicle Costs and Consumer
Benefits in the United States in the 2022-2035 Time Frame,'' October
2022. ``This analysis does not consider the effect of any available
state, local, or federal subsidies and tax incentives for electric
vehicles and their charging infrastructure'' (page 30).
\1038\ International Council on Clean Transportation,
``Assessment of Light-Duty Electric Vehicle Costs and Consumer
Benefits in the United States in the 2022-2035 Time Frame,'' October
2022. ``This analysis does not consider the effect of any available
state, local, or federal subsidies and tax incentives for electric
vehicles and their charging infrastructure'' (page 30).
\1039\ Environmental Defense Fund and ERM, ``Electric Vehicle
Market Update: Manufacturer Commitments and Public Policy
Initiatives Supporting Electric Mobility in the U.S. and
Worldwide,'' September 2022. This report notes the Inflation
Reduction Act (IRA), but estimates do not take into act effects of
the IRA.
\1040\ International Council on Clean Transportation,
``Assessment of Light-Duty Electric Vehicle Costs and Consumer
Benefits in the United States in the 2022-2035 Time Frame,'' October
2022 (page iii). ``This analysis does not consider the effect of any
available state, local, or federal subsidies and tax incentives for
electric vehicles and their charging infrastructure'' (page 30).
\1041\ Environmental Defense Fund and ERM, ``Electric Vehicle
Market Update: Manufacturer Commitments and Public Policy
Initiatives Supporting Electric Mobility in the U.S. and
Worldwide,'' September 2022 (page 10). This report notes the
Inflation Reduction Act (IRA), but estimates do not take into act
effects of the IRA.
\1042\ Slowik, P., Searle, S., Basma, H., Miller, J., Zhou, Y.,
Rodriguez, F., . . . Baldwin, S. (2023). Analyzing the Impact of the
Inflation Reduction Act on Electric Vehicle Uptake in the United
States. The International Council on Clean Transportation. Retrieved
October 26, 2023, from https://energyinnovation.org/wp-content/uploads/2023/01/IRA-EV-assessment-white-paper-letter-v46.pdf.
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Recent research also further substantiates the conclusion that PEVs
acceptance and adoption will continue to grow and expand. Foremost
among those studies are the recent third-party projections of PEV
market shares. EPA reviewed several recent reports and studies
containing PEV projections, all of which include the impact of the IRA;
none consider the impact of this rule. Altogether, these studies
project PEV market share in a range from 42 to 68 percent of new
vehicle sales in 2030. The mid-range projections of PEV sales from
these studies, to which we compare our No Action case, range from 48 to
58 percent in 2030.1043 1044 1045 1046 1047 1048 In a recent
report, LBNL challenges ``emergent rules of thumb regarding PEV
acceptance'' (e.g., wealthy, urban, male). Their work suggests that
there is untapped demand among mainstream vehicle buyers that emerging
conventional wisdom regarding who buys and who doesn't buy PEVs is
[[Page 28028]]
incorrect. For example, they note that early PEVs were not well-
positioned to appeal to a large segment of the population. Most early
EVs were hatchbacks, which represents a very small portion of overall
US vehicle sales in a market where vehicle buyers tend to consider and
purchase vehicles with the same body style (e.g., many buyers only
consider SUVs.\1049\ In the hierarchy of purchase criteria, body style
ranks very high among consumers, and tends to be a criterion they are
unwilling to compromise.\1050\ Thus, a consumer may not consider
purchasing a PEV, even if they are interested in PEVs generally, when
PEVs are not available in their preferred body style but will consider
a PEV when a PEV is available in their preferred body style. All of the
above supports our conclusions that considerable further growth in the
US PEV market is not only possible, with additional investment and
product offerings by automakers and others, but likely to occur.
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\1043\ Cole, Cassandra, Michael Droste, Christopher Knittel,
Shanjun Li, and James H. Stock. 2023. ``Policies for Electrifying
the Light-Duty Fleet in the United States.'' AEA Papers and
Proceedings 113: 316-322. doi:https://doi.org/10.1257/pandp.20231063.
\1044\ IEA. 2023. ``Global EV Outlook 2023: Catching up with
climate ambitions.'' International Energy Agency.
\1045\ Forsythe, Connor R., Kenneth T. Gillingham, Jeremy J.
Michalek, and Kate S. Whitefoot. 2023. ``Technology advancement is
driving electric vehicle adoption.'' PNAS 120 (23). doi:https://doi.org/10.1073/pnas.2219396120.
\1046\ Bloomberg NEF. 2023. ``Electric Vehicle Outlook 2023.''
\1047\ U.S. Department of Energy, Office of Policy. 2023.
``Investing in American Energy: Significant Impacts of the Inflation
Reduction Act and Bipartisan Infrastructure Law on the U.S. Energy
Economy and Emissions Reductions.''
\1048\ Slowik, Peter, Stephanie Searle, Hussein Basma, Josh
Miller, Yuanrong Zhou, Felipe Rodriguez, Claire Buysse, et al. 2023.
``Analyzing the Impact of the Inflation Reduction Act on Electric
Vehicle Uptake in the United States.'' International Council on
Clean Transportation and Energy Innovation Policy & Technology LLC.
\1049\ Taylor, M., Fujita, K.S., and Campbell, N. 2024. Draft of
``The False Dichotomies of Plug-in Electric Vehicle Markets.''
Lawrence Berkeley National Laboratory.
\1050\ Fujita, K.S., Yang, H-C, Taylor, M., Jackman, D. 2022.
``Green Light on Buying a Car: How Consumer Decision-Making
Interacts with Environmental Attributes in the New Vehicle Purchase
Process.'' Transportation Research Record: Journal of the
Transportation Research Board, 2676:7. https://doi.org/10.1177/03611981221082566.
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Lastly, many individuals and institutions provided diverse comments
on our proposed rule regarding consumer acceptance. Commenters
expressed views about both access to and demand for PEVs, some noting
individual/household characteristics, vehicle attributes, and/or system
conditions affecting consumer acceptance of PEVs. For example, Consumer
Reports identified substantial unmet demand among U.S. consumers,
calculating that ``there are now approximately 45 EV-ready buyers for
every EV being manufactured.'' \1051\ Individual commenters at the
public hearings appear to have experienced this lack of access to PEVs
firsthand, stating that despite intentions to purchase a plug-in
electric vehicle, none were available for them to purchase. In a
similar vein, commenters from the Carnegie Mellon University and Yale
University ``present evidence that BEVs could constitute the majority
or near-majority of cars and SUVs by 2030, given widespread BEV
availability and technology trends.'' \1052\ In contrast, some
commenters, such as Stellantis and Honda, asserted that estimates of
PEV market growth in the proposed rule, were ``overly optimistic'' and
did not appear to take into account that PEV adoption ``does require
the owner to embrace a different approach'' and ``adapt their trip
planning and driving behavior to allow for charging needs.'' \1053\ For
example, Volkswagen Group of America expressed concerns about the
absence of a ``prerequisite . . . comprehensive, interoperable and
integrated charging infrastructure network across the U.S.'' \1054\
Relatedly, other commenters, including Nissan, Alliance for Automotive
Innovation, Toyota, and National Automobile Dealers Association,
suggested that PEVs could be out of reach for some consumers due to
purchase price; the inconvenience, novelty, or expense of charging; or
their belief that PEVs may not meet the needs of all consumers. In
response to these and other comments, we were attentive to the
timeframe, uncertainties, evidence, and studies associated with each
comment.\1055\ We considered all of the information provided by
commenters. See RTC section 13.
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\1051\ Harto, C. (2023). Excess Demand: The Looming Shortage.
Retrieved November 29, 2023, from https://advocacy.consumerreports.org/wp-content/uploads/2023/03/Excess-Demand-The-Looming-EV-Shortage.pdf.
\1052\ Forsythe, C. R., Gillingham, K. T., Michalek, J. J., &
Whitefoot, K. S. (2023). Technology advancement is driving electric
vehicle adoption. PNAS, 120(23). Retrieved November 29, 2023, from
https://www.pnas.org/doi/epdf/10.1073/pnas.2219396120.
\1053\ EPA-HQ-OAR-2022-0829-0678-0002 and EPA-HQ-OAR-2022-0829-
0652-0049.
\1054\ EPA-HQ-OAR-2022-0829-0669-003.
\1055\ EPA-HQ-OAR-2022-0829-0594-0005, EPA-HQ-OAR-2022-0829-
0701-0069, EPA-HQ-OAR-2022-0829-0620-0029, and EPA-HQ-OAR-2022-0829-
0470-0001.
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Taking into account all of the above--EPA and LBNL's report on PEV
acceptance, recent acceptance research, recent third party projections
of PEV adoption, public comments, market trends, and analyses presented
throughout this preamble and the RIA--we conclude that PEV acceptance
is growing and will continue to grow rapidly for all body styles,
particularly for vehicles likely to be used largely as passenger
vehicles such as sedans, wagons, CUVs, and SUVs. Observed and expected
PEV adoption and acceptance aligns well with patterns of adoption of
innovations observed through history. Typically, sales of a new
technology are low and increase slowly and unpredictably in what is
called the innovator and early adopter stage. After the early adopter
stage, adoption increases very quickly, with rapidly accelerating
demand as the technology becomes mainstream. We expect PEV adoption and
acceptance to follow the S-shaped behavior. See RIA Chapter 4.1.
We also conclude that our expectations for continued rapid growth
in PEV acceptance are reasonable. The system of PEV growing acceptance
enablers and diminishing obstacles is robust. PEV acceptance is
responding to the evolution of the environment in which people make
decisions (e.g., increasing market presence, expanding infrastructure,
advancements in technology, more model choices, decreasing costs to
consumers, increasing familiarity). Exposure to and experience with
PEVs lead to more PEV purchase which leads to more exposure and
experience and so on. More PEV production leads to economies of scale
that feed cost declines, more purchase, and more production. Recent
research also further substantiates the conclusion that PEVs acceptance
and adoption will continue to grow and expand. Foremost among those
studies are the recent third-party projections of PEV market shares,
with which EPA projections align. There appears to be little if any
evidence contrary to our conclusions among researchers and commenters
who recognize the interactions of time and network effects on the pace
and acceleration of the diffusion of innovation. At this time, the
evidence we have assessed indicates that over the next several years
consumer interest in PEVs will yield significant increases in PEV
adoption.
While we have emphasized PEVs and the relative growth in PEV
acceptance here, we note that the acceptance and purchase of ICE
vehicles, HEVs, PHEVs, and BEVs will persist throughout the timeframe
of this rule. Therefore, in relative terms, we represent acceptance of
all vehicle technologies. All of these technologies are well-
represented in EPA's modeling and in demonstrated compliance pathways,
as they are in third-party projections. For more information on LD
vehicle consumer modeling and considerations, see RIA Chapter 4.
7. Supply Chain, Manufacturing, and Mineral Security Considerations
All new motor vehicles, including ICE vehicles and PEVs, require
manufacturing inputs in the form of materials such as structural
metals, plastics, electrical conductors, electronics and computer
chips, and many other materials, minerals, and components that are
produced both domestically and globally. These inputs rely to varying
degrees on a highly interconnected global supply chain that includes
mining and recycling operations, processing of mined or
[[Page 28029]]
reclaimed materials into pure metals or chemical products, manufacture
of vehicle components, and final assembly of vehicles.
Although the market share of PEVs in the U.S. is already rapidly
growing, EPA recognizes that many manufacturers will likely produce
additional PEVs as part of their chosen strategy to achieve the
performance-based emissions standards, particularly after 2030.
Compared to ICE vehicles, the electrified powertrain of PEVs commonly
contains a greater proportion of conductive metals such as copper as
well as certain minerals and mineral products that are used in the
high-voltage battery. Accordingly, many of the public comments we
received were related to the need to secure sources of these inputs to
support increased manufacture of PEVs for the U.S. market.
First, it is important to view this issue from a holistic
perspective that also considers the inputs currently required by ICE
vehicles. Compared to PEVs, ICE vehicles rely to a greater degree on
certain inputs, most notably refined crude oil products such as
gasoline or diesel. Historically, supply and price fluctuations of
crude oil products have periodically created significant risks, costs,
and uncertainties for the U.S. economy and for national security, and
continue to pose them today. Manufacture of ICE vehicles also relies on
critical minerals (for example, platinum group metals) used in emission
control catalysts. EPA thus has many years of experience in assessing
the availability of critical minerals as part of our assessment of
feasibility of standards taking into consideration available
technologies, cost, and lead time. The critical minerals used in
emission control catalysts of ICE products, such as cerium, palladium,
platinum, and rhodium,\1056\ historically have posed uncertainty and
risk regarding their reliable supply. For example, platinum, which has
historically been recognized as a precious metal, was the dominant
platinum group metal used in early catalysts.\1057\ Platinum group
metals were understood to be costly and potentially scarce in advance
of emission control standards of the 1970s that were premised on use of
those minerals for catalyst control of pollutants.1058 1059
In the 1990s, concerns were similarly raised about possible shortages
of palladium resulting from the Tier 2 standards, yet the supply chain
adjusted to this need as well.\1060\ Although manufacturers have
engineered emission control systems to reduce the amount of these
minerals that are needed, they continue to be scarce and costly today,
and continue to be largely sourced from countries with which the U.S.
does not have free trade agreements. For example, South Africa and
Russia continue to be dominant suppliers of these metals as they were
in the 1970s, and U.S. relations with both countries have periodically
been strained. In this sense, the need for a secure supply chain for
the inputs required for PEV production is similar to that which
continues to be important for ICE vehicle production.
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\1056\ Department of Energy, ``Critical Materials Assessment,''
July 2023.
\1057\ Hageluken, C., ``Markets for the Catalyst Metals
Platinum, Palladium and Rhodium,'' Metall, v60, pp. 31-42, January
2006.
\1058\ For example, in floor debate over the Clean Air Act of
1970, Senator Griffin opposed the vehicle emissions standards
because the vehicle that had been shown capable of meeting the
standards used platinum-based catalytic converters and ``[a]side
from the very high cost of the platinum in the exhaust system, the
fact is that there is now a worldwide shortage of platinum and it is
totally impractical to contemplate use in production line cars of
large quantities of this precious material. . . .'' Environmental
Policy Division of the Congressional Research Service Volume 1, 93d
Cong., 2d Sess., A Legislative History of the Clean Air Amendments
of 1970 at 307 (Comm. Print 1974).
\1059\ Further, in debate over both the 1977 and 1990 amendments
to the Clean Air Act, some members of Congress supported relaxing
NOX controls from motor vehicles due to concerns over
foreign control of rhodium supplies, but Congress rejected those
efforts. See 136 Cong. Rec. 5102-04 (1990); 123 Cong. Rec. 18173-74
(1977).
\1060\ U.S. EPA, Tier 2 Report to Congress, EPA420-R-98-008,
July 1998, p. E-13.
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The PEV supply chain consists of several activity stages including
upstream, midstream, and downstream, which includes end of life. In
this discussion, upstream refers to extraction of raw materials from
mining activities. Midstream refers to additional processing of raw
materials into battery-grade materials, production of electrode active
materials (EAM), production of other battery components (i.e.,
electrolyte, foils, and separators), and electrode and cell
manufacturing. Downstream refers to production of battery modules, and
packs from battery cells. End of life refers to recovery and processing
of used batteries for reuse or recycling.\1061\ Global demand for zero-
emission vehicles has already led to rapidly growing demand for
capacity in each of these areas and subsequent buildout of this
capacity across the world.
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\1061\ Rocky Mountain Institute, ``The EV Battery Supply Chain
Explained,'' May 5, 2023. Accessed on May 15, 2023 at https://rmi.org/the-ev-battery-supply-chain-explained.
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The value of developing a robust and secure supply chain that
includes these activities and the products they create has accordingly
received broad attention in the industry and is a key theme of comments
we have received. The primary considerations here are (a) the
capability of global and domestic supply chains to support U.S.
manufacturing of batteries and other PEV components, (b) the
availability of critical minerals as manufacturing inputs, and (c) the
possibility that sourcing of these items from other countries, to the
extent it occurs, might pose a threat to national security. In this
section, EPA considers how these factors relate to the feasibility of
producing the PEVs that manufacturers may choose to produce to comply
with the standards.
As in the proposal, we continue to note several key themes that
contribute to our conclusion that the proposed standards are
appropriate with respect to these issues. First, we note that, to the
extent that minerals, battery components, and battery cells are sourced
from outside of the U.S., it is not because the products cannot be
produced in the U.S., but because other countries have already invested
in developing a supply chain for their production, while the U.S. has
begun doing so more recently. The rapid growth in domestic demand for
automotive lithium-ion batteries that is already taking place is
driving the development of a supply chain for these products that
includes development of domestic sources as well as a rapid buildout of
production capacity in countries with which the U.S. has good
relations, including countries with free-trade agreements (FTAs), long-
established trade allies and other economic allies.\1062\ For example
(as described and cited later in this section), U.S. manufacturers are
increasingly seeking out secure, reliable, and geographically proximate
supplies of batteries, cells, and the minerals and materials needed to
build them; this is also necessary to remain competitive in the global
automotive market where electrification is proceeding rapidly. As a
result, a large number of new U.S. battery, cell, and component
manufacturing facilities have recently been announced or are already
under
[[Page 28030]]
construction. Many automakers, suppliers, startups, and related
industries have already recognized the need for increased domestic and
``friendshored'' production capacity as a business opportunity, and are
investing in building out various aspects of the supply chain
domestically as well. Second, Congress and the Administration have
taken significant steps to accelerate this activity by funding,
facilitating, and otherwise promoting the rapid growth of U.S. and
allied supply chains for these products through the Inflation Reduction
Act (IRA), the Bipartisan Infrastructure Law (BIL), and numerous
Executive Branch initiatives. Recent and ongoing announcements of
investment and construction activity stimulated by these measures
indicate that they are having a strong impact on development of the
domestic supply chain, as illustrated by recent analysis from Argonne
National Laboratory and the Department of Energy. Finally, to the
extent that minerals are imported to the U.S. as constituents of
vehicles, batteries, or cells, or for vehicle or battery production in
the U.S., they largely remain in the U.S. and over the long term have
the potential to be reclaimed through recycling, reducing the need for
new materials from either domestic or foreign sources. In this updated
analysis for the final rule, we examine these themes again in light of
the public comments and additional data that has become available since
the proposal.
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\1062\ Here we use the term ``economic allies'' to refer to
countries that are not covered nations and do not have a free-trade
agreement (FTA) with the U.S., but which are party to other economic
agreements or defense treaties. Economic agreements include the
Minerals Security Partnership (MSP), Critical Minerals Agreement
(CMA), Trade and Investment Framework Agreement (TIFA), bilateral
investment treaties (BITs), or other international initiatives as
described in Figure 18, ``U.S. government international initiatives
to secure battery minerals and materials.''
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We received a large number of comments on our analysis of critical
minerals, battery and mineral production capacity, and mineral
security. Some common themes were: that the proposal did not adequately
address critical minerals or battery manufacturing; that we should
account for all critical minerals rather than lithium only; that the
proposal did not adequately address the risk associated with uncertain
availability of critical minerals in the future; and that the timeline
and/or degree of BEV penetration anticipated by the proposal cannot be
supported by available minerals and/or growth in domestic supplies or
battery manufacturing. It was also suggested that the rapid growth in
demand stemming from the rule would result in undue reliance on nations
with which the U.S. does not have good trade relations, increased
reliance on imports in general, and/or encourage environmentally or
socially unsound sourcing practices. Some commenters felt that the
discussion of national security in the proposal was not sufficient,
pointing again to concerns about vulnerabilities resulting from a
dependence on imported minerals and materials in order to manufacture
vehicles or support the infrastructure they require.\1063\
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\1063\ While these latter concerns bear a resemblance to the
issue of energy security, in the context of mineral or other inputs
to vehicle manufacturing we refer to this topic as mineral security.
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Another frequent theme of the comments was a perception of
uncertainty and risk, in reference to the question of whether or not
critical mineral prices and availability will stabilize in the near
term or even the long term. Some commenters also suggested that this
uncertainty might be addressed by a stringency adjustment mechanism, in
which progress in domestic sourcing of critical minerals, battery
components, and other inputs to the supply chain would be monitored and
the stringency of the standards adjusted if progress underperforms
expectations. Commenters also cited the need for permitting reform and
streamlining, as permitting is a major factor in the lead time
necessary to develop new mineral sources. It was also suggested that
the desire to source from responsible vendors that support
Environmental, Social, and Governance (ESG) goals could increase the
cost of purchased minerals by encouraging use of higher-cost domestic
supplies. It was also suggested that BEVs are not an efficient use of
these limited resources, and the goals of the standards could be more
effectively met with HEVs and PHEVs, which require less critical
mineral content and impose less demand on infrastructure, reducing the
level of risk associated with all of these issues.
For this final rule we considered the public comments carefully. We
have provided detailed responses to comments relating to critical
minerals, the supply chain, and mineral security in section 15 of the
RTC. We also continued our ongoing consultation with industry and
government agency sources (including the Department of Energy (DOE) and
National Labs, the Department of State, the U.S. Geological Survey
(USGS), and several analysis firms) to collect information on
production capacity forecasts, price forecasts, global mineral markets,
and related topics. Importantly, we also coordinated with DOE and NHTSA
in their assessment of the outlook for supply chain development and
critical mineral availability. The Department of Energy is well
qualified for such research, as it routinely studies issues related to
electric vehicles, development of the supply chain, and broad-scale
issues relating to energy use and infrastructure, through its network
of National Laboratories. DOE worked together with Argonne National
Laboratory (ANL) beginning in 2022 to assess global critical minerals
availability and North American battery components manufacturing, and
coordinated with EPA to share the results of these analyses during much
of 2023 and early 2024. In sections IV.C.7.i through IV.C.7.iv of this
preamble, below, we review the main findings of this work, along with
the additional information we have collected since the proposal. As in
the proposal, we have considered the totality of information in the
public record in reaching our conclusions regarding the influence of
future manufacturing capacity, critical minerals, and mineral security
on the feasibility of the final standards.
In EPA's view, many of the concerns stated by commenters about the
supply chain, critical minerals, and mineral security were stated as
part of a broader argument that the proposed standards were too
stringent; that is, that the commenter believed that the standards
should be weakened (or withdrawn entirely) because the supply chain or
the availability of critical minerals could not support the amount of
vehicle electrification that would result from the standards, or it
would create a reliance on imported products that would threaten
national security. As will be discussed in the following sections, our
updated assessment of the evidence continues to support the conclusion
that the standards are appropriate from the perspective of critical
minerals availability, the battery supply chain, and mineral security.
Further, given the economic and other factors that are contributing to
continued development of a robust and secure supply chain, we find no
persuasive evidence that the need to establish supply chains for
critical minerals or components will adversely impact national security
by creating a long-term dependence on imports of critical minerals or
components from covered nations or associated suppliers. The current
and projected availability of critical minerals and components from
domestic production or trade with friendly countries, including
countries with FTAs, countries participating in the Mineral Security
Partnership (MSP),1064 1065 and other economic
[[Page 28031]]
allies, as well as the continued incentives for suppliers and
manufacturers to develop sourcing options from these countries, provide
a sufficient basis to conclude that these materials are likely to be
available in sufficient quantities for vehicle manufacturers without
undue reliance on covered nations or associated suppliers that could
potentially raise national security concerns. Moreover, we expect that
the standards will provide increased regulatory certainty for domestic
production of batteries and critical minerals, and for creating
domestic supply chains, which in turn has the potential to strengthen
the global competitiveness of the U.S. in these areas. Our assessments
are informed by extensive consultation with the Department of Energy,
Argonne National Laboratory, and other government agencies that
represent some of the strongest public sector expertise in these areas.
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\1064\ The Minerals Security Partnership (MSP) ``aims to
accelerate the development of diverse and sustainable critical
energy minerals supply chains through working with host governments
and industry to facilitate targeted financial and diplomatic support
for strategic projects along the value chain.'' MSP partners include
Australia, Canada, Finland, France, Germany, India, Italy, Japan,
Norway, the Republic of Korea, Sweden, the United Kingdom, the
United States, and the European Union (represented by the European
Commission). https://www.state.gov/minerals-security-partnership.
\1065\ ``Minerals Security Partnership (MSP) Principles for
Responsible Critical Mineral Supply Chains,'' https://www.state.gov/wp-content/uploads/2023/02/MSP-Principles-for-Responsible-Critical-Mineral-Supply-Chains-Accessible.pdf.
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Regarding the adequacy of the supply chain in supporting the
standards, EPA notes that it is a misconception to assume that the U.S.
must establish a fully independent domestic supply chain for critical
minerals or other inputs to PEV production in order to contemplate
standards that may result in increased manufacture of PEVs. The supply
chain that supports production of consumer products, including ICE
vehicles, is highly interconnected across the world, and it has long
been the norm that global supply chains are involved in providing many
of the products that are commonly available in the U.S. market and that
are used on a daily basis. As with almost any other product, the
relevant standard is not complete domestic self-sufficiency, but rather
a diversified supply chain that includes not only domestic production
where possible and appropriate but also includes trade with FTA
countries and other economic allies with whom the U.S. has good trade
relations. As discussed later and further illustrated in Figure 38 of
section IV.C.7.ii of this preamble, bilateral and multilateral trade
agreements and other arrangements (such as defense agreements and
various development and investment partnerships), either long-standing
or more recently established, already exist with many countries, which
greatly expands opportunities to develop a secure supply chain that
reaches well beyond the borders of U.S.
EPA also notes that no analysis of future outcomes with regard to
the supply chain, critical minerals, or mineral security can be
absolutely certain. In general, in establishing appropriateness of
standards, the Clean Air Act does not require that EPA must prove that
every potential uncertainty associated with compliance with the
standards must be eliminated a priori. It is well-established in case
law that ``[i]n the absence of theoretical objections to the
technology, the agency need only identify the major steps necessary for
development of the device, and give plausible reasons for its belief
that the industry will be able to solve those problems in the time
remaining. Thus, EPA is not required to rebut all speculation that
unspecified factors may hinder `real world' emission control.'' \1066\
Thus, it is not required, nor would it be reasonable to expect, that
EPA prove sufficient production capacity already exists today for
technologies or inputs that may be needed to comply with standards in
the future, nor that all potential uncertainties that can be identified
regarding the development of that capacity must be eliminated. In fact,
past EPA rulemakings have often been technology-forcing, and so have
led industry to develop and increase production of technologies for
which critical inputs or production capacity were not fully developed
and in place at the time. Some examples include standards in the 1970s
that led to the widespread use of catalysts for emission control, the
phase-down of lead in gasoline from the 1970s to the 1980s,
reformulated gasoline in the 1990s, and the use of selective catalytic
reduction (and diesel exhaust fluid), in the 2010s.
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\1066\ NRDC v. EPA, 655 F.2d 318, 333-34 (D.C. Cir. 1981).
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Accordingly, our analysis of the supply chain and critical minerals
is oriented toward recognizing the steps that are needed to support the
increased penetrations of PEVs we project in the compliance analysis,
and showing that these needs are capable of being addressed in a manner
consistent with meeting the standards during the time frame of the
rule.
EPA has considered the public comments in total, and as described
throughout these rulemaking documents, is finalizing standards that are
less stringent than in the proposal, particularly in the early years of
the program. In the public comments relating to supply chain, critical
minerals, and mineral security, EPA finds no evidence that would lead
it to conclude that a further reduction in the stringency of the
standards is appropriate or necessary.
While commenters have presented information to further demonstrate
the well-understood concept that currently operating supply capacity
must grow in order to meet projected future demand, and have recited
many of the uncertainties commonly associated with predicting this or
any future response of supply to future demand, they have failed to
provide specific evidence to support the implication that the demand
resulting from the standards will not or cannot be met by industry in
the time available. Commenters question whether market forces and
government initiatives and incentives that are already underway will
lead to sufficient supply to meet the standards, but do not show
specifically why these activities should reasonably be expected to
fail. Indeed, EPA has shown that the industry is working actively and
effectively to increase supply and secure supply chains for needed
materials; that government incentives and initiatives have been defined
and are moving forward with intended effect; and that current price
forecasts and investment outlooks for the time frame of the rule do not
suggest that industry at large foresees a looming inability to meet the
proposed standards, especially given that they have been publicly known
for nearly a year and were more stringent than the final standards.
Although commenters imply that current circumstances or future
unknowns amount to a constraint that will prevent industry from meeting
the standards or would cause harm by doing so, they have not identified
any specific alleged constraint or set of constraints with sufficient
specificity that it would lead EPA to reasonably conclude that a
reduction in stringency is necessary to address their concerns. Nor
have commenters detailed and quantified any such constraint
sufficiently that it could be translated into any specific degree of
stringency reduction that commenters believe would address their
concerns.
The presence of uncertainty is a common element in any forward-
looking analysis, and is typically approached as a matter of risk
assessment, including sensitivity analysis conducted around costs,
compliance paths, or other key factors. Taken as a whole, our
examination of the status and outlook for development of the supply
chain, combined with the
[[Page 28032]]
robust set of sensitivity cases that we include in the updated
analysis, explore the most significant risks and uncertainties
surrounding the future development of these and other issues, and show
that compliance with the final standards is possible under a broad
range of reasonable scenarios. Included in these scenarios are
alternative compliance pathways that would rely on fewer BEVs and more
vehicles with ICEs across a range of electrification (including non-
hybrid ICE vehicles, HEVs and PHEVs), which would significantly reduce
the demand for battery production and critical minerals compared to the
central case.
Section IV.C.7.i of the preamble provides a general review of how
we considered supply chain and manufacturing considerations in this
analysis, the sources we considered, and how we used this information
in the analysis. Section IV.C.7.ii examines the issues surrounding
availability of critical mineral inputs. Section IV.C.7.iii provides a
high-level discussion of the security implications of increased demand
for critical minerals and other materials used to manufacture
electrified vehicles. Section IV.C.7.iv describes the role of battery
and mineral recycling. Additional details on these aspects of the
analysis may be found in RIA Chapter 3.1, including 3.1.5 where we
describe how we used this information to develop modeling constraints
on PEV penetration for the compliance analysis.
i. Production Capacity for Batteries and Battery Components
Major steps in manufacturing a PEV battery pack include
manufacturing of battery cells and assembly of cells into modules that
can be assembled into a battery pack. Inputs to cell manufacturing
include electrode active materials (EAM), such as cathode and anode
powders, as well as specialized products such as electrolytes,
separators, binders, and similar materials. Depending on the level of
vertical integration, a plant making cells might produce some of these
inputs in-house or purchase them from a supplier. While other battery
chemistries exist or are under development, this section focuses on
supply chains for lithium-ion batteries given their wide use and likely
predominance during the time frame of the rule.
In the proposal, we examined the outlook for U.S. and global
battery manufacturing capacity for automotive lithium-ion batteries and
compared it to our projection of U.S. battery demand under the proposed
standards. We collected and reviewed a number of independent studies
and forecasts, including numerous studies by analyst firms and various
stakeholders, as well as a study of announced North American cell and
battery manufacturing facilities compiled by Argonne National
Laboratory. Our review of these studies included consideration of
uncertainties of the sort that are common to any forward-looking
analysis but did not identify any hard constraint that indicated that
global or domestic battery manufacturing capacity would be insufficient
to support battery demand under the proposed standards. The review
indicated that the industry was already showing a rapidly growing and
robust response to meet current and anticipated demand, that this
activity was widely expected to continue, and that the level of North
American manufacturing capacity that had been announced to date would
be sufficient to meet the demand projected under the proposed
standards. We assessed that battery manufacturing capacity was not
likely to pose a limitation on the ability of auto manufacturers to
meet the standards as proposed.
We received a variety of comments, some of which disagreed with our
assessment and others which supported it. Among those that disagreed,
some primary themes included: that we looked only at light-duty battery
demand and not at other transportation or product sectors that use
lithium-ion batteries, such as heavy-duty vehicles, stationary storage,
and portable devices; that the projections of North American
manufacturing capacity did not include sufficient ramp-up time; and
that we should consider active material manufacturing in addition to
cell manufacturing. The Alliance for Automotive Innovation included in
its comments a BMI forecast that indicated a somewhat lower battery
manufacturing capacity than that documented by ANL.
EPA appreciates and has carefully considered the substantive and
detailed comments offered by the commenters. The additional information
EPA has collected since the proposal, through these public comments and
our continued research, informs many of the points raised by the
commenters. Taken together, EPA does not find evidence that would
change our previous assessment in the proposal that the outlook for
U.S. battery production indicates that it is likely to be sufficient to
support the standards.
One important factor in our assessment is a study of North American
battery and cell manufacturing capacity performed by ANL, which updates
an earlier version of the study that we cited in the proposal.\1067\
The updated ANL study further reinforces our assessment of U.S. battery
manufacturing capacity, showing that announced capacity has
significantly increased since the prior study. EPA considers ANL's
assessment through December 2023 to be thorough and up to date and
notes that the BMI assessment cited in comments by the Alliance in July
2023 necessarily represents earlier information. The updated ANL
projections estimate the period from announcement to beginning of
production for each individual plant based on numerous factors, and
uses a baseline estimate of 3 years from beginning of production to
full scale operation, based on historical cell manufacturing data. ANL
describes this as ``a modestly conservative estimate,'' acknowledging
that plants could reach nominal capacity more quickly or more slowly.
ANL has also specifically accounted for the intended use of the cells
produced in these plants, finding as expected that the vast majority
are expected to be used in light-duty automotive applications rather
than heavy-duty, stationary or consumer product applications.
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\1067\ Argonne National Laboratory, ``Quantification of
Commercially Planned Battery Component Supply in North America
through 2035,'' ANL-24/14, March 2024. https://publications.anl.gov/anlpubs/2024/03/187735.pdf.
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Some public commenters stated that we should include consideration
of active material manufacturing. In response, EPA notes that the
outlook for global cathode active material manufacturing capacity was
considered in the proposal; later in this section we consider
additional information regarding manufacturing for electrode active
materials and other cell components.
[[Page 28033]]
In addition, our updated compliance analysis projects a
substantially lower demand for battery production than in the proposal.
This is largely due to the effect of our higher battery cost inputs,
which reduce the penetration of BEVs, the inclusion of PHEVs which use
smaller batteries than BEVs, and updated BEV efficiency inputs. After
including all of these updates, projected North American automotive
battery production capacity continues to surpass projected demand (see
the later discussion at Figure 36). Even if a shortfall were to occur,
our higher battery cost sensitivity accounts for higher battery costs
that might result, and as previously noted, alternative compliance
pathways that place less demand on battery production would continue to
exist.
Since the proposal, we have not found evidence to change our
observation that U.S. PEV production to date has not been particularly
reliant on foreign manufacture of batteries and cells, nor that
increased PEV penetration must imply such a reliance. In the proposal
we noted that about 57 percent of cells and 84 percent of assembled
packs sold in the U.S. from 2010 to 2021 were manufactured in the
U.S.1068 1069 Continued growth in U.S. BEV sales is
dominated by manufacturers such as Tesla who largely use U.S. made
batteries, and the large production capacity of announced U.S. plants
under construction or planned also suggests that this will continue to
be the case going forward.
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\1068\ Argonne National Laboratory, ``Lithium-Ion Battery Supply
Chain for E-Drive Vehicles in the United States: 2010-2020,'' ANL/
ESD-21/3, March 2021.
\1069\ U.S. Department of Energy, ``Vehicle Technologies Office
Transportation Analysis Fact of the Week #1278, Most Battery Cells
and Battery Packs in Plug-in Vehicles Sold in the United States From
2010 to 2021 Were Domestically Produced,'' February 20, 2023.
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We also continue to see evidence that global lithium-ion battery
and cell production is growing rapidly and is likely to keep pace with
increasing global demand. In the proposal we noted a 2021 report from
Argonne National Laboratory (ANL) \1070\ that examined the state of the
global supply chain for electrified vehicles and included a comparison
of recent projections of future global battery manufacturing capacity
and projections of future global battery demand from various analysis
firms out to 2030, as seen in Figure 32. The three most recent
projections of capacity (from BNEF, Roland Berger, and S&P Global in
2020-2021) that were collected by ANL at that time exceeded the
corresponding projections of demand by a significant margin in every
year for which they were projected, suggesting that global battery
manufacturing capacity was already responding strongly to increasing
demand.
---------------------------------------------------------------------------
\1070\ Argonne National Laboratory, ``Lithium-Ion Battery Supply
Chain for E-Drive Vehicles in the United States: 2010-2020,'' ANL/
ESD-21/3, March 2021.
\1071\ Argonne National Laboratory, ``Lithium-Ion Battery Supply
Chain for E-Drive Vehicles in the United States: 2010-2020,'' ANL/
ESD-21/3, March 2021.
\1072\ Federal Consortium for Advanced Batteries, ``National
Blueprint for Lithium Batteries 2021-2030,'' June 2021 (Figure 2).
Available at https://www.energy.gov/sites/default/files/2021-06/FCAB%20National%20Blueprint%20Lithium%20Batteries%200621_0.pdf.
[GRAPHIC] [TIFF OMITTED] TR18AP24.030
Figure 32: Future Global Li-ion Battery Demand and Production Capacity,
2020-2030 1071 1072
[[Page 28034]]
Since the proposal, we have not seen evidence that the general
conclusion conveyed by Figure 32 has changed. More recent projections
have become available that indicate that projections of future capacity
have grown dramatically in only a short time. For example, in May 2023
the International Energy Agency (IEA) projected a global capacity of
3.97 TWh in 2025,\1073\ more than twice the highest projection in
Figure 32 of about 1.75 TWh for 2025 made by BNEF in 2020. IEA also
projected 6.8 TWh for 2030,\1074\ which is about triple the highest
projection made for 2029 by Roland Berger in 2020. In December 2023,
BNEF indicated that its projection of North American lithium-ion cell
manufacturing nameplate capacity for 2030 was 76 percent higher than
its projection for the same year in 2022, and attributed the increase
in part to industry's response to IRA incentives including the 45X
production tax credit. The same report indicated that global capacity
could increase to as much as 7.4 TWh in 2025 if all project
announcements that were public at the time were to be completed.\1075\
The rate of increase of projections such as these strongly indicate
that the capacity of both domestic and global battery production is
increasing at a rapid pace that is much greater than anticipated only
two to three years ago. Further, the IEA indicates that the 6.8 TWh
global capacity projected for 2030 would be enough to cover global
battery demand under its ``Net Zero'' scenario, and would cover nearly
twice the demand implied by currently announced pledges across the
world.\1076\ The updated ANL study supports the continuation of this
trend, finding projected battery cell production in MSP countries
through 2035 (outside North America) to slightly exceed the sum in
North America, with each reaching 1,300 GWh/year by 2030.
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\1073\ International Energy Agency, ''Lithium-ion battery
manufacturing capacity, 2022-2030,'' May 22, 2023. Accessed on
February 22, 2024 at https://www.iea.org/data-and-statistics/charts/lithium-ion-battery-manufacturing-capacity-2022-2030.
\1074\ International Energy Agency, ``Global EV Outlook 2023,''
p. 112, May 2023. Accessed on November 28, 2023 at https://iea.blob.core.windows.net/assets/dacf14d2-eabc-498a-8263-9f97fd5dc327/GEVO2023.pdf.
\1075\ BloombergNEF, ``Zero-Emission Vehicles Factbook: A
BloombergNEF special report prepared for COP28, December 2023, p. 30
and 40.
\1076\ International Energy Agency, ``Global EV Outlook 2023,''
p. 122, May 2023. Accessed on November 28, 2023 at https://iea.blob.core.windows.net/assets/dacf14d2-eabc-498a-8263-9f97fd5dc327/GEVO2023.pdf.
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As described in section I.A.2 of this preamble, manufacturers are
continuing to project high levels of electrification in their future
fleets and are continuing to make very large investments toward making
this possible, by increasing manufacturing capacity and securing
sources and suppliers for critical minerals, materials, and components.
Although some manufacturers, such as Toyota and Stellantis, have most
recently signaled a potential interest in including a significant
percentage of HEVs and PHEVs in their fleets, this remains consistent
with our modeling as it represents a potential compliance path that may
be attractive to manufacturers with substantial expertise or customer
base that supports these products. Indeed, as we show below,
manufacturers' choosing to produce more HEVs and PHEVs would decrease
the need for batteries, battery components, and critical minerals,
providing even further support for our conclusion that related supply
issues are unlikely to constrain compliance with the final rule.
One analysis we cited in the proposal indicated that 37 of the
world's automakers are planning to invest a total of almost $1.2
trillion by 2030 toward electrification,\1077\ a large portion of which
will be used for construction of manufacturing facilities for vehicles,
battery cells and packs, and materials, supporting up to 5.8 terawatt-
hours of battery production and 54 million electric vehicles per year
globally.\1078\ Similarly, an analysis by the Center for Automotive
Research showed that a significant shift in North American investment
is occurring toward electrification technologies, with $36 billion of
about $38 billion in total automaker manufacturing facility investments
announced in 2021 being slated for electrification-related
manufacturing in North America, with a similar proportion and amount on
track for 2022.\1079\
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\1077\ Reuters, ``A Reuters analysis of 37 global automakers
found that they plan to invest nearly $1.2 trillion in electric
vehicles and batteries through 2030,'' October 21, 2022. Accessed on
November 4, 2022 at https://graphics.reuters.com/AUTOS-INVESTMENT/ELECTRIC/akpeqgzqypr/.
\1078\ Reuters, ``Exclusive: Automakers to double spending on
EVs, batteries to $1.2 trillion by 2030,'' October 25, 2022.
Accessed on November 4, 2022 at https://www.reuters.com/technology/exclusive-automakers-double-spending-evs-batteries-12-trillion-by-2030-2022-10-21/.
\1079\ Center for Automotive Research, ``Automakers Invest
Billions in North American EV and Battery Manufacturing
Facilities,'' July 21, 2022. Retrieved on November 10, 2022 at
https://www.cargroup.org/automakers-invest-billions-in-north-american-ev-and-battery-manufacturing-facilities/.
---------------------------------------------------------------------------
Since the proposal, ongoing work conducted by ANL examines the most
recent developments in the growth of the supply chain and confirms
continuation of this trend. As noted previously, ANL has continued
tracking investments in battery and electric vehicle manufacturing to
estimate growth of battery production in North America, based on press
releases, financial disclosures, and news articles.\1080\ ANL finds
that since 2000, companies have announced over $150 billion in planned
investments for battery production in the United States.\1081\ In this
context, battery production refers to the full chain of production
including extraction of the raw minerals necessary to make batteries,
processing into battery-grade materials, manufacturing of active
materials and cell components, and production of battery cells and
packs for end use. ANL finds that this investment has accelerated in
recent years, with over $100 billion dollars of investment announced in
the last two years alone.
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\1080\ Argonne National Laboratory, ``Quantification of
Commercially Planned Battery Component Supply in North America
through 2035,'' ANL-24/14, March 2024.
\1081\ This value is based upon public statements of investment.
Not all manufacturing facility expansions include explicit
information about the scale of the investment. Additionally, this
value is based on ANL tracking of investments. While diligent effort
has been paid to include existing facilities and older press
releases, these historical announcements are more difficult to find,
and so this data may be biased against older investments.
---------------------------------------------------------------------------
The majority of the battery investments are for lithium-ion
batteries, linked to the development and deployment of electric
vehicles. Historically, many of these investments have been in
traditional auto manufacturing locations in eastern North America, with
many found in a band from Ontario through Michigan and other Great
Lakes states, and then to newer vehicle assembly plants in the south,
especially in Alabama, Tennessee, and South Carolina. The most
prominent battery cell manufacturing investments have roughly followed
this pattern.
We also noted in the proposal that the Department of Energy had in
2021 accounted for at least 13 new battery plants, most of which will
include cell manufacturing, that were expected to become operational in
the U.S. in the next few years.\1082\ Among these, in partnership with
SK Innovation, Ford is building three large new battery plants in
Kentucky and Tennessee \1083\ and a
[[Page 28035]]
fourth in Michigan.\1084\ General Motors is partnering with LG Chem to
build another three plants in Tennessee, Michigan, and Ohio, and
considering another in Indiana. LG Chem has also announced plans for a
cathode material production facility in Tennessee, said to be
sufficient to supply 1.2 million high-performance electric vehicles per
year by 2027.\1085\ Panasonic, already partnering with Tesla for its
factories in Texas and Nevada, is planning two new factories in
Oklahoma and Kansas. Toyota plans to be operational with a plant in
Greensboro, North Carolina in 2025, and Volkswagen in Chattanooga,
Tennessee at about the same time. According to a May 2022 forecast by
S&P Global, announcements such as these were expected to result in a
U.S. annual manufacturing capacity of 382 GWh by 2025,\1086\ or 580 GWh
by 2027,\1087\ up from roughly 60 GWh 1088 1089 today.
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\1082\ Department of Energy, Fact of the Week #1217, ``Thirteen
New Electric Vehicle Battery Plants Are Planned in the U.S. Within
the Next Five Years,'' December 20, 2021.
\1083\ Ford Media Center, ``Ford to Lead America's Shift to
Electric Vehicles with New Mega Campus in Tennessee and Twin Battery
Plants in Kentucky; $11.4B Investment to Create 11,000 Jobs and
Power New Lineup of Advanced EVs,'' Press Release, September 27,
2021.
\1084\ Ford Media Center, ``Ford Taps Michigan for New LFP
Battery Plant; New Battery Chemistry Offers Customers Value,
Durability, Fast Charging, Creates 2,500 More New American Jobs,''
Press Release, February 13, 2023.
\1085\ LG Chem, ``LG Chem to Establish Largest Cathode Plant in
US for EV Batteries,'' Press Release, November 22, 2022.
\1086\ S&P Global Market Intelligence, ``US ready for a battery
factory boom, but now it needs to hold the charge,'' October 3,
2022. Accessed on November 22, 2022 at https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-ready-for-a-battery-factory-boom-but-now-it-needs-to-hold-the-charge-72262329.
\1087\ S&P Global Mobility, ``Growth of Li-ion battery
manufacturing capacity in key EV markets,'' May 20, 2022. Accessed
on November 22, 2022 at https://www.spglobal.com/mobility/en/research-analysis/growth-of-liion-battery-manufacturing-capacity.html.
\1088\ Federal Consortium for Advanced Batteries, ``National
Blueprint for Lithium Batteries 2021-2030,'' June 2021. Available at
https://www.energy.gov/sites/default/files/2021-06/FCAB%20National%20Blueprint%20Lithium%20Batteries%200621_0.pdf.
\1089\ S&P Global Mobility, ``Growth of Li-ion battery
manufacturing capacity in key EV markets,'' May 20, 2022. Accessed
on November 22, 2022 at https://www.spglobal.com/mobility/en/research-analysis/growth-of-liion-battery-manufacturing-capacity.html.
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As noted in the proposal, manufacturers continue to approach
construction of new battery manufacturing plants as part of joint
ventures with established cell suppliers, by which the OEM may secure a
supply of cells, modules, or battery packs for its products and develop
a chain of supply that will support their production
needs.1090 1091 1092 1093 1094 1095 According to
ANL, the largest portion of total forecast North American cell
production capacity represents joint ventures of energy companies with
automotive companies, while a similar amount represents cell suppliers
without a formal joint venture, and the remaining group represent OEM
ventures.\1096\
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\1090\ Voelcker, J., ``Good News: Ford and GM Are Competing on
EV Investments,'' Car and Driver, October 18, 2021. Accessed on
December 9, 2021 at https://www.caranddriver.com/features/a37930458/ford-gm-ev-investments/.
\1091\ Stellantis, ``Stellantis and LG Energy Solution to Form
Joint Venture for Lithium-Ion Battery Production in North America,''
Press Release, October 18, 2021.
\1092\ Toyota Motor Corporation, ``Toyota Charges into
Electrified Future in the U.S. with 10-year, $3.4 billion
Investment,'' Press Release, October 18, 2021.
\1093\ Ford Motor Company, ``Ford to Lead America's Shift To
Electric Vehicles With New Mega Campus in Tennessee and Twin Battery
Plants in Kentucky; $11.4B Investment to Create 11,000 Jobs and
Power New Lineup of Advanced EVs,'' Press Release, September 27,
2021.
\1094\ General Motors Corporation, ``GM and LG Energy Solution
Investing $2.3 Billion in 2nd Ultium Cells Manufacturing Plant in
U.S.,'' Press Release, April 16, 2021.
\1095\ Shepardson, D. and Lienert, P., ``GM eyes investments of
more than $4 billion in Michigan EV plants,'' Reuters, December 10,
2021. Accessed on December 13, 2021 at https://www.reuters.com/business/autos-transportation/gm-eyes-3-billion-investment-michigan-ev-plants-source-2021-12-10/.
\1096\ Argonne National Laboratory, ``Quantification of
Commercially Planned Battery Component Supply in North America
through 2035,'' ANL-24/14, March 2024.
---------------------------------------------------------------------------
Overall, these investments are part of a pattern of rapidly
increasing investment over the last three years that continues today.
Figure 33 shows that cumulative announcements of investments in the
battery supply chain have increased by a factor of six from about $25
billion three years ago to about $156 billion today.\1097\ U.S. policy,
including the BIL and the IRA, is likely to have driven much of this
investment. As seen in the figure, cumulative investment announcements
roughly doubled after the BIL (or IIJA) was enacted, and more than
doubled again after the IRA was enacted. Additional announcements are
likely as the rollout of funds and incentives from BIL and IRA
continues. This aggressive investment in North American manufacturing
is likely to play a strong role in minimizing risks of supply chain
shocks and assuring U.S. manufacturing resilience.
---------------------------------------------------------------------------
\1097\ Argonne National Laboratory, ``Quantification of
Commercially Planned Battery Component Supply in North America
through 2035,'' ANL-24/14, March 2024.
[GRAPHIC] [TIFF OMITTED] TR18AP24.031
Figure 33: Evolution of Battery Supply Chain Investments in the U.S.
Since 2021
[[Page 28036]]
Even as these investment trends have continued, in the second half
of 2023 some automakers announced changes to previously announced
battery production plans. For example, in mid-2023, Ford paused
construction of their recently announced battery plant in Marshall,
Michigan \1098\ (since restarted), and in November 2023 announced a
reduction in the size of the plant from 50 GWh to 20 GWh.\1099\ Tesla
also announced a delay in construction of a battery plant in
Mexico.1100 1101 We discussed the broader topic of changes
to manufacturer investment and product plan outlooks in section I.A.2
of this preamble, and extending from our conclusion in that discussion,
EPA does not consider these changes to indicate a meaningful slowdown
or reversal of the U.S. or global battery production trends described
here. Specific factors were active during the period when Ford made its
announcement, such as the 2023 United Auto Workers strike,\1102\ and an
increase in inventories for light-duty vehicles of all types,\1103\
which may be related to economic conditions such as high interest rates
and higher transaction prices for all types of
vehicles.1104 1105 1106 Ford has since restarted
construction.\1107\ Tesla specifically cited economic conditions, and
not a change in overall battery production plans, for its delay, while
a delay in GM's Ultium plant in Tennessee was attributed to
construction delays.\1108\ Despite the delays by Ford and Tesla, others
announced increased investments or accelerated timetables at the same
time. For example, Toyota announced an $8 billion increase in
investment in its North Carolina plant,\1109\ and Hyundai accelerated
construction of its Georgia plant.\1110\ Given the unprecedented rate
and size of recent investment activity in PEV technology, adjustments
to previously announced plans would ordinarily be expected to occur,
and to date have included both reductions and increases in investment
amounts and pacing. The overall trend continues to be very large and
rapid increases in domestic production of batteries and battery
components.
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\1098\ Reuters, ``Ford pauses work on $3.5 bln battery plant in
Michigan,'' September 25, 2023. Accessed on December 15, 2023 at
https://www.reuters.com/business/autos-transportation/ford-pauses-work-35-billion-battery-plant-michigan-2023-09-25.
\1099\ New York Times, ``Ford Resumes Work on E.V. Battery Plant
in Michigan, at Reduced Scale,'' November 21, 2023. Accessed on
December 15, 2023 at https://www.nytimes.com/2023/11/21/business/ford-ev-battery-plant-michigan.html.
\1100\ Reuters, ``Mexico gives Tesla land-use permits for
gigafactory, says state government,'' December 12, 2023. Accessed on
February 14, 2024 at https://www.reuters.com/business/autos-transportation/mexico-gives-tesla-land-use-permits-gigafactory-says-state-government-20231213.
\1101\ Mexico Now, ``Taxes and global economy stop Tesla plant
in Nuevo Leon,'' October 23, 2023. Accessed on February 14, 2024 at
https://mexico-now.com/taxes-and-global-economy-stop-tesla-plant-in-nuevo-leon.
\1102\ CBS News, ``Ford resuming construction of Michigan EV
battery plant delayed by strike, scaling back jobs,'' November 21,
2023. Accessed on December 15, 2023 at https://www.cbsnews.com/detroit/news/ford-resuming-construction-of-michigan-ev-battery-plant-delayed-by-strike-scaling-back-jobs.
\1103\ National Automobile Dealers Association, ``NADA Market
Beat,'' November 2023. Accessed on December 11, 2023 at https://www.nada.org/nada/nada-headlines/nada-market-beat-new-light-vehicle-inventory-reaches-20-month-high.
\1104\ Reuters, ``More alarm bells sound on slowing demand for
electric vehicles,'' October 25, 2023. Accessed on December 15, 2023
at https://www.reuters.com/business/autos-transportation/more-alarm-bells-sound-slowing-demand-electric-vehicles-2023-10-25.
\1105\ CNBC, ``Sparse inventory drives prices for new, used
vehicles higher,'' October 17, 2023. Accessed on December 15, 2023
at https://www.cnbc.com/2023/10/17/sparse-inventory-drives-prices-for-new-used-cars-higher.html.
\1106\ San Diego Union-Tribune, ``Has enthusiasm for electric
cars waned?,'' October 27, 2023. Accessed on December 15, 2023 at
https://www.sandiegouniontribune.com/business/story/2023-10-27/has-enthusiasm-for-electric-cars-waned.
\1107\ CBS News, ``Ford resuming construction of Michigan EV
battery plant delayed by strike, scaling back jobs,'' November 21,
2023. Accessed on December 15, 2023 at https://www.cbsnews.com/detroit/news/ford-resuming-construction-of-michigan-ev-battery-plant-delayed-by-strike-scaling-back-jobs.
\1108\ InsideEVs.com, ``GM's Ultium Cells Plant In Tennessee
Delayed Until 2024 (Updated),'' October 28, 2023. Accessed on
February 22, 2024 at https://insideevs.com/news/693537/gm-ultium-cells-tennessee-plant-delayed-2024.
\1109\ Toyota Newsroom, ``Toyota Supercharges North Carolina
Battery Plant with New $8 Billion Investment,'' Press Release,
October 31, 2023. Available at https://pressroom.toyota.com/toyota-supercharges-north-carolina-battery-plant-with-new-8-billion-investment.
\1110\ Ars Technica, ``Hyundai hurries to finish factory in
Georgia to meet US EV demand,'' September 20, 2023. Accessed on
February 23, 2024 at https://arstechnica.com/cars/2023/09/hyundai-hurries-to-finish-factory-in-georgia-to-meet-us-ev-demand.
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The updated ANL analysis accounts not only for new announcements
since the proposal, but also for recent reductions in scope, such as
the reduction of the Ford plant's announced capacity. As seen in Figure
34, ANL indicates that overall projections for North American battery
production capacity by 2030 have increased by a factor of about 10 over
the last three years. The vertical axis shows the estimated North
American production capacity for 2030, and the horizontal axis shows
the date of company announcements. Expected capacity for 2030 increased
from 300 GWh/year in December 2021 to 800 GWh/year by December 2022,
and now stands at more than 1,300 GWh/year.
[GRAPHIC] [TIFF OMITTED] TR18AP24.032
Figure 34: Evolution in Battery Cell Production Announcements in North
America
[[Page 28037]]
As shown in Figure 35, this updated study illustrates the rapid
recent growth in new plant announcements. Light-duty vehicle
applications are the largest portion of announced and operating plants.
These production estimates are based on new plant announcements and
construction and include an estimate of time between announcement and
initial production based on historical data, as described
previously.\1111\ Based on its assessment, ANL projected annual
operating capacities by applying a 36 month linear ramp-up time from
announced date of initial production to full-scale production. It is
important to note that, as with all projections of future capacity, the
apparent flattening of growth after 2030 is only an artifact of data
availability, in that public announcements tend to extend only a
limited period into the future. It does not indicate that investment
past 2030 will slow or stop, as additional demand is likely to spur
additional announcements just as it has for the earlier years.
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\1111\ Most announcements include initial production date, and
some show assumed date for full-scale production. For plants without
this information, DOE assumed 3 years from initial opening of the
plant to full-scale production as default, based on historical
growth of cell production plants. This may be overly conservative,
as older plants did not have the rest of the battery infrastructure
growing in tandem.
[GRAPHIC] [TIFF OMITTED] TR18AP24.033
Figure 35: Modeled Lithium-Ion Cell Production Capacity in North
America From 2018 to 2035 by Transportation Sector
Looking at cells dedicated specifically to light-duty vehicles,
Figure 36 shows that in all years of the rule from 2027 to 2032, North
American light-duty vehicle cell manufacturing is expected to be meet
demand under all compliance scenarios EPA modeled.\1112\ This
accounting of projected battery manufacturing is particularly
conservative because it excludes production designated for vehicles but
for which the vehicle type was not specified, and also excludes rumored
and conditional manufacturing capacity. The lines in Figure 36 show the
projected GWh of battery production needed to support the PEV and HEV
market under several cases of our analysis including the central case,
No Action case, and two alternative pathways (Pathway B and C of the
Executive Summary). It shows that in all years of the rule, the
projected battery demand for U.S. electrified light- and medium-duty
vehicles is well within projected operating North American battery cell
production capacity for light-duty vehicles. As the bulk of these
announcements are slated for automotive applications, it shows that
already-announced North American battery manufacturing capacity is
likely to be more than sufficient to meet battery demand under the
rule.\1113\ Although demand in the central case begins to approach
projected capacity in 2032, this again is an artifact of the limited
time frame of currently known supply announcements, as described
previously.
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\1112\ Argonne National Laboratory, ``Quantification of
Commercially Planned Battery Component Supply in North America
through 2035,'' ANL-24/14, March 2024.
\1113\ This finding also has implications for the ability of
U.S. manufacturers to take advantage of the Inflation Reduction
Act's Manufacturer Production Tax Credit (IRC 45X) of up to $45 per
kWh for cells and modules produced in the United States. We address
our updated assumptions for these incentives in section IV.C.2 of
this preamble.
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[[Page 28038]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.034
Figure 36: Planned North America Light-Duty Vehicle Cell Production
Capacity Compared to Battery Demand Under Various Cases of the Analysis
The annual battery production required for the compliant fleet
generated by OMEGA under our central case is 671 GWh in 2030, far less
than the projected operating North American light-duty vehicle battery
production capacity of 935 GWh projected for the same year in Figure 36
above. Demand reaches a maximum of 839 GWh in 2032, still less than
projected capacity. These amounts compare to a maximum of about 540 GWh
under the No Action case. Pathway B is a pathway with moderate
penetration of HEVs and PHEVs (collectively called P/HEVs) in place of
BEVs. Pathway C is a pathway in which no new BEV models are introduced
beyond the No Action case, in which ICE, HEV and PHEV are more
prevalent. Pathway C results in the lowest peak battery demand of 612
GWh in 2032. These latter cases show that compliance with the standards
would continue to be possible even if critical mineral availability or
manufacturing capacity were more constrained than current projections
indicate.
Moving beyond battery and cell manufacturing, we now consider the
outlook for North American manufacturing of electrode active materials
and other cell components. Active materials include cathode and anode
powders and electrolyte, for which critical minerals and precursor
chemicals are important manufacturing inputs. Cell components include
specialty products such as aluminum and copper current collector foils,
electrode separators, and solvents and binders. In order to meet their
projected operating capacities, the North American battery plants
represented in Figure 36 above will either manufacture these materials
on site or at another location, or purchase them from a supplier, or a
combination of the two.
Significant production of many of these items is occurring in the
U.S. For example, several large suppliers of batteries and cells, as
well as major OEMs, are increasingly taking steps to secure
domestically sourced raw minerals, active materials and cell components
to supply their battery and cell manufacturing plants. Auto
manufacturers are also moving to secure supplies of these items to
support their production needs and partnerships. For example, Ford has
moved to secure sources of raw materials for its battery needs;
1114 1115 General Motors has signed similar supply chain
agreements, for battery materials 1116 1117 1118 as well as
for rare-earth metals for electric machines; \1119\ and Tesla has also
moved to secure a domestic lithium supply.\1120\ Announcements in this
general vein have been occurring regularly since the proposal and
continue to provide evidence that the industry is continuing to
actively pursue domestic sources of battery materials. In addition, the
Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law
(BIL) continue to provide significant support to accelerate these
efforts to build out a U.S. supply chain for mineral, cell, battery
component, and battery production.
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\1114\ Green Car Congress, ``Ford sources battery capacity and
raw materials for 600K EV annual run rate by late 2023, 2M by end of
2026; adding LFP,'' July 22, 2022.
\1115\ Ford Motor Company, ``Ford Releases New Battery Capacity
Plan, Raw Materials Details to Scale EVs; On Track to Ramp to 600K
Run Rate by '23 and 2M+ by '26, Leveraging Global Relationships,''
Press Release, July 21, 2022.
\1116\ Green Car Congress, ``GM signs major Li-ion supply chain
agreements: CAM with LG Chem and lithium hydroxide with Livent,''
July 26, 2022.
\1117\ Grzelewski, J., ``GM says it has enough EV battery raw
materials to hit 2025 production target,'' The Detroit News, July
26, 2022.
\1118\ Hall, K., ``GM announces new partnership for EV battery
supply,'' The Detroit News, April 12, 2022.
\1119\ Hawkins, A., ``General Motors makes moves to source rare
earth metals for EV motors in North America,'' The Verge, December
9, 2021.
\1120\ Piedmont Lithium, ``Piedmont Lithium Signs Sales
Agreement With Tesla,'' Press Release, September 28, 2020.
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In the 2024 ANL study of battery manufacturing,\1121\ ANL
quantitatively examined the outlook for North American production of
these components, based on currently known company announcements to
increase production in North America of anode active material (AAM),
cathode active material (CAM), electrolyte, foils, and separators. ANL
then compared the potential supply with anticipated demand for domestic
battery production.
---------------------------------------------------------------------------
\1121\ Argonne National Laboratory, ``Quantification of
Commercially Planned Battery Component Supply in North America
through 2035,'' ANL-24/14, March 2024.
---------------------------------------------------------------------------
Unlike with battery cell manufacturing, ANL found that a gap
currently exists between anticipated future domestic demand and
currently operating and announced future U.S. manufacturing capacity
for many of the constituent materials and cell
[[Page 28039]]
components listed above. Based on currently known announcements, ANL
finds that North American production can meet all of the North American
demand for electrolyte, approximately half of the demand for electrode
active materials, and about one quarter of the demand for separators
and foils by the end of the decade. ANL notes that these estimates for
North American production take ``a conservative view of future
manufacturing announcements, only including sites which have been
explicitly formally announced.'' \1122\
---------------------------------------------------------------------------
\1122\ Id. at p. 50.
---------------------------------------------------------------------------
Again, as stated previously, the relevant standard is not complete
domestic self-sufficiency but rather a diversified supply chain that
includes not only domestic production where possible and appropriate
but also includes trade with FTA countries as well as our many other
economic allies with whom the U.S. has good trade relations. While it
is likely that some of domestic demand for the battery components
listed above will be satisfied through imports, allies and partners
outside of North America are likely to be key suppliers.
ANL observes that manufacturing announcements for battery
components often significantly lag those for battery cell
manufacturing, and without growth in battery cell manufacturing
creating demand for their products in the U.S., battery component
manufacturers would have little reason to increase their manufacturing
capacity in North America. Indeed, with any product, the mere
identification of a gap between projected supply and projected demand
does not by itself constitute a future shortage, and often represents
the very signal that motivates new supply to be developed or expanded.
ANL also notes that past history suggests that the market often
rapidly adapts in response to demand and industrial policies.\1123\
Significantly, ANL does not conclude that the gap represents a hard
constraint or that it cannot be significantly reduced or closed in the
future, citing several factors that are likely to address the gap.
These factors include the fact that increases in production capacity
for these components tend to require less lead time than for cell
production or mining operations. According to ANL, ``because of their
shorter construction and permitting time, most battery components can
be responsive to the demand arising from battery cell plants.''
Producers of these components are therefore more likely to be in a
position to await clear demand signals, such as specific offtake
agreements, before new projects or capacity expansions will be
announced. That is, quoting the ANL study, companies ``may be waiting
for certainty in demand from cell production or for availability of
financing before publicly committing to building a manufacturing
plant.'' Currently observed capacities for cell material and components
production may therefore be more indicative of current offtake
agreements and spot market demand than of production potential, and
announcements of future capacity resulting from increased demand or
offtake are likely to become known at a time much closer to the
beginning of production. Plans may depend upon various other factors
such as, for example, additional guidance on IRA provisions, or the
progress of funding distributions. Many production plans have
outstanding funding applications through the various DOE and other
government funding and loan programs (described later), but have yet to
be awarded or publicly announced. Some further capacity increases may
occur despite the lack of a formal announcement at this time; for
example, ANL identified an additional 590 GWh/year in nominal anode
active material capacity that would arise by the end of the decade at
facilities which are being planned or considered but have not yet been
formally announced, which would close the supply-demand gap by 2032.
---------------------------------------------------------------------------
\1123\ Id.
---------------------------------------------------------------------------
Further, domestic production for any of these materials and
components could be significantly underestimated to the degree that any
of the announced cell production facilities discussed previously are
also planning to manufacture these components onsite. Announcements of
cell manufacturing plants typically lack sufficient detail to determine
the degree of vertical integration that might be planned, and these
details often are not separately announced. EPA also notes that the
overall scale of investment in cell and component manufacturing
capacity across the industry suggests that the industry at large has
confidence in being able to secure sufficient supplies of materials and
components to operate these plants in a manner that returns their
investment.
Importantly, as noted above, allies and partners outside of North
America are likely to be integral to meeting domestic battery component
demand. Some of the world leaders in production of cell materials and
components are close allies of the U.S. and are likely to have a
prominent role in filling the gap, as they do today. For example, Japan
and South Korea are the second and third largest producers of electrode
active materials,\1124\ while South Korea is dominant in separator film
\1125\ and home to the largest manufacturer of copper foils which also
is constructing capacity in the U.S.1126 1127
---------------------------------------------------------------------------
\1124\ Id.
\1125\ Byun, H., ``Korea to dominate 75% of battery separator
market by 2030: report,'' The Korea Herald, July 17, 2023. Accessed
on March 1, 2024 at https://www.koreaherald.com/view.php?ud=20230717000571.
\1126\ Kim, H., ``Hopes rise for Korean copper foil makers'
gains under IRA,'' The Korea Economic Daily, August 10, 2023.
Accessed on March 1, 2024 at https://www.kedglobal.com/batteries/newsView/ked202308100025.
\1127\ Kim, J., ``SK Nexilis launches copper foil production in
Malaysia,'' November 5, 2023. Accessed on March 1, 2024 at https://www.kedglobal.com/batteries/newsView/ked202311050002.
---------------------------------------------------------------------------
For these and similar reasons EPA does not consider the apparent
gap between projected domestic demand and projected North American
supply of cells, components, and material inputs identified by ANL to
be indicative of a constraint that would prevent announced U.S. battery
cell manufacturing from operating as planned, with a combination of
domestically produced materials and components and those acquired
through trade with economic allies.
To the extent that content is imported from partner nations, it is
important to note that this carries significance primarily for
qualification of a vehicle for the IRC 30D clean vehicle credit or for
concerns about U.S. reliance on imports, and does not constrain U.S.
cell production for U.S. PEVs per se. The presence of imported content
does not exclude any PEV from being sold in the U.S. market, nor does
it prevent access to the similarly significant 45X cell and module
production credit to manufacturers.\1128\ Therefore, the ability for
North American plants to operate at the capacities projected previously
would not be constrained by any potential shortfall in domestic
production of cell materials and components, but only by a shortfall in
global production, if such a shortfall were to exist.
---------------------------------------------------------------------------
\1128\ It is also relevant that imported mineral content
eventually becomes feedstock for recycling, through which it becomes
a domestic resource.
---------------------------------------------------------------------------
We now consider the outlook for global production of cell materials
and components.\1129\ Figure 37 repeats the chart that was provided in
the proposal, showing projections prepared by Li-Bridge for DOE,\1130\
and presented to the
[[Page 28040]]
Federal Consortium for Advanced Batteries (FCAB) \1131\ in November
2022. These projections were largely derived by DOE from Benchmark
Minerals Intelligence (BMI) projections, and indicated that global
supplies of cathode active material (CAM) were expected to be
sufficient through 2035.
---------------------------------------------------------------------------
\1129\ Our assumptions for access to 30D are described
separately in section IV.C.2 of this preamble, and implications for
mineral security are discussed in IV.C.7.iii.
\1130\ Slides 6 and 7 of presentation by Li-Bridge to Federal
Consortium for Advanced Batteries (FCAB), November 17, 2022.
\1131\ https://www.energy.gov/eere/vehicles/federal-consortium-advanced-batteries-fcab.
[GRAPHIC] [TIFF OMITTED] TR18AP24.035
Figure 37: DOE Li-Bridge Assessment of Global CAM Supply and Demand
In the figure, the labels T1 and T2 represent supplies that BMI
considers as having a track record of supplying these materials outside
of China and within China, respectively. The label T3 represents
supplies that BMI assessed as not having an established track record of
production, and thus represent earlier stage efforts, such as for
example, new entrants to the market that intend to supply anticipated
demand but which may not have established offtake agreements.
To the degree that the Li-Bridge assessment of global demand begins
to enter T3 supply in 2029, the same observation cited above applies,
regarding the shorter notice typically provided by announcements that
react to demonstration of demand. That is, in the period between now
and 2029 it is likely that increases in demand will motivate increases
in supply that would not be announced until much closer to 2029. The
ability of production capacity for many cell materials and components
to adjust relatively quickly to changes in anticipated demand suggests
that these materials do not represent a constraint to PEV production in
the global context any more than in the domestic context. Also, new
cell component or active material plants tend to have shorter
construction and permitting time than cell manufacturing plants.\1132\
---------------------------------------------------------------------------
\1132\ Argonne National Laboratory, ``Quantification of
Commercially Planned Battery Component Supply in North America
through 2035,'' ANL-24/14, March 2024.
---------------------------------------------------------------------------
As another factor promoting domestic capacity, the IRA offers
sizeable incentives and other support for further development of
domestic and North American manufacture of electrified vehicles and
components. These incentives represent a significant dollar investment.
At the time of passage of the IRA, the Joint Committee on Taxation
estimated that $30.6 billion would be realized by manufacturers through
the 45X Advanced Manufacturing Production Credit alone.\1133\ Since the
proposal, the Committee has significantly increased its estimates for
IRA climate and clean energy incentives, due in part to higher expected
utilization of 45X.\1134\ Another $6.2 billion or more may be realized
through expansion of the 48C Advanced Energy Project Credit, a 30
percent tax credit for investments in projects that reequip, expand, or
establish certain energy manufacturing facilities.\1135\ The IRC 30D
Clean Vehicle Credit also indirectly incentivizes domestic
manufacturing investments by offering a vehicle manufacturer's eligible
retail customers up to $7,500 toward the purchase of PEVs that have a
specified amount of critical mineral and battery component content
manufactured in North America. Together, these provisions are
continuing to motivate manufacturers to invest in the continued
development of a North American supply chain, and already appear to
have proven influential on the plans of manufacturers to procure
domestic or North American mineral and component sources and to
construct domestic manufacturing facilities to claim the benefits of
the act.1136 1137
---------------------------------------------------------------------------
\1133\ Congressional Research Service, ``Tax Provisions in the
Inflation Reduction Act of 2022 (H.R. 5376),'' August 10, 2022.
\1134\ Obey, D., ``CBO Sees Higher IRA Costs From EV Credit
Popularity, EPA Auto Rules,'' Inside EPA, February 9, 2024. Accessed
on February 23, 2024 at https://insideepa.com/daily-news/cbo-sees-higher-ira-costs-ev-credit-popularity-epa-auto-rules.
\1135\ Congressional Research Service, ``Tax Provisions in the
Inflation Reduction Act of 2022 (H.R. 5376),'' August 10, 2022.
\1136\ Subramanian, P., ``Why Honda's EV battery plant likely
wouldn't happen without new climate credits,'' Yahoo Finance, August
29, 2022.
\1137\ LG Chem, ``LG Chem to Establish Largest Cathode Plant in
US for EV Batteries,'' Press Release, November 22, 2022.
---------------------------------------------------------------------------
[[Page 28041]]
In addition, funds continue to be awarded under the BIL, which
provides for $7.9 billion to support development of the domestic supply
chain for battery manufacturing, recycling, and critical
minerals.\1138\ Through this funding DOE is working to facilitate and
support further development of the midstream and downstream supply
chain, by identifying priorities and rapidly funding those areas
through numerous programs and funding
opportunities.1139 1140 1141 Programs that include midstream
and downstream in their scope include those administered by the Office
of Manufacturing and Energy Supply Chains (MESC), which has allocated
about $1.9 billion in funding out of an available $4.1 billion that is
available for active material production, separator production,
precursor materials production, and battery cell production.\1142\
Across all stages of the supply chain, these programs are designed to
have a large impact. According to a final report from the Department of
Energy's Li-Bridge alliance,\1143\ ``the U.S. industry can double its
value-added share by 2030 (capturing an additional $17 billion in
direct value-add annually and 40,000 jobs in 2030 from mining to cell
manufacturing), dramatically increase U.S. national and economic
security, and position itself on the path to a near-circular economy by
2050.'' \1144\ The $7.9 billion provided by the BIL for U.S. battery
supply chain projects \1145\ represents a total of about $14 billion
when industry cost matching is considered.1146 1147 Other
recently announced projects will utilize another $40 billion in private
funding.\1148\ According to DOE's Li-Bridge alliance, the total of
these commitments already represents more than half of the capital
investment that Li-Bridge considers necessary for supply chain
investment to 2030.\1149\
---------------------------------------------------------------------------
\1138\ Congressional Research Service, ``Energy and Minerals
Provisions in the Infrastructure Investment and Jobs Act (Pub. L.
117-58)'', February 16, 2022. https://crsreports.congress.gov/product/pdf/R/R47034.
\1139\ Department of Energy, Li-Bridge, ``Building a Robust and
Resilient U.S. Lithium Battery Supply Chain,'' February 2023.
\1140\ The White House, ``Building Resilient Supply Chains,
Revitalizing American Manufacturing, and Fostering Broad-Based
Growth,'' 100-Day Reviews under Executive Order 14017, June 2021.
\1141\ Federal Consortium for Advanced Batteries, ``National
Blueprint for Lithium Batteries 2021-2030,'' June 2021. Available at
https://www.energy.gov/sites/default/files/2021-06/FCAB%20National%20Blueprint%20Lithium%20Batteries%200621_0.pdf.
\1142\ Argonne National Laboratory, ``Quantification of
Commercially Planned Battery Component Supply in North America
through 2035,'' ANL-24/14, March 2024.
\1143\ https://www.anl.gov/li-bridge.
\1144\ Department of Energy, Li-Bridge, ``Building a Robust and
Resilient U.S. Lithium Battery Supply Chain,'' February 2023.
\1145\ Congressional Research Service, ``Energy and Minerals
Provisions in the Infrastructure Investment and Jobs Act (Pub. L.
117-58)'', February 16, 2022. https://crsreports.congress.gov/product/pdf/R/R47034.
\1146\ Department of Energy, Li-Bridge, ``Building a Robust and
Resilient U.S. Lithium Battery Supply Chain,'' February 2023 (p. 9).
\1147\ Department of Energy, EERE Funding Opportunity Exchange,
EERE Funding Opportunity Announcements. Accessed March 4, 2023 at
https://eere-exchange.energy.gov/Default.aspx#FoaId0596def9-c1cc-478d-aa4f-14b472864eba.
\1148\ Federal Reserve Bank of Dallas, ``Automakers' bold plans
for electric vehicles spur U.S. battery boom,'' October 11, 2022.
Accessed on March 4, 2023 at https://www.dallasfed.org/research/economics/2022/1011.
\1149\ Department of Energy, Li-Bridge, ``Building a Robust and
Resilient U.S. Lithium Battery Supply Chain,'' February 2023 (p. 9).
---------------------------------------------------------------------------
Further, the DOE Loan Programs Office continues to disburse
substantial amounts of assistance through the Advanced Technology
Vehicles Manufacturing (ATVM) Loan Program and Title 17 Innovative
Energy Loan Guarantee Program, which include midstream activities such
as manufacturing of active materials, battery components and cells
among their focus.\1150\ These programs together comprise $110 billion
of total available funds for loans and loan guarantees \1151\ much of
which is available to fund such projects.
---------------------------------------------------------------------------
\1150\ Department of Energy Loan Programs Office, ``Critical
Materials Loans & Loan Guarantees,'' https://www.energy.gov/sites/default/files/2021-06/DOE-LPO_Program_Handout_Critical_Materials_June2021_0.pdf.
\1151\ See Table 1 in Argonne National Laboratory,
``Quantification of Commercially Planned Battery Component Supply in
North America through 2035,'' ANL-24/14, March 2024.
---------------------------------------------------------------------------
Analyst sentiment largely agrees that the U.S. is taking the
appropriate steps to secure its supply chain. According to BNEF, Canada
and the United States rank first and third, respectively, in their
Global Lithium-Ion Battery Supply Chain Ranking. This annual ranking
rates 30 countries on their relative ``potential to build a secure,
reliable, and sustainable lithium-ion battery supply chain''. BNEF
credits ``clear policy commitment and implementation'' for North
America's high position, including the effect of the IRA.\1152\
---------------------------------------------------------------------------
\1152\ Bloomberg New Energy Finance (BNEF), ``China Drops to
Second in BloombergNEF's Global Lithium-Ion Battery Supply Chain
Ranking as Canada Comes Out on Top,'' February 5, 2024. Accessed on
February 24, 2024 at https://about.bnef.com/blog/china-drops-to-second-in-bloombergnefs-global-lithium-ion-battery-supply-chain-ranking-as-canada-comes-out-on-top.
---------------------------------------------------------------------------
In consideration of this updated information on battery cell and
cell component manufacturing, EPA has continued to identify the steps
necessary to secure the supply of battery cells and cell materials and
components needed to comply with the standards. EPA also notes rapidly
growing evidence that the federal investments and initiatives under the
IRA and BIL are continuing to build the domestic supply chain as
intended, and indicate that the federal government is taking
appropriate actions to support its development. It continues to be our
assessment that the development of this supply chain is proceeding in a
manner capable of supporting the future levels of PEV technology
indicated in the scenarios of the compliance analysis, and is therefore
unlikely to constrain manufacturers' ability to comply.
ii. Critical Minerals
Critical minerals include a large diversity of minerals and metals
that are deemed to be essential to economic or national security of the
U.S. and whose supply chain is potentially vulnerable to
disruption.1153 1154 The Energy Act of 2020 defines a
``critical mineral'' as a non-fuel mineral or mineral material
essential to the economic or national security of the United States and
which has a supply chain vulnerable to disruption. The U.S. Geological
Survey (USGS) lists 50 minerals as ``critical to the U.S. economy and
national security.'' 1155 1156 Risks to mineral availability
may stem from geological scarcity, geopolitics, trade policy, or
similar factors.\1157\ Critical minerals range from relatively
plentiful materials that are constrained primarily by production and
refining capacity, such
[[Page 28042]]
as aluminum, to those that are both relatively difficult to source and
costly to process, such as the rare-earth metals that are used in
magnets for permanent-magnet synchronous motors (PMSMs) and some
semiconductor products. Extraction, processing, and recycling of
minerals are key parts of the supply chain that affect the availability
of minerals. For the purposes of this rule, we focus on a key set of
minerals (lithium, cobalt, nickel, manganese, and graphite) commonly
used in BEVs; their general availability impacts the production of
battery cells and battery components.
---------------------------------------------------------------------------
\1153\ According to USGS, the Energy Act of 2020 defines a
``critical mineral'' as ``a non-fuel mineral or mineral material
essential to the economic or national security of the U.S. and which
has a supply chain vulnerable to disruption.''
\1154\ U.S. Geological Survey, ``U.S. Geological Survey Releases
2022 List of Critical Minerals,'' February 22, 2022. Available at:
https://www.usgs.gov/news/national-news-release/us-geological-survey-releases-2022-list-critical-minerals.
\1155\ Id.
\1156\ The full list includes: Aluminum, antimony, arsenic,
barite, beryllium, bismuth, cerium, cesium, chromium, cobalt,
dysprosium, erbium, europium, fluorspar, gadolinium, gallium,
germanium, graphite, hafnium, holmium, indium, iridium, lanthanum,
lithium, lutetium, magnesium, manganese, neodymium, nickel, niobium,
palladium, platinum, praseodymium, rhodium, rubidium, ruthenium,
samarium, scandium, tantalum, tellurium, terbium, thulium, tin,
titanium, tungsten, vanadium, ytterbium, yttrium, zinc, and
zirconium.
\1157\ International Energy Agency, ``The Role of Critical
Minerals in Clean Energy Transitions,'' World Energy Outlook Special
Report, Revised version. March 2022.
---------------------------------------------------------------------------
As discussed in the opening paragraphs of section IV.C.7 of the
preamble, certain critical minerals have long been essential to
manufacturing both ICE vehicles and PEVs. Emission control catalysts
for ICE vehicles utilize critical minerals including cerium, palladium,
platinum, and rhodium, which (as described previously) were understood
to be costly and potentially scarce in advance of emission control
standards of the 1970s that were premised on use of those minerals for
catalyst control of pollutants. These minerals are also required by
PHEVs due to the presence of the ICE. Nickel-metal hydride batteries
that have been used in many HEVs for over twenty years require
significant amounts of nickel and rare-earth metals such as lanthanum.
Critical minerals most important to lithium-ion battery production
include lithium and graphite, and the cathode chemistries that are used
in the majority of cells produced today also call for nickel, cobalt,
and manganese. Aluminum is also used for cathode foils and in some
cathode chemistries. Rare-earth metals are used in permanent-magnet
electric machines, and include several elements such as dysprosium,
neodymium, and samarium.
The battery cell manufacturing capacity discussed in the previous
section will depend on the ability of manufacturers to secure the
inputs necessary for battery components, which include battery
minerals. This is one of the reasons why extraction, processing, and
recycling of critical minerals such as lithium, cobalt, nickel,
manganese, and graphite are gaining a large amount of attention as
important parts of the supply chain. They are produced in upstream
activities which include extraction and refining of raw materials and
are inputs to midstream activities such as manufacturing of precursor
substances and electrode active materials and production of
electrolytes.
In addition to growing demand from the transportation industry,
these minerals are also experiencing increasing demand across many
other sectors of the global economy as the world seeks to reduce carbon
emissions. As with any technology that is experiencing rapid demand
growth, a robust supply chain to support increasing production of these
products is continuing to develop. At the present time in the U.S.,
some of these minerals are not produced domestically in large
quantities and are often sourced to varying degrees from global
suppliers with whom manufacturers have developed supply relationships.
Here it is important to reiterate that it is erroneous to assume
that the U.S. must establish a fully independent domestic supply chain
in order to contemplate increased manufacture of products that use
these minerals. Such a position is without any credible analogy in
other products, including ICE vehicles, that are used widely in the
U.S. on a daily basis. As discussed previously, it has long been the
norm that global supply chains are involved in providing many products
that are commonly available in the U.S. market. In the context of
critical minerals needed for PEV production, the relevant concern is to
develop and secure a supply chain that includes not only domestic
production where possible and appropriate but also includes sourcing
from FTA countries as well as our many economic allies with whom the
U.S. has good trade relations.
In the proposal, we examined the outlook for U.S. and global
critical mineral supply and demand in light of our projections of U.S.
PEV demand under the proposed standards. We collected and reviewed a
number of independent studies and forecasts, including numerous studies
by analyst firms and various stakeholders. We also considered a
compilation of lithium mining projects compiled by the Department of
Energy and Argonne National Laboratory. Through this work it was our
assessment that, among the critical minerals that were most likely to
pose a potential constraint on PEV production, lithium availability was
the most important consideration. We proceeded to examine detailed
forecasts of supply and demand for lithium chemical products used in
battery cell production, and reports of rapidly growing activity in
securing sourcing agreements and lithium resource exploration in the
U.S. Our review of this information indicated that the industry was
responding rapidly to meet current and anticipated demand, and that
this activity was likely to continue. Our analysis examined many
uncertainties of the sort that are common to any forward-looking
analysis but did not identify any hard constraint that indicated that
global and domestic lithium supply would not be sufficient to support
battery demand under the proposed standards. Our assessment found that
availability of lithium chemical product was not likely to pose a
limitation on the ability of auto manufacturers to meet the standards.
We received a variety of comments on our analysis of critical
minerals, some of which disagreed with our findings and others which
supported them. Supportive comments often included detailed analysis
and discussion that built upon EPA's analysis by providing additional
examples of domestic and global activity in critical mineral
development, examples of how the BIL and IRA have been promoting this
activity, and other information about the outlook for critical mineral
supply and demand. Commenters who disagreed with our findings largely
expressed the position that EPA did not adequately address the issue of
critical minerals, particularly for minerals other than lithium such as
nickel, cobalt, and graphite, that we had not adequately considered the
risks associated with potential instability of the global critical
minerals market, and that the pace of domestic critical mineral
development and/or domestic mineral processing would be insufficient to
meet demand under the proposed standards.
EPA appreciates and has carefully considered the substantive and
detailed comments offered by the various commenters. Much of the
information provided by commenters who disagreed with our findings
expands upon the evidence that EPA already presented in the proposal
concerning the risks and uncertainties associated with the development
of the critical mineral supply chain. Much of the information provided
by supportive commenters also expands on the evidence EPA presented in
the proposal about the pace of activity and overall outlook for
buildout of the critical mineral supply chain. While contributing to
the record, the information provided by the commenters largely
parallels the considerations and trends that were already identified
and considered by EPA. In particular, the comments relating to risk and
uncertainty largely present information of a similar nature to that
which EPA identified and considered in the proposal, and do not
identify new, specific constraints that would change the conclusions we
reached in the proposal. Taken together,
[[Page 28043]]
the totality of information in the public record continues to indicate
that development of the critical mineral supply chain is proceeding
both domestically and globally in the expected manner in response to
anticipated demand. In light of this information provided in the public
comments and additional information that EPA has collected through
continued research, and as further explained below, it continues to be
our assessment that future availability of critical minerals is not
likely to pose a constraint on automakers' ability to meet the
standards.
The additional information EPA has collected, and other aspects of
the updated analysis, largely respond to the concerns raised by the
commenters. In particular, the Department of Energy through ANL has
conducted an updated assessment \1158\ of mineral supply development
that further reinforces the growth in supply available from North
America, FTA countries, MSP partners, and other economic allies that we
noted in the proposal. The assessment considers geological resources
and current international development activities that contribute to the
understanding of mineral supply security as the jurisdictions around
the world seek to reduce emissions. The ANL study \1159\ focuses on
five materials identified in the 2023 DOE Critical Materials
Assessment,\1160\ including lithium, nickel, cobalt, graphite, and
manganese.
---------------------------------------------------------------------------
\1158\ Argonne National Laboratory, ``Securing Critical
Materials for the U.S. Electric Vehicle Industry: A Landscape
Assessment of Domestic and International Supply Chains for Five Key
EV Battery Materials,'' ANL-24/06, February 2024.
\1159\ Id.
\1160\ Department of Energy, ``Critical Materials Assessment,''
July 2023. At https://www.energy.gov/sites/default/files/2023-07/doe-critical-material-assessment_07312023.pdf.
---------------------------------------------------------------------------
The study collects and examines potential domestic sources as well
as sources outside the U.S., including Free Trade Agreement (FTA)
partners, members of the Mineral Security Partnership (MSP), economic
allies without FTAs (referred to as ``Non-FTA countries'' in the ANL
study), and FEOC sources associated with covered nations. The study
also highlights current activities that are intended to expand a secure
supply chain for critical minerals both domestically and among U.S.
allies and partner nations, and considers the potential to meet U.S.
demand with domestic and other secure sources. EPA considers the
assessment by DOE/ANL to be thorough and up to date.
In response to comments that we should consider availability of
critical minerals other than lithium, we have included in this section
additional analysis and discussion of graphite, cobalt, nickel, and
lithium based on ANL's assessment.
As is already true for many of the materials used to produce ICE
vehicles, the ANL analysis confirms that imports will be needed to
supplement domestic supplies for many of the key minerals used in PEV
production. However, there is ample evidence to indicate that the U.S.
is fully capable of securing these minerals in the time frame needed
for this rulemaking without harm to economic or national security. The
ANL analysis shows that many of the minerals needed to support
worldwide decarbonization goals are abundant outside of China and other
covered nations, and those needed by the U.S. to meet the final
standards can ultimately be supplied in the time frame needed for this
rulemaking by relying primarily if not exclusively on a combination of
domestic sources and sources accessed through FTA partners, MSP
partners, and other economic allies. Hence the ensuing discussion, and
in general the issue of future adequacy of the supply chain for
critical minerals and PEV production to support the standards, is
focused on the outlook for securing a mineral supply chain that
includes domestic supply as well as supply accessible through our
global trading partners.
In contrast to the concerns stated by some commenters, the evidence
does not indicate that the status of mineral availability to comply
with the standards is dire, nor that the U.S. must rely heavily in the
long-term on covered nations or FEOCs. Rather, the U.S. and U.S. firms
can secure sufficient minerals by executing strategies that have
already been identified and are underway. While completing the
development of a secure supply chain will require a deliberate effort
between the U.S., allies, and partner countries, the work is already
underway and is being further supported by strong government
initiatives. The U.S. automotive industry is already engaging actively
and successfully in efforts to secure these sources for their own
production needs (motivated in part by IRA incentives that promote U.S.
battery and battery component production, North American final
assembly, and U.S./FTA mineral sourcing), and the U.S. government is
also engaged in numerous activities that are further enabling U.S.
industry to expand a secure supply chain for critical minerals among
U.S. allies and partner nations. These include substantial efforts to
scale mining supply domestically and in partner countries, strong
financial support and technical guidance supporting investment in U.S.
production facilities and technology research and development, building
international partnerships that directly act to establish and secure
mineral trade with friendly nations, and scaling battery recycling.
To illustrate the diversity of America's trade allies, and the many
ways in which the U.S. already has or is actively developing
relationships relevant to securing battery minerals and materials
through these partners, Argonne National Laboratory has compiled an
accounting of international initiatives (Figure 38). This figure
identifies 85 countries that together comprise our FTA partners, MSP
partners, Trade and Investment Framework Agreement partners, and
parties to other bilateral investment treaties, multilateral
initiatives or defense agreements.\1161\
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\1161\ Argonne National Laboratory, ``Securing Critical
Materials for the U.S. Electric Vehicle Industry: A Landscape
Assessment of Domestic and International Supply Chains for Five Key
EV Battery Materials,'' ANL-24/06, February 2024.
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[[Page 28044]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.036
Figure 38: U.S. Government International Initiatives To Secure Battery
Minerals and Materials 1162
---------------------------------------------------------------------------
\1162\ Id.
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ANL concludes that a diversified sourcing strategy that includes
these international sources coupled with strategic investments at home
and abroad represent a viable pathway to sustainable and secure
critical mineral supplies for the U.S. This strategy includes the
formation of ``economic partnerships and trade with non-FTA countries
that have significant capacity; strengthening processing, refining, and
recycling in the U.S. and allied nations; and fostering collaborative
efforts with FTA and MSP partners to ensure the success of mining
projects.'' \1163\ ANL also identifies a portfolio of actions
supporting this comprehensive approach that are already underway to
build capacity, secure financing, improve governance, and pursue
innovative solutions both at home and abroad.
---------------------------------------------------------------------------
\1163\ Id.
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Internationally, the U.S. industry and federal government are
actively working to facilitate the securing of minerals. These efforts
include diversification of sourcing strategies by strengthening
currently existing trade agreements and building new economic,
technology, and regional security alliances. IRA incentives are also
key to promoting onshoring and friendshoring of production.
Manufacturers within the U.S. and globally are already beginning to
alter their trading patterns in response, with U.S. manufacturers
beginning to substitute supplies formerly obtained from FEOC sources
with those from domestic sources or from FTA countries and other
economic allies. Moves such as these are likely to reduce the potential
for volatility in international supply chains. The U.S. government is
facilitating this substitution through a range of initiatives that
directly and indirectly enhance the resilience of the domestic battery
components industry while also supporting that of its partners and
allies.
We now examine the outlook for U.S. battery cell and electrode
active material manufacturers to access sufficient critical minerals
from domestic sources and global trade partners and allies.
As seen in Figure 39, ANL assessed potential upstream mined mineral
supply based on the location of mine production.\1164\ ANL categorized
potential U.S. trading partners into four primary groups: countries
with which the U.S. has a Free Trade Agreement (FTA), countries that
are members of the Minerals Security Partnership (MSP), countries that
do not have an FTA agreement nor are partners of the MSP (Non FTA (Non
MSP)), and sources that would be considered a Foreign Entity of Concern
(FEOC) as defined by the U.S. Department of Energy.1165 1166
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\1164\ Argonne National Laboratory, ``Securing Critical
Materials for the U.S. Electric Vehicle Industry: A Landscape
Assessment of Domestic and International Supply Chains for Five Key
EV Battery Materials,'' ANL-24/06, February 2024.
\1165\ Foreign entities of concern include entities (individuals
and businesses) ``owned by, controlled by, or subject to
jurisdiction or direction of'' a ``covered nation'' (defined in 10
U.S. Code 2533(c)(d)(2) as the Democratic People's Republic of North
Korea, the People's Republic of China, the Russian Federation, and
the Islamic Republic of Iran).
\1166\ Department of Energy, ``Department of Energy Releases
Proposed Interpretive Guidance on Foreign Entity of Concern for
Public Comment,'' December 1, 2023. https://www.energy.gov/articles/department-energy-releases-proposed-interpretive-guidance-foreign-entity-concern-public.
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The white horizontal line and the ``+'' represent low and high
domestic demand scenarios, respectively. While ANL could not
specifically assess domestic demand under the final standards (which
were not yet public at the time of the study), ANL's description of BEV
penetrations in each scenario indicates that the final standards would
align closely to the ``ANL-Low'' scenario,\1167\ indicated by the white
horizontal line.
---------------------------------------------------------------------------
\1167\ ``In ANL-Low, the BEV sales share of LDV reaches 50% in
2030 and 69% in 2035.'' ANL includes a figure titled ``EV sales for
LDV and MHDV under Low and High scenarios'' in which the 2032 BEV
penetration under the ANL-Low scenario is about 59 percent. See:
Argonne National Laboratory, ``Securing Critical Materials for the
U.S. Electric Vehicle Industry: A Landscape Assessment of Domestic
and International Supply Chains for Five Key EV Battery Materials,''
ANL-24/06, February 2024.
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[[Page 28045]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.037
Figure 39: Potential Upstream Mined Critical Minerals Supply Grouped by
Location of Mine Production
These results indicate that from 2025 to 2035, the currently
identified capacity for lithium and nickel in the U.S. and FTA and MSP
countries is significantly greater than U.S. demand under both the low
and high domestic demand scenarios, and greater for cobalt under at
least the low scenario. In particular, the U.S. is poised to become a
key global producer of lithium, and supplemented by supply from FTA
countries, the U.S. is positioned well for lithium through 2035. Of
course, U.S. demand will be in competition with the demand for minerals
created by other countries' decarbonization goals, particularly those
outside of China. As a practical matter, this means that some portion
of U.S. demand for these minerals might be secured to some degree from
sources in partner countries that are not currently free trade partners
or MSP members (but also are not covered nations or FEOCs). As
previously shown in Figure 38, many of these non-FTA, non-MSP countries
are economic allies that share other cooperative relationships or
partnerships with the U.S. FTA, MSP, and the latter group of countries
possess significant reserves. For example, an accounting of known
mineral reserves in democratic countries across the world indicates
that they surpass projected global needs through 2030 for the five
minerals assessed by ANL, under a demand scenario that limits global
temperature rise to 1.5 [deg]C.\1168\ As opposed to resources, which
include possibly unrecoverable materials, reserves include ``measured
and indicated deposits that have been deemed economically viable.''
\1169\ While this statistic does not demonstrate that these reserves
will be extracted in any specific time frame, it demonstrates their
presence and potential availability. As demand increases, particularly
for secure supplies, further exploration and development of existing
resources in these countries is likely to further increase these
reserves. In addition, as discussed in more detail later in this
section, EPA has examined pricing forecasts for critical minerals
during the time frame of the rule, not only to inform its battery cost
projections but also as a general indicator of industry sentiment
regarding future availability. The evidence does not show expectation
of large steep increases in future pricing, suggesting that industry at
large has not identified hard constraints on the sufficiency of global
supply to meet demand. Rather, the level of constructive activity in
the auto industry and among its suppliers to secure supplies for these
minerals suggests that the industry sees the identification of a gap
between present supply and future demand not as a cause for panic but
as a business opportunity.
---------------------------------------------------------------------------
\1168\ Allan, B. et al., ``Friendshoring Critical Minerals: What
Could the U.S. and Its Partners Produce?,'' Carnegie Endowment for
International Peace, May 3, 2023. At https://carnegieendowment.org/2023/05/03/friendshoring-critical-minerals-what-could-u.s.-and-its-partners-produce-pub-89659.
\1169\ Similarly, the USGS defines reserves as ``that part of
the reserve base which could be economically extracted or produced
at the time of determination. The term reserves need not signify
that extraction facilities are in place and operative.'' U.S. Bureau
of Mines and the U.S. Geological Survey, ``Principles of a Resource/
Reserve Classification For Minerals,'' Geological Survey Circular
831, 1980.
---------------------------------------------------------------------------
Figure 39 suggests that, among the minerals profiled, graphite is
most exposed to potential need for supply from non-FTA, non-MSP
countries. However, alternatives to imported graphite exist and are
poised to become increasingly important during the time frame of the
rule. ANL notes that synthetic graphite is already being produced and
that scaling domestic synthetic graphite production holds significant
promise for closing the gap. Unlike natural graphite, synthetic
graphite does not depend on the existence of natural mineral deposits
nor does it require the long permitting and approval time associated
with mine development. Synthetic graphite can be manufactured from
organic materials
[[Page 28046]]
such as lignin \1170\ as well as coal, coal waste, and plastic waste
\1171\ and can substitute for natural graphite as a lithium-ion anode
active material, as already done by some manufacturers.\1172\ ANL
indicates that synthetic graphite can help meet future demands for this
mineral over time. To this end, the Department of Energy has awarded a
$100 million grant to Novonix to expand domestic production at its
facility in Chattanooga, Tennessee.\1173\ Silicon is also increasingly
used in place of a portion of anode graphite content, and on a mass
basis can store much more lithium than graphite. The IEA indicates that
in 2023, about 30 percent of anodes in production already contained a
portion of silicon.\1174\ ANL has projected that anodes in common
nickel-manganese chemistries will contain up to 15 weight percent
silicon in the anode by 2030,\1175\ and some expect the global market
for silicon anode material to expand by a factor of ten by 2035.\1176\
Both of these substitutes for imported graphite are growing and will
play a rapidly growing role during the time frame of the rule.
According to Wood Mackenzie, ``synthetic graphite will remain dominant
in this space over the next decade, although the shift to silicon-
containing anodes is accelerating.'' \1177\
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\1170\ Zhang, J. et al., ``Graphite Flows in the U.S.: Insights
into a Key Ingredient of Energy Transition,'' Environ. Sci. Technol.
2023, 57, 3402-3414.
\1171\ National Energy Technology Laboratory, ``NETL Driving
Research To Produce Graphite for Electric Vehicles, Other Green
Applications,'' September 19, 2023.
\1172\ Zhang, J. et al., ``Graphite Flows in the U.S.: Insights
into a Key Ingredient of Energy Transition,'' Environ. Sci. Technol.
2023, 57, 3402-3414.
\1173\ NOVONIX, ``NOVONIX Finalizes US$100 Million Grant Award
from U.S. Department of Energy,'' Press Release, November 1, 2023.
Accessed on February 24, 2024 at https://ir.novonixgroup.com/news-releases/news-release-details/novonix-finalizes-us100-million-grant-award-us-department-energy.
\1174\ International Energy Agency, ``Global EV Outlook 2023,''
p. 58, 2023. Accessed on November 30, 2023 at https://www.iea.org/reports/global-ev-outlook-2023.
\1175\ Argonne National Laboratory, ``Cost Analysis and
Projections for U.S.-Manufactured Automotive Lithium-ion
Batteries,'' ANL/CSE-24/1, January 2024.
\1176\ Sang, S.H., ``EV battery makers' silicon anode demand set
for take-off,'' Korea Economic Daily, February 23, 2024. Accessed on
March 12, 2024 at https://www.kedglobal.com/batteries/newsView/ked202402230020.
\1177\ Wood Mackenzie, ``Global graphite investment horizon
outlook,'' slide 4, December 2023 (filename: global-graphite-
investment-horizon-outlook-q4-2023). Available to subscribers.
---------------------------------------------------------------------------
In addition to these trends, supply sources of natural graphite are
expected to become more diverse over time with new planned capacity in
FTA countries (Canada and Australia) and in other economic allies
(Tanzania and Mozambique), and others supported by the MSP.
The DOE grant to Novonix is just one example of how the DOE's
Office of Manufacturing and Energy Supply Chains (MESC) program,
enabled by the BIL, is targeting key elements of the U.S. battery
supply chain for accelerated development. As previously described in
section IV.C.7.i, the BIL provides for $7.9 billion to support
development of the domestic supply chain for battery manufacturing,
recycling, and critical minerals.\1178\ For example, with respect to
critical minerals, the BIL supports the development and implementation
of a $675 million Critical Materials Research, Development,
Demonstration, and Commercialization Program administered by the
Department of Energy (DOE),\1179\ and has created numerous other
programs in related areas, such as critical minerals data collection by
the U.S. Geological Survey (USGS).\1180\ Provisions extend across
several areas including critical minerals mining and recycling
research, USGS energy and minerals research, rare earth elements
extraction and separation research and demonstration, and expansion of
DOE loan programs in critical minerals and zero-carbon
technologies.1181 1182 Further, the DOE Loan Programs Office
continues to disburse substantial amounts of assistance through its
loans programs that include extraction, processing and recycling of
lithium and other critical minerals.\1183\ Through the Advanced
Technology Vehicles Manufacturing (ATVM) Loan Program and Title 17
Innovative Energy Loan Guarantee Program over $20 billion in loans and
loan guarantees is available to finance critical materials projects.
Some examples of recent projects, amounting to $3.4 billion in loan
support, are outlined in RIA Chapter 3.1.4.
---------------------------------------------------------------------------
\1178\ Congressional Research Service, ``Energy and Minerals
Provisions in the Infrastructure Investment and Jobs Act (Pub. L.
117-58)'', February 16, 2022. https://crsreports.congress.gov/product/pdf/R/R47034.
\1179\ Department of Energy, ``Biden-Harris Administration
Launches $675 Million Bipartisan Infrastructure Law Program to
Expand Domestic Critical Materials Supply Chains,'' August 9, 2022.
Available at https://www.energy.gov/articles/biden-harris-administration-launches-675-million-bipartisan-infrastructure-law-program.
\1180\ U.S. Geological Survey, ``Bipartisan Infrastructure Law
supports critical-minerals research in central Great Plains,''
October 26, 2022. Available at https://www.usgs.gov/news/state-news-release/bipartisan-infrastructure-law-supports-critical-minerals-research-central.
\1181\ Congressional Research Service, ``Energy and Minerals
Provisions in the Infrastructure Investment and Jobs Act (Pub. L.
117-58)'', February 16, 2022. https://crsreports.congress.gov/product/pdf/R/R47034.
\1182\ International Energy Agency, ``Infrastructure and Jobs
act: Critical Minerals,'' October 26, 2022. https://www.iea.org/policies/14995-infrastructure-and-jobs-act-critical-minerals.
\1183\ Department of Energy Loan Programs Office, ``Critical
Materials Loans & Loan Guarantees,'' https://www.energy.gov/sites/default/files/2021-06/DOE-LPO_Program_Handout_Critical_Materials_June2021_0.pdf.
---------------------------------------------------------------------------
EPA notes that the categorization of mineral origins in Figure 39
refers to mine location and not where the extracted material is
processed into inputs to cell manufacturing such as precursors or
electrode powders. As noted in the study, a large portion of processing
capacity for mined battery minerals is located in China. However,
unlike mining of mineral resources, refining and processing can take
place in any country where capacity is built. Just as with other
elements of the supply chain, mineral processing is also receiving
attention from the domestic battery industry and the federal
government. For example, mineral processing facilities are eligible for
the Qualifying Advanced Energy Project Credit (48C), and are among the
projects in a first round of $4 billion in tax credits that have been
announced.\1184\ Critical materials processing is also included among
projects eligible for the DOE ATVM loan program,\1185\ and the program
has already issued conditional commitments to two projects for lithium
carbonate and natural graphite active material production totaling $802
million.1186 1187
---------------------------------------------------------------------------
\1184\ Department of Energy, ``Qualifying Advanced Energy
Project Credit (48C) Program--48C Updates,'' web page. Accessed on
March 1, 2024 at https://www.energy.gov/infrastructure/qualifying-advanced-energy-project-credit-48c-program.
\1185\ Id.
\1186\ Department of Energy, ``LPO Announces Conditional
Commitment to Ioneer Rhyolite Ridge to Advance Domestic Production
of Lithium and Boron, Boost U.S. Battery Supply Chain,'' website
announcement, January 13, 2023. https://www.energy.gov/lpo/articles/lpo-announces-conditional-commitment-ioneer-rhyolite-ridge-advance-domestic-production.
\1187\ Department of Energy, ``DOE Announces First Advanced
Technology Vehicles Manufacturing Loan in More than a Decade,''
website announcement, July 27, 2022. https://www.energy.gov/articles/doe-announces-first-advanced-technology-vehicles-manufacturing-loan-more-decade.
---------------------------------------------------------------------------
In addition to EPA's assessment of the supply chain for critical
minerals, several specific aspects of our updated compliance analysis
act to address commenters' concerns about supply chain risk and
uncertainty. Our updated central case projects a substantially lower
demand for battery production than in the proposal, which would reduce
resultant demand for critical minerals compared to the proposal. We
[[Page 28047]]
also are using substantially higher battery costs than in the proposal,
which along with our upper battery cost sensitivity (which increases
battery cost by an additional 25 percent), additionally recognizes and
addresses commenters' concerns regarding uncertainty of future mineral
prices. We also show multiple pathways that illustrate it is possible
to comply with the standards with lower levels of BEVs (and hence lower
demand for battery minerals) than in the central analysis, which
further supports our conclusion that the standards can be met from the
perspective of critical mineral availability.
Regarding U.S. automaker access to critical minerals, EPA notes
that U.S. automakers are actively addressing their need to secure a
supply of critical minerals. In addition to continuing to reduce cobalt
and rare earth magnet content in batteries and electric machines,
manufacturers are also directly securing supplies of critical battery
and rare-earth minerals necessary for increasing the scale of BEV
production, often with a focus on U.S.
sources.1188 1189 1190 1191 1192 1193 1194 1195 Here it is
relevant to repeat that domestic sourcing of minerals primarily affects
eligibility for the 30D Clean Vehicle Credit and does not otherwise
prevent PEVs from contributing to the U.S. compliance fleet. EPA
believes that these developments further indicate that the automotive
industry has recognized the need to establish a supply chain for
electrified vehicles and is taking appropriate action to address this
business need.
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\1188\ Hawkins, A.J. General Motors makes moves to source rare
earth metals for EV motors in North America. The Verge, 12/09/2021.
Accessed on 12/10/2021 at https://www.theverge.com/2021/12/9/22825948/gm-ev-motor-rare-earth-metal-magnet-mp-materials.
\1189\ General Motors Press Release. GM to Source U.S.-Based
Lithium for Next-Generation EV Batteries Through Closed-Loop Process
with Low Carbon Emissions. Accessed on 12/10/2021 at https://media.gm.com/media/us/en/gm/home.detail.html/content/Pages/news/us/en/2021/jul/0702-ultium.html.
\1190\ Waylund, M. GM to form new joint venture to produce
crucial materials for EVs. CNBC, 12-0102021. Accessed on 12/10/2021
at https://www.cnbc.com/2021/12/01/gm-to-form-new-joint-venture-to-produce-costly-raw-materials-for-evs.html.
\1191\ Lambert, F. Tesla secures lithium supply contract from
world's largest producer. Electrek, 11/01/2021. Accessed on 12/10/
2021 at https://electrek.co/2021/11/01/tesla-secures-lithium-supply-contract-ganfeng-lithium.
\1192\ Lambert, F. Tesla secures large supply of nickel from New
Caledonia for battery production. Electrek, 10/13/2021. Accessed on
12/10/2021 at https://electrek.co/2021/10/13/tesla-secures-large-amount-nickel-from-new-caledonia-battery-production.
\1193\ Lipinski, P., Steitz, C. Volkswagen secures raw materials
as part of $34 billion battery push. Reuters, 12/08/2021. Accessed
on 12/10/2021 at https://www.reuters.com/markets/deals/belgiums-umicore-plans-battery-material-venture-supply-volkswagen-2021-12-08.
\1194\ Kilgore, T. Ford invests $50 million into EV battery
supply chain company Redwood Materials. Marketwatch, 09/22/2021.
Accessed on 12/10/2021 at https://www.marketwatch.com/story/ford-invests-50-million-into-ev-battery-supply-chain-company-redwood-materials-2021-09-22.
\1195\ LaReau, J.L., ``GM forms 2 new partnerships that will
create new factories in US,'' Detroit Free Press, December 9, 2021.
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As demand for these materials increases, we expect that mining and
processing capacity across the world will continue to expand. Globally
and in the U.S., interest and motivation toward developing new
resources and expanding existing ones has become very high and is
expected to remain so, as the demand outlook for lithium and other
battery minerals continues to be robust. In the U.S. specifically, the
process of establishing new mining capacity can be subject to greater
uncertainty stemming from issues such as permitting; investor
expectations of demand and future prices also make it difficult to
predict with precision the rate at which new mines will be developed
and brought online. For example, new lithium mining sources are
sometimes described as taking from five to ten years or longer to
develop. Comments from Toyota, for example, cite ``exploration and
feasibility studies, approval and permitting processes, potential for
project abandonment and delays, learning rates for new companies, and
production ramp up'' as primary factors. These factors are well known
in the industry and are typically considered by industry analysts when
assessing production potential in future years, by assigning a
percentage of potential production to each project based on their
knowledge of the specific circumstances of each, including the level of
development that has already taken place. Potential expansion of
production at already-operating projects or resumption of halted or
mothballed projects are typically weighted higher than entirely new
operations. The 2024 ANL critical minerals analysis has identified
numerous examples of mining development efforts in the U.S. that are
currently in various stages of development, and has projected
significant output in the future, particularly for lithium.\1196\
Canada is also taking specific steps to shorten permitting time, and
also has significant mineral reserves as do other economic
allies.\1197\
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\1196\ Argonne National Laboratory, ``Securing Critical
Materials for the U.S. Electric Vehicle Industry: A Landscape
Assessment of Domestic and International Supply Chains for Five Key
EV Battery Materials,'' ANL-24/06, February 2024.
\1197\ Reuters, ``Canada to accelerate critical mineral mining--
energy minister,'' February 13, 2024. Accessed on March 10, 2024 at
https://www.reuters.com/markets/commodities/canada-accelerate-critical-mineral-mining-energy-minister-2024-02-13.
---------------------------------------------------------------------------
Additionally, the U.S. government is taking steps to promote the
production of critical minerals through both mining and recycling. This
includes developing recommendations for improving the process of mining
on public lands including modernization of the U.S. Mining Law of
1872,1198 1199 and streamlining permitting processes under
the Federal Permitting Improvement Steering Council (FAST-41).\1200\
The ANL mineral study also identifies a number of enabling approaches
to promote critical mineral production. Additionally, the BIL and the
IRA have introduced a number of incentives to scale domestic processing
and recycling of critical minerals. These incentives include grants,
such as the $3 billion Battery Manufacturing and Recycling Grant
Program,\1201\ as well as the IRC 45X and 48C tax credits. In 2022,
approximately $2.8 billion of BIL funding was invested in the battery
supply chain, including processing and recycling, across the
country.\1202\
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\1198\ U.S. Department of the Interior, ``Biden-Harris
Administration Report Outlines Reforms Needed to Promote Responsible
Mining on Public Lands,'' September 12, 2023. https://www.doi.gov/pressreleases/biden-harris-administration-report-outlines-reforms-needed-promote-responsible-mining.
\1199\ Interagency Working Group on Mining Laws, Regulations,
and Permitting, ``Recommendations to Improve Mining on Public
Lands,'' Final Report, September 2023.
\1200\ Department of Transportation, Permitting Dashboard
Office, ``Permitting Council Moves to Designate the Critical
Minerals Supply Chain as a FAST-41 Sector,'' Press Release,
September 21, 2023.
\1201\ Department of Energy, ``Battery Manufacturing and
Recycling Grants,'' website. Located at https://www.energy.gov/mesc/battery-manufacturing-and-recycling-grants.
\1202\ Department of Energy, ``Bipartisan Infrastructure Law
Battery Materials Processing and Battery Manufacturing & Recycling
Funding Opportunity Announcement (DE-FOA-0002678) Selections,''
Factsheets, October 19, 2022. Located at https://www.energy.gov/sites/default/files/2022-10/DOE%20BIL%20Battery%20FOA-2678%20Selectee%20Fact%20Sheets%20-%201_2.pdf.
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Complementing select mining investments through the Defense
Production Act (DPA), midstream and downstream investments are expected
to incentivize upstream operations. Companies are competing to secure
materials to feed domestic mid-stream operations, such as processing,
cathode, and anode production. As of January 2024, more than 600
facilities across the battery supply chain, including 79
[[Page 28048]]
facilities for electrode and cell manufacturing and 63 facilities for
battery grade components manufacturing, are in various stages of
development across the U.S.\1203\ New battery manufacturing and supply
chain investments total more than $120 billion, with over 80,000
potential new jobs, and DOE estimates that announced battery cell
factories could supply batteries for more than 10 million new EVs every
year.\1204\ Following enactment of the IRA, numerous investments in
battery minerals have been announced across the country. Notable
examples include the Kings Mountain lithium project by Albemarle in
North Carolina, and the Smackover lithium project by ExxonMobil in
Arkansas. In addition, the Export-Import Bank of the U.S. (EXIM) is
supporting critical minerals projects, including in mining and
processing, in the U.S. and abroad through an array of financing
products including direct loans, loan guarantees, and export credit
insurance.\1205\
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\1203\ National Renewable Energy Laboratory, ``NAATBatt Lithium-
Ion Battery Supply Chain Database,'' January 2024. Accessible at
https://www.nrel.gov/transportation/li-ion-battery-supply-chain-database-online.html.
\1204\ U.S. Department of Energy, ``Building America's Clean
Energy Future,'' at https://www.whitehouse.gov/invest/. Accessed on
February 16, 2024.
\1205\ Export-Import Bank of the United States, ``EXIM Support
for Critical Minerals Transactions,'' website, at: https://www.exim.gov/about/special-initiatives/ctep/critical-minerals.
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The federal government is also taking many other steps to assist
with domestic critical mineral development. For example, the U.S.
Geological Survey (USGS) is leading numerous projects under the Earth
Mapping Resources Initiative (Earth MRI) to improve mapping and
exploration of domestic resources, including already-announced or in-
progress projects in Alabama, Florida, New York, Montana, Kentucky,
Tennessee, Georgia, and across the U.S. including projects focused on
Arizona and Nevada.1206 1207 The FY24 National Defense
Authorization Act (NDAA) created the Intergovernmental Critical
Minerals Task Force to facilitate coordination for data sharing,
capacity building, workforce development, policy review, environmental
responsibility, onshoring opportunities, and identifying alternatives.
The FY24 NDAA also directs the Department of Defense to develop a
University Affiliated Research Center for Critical Minerals.\1208\
USGS, DOD, and DOE are also collaborating to leverage AI and machine
learning for assessment of domestic critical mineral resources.\1209\
Many more examples of similar efforts have been compiled by ANL in its
2024 study of critical minerals.\1210\
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\1206\ See website at https://www.usgs.gov/special-topics/earth-mri.
\1207\ U.S. Geological Survey, ``News Releases or Technical
Announcements about or related to Earth MRI,'' accessed on February
24, 2024 at https://www.usgs.gov/special-topics/earth-mri/news.
\1208\ National Defense Authorization Act, H.R. 2670, Section
227. https://www.congress.gov/bill/118th-congress/house-bill/2670/text.
\1209\ The White House, ``FACT SHEET: President Biden Announces
New Actions to Strengthen America's Supply Chains, Lower Costs for
Families, and Secure Key Sectors,'' November 27, 2023.
\1210\ Argonne National Laboratory, ``Securing Critical
Materials for the U.S. Electric Vehicle Industry: A Landscape
Assessment of Domestic and International Supply Chains for Five Key
EV Battery Materials,'' ANL-24/06, February 2024.
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With regard to lithium, rapid growth in demand has driven new
development of global resources and robust growth in supply, which is
likely a factor in recently observed reductions in lithium price.\1211\
The IEA states that lithium ``is attracting substantial attention from
mining investors'' and ``production levels are also increasing at a
significant pace, with an annual growth rate ranging between 25 percent
and 35 percent.'' \1212\ Growth in supply has also occurred in other
battery minerals, sometimes outpacing growth in demand. For example,
BloombergNEF projects that globally, cobalt and nickel reserves ``are
now enough to supply both our Economic Transition and Net Zero
scenarios,'' the latter of which is an aggressive global
decarbonization scenario.\1213\
---------------------------------------------------------------------------
\1211\ New York Times, ``Falling Lithium Prices Are Making
Electric Cars More Affordable,'' March 20, 2023. Accessed on March
23, 2023 at https://www.nytimes.com/2023/03/20/business/lithium-prices-falling-electric-vehicles.html.
\1212\ International Energy Agency, ``Critical Minerals Market
Review 2023,'' December 2023, p. 52.
\1213\ BloombergNEF, ``Electric Vehicle Outlook 2023,''
Executive Summary, p. 5.
---------------------------------------------------------------------------
In the proposal we cited expectations that the price of lithium and
other critical minerals was likely to stabilize in the mid-2020s,\1214\
which we noted was also supported by proprietary battery price
forecasts such as those EPA examined from Wood
Mackenzie.1215 1216 Since the proposal we have continued to
see evidence supporting that assessment. Numerous reports in the press
that cite a decline in many critical mineral prices including lithium
throughout 2023 1217 1218 are also supported by the latest
subscription forecasts by Wood Mackenzie for key critical minerals and
precursor chemicals. These forecasts indicate that prices are expected
to stabilize and remain relatively low through 2028. For example, the
2028 forecast for lithium carbonate and lithium hydroxide indicates
stabilization at more than 20 percent below 2023 prices, with other
minerals and precursors including flake graphite all similar to 2023
prices or slightly lower.1219 1220 Further out, from 2029 to
2032 prices for electrode raw materials, precursors and cathodes are
projected to begin trending upward from the predicted low levels in the
period prior to 2028 but not beyond levels already seen in
2022.1221 1222 Similarly, projections for pricing of various
forms of graphite do not anticipate per annum growth rates beyond low
single digits from 2023 through 2032, indicative of a stable response
to increasing demand.\1223\ These expectations lend further support to
EPA's assessment that the combined cost of battery mineral content
overall will not continually march upward from now through the time
frame of the rulemaking as some commenters have suggested but will find
a position within a reasonable range below the peak of prior years as
the rapidly growing supply chain continues to mature and price
discovery
[[Page 28049]]
gradually occurs in the developing market for each mineral.
---------------------------------------------------------------------------
\1214\ For example, EPA cited Sun et al., ``Surging lithium
price will not impede the electric vehicle boom,'' Joule,
doi:10.1016/j.joule. 2022.06.028 (https://dx.doi.org/10.1016/j.joule.2022.06.028).
\1215\ Wood Mackenzie, ``Battery & raw materials--Investment
horizon outlook to 2032,'' September 2022 (filename: brms-q3-2022-
iho.pdf). Available to subscribers.
\1216\ Wood Mackenzie, ``Battery & raw materials--Investment
horizon outlook to 2032,'' accompanying data set, September 2022
(filename: brms-data-q3-2022.xlsx). Available to subscribers.
\1217\ The Wall Street Journal, ``Low Battery Metal Prices Set
to Persist in 2024, Adding Friction to Energy Transition,'' December
28, 2023. Accessed on February 24, 2024 at https://www.wsj.com/articles/low-battery-metal-prices-set-to-persist-in-2024-adding-friction-to-energy-transition-3773ba00.
\1218\ Benchmark Minerals, ``OEMs and battery makers on alert as
lower lithium prices to push into 2024,'' October 11, 2023. Accessed
on February 24, 2024 at https://source.benchmarkminerals.com/article/oems-and-battery-makers-on-alert-as-lower-lithium-prices-to-push-into-2024-benchmark.
\1219\ Wood Mackenzie, ``Electric Vehicle & Battery Supply Chain
Short-term outlook January 2024'', slide 29, February 2, 2024
(filename: evbsc-short-term-outlook-january-2024.pdf). Available to
subscribers.
\1220\ Wood Mackenzie, ``Global cathode and precursor short-term
outlook January 2024,'' slide 5, January 2024 (filename: global-
cathode-and-precursor-market-short-term-outlook-january-2024.pdf).
Available to subscribers.
\1221\ Wood Mackenzie, ``Global cathode & precursor markets
investment horizon outlook--Q4 2023,'' slides 21 and 22, December
2023 (filename: global-cathode-and-precursor-market-investment-
horizon-outlook-december-2023.pdf). Available to subscribers.
\1222\ Wood Mackenzie, ``Global lithium investment horizon
outlook Q4 2023,'' slides 23 and 24, December 2023. (filename:
global-lithium-investment-horizon-outlook-q4-2023-final.pdf).
Available to subscribers.
\1223\ Wood Mackenzie, ``Global graphite investment horizon
outlook,'' slides 27 and 28, December 2023 (filename: global-
graphite-investment-horizon-outlook-q4-2023). Available to
subscribers.
---------------------------------------------------------------------------
EPA considers this projected stability and moderate projected
trends in pricing as further evidence of future mineral availability
and a ``healthy'' mineral market. That is, the market has been
anticipating large increases in mineral and active material demand
during the time frame of the forecasts (2023-2028 and 2023-2032), and
has also been aware of EPA's projected PEV penetrations through 2032 as
published in the proposed rule in April 2023. These demand drivers have
had significant time to be ``priced in'' by the market and nonetheless
have not resulted in dramatically higher price expectations, which
continue to be characterized by moderate upward trends in some minerals
and little effect in others, suggesting that an irreconcilable
shortfall is not anticipated. This suggests that like EPA, the industry
at large has not identified hard constraints on the ability of the
supply chain to react to growing demand without causing critical
shortages.
Some analysts as well as public commenters have pointed out that
lower mineral prices, if they remain low enough for long enough, may
begin to discourage continued investments in new supply. For example,
in describing the growth rate of lithium production, IEA also stated
that the ``recent decline in lithium prices could pose challenges to
junior miners and early-stage projects.'' Others have remained
positive; for example, strong profit margins have often remained
afterward,\1224\ and many remain bullish in outlook.\1225\ EPA agrees
that low prices can have the effect of discouraging long term
investment in new production. However, it is well understood that like
many other industries, critical mineral mining and production are
cyclical industries in which rising prices stimulate new capacity,
later resulting in lower prices that cause capacity to be taken out of
production, followed again by higher prices, and so on. At this early
stage, the previously described activities of the federal government in
providing incentives, funding, and assistance can play an important
role in sustaining resource development and keeping it focused on the
longer term. Furthermore, additional federal government efforts to
stockpile minerals, increase price transparency, and establish multi-
year procurement contracts can aid in improving certainty for critical
minerals development.1226 1227
---------------------------------------------------------------------------
\1224\ New York Times, ``Falling Lithium Prices Are Making
Electric Cars More Affordable,'' March 20, 2023. Accessed on March
23, 2023 at https://www.nytimes.com/2023/03/20/business/lithium-prices-falling-electric-vehicles.html.
\1225\ S&P Global, ``Commodities 2024: US, Canada lithium
prospects hope to advance despite headwinds,'' December 19, 2023.
Accessed on February 24, 2024 at https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/metals/121923-us-canada-lithium-prospects-hope-to-advance-in-2024-despite-headwinds.
\1226\ Commodity Futures Trading Commission, ``Statement of
Commissioner Christy Goldsmith Romero on U.S. Supply Chain
Resilience for Critical Minerals Before the Energy and Environmental
Markets Advisory Committee,'' February 13, 2024. At https://www.cftc.gov/PressRoom/SpeechesTestimony/romerostatement021324.
\1227\ National Defense Authorization Act, H.R. 2670, Section
152. https://www.congress.gov/bill/118th-congress/house-bill/2670/text.
---------------------------------------------------------------------------
Some commenters cited specific examples of mines that had received
permitting and investment but which were later put on hold, or had
production reduced or stopped, due to declining mineral prices.
However, EPA notes that these operations can be restarted more quickly
in the event of higher prices than new mining operations or new
factories. Mineral analysis firms (e.g., BMI) commonly categorize such
projects as under ``care and maintenance,'' representing ``projects
that were at some point in production, or have been commissioned, but
have been idled/placed on care and maintenance,'' and ``could be
brought online with less capital and time than other projects.'' \1228\
For the purpose of assessing future supply potential, BMI weights such
projects at 90 percent of stated capacity.\1229\
---------------------------------------------------------------------------
\1228\ Benchmark Mineral Intelligence (BMI), ``Lithium Mining
Projects--Supply Projections,'' slide 2, Presentation, June 2023.
Attachment to comment titled ``Comments of Environmental and Public
Health Organizations,'' docket EPA-HQ-OAR-2022-0829.
\1229\ Id.
---------------------------------------------------------------------------
Regarding global lithium production, we have also supplemented our
lithium analysis from the proposal with newly available research and
information. The outlook for lithium production has evolved rapidly,
with new projects regularly identified and contributing to higher
projections of resource availability and production.
Benchmark Minerals Intelligence (BMI) conducted a comprehensive
analysis of global and domestic lithium supply and demand in June 2023
1230 1231 that indicates that lithium supply is likely to
keep pace with growing demand during the time frame of the rule. In
Figure 40 the vertical bars (at full height) represent estimated global
demand, including U.S. demand. The top segment of each bar represents
BMI's estimate of added U.S. demand under the proposed rule. The lowest
line represents BMI's projection of global lithium supply (including
U.S.) in GWh equivalent, weighted by current development status of each
project. The middle line represents global supply where the U.S.
portion is unweighted (i.e., all included projects reach full expected
production). These two lines together represent a potential range for
future global supply bounded by a standard weighted scenario (lowest
line) and a maximum scenario applied to U.S. production only (middle
line). In both cases, projected global lithium supply meets or
surpasses projected global demand through 2029. Past 2029, global
demand is either generally met or within 10 percent of projected demand
through 2032. For reference, the uppermost line is a high supply
scenario in which global supply is also unweighted.
---------------------------------------------------------------------------
\1230\ Id.
\1231\ Referenced in docket EPA-HQ-OAR-2022-0829, attachment to
comment titled ``Comments of Environmental and Public Health
Organizations,'' comprising comments attributed to Center for
Biological Diversity, Conservation Law Foundation, Environmental Law
& Policy Center, Natural Resources Defense Council, Public Citizen,
Sierra Club, and the Union of Concerned Scientists.
---------------------------------------------------------------------------
[[Page 28050]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.038
Figure 40: Global Lithium Supply and Demand Based on Current
Announcements--GWh Basis
EPA notes that BMI based its estimate of U.S. demand on PEV
penetrations under the proposed standards, which projected higher PEV
penetrations than in the final standards. This means that the top
segment of each bar would be shorter under the final standards, making
the depicted results more conservative.
EPA also notes that although BMI states that it is aware of 330
lithium mining projects ranging from announced projects to fully
operating projects and stages in between, the supply projections shown
here are limited to only 153 projects that are already in production or
have publicly identified production estimates as of December 2022 (more
than one year ago). Excluded from both the weighted and unweighted
supply projections are 177 projects for which no information on likely
production level was available. It is standard practice to weight
projects that have production estimates according to their stage of
development, and BMI has followed this practice with the 153 projects.
However, complete exclusion of the potential production of 177 projects
(more than half of the total) suggests that the projections shown may
be extremely conservative. If even a very conservative estimate of
ultimate production from these 177 projects by 2030 were to be added to
the chart, projected supply would increase and perhaps meet or surpass
demand. At this time of rising mineral demand coupled with active
private investment and U.S. government activities to promote mineral
resource development, exclusion of potential production from these
resources is not likely to reflect their future contribution to U.S.
supply.
In Figure 41 we show projections performed by ANL in February 2024
for U.S. lithium supply and demand alone.\1232\ Like the BMI
projections, the ANL projections include recycling potential. As
mentioned previously, the ``ANL-Low'' scenario (solid line) is most
similar to the final standards, indicating that domestically mined or
recycled lithium would be sufficient to supply the majority of U.S.
demand from 2027 to 2029 and all demand in 2030 and after.\1233\
---------------------------------------------------------------------------
\1232\ Argonne National Laboratory, ``Securing Critical
Materials for the U.S. Electric Vehicle Industry: A Landscape
Assessment of Domestic and International Supply Chains for Five Key
EV Battery Materials,'' ANL-24/06, February 2024.
\1233\ In comparing the charts, note that the lines in the BMI
chart represent supply (in GWh equivalent), while the lines in the
ANL chart represent demand (in K tonnes).
---------------------------------------------------------------------------
[[Page 28051]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.039
Figure 41: Potential U.S. Lithium Supply and Demand, ANL Study
In mid-2023, some analysts began speaking of the possibility of a
future tightness in global lithium supply. Opinions varied, however,
about its potential development and timing, with the most bearish
opinions suggesting as early as 2025 with others suggesting 2028 or
2030.\1234\ However, the projections from BMI suggest only a mild gap
in global supply beginning to form in 2030 and only if the 177 projects
that were not quantified in the BMI study do not contribute. The ANL
study does predict a gap but only in purely domestic supply, and there
is no expectation that the U.S. must rely only on domestic
lithium.\1235\ Further, the analysts quoted as predicting a future
tightness stop well short of identifying an unavoidable hard constraint
on lithium availability that would reasonably lead EPA to conclude that
the standards cannot be met. Forecasts of potential supply and demand,
including those that purport to identify a supply shortfall, typically
are also accompanied by descriptions of burgeoning activity and
investment oriented toward supplying demand, rather than a paucity of
activity and investment that would be more indicative of a critical
shortage. EPA also notes that since the time of the referenced article,
demand for lithium has increasingly been depicted as having
underperformed peak expectations. The final standards also project a
lower PEV penetration than in the proposal, which would lead to lower
demand from the standards than the proposal would have suggested.
---------------------------------------------------------------------------
\1234\ CNBC, ``A worldwide lithium shortage could come as soon
as 2025,'' August 29, 2023. Accessed on February 25, 2024 at https://www.cnbc.com/2023/08/29/a-worldwide-lithium-shortage-could-come-as-soon-as-2025.html.
\1235\ In the case of the solid black line (ANL-Low scenario)
which is similar to the final standards in PEV penetration.
---------------------------------------------------------------------------
We also continue to note developments indicating that the lithium
supply continues to respond robustly to demand. Since the proposal, in
which we described ongoing work by DOE to characterize lithium mining
developments in the U.S.,\1236\ the outlook for domestic lithium
supplies has continued to expand as new resources have been identified
and characterized, projects have continued through engineering economic
assessments, and others begin permitting or construction. Significant
lithium deposits exist in the U.S. in Nevada, California and several
other states,1237 1238 and are currently attracting
development interest from suppliers and automakers.\1239\ For example,
largely since the proposal or the date of analyses available at the
time, several large U.S. lithium resources have been announced and
considered for development, including what could be the largest known
lithium resource in the world.1240 1241 1242 The recent
discovery of such sources and increased interest in development of
known but unutilized sources suggests that resources of lithium, which
previously was used only in a limited number of applications, may be
underexplored and underdeveloped, and suggests that additional
discoveries and developments will continue to improve our understanding
of lithium availability.\1243\
---------------------------------------------------------------------------
\1236\ Department of Energy, communication to EPA titled
``Lithium Supplies--additional datapoints and research,'' March 8,
2023. See memorandum to Docket ID No. EPA-HQ-OAR-2022-0829 titled
``DOE Communication to EPA Regarding Critical Mineral Projects.''
\1237\ U.S. Geological Survey, ``Mineral Commodity Summaries
2022--Lithium'', January 2022. Available at https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-lithium.pdf.
\1238\ U.S. Geological Survey, ``Lithium Deposits in the United
States,'' June 1, 2020. Available at https://www.usgs.gov/data/lithium-deposits-united-states.
\1239\ Investing News, ``Which Lithium Juniors Have Supply Deals
With EV Makers?,'' February 8, 2023. Accessed on March 24, 2023 at
https://investingnews.com/lithium-juniors-ev-supply-deals.
\1240\ Yirka, B., ``New evidence suggests McDermitt Caldera may
be among the largest known lithium reserves in the world,'' August
31, 2023. Accessed on October 18, 2023 at https://phys.org/news/2023-08-evidence-mcdermitt-caldera-largest-lithium.html.
\1241\ ExxonMobil, ``ExxonMobil drilling first lithium well in
Arkansas, aims to be a leading supplier for electric vehicles by
2030,'' Press release, November 13, 2023. Accessed on December 16,
2023 at https://corporate.exxonmobil.com/news/news-releases/2023/1113_exxonmobil-drilling-first-lithium-well-in-arkansas.
\1242\ Reuters, ``Exxon to start lithium production for EVs in
the US by 2027,'' November 13, 2023. Accessed on December 16, 2023
at https://www.reuters.com/markets/commodities/exxon-start-producing-lithium-by-2027-2023-1-13-.
\1243\ Washington Post, ``A Huge Lithium Discovery That
Economists Were Expecting,'' September 11, 2023. Accessed on
December 16, 2023 at https://www.washingtonpost.com/business/energy/2023/09/11/discovery-of-vast-new-lithium-deposit-in-us-shows-power-of-market/baad25be-50d211ee-accf-88c266213aac_story.html.
---------------------------------------------------------------------------
DOE's lithium resource assessment work has continued via the
February 2024 ANL critical minerals study.\1244\ The study continues to
confirm a trend of rapidly growing identification of U.S. lithium
resources and extraction development. The identification of these
resources, some of which were publicly announced within the last year,
[[Page 28052]]
exemplifies the dynamic nature of the industry and the likely
conservative aspect of existing assessments.
---------------------------------------------------------------------------
\1244\ Argonne National Laboratory, ``Securing Critical
Materials for the U.S. Electric Vehicle Industry: A Landscape
Assessment of Domestic and International Supply Chains for Five Key
EV Battery Materials,'' ANL-24/06, February 2024.
Table 74--Examples of Domestic Lithium Projects Identified by ANL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Anticipated
annual Projected
Property name Development stage capacity State start date \a\ Data source
(tonnes LCE)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Paradox.............................. Feasibility Complete.... 13,074 Utah......................... 2025 Anson Resources.
Silver Peak.......................... Operational............. 5,000 Nevada....................... Active Steven, 2022.
South-West Arkansas.................. Prefeasibility complete. 26,400 Arkansas..................... 2027 Standard Lithium.
Fort Cady............................ Under Construction...... 4,990 California................... 2026 5E Advanced Materials.
Clayton Valley (Zeus)................ Preliminary assessment/ 31,900 Nevada....................... 2030 Noram Lithium Corp.
Prefeasibility.
Round Top............................ Preliminary assessment/ 9,800 Texas........................ 2030 Texas Mineral Resource
Prefeasibility. Corp.
Clayton Valley....................... Feasibility Started..... 27,400 Nevada....................... 2028 Century Lithium.
Thacker Pass (Phase I)............... Under Construction...... 40,000 Nevada....................... 2026 Lithium Americas.
Thacker Pass (Phase II).............. Construction Planned.... 80,000 Nevada....................... 2029 Lithium Americas.
Piedmont............................. Feasibility Complete.... 26,400 North Carolina............... 2025 Piedmont Lithium.
Rhyolite Ridge....................... Construction Planned.... 20,600 Nevada....................... 2026 Ioneer.
TLC Phase I.......................... Prefeasibility.......... 24,000 Nevada....................... 2028 American Lithium.
ABTC................................. Construction Planned.... 26,400 Nevada....................... 2026 American Battery
Technology Co.
Kings Mountain....................... Under Construction...... 50,000 North Carolina............... 2026 Albemarle.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The start dates for the projects are adopted as provided through press releases or company investor reports. In cases where an anticipated start
date is not specified, ANL provides an estimated start date. This estimate is based on assumptions about the typical timeline for project initiation,
provided all necessary elements align as anticipated. It is important to note that any failure in meeting necessary prerequisites such as technical
requirements, sustaining project economics, permitting, or financing could result in project delays or, in extreme cases, even cancellation. Thus,
actual start dates could be earlier or later than reported here. The data was last updated in February 2024. The list only includes projects with
publicly available information and is intended solely for illustrative purposes. Some evaluated projects are excluded from this list.
As shown in Figure 42, ANL anticipates that projects such as these
will increase U.S. lithium production by almost an order of magnitude
from about 50,000 metric tons of lithium carbonate equivalent in 2025
to over 450,000 metric tons by 2030.\1245\
---------------------------------------------------------------------------
\1245\ Argonne National Laboratory, ``Securing Critical
Materials for the U.S. Electric Vehicle Industry: A Landscape
Assessment of Domestic and International Supply Chains for Five Key
EV Battery Materials,'' ANL-24/06, February 2024.
[GRAPHIC] [TIFF OMITTED] TR18AP24.040
Figure 42: Prospective Domestic Lithium Supply, 2023 to 2035
We also note that the example provided by the critical mineral
content requirements for $3,750 of the 30D Clean Vehicle Credit has
spurred other countries to consider action that would further expand
global lithium supply. For example, the European Union is seeking to
promote rapid development of Europe's battery supply chains by
considering targeted measures such as accelerating permitting processes
and encouraging private investment. To these ends the European
Parliament proposed a Critical Raw Materials Act on March 16, 2023,
which includes these and other measures to encourage the development of
new supplies of critical minerals not currently
[[Page 28053]]
anticipated in market projections.1246 1247 1248 The Act was
adopted in December 2023.\1249\
---------------------------------------------------------------------------
\1246\ European Union, ``7th High-Level Meeting of the European
Battery Alliance: main takeaways by the Chair Maro[scaron]
[Scaron]ef[ccaron]ovi[ccaron] and the Council Presidency,'' March 1,
2023. Accessed on March 9, 2023 at https://single-market-economy.ec.europa.eu/system/files/2023-03/Main%20takeaways_7th%20High-Level%20Meeting%20of%20EBA.pdf.
\1247\ New York Times, ``U.S. Eyes Trade Deals With Allies to
Ease Clash Over Electric Car Subsidies,'' February 24, 2023.
\1248\ European Parliament, ``Proposal for a regulation of the
European Parliament and of the Council establishing a framework for
ensuring a secure and sustainable supply of critical raw
materials,'' March 16, 2023. https://single-market-economy.ec.europa.eu/publications/european-critical-raw-materials-act_en.
\1249\ European Parliament, ``Critical raw materials: MEPs adopt
plans to secure the EU's supply and sovereignty,'' Press release,
December 12, 2023. At https://www.europarl.europa.eu/news/en/press-room/20231208IPR15763/critical-raw-materials-plans-to-secure-the-eu-s-supply.
---------------------------------------------------------------------------
We also note, as in the proposal, that supply and demand of some
critical minerals is subject to the potential substitution of some
minerals for others. We noted as an example that some PEV battery
applications already employ a lithium-iron phosphate (LFP) cathode
which does not require cobalt, nickel, or manganese. Since the
proposal, we continue to see evidence that LFP batteries are
increasingly specified for PEV use. Globally, LFP already has about 30
percent market share in PEV applications.\1250\ In the U.S., LFP share
is currently lower, but in section IV.C.2 of this preamble we discuss
evidence that indicates LFP share will grow to about 20 percent in the
time frame of the rule. The ANL battery production study finds a
similar LFP share among announced U.S. cell manufacturing plants.\1251\
Other innovations in battery technology also have the potential to
dramatically reduce demand for key battery minerals and are continuing
to be developed in both the private and public sector. For example, DOE
is prioritizing the reduction or elimination of the use of cobalt in
batteries, and Lawrence Berkeley National Laboratory is leading a
consortium focused on cheaper, more abundant alternatives to nickel and
cobalt.\1252\ Sodium-ion chemistry has potential to eventually
substitute for lithium-ion and does not require lithium,\1253\ lithium-
sulfur chemistry has similar potential to replace critical minerals in
the cathode.\1254\ and silicon is already increasingly displacing
graphite in the lithium-ion anode.\1255\ Although our analysis has not
assumed that these latter chemistries will be ready for vehicle use in
the time frame of the rule, they demonstrate a path by which critical
minerals may become far less important to PEV battery production in the
future than they are today.
---------------------------------------------------------------------------
\1250\ International Energy Agency, ``Global EV Outlook 2023,''
p. 57, 2023. Accessed on November 30, 2023 at https://www.iea.org/reports/global-ev-outlook-2023.
\1251\ Argonne National Laboratory, ``Quantification of
Commercially Planned Battery Component Supply in North America
through 2035,'' ANL-24/14, March 2024. See Figure 18 therein, titled
``Modeled lithium-ion cell production capacity in North America from
2018 to 2035 by cathode chemistry.''
\1252\ Duque, T., ``New Consortium to Make Batteries for
Electric Vehicles More Sustainable,'' News from Berkeley Lab,
September 11, 2023. At https://newscenter.lbl.gov/2023/09/11/new-consortium-to-make-ev-batteries-more-sustainable/.
\1253\ Argonne National Laboratory, ``Cathode innovation makes
sodium-ion battery an attractive option for electric vehicles,''
January 8, 2024. Accessed on March 12, 2024 at https://www.anl.gov/article/cathode-innovation-makes-sodiumion-battery-an-attractive-option-for-electric-vehicles.
\1254\ Argonne National Laboratory, ``Lithium-sulfur batteries
are one step closer to powering the future,'' January 6, 2023.
Accessed on March 12, 2024 at https://www.anl.gov/article/lithiumsulfur-batteries-are-one-step-closer-to-powering-the-future.
\1255\ Patel, P., ``The Age of Silicon Is Here . . . for
Batteries,'' IEEE Spectrum, May 4, 2023. Accessed on March 12, 2024
at https://spectrum.ieee.org/silicon-anode-battery.
---------------------------------------------------------------------------
Similarly, we continue to assess that rare earth metals used in
permanent-magnet electric machines have alternatives in the form of
ferrite or other advanced magnets, or the use of induction machines or
advanced externally excited motors, which do not use permanent magnets.
EPA does not anticipate shortages or high prices in rare earth metals
that would prevent compliance with the standards, as indicated by
evidence of a gradually increasing but apparently stable price outlook
for rare earths used in magnets, and a generally declining outlook for
other rare earths, during the time frame of the rule.\1256\ According
to Wood Mackenzie, ``Demand growth and tight supply will incentivize
expansions at existing operations and the development of new supply,
both within and outside of China.'' \1257\ EPA has reached similar
conclusions regarding electrical steel, and we discuss the outlook for
electrical steel in detail in section 12.2.3 of the Response to
Comments document.
---------------------------------------------------------------------------
\1256\ Wood Mackenzie, ``Global rare earths investment horizon
outlook,'' December 2023, p. 15 and 16 (filename: global-rare-
earths-investment-horizon-outlook-q4-2023.pdf). Available to
subscribers.
\1257\ Id.
---------------------------------------------------------------------------
In RIA Chapter 3.1.5, we describe our reasoning behind the
selection of lithium supply as the primary mineral-based limiting
factor in constraining the potential rate of PEV penetration for
modeling purposes. In addition, with respect to other cathode and anode
minerals, we note that there is some flexibility in choice of these
minerals, as in many cases, opportunity will exist to reduce cobalt and
manganese content or to substitute with iron-phosphate chemistries that
do not utilize nickel, cobalt or manganese, or use other forms of
carbon in the anode, or in conjunction with silicon. However, all
chemistries currently used in PEV batteries require lithium in the
electrolyte and the cathode, and these have no viable substitute that
is expected to be commercially available in the near term.\1258\
Accordingly, in RIA Chapter 3.1.5 we focused on lithium availability as
a potential limiting factor on the rate of growth of PEV production,
and thus the most appropriate basis for establishing a modeling
constraint on the rate of PEV penetration into the fleet over the time
frame of this rule. In that analysis, we conclude that the scale and
pace of demand growth and investment in lithium supply means that it is
well positioned to meet anticipated demand as demand increases and
supply grows.
---------------------------------------------------------------------------
\1258\ In RIA Chapter 3.1.4 we discuss the outlook for
alternatives to lithium in battery chemistries that are under
development.
---------------------------------------------------------------------------
Finally, EPA notes that manganese is listed as being ``not
critical'' by a 2023 DOE Critical Minerals Assessment in both the near
and medium terms, due both to a lack of supply risk and overall level
of importance to clean energy technologies.\1259\ The 2024 ANL critical
mineral report includes analysis of manganese and notes that
``significant manganese reserves are concentrated among a few FTA and
MSP trade partners, such as Australia, Canada, and India. Manganese
supply from these countries is quite substantial and is likely to be
sufficient to meet U.S. demand in both the near and medium term.''
\1260\
---------------------------------------------------------------------------
\1259\ Department of Energy, ``Critical Materials Assessment,''
July 2023. At https://www.energy.gov/sites/default/files/2023-07/doe-critical-material-assessment_07312023.pdf.
\1260\ See p. 63, Argonne National Laboratory, ``Securing
Critical Materials for the U.S. Electric Vehicle Industry: A
Landscape Assessment of Domestic and International Supply Chains for
Five Key EV Battery Materials,'' ANL-24/06, February 2024.
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Taken together these outlooks support the perspective that critical
minerals are not likely to encounter a critical shortage as supply
responds to meet growing demand. It continues to be EPA's assessment
that future availability of critical minerals will not pose a
constraint on automakers' ability to meet the standards.
[[Page 28054]]
For additional details on the mineral supply outlook for the time
frame of this rule, see Chapter 3.1.4 of the RIA.
iii. Mineral Security
Mineral security refers to the ability for the U.S. to meet its
needs for critical minerals, and the potential economic or national
security risks posed by their sourcing.\1261\ This section examines the
outlook for mineral security as it relates to demand for critical
minerals resulting from increased PEV production under the final
standards. We note that this section focuses on mineral security, and
not on energy security, which relates to security of energy consumed by
transportation and other needs. Energy security is discussed separately
in section VIII.D.3 of this preamble.
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\1261\ For additional context, consider that according to USGS,
the Energy Act of 2020 defines a ``critical mineral'' as ``a non-
fuel mineral or mineral material essential to the economic or
national security of the U.S. and which has a supply chain
vulnerable to disruption.''
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In the context of vehicle manufacturing, concern for U.S. mineral
security relates to the global distribution of established supply
chains for critical minerals that are important to vehicle production,
and the fact that, at present, not all domestic demand for these
materials is satisfied through domestic sources or from secure sources
such as FTA countries, MSP countries or other economic allies.
Currently, despite a wide distribution of mineral resources
globally, mineral production is not evenly distributed across the
world. At present, production is concentrated in a relatively small
number of countries due to several factors, including where the
resources are found in nature, the level of investment that has
occurred to develop the resources, economic factors such as
infrastructure, and the presence or absence of government policy
relating to their production. For example, investment in mineral
refinement and processing has received strong emphasis in China, while
Japan and South Korea have become leaders in cell and cell component
manufacturing, and countries with abundant mineral resources have
become leading producers, for example Indonesia for nickel, Australia
for lithium, and Democratic Republic of Congo for cobalt.
While the U.S. is not currently a leading producer of minerals used
in PEV production, substantial investment has already gone towards and
continues to be deployed toward expanding domestic mineral supply and
building a more secure supply chain among FTA partners, MSP partners,
and economic allies.
To examine U.S. mineral security in the context of the rule, first
it is important to understand how mineral security compares to the
similar but distinct topic of energy security. As EPA defines them,
energy security relates primarily to the securing of energy sources,
while mineral security relates to mineral sources that are not a source
of energy. Supply disruptions and fluctuating prices are relevant to
critical minerals as well as to energy markets, but the impacts of such
disruptions to the mineral market are felt differently and by different
parties. Disruptions in the price or availability of oil or gasoline
has an immediate impact on consumers through higher fuel prices, and
thus has an immediate effect on the cost or ability to travel. The same
disruptions in critical minerals do not impact the immediate ability to
travel but affect only the production and cost of new vehicles. In
practice, short-term price fluctuations do not always translate to
higher production cost as most manufacturers purchase minerals via
long-term contracts that insulate them to a degree from volatility in
spot prices. Moreover, critical minerals are not concentrated among a
small group of commodities such as crude oil or natural gas, but
comprise a larger number of distinct commodities, each having its own
supply and demand dynamics, and some being capable of substitution by
other minerals. Importantly, while oil is consumed as a fuel and thus
requires continuous supply, minerals become a constituent part of the
vehicle and have the potential to be recovered and recycled. Thus, even
when minerals are imported from other countries, their acquisition adds
to the domestic mineral stock that is available for domestic recycling
in the future.
In the proposal, EPA analyzed the primary issues surrounding
mineral security. We collected and reviewed information relating to the
present geographical distribution of developed and known critical
mineral resources and products, including information from the U.S.
Geological Survey, analyst firms and various stakeholders. In
considering these sources we highlighted and examined the potential for
the U.S. to secure its sources for critical minerals. Our assessment of
the available evidence indicated that the increase in PEV production
projected to result from the proposed standards could be accommodated
without causing harm to national security.
We received a variety of comments on our analysis, some of which
disagreed with our findings and others which supported them. Supportive
comments often pointed to examples of rapidly increasing attention to
development of mineral resources in the U.S. and in nations with which
the U.S. has good trade relations, and also pointed to the current and
ongoing influence of support from the BIL and IRA in advancing such
projects. Commenters who disagreed with our findings largely expressed
the position that EPA did not adequately address the issue, or did not
adequately consider the risks posed by increased demand for critical
minerals or products that use them. Because mineral security is closely
related to development of the domestic supply chain, comments often
included references to the state of the domestic supply chain and the
commenter's views on how it either is or is not advancing at a
sufficient pace to allay mineral security concerns.
EPA appreciates and has carefully considered the substantive and
detailed comments offered by the various commenters. Much of the
information provided by commenters who disagreed with our assessment
tends to expand upon the evidence that EPA already presented in the
proposal concerning the risks and uncertainties associated with the
future impact of mineral demand on mineral security. Much of the
information provided by supportive commenters also expands on the
evidence EPA presented in the proposal about the pace of activity and
overall outlook for buildout of the critical mineral supply chain.
While contributing to the record, the information provided by the
commenters largely serves to further inform the trends that were
already identified and considered by EPA in the proposal, and do not
identify new, specific aspects of mineral security that were not
acknowledged in the proposal. Taken together, the totality of
information in the public record continues to indicate that development
of the critical mineral supply chain is proceeding both domestically
and globally in a manner that supports the industry's compliance with
the final standards. In light of this information provided in the
public comments and additional information that EPA has collected
through continued research, it continues to be our assessment that the
increase in PEV production projected under the standards will not
adversely impact national security.
The findings discussed in section IV.C.7 of this preamble inform
our basis for this assessment. In fact, rather than harming national
security, EPA finds that the final rule will promote the
[[Page 28055]]
interest of national security by reducing exposure to the risks
associated with reliance on petroleum (benefits which EPA monetizes in
section VIII of the preamble), and by providing regulatory and market
certainty for the continued development of a secure domestic and allied
supply chain for critical minerals (as previously mentioned at the
beginning of this section IV.C.7 of the preamble). This is consistent
with views prevalent in the industry that acknowledge the value of
regulatory certainty in driving investment in
production.1262 1263 1264 Some commenters, such as the
``Environmental and Public Health Organizations'' and ZETA, echoed this
principle, stating for example, ``clear regulatory signals--like EPA's
vehicle emissions regulations--can create further confidence in the
private sector to accelerate and expand investments.'' If commenters
citing concerns about national security are correct that development of
a domestic supply chain for these products will be important to
national security and global competitiveness of the U.S., it is also
relevant to note that it was in the absence of (i.e., prior to) this
rule that U.S. domestic production capacity has lagged far behind that
of China and other countries. While the domestic supply chain has
already begun to develop in part as a result of rapidly growing
industry attention to vehicle electrification as well as the influence
of the IRA and BIL, the need to comply with the standards provides
additional market certainty to improve confidence in investment in this
area and is likely to lead to even faster development of the supply
chain. In fact, many of the same critical minerals and the same types
of production capacity are necessary not only for complying with the
standards, but also for the general competitiveness of the U.S. on a
global stage, at a time when the need to reduce greenhouse gases,
reduce other pollutants, and produce clean energy is being recognized
across the world. The standards are thus consistent with, and are
likely to promote, the competitiveness of U.S. industry as well as the
national security benefits that accompany such an outcome.
---------------------------------------------------------------------------
\1262\ Allen & Overy, ``U.S. Inflation Reduction Act takes
climate change out of political cycle,'' November 3, 2022. Accessed
on February 16, 2024 at https://www.allenovery.com/en-gb/global/news-and-insights/publications/us-inflation-reduction-act-takes-climate-change-out-of-political-cycle.
\1263\ Union of Concerned Scientists, ``Production Tax Credit
for Renewable Energy,'' February 9, 2015. Accessed on February 16,
2024 at https://www.ucsusa.org/resources/production-tax-credit-renewable-energy.
\1264\ Bistline, J. et al., ``Economic Implications of the
Climate Provisions of the Inflation Reduction Act,'' Brookings
Papers on Economic Activity, BPEA Conference Draft, March 30-31,
2023. Accessed on February 16, 2024 at https://www.brookings.edu/wp-content/uploads/2023/03/BPEA_Spring2023_Bistline-et-al_unembargoedUpdated.pdf.
---------------------------------------------------------------------------
In the proposal, we also acknowledged the well-known fact that
critical minerals are distributed widely across the world and are
traded via a highly globalized supply chain that includes numerous
stages of their production. A description of worldwide sources of
critical minerals as they exist today, and key takeaways from the ANL
study which explores these issues,\1265\ are provided in Chapter 3 of
the RIA.
---------------------------------------------------------------------------
\1265\ Argonne National Laboratory, ``Securing Critical
Materials for the U.S. Electric Vehicle Industry: A Landscape
Assessment of Domestic and International Supply Chains for Five Key
EV Battery Materials,'' ANL-24/06, February 2024.
---------------------------------------------------------------------------
The development of critical mineral mining, processing, and related
manufacturing capacity in the U.S. is a primary focus of efforts on the
part of both industry and the federal government toward building a
secure supply chain that reduces or eliminates exposure to security
risks. These efforts are being greatly facilitated by the provisions of
the BIL and the IRA as well as large private-sector investments that
are already underway and continuing. The Inflation Reduction Act and
the Bipartisan Infrastructure Law are in fact continuing to be a highly
effective means by which Congress and the Administration are supporting
the building of a robust supply chain, and accelerating this activity
to ensure that it forms as rapidly as possible.
The U.S. is also taking advantage of a significant and growing
portfolio of international engagements to secure mineral supplies,
including FTAs, the Minerals Security Partnership (MSP), Trade
Investment Framework Agreements (TIFAs), and other bilateral and
multilateral agreements such as the Partnership for Global
Infrastructure and Investment (PGI). In the words of Assistant
Secretary of State for Energy Resources Geoffrey R. Pyatt in June 2023,
the administration is ``using all the tools at its disposal, such as
investments, loan programs, public-private partnerships, and technical
assistance for energy infrastructure and supply chain development.''
\1266\ Government entities, including the White House, the U.S. Agency
for International Development (USAID), the U.S. Development Finance
Corporation (DFC), the U.S. Export-Import Bank (EXIM), and the
Departments of Defense, State, Commerce, Labor, Interior, and Energy,
are engaged in these efforts. These agencies have engaged governments
in Asia, Africa, Europe, South America, and Australia on issues
spanning investment, cooperative agreements, anti-corruption efforts,
research, and economic development. Extensive details on the work being
pursued by these and similar efforts are outlined in the ANL
study.\1267\
---------------------------------------------------------------------------
\1266\ Written Testimony of Geoffrey R. Pyatt, Assistant
Secretary for Energy Resources, United States Department of State
Before the House Foreign Affairs Committee, ``Assessing U.S. Efforts
to Counter China's Coercive Belt and Road Diplomacy, ``June 14,
2023. https://docs.cchouse.gov/meetings/FA/FA00/20230614/116025/HHRG-118-FA00-Wstate-PyattG-20230614.pdf.
\1267\ Argonne National Laboratory, ``Securing Critical
Materials for the U.S. Electric Vehicle Industry: A Landscape
Assessment of Domestic and International Supply Chains for Five Key
EV Battery Materials,'' ANL-24/06, February 2024.
---------------------------------------------------------------------------
For example, in 2023, the State Department launched the Minerals
Investment Network for Vital Energy Security and Transition (MINVEST),
a public-private partnership between the U.S. Department of State and
SAFE Center for Critical Minerals Strategy to spur investment in
mining, processing, and recycling opportunities.1268 1269
Another example is the work of Li-Bridge, a public-private alliance
committed to accelerating the development of a robust and secure
domestic supply chain for lithium-based batteries. It has set forth a
goal that by 2030 the United States should capture 60 percent of the
economic value associated with the U.S. domestic demand for lithium
batteries. Achieving this target would double the economic value
expected in the U.S. under ``business as usual'' growth.\1270\ More
evidence of recent growth in the supply chain is found in a February
2023 report by Pacific Northwest National Laboratory (PNNL), which
documents robust growth in the North American lithium battery
industry.\1271\
---------------------------------------------------------------------------
\1268\ Department of State, ``MINVEST: Minerals Investment
Network for Vital Energy Security and Transition,'' website, https://www.state.gov/minvest.
\1269\ Department of State, ``Final MINVEST One-Pager.'' https://www.state.gov/wp-content/uploads/2024/02/FINAL-MINVEST-One-Pager.pdf.
\1270\ Department of Energy, Li-Bridge, ``Building a Robust and
Resilient U.S. Lithium Battery Supply Chain,'' February 2023.
\1271\ Pacific Northwest National Laboratory, ``North American
Lithium Battery Materials V 1.2,'' February 2023. Available at
https://www.pnnl.gov/projects/north-american-lithium-battery-materials-industry-report.
---------------------------------------------------------------------------
Recent policy recommendations from Congress have also expressed the
goal of expanding and strengthening trade relationships with allies. In
December 2023 the House Select Committee on US-China Competition
released a series
[[Page 28056]]
of policy recommendations \1272\ that included a resource reserve,
advancement of trade agreements, investigation of product dumping,
restriction of recycled material exports, enhancement of training
programs, and expansion of the MSP. A November letter from Senators
Marco Rubio (R-FL) and Mark Warner (D-VA) to the Export-Import Bank
requested that projects to secure critical mineral supply chains in
allied and partner nations be prioritized.\1273\ The 2024 National
Defense Authorization Act signed on December 22, 2023 also contains
numerous provisions related to securing and diversifying the supply
chain for critical materials.\1274\
---------------------------------------------------------------------------
\1272\ ``Reset, Prevent, Build: A Strategy to Win America's
Economic Competition with the Chinese Communist Party.'' At https://selectcommitteeontheccp.house.gov/sites/evo-subsites/selectcommitteeontheccp.house.gov/files/evo-media-document/reset-prevent-build-scc-report.pdf.
\1273\ Letter from Sens. Marco Rubio and Mark Warner to Reta Jo
Lewis, President of the Export-Import Bank of the U.S., November 16,
2023. https://www.warner.senate.gov/public/_cache/files/1/7/17def9a2-d95c-40b1-9028-119f35769394/FCB942C1068EB79B54E8769260B13F59.11.16.23-rubio-warner-letter-to-exim-re-critical-minerals.pdf-.
\1274\ https://www.congress.gov/bill/118th-congress/house-bill/2670/text.
---------------------------------------------------------------------------
Since the proposal, EPA has observed a general trend of continued
activity to build the domestic and allied supply chain for critical
minerals. EPA believes that this continued progress indicates that
automakers, suppliers, and investors are taking advantage of the
business opportunities that this need presents, and that the U.S.
manufacturing industry is taking the necessary steps to create a secure
supply chain for these products. Our assessment of the available
evidence indicates that the increase in PEV production projected to
result from the proposed standards can be accommodated without causing
harm to national security.
iv. Battery and Mineral Recycling
EPA received comment on the potential role of recycling as a means
of reducing future reliance on newly mined or acquired critical
minerals over the long term. Some commenters supported EPA's view that
battery recycling will contribute to mineral security and
sustainability, gradually becoming more important as a domestically
produced mineral source that will reduce reliance on foreign-sourced
minerals. Other commenters expressed the view that recycling would not
be a significant factor or would not develop quickly enough.
In the proposal, EPA reviewed the potential for recycling to become
an important source of future mineral supply but did not specifically
rely on projections of growth in recycling activity or recycled content
to justify the feasibility of the standards. Similarly, the compliance
analysis for the final standards does not specifically consider
recycled content nor rely on specific assumptions regarding the growth
of recycling in the future. As such, our analysis is conservative: we
find that critical minerals and the battery supply chain will not
constrain manufacturers who choose to produce PEVs to comply with the
final standards, assuming no recycling activities, even though we
believe that recycling has the potential to provide a significant
source of critical minerals and other materials for battery production,
particularly in later years of the program.
As in the proposal, EPA continues to recognize that recycling will
take time to become a strong contributor to ongoing domestic mineral
supply. For example, we noted that growth in the return of end-of-life
PEV batteries will lag the market penetration of PEVs, and that it is
important to consider the development of a battery recycling supply
chain during the time frame of the rule and beyond. We also noted
evidence that suggest by 2050, battery recycling could be capable of
meeting 25 to 50 percent of total lithium demand for battery
production.1275 1276 The lithium supply projections
performed by BMI and ANL described in section IV.C.7.i of the preamble
do include projections of recycled lithium content although at lower
percentages reflecting the earlier time frame of the estimates. EPA
considers the BMI and ANL estimates of potential recycled lithium
content to be reasonable and consistent with prevailing expectations
that recycled content will be relatively small at first and grow over
time as more end-of-life batteries become available for recycling.
---------------------------------------------------------------------------
\1275\ Sun et al., ``Surging lithium price will not impede the
electric vehicle boom,'' Joule, doi:10.1016/j.joule. 2022.06.028
(https://dx.doi.org/10.1016/j.joule.2022.06.028).
\1276\ Ziemann et al., ``Modeling the potential impact of
lithium recycling from EV batteries on lithium demand: a dynamic MFA
approach,'' Resour. Conserv. Recycl. 133, pp. 76-85. https://doi.org/10.1016/j.resconrec.2018.01.031.
---------------------------------------------------------------------------
EPA continues to note that battery recycling has been and remains a
very active area of research. The Department of Energy coordinates much
research in this area through the ReCell Center, described as ``a
national collaboration of industry, academia and national laboratories
working together to advance recycling technologies along the entire
battery life-cycle for current and future battery chemistries.'' \1277\
Funding is also being disbursed as directed by the Bipartisan
Infrastructure Law.\1278\ A growing number of private companies are
entering the battery recycling market as the rate of recyclable
material becoming available from battery production facilities and
salvaged vehicles has grown, and manufacturers are already reaching
agreements to use these recycled materials for domestic battery
manufacturing. For example, Panasonic has contracted with Redwood
Materials Inc. to supply domestically processed cathode material, much
of which will be sourced from recycled batteries.\1279\ Ford and Volvo
have also partnered with Redwood to collect end-of-life batteries for
recycling and promote a circular, closed-loop supply chain utilizing
recycled materials.\1280\ Redwood has also announced a battery active
materials plant in South Carolina with capacity to supply materials for
100 GWh per year of battery production, and is likely to provide these
materials to many of the ``battery belt'' factories that are developing
in a corridor between Michigan and Georgia.\1281\ General Motors and LG
Energy Solution have also partnered with Li-Cycle to provide recycling
of GM's Ultium cells.\1282\
---------------------------------------------------------------------------
\1277\ https://recellcenter.org/about.
\1278\ Department of Energy, ``Biden-Harris Administration
Announces Nearly $74 Million To Advance Domestic Battery Recycling
And Reuse, Strengthen Nation's Battery Supply Chain,'' Press
Release, November 16, 2022.
\1279\ Randall, T., ``The Battery Supply Chain Is Finally Coming
to America,'' Bloomberg, November 15, 2022.
\1280\ Automotive News Europe, ``Ford, Volvo join Redwood in EV
battery recycling push in California,'' February 17, 2022. https://europe.autonews.com/automakers/ford-volvo-join-redwood-ev-battery-recycling-push-california.
\1281\ Wards Auto, ``Battery Recycler Redwood Plans $3.5 Billion
South Carolina Plant,'' December 27, 2022. https://www.wardsauto.com/industry-news/battery-recycler-redwood-plans-35-billion-south-carolina-plant.
\1282\ General Motors, ``Ultium Cells LLC and Li-Cycle
Collaborate to Expand Recycling in North America,'' Press Release,
May 11, 2021. https://news.gm.com/newsroom.detail.html/Pages/news/us/en/2021/may/0511-ultium.html.
---------------------------------------------------------------------------
Recycling infrastructure is the subject of several provisions of
the BIL. It includes a Battery Processing and Manufacturing program,
which grants significant funds to promote U.S. processing and
manufacturing of batteries for automotive and electric grid use, by
awarding grants for demonstration projects, new construction, retooling
and retrofitting, and facility expansion. It will provide a total of $3
billion for battery material processing, $3 billion for battery
manufacturing and recycling, $10 million for a lithium-ion battery
[[Page 28057]]
recycling prize competition, $60 million for research and development
activities in battery recycling, an additional $50 million for state
and local programs, and $15 million to develop a collection system for
used batteries. In addition, the Electric Drive Vehicle Battery
Recycling and Second-Life Application Program will provide $200 million
in funds for research, development, and demonstration of battery
recycling and second-life applications.\1283\ Outside the BIL, DOE
recently announced the three-phase Electronics Scrap Recycling
Advancement Prize, a $3.95 million challenge with the goal of
increasing the domestic supply of critical minerals from electronics
scrap.\1284\
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\1283\ Environmental Defense Fund and ERM, ``Electric Vehicle
Market Update: Manufacturer Commitments and Public Policy
Initiatives Supporting Electric Mobility in the U.S. and
Worldwide,'' September 2022.
\1284\ Department of Energy, ``Electronics Scrap Recycling
Advancement Prize,'' web page. At https://www.energy.gov/eere/ammto/electronics-scrap-recycling-advancement-prize.
---------------------------------------------------------------------------
The efforts to fund and build a mid-chain processing supply chain
for active materials and related products will also be important to
reclaiming minerals through domestic recycling. While domestic
recycling can recover minerals and other materials needed for battery
cell production, these materials commonly are recovered in elemental
forms that require further midstream processing into precursor
substances and active material powders that can be used in cell
production. The DOE ReCell Center coordinates extensive research on
development of a domestic lithium-ion recycling supply chain, including
direct recycling, in which materials can be recycled for direct use in
cell production without destroying their chemical structure, and
advanced resource recovery, which uses chemical conversion to recover
raw minerals for processing into new constituents.\1285\
---------------------------------------------------------------------------
\1285\ Department of Energy, ``The ReCell Center for Advanced
Battery Recycling FY22 Q4 Report,'' October 20, 2022. Available at:
https://recellcenter.org/2022/12/15/recell-advanced-battery-recycling-center-fourth-quarter-progress-report-2022/.
---------------------------------------------------------------------------
Currently, pilot-scale battery recycling research projects and
private recycling startups have access to only limited amounts of
recycling stock that originate from sources such as manufacturer waste,
crashed vehicles, and occasional manufacturer recall/repair events. As
PEVs are currently only a small portion of the U.S. vehicle stock, some
time will pass before vehicle scrappage can provide a steady supply of
end-of-life batteries to support large-scale battery recycling. During
this time, we expect that the mid-chain processing portion of the
supply chain will continue to develop and will be able to capture much
of the resources made available by the recycling of used batteries
coming in from the fleet.
D. Projected Compliance Costs and Technology Penetrations
1. Technology Penetration Rates
i. Light-Duty Technology Penetrations
In this section, we discuss the projected new vehicles sales
technology penetration rates from EPA's analysis for the final
standards. EPA has incorporated PHEVs into our analysis for the final
rule, as requested by commenters and as we had indicated in the
proposal was our plan. Table 75 and Table 76 reflect the projected
penetration rates of PEVs (which include BEVs and PHEVs \1286\) for the
final standards and No Action case, respectively, by body style
(sedans, crossover/SUVs and pickups). It is important to note that
these are projections and represent one of many possible compliance
pathways for the industry. The standards are performance-based and do
not mandate any specific technology for any manufacturer or any vehicle
type. Each manufacturer is free to choose its own set of technologies
with which it will demonstrate compliance with the standards. In our
projections, as the final standards become more stringent over MYs 2027
to 2032, the penetration of PEVs increases by 36 percentage points over
this 6-year period, from 32 percent in MY 2027 to 68 percent of overall
vehicle production in MY 2032. Note that the standards are not
anticipated to increase PEV penetration significantly above the No
Action scenario in 2027, and while the standards are anticipated to
increase PEV penetration to 68 percent by 2032, the level of PEVs under
the No Action case are projected to reach 47 percent in that year.
Thus, the majority of the increase in PEV penetration is anticipated to
occur as a result of developments in the market attributable to factors
such as the IRA, increasing consumer acceptance, and automaker
investments, rather than as a result of EPA's standards.
---------------------------------------------------------------------------
\1286\ PHEVs were added as a technology option to all vehicle
types in OMEGA in a similar fashion as BEV and ICE technologies. A
more detailed description of the PHEV modeling assumptions can be
found in RIA Chapter 2.4.4.2 and 2.6.1.4.
---------------------------------------------------------------------------
We note that we have also analyzed several sensitivities (refer to
section IV.F of this preamble), including one looking at the impact of
adoption of ACC II policies in various states and other sensitivities
considering the possibility of higher or lower battery costs.\1287\
These scenarios may have different penetrations of various technologies
for their No Action case as well as for the final standards. For
example, PEV penetration rates in the No Action baseline in 2032 for
these sensitivities varies from 18 percent to 60 percent and PEV
penetration rates under the final standards in 2032 range from 62
percent to 70 percent. The penetration rates for other technologies
similarly vary, e.g., ICE penetration rates in these analyses range
from 2 percent to 32 percent under the final standards in 2032. EPA
considers our central case analysis combined with the range of
sensitivity analyses to illustrate a range of possible outcomes which
are each technically feasible, have reasonable costs, and provide
sufficient lead time.
---------------------------------------------------------------------------
\1287\ Though not considered as a sensitivity, we also assessed
an additional illustrative scenario, ``No Additional BEVs,'' which
assumes no additional BEV production beyond that in the MY 2022 base
year fleet. See Section IV.H of the preamble.
Table 75--Fleet PEV Penetration Rates, by Body Style, Under the Final Light-Duty GHG Standards
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................ 40 47 58 66 69 75
Crossovers/SUVs................... 31 35 43 49 59 66
Pickups........................... 27 31 45 55 63 67
----------------------------------------------------------------------------------------------------------------
Total......................... 32 37 46 53 61 68
----------------------------------------------------------------------------------------------------------------
[[Page 28058]]
Table 76--Fleet PEV Penetration Rates, by Body Style, Under the No Action Case
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................ 40 41 45 46 52 56
Crossovers/SUVs................... 30 32 36 38 40 45
Pickups........................... 25 30 34 38 39 45
----------------------------------------------------------------------------------------------------------------
Total......................... 31 33 37 39 42 47
----------------------------------------------------------------------------------------------------------------
For both the final standards as well as the No Action case, BEVs
make up the majority of PEVs. From 2027 MY to 2032 MY for the final
standards, PHEV projections grow from 4 percent to 8 percent in sedans,
7 percent to 14 percent in pickups and 6 percent up to 13 percent in
crossovers. The remainder of the projected PEV shares are BEVs. Table
77 and Table 78 show projected PHEV penetrations rates for the final
standards and the No Action case.
Table 77--Fleet PHEV Penetration Rates, by Body Style, Under the Final Light-Duty GHG Standards
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................ 4 5 6 7 9 8
Crossovers/SUVs................... 6 7 8 9 10 13
Pickups........................... 7 5 8 12 13 14
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Total......................... 6 6 8 9 11 13
----------------------------------------------------------------------------------------------------------------
Table 78--Fleet PHEV Penetration Rates, by Body Style, Under the No Action Case
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................ 4 5 6 6 7 10
Crossovers/SUVs................... 6 6 8 9 9 13
Pickups........................... 6 4 7 8 9 14
-----------------------------------------------------------------------------
Total......................... 5 6 7 8 8 12
----------------------------------------------------------------------------------------------------------------
Table 79 and Table 80 show the projected market penetrations for
strong HEVs under the final standards and the No Action case. For MY
2027-2032, penetrations are less than 5 percent, and under the final
standards are projected to decrease over time. However, these results
do not imply that strong HEVs are ineffective as a compliance option.
Instead, under the cost-minimizing compliance strategy used in our
analysis, strong HEVs are being displaced by PEVs that provide
emissions reductions at a relatively lower cost per Mg CO2
reduced. In other words, comparing the incremental cost of HEVs and
PEVs relative to the amount of vehicle CO2 pollution they
prevent, we find that PEVs cost much less to reduce the same amount of
CO2. While manufacturers may choose any compliance pathway
that meets the final standards, we expect that they, as any other
private businesses, would generally choose the least-cost pathway
(i.e., PEVs over strong HEVs, as well as the advanced ICE discussed
below). This choice would be made not because of an EPA regulatory
mandate (since EPA does not mandate any particular technology for
compliance), but rather in order to maximize profits and remain
economically competitive within the vehicle manufacturing sector. In
the No Action case, the industry is already overachieving the standards
due to increased sales of BEVs and the market penetration of strong
HEVs remains relatively constant. The potential for strong HEVs as a
potentially important compliance technology is discussed in section
IV.F.4 of this preamble.
Table 79--Fleet Strong HEV Penetration Rates Under the Final Standards
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................ 4 1 1 1 1 1
Crossovers/SUVs................... 4 6 5 5 4 3
Pickups........................... 2 2 2 2 2 2
-----------------------------------------------------------------------------
Total......................... 4 4 4 3 3 2
----------------------------------------------------------------------------------------------------------------
[[Page 28059]]
Table 80--Fleet strong HEV Penetrations Rates Under the No Action Case
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................ 5 1 2 2 1 1
Crossovers/SUVs................... 4 4 4 4 3 3
Pickups........................... 3 2 2 2 13 14
-----------------------------------------------------------------------------
Total......................... 4 3 3 3 5 5
----------------------------------------------------------------------------------------------------------------
Consistent with past rulemakings, EPA has evaluated a range of
advanced technologies for ICE vehicles (``advanced ICE'') which include
advanced turbocharged downsized engines (TURB12), advanced Atkinson
(ATK) engines, and Miller (MIL) cycle engines.\1288\ Further details on
EPA's modeling of engine technologies can be found in RIA Chapters
2.4.5.1 and 3.5.1. This grouping of ICE engines includes some of the
more cost-effective non-electrified technologies for GHG compliance.
However, like HEVs, they are still not as cost-effective as PEVs in
achieving lower levels of GHG targets and are not eligible for tax
credits under the IRA. The advanced ICE technologies are projected to
decline as sales of PEVs increase over time, both for the final
standards as well as the No Action case. For example, advanced ICE is
anticipated to capture 33 percent of the market in 2032 under the No
Action scenario, down to 21 percent under the final standards. Table 81
and Table 82 show the projected market penetrations for advanced ICE
engines in the final standards and the No Action case. Note that a
majority of ICE vehicles are projected to be advanced ICE vehicles for
both the final standards and the No Action case. Table 83 and Table 84
show the projected penetrations of advanced ICE vehicles as a
percentage of ICE vehicles under the final standards and the No Action
case, respectively.
---------------------------------------------------------------------------
\1288\ All mild hybrid vehicles, with or without advanced
engines, are grouped separately as MHEVs. As a result, technology
groupings are distributed into one of the following independent
architectures: BEV, PHEV, strong HEV, MHEV, advanced ICE and base
ICE.
Table 81--Advanced ICE Penetration Rates Under the Final Standards
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................ 44 27 22 18 17 14
Crossovers/SUVs................... 48 41 37 33 26 21
Pickups........................... 64 60 48 39 32 28
-----------------------------------------------------------------------------
Total......................... 50 42 36 31 26 21
----------------------------------------------------------------------------------------------------------------
Table 82--Advanced ICE Penetration Rates Under the No Action Case
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................ 44 36 33 33 29 26
Crossovers/SUVs................... 48 42 39 38 37 34
Pickups........................... 66 61 58 54 42 36
-----------------------------------------------------------------------------
Total......................... 51 44 41 40 36 33
----------------------------------------------------------------------------------------------------------------
Table 83--Advanced ICE Penetration Rates (Percentage of ICE Vehicles), Under the Final Standards
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................ 79 57 57 58 60 59
Crossovers/SUVs................... 74 71 71 71 71 71
Pickups........................... 91 91 91 91 90 90
-----------------------------------------------------------------------------
Total......................... 78 73 73 73 73 73
----------------------------------------------------------------------------------------------------------------
Table 84--Advanced ICE Penetrations Rates (Percentage of ICE Vehicles) Under the No Action Case
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Sedans............................ 79 65 65 66 65 65
Crossovers/SUVs................... 74 65 65 65 65 66
Pickups........................... 90 90 90 89 87 86
-----------------------------------------------------------------------------
[[Page 28060]]
Total......................... 78 70 70 70 69 69
----------------------------------------------------------------------------------------------------------------
ii. Medium-Duty Technology Penetrations
In this section we discuss the projected MDV \1289\ technology
penetration rates based on EPA's analysis for the final standards.
Table 85 and Table 86 show EPA projected penetration rates of PEV
technology under the final standards and the No Action case by body
style, comparing vans, MDV pickups and the fleet total. It is important
to note that this is a projection and represents one of many possible
compliance pathways manufacturers could choose. The standards are
performance-based and do not mandate any specific technology for any
manufacturer or any vehicle type. Each manufacturer is free to choose
its own set of technologies with which it will demonstrate compliance
with the standards. As the standards become more stringent over MYs
2027 to 2032, the projected penetration of PEVs (driven largely by
electrification of vans) increases from 3 percent in MY 2027 to 43
percent of overall MDV production in MY 2032.
---------------------------------------------------------------------------
\1289\ MDVs were not broken down into separate Class 2b and
Class 3 categories in the analysis for this rule. The GHG standards
apply to Class 2b and Class 3 as a single MDV class. The analysis
does include a breakdown between MDV vans and MDV pickups due to
differences in use-case and applicable technologies.
Table 85--Fleet PEV Penetration Rates, by Body Style, Under the Final Standards for Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Vans.............................. 3 4 24 44 64 76
Pickups........................... 3 4 8 17 15 26
-----------------------------------------------------------------------------
Total......................... 3 4 14 27 32 43
----------------------------------------------------------------------------------------------------------------
Table 86--Fleet PEV Penetration Rates, by Body Style, Under the No Action Case for Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Vans.............................. 3 4 5 6 7 8
Pickups........................... 3 4 5 6 7 8
-----------------------------------------------------------------------------
Total......................... 3 4 5 6 7 8
----------------------------------------------------------------------------------------------------------------
The projected PHEV penetrations (which are a subset of total PEVs)
are provided for the final standards in Table 87. Similar to what was
seen in light-duty vehicles, for the van segment and the MDV fleet
overall, most of the PEVs in the medium-duty compliance modeling are
projected to be BEVs. However, for MDV pickups PHEV penetrations make
up over half of the PEVs for that segment by MY 2032.
Table 87--Fleet PHEV Penetration Rates, by Body Style, Under the Final Standards for Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Vans.............................. 0 0 0 0 0 1
Pickups........................... 0 0 0 8 5 16
-----------------------------------------------------------------------------
Total......................... 0 0 0 5 3 11
----------------------------------------------------------------------------------------------------------------
No strong HEVs were projected for the medium-duty fleet. However,
there remain a significant penetration of advanced ICE vehicles
(although their sales shares are projected to decline as the standards
become more stringent). Table 88 and Table 89 show the penetration
rates for advanced ICE vehicles for the final standards and the No
Action case. For reference, Table 90 shows the advanced ICE percentage
of all ICE vehicles for the final standards.
[[Page 28061]]
Table 88--Advanced ICE Penetration Rates, by Body Style, Under the Final Standards for Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Vans.............................. 86 85 68 50 32 22
Pickups........................... 42 41 39 35 37 32
-----------------------------------------------------------------------------
Total......................... 57 57 49 40 35 28
----------------------------------------------------------------------------------------------------------------
Table 89--Advanced ICE Penetration Rates, by Body Style, Under the No Action Case for Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Vans.............................. 87 86 85 84 83 82
Pickups........................... 42 41 41 40 40 39
-----------------------------------------------------------------------------
Total......................... 57 57 56 55 55 54
----------------------------------------------------------------------------------------------------------------
Table 90--Advanced ICE Penetration Rates (Percentage of ICE Vehicles), by Body Style, Under the Final Standards
for Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Vans.............................. 89 89 89 89 89 89
Pickups........................... 43 43 43 43 43 43
-----------------------------------------------------------------------------
Total......................... 59 59 57 55 51 50
----------------------------------------------------------------------------------------------------------------
2. Criteria Pollutant Technology Penetrations
To meet the final criteria pollutant standards, vehicle
manufacturers are anticipated to apply better emissions control
technologies to ICE, hybrid and PHEV vehicles. While BEVs are
anticipated to provide some contribution to a manufacturer's
compliance, we expect that manufacturers will also choose to improve
the emissions control of their ICE vehicles. ICE vehicles, hybrids and
PHEVs can continue their downward trend in NMOG+NOX
emissions through better design, controls, and calibrations of engines
and TWC systems. EPA anticipates that all ICE-based vehicles will be
equipped with gasoline particulate filters by the time this rulemaking
is fully phased in to meet the final PM standards. Changes will also be
required to meet the revised CO standards. In order to meet the three
light-duty vehicle provisions aligned with the CARB ACC II program, we
expect manufacturers will choose to adopt improved controls on ICE
vehicles to meet the early driveaway requirements and the mid-
temperature starts. Similarly, manufacturers that choose to produce
PHEVs will require PHEV control changes to meet the new high load cold
start provision. Finally, incomplete medium-duty vehicles will require
evaporative emission controls to support the new ORVR requirement.
Additional detail regarding technology adoption for meeting the
criteria pollutant standards, refer to RIA Chapters 3.2.5.1 and
3.2.6.1.
3. CO2 Targets and Compliance Levels
i. Light-Duty Vehicle CO2 Targets and Compliance Levels
The final footprint CO2 standards curve coefficients for
light-duty vehicles were presented in section III.C.2.iv of the
preamble. Here we present the projected industry average fleet targets
for both the final standards and the No Action case for reference.
These average targets (for the final standards and the No Action
case,\1290\ respectively) are presented for both the car and truck
regulatory classes in Table 91 and Table 92, and then for three
different modeled body styles: sedans, crossovers and SUVs, and pickup
trucks,\1291\ in Table 93 and Table 94. The projected targets for each
are based on the industry sales weighted average of vehicle models (and
their respective footprints) within the regulatory class or body
style.\1292\ The industry total targets have increased slightly
compared to the respective Alternative 3 targets presented in the NPRM,
due mainly to an increase in the truck sales share as projected by AEO
2023, and also slightly larger size trucks in the updated base year
vehicle fleet. AEO 2023 predicts that new vehicle sales in 2032 will be
30 percent cars and 70 percent trucks (in NPRM, the projection was 40
percent cars and 60 percent trucks).
---------------------------------------------------------------------------
\1290\ The No Action case continues MY 2026 flexibilities for
the off-cycle and A/C credits available to OEMs as defined in the
2021 Final Rule.
\1291\ All sedans are of the car regulatory class; crossovers
and SUVs include both cars and trucks; and all pickups are of the
truck regulatory class.
\1292\ Note that these targets are projected based on both
projected future sales in applicable MYs and our final standards;
the targets will change in each future model year depending on each
manufacturer's actual sales.
[[Page 28062]]
Table 91--Projected Targets for Final Light-Duty Vehicle GHG Standards, by Regulatory Class
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Cars.............................. 139 125 112 99 86 73
Trucks............................ 184 165 146 128 109 90
-----------------------------------------------------------------------------
Total......................... 170 153 136 119 102 85
----------------------------------------------------------------------------------------------------------------
Table 92--Projected Targets for Light-Duty Vehicle No Action Case, by Regulatory Class
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Cars.............................. 132 131 132 132 133 133
Trucks............................ 185 185 186 186 187 188
-----------------------------------------------------------------------------
Total......................... 168 169 169 170 171 171
----------------------------------------------------------------------------------------------------------------
Table 93--Projected Targets for Final Light-Duty Vehicle GHG Standards, by Body Style
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Sedans............................ 139 126 112 99 86 73
Crossovers/SUVs................... 167 149 133 117 99 83
Pickups........................... 216 193 171 149 126 104
-----------------------------------------------------------------------------
Total......................... 170 153 136 119 102 85
----------------------------------------------------------------------------------------------------------------
Table 94--Projected Targets for Light-Duty Vehicle No Action Case, by Body Style
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Sedans............................ 133 133 133 133 134 134
Crossovers/SUVs................... 164 164 165 165 165 166
Pickups........................... 222 223 224 225 228 229
-----------------------------------------------------------------------------
Total......................... 168 169 169 170 171 171
----------------------------------------------------------------------------------------------------------------
The modeled achieved CO2 levels for the final standards
and the No Action case are shown for both the car and truck regulatory
class in Table 97 and Table 98 and then by body style in Table 99 and
Table 100, respectively. These values were produced by the modeling
analysis and represent the projected, sales-weighted average
certification emissions values for possible compliance approaches with
the standards. The achieved CO2 levels are calculated from
projected 2-cycle tailpipe emissions (via modeled application of
emissions-reduction technologies) minus the modeled application of off-
cycle credit technologies and A/C credits. Table 95 and Table 96
summarize the fleet average contribution of off-cycle credits and A/C
credits towards the achieved CO2 levels for the final
standards and the No Action case.\1293\
---------------------------------------------------------------------------
\1293\ In contrast to the maximum allowable credits presented in
Table 10 and Table 11 in section III.C of the preamble, these credit
levels shown are modeling results that reflect projected penetration
of BEVs for the final standards and No Action case.
Table 95--Final Light-Duty Vehicle GHG Standards--Achieved Levels Summary
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Tailpipe emissions................ 187.5 169.2 145.7 127.6 109.3 94.3
A/C leakage credits............... 12.9 9.7 6.5 3.2 1.9 1.9
Off-cycle + A/C eff credits....... 10.2 10.1 9.0 8.5 7.0 5.3
-----------------------------------------------------------------------------
Achieved CO2 g/mile (unrounded)... 164.4 149.3 130.2 115.8 100.5 87.1
----------------------------------------------------------------------------------------------------------------
[[Page 28063]]
Table 96--No Action Case--Achieved Levels Summary
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Tailpipe emissions................ 189.4 182.4 171.8 166.5 157.9 147.6
A/C leakage credits............... 16.1 16.2 16.2 16.2 16.2 16.2
Off-cycle + A/C eff credits....... 13.5 13.5 13.6 13.8 13.8 13.9
Achieved CO2 g/mile (unrounded)... 159.8 152.7 142.0 136.6 127.9 117.6
----------------------------------------------------------------------------------------------------------------
Table 97--Final Light-Duty Vehicle GHG Standards--Achieved Levels by Regulatory Class
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Cars.............................. 116 97 83 72 67 57
Trucks............................ 186 173 151 135 115 100
-----------------------------------------------------------------------------
Total......................... 164 149 130 116 100 87
----------------------------------------------------------------------------------------------------------------
Table 98--Light-Duty Vehicle GHG No Action Case--Achieved Levels by Regulatory Class
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Cars.............................. 110 102 94 92 83 76
Trucks............................ 182 175 163 156 148 136
-----------------------------------------------------------------------------
Total......................... 160 153 142 137 128 118
----------------------------------------------------------------------------------------------------------------
Table 99--Final Light-Duty Vehicle GHG Standards--Achieved Levels by Body Style
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Sedans............................ 110 91 75 63 63 52
Crossovers/SUVs................... 165 150 135 125 106 91
Pickups........................... 221 211 172 139 122 111
-----------------------------------------------------------------------------
Total......................... 164 149 130 116 100 87
----------------------------------------------------------------------------------------------------------------
Table 100--Light-Duty Vehicle No Action Case--Achieved Levels by Body Style
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Sedans............................ 104 97 88 86 74 69
Crossovers/SUVs................... 160 155 144 141 134 124
Pickups........................... 222 204 194 174 161 147
-----------------------------------------------------------------------------
Total......................... 160 153 142 137 128 118
----------------------------------------------------------------------------------------------------------------
Comparing the target and achieved values (e.g., Table 91 vs. Table
97) it can be seen that within any given year, the achieved values may
be over target (higher emissions) or under target (lower emissions),
depending on the body style or regulatory class. This is a feature of
the unlimited credit transfer provision, which results in a compliance
determination that is based on the combined car and truck fleet credits
for each manufacturer, rather than a separate determination of each
fleet's compliance. The application of technologies is influenced by
the relative cost-effectiveness of technologies among each
manufacturer's vehicles. For the combined fleet, the achieved values
are typically close to or slightly under the target values, which would
represent the banking of credits that can be carried over into other
model years. This indicates that overall, the modeled fleet tracks the
standards very closely from year-to-year. Note that an achieved value
for a manufacturer's combined fleet that is above the target in a given
model year does not indicate a likely failure to comply with the
standards, since the model includes the GHG program credit banking
provisions that allow credits from one year to be carried into another
year.
The modeling predicts that the industry will over comply against
the MY 2027-2032 standards in the No Action scenario, driven by the
projected significant increase in PEVs. This is in part due to the
economic opportunities provided for PEVs to both manufacturers and
consumers by the IRA. Figure 43 shows a plot of industry average
achieved g/mile compared to the projected targets for both the No
Action case and the final standards. In
[[Page 28064]]
MY 2027, achieved g/mile are lower for the No Action case than shown
for the final standards. This is an effect of the additional off-cycle
and A/C credits being available in the No Action case that are phased
out in the final standards. This makes it appear as though there is a
better g/mile outcome under the No Action case. If the No Action case
reflected the phasing out of those credits, then it would show higher
average compliance g/mile values than are achieved under the final
standards. A relative comparison between the two policies, but without
this difference in the credit phase out, can be seen by comparing Table
95 and Table 96, which show that the tailpipe g/mile are lower in the
final standards for all years than in the No Action case. The modeling
results show that the industry as a whole should be able to achieve the
standards over the MY 2027-2032 time frame.
[GRAPHIC] [TIFF OMITTED] TR18AP24.041
Figure 43: Achieved vs. Target GHG g/mile for No Action Case and Final
Standards
[[Page 28065]]
ii. Medium-Duty Vehicle Targets and Compliance Levels
Based on the work-factor based standards curve coefficients
described in section III.C.3 of the preamble, we present the projected
industry average medium-duty vehicle fleet targets for both the final
standards and the No Action case in Table 101 and Table 102. These
average targets are shown for two different modeled body styles: vans
and pickup trucks. The projected targets for each case are based on the
industry sales weighted average of vehicle models (and their respective
work factors) within each body style.\1294\
---------------------------------------------------------------------------
\1294\ Note that these targets are projected based on both
projected future sales in applicable MYs and our final standards;
the actual targets will change each MY depending on each
manufacturer's actual sales.
Table 101--Projected Targets for Final Medium-Duty Vehicle GHG Standards, by Body Style
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Vans.............................. 392 391 355 317 281 245
Pickups........................... 497 486 437 371 331 290
-----------------------------------------------------------------------------
Total......................... 461 453 408 353 314 274
----------------------------------------------------------------------------------------------------------------
Table 102--Projected Targets for Medium-Duty Vehicles, No Action Case, by Body Style
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Vans.............................. 413 412 412 412 412 411
Pickups........................... 508 508 508 507 507 506
-----------------------------------------------------------------------------
Total......................... 475 475 474 474 474 474
----------------------------------------------------------------------------------------------------------------
The modeled achieved CO2 levels for the final standards
and the No Action case are shown for both vans and pickups in Table 103
and Table 104. These values were produced by the modeling analysis and
represent the projected certification emissions values for possible
compliance approaches with the final standards, grouped by body style.
Table 103--Final GHG Standards for Medium-Duty Vehicles--Projected Achieved Levels by Body Style
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Vans.............................. 434 429 340 249 151 103
Pickups........................... 468 463 443 405 396 361
-----------------------------------------------------------------------------
Total......................... 456 451 407 351 312 272
----------------------------------------------------------------------------------------------------------------
Table 104--No Action Case for Medium-Duty Vehicles--Projected Achieved Levels by Body Style
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Vans.............................. 435 431 426 422 418 414
Pickups........................... 468 463 458 454 449 444
-----------------------------------------------------------------------------
Total......................... 456 452 447 443 438 434
----------------------------------------------------------------------------------------------------------------
Similar to light-duty vehicles, within a given year it can be seen
that the achieved values might be over target (higher emissions) or
under target (lower emissions). This is another example of the
unlimited credit transfer provision, which results in a compliance
determination that is based on the overall fleet credits for each
manufacturer, rather than a separate compliance determination for
individual vehicles or groups of vehicles. The application of
technologies is influenced by the relative cost-effectiveness of
technologies among each manufacturer's vehicles. For the combined
fleet, the achieved values are typically close to or slightly under the
target values, which would represent the banking of credits that can be
carried over into other model years. This indicates that overall, the
modeled fleet tracks the standards very closely from year-to-year. Note
that an achieved value for a manufacturer's combined fleet that is
above the target in a given model year does not indicate a likely
failure to comply with the standards, since the model includes the GHG
program credit banking provisions that allow credits from one year to
be carried into another year.
[[Page 28066]]
4. Compliance Costs per Vehicle for the Final Standards
i. Light-Duty Projected Compliance Costs
EPA has performed an assessment of the estimated per-vehicle costs
for manufacturers to meet the MY 2027-2032 GHG and criteria air
pollutant standards. The fleet average costs per vehicle, again grouped
by both regulatory class and body style, are shown in Table 105 and
Table 106. As shown, the combined cost for cars and trucks are about
$200 for MY 2027 and then increase gradually through MY 2032.
Table 105--Average Incremental Vehicle Cost by Regulatory Class, Relative to the No Action Scenario
[2022 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-year avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cars......................................................... $135 $348 $552 $968 $849 $934 $631
Trucks....................................................... 276 642 1,199 1,703 2,318 2,561 1,450
------------------------------------------------------------------------------------------
Total.................................................... 232 552 1,002 1,481 1,875 2,074 1,203
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 106--Average Incremental Vehicle Cost by Body Style, Relative to the No Action Scenario
[2022 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-year avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sedans....................................................... $115 $277 $555 $1,036 $666 $821 $578
Crossovers/SUVs.............................................. 185 694 961 1,443 2,249 2,558 1,348
Pickups...................................................... 528 349 1,611 2,066 1,816 1,659 1,338
------------------------------------------------------------------------------------------
Total.................................................... 232 552 1,002 1,481 1,875 2,074 1,203
--------------------------------------------------------------------------------------------------------------------------------------------------------
Overall, EPA estimates the average costs of this final rule at
approximately $2,100 per vehicle in MY 2032 relative to meeting the No
Action case in MY 2032. However, these estimates represent the
incremental technology costs to manufacturers; for consumers, these
costs are offset by savings in the reduced fuel costs, and, for PEVs,
maintenance and repair costs, as discussed in section VIII of the
preamble. Additionally, consumers may also benefit from IRA purchase
incentives for PEVs.
These light-duty compliance costs are somewhat different from the
values presented in the NPRM, and now show lower costs in earlier years
and higher costs in 2031 and 2032. These changes are the result of the
additional credit flexibilities in the final standards that were not
included in the proposed standards, as well as a number of modeling
updates made in response to public comments and consideration of the
latest and most appropriate data. As described in section IV.A.1 of the
preamble, noteworthy updates to projected battery costs and revised ICE
powertrain costs both contribute to the increased compliance costs in
later years.
ii. Medium-Duty Projected Compliance Costs
EPA's assessment of the estimated per-vehicle costs for
manufacturers to meet the final MY 2027-2032 GHG and criteria air
pollutant standards for medium-duty vehicles is presented here. The
fleet average costs per vehicle, grouped by body style, are shown in
Table 107. As shown, the combined cost for vans and pickups generally
increases from MY 2027 through MY 2032.
Table 107--Average Incremental Vehicle Cost by Body Style, Medium-Duty Vehicles
[2022 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-year avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vans......................................................... $178 $185 $1,443 $2,732 $4,128 $4,915 $2,264
Pickups...................................................... 97 88 531 1,432 1,516 2,416 1,013
------------------------------------------------------------------------------------------
Total.................................................... 125 122 847 1,881 2,416 3,275 1,444
--------------------------------------------------------------------------------------------------------------------------------------------------------
Overall, EPA estimates the average costs of this rule at
approximately $3,300 per medium-duty vehicle in MY 2032 relative to
meeting the No Action case in MY 2032. Similar to our light-duty costs,
these estimates represent the incremental costs to manufacturers; for
consumers, these costs are offset by savings in reduced fuel costs, and
for PEVs, maintenance and repair costs, as discussed in section VIII of
the preamble. Additionally, consumers may also benefit from IRA
purchase incentives for PEVs.
E. How did EPA consider alternatives in selecting the final program?
In section III.F of this preamble, we described alternatives that
we considered in addition to the final light-duty vehicle GHG
standards. See Figure 5 and Table 18 in section II.C of this preamble.
The alternatives analyzed for the final rule, in addition to the
standards we are finalizing, are Alternative A (the proposed standards)
and Alternative B (less stringent standards). The analyses of the
technology penetrations, targets and achieved levels, and compliance
cost are summarized below. Additional details for each alternative are
presented in the RIA Chapters 4, 8 and 12.
[[Page 28067]]
In comparing the per-vehicle costs of the final standards and the
two alternatives, costs of Alternative A (the proposed standards) have
increased compared to the projections of costs for the proposed
standards as estimated in the NPRM. This cost increase is due to
updates in technical inputs, as discussed in section IV.D.3 of this
preamble and detailed in RIA Chapter 2.1.3. The final standards, which
include a slower phase-out of flexibilities and a more gradual year-
over-year stringency increase in the standards curves for MY 2027
through 2030, have reduced compliance costs compared to Alternative A.
The 6-year average of the final standards is about $1,200 per
vehicle, which is about half of the 6-year average costs for
Alternative A ($2,400). The lower costs of the final standards are
largely attributed to the reduced compliance costs for MY 2027 through
MY 2029 which are projected at or less than $1000 per vehicle.
While Alternative A achieves slightly greater cumulative
CO2 emissions reductions than the final standards in the
early years, the final standards achieve similar cumulative
CO2 reductions through 2055 as Alternative A, and 1.8
billion metric tons (about 30 percent) more than Alternative B. See RIA
Chapter 8.6.6.1.
EPA's updated analysis shows that the final standards and
Alternative A achieve similar levels of technology penetration in MY
2032. The important difference between the final standards and
Alternative A is in the per-vehicle costs during the earlier years (MYs
2027 through 2030), where we believe the lower costs of the final
standards are important considering the shorter lead time for
manufacturers. EPA discusses further in section V of this preamble the
reasons we believe the final standards represent the appropriate
standards under the CAA.
Table 108 compares the projected PEV penetration rates for the
final standards, the alternatives and the No Action case.
Table 108--Comparison of Projected PEV Penetrations for Alternatives vs Final Standards
----------------------------------------------------------------------------------------------------------------
Final standards Alternative A Alternative B No action
Model year (%) (%) (%) case (%)
----------------------------------------------------------------------------------------------------------------
2027.......................................... 32 39 32 31
2028.......................................... 37 45 36 33
2029.......................................... 46 54 46 37
2030.......................................... 53 58 51 39
2031.......................................... 61 64 58 42
2032.......................................... 68 69 65 47
----------------------------------------------------------------------------------------------------------------
Table 109 compares the projected targets for the alternatives and
the final standards, while Table 110 compares the achieved levels for
each.
Table 109--Comparison of Projected Combined Fleet Targets to Alternatives
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
No action
Model year Final standards Alternative A Alternative B case
----------------------------------------------------------------------------------------------------------------
2026.......................................... 168 168 168 168
2027.......................................... 170 155 170 168
2028.......................................... 153 135 153 169
2029.......................................... 136 114 136 169
2030.......................................... 119 105 119 170
2031.......................................... 102 96 107 171
2032.......................................... 85 85 95 171
----------------------------------------------------------------------------------------------------------------
Table 110--Comparison of Projected Combined Fleet Achieved Levels to Alternatives
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
No action
Model year Final standards Alternative A Alternative B case
----------------------------------------------------------------------------------------------------------------
2026.......................................... 166 166 166 166
2027.......................................... 164 160 163 160
2028.......................................... 149 132 149 153
2029.......................................... 130 115 128 142
2030.......................................... 116 103 116 137
2031.......................................... 100 93 104 128
2032.......................................... 87 82 86 118
----------------------------------------------------------------------------------------------------------------
Table 111 presents a comparison of average incremental per-vehicle
costs for the final standards and the alternatives, as well as the
average annual cost over the rulemaking period.
[[Page 28068]]
Table 111--Comparison of Projected Incremental Costs Relative to the No Action Scenario
[CO2 grams/mile]
----------------------------------------------------------------------------------------------------------------
Model year Final standards Alternative A Alternative B
----------------------------------------------------------------------------------------------------------------
2027....................................................... $232 $1,114 $214
2028....................................................... 552 1,794 437
2029....................................................... 1,002 2,088 936
2030....................................................... 1,481 2,390 1,375
2031....................................................... 1,875 2,418 1,561
2032....................................................... 2,074 2,425 1,867
6-year avg................................................. 1,203 2,038 1,065
----------------------------------------------------------------------------------------------------------------
F. Sensitivities--LD GHG Compliance Modeling
EPA often conducts sensitivity analyses to help assess key areas of
uncertainty in both underlying data and modeling assumptions,
consistent with OMB Circular No. A-4 which establishes guidelines for
conducting regulatory impact analyses, including benefit-cost
analysis.\1295\ In the analysis for this rule, EPA has evaluated the
feasibility and appropriateness of the standards using the central case
assumptions for technology, market acceptance, and various other
assumptions described throughout this preamble and RIA. For a number of
these key assumptions, we have conducted sensitivity analyses for the
final standards using alternative sets of assumptions. We believe that,
together with the central case assumptions, these sensitivities span
ranges of values that reasonably cover uncertainties in the critical
areas of state policies, battery costs, the market for PEVs, and
manufacturer participation in credit trading. As with the central case,
we reach the conclusion that the final standards are feasible given
consideration of lead time and cost under each of the individual
sensitivity cases presented here.
---------------------------------------------------------------------------
\1295\ Though Circular A-4 was revised on November 9, 2023, the
updated guidance will not become effective for final rules that are
submitted for OMB review until after December 31, 2024. The analyses
conducted in support of this rule follow guidance from Circular A-4
finalized in 2003.
---------------------------------------------------------------------------
1. State-Level ZEV Policies (ACC II)
We have provided an analysis that accounts for state-level zero-
emission vehicle (ZEV) policies as described by California's ACC II
program and other participating states under CAA section 177.
California has submitted to EPA a request for a waiver for its ACC II
program, which is currently under review; EPA is not prejudging the
outcome of any waiver process or whether or not certain states are able
to adopt California's regulations under the criteria of section 177.
Nevertheless, it is an important question to analyze what the potential
effect of state adoption of ZEV policies might be in the context of the
No Action case, particularly since manufacturers may be adjusting
product plans to account for ACC II, and thus we are providing this
sensitivity analysis to explore this question. As shown in Table 112,
state adoption of ACC II is projected to amount to about 30 percent of
total U.S. light-duty sales in 2027 and beyond. Within the states
adopting ACC II, manufacturers are required to sell a certain portion
of vehicles that meet the ZEV definition, which includes BEVs, FCEVs,
and a limited number of PHEVs that satisfy a minimum requirement for
charge depleting range. The required ZEV shares increase by model year,
reaching 100 percent in 2035 as shown in Table 113.
Table 112--Sales Share of U.S. New Light-Duty Vehicles in States
Adopting ACC II, by Model Year
------------------------------------------------------------------------
Portion of U.S. new States adopting ACC
Model years light-duty sales (%) II
------------------------------------------------------------------------
2018 to 2025................ 12.6 CA.
2026........................ 25.3 CA, MA, NY, OR, VA,
VT, WA.
2027 and later.............. 32.8 CA, CO, DC, DE, MA,
MD, NM, NJ, NY, OR,
RI, VA, VT, WA.
------------------------------------------------------------------------
Table 113--ZEV Percentage Sales Requirements Within States Adopting ACC II, by Model Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
--------------------------------------------------------------------------------------------------------------------------------------------------------
14.5 17.0 19.5 22.0 35.0 43.0 51.0 59.0 68.0 76.0 82.0 88.0 94.0 100.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
EPA's analysis of state-level ZEV mandates was conducted by
separating the base year fleet into two regions. We applied a minimum
PEV sales share constraint to the portion of new vehicles in the ACC
II-adopting states, using the values in Table 113. For the remainder of
new vehicles, a minimum PEV sales share value of zero was specified. In
both ZEV and non-ZEV regions, the OMEGA modeling allowed manufacturers
to exceed the minimum PEV shares if it resulted in lower producer
generalized cost, while still meeting other modeling constraints
including compliance with the National GHG standards for the particular
policy case and satisfying the consumer demand for PEVs. The results of
the analysis for this state-level ZEV mandate sensitivity are
summarized in Table 114 through Table 120.
[[Page 28069]]
Table 114--Projected Targets With ACC II, for No Action Case and Final Standard (CO2 grams/mile)--cars and
trucks combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 169 170 171 172 171 172
Final Standards................... 171 153 136 119 102 85
----------------------------------------------------------------------------------------------------------------
Table 115--Projected Achieved Levels With ACC II, for No Action Case and Final Standard (CO2 grams/mile)--Cars
and Trucks Combined \a\
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 145 129 116 104 91 83
Final Standards................... 152 136 126 114 100 92
----------------------------------------------------------------------------------------------------------------
\a\ Due to a lower limit of available AC leakage, off-cycle and A/C efficiency credits, the achieved levels in
the Final Standards appear higher than in the No Action case, although tailpipe CO2 is equal or less than the
No Action case in each year. That is, we expect the final standards to drive CO2 emissions decreases relative
to the No Action case.
Table 116--PEV Penetrations With ACC II, for No Action Case and Final Standard--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 37 41 45 50 56 59
Final Standards................... 37 42 47 53 60 64
----------------------------------------------------------------------------------------------------------------
Table 117--PHEV Penetrations With ACC II, for No Action Case and Final Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 5 6 6 8 14 14
Final Standards................... 5 6 7 6 8 8
----------------------------------------------------------------------------------------------------------------
Table 118--Strong HEV Penetrations With ACC II, for No Action Case and Final Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 4 4 4 4 4 4
Final Standards................... 4 5 5 5 5 5
----------------------------------------------------------------------------------------------------------------
Table 119--Advanced ICE Penetrations With ACC II, for No Action Case and Final Standards--Cars and Trucks
Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 45 38 35 31 27 25
Final Standards................... 46 40 36 31 25 22
----------------------------------------------------------------------------------------------------------------
Table 120--Average Incremental Vehicle Cost vs. No Action Case With ACC II for the Final Standard--Cars and Trucks Combined
[2022 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Standards.............................................. $143 $82 $95 $227 $969 $1,003 $420
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. Battery Costs
The following section presents key OMEGA results for the low and
high battery cost sensitivities, which are described in more detail in
section IV.C.2 of the preamble.
i. Low Battery Costs
The low battery cost assumes a 15 percent reduction in battery pack
costs
[[Page 28070]]
(on a $/kWh basis) from the central case compliance analysis, as
described in section IV.C.2. Additionally, we use the 45X figures from
the NPRM analysis and the 30D/45W estimates from DOE without the
reductions described in IV.C.2 that were applied in the central
analysis. The corresponding GHG targets and achieved g/mile levels are
provided in Table 121 and Table 122. Technology penetrations of PEVs,
PHEVs, strong HEVs, and advanced ICE vehicles are summarized in Table
123, Table 124, Table 125, and Table 126. The resulting incremental
compliance costs (against the corresponding No Action case) are given
in Table 127.
Table 121--Projected Targets With Low Battery Costs, for No Action Case and Final Standard (CO2 Grams/Mile)--
Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 170 171 172 172 172 172
Final Standards................... 171 154 136 119 102 85
----------------------------------------------------------------------------------------------------------------
Table 122--Projected Achieved Levels With Low Battery Costs, for No Action Case and Final Standards (CO2 Grams/
Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 131 111 101 101 100 103
Final Standards................... 140 119 113 111 96 82
----------------------------------------------------------------------------------------------------------------
Table 123--PEV Penetrations With Low Battery Costs, for No Action Case and Final Standards--Cars and Trucks
Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 42 47 51 51 51 50
Final Standards................... 42 50 54 55 63 70
----------------------------------------------------------------------------------------------------------------
Table 124--PHEV Penetrations With Low Battery Costs, for No Action Case and Final Standards--Cars and Trucks
Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 5 6 7 8 8 9
Final Standards................... 5 6 7 8 9 11
----------------------------------------------------------------------------------------------------------------
Table 125--Strong HEV Penetrations With Low Battery Costs, for No Action Case and Final Standards--Cars and
Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 3 4 3 3 3 4
Final Standards................... 3 3 3 3 3 2
----------------------------------------------------------------------------------------------------------------
Table 126--Advanced ICE Penetrations With Low Battery Costs, for No Action Case and Final Standards--Cars and
Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 42 34 31 31 31 31
Final Standards................... 42 35 32 30 25 20
----------------------------------------------------------------------------------------------------------------
Table 127--Average Incremental Vehicle Cost vs. No Action Case for Low Battery Costs for the Final Standards--Cars and Trucks Combined
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Standards....................................... $106 -$12 -$72 $25 $653 $1,416 $353
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 28071]]
ii. High Battery Costs
The high battery cost assumes a 25 percent increase in battery pack
costs (on a $/kWh basis) from the central case compliance analysis. The
corresponding GHG targets and achieved g/mile levels are provided in
Table 128 and Table 129. Technology penetrations of PEVs, PHEVs, strong
HEVs, and advanced ICE vehicles are summarized in Table 130, Table 131,
Table 132, and Table 133. The resulting incremental compliance costs
(against the corresponding No Action case) are given in Table 134.
Table 128--Projected Targets With High Battery Costs, for No Action Case and Final Standard (CO2 Grams/Mile)--
Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 168 168 169 169 170 170
Final Standards................... 170 154 136 120 102 85
----------------------------------------------------------------------------------------------------------------
Table 129--Projected Achieved Levels With High Battery Costs, for No Action Case and Final Standards (CO2 Grams/
Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 163 149 148 144 134 128
Final Standards................... 168 137 126 108 95 83
----------------------------------------------------------------------------------------------------------------
Table 130--PEV Penetrations With High Battery Costs, for No Action Case and Final Standards--Cars and Trucks
Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 29 29 29 31 35 39
Final Standards................... 30 36 43 52 61 68
----------------------------------------------------------------------------------------------------------------
Table 131--PHEV Penetrations With High Battery Costs, for No Action Case and Final Standards--Cars and Trucks
Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 10 9 8 9 11 13
Final Standards................... 10 12 12 13 15 18
----------------------------------------------------------------------------------------------------------------
Table 132--Strong HEV Penetrations With High Battery Costs, for No Action Case and Final Standards--Cars and
Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 5 9 9 9 8 8
Final Standards................... 5 11 11 12 11 8
----------------------------------------------------------------------------------------------------------------
Table 133--Advanced ICE Penetrations With High Battery Costs, for No Action Case and Final Standards--Cars and
Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 49 39 39 38 35 33
Final Standards................... 49 25 22 16 12 10
----------------------------------------------------------------------------------------------------------------
Table 134--Average Incremental Vehicle Cost vs. No Action Case for High Battery Costs for the Final Standards--Cars and Trucks Combined
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Standards....................................... $230 $1,562 $2,300 $3,335 $3,818 $4,187 $2,572
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 28072]]
3. Consumer Acceptance of PEVs
We have included sensitivities on the rate of BEV and PHEV
acceptance. Given uncertainties in vehicle markets, we estimate results
assuming both faster and slower rates of BEV acceptance for all body
styles. We also acknowledge that PHEV acceptance could be more
prevalent than we estimate in our central case. For information on what
these BEV and PHEV acceptance rates are, refer to RIA Chapter 4.1.3.
i. Faster BEV Acceptance
Results assuming a faster rate of BEV acceptance are provided here.
The corresponding GHG targets and achieved g/mile levels are provided
in Table 135 and Table 136. Technology penetrations of PEVs, PHEVs,
strong HEVs, and advanced ICE vehicles are summarized in Table 137,
Table 138, Table 139, and Table 140. The resulting incremental
compliance costs (against the corresponding No Action case) are given
in Table 141.
Table 135--Projected Targets With Faster BEV Acceptance, for No Action Case and Final Standard (CO2 Grams/Mile)--
Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 170 171 172 173 173 174
Final Standards................... 171 154 136 120 102 85
----------------------------------------------------------------------------------------------------------------
Table 136--Projected Achieved Levels With Faster BEV Acceptance, for No Action Case and Final Standards (CO2
Grams/Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 133 108 94 86 75 67
Final Standards................... 140 114 103 99 91 78
----------------------------------------------------------------------------------------------------------------
Table 137--PEV Penetrations With Faster BEV Acceptance, for No Action Case and Final Standards--Cars and Trucks
Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 41 48 54 57 62 65
Final Standards................... 41 51 57 60 65 71
----------------------------------------------------------------------------------------------------------------
Table 138--PHEV Penetrations With Faster BEV Acceptance, for No Action Case and Final Standards--Cars and Trucks
Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 4 5 6 6 8 9
Final Standards................... 5 5 5 6 6 9
----------------------------------------------------------------------------------------------------------------
Table 139--Strong HEV Penetrations With Faster BEV Acceptance, for No Action Case and Final Standards--Cars and
Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 3 3 3 3 2 3
Final Standards................... 3 3 3 2 2 2
----------------------------------------------------------------------------------------------------------------
Table 140--Advanced ICE Penetrations With Faster BEV Acceptance, for No Action Case and Final Standards--Cars
and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 42 34 30 28 25 23
Final Standards................... 42 33 29 27 24 19
----------------------------------------------------------------------------------------------------------------
[[Page 28073]]
Table 141--Average Incremental Vehicle Cost vs. No Action Case for Faster BEV Acceptance for the Final Standards--Cars and Trucks Combined
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Standards....................................... $138 $193 $181 $40 -$19 $274 $134
--------------------------------------------------------------------------------------------------------------------------------------------------------
ii. Slower BEV Acceptance
Results assuming a slower rate of BEV acceptance are provided here.
The corresponding GHG targets and achieved g/mile levels are provided
in Table 142 and Table 143. Technology penetrations of PEVs, PHEVs,
strong HEVs, and advanced ICE vehicles are summarized in Table 144,
Table 145, Table 146, and Table 147. The resulting incremental
compliance costs (against the corresponding No Action case) are given
in Table 148.
Table 142--Projected Targets With Slower BEV Acceptance, for No Action Case and Final Standard (CO2 Grams/Mile)--
Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 168 170 170 170 171 171
Final Standards................... 170 153 136 119 102 85
----------------------------------------------------------------------------------------------------------------
Table 143--Projected Achieved Levels With Slower BEV Acceptance, for No Action Case and Final Standards (CO2
Grams/Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 161 151 145 141 129 125
Final Standards................... 162 136 122 107 98 81
----------------------------------------------------------------------------------------------------------------
Table 144--PEV Penetrations With Slower BEV Acceptance, for No Action Case and Final Standards--Cars and Trucks
Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 29 26 29 31 37 39
Final Standards................... 31 36 45 52 60 68
----------------------------------------------------------------------------------------------------------------
Table 145--PHEV Penetrations With Slower BEV Acceptance, for No Action Case and Final Standards--Cars and Trucks
Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 9 9 10 10 11 12
Final Standards................... 10 11 13 14 15 17
----------------------------------------------------------------------------------------------------------------
Table 146--Strong HEV Penetrations With Slower BEV Acceptance, for No Action Case and Final Standards--Cars and
Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 5 14 13 13 12 12
Final Standards................... 5 15 13 15 15 12
----------------------------------------------------------------------------------------------------------------
Table 147--Advanced ICE Penetrations With Slower BEV Acceptance, for No Action Case and Final Standards--Cars
and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 48 34 33 32 30 29
Final Standards................... 46 25 22 15 11 8
----------------------------------------------------------------------------------------------------------------
[[Page 28074]]
Table 148--Average Incremental Vehicle Cost vs. No Action Case for Slower BEV Acceptance for the Final Standards--Cars and Trucks Combined
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Standards....................................... $426 $1,074 $1,512 $2,158 $2,291 $2,887 $1,725
--------------------------------------------------------------------------------------------------------------------------------------------------------
4. No Credit Trading Case
As described in section III.C.4 of this preamble, averaging,
banking and trading are some of the key compliance flexibilities that
EPA has included in its emissions standards dating back to 1983. EPA
expects manufacturers to leverage each of these flexibilities to some
extent, including the trading of credits between companies. The OMEGA
model is set up to allow trading between companies and can be
configured so that all of the credits generated are traded to
manufacturers that need them (perfect trading), or that only a
percentage of credits are traded (imperfect trading), down to a
hypothetical ``no trading'' case where each manufacturer must comply on
its own using only averaging and banking without the ability to
purchase credits earned by another manufacturer.
As we did for the proposal,\1296\ in our central case EPA assumes a
CME (credit market efficiency) of 0.8, which indicates that 80 percent
of a manufacturer's total debits may be purchased from another
manufacturer, with the remaining debits having to be made up via
implementation of additional vehicle technology. For this ``no
trading'' sensitivity, we are setting the CME at a value of 0. As we
did in our no trading sensitivity for the proposal, we also apply a 10
percent compliance buffer which requires the manufacturer to
strategically aim for a CO2 level (in total Mg
CO2) that is 10 percent below the target level in each year,
so that a sufficient buffer of banked credits is maintained, in lieu of
the use of the credit trading flexibility.
---------------------------------------------------------------------------
\1296\ See the memo to docket, EPA-HQ-OAR-2022-0829.
---------------------------------------------------------------------------
Table 149 and Table 150 present the targets and achieved levels for
the No Trading case and the No Action No Trading case. Table 151
through Table 154 show the respective technology penetrations for PEVs,
PHEVs, strong HEVs and advanced ICE vehicles, while Table 155 shows the
incremental compliance costs for the No Trading case.
Table 149--Projected Targets Under the No Trading Sensitivity for No Action Case and Final Standards (CO2 Grams/
Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action-No Trading.............. 170 169 169 170 170 170
Final Standards-No Trading........ 171 153 136 119 102 85
----------------------------------------------------------------------------------------------------------------
Table 150--Projected Achieved Levels Under the No Trading Sensitivity for No Action Case and Final Standards
(CO2 Grams/Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action-No Trading.............. 142 141 133 129 121 117
Final Standards-No Trading........ 146 132 116 103 89 77
----------------------------------------------------------------------------------------------------------------
Table 151--PEV Penetrations Under the No Trading Sensitivity, for No Action Case and Final Standards--Cars and
Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action-No Trading.............. 33 34 37 39 42 45
Final Standards-No Trading........ 34 40 48 55 63 70
----------------------------------------------------------------------------------------------------------------
Table 152--PHEV Penetrations Under the No Trading Sensitivity, for No Action Case and Final Standards--Cars and
Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action-No Trading.............. 6 6 7 8 9 10
Final Standards-No Trading........ 6 7 8 9 11 13
----------------------------------------------------------------------------------------------------------------
[[Page 28075]]
Table 153--Strong HEV Penetrations Under the No Trading Censitivity, for No Action Case and Final Standards--
Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action-No Trading.............. 7 7 7 7 6 6
Final Standards-No Trading........ 7 12 10 12 11 10
----------------------------------------------------------------------------------------------------------------
Table 154--Advanced ICE Penetrations Under the No Trading Sensitivity, for No Action Case and Final Standards--
Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action-No Trading.............. 39 46 44 43 40 39
Final Standards-No Trading........ 38 32 28 21 17 13
----------------------------------------------------------------------------------------------------------------
Table 155--Average Incremental Vehicle Cost vs. No Action Case Under the No Trading Sensitivity for the Final Standards--Cars and Trucks Combined
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Standards-No Trading............................ $268 $1,055 $1,420 $1,983 $2,365 $2,807 $1,650
--------------------------------------------------------------------------------------------------------------------------------------------------------
5. Alternative Manufacturer Pathways
i. Lower BEV Production
This sensitivity was developed to illustrate a hypothetical
scenario where manufacturers choose to limit BEV production and focus
on PHEVs as a more significant part of their compliance strategy than
in the Central case. Note that this is the scenario referred to as
``Pathway B'' in section I.B.1 of this preamble. To characterize this
scenario, we assume that consumers eventually consider PHEVs and ICE
vehicles equally acceptable, all else equal. We also apply a production
restriction to BEVs increasing over time in a trajectory similar to the
No Action central case.
Results assuming Lower BEV Production are provided below. Table 156
and Table 157 give the targets and achieved levels for the Lower BEV
Production case and the No Action case. Table 158 through Table 161
show the respective technology penetrations for PEVs, PHEVs, strong
HEVs and advanced ICE vehicles, while Table 162 shows the incremental
compliance costs for this pathway compared to its No Action case.
Table 156--Projected Targets for Lower BEV Production, for No Action Case and Final Standard
(CO2 G/Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 168 169 169 170 171 171
Final Standards................... 170 153 136 119 102 85
----------------------------------------------------------------------------------------------------------------
Table 157--Projected Achieved Levels for Lower BEV Production, for No Action Case and Final Standards (CO2 Grams/
Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 160 153 142 137 128 118
Final Standards................... 160 146 133 117 102 88
----------------------------------------------------------------------------------------------------------------
Table 158--PEV Penetrations for Lower BEV Production, for No Action Case and Final Standards--Cars and Trucks
Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 31 33 37 39 42 47
Final Standards................... 34 41 47 54 65 73
----------------------------------------------------------------------------------------------------------------
[[Page 28076]]
Table 159--PHEV Penetrations for Lower BEV Production, for No Action Case and Final Standards--Cars and Trucks
Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 5 6 7 8 8 12
Final Standards................... 10 12 15 18 24 29
----------------------------------------------------------------------------------------------------------------
Table 160--Strong HEV Penetrations for Lower BEV Production, for No Action Case and Final Standards--Cars and
Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 4 4 4 4 5 6
Final Standards................... 4 4 3 6 7 6
----------------------------------------------------------------------------------------------------------------
Table 161--Advanced ICE Penetrations for Lower BEV Production, for No Action Case and Final Standards--Cars and
Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 51 44 41 40 36 33
Final Standards................... 46 41 36 28 20 15
----------------------------------------------------------------------------------------------------------------
Table 162--Average Incremental Vehicle Cost vs. No Action Case for Lower BEV Production Scenario for the Final Standards--Cars and Trucks Combined
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%) 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Standards....................................... $449 $788 $980 $1,639 $2,303 $2,575 $1,456
--------------------------------------------------------------------------------------------------------------------------------------------------------
ii. No Additional BEVs Beyond the No Action Case
This sensitivity was developed to illustrate a hypothetical
scenario where manufacturers choose to limit BEV production to the
trajectory observed in the Central No Action case. Again, we assume
that manufacturers use an increasing number of PHEVs to comply with the
final standards. This scenario is also referred to as ``Pathway C'' in
section I.B.1 of this preamble. To characterize this scenario, we
assume that consumers eventually consider PHEVs and ICE vehicles
equally acceptable, all else equal. We also apply a production
restriction to BEVs increasing over time in a trajectory similar to the
No Action central case.
Results for this sensitivity are provided below. Table 163 and
Table 164 give the targets and achieved levels for the No Additional
BEVs case and the No Action case. Table 165 through Table 168 show the
respective technology penetrations for PEVs, PHEVs, strong HEVs and
advanced ICE vehicles, while Table 169 shows the incremental compliance
costs for this pathway compared to its No Action case.
Table 163--Projected Targets for No Additional BEVs Beyond the No Action Case, for No Action Case and Final
Standard (CO2 G/Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 168 169 169 170 171 171
Final Standards................... 170 155 137 121 103 86
----------------------------------------------------------------------------------------------------------------
Table 164--Projected Achieved Levels for No Additional BEVs Beyond the No Action Case, for No Action Case and
Final Standards (CO2 Grams/Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action......................... 160 153 142 137 128 118
Final Standards................... 159 124 112 100 95 90
----------------------------------------------------------------------------------------------------------------
[[Page 28077]]
Table 165--PEV Penetrations for No Additional BEVs Beyond the No Action Case, for No Action Case and Final
Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 31 33 37 39 42 47
Final Standards................... 35 43 52 57 66 71
----------------------------------------------------------------------------------------------------------------
Table 166--PHEV Penetrations for No Additional BEVs Beyond the No Action Case, for No Action Case and Final
Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 5 6 7 8 8 12
Final Standards................... 10 17 22 27 32 36
----------------------------------------------------------------------------------------------------------------
Table 167--Strong HEV Penetrations for No Additional BEVs Beyond the No Action Case, for No Action Case and
Final Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 4 4 4 4 5 6
Final Standards................... 4 15 13 16 15 13
----------------------------------------------------------------------------------------------------------------
Table 168--Advanced ICE Penetrations for No Additional BEVs Beyond the No Action Case, for No Action Case and
Final Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action......................... 51 44 41 40 36 33
Final Standards................... 46 20 17 10 6 5
----------------------------------------------------------------------------------------------------------------
Table 169--Average Incremental Vehicle Cost vs. No Action Case for No Additional BEVs Beyond the No Action Case Scenario for the Final Standards--Cars
and Trucks Combined
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Standards....................................... $536 $2,517 $2,630 $3,120 $3,334 $3,112 $2,542
--------------------------------------------------------------------------------------------------------------------------------------------------------
6. Overall Consideration of Sensitivity Analyses
The following is a summary of the sensitivities conducted and a
comparison of resulting PEV penetrations and incremental technology
costs for the standards compared to the respective No Action case.
As can be seen, the projected targets for the final standards are
not significantly different across the range of sensitivities discussed
in this section.\1297\ It is important to note that manufacturers are
able to meet the targets for the standards in every year for the range
of sensitivities analyzed here. However, the achieved levels do vary in
each sensitivity; in some cases, there is greater level of
overcompliance (most notably in the Faster BEV Acceptance case).
---------------------------------------------------------------------------
\1297\ While manufacturers may adjust their product mix as one
of their compliance strategies, the OMEGA future car/truck mix is
fixed, and based on the forecast from AEO 2023.
---------------------------------------------------------------------------
Table 170 and Table 171 present a comparison for the projected
targets and achieved levels for the final standards, based on the
various identified sensitivities (the central No Action case is
provided for reference). While total PEV penetrations projected to meet
the standards (shown in Table 174) do not vary much across the
sensitivity cases, the mix of PHEVs and BEVs does vary across
sensitivities (refer to Table 175 and Table 176). PEV penetrations in
the No Action case vary significantly: projected MY 2032 PEV
penetrations range from 39 percent to 65 percent based on different
input assumptions which affect consumer demand for electric vehicles
and in the case of the State-level ZEV Policies scenario also reflect
state required BEV shares. The range of PEV penetrations in the No
Action case is provided in Table 177.
Of the metrics considered, the range of sensitivities have the
greatest impact on incremental vehicle cost compared to their
respective No Action case. We have also provided industry average
absolute vehicle costs in Table 178, with the incremental costs of
compliance for each sensitivity in Table 179. Compared to a 6-year
average incremental cost of about $1,200 for the central case, these
sensitivities result in a range of 6-year average incremental costs
from $100 (the Faster BEV Acceptance case) per vehicle to about $2,600
(the High Battery Costs case). The two sensitivity cases that result in
less BEV penetrations in the No Action case--High Battery Costs and the
No Additional BEVs cases--result in the highest incremental costs.
Three
[[Page 28078]]
sensitivities have substantially lower incremental costs than the
central case--the Low Battery Costs, Faster BEV Acceptance, and State-
Level ZEV Policies scenarios. Three other sensitivities have
incremental costs comparable to those of the central case--Slower BEV
Acceptance, No Trading case, and Lower BEV Production. We believe the
costs are reasonable across this range of sensitivities, as discussed
in section V.B.
Table 170--Range of Targets for Final Standards (CO2 Grams/Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Central case--No Action 168 169 169 170 171 171
(reference)......................
Central case--Final Standards..... 170 153 136 119 102 85
----------------------------------------------------------------------------------------------------------------
Sensitivities
----------------------------------------------------------------------------------------------------------------
State-level Policies.............. 171 153 136 119 102 85
Low Battery Costs................. 171 154 136 119 102 85
High Battery Costs................ 170 154 136 120 102 85
Faster BEV Acceptance............. 171 154 136 120 102 85
Slower BEV Acceptance............. 170 153 136 119 102 85
No Trading case................... 171 153 136 119 102 85
Lower BEV Production.............. 170 153 136 119 102 85
No Additional BEVs................ 170 155 137 121 103 86
----------------------------------------------------------------------------------------------------------------
Table 171--Range of Achieved Levels for Final Standards (CO2 Grams/Mile)--Cars and Trucks Combined a
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Central case--No Action 160 153 142 137 128 118
(reference)......................
Central case--Final Standards..... 164 149 130 116 100 87
----------------------------------------------------------------------------------------------------------------
Sensitivities
----------------------------------------------------------------------------------------------------------------
State-level Policies.............. 152 136 126 114 100 92
Low Battery Costs................. 131 111 101 101 100 103
High Battery Costs................ 168 137 126 108 95 83
Faster BEV Acceptance............. 140 114 103 99 91 78
Slower BEV Acceptance............. 162 136 122 107 98 81
No Trading case................... 146 132 116 103 89 77
Lower BEV Production.............. 160 146 133 117 102 88
No Additional BEVs................ 159 124 112 100 95 90
----------------------------------------------------------------------------------------------------------------
\a\ Achieved levels for the No Action case are lower in MY 2027 due to additional off-cycle and A/C credits
available to manufacturers.
Table 172--Range of Targets for No Action Case (CO2 Grams/Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Central case...................... 168 169 169 170 171 171
State-level Policies.............. 169 170 171 172 171 172
Low Battery Costs................. 170 171 172 172 172 172
High Battery Costs................ 168 168 169 169 170 170
Faster BEV Acceptance............. 170 171 172 173 173 174
Slower BEV Acceptance............. 168 170 170 170 171 171
No Trading case................... 170 169 169 170 170 170
Lower BEV Production.............. 168 169 169 170 171 171
No Additional BEVs................ 168 169 169 170 171 171
----------------------------------------------------------------------------------------------------------------
Table 173--Range of Achieved Levels for No Action Case (CO2 Grams/Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Central case...................... 160 153 142 137 128 118
State-level Policies.............. 145 129 116 104 91 83
Low Battery Costs................. 131 111 101 101 100 103
High Battery Costs................ 163 149 148 144 134 128
Faster BEV Acceptance............. 133 108 94 86 75 67
Slower BEV Acceptance............. 161 151 145 141 129 125
No Trading case................... 142 141 133 129 121 117
Lower BEV Production.............. 160 153 142 137 128 118
No Additional BEVs................ 160 153 142 137 128 118
----------------------------------------------------------------------------------------------------------------
[[Page 28079]]
Table 174--Range of PEV Penetrations for Final Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Central case--No Action 31 33 37 39 42 47
(reference)......................
Central case--Final Standards..... 32 37 46 53 61 68
----------------------------------------------------------------------------------------------------------------
Sensitivities
----------------------------------------------------------------------------------------------------------------
State-level Policies.............. 37 42 47 53 60 64
Low Battery Costs................. 42 50 54 55 63 70
High Battery Costs................ 30 36 43 52 61 68
Faster BEV Acceptance............. 41 51 57 60 65 71
Slower BEV Acceptance............. 31 36 45 52 60 68
No Trading case................... 34 40 48 55 63 70
Lower BEV Production.............. 34 41 47 54 65 73
No Additional BEVs................ 35 43 52 57 66 71
----------------------------------------------------------------------------------------------------------------
Table 175--Range of BEV Penetrations for Final Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Central case--No Action 26 27 30 31 34 35
(reference)......................
Central case--Final Standards..... 26 31 39 44 51 56
----------------------------------------------------------------------------------------------------------------
Sensitivities
----------------------------------------------------------------------------------------------------------------
State-level Policies.............. 31 36 40 47 52 56
Low Battery Costs................. 37 44 47 48 54 59
High Battery Costs................ 20 25 30 38 46 50
Faster BEV Acceptance............. 37 46 52 54 58 62
Slower BEV Acceptance............. 21 25 32 38 44 52
No Trading case................... 28 33 41 46 52 56
Lower BEV Production.............. 24 29 33 37 41 43
No Additional BEVs................ 24 26 30 31 34 35
----------------------------------------------------------------------------------------------------------------
Table 176--Range of PHEV Penetrations for Final Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Central case--No Action 5 6 7 8 8 12
(reference)......................
Central case--Final Standards..... 6 6 8 9 11 13
----------------------------------------------------------------------------------------------------------------
Sensitivities
----------------------------------------------------------------------------------------------------------------
State-level Policies.............. 5 6 7 6 8 8
Low Battery Costs................. 5 6 7 8 9 11
High Battery Costs................ 10 12 12 13 15 18
Faster BEV Acceptance............. 5 5 5 6 6 9
Slower BEV Acceptance............. 10 11 13 14 15 17
No Trading case................... 6 7 8 9 11 13
Lower BEV Production.............. 10 12 15 18 24 29
No Additional BEVs................ 10 17 22 27 32 36
----------------------------------------------------------------------------------------------------------------
Table 177--Range of PEV Penetrations for No Action Case--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Central case...................... 31 33 37 39 42 47
State-level Policies.............. 37 41 45 50 56 59
Low Battery Costs................. 42 47 51 51 51 50
High Battery Costs................ 29 29 29 31 35 39
Faster BEV Acceptance............. 41 48 54 57 62 65
Slower BEV Acceptance............. 29 26 29 31 37 39
No Trading case................... 33 34 37 39 42 45
Lower BEV Production.............. 31 33 37 39 42 47
No Additional BEVs................ 31 33 37 39 42 47
----------------------------------------------------------------------------------------------------------------
[[Page 28080]]
Table 178--Range of Absolute Vehicle Costs for No Action Case--Cars and Trucks Combined
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Central case................................................. $43,412 $43,561 $43,761 $43,948 $44,357 $44,915 $43,992
State-level Policies......................................... 44,127 44,643 44,844 45,313 45,165 45,641 44,956
Low Battery Costs............................................ 43,374 43,953 43,996 44,219 44,478 44,593 44,102
High Battery Costs........................................... 43,952 44,359 44,157 44,330 44,828 45,175 44,467
Faster BEV Acceptance........................................ 44,697 45,532 45,716 46,044 46,496 46,959 45,907
Slower BEV Acceptance........................................ 43,298 43,897 43,934 44,044 44,516 44,721 44,068
No Trading case.............................................. 44,260 44,083 44,155 44,264 44,567 44,830 44,360
Lower BEV Production......................................... 43,412 43,561 43,761 43,948 44,357 44,915 43,992
No Additional BEVs........................................... 43,412 43,561 43,761 43,948 44,357 44,915 43,992
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 179--Range of Incremental Vehicle Cost vs. No Action Case for Final Standards--Cars and Trucks Combined
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Central case.......................................... $232 $552 $1,002 $1,481 $1,875 $2,074 $1,203
State-level Policies.................................. 143 82 95 227 969 1,003 420
Low Battery Costs..................................... 106 -12 -72 25 653 1,416 353
High Battery Costs.................................... 230 1,562 2,300 3,335 3,818 4,187 2,572
Faster BEV Acceptance................................. 138 193 181 40 -19 274 134
Slower BEV Acceptance................................. 426 1,074 1,512 2,158 2,291 2,887 1,725
No Trading case....................................... 268 1,055 1,420 1,983 2,365 2,807 1,650
Lower BEV Production.................................. 449 788 980 1,639 2,303 2,575 1,456
No Additional BEVs.................................... 536 2,517 2,630 3,120 3,334 3,112 2,542
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 180--Absolute Cost Comparison of No Action and Final Standards for Central Case and Sensitivities--2032 MY
----------------------------------------------------------------------------------------------------------------
Final
No action standards Incremental
absolute cost absolute cost cost
----------------------------------------------------------------------------------------------------------------
Central case.................................................... $44,915 $46,989 $2,074
State-level Policies............................................ 45,641 46,644 1,003
Low Battery Costs............................................... 44,593 46,009 1,416
High Battery Costs.............................................. 45,175 49,362 4,187
Faster BEV Acceptance........................................... 46,959 47,233 274
Slower BEV Acceptance........................................... 44,721 47,608 2,887
No Trading case................................................. 44,830 47,637 2,807
Lower BEV Production............................................ 44,915 47,490 2,575
No Additional BEVs.............................................. 44,915 48,027 3,112
----------------------------------------------------------------------------------------------------------------
G. Sensitivities--MD GHG Compliance Modeling
1. Battery Costs (Low and High)
For medium-duty vehicles, we have conducted high and low battery
pack cost sensitivities, similar to those done for the light-duty GHG
analysis (for more information refer to section IV.F.2 of this
preamble). The low and high battery pack cost sensitivities have been
combined into the summary tables in this section.
Table 181 and Table 182 present a comparison for the targets and
the projected achieved levels for the final standards, based on battery
costs assumed for the central case and the low and high cost
sensitivity cases. The range of PEV penetrations and PHEV penetrations
for the final MD standards are provided in Table 183 and Table 184.
These tables show generally consistent results between the central case
and the battery cost sensitivities because consumer behavior was not
reflected in the medium-duty compliance analysis.
Battery costs have the greatest impact on incremental vehicle cost
compared to the No Action case. Compared to a 6-year average
incremental costs of about $1,400 for the central case, these
sensitivities result in a range of incremental costs from $1,100 per
vehicle to about $1,900. Incremental vehicle costs for the final
standards for the two sensitivities are provided in Table 185.
Table 181--Projected Targets for Final Standards (CO2 Grams/Mile)--Central Case, Low and High Battery
Sensitivities--Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Central case...................... 461 453 408 353 314 274
Low Battery Costs................. 461 453 408 353 314 274
[[Page 28081]]
High Battery Costs................ 461 453 409 353 315 275
----------------------------------------------------------------------------------------------------------------
Table 182--Projected Achieved Levels for Final Standards (CO2 Grams/Mile)--Central Case, Low and High Battery
Sensitivities--Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
Central case...................... 456 451 407 351 312 272
Low Battery Costs................. 456 452 407 351 311 272
High Battery Costs................ 456 451 408 352 314 273
----------------------------------------------------------------------------------------------------------------
Table 183--PEV Penetrations for Final Standards--Central Case, Low and High Battery Sensitivities--Medium-Duty
Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Central case...................... 3 4 14 27 32 43
Low Battery Costs................. 3 4 14 27 33 44
High Battery Costs................ 3 4 14 27 31 42
----------------------------------------------------------------------------------------------------------------
Table 184--PHEV Penetrations for Final Standards--Central Case, Low and High Battery Sensitivities--Medium-Duty
Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
Central case...................... 0 0 0 5 3 11
Low Battery Costs................. 0 0 0 5 5 12
High Battery Costs................ 0 0 4 9 6 11
----------------------------------------------------------------------------------------------------------------
Table 185--Average Incremental Vehicle Cost vs. No Action Case for Final Standards--Central Case, Low and High Battery Sensitivities--Medium-Duty
Vehicles
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Central case................................................. $125 $122 $847 $1,881 $2,416 $3,275 $1,444
Low Battery Costs............................................ 125 122 553 1,356 1,863 2,696 1,119
High Battery Costs........................................... 125 121 1,120 2,493 3,247 4,206 1,885
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. No Credit Trading Case
Similar to the approach we used for the light-duty GHG modeling
sensitivity (section IV.F.4 of the preamble), we conducted a No Trading
sensitivity for medium-duty vehicles. Refer to section IV.F.4 of this
preamble for modeling details that we applied for this No Trading case.
Table 186 and Table 187 present the CO2 targets and
achieved levels for the No Trading case and the No Action No Trading
case. Table 188 and Table 189 show the respective technology
penetrations for PEVs and PHEVs. Table 190 shows the incremental
compliance costs for the No Trading case for medium-duty vehicles.
Table 186--Projected Targets Under the No Trading Sensitivity for No Action Case and Final Standards (CO2 Grams/
Mile)--Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action-No Trading.............. 473 473 473 473 474 473
Final Standards-No Trading........ 460 452 408 352 313 274
----------------------------------------------------------------------------------------------------------------
[[Page 28082]]
Table 187--Projected Achieved Levels Under the No Trading Sensitivity for No Action Case and Final Standards
(CO2 Grams/Mile)--Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action-No Trading.............. 426 425 424 423 422 420
Final Standards-No Trading........ 413 406 366 317 282 247
----------------------------------------------------------------------------------------------------------------
Table 188--PEV Penetrations for Final Standards--Central Case, No Trading Sensitivity--Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action-No Trading.............. 8 8 8 8 8 9
Final Standards-No Trading........ 10 11 20 32 40 50
----------------------------------------------------------------------------------------------------------------
Table 189--PHEV Penetrations for Final Standards--Central Case, No Trading Sensitivity--Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action-No Trading.............. 0 0 0 0 0 0
Final Standards-No Trading........ 0 0 0 5 11 20
----------------------------------------------------------------------------------------------------------------
Table 190--Average Incremental Vehicle Cost vs. No Action Case for Final Standards--Central Case, No Trading Sensitivity--Medium-Duty Vehicles
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Standards-No Trading............................ $326 $412 $1,086 $2,072 $2,846 $3,806 $1,758
--------------------------------------------------------------------------------------------------------------------------------------------------------
H. Additional Illustrative Scenarios
1. No New BEVs Above Base Year Fleet--Light-Duty Vehicles
For this analysis, EPA has also assessed the ability for
manufacturers to comply with the final standards in an illustrative
scenario where No New BEV models are sold beyond those that were
already present in the MY 2022 fleet (5 percent of the new vehicle
market). In this ``No New BEVs Above Base Year Fleet'' scenario, we
restricted OMEGA so that ICE vehicles, HEVs and PHEVs cannot be
redesigned as a new BEV. EPA also applied this restriction to the No
Action case associated with this scenario. It is important to note that
MY 2023 BEV sales for the U.S. are expected to approach 10 percent
market share, so this analysis assumes a 50 percent reduction in BEV
sales even from current levels. Although EPA recognizes that this
scenario is highly unlikely to occur given the ongoing investment and
growth in consumer acceptance of BEVs, it is illustrative of the
potential range of compliance options available to manufacturers to
meet these standards.
EPA developed this scenario to evaluate concerns raised by some
commenters that the standards imposed a BEV ``mandate'' that would
dramatically transform the U.S. economy. All regulated entities
indicated their intention to produce BEVs as an increasing share of
their fleet to achieve GHG emissions reductions--including in the
absence of this rule due to their market strategies, the IRA, and other
factors. As already explained, the final standards do not impose any
BEV mandate, either legally or practically, and we expect manufacturers
to choose to produce a range of BEV, PHEV, HEV and ICE vehicles during
the timeframe for this rule. Nothing in the Clean Air Act requires EPA
to identify multiple technology pathways to achieve compliance or to
show that manufacturers can achieve the standards solely by relying on
alternatives to what is currently the most effective technology for
controlling emissions. Nonetheless, EPA performed this illustrative
scenario to evaluate certain commenters' claims that this rule would
force increased BEV adoption. EPA's modeling demonstrates that this is
not the case. Rather, the final standards are feasible even with no new
BEV adoption, albeit at a greater cost. As the modeling results show,
the industry can comply with the final standards by producing the base
year percentage of BEVs and a significant percentage of PHEVs. However,
as PHEVs are not as cost-effective for compliance as BEVs, the cost of
compliance increases. The corresponding GHG targets and achieved g/mile
levels are provided in Table 191 and Table 192. Technology penetrations
of PEVs, PHEVs, strong HEVs, and advanced ICE vehicles are summarized
in Table 193 through Table 196. Incremental costs are relative to the
alternative No Action case which also restricts additional production
of new BEVs. Costs are provided in Table 197.
[[Page 28083]]
Table 191--Projected Targets Under the No New BEVs Above Base Year Fleet Scenario for No Action Case and Final
Standards (CO2 Grams/Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action-No New BEVs............. 167 167 166 168 167 167
Final Standards-No New BEVs....... 169 152 134 118 101 84
----------------------------------------------------------------------------------------------------------------
Table 192--Projected Achieved Levels Under the No New BEVs Above Base Year Fleet Scenario for No Action Case and
Final Standards (CO2 Grams/Mile)--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action-No New BEVs............. 165 165 164 166 164 165
Final Standards-No New BEVs....... 167 150 133 117 102 84
----------------------------------------------------------------------------------------------------------------
Table 193--PEV Penetrations Under the No New BEVs Above Base Year Fleet Scenario, for No Action Case and Final
Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action-No New BEVs............. 14 14 14 13 12 13
Final Standards-No New BEVs....... 15 25 36 48 74 91
----------------------------------------------------------------------------------------------------------------
Table 194--PHEV Penetrations Under the No New BEVs Above Base Year Fleet Scenario, for No Action Case and Final
Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action-No New BEVs............. 9 8 9 7 7 7
Final Standards-No New BEVs....... 10 19 31 43 69 86
----------------------------------------------------------------------------------------------------------------
Table 195--Strong HEV Penetrations Under the No New BEVs Above Base Year Fleet Scenario, for No Action Case and
Final Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action-No New BEVs............. 20 22 24 18 22 23
Final Standards-No New BEVs....... 23 26 21 19 15 5
----------------------------------------------------------------------------------------------------------------
Table 196--Advanced ICE Penetrations Under the No New BEVs Above Base Year Fleet Scenario, for No Action Case
and Final Standards--Cars and Trucks Combined
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action-No New BEVs............. 28 35 37 34 33 37
Final Standards--No New BEVs...... 20 13 8 5 0 0
----------------------------------------------------------------------------------------------------------------
Table 197--Average Incremental Vehicle Cost vs. No Action Case Under the No New BEVs Above Base Year Fleet Scenario for the Final Standards--Cars and
Trucks Combined
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Standards-No New BEVs........................... $205 $1,538 $2,536 $3,019 $4,722 $5,459 $2,913
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. No New BEVs Above Base Year Fleet--Medium-Duty Vehicles
As we did for light-duty vehicles, EPA has also assessed the
ability for manufacturers to comply with the final medium-duty GHG
standards in a scenario where No New BEV models are sold beyond those
already present in the base year fleet used for this analysis.\1298\ In
the medium-duty ``No New BEVs'' scenario, OMEGA is restricted so that
any ICE, HEV or PHEV vehicle cannot be redesigned as a new BEV. We also
[[Page 28084]]
restrict OMEGA from redesigning new BEVs for the corresponding No
Action case; OMEGA applies PHEVs to satisfy CARB's Advanced Clean
Trucks (ACT) ZEV requirements. Although EPA recognizes that the No New
BEVs scenario is highly unlikely to occur given the ongoing investment
in BEVs, it is illustrative of the range of compliance options
available to the industry to meet these standards.
---------------------------------------------------------------------------
\1298\ No BEVs existed in the market for the MY 2020 medium-duty
vehicle base year fleet used for this analysis; therefore, ``No New
BEVs'' is analogous to ``No BEVs.'' Accordingly, all electrified
vehicles for this scenario are PHEVs.
---------------------------------------------------------------------------
As the modeling results show, the industry can still comply with
the final medium-duty GHG standards by producing a significant
percentage of PHEVs. However, as PHEVs are not as cost-effective for
compliance as pure battery electric vehicles, the costs of compliance
increase. The corresponding GHG targets and achieved g/mile levels are
provided in Table 198 and Table 199. Technology penetrations of PEVs,
PHEVs, and advanced ICE vehicles \1299\ are summarized in Table 200
through Table 202. Incremental costs are relative to the alternative No
Action case which also restricts additional production of new BEVs.
Costs are provided in Table 203.
---------------------------------------------------------------------------
\1299\ As discussed, strong HEVs were not modeled for medium-
duty vans and pickup trucks.
Table 198--Projected Targets Under the No New BEVs Above Base Year Fleet Sensitivity for No Action Case and
Final Standards (CO2 Grams/Mile)--Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action-No New BEVs............. 477 477 477 478 478 478
Final Standards-No New BEVs....... 461 454 411 355 318 278
----------------------------------------------------------------------------------------------------------------
Table 199--Projected Achieved Levels Under the No New BEVs Above Base Year Fleet Sensitivity for No Action Case
and Final Standards (CO2 Grams/Mile)--Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032
----------------------------------------------------------------------------------------------------------------
No Action-No New BEVs............. 459 455 452 448 445 441
Final Standards-No New BEVs....... 459 454 411 356 317 279
----------------------------------------------------------------------------------------------------------------
Table 200--PEV Penetrations Under the No New BEVs Above Base Year Fleet Sensitivity, for No Action Case and
Final Standards--Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action-No New BEVs............. 3 4 5 6 7 8
Final Standards-No New BEVs....... 3 4 16 30 39 51
----------------------------------------------------------------------------------------------------------------
Table 201--PHEV Penetrations Under the No New BEVs Above Base Year Fleet Sensitivity, for No Action Case and
Final Standards--Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action-No New BEVs............. 3 4 5 6 7 8
Final Standards-No New BEVs....... 3 4 16 30 39 51
----------------------------------------------------------------------------------------------------------------
Table 202--Advanced ICE Penetrations Under the No New BEVs Above Base Year Fleet Sensitivity, for No Action Case
and Final Standards--Medium-Duty Vehicles
----------------------------------------------------------------------------------------------------------------
2027 (%) 2028 (%) 2029 (%) 2030 (%) 2031 (%) 2032 (%)
----------------------------------------------------------------------------------------------------------------
No Action-No New BEVs............. 57 57 56 55 55 54
Final Standards-No New BEVs....... 57 56 50 42 38 31
----------------------------------------------------------------------------------------------------------------
Table 203--Average Incremental Vehicle Cost vs. No Action Case Under the No New BEVs Above Base Year Fleet Sensitivity for the Final Standards--Medium-
Duty Vehicles
[2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 2028 2029 2030 2031 2032 6-yr avg
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Standards-No New BEVs........................... $129 $181 $1,284 $2,850 $4,189 $5,360 $2,332
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 28085]]
V. EPA's Basis That the Final Standards are Feasible and Appropriate
Under the Clean Air Act
A. Overview
The Clean Air Act authorizes EPA to establish emissions standards
for motor vehicles to regulate emissions of air pollutants that
contribute to air pollution which, in the Administrator's judgment, may
reasonably be anticipated to endanger public health or welfare. See
also Coalition for Responsible Regulation v. EPA, 684 F. 3d at 122
(``the job Congress gave [EPA] in CAA section 202(a)'' is ``utilizing
emission standards to prevent reasonably anticipated endangerment from
maturing into concrete harm''). As discussed in section II of this
preamble, emissions from motor vehicles contribute to ambient levels of
pollutants for which EPA has established health-based NAAQS. These
pollutants are linked with respiratory and/or cardiovascular problems
and other adverse health impacts leading to increased medication use,
hospital admissions, emergency department visits, and premature
mortality. In addition, light and medium-duty vehicles are significant
contributors to the U.S. GHG emissions inventories. As discussed in
section II of this preamble, there is a critical need for further
criteria pollutant and GHG reductions to address the adverse impacts of
air pollution from light- and medium-duty vehicles on public health and
welfare.
To this end, as in EPA's past light and medium duty rulemakings, in
this final rule we considered the following factors in setting final
standards: technology effectiveness, its cost (including per vehicle,
per manufacturer, and per purchaser), the lead time necessary to
implement the technology, and, based on this, the feasibility of
potential standards; the impacts of potential standards on emissions
reductions; the impacts of standards on oil conservation and energy
security; the impacts of standards on fuel savings by vehicle
operators; the impacts of standards on the vehicle manufacturing
industry; as well as other relevant factors such as impacts on safety.
To evaluate and balance these statutory factors and other relevant
considerations, EPA must necessarily estimate a means of compliance:
what technologies are projected to be available to be used, what do
they cost, and what is appropriate lead time for their deployment.
Thus, to support the feasibility of the final standards, EPA identified
a potential compliance pathway. Having identified one means of
compliance, EPA's task is to ``answe[r] any theoretical objections'' to
that means of compliance, ``identif[y] the major steps necessary,'' and
to ``offe[r] plausible reasons for believing that each of those steps
can be completed in the time available.'' NRDC v. EPA, 655 F. 2d at
332. That is what EPA has done here in this final rule, and indeed what
it has done in all of the motor vehicle emission standard rules
implementing section 202(a) of the Act for half a century.
In assessing the means of compliance, EPA considers updated data
available at the time of this rulemaking, including real-world
technological and corresponding costs developments related to
emissions-reducing technologies for light and medium duty vehicles. The
statute directs EPA to assess the ``development and application of the
requisite technology, giving appropriate consideration to the cost of
compliance within'' the relevant timeframe, and specifically compels
EPA to consider relevant emissions-reduction technologies on vehicles
and engines regardless of ``whether such vehicles and engines are
designed as complete systems or incorporate devices to prevent or
control such pollution.'' CAA section 202(a)(1), (2). The statute does
not prescribe particular technologies, but rather entrusts to the EPA
Administrator the authority and obligation to identify a range of
available technologies that have the potential to significantly control
or prevent emissions of the relevant pollutants and establish standards
based on his consideration of the lead-time and costs for such
technologies, along with other factors. Pursuant to the statutory
mandate and as explained throughout this preamble, EPA has considered
the full range of vehicle technologies that meet these criteria and
that we anticipate will be available in the MY 2027-32 timeframe,
including numerous ICE and advanced ICE vehicle, HEV, PHEV, and BEV
technologies.
With continued advances in internal combustion emissions controls
and a range of vehicle electrification technologies being more widely
deployed, EPA believes substantial further emissions reductions are
feasible and appropriate under the Clean Air Act. It has been a decade
since EPA updated light-duty vehicle criteria pollutant standards.
While light-duty GHG standards have been updated more recently, various
developments since the most recent light-duty standards are supportive
of even greater levels of production and adoption of PEV technology,
which is highly effective for controlling tailpipe emissions of
criteria pollutants and GHGs.\1300\ These developments include the
public announcements by manufacturers about their plans to transition
fleets to electrified vehicles, the increase in PEV model availability
across all vehicle types, continued growth in consumer acceptance--and
sales--of PEVs, and the additional support for PEVs provided by the
Inflation Reduction Act (IRA). Prior to the passage of the IRA, EPA
received input from auto manufacturers that increasing the market share
of PEVs is now technologically feasible but that it is important to
address consumer issues such as charging infrastructure and the cost to
purchase a PEV, as well as manufacturing issues such as battery supply
and manufacturing costs. The IRA provides powerful incentives in all of
these areas that will address these issues in the timeframe considered
in this rulemaking. Indeed, EPA's projections, which are consistent
with a range of third-party projections, suggest that automakers sell
significant numbers of PEVs even absent any revised standards, in part
due to the incentives of the IRA. EPA has consulted closely with DOE in
considering the impacts of the IRA in our assessment of the appropriate
standards and those impacts are an important element of EPA's cost and
feasibility assessment.\1301\
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\1300\ See also the extensive discussion of recent developments
in emission-reducing technologies, including PEV technology, in
sections I.A.2 and IV.C.1 of this preamble.
\1301\ It is important to note that, although E.O. 14037
identified a goal for 50 percent of U.S. new vehicle sales to be
zero-emission vehicles by 2030, the E.O. only directed EPA to
consider beginning work on a new rulemaking and to do so consistent
with applicable law. EPA exercised its technical judgment based on
the record before it in developing this rule consistent with the
authority of section 202 of the Clean Air Act.
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The balance of this section summarizes the key factors found in the
administrative record (including the entire preamble, RIA, and RTC)
that form the basis for the Administrator's determination that the
final standards are feasible and appropriate under our Clean Air Act
authority. Section V.B of the preamble discusses the statutory factors
of technological feasibility, compliance costs, and lead time, and it
explains that the final standards are predicated upon technologies that
are feasible and of moderate cost during the timeframe for this rule.
Section V.C of the preamble evaluates emissions of GHGs and criteria
pollutants, and it finds that the final standards would achieve
significant GHG and criteria pollutant reductions that make an
important contribution to mitigating air pollution, including climate
change.
[[Page 28086]]
Section V.D of the preamble evaluates other relevant factors that are
important to evaluating the real-world feasibility of the standards as
well as their impact, including impacts on purchasers, energy, safety,
and other factors. It concludes that the final standards will result in
considerable benefits for purchasers and operators of light and medium
duty vehicles, create positive energy security benefits for the United
States, and not create an unreasonable risk to safety. Section V.E of
the preamble explains how the Administrator exercised the discretion
Congress entrusted the agency with in balancing the various factors we
considered. It articulates the key factors that were dispositive to the
Administrator's decision in selecting the final standards, such as
feasibility, compliance costs, lead time, and emissions reductions; as
well as other factors that were not used to select the standards but
that nonetheless provide further support for the Administrator's
decision. On balance, this section V, together with the rest of the
administrative record, demonstrates that the final standards are
supported by voluminous evidence, the product of the agency's well-
considered technical judgment and the Administrator's careful weighing
of the relevant factors, and that these standards faithfully implement
the important directive contained in section 202(a) of the Clean Air
Act to reduce emissions of air pollutants from motor vehicles which
cause or contribute air pollution that may reasonably be anticipated to
endanger public health or welfare.
B. Consideration of Technological Feasibility, Compliance Costs and
Lead Time
The technological readiness of the auto industry to meet the final
standards for model years 2027-2032 is best understood in the context
of over a decade of light-duty vehicle emissions reduction programs in
which the auto industry has introduced emissions-reducing technologies
in a wide lineup of ever more cost-effective, efficient, and high-
volume vehicle applications. Among the range of technologies that have
been demonstrated over the past decade, electrification technologies
have seen particularly rapid development and lower costs. Since EPA
first started assessing technologies for reducing GHG emissions, we
have recognized that ``electrification'' represents a full spectrum of
technologies, from reducing demand on a gasoline powertrain for certain
accessories or circumstances (such as regenerative braking or engine
stop-start), to hybrid gasoline-electric powertrains to pure electric
powertrains. In light of increased automaker investment and reduced
costs, the level of electrification across all the No Action scenarios,
as well as the policy alternatives considered in this rule, is higher
than in any of EPA's prior rulemakings. In particular, the advancements
across the spectrum of electrification technologies, including those
with tailpipe emissions rates much lower than ICE-only vehicles, are
supportive of EPA setting standards with much lower GHG,
NMOG+NOX, and PM levels than was achievable in earlier
rulemakings. Manufacturers have also demonstrated impressive gains in
controlling NMOG+NOX and PM from vehicles with internal
combustion engines. Many vehicles are already demonstrating emissions
performance at one-third to one half of the Tier 3 NMOG+NOX
final fleet average of 30 mg/mile through optimized engine and
aftertreatment design and controls. In addition, there have been
approximately 100 million gasoline particulate filters (GPFs) installed
in light-duty vehicles worldwide, with current GPFs typically reducing
PM emissions by over 95 percent.
In this rulemaking, unlike some prior vehicle emissions standards
(including those adopted in the Clean Air Act of 1970), the technology
necessary to achieve significantly more stringent standards has already
been developed and demonstrated in production vehicles. For example,
vehicles equipped with gasoline particulate filters are already in
widespread use in Europe and China; manufacturers have been building
gasoline particulate filter equipped cars and trucks in the U.S. for
export to countries with more stringent PM standards; and at least one
manufacturer has been selling vehicles with gasoline particulate
filters in the U.S.\1302\ PEVs are now being produced in large numbers
in every segment and size of the current light-duty fleet, ranging from
small cars such as Tesla's Model 3 or Hyundai's Kona to light trucks
such as Ford's F150 Lightning, and their production for the U.S. market
have quadrupled in the last few years.\1303\ Large fleet owners have
also begun fulfilling fleet electrification commitments by taking
delivery of rapidly growing numbers of BEV medium-duty delivery
vans.\1304\ In setting standards, EPA considers the extent of further
deployment that is warranted to provide the benefits to public health
and welfare, and potential constraints, such as costs, raw material
availability, component supplies, redesign cycles, refueling
infrastructure, and consumer acceptance. The extent of these potential
constraints has diminished significantly, even since the 2021 rule, as
evidenced by increased automaker investments, increased acceptance by
consumers, further deployment of charging infrastructure, and
significant support from Congress to address such areas as upfront
purchase price, charging infrastructure, critical mineral supplies, and
domestic supply chain manufacturing.
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\1302\ Ferrari noted in its comments it has been selling
vehicles with GPF in the US since 2019. (Docket EPA-HQ-OAR-2022-
0829-0637, p. 3).
\1303\ Estimated at 8.4 percent of production in MY 2022, up
from 4.4 percent in MY 2021 and 2.2 percent in MY 2020. See also the
discussion of U.S. PEV penetration in I.A.2.ii.
\1304\ See the discussion of fleet electrification commitments
in I.A.2.ii.
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In response to these diminished constraints and the increased
stringency of the standards, we expect that automakers will continue to
adopt advanced technologies at an increasing pace across more of their
vehicle fleets. EPA has carefully considered potential remaining
constraints on further deployment of these advanced technologies. For
example, in addition to considering the breadth of current product
offerings, EPA has also considered vehicle redesign cycles. Based on
previous public comments and industry trends, manufacturers generally
require about five years to design, develop, and produce a new vehicle
model.\1305\ EPA's technical assessment for this rule accounts for
these redesign limits.\1306\ Within the modeling that EPA conducted to
support this rule, we have assumed limits to the rate at which a
manufacturer can alter its technology mix. We have also, after
consultation with DOE, applied limits to the ramp up of battery
production, considering the time needed to increase the availability of
raw materials and construct or expand battery production facilities.
Constraints for redesign and battery production in our compliance
modeling are described in more detail in Chapter 2.6 of the RIA. Our
modeling also incorporates constraints related to
[[Page 28087]]
consumer acceptance. Under our central case analysis assumptions, the
model anticipates that consumers will in the near term tend to favor
ICE vehicles over PEVs when two vehicles are comparable in cost and
capability.\1307\ Taking into account individual consumer preferences,
we anticipate that PEV acceptance and adoption will continue to
accelerate as consumer familiarity with PEVs grows, as demonstrated in
the scientific literature on PEV acceptance and consistent with typical
diffusion of innovation. Adoption of PEVs is expected to be further
supported by expansion of key enablers of PEV acceptance, namely
increasing market presence of PEVs, more model choices, expanding
infrastructure, and decreasing costs to consumers.\1308\ See also
section IV.C.5 of the preamble and RIA Chapter 4. Overall, given the
flexibility to adopt diverse compliance strategies, the number and
breadth of current low- or zero-emission vehicles and the assumptions
we have made to limit the rate at which new vehicle technologies are
adopted, our assessment shows that there is sufficient lead time for
the industry to deploy existing technologies more broadly and
successfully comply with the final standards.
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\1305\ For example, in its comments on the 2012 rule, Ford
stated that manufacturers typically begin to firm up their product
plans roughly five years in advance of actual production. Docket
OAR-2009-0472-7082.1, p. 10.
\1306\ In our compliance modeling, we have limited vehicle
redesign opportunities through MY 2029 in our compliance modeling to
every 7 years for light- and medium-duty pickup trucks and medium-
duty vans, and 5 years for all other vehicles. We are assuming that
manufacturers have sufficient lead team to adjust product redesign
years after MY 2029, so we do not continue to apply redesign
constraints for MYs 2030 and beyond.
\1307\ EPA's compliance modeling estimates the consumer demand
for PHEV, BEV and ICE vehicles using a consumer ``generalized cost''
that includes elements of the purchase cost (including any purchase
incentives), vehicle maintenance and repair costs, and fuel
operating costs as described in RIA Chapter 4.1.
\1308\ Jackman, D K, K S Fujita, H C Yang, and M Taylor. 2023.
Literature Review of U.S. Consumer Acceptance of New Personally
Owned Light Duty Plug-in Electric Vehicles. Washington, DC: U.S.
Environmental Protection Agency.
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Our analysis projects that for the industry overall, one potential
compliance strategy manufacturers could choose to meet the standards is
by using 68 percent PEVs in MY 2032, of which 56 percent are BEVs and
13 percent are PHEVs. EPA believes that this is an achievable level
based on our technical assessment for this rule that includes
consideration of the feasibility and required lead time, including
acceptance of PEVs in the market. Our assessment of the appropriateness
of the level of PEVs in our analysis is also informed by public
announcements by manufacturers about their plans to transition fleets
to electrified vehicles, as described in section I.A.2 of this preamble
and further discussed in RIA Chapter 3.1.3. We also note that our ``No
Action'' scenario, which models the effect of the IRA but does not
attempt to account for manufacturers' announced strategies, shows that
PEV penetration in the absence of revised standards is expected to grow
from 31 percent in MY 2027 to 39 percent in MY 2030. We have good
reason to believe that our No Action PEV estimates are conservative,
and that they could be higher given that mid-range third party
estimates range from 48 percent to 58 percent in
2030.1309 1310 1311 1312 1313 1314 Mid-range third party
estimates exclude extreme estimates, which did not implement all IRA
incentives (42 percent in 2030) or are self-described as ``High'' (60
and 68 percent in 2030) or ``Advanced'' (65 percent in 2030) by
respective study authors.1315 1316 1317 1318 We project our
standards, if manufacturers choose the potential compliance path
modeled, would result in PEV penetration rates of 32 percent in MY 2027
and 53 percent in MY 2030 (i.e., almost no change in MY 2027 and only
an 14 percentage point increase in 2030 as compared to the No Action
scenario). We do anticipate greater PEV penetration in later years
(growing from 47 percent in the No Action scenario in MY 2032 to 68
percent under the modeled potential compliance path in 2032) but the
very substantial rates of PEV penetration under the No Action scenario
underscore that a shift to widespread use of electrification
technologies is already well underway, which contributes to the
feasibility of further emissions controls under these standards.
Indeed, in light of the very substantial rates of PEV penetration
anticipated by EPA, as well as a variety of third parties, even in the
No Action scenario (i.e., absent revised standards) it would be
unreasonable for EPA not to take electrification technologies into
account in assessing the feasibility of additional reductions of
dangerous air pollutants. More detail about our technical assessment,
and the assumptions for the production feasibility and consumer
acceptance of PEVs is provided in section IV of this preamble, and
Chapters 2, 3, 4, and 6 of the RIA.
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\1309\ Cole, Cassandra, Michael Droste, Christopher Knittel,
Shanjun Li, and James H. Stock. 2023. ``Policies for Electrifying
the Light-Duty Fleet in the United States.'' AEA Papers and
Proceedings 113: 316-322. doi: https://doi.org/10.1257/pandp.20231063.
\1310\ IEA. 2023. ``Global EV Outlook 2023: Catching up with
climate ambitions.'' International Energy Agency.
\1311\ Forsythe, Connor R., Kenneth T. Gillingham, Jeremy J.
Michalek, and Kate S. Whitefoot. 2023. ``Technology advancement is
driving electric vehicle adoption.'' PNAS 120 (23). doi: https://doi.org/10.1073/pnas.2219396120.
\1312\ Bloomberg NEF. 2023. ``Electric Vehicle Outlook 2023.''
\1313\ U.S. Department of Energy, Office of Policy. 2023.
``Investing in American Energy: Significant Impacts of the Inflation
Reduction Act and Bipartisan Infrastructure Law on the U.S. Energy
Economy and Emissions Reductions.''
\1314\ Slowik, Peter, Stephanie Searle, Hussein Basma, Josh
Miller, Yuanrong Zhou, Felipe Rodriguez, Claire Buysse, et al. 2023.
``Analyzing the Impact of the Inflation Reduction Act on Electric
Vehicle Uptake in the United States.'' International Council on
Clean Transportation and Energy Innovation Policy & Technology LLC.
\1315\ Cole, Cassandra, Michael Droste, Christopher Knittel,
Shanjun Li, and James H. Stock. 2023. ``Policies for Electrifying
the Light-Duty Fleet in the United States.'' AEA Papers and
Proceedings 113: 316-322. doi: https://doi.org/10.1257/pandp.20231063.
\1316\ Slowik, Peter, Stephanie Searle, Hussein Basma, Josh
Miller, Yuanrong Zhou, Felipe Rodriguez, Claire Buysse, et al. 2023.
``Analyzing the Impact of the Inflation Reduction Act on Electric
Vehicle Uptake in the United States.'' International Council on
Clean Transportation and Energy Innovation Policy & Technology LLC.
\1317\ Wood, Eric, Brennan Borlaug, Matt Moniot, D-Y Lee, Yanbo
Ge, Fan Yang, and Zhaocai Liu. 2023. ``The 2030 National Charging
Network: Estimating U.S. Light-Duty Demand for Electric Vehicle
Charging Infrastructure.'' National Renewable Energy Laboratory.
Accessed December 18, 2023. https://www.nrel.gov/docs/fy23osti/85654.pdf.
\1318\ U.S. Department of Energy, Office of Policy. 2023.
``Investing in American Energy: Significant Impacts of the Inflation
Reduction Act and Bipartisan Infrastructure Law on the U.S. Energy
Economy and Emissions Reductions.''
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At the same time, we note that the GHG and criteria pollutant
standards are performance-based, phase-in over six years, and do not
mandate any specific technology for any manufacturer or any vehicle.
Moreover, the overall industry does not necessarily need to reach this
level of PEVs, or this particular percentage of BEVs and PHEVs, in
order to comply--the projection in our analysis is one of many possible
compliance pathways that manufacturers could choose to take under the
performance-based standards. For example, for the GHG standards, our
analysis indicates that it would be technologically feasible for PHEVs
to meet the CO2 footprint targets established in this rule
across a wide range of footprints and vehicle styles (and thus for a
manufacturer to meet the fleetwide average standards with a diverse
fleet of PHEVs). The structure of the standards--performance-based with
averaging, banking and trading (ABT) flexibilities, phased-in over six
model years--enables manufacturers to choose which technologies to
apply to which vehicles and when to apply them, which increases
consumer choice and reduces costs. For example, under the GHG
standards, manufacturers that choose to increase their sales of HEV
technologies or apply more advanced technology to existing non-hybrid
ICE vehicles, would require a smaller number of PEVs than we have
projected in our assessment to comply with the standards. Similarly,
manufacturers that choose to sell more vehicles with PHEV
[[Page 28088]]
technology would need less improvement to non-hybrid ICE vehicles and
smaller volumes of HEVs and BEVs in order to comply.
Moreover, while all the standards can be met by an array of
different technologies, the array of available technologies for meeting
each standard varies. For example, in addition to the above
possibilities, a manufacturer could meet the PM standard solely through
adding gasoline particulate filters to ICE vehicles. Similarly,
manufacturers could meet the NMOG+NOX standard solely
through improvements in engines and aftertreatment systems in ICE
vehicles. In addition, while EPA is basing its judgment regarding
feasibility of the standards on the numerous technologies it has
identified as available today for meeting all the standards,
manufacturers and their suppliers are highly innovative and may develop
novel technologies, not available at this time, or find ways of
reducing cost and complexity while increasing effectiveness of existing
technologies for achieving the requisite emissions reductions. For
example, when EPA implemented certain statutory standards following the
1970 Clean Air Act Amendments, manufacturers met those standards
through three-way catalysts, a heretofore unproven technology. More
recently, manufacturers responded to EPA's 2007 heavy-duty rule by
applying selective catalytic reduction technologies, even though EPA
had not anticipated such technology would be available for
compliance.\1319\
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\1319\ 66 FR 5002, 5036.
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In our technical assessment, we present various sensitivities in
which the industry overall is projected to apply technologies in
different proportions, with each scenario representing a different
feasible compliance pathway. We do not expect, and the standards do not
require, that all manufacturers follow a similar pathway. Instead,
individual manufacturers can choose to apply a mix of technologies--
including various levels of base ICE, advanced ICE, strong HEV, PHEV,
and BEV technologies--that best suits the company's particular product
mix and market position as well as its strategies for investment and
technology development. Considering the range of potential paths for
designing compliant vehicles and the diversity of consumer demand for
vehicles, EPA anticipates that manufacturers will employ a wide range
of technologies, applied to ICE, hybrid, plug-in hybrid and fully
electric vehicles to meet their fleetwide average standards.
In considering the feasibility of the standards, EPA also considers
the impact of available compliance flexibilities on automakers'
compliance options.\1320\ The advanced technologies that automakers are
continuing to incorporate in vehicle models today directly contribute
to each company's compliance plan (i.e., these vehicle models have
lower criteria pollutant and GHG emissions), and manufacturers can
choose to comply with the standards outright through their choice of
emissions reducing technologies. That is, the standards are feasible
even absent credit trading across manufacturers, as demonstrated by our
``no credit trading'' sensitivity in section IV.F.4 and G.2.\1321\
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\1320\ While EPA considered these compliance flexibilities in
assessing the feasibility of the standards, EPA did not reopen such
flexibilities, except to the extent that we finalized a specific
flexibility as in section III of this preamble. Specifically, EPA
did not reopen the structure or general availability of ABT.
\1321\ Technical feasibility of the standards is further
discussed in RIA Chapters 3.2 and 3.5.
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At the same time, automakers typically have widely utilized the
program's established ABT provisions which provide a variety of
flexible paths to plan compliance. We have discussed this dynamic at
length in past rules, and we anticipate that this same dynamic will
support compliance with this rulemaking. Although the ABT program for
GHG and criteria pollutants have some differences (as discussed in
detail in sections III.C.4 and III.D.9 of the preamble), they
fundamentally operate in a similar fashion. The GHG credit program was
designed to recognize that automakers typically have compliance
opportunities and strategies that differ across their fleet, as well as
a multi-year redesign cycle, so not every vehicle will be redesigned
every year to add emissions-reducing technology. Moreover, when
technology is added, a given vehicle will generally not achieve
emissions reductions corresponding exactly to a single year-over-year
change in stringency of the standards. Instead, in any given model
year, some vehicles will be ``credit generators,'' over-performing
compared to their footprint-based CO2 emissions targets in
that model year, while other vehicles will be ``debit generators'' and
under-performing against their standards or targets. As the standards
reach increasingly lower numerical emissions levels, some vehicle
designs that had generated credits in earlier model years may instead
generate debits in later model years. In MY 2032 when the final
standards reach the lowest level, it is possible that only some vehicle
technologies are generating positive credits, and vehicles equipped
with other technologies all generate varying levels of debits. In the
criteria pollutant program, the NMOG+NOX standards also
allow manufacturers to average emissions across their fleet, allowing
some vehicles to have higher emissions (i.e., certify to higher
emissions ``bins''), and other vehicles lower emissions (i.e., certify
to lower emissions bins), than the fleet-wide average standard. For
example, along the continuum of vehicle electrification, PHEVs with
longer all electric range and efficient internal combustion engines and
BEVs might generate credits, while non-hybrid ICE vehicles and some
less effective PHEVs and strong HEVs might generate some debits. Even
in this case, the application of a greater degree of vehicle
electrification short of BEV technology, and further adoption of ICE
and advanced ICE technologies can remain an important part of a
manufacturer's compliance strategy by reducing the amount of debits
generated by these vehicles. A greater application of technologies to
vehicles with internal combustion engines (e.g., strong hybrids and
PHEVs) can enable compliance with fewer BEVs than if less technology
was adopted for such vehicles, and therefore enable the tailoring of a
compliance strategy to the manufacturer's specific market and product
offerings. Together, an automaker's mix of credit-generating and debit-
generating vehicles determine its compliance with GHG standards, and
certain criteria pollutant standards, for that year.
Moreover, the trading provisions of the program allow each
manufacturer to design a compliance strategy relying not only on
overcompliance and undercompliance by different vehicles or in
different years within its own fleet, but also between different
manufacturers. Credit trading is a compliance flexibility provision
that allows one vehicle manufacturer to purchase credits from another,
accommodating the ability of manufacturers to make strategic choices in
planning for and reacting to normal fluctuations in an automotive
business cycle. When credits are available for less than the marginal
cost of compliance, EPA would anticipate that an automaker might choose
to adopt a compliance strategy relying at least in part on purchasing
credits.
The final performance-based standards with ABT provisions give
manufacturers a degree of flexibility in the design of specific
vehicles and their fleet offerings, while allowing industry
[[Page 28089]]
overall to meet the standards and thus achieve the health and
environmental benefits projected for this rulemaking at a lower cost.
EPA has considered ABT in the feasibility assessments for many previous
rulemakings since EPA first began incorporating ABT credits provisions
in mobile source rulemakings in the 1980s (see section III.C.4 of the
preamble for further information on the history of ABT) and continues
that practice for this rule. EPA's annual Automotive Trends Report
illustrates how different automakers have chosen to make use of the GHG
program's various credit features.\1322\ It is clear that manufacturers
are widely utilizing the various credit programs available, and we have
every expectation that manufacturers will continue to take advantage of
the compliance flexibilities and crediting programs to their fullest
extent, thereby providing them with additional tools in finding the
lowest cost compliance solutions in light of the revised standards.
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\1322\ Environmental Protection Agency, ``The 2023 EPA
Automotive Trends Report: Greenhouse Gas Emissions, Fuel Economy,
and Technology since 1975,'' EPA-420-R-23-033, December 2023.
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While the potential value of credit trading as a means of reducing
costs to automakers was always clear, there is increasing evidence that
automakers have successfully adopted credit trading as an important
compliance strategy that reduces costs. The market for trading credits
is now well established. As shown in the most recent EPA Trends Report,
21 vehicle firms collectively have participated in over 100 credit
trading transactions totaling 194 Tg of credits since the inception of
the EPA program through Model Year 2022. These firms include many of
the largest automotive firms.\1323\ Several of these manufacturers have
publicly acknowledged the importance of considering credit purchase or
sales as part of their business plans to improve their competitive
position.1324 1325 For firms with new vehicle production
made up entirely or primarily of credit-generating vehicles, the
revenue generated from credit sales can help to fund the development of
GHG-reducing technologies and offset production costs. Other firms have
the option of purchasing credits if they choose to make a fleet that is
overall deficit-generating. This can be a cost-effective compliance
strategy, especially for companies that make lower-volume vehicles
where the incremental development costs for GHG-reducing technologies
would be higher on a per-vehicle basis than for another company. The
opportunity to purchase credits can also enable a company to continue
specializing in vehicle applications where the application of advanced
GHG-reducing technologies may be more costly than purchasing credits.
For example, manufacturers of light- and medium-duty pickups might
choose to purchase credits rather than apply BEV technology to some of
those vehicles used frequently for long distance towing applications,
at least in the shorter term when higher capacity batteries might be
used to accommodate the existing charging infrastructure. As another
example, a small volume manufacturer, which tends to have fewer vehicle
models, might choose to comply partly through the purchase of credits
instead of adding across its entire line of models technology that
brings the emissions of each vehicle down to the target level.
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\1323\ EPA 2023 Trends Report, Figure 5.12.
\1324\ ``FCA historically pursued compliance with fuel economy
and greenhouse gas regulations in the markets where it operated
through the most cost effective combination of developing,
manufacturing and selling vehicles with better fuel economy and
lower GHG emissions, purchasing compliance credits, and, as allowed
by the U.S. federal Corporate Average Fuel Economy (``CAFE'')
program, paying regulatory penalties.'' Stellantis N.V. (2020).
``Annual Report and Form 20-F for the year ended December 31,
2020.''
\1325\ ``We have several options to comply with existing and
potential new global regulations. Such options include increasing
production and sale of certain vehicles, such as EVs, and curtailing
production of less fuel efficient ICE vehicles; technology changes,
including fuel consumption efficiency and engine upgrades; payment
of penalties; and/or purchase of credits from third parties. We
regularly evaluate our current and future product plans and
strategies for compliance with fuel economy and GHG regulations''
General Motors Company (2022). ``Annual Report and Form 10-K for the
fiscal year ended December 31, 2021.''
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In light of the evidence of increased adoption of trading as a
compliance strategy and the increased vehicle sales from EV-only
manufacturers (who are likely to view credit sales as a potential
revenue stream), EPA has included the ability of manufacturers to trade
credits as part of our central case compliance modeling for this rule,
rather than as a sensitivity analysis as we did in the modeling for the
2021 rule. We anticipate that the economic efficiencies of credit
trading will generally be attractive to automakers, and thus we
consider it appropriate to take trading into account in estimating the
costs of the standards. However, trading is an optional compliance
flexibility, and we recognize that automakers may choose to use it in
their compliance strategies to varying degrees. For this final rule,
EPA has analyzed a sensitivity case in which we assume that no
manufacturers take advantage of the credit trading flexibility. As
noted above, the active and widespread participation in credit trading
(including by EV-only manufacturers) to date indicates that such an
assumption is unlikely to apply across the entire industry. However, it
is an illustrative bounding case since we find that all manufacturers
can comply by only the application of technology without any reliance
on purchased credits, at a cost that is similar to our central case
analysis. In other words, we conclude that the standards are feasible
and appropriate even in the absence of trading.
As part of its assessment of technological feasibility and lead
time, EPA has considered the cost for the auto industry to comply with
the revised standards. See section IV.D of the preamble and Chapter 12
of the RIA for our analysis of compliance costs. The estimated average
cost to manufacturers to meet the light-duty standards (both criteria
and GHG) is approximately $2,100 (2022 dollars) per vehicle in MY 2032,
which is within the range of costs projected in prior rules, which EPA
estimated at about $1,800 (2010 dollars, equivalent to approximately
$2,400 in 2022 dollars), and $1,000 (2018 dollars, equivalent to
approximately $1,200 in 2022 dollars) per vehicle for the 2012 and 2021
LD GHG rules respectively. The estimated average cost to comply for
medium-duty manufacturers is projected to be $3,300 (2022 dollars) in
2032, compared to $1,400 (2013 dollars, equivalent to $1,700 in 2022
dollars) in the HD Phase 2 rulemaking.\1326\ Over the entire MY 2027-
2032 timeframe, the average cost of the light-duty standards ($1,200)
represents less than 3 percent of the projected average cost of a new
vehicle (about $44,000), comparable to relative cost increases in prior
rules.1327 1328 Similarly, the medium-
[[Page 28090]]
duty vehicle six-year average (MYs 2027-2032) cost increase is $1,400,
which is 2% higher than the 6-year average in the no action case.\1329\
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\1326\ We note that the costs we present for this rule in this
paragraph reflect the costs of controls to meet all the standards we
are promulgating, including for GHG, PM, and NMOG+NOX. By
contrast, the costs we present for the prior 2012 LD GHG, 2021 LD
GHG, and HD Phase 2 GHG Rules reflects only costs to achieve GHG
standards. Were EPA to consider the cumulative costs of prior GHG
and criteria pollutant rules, those costs would appear relatively
higher.
\1327\ The 2010 rule estimated an average MY 2016 per-vehicle
cost of $948 (2007 dollar years, see 75 FR 25348), which represents
2.8 percent of the average price of a vehicle in 2016 ($34,077). The
2012 rule estimated an average MY 2023 vehicle cost of $1,425 (2010
dollar years, see 77 FR 62920), which represents 2.9 percent of the
average price of a vehicle in 2023 ($48,759). Source for 2016
average vehicle price: https://www.edmunds.com/about/press/average-
vehicle-transaction-price-hits-all-time-high-in-2016-according-to-
edmundscom.html#:~:text=SANTA%20MONICA%2C%20CA%20%E2%80%94%20December
%2015,shopping%20network%2C%20Edmunds.com. Source for 2023 average
vehicle price:https://mediaroom.kbb.com/2024-01-11-Automotive-
Market-Shifts-to-Favor-Buyers-as-US-New-Vehicle-Prices-Down-Record-
2-4-Year-Over-Year-in-December-
2023#:~:text=The%20average%20transaction%20price%20(ATP,from%202.7%25
%20one%20year%20ago (last accessed February 26, 2024).
\1328\ Further, the highest estimated model year cost (MY 2032)
of $2,100 represents about 4.5 percent of the projected average cost
of a new MY 2032 light-duty vehicle (about $46,700) (both estimates
in 2022 dollars). Note that these values are averages across all
body styles, powertrains, makes, models, and trims, and there will
be differences for each individual vehicle. Also note that, as
discussed in RIA Chapter 4.2, the price of a new vehicle has been
increasing over time due to factors not associated with our rules.
If the average price of a MY 2032 vehicle is higher than our
estimate shown here, this estimated percentage increase in cost
could well be smaller than 4.5 percent compared to the cost of a new
MY 2032 vehicle.
\1329\ EPA's central case assessment projects a $3,300 increase
in MY2032, which is a 4.5% increase in the average total vehicle
costs for the no action case.
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EPA also carefully evaluated a range of sensitivities for both the
light-duty and medium-duty standards, as described in detail in section
IV of the preamble and RIA Chapter 12.1.4 and 12.2.4. Taken together
these sensitivities, encompass a wide array of potential uncertainties
and future scenarios, including higher and lower battery cost, greater
and lesser consumer acceptance for different vehicle technologies,
different assumptions about the availability of IRA tax credits, and a
diversity of manufacturer compliance strategies. Specifically, for the
light-duty vehicle sensitivity assessments presented in sections IV.F
and IV.H.1 of the preamble and RIA Chapter 12.1.4, for the majority of
scenarios we estimate six-year average cost increases that represent
between 0.3 percent and 3.9 percent increase in the projected total
costs of a new vehicle (six-year average costs of $130 to $1,700), with
two of the sensitivities showing a projected 5.8 percent increase (six-
year average costs of $2,500-$2,600).\1330\ These potential cost
increases are small in comparison to the average costs of a new
vehicle, and they are similar to the projected cost increase in a new
vehicle under our central assessment of 2.7 percent, and in some cases
smaller. Two of the sensitivities (the ``high battery cost'' and ``no
additional BEVs'') have projected six-year average cost increases as
high as 5.8 percent of a new vehicle cost. EPA believes both
sensitivities are unlikely to occur. The high battery cost sensitivity
battery cost projections are much higher than the EPA, DOE or the
majority of third party projections, in particular for the 2030-2032
time frame, and in fact we believe our central battery costs
projections are conservative and that actual battery costs are likely
to be lower. The ``no additional BEVs'' (beyond the no action case)
sensitivity is also unlikely to occur, as it is inconsistent with the
public announcements and the investments being made by many of the
major automotive manufacturers as well as the projections from many
researchers and automotive industry consultants. EPA also evaluated an
illustrative scenario where no new BEV models are sold beyond those
that were already present in the MY 2022 fleet. In this scenario, the
six-year average costs ($2,900) increase the projected total cost of a
new vehicle by 6.6 percent. We think this scenario is highly unlikely
to occur given the ongoing investment and growth in consumer acceptance
of BEVs and the fact that 2023 BEV sales already exceed this level, but
it is illustrative of the potential range of compliance options
available to manufacturers to meet these standards.
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\1330\ We present detailed costs for each of the sensitivities,
including for each MY, in section IV of the preamble and RIA Chapter
12.1.4 and 12.2.4. We considered all the costs presented in
evaluating the cost of compliance.
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EPA also performed cost assessments for the medium-duty vehicle
CO2 standards, as discussed in sections IV.D.4, IV.G, and
IV.H.2 of the preamble. EPA performed a central analysis and three
medium-duty vehicle sensitivity assessments; across the range of
sensitivities, the projected cost increases are similar to those of the
central analysis. For the six-year average costs, the central case cost
increases ($1,400) represent 2 percent of the total vehicle costs, and
across the sensitivities, the six-year average cost increases ($1,100
to $1,900) represent a range from 1.5 percent to 2.6 percent of the
total new vehicle cost.\1331\ In addition, EPA also assessed an
illustrative scenario, which we believe is highly unlikely to occur, in
which we assumed there are no new BEVs produced beyond those included
in the base year fleet (which for MDVs is MY 2020). Under this
illustrative scenario, the six-year average costs ($2,300) represent
3.2 percent of the total vehicle cost. Similar to the light-duty
vehicle scenarios, the highest projected cost increases from the
medium-duty vehicle scenarios come from the ``high battery cost'' and
``no new BEVs'' scenarios. For similar reasons as for the light-duty
sensitivities, EPA finds that that ``high battery cost'' scenario is
unlikely to occur, while the ``no new BEVs'' scenario is highly
unlikely to occur.
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\1331\ The projected average cost of a new MY 2032 medium-duty
vehicle in our modeling analysis is about $72,500 (in 2022 dollars).
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EPA recognizes that, although the costs of the final standards in
the first year of the program are lower than those of the proposed
standards, updates to our technology cost estimates, for example our
battery cost estimates, have resulted in the estimated costs per
vehicle of the final standards being higher than the costs of the
proposed standards in the later years of the program. Over the 6-year
rulemaking period of MYs 2027-2032, average new light-duty vehicle
manufacturing costs are increased by $1,200 due to the final standards,
compared to the increase of $680 for the proposed standards over the
same period. Costs of the final standards in the earlier years are
lower and remain in the $200-$1,000 range for MYs 2027-2029. Light-duty
vehicle costs increase in the latter three years (MYs 2030-2032) range
from $1,500 to the above mentioned $2,100 for MY 2032, which is within
the proposal's cost range of $500 to $2,800 (in 2022 dollars) for that
year across the sensitivity cases. The general increase in costs is a
result of EPA's updated analysis of the inputs and assumptions for the
modeling used in projecting costs, informed by public comments, and in
consultation with DOE and NHTSA. The final rule uses the same OMEGA2
modeling approach as was used for the proposal, but as discussed in
section IV of this preamble and Chapters 2, 3, 4, and 8 of the RIA,
various inputs and assumptions have been improved to address certain
issues EPA identified in the proposal and in response to public
comments. For example, EPA and NHTSA have engaged in extended
consultation with DOE and the National Labs to better estimate future
availability and cost of batteries used in PEVs and to assess the
impacts of the tax credits established in the IRA on manufacturer
costs. As a result of this and other work, EPA has updated its inputs
for both ICE technology costs and batteries. EPA has also explicitly
modeled PHEVs as a compliance option for the final rulemaking analysis.
In addition, EPA has revised its car/truck sales share forecast
according to the 2023 version of EIA's Annual Energy Outlook, which now
projects an increased share of truck sales for future years. This shift
to a higher share of truck sales also tends to increase the cost of the
fleetwide standards. Overall, these incremental refinements to the
inputs have improved the robustness of the
[[Page 28091]]
modeling results. Despite the increased costs of the final standards
compared to our estimate at proposal, the cost of compliance of the
standards in the final year are still smaller than those of the 2012
rule when adjusted for inflation ($2,400 in MY 2025 ($2022)).
As also discussed in section I.A.2.ii of this preamble, EPA has
observed a shift toward increased use of electrification technologies
both in vehicle sales and across the automotive industry at large, and
that these changes are being driven to a large degree by the
technological innovation of the automotive industry and the significant
funds, estimated at $1.2 trillion by at least one
analysis,1332 1333 those firms intend to spend by 2030 on
developing and deploying electrification technologies. This very
significant investment and, particularly in light of the available
compliance flexibilities and multiple paths for compliance, supports
EPA's conclusion that the standards are feasible and will not cause
economic disruption in the automotive industry. Indeed, EPA notes that
for the early years of the revised standards our projection is that the
standards will have very little cost for manufacturers as we anticipate
that the IRA and manufacturers' own product plans will drive sufficient
technology adoption to meet the standards for these years with some
additional compliance planning. For these years the agency finds that
the standards will provide an important degree of certainty and send
appropriate market signals to facilitate anticipated investments, not
only in technology adoption but also in complementary areas such as
supply chains and charging infrastructure. In later years, EPA's
modeling suggests that automakers are likely to choose to sell more
PEVs than they would under the existing standards, and incur increased
costs of emissions control technologies. However, we do not believe the
estimated increase in marginal vehicle cost will lead to detrimental
effects to automakers for multiple reasons, including the fact that
macroeconomic effects are a much larger factor in OEM revenues (for
example, inflation, supply chain disruptions, or labor costs), and that
automakers regularly adjust product plans and choose the mix of
vehicles they produce to maximize profits. We also note that in the
first half of 2023, domestic automakers reported increased profits
compared to the same period in 2022.\1334\ And in that previous year,
the same automakers had already reported the highest profits since
2016, even as domestic vehicle sales fell. We also note that our
estimates of sales impacts in RIA Chapter 4.4 show very small impacts
(ranging from about -0.2 percent to -0.9 percent per year) on vehicle
sales. In addition, the significant investments by industry and
Congress (e.g., BIL and IRA) in supporting technology that eliminates
both criteria and GHG tailpipe emissions, presents an opportunity for a
significant step forward in achieving the goals of the Clean Air Act.
The compliance costs per vehicle in this rule are reasonable and
generally consistent with those in past GHG rules while the standards
will achieve substantial emissions reductions for both GHG and criteria
pollutants.
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\1332\ Reuters, ``A Reuters analysis of 37 global automakers
found that they plan to invest nearly $1.2 trillion in electric
vehicles and batteries through 2030,'' October 21, 2022. Accessed on
November 4, 2022 at https://graphics.reuters.com/AUTOS-INVESTMENT/ELECTRIC/akpeqgzqypr/.
\1333\ Reuters, ``Exclusive: Automakers to double spending on
EVs, batteries to $1.2 trillion by 2030,'' October 25, 2022.
Accessed on November 4, 2022 at https://www.reuters.com/technology/exclusive-automakers-double-spending-evs-batteries-12-trillion-by-2030-2022-10-21/.
\1334\ Stellantis Press Release, '' First Half 2023 Results''
July 26,2023. Accessed December 18, 2023 at https://www.stellantis.com/en/news/press-releases/2023/july/first-half-2023-results.
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For this rule, EPA finds that standards are feasible in the lead
time available, and that the expected compliance costs for automakers
are reasonable, in light of the emissions reductions in air pollutants
and the resulting benefits for public health and welfare. In making
this finding we have considered our central case projection, as well as
the full range of sensitivity analyses, considering the range of the
projected costs, their respective likelihoods, the factors underlying
them (e.g., differences in battery costs or consumer acceptance), and
their relationship to the central case, for each of light-duty and
medium-duty.
C. Consideration of Emissions of GHGs and Criteria Pollutants
An essential factor that EPA considered in determining the
appropriate level of the standards is the reductions in air pollutant
emissions that will result from the program, including emissions of
GHGs, criteria pollutants and air toxics, and associated public health
and welfare impacts.
Although EPA has to date coordinated its light-duty GHG and
criteria pollutants standards, this is the first time EPA has
established both GHG and criteria pollutant standards in a single
rulemaking for light-duty, as well as medium-duty, vehicles. The final
standards will achieve very significant reductions of both GHG and
criteria pollutants. The cumulative GHG emissions reductions through
2055 are projected to be 7,200 MMT of CO2, 0.12 MMT of
CH4 and 0.13 MMT of N2O, as the fleet turns over
year-by-year to new vehicles that meet the light- and medium-duty
standards. This represents a 21 percent reduction in CO2
over that time period relative to the No Action case. See section VI of
this preamble and Chapter 8 of the RIA. These GHG emission reductions
will make an important contribution to efforts to limit climate change
and its anticipated impacts. See Coal. For Resp. Reg., 684 F. 3d at 128
(removal of 960 million metric tons of CO2e over the life of the GHG
vehicle emission standards rule was found by EPA to be ``meaningful
mitigation'' of GHG emissions). We also project, in calendar year 2055,
16 percent to 25 percent reductions in PM2.5,
NOX, and SOX emissions. Further, we project over
45 percent reduction in VOC emissions in the year 2055. See section VII
of this preamble and Chapter 8 of the RIA. EPA finds that the
additional emissions reductions of GHG and criteria pollutants that
will be achieved under these standards are important, considered both
severally, and together, in reducing the public health and welfare
impacts of air pollution, consistent with the purpose and mandate of
section 202.
As discussed in section VIII of the preamble, we monetize benefits
of the standards and evaluate other costs in part to enable a
comparison of costs and benefits pursuant to E.O. 12866, but we
recognize there are benefits that we are currently unable to fully
quantify. EPA's practice has been to set standards to achieve improved
air quality consistent with CAA section 202, and not to rely on cost-
benefit calculations, with their uncertainties and limitations, as
identifying the appropriate standards. Nonetheless, our conclusion that
the estimated benefits exceed the estimated costs of the program
reinforces our view that the standards are appropriate under section
202(a).
The annualized value of climate benefits attributable to the
standards are estimated at $72 billion using a 2 percent discount rate
through 2055. See section VIII of the preamble and Chapter 9 of the RIA
for a full discussion of the SC-GHG estimates used to monetize climate
benefits and the data and modeling limitations that constrain the
ability of SC-GHG estimates to include all the important physical,
ecological, and economic impacts of climate change, such that the
estimates are a partial accounting of climate change impacts and will
therefore tend to be
[[Page 28092]]
underestimates of the marginal benefits of abatement.
The annualized value of PM2.5-related health benefits
attributable to the standards through 2055 is estimated to total $6.4
billion to $13 billion (assuming a 2 percent discount rate and
depending on the assumed long-term exposure study of PM2.5-
related premature mortality risk; see section VIII.F of the
preamble).\1335\ We separately estimate that in 2055, 1,000 to 2,000
PM2.5-related premature deaths will be avoided as a result
of the modeled policy scenario, depending on the assumed long-term
exposure study of PM2.5-related premature mortality risk. We
also estimate that the modeled policy scenario will avoid 25 to 550
ozone-related premature deaths, depending on the assumed study of
ozone-related mortality risk (see section VII.C of the preamble).
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\1335\ The criteria pollutant benefits associated with the
standards presented here do not include the full complement of
health and environmental benefits that, if quantified and monetized,
would increase the total monetized benefits (such as the benefits
associated with reductions in human exposure to ambient
concentrations of ozone). See section VIII.E of the preamble and RIA
Chapter 6 for more information about benefits we are not currently
able to fully quantify.
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D. Consideration of Impacts on Consumers, Energy, Safety and Other
Factors
EPA also considered the impact of the final light- and medium-duty
standards on consumers as well as on energy and safety. EPA concludes
that the standards would be beneficial for consumers because the lower
operating costs would offset increases in vehicle technology costs,
even without consideration of PEV purchase incentives in the IRA. For
example, in 2055, when the standards have been fully implemented and
the in-use vehicle fleet has largely turned over to the new standards,
EPA estimates the rule would provide $57 billion in consumer savings
associated with reduced fuel consumption despite the increased
consumption of electricity of $18 billion (both values on an annualized
basis through 2055 at a 2 percent discount rate, see section VIII.C.1
of this preamble). Vehicle technology cost increases for light-and
medium-duty vehicles through 2055 are estimated at $40 billion on an
annualized basis at a 2 percent discount rate. Annualized maintenance
and repair costs at a 2 percent discount rate through 2055 are
estimated to be $16 billion lower due to the final standards (See
sections VIII.C and VIII.G of the preamble and Chapter 9 of the RIA).
Thus, considering fuel savings and the lower maintenance and repair
costs the final rule will result in significant savings for consumers.
In addition to the above, EPA also carefully considered the
distribution of consumer impacts of these standards, specifically the
impacts of low-income consumers. We recognize that increases in upfront
purchase costs are likely to be of particular concern to low-income
households, but we anticipate that automakers will continue to offer a
variety of models at different price points (see Chapter 4 of the RIA).
Moreover, because lower-income households spend more of their income on
fuel than other households, the effects of reduced fuel costs may be
especially important for these households. Similarly, low-income
households are more likely to buy used vehicles and own older vehicles,
and thus would benefit from significant savings in repair and
maintenance costs if they purchase electric vehicles. Furthermore, for
used BEVs, there is evidence that the original purchase incentive is
passed on to the next buyer (i.e., reduces the used price of
BEVs).\1336\ In addition, BEV purchase incentives for used vehicles are
provided through the IRA. Thus, EPA expects that low-income households
like other households will experience significant savings on vehicle
operating costs projected as a result of these standards.
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\1336\ Turrentine, T., Tal, G., Rapson, D., ``The Dynamics of
Plug-in Electric Vehicles in the Secondary Market and Their
Implications for Vehicle Demand, Durability, and Emissions,'' April
2018, National Center for Sustainable Transportation, UC Davis,
Institute of Transportation Studies, p. 39. Accessed on December 1,
2023 at https://escholarship.org/uc/item/8wj5b0hn.
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EPA has also considered the impact of this rule on consumers
through the need for sufficient charging infrastructure and potential
impacts on the electricity grid. We expect that through 2055 the
majority of light and medium duty PEV charging will occur at home, but
we recognize the need for additional public charging infrastructure to
support anticipated levels of PEV adoption. As discussed in section
IV.C.5 of the preamble and RIA Chapter 5.3, charging infrastructure has
grown rapidly over the last decade, and investments in charging
infrastructure continue to grow. Based on our evaluation of the record,
EPA finds the market for charging is already responding to increased
demand through investments from a wide range of public and private
entities, and it is reasonable to expect the market will continue to
keep up with demand. We further anticipate these final standards will
encourage additional investments in charging infrastructure. EPA does
not find that the increase in electricity consumption associated with
modeled increases in PEV sales will adversely affect reliability of the
electric grid, and, as explained in section IV of this preamble and
Chapter 5 of the RIA, more widespread adoption of PEVs could have
significant benefits for the electric power system.
EPA also evaluated the impacts of the light- and medium-duty
standards on energy, in terms of fuel consumption and energy security.
This rule is projected to result in a reduction of U.S. gasoline
consumption by 780 billion gallons through 2055 and an increase of
6,700 Terawatt hours (TWh) of electricity consumption (see RIA Chapter
8). EPA considered the impacts of these projected changes in fuel
consumption on energy security, specifically the avoided costs of
macroeconomic disruption (See section VIII.H of the preamble).
Promoting energy independence and security through reducing demand for
refined petroleum use by motor vehicles has long been a goal of both
Congress and the Executive Branch because of both the economic and
national security benefits of reduced dependence on imported oil, and
was an important reason for amendments to the Clean Air Act in 1990,
2005, and 2007.\1337\ A reduction of U.S. net petroleum imports reduces
both financial and strategic risks caused by potential sudden
disruptions in the supply of petroleum
[[Page 28093]]
to the U.S., thus increasing U.S. energy security. EPA finds this rule
to have significant benefits from an energy security perspective. We
estimate the annualized energy security benefits of the rule through
2055 at $1.5 billion to $2.1 billion depending on discount rate (see
section VIII.E of this preamble and Chapter 9 of the RIA).
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\1337\ See e.g., 136 Cong. Rec. 11989 (May 23, 1990) (Rep.
Waxman stating that clean fuel vehicles program is ``tremendously
significant as well for our national security. We are overly
dependent on oil as a monopoly; we need to run our cars on
alternative fuels.''); Remarks by President George W. Bush upon
signing Energy Policy Act of 2005, 2005 U.S.C.C.A.N. S19, 2005 WL
3693179 (``It's an economic bill, but as [Sen. Pete Domenici]
mentioned, it's also a national security bill. . . . Energy
conservation is more than a private virtue; it's a public virtue'');
Energy Independence and Security Act, P.L. 110-140, section 806
(finding ``the production of transportation fuels from renewable
energy would help the United States meet rapidly growing domestic
and global energy demands, reduce the dependence of the United
States on energy imported from volatile regions of the world that
are politically unstable, stabilize the cost and availability of
energy, and safeguard the economy and security of the United
States''); Statement by George W. Bush upon signing, 2007
U.S.C.C.A.N. S25, 2007 WL 4984165 (``One of the most serious long-
term challenges facing our country is dependence on oil--especially
oil from foreign lands. It's a serious challenge. . . . Because this
dependence harms us economically through high and volatile prices at
the gas pump; dependence creates pollution and contributes to
greenhouse gas admissions [sic]. It threatens our national security
by making us vulnerable to hostile regimes in unstable regions of
the world. It makes us vulnerable to terrorists who might attack oil
infrastructure.'')
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Section 202(a)(4)(A) of the CAA specifically prohibits the use of
an emission control device, system or element of design that will cause
or contribute to an unreasonable risk to public health, welfare, or
safety. EPA has a long history of considering the safety implications
of its emission standards from 1980 regulations establishing criteria
pollutant standards \1338\ up to and including the 2021 light-duty GHG
rule. The relationship between emissions standards and safety is multi-
faceted, and can be influenced not only by control technologies, but
also by consumer decisions about vehicle ownership and use. EPA has
estimated the impacts of this rule on safety by accounting for changes
in new vehicle purchase, fleet turnover and VMT, changes in vehicle
footprint, and vehicle weight changes that are in some cases lower (as
an emissions control strategy) and in other cases higher (with the
additional weight often associated with electrified vehicles). EPA
finds that under this rule, there is no statistically significant
change in the estimated risk of fatalities per distance traveled. EPA
is presenting non-statistically significant values here in part to
enable comparison with prior rules. We have found no change in fatality
risk as a result of the standards (see section VIII.K of the preamble).
However, as the costs of driving decline due to the improvement in fuel
economy, we project consumers overall will choose to drive more miles
(this is the ``VMT rebound'' effect). As a result of this personal
decision by consumers to drive more due to the reduced cost of driving,
EPA projects this will result in an increase in accidents, injuries,
and fatalities (i.e., although the rate of injury per mile stays
virtually unchanged, an increase in miles driven results in an increase
in total number of injuries). EPA's goal in setting motor vehicle
standards is to protect public health and welfare while recognizing the
importance of the mobility choices of Americans. Because the only
statistically significant projected increase in accidents, injuries,
and fatalities would be the result of consumers' voluntary choices to
drive more when operating costs are reduced, EPA believes it is
appropriate to place emphasis on the level of risk of injury per mile
traveled, and to consider the projected change in injuries in that
context.
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\1338\ See, e.g., 45 FR 14496, 14503. ``EPA would not require a
particulate control technology that was known to involve serious
safety problems.''.
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As with the 2021 rule, EPA considers safety impacts in the context
of all projected health impacts from the rule including public health
benefits from the projected reductions in air pollution. In considering
these estimates in the context of anticipated public health benefits,
EPA notes that the air quality modeling, as discussed further in
Chapter 7 of the RIA, estimates that in 2055 such a scenario would
prevent between 1,000 and 2,000 premature deaths associated with
exposure to PM2.5 and prevent between 25 and 550 premature
deaths associated with exposure to ozone. We expect that the cumulative
number of premature deaths avoided that would occur during the entire
period of 2027-2055 as a result of the rule would be much larger than
the 2055 estimate.
Finally, EPA notes that the estimated benefits of the standards
exceed the estimated costs, and estimates of the present values of net
benefits of this rule through 2055 range from $1.7 trillion to $2.1
trillion (7 percent and 2 percent discount rates, with 2 percent near-
term Ramsey discount rate for SC-GHG) (see section VIII of the preamble
and Chapter 9 of the RIA). We recognize the uncertainties and
limitations in these estimates (including unquantified benefits), and
the Administrator has not relied on these estimates in identifying the
appropriate standards under section 202. Nonetheless, we take note of
the fact that estimated benefits exceed the estimated costs of these
standards.
E. Selection of the Final Standards Under CAA Section 202(a)
Under section 202(a)(1) EPA has a statutory obligation to set
standards to reduce air pollution from classes of motor vehicles that
the Administrator has found contribute to air pollution that may be
expected to endanger public health and welfare. Consistent with our
longstanding approach to setting motor vehicle standards, the
Administrator has considered a number of factors in setting these
vehicles standards. In setting such standards, the Administrator must,
pursuant to section 202(a)(2), provide adequate lead time for the
development and application of technology to meet the standards, taking
into consideration the cost of compliance. Furthermore, in setting
standards for NMOG+NOX, PM and CO for heavy-duty vehicles
(including MDVs and light trucks over 6,000 pounds GWVR), EPA acts
pursuant to its authority under CAA section 202(a)(3)(A)(i), and such
standards shall reflect the greatest degree of emissions reduction that
the Administrator determines is achievable for the model year, giving
appropriate consideration to cost, energy and safety factors. EPA's
standards properly implement these statutory provisions. As discussed
in sections II, VI, and VII of the preamble, the standards will achieve
significant and important reductions in emissions of a wide range of
air pollutants that endanger public health and welfare. Furthermore, as
discussed throughout this preamble, the emission reduction technologies
needed to meet the standards have already been developed and are
feasible and available for manufacturers to utilize in their fleets at
reasonable cost in the timeframe of these standards, even after
considering key constraints including battery manufacturing capacity,
critical materials availability, and vehicle redesign cadence.
Moreover, the provisions for credit carry-forward and deficit
carry-forward under the existing GHG program, as well as carry forward
of Tier 3 NMOG+NOX credits, enable manufacturers to spread
the compliance requirement for any particular vehicle model year across
multiple model years. Similarly, the provisions for averaging enable
manufacturers to spread compliance requirements across multiple vehicle
models within a model year. Together, these credit banking and
averaging provisions further support EPA's conclusion that the
standards provide sufficient time for the development and application
of technology, giving appropriate consideration to cost.
As noted above, section 202(a)(3) is explicit that, for certain
pollutants for certain vehicles, the Administrator shall establish
standards that achieve the greatest degree of emissions reduction
achievable, although the provision identifies other factors to consider
and requires the Administrator to exercise judgment in weighing those
factors. Section 202(a)(1)-(2) provides greater discretion to the
Administrator to weigh various factors but, as with the 2021 rule, the
Administrator notes that the purpose of adopting standards under that
provision of the Clean Air Act is to address air pollution that may
reasonably be anticipated to endanger public health and welfare and
that reducing air pollution has traditionally been the focus of such
standards. Thus, for this rulemaking the agency's focus in identifying
final standards is on
[[Page 28094]]
achieving significant emissions reductions, within the constraints
identified by CAA section 202.
There have been very significant developments in the feasibility of
further control of pollution from motor vehicles since EPA promulgated
the 2021 rule. While at the time of the 2021 rule, estimates of
financial commitments to electric vehicle technologies by the
automotive industry were in the range of $500-600 billion, more recent
estimates are $1.2 trillion, approximately twice that of only two years
ago.1339 1340 The European Union has finalized standards
requiring 100 percent of new cars and vans to have zero tailpipe
emissions by 2035, to complement other countries' decisions to phase
out ICE engines.1341 1342 In 2022, BEVs alone accounted for
about 807,000 U.S. new car sales, or about 5.8 percent of the new
light-duty passenger vehicle market, up from 3.2 percent BEVs the year
before, while in 2023 PEVs were around 1.4 million vehicles, of which
1.1 million were BEVs.1343 1344 PEV sales represented 9.1
percent of new light-duty passenger vehicle sales in 2023, up from 6.8
percent in 2022 and 3.2 percent the year before.\1345\ The year-over-
year growth in U.S. PEV sales suggests that an increasing share of new
vehicle buyers are concluding that a PEV is the best vehicle to meet
their needs. Furthermore, published studies indicate that consumer
demand for PEVs is strong, and that limited availability was a greater
constraint than consumer acceptance.1346 1347
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\1339\ Reuters, ``A Reuters analysis of 37 global automakers
found that they plan to invest nearly $1.2 trillion in electric
vehicles and batteries through 2030,'' October 21, 2022. Accessed on
November 4, 2022 at https://graphics.reuters.com/AUTOS-INVESTMENT/ELECTRIC/akpeqgzqypr.
\1340\ Reuters, ``Exclusive: Automakers to double spending on
EVs, batteries to $1.2 trillion by 2030,'' October 25, 2022.
Accessed on November 4, 2022 at https://www.reuters.com/technology/exclusive-automakers-double-spending-evs-batteries-12-trillion-by-2030-2022-10-21.
\1341\ European Commission, ``Fit for 55: EU reaches new
milestone to make all new cars and vans zero-emission from 2035,''
March 28, 2023. Accessed on January 1, 2024 at https://climate.ec.europa.eu/news-your-voice/news/fit-55-eu-reaches-new-milestone-make-all-new-cars-and-vans-zero-emission-2035-2023-03-28_en.
\1342\ The EU regulations allow for the use of zero carbon fuels
to meet the emissions requirements for 2035 and beyond.
\1343\ Colias, M., ``U.S. EV Sales Jolted Higher in 2022 as
Newcomers Target Tesla,'' Wall Street Journal, January 6, 2023.
\1344\ DOE, FOTW #1327, January 29, 2024: Annual New Light-Duty
EV Sales Topped 1 Million for the First Time in 2023 (``Annual sales
of EVs more than quadrupled from 2020 to 2023, with a period of
rapid growth beginning in 2021. . .'') Accessed on February 21, 2024
at https://www.energy.gov/eere/vehicles/articles/fotw-1327-january-29-2024-annual-new-light-duty-ev-sales-topped-1-million.
\1345\ Argonne National Laboratory, ``Light Duty Electric Drive
Vehicles Monthly Sales Updates,'' January 30, 2024. Accessed on
February 2, 2024 at https://www.anl.gov/esia/light-duty-electric-drive-vehicles-monthly-sales-updates.
\1346\ Gillingham, K.T., A.A. van Benthem, S. Weber, M.A. Saafi,
and X. He. 2023. ``Has Consumer Acceptance of Electric Vehicles Been
Increasing: Evidence from Microdata on Every New Vehicle Sale in the
United States.'' AEA Papers and Proceedings, 113:329-35.
\1347\ Bartlett, Jeff. 2022. More Americans Would Buy and
Electric Vehicle, and Some Consumers Would Use Low-Carbon Fuels,
Survey Shows. Consumer Reports. July 7. Accessed March 2, 2023.
https://www.consumerreports.org/hybrids-evs/interest-in-electric-vehicles-and-low-carbon-fuels-survey-a8457332578.
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One of the most significant developments for U.S. automakers and
consumers is Congressional passage of the IRA, which takes a
comprehensive approach to addressing many of the potential barriers to
wider adoption of PEVs in the United States. The IRA provides tens of
billions of dollars in tax credits and direct Federal funding to reduce
the upfront cost to consumers of purchasing PEVs, to increase the
number of charging stations across the country, to reduce the cost of
manufacturing batteries, and to promote domestic sources of critical
minerals and other important elements of the PEV supply chain. By
addressing all of these potential obstacles to wider PEV adoption in a
coordinated, well-financed, strategy, Congress significantly advanced
the potential for PEV adoption, and associated emissions reductions, in
the near term. In fact, EPA anticipates that the increased PEV
penetration for the initial years of these standards will be driven by
automakers and consumers making use of IRA incentives, and would occur
even in the absence of the revised standards.
In developing this rule, EPA has recognized that these significant
developments in automaker investment, PEV market growth, and
Congressional support through the BIL and IRA represent a significant
opportunity to ensure that the emissions reductions these developments
make possible will be realized as fully as possible and at a reasonable
cost over the time frame of the rule. It is clear that these ongoing
developments have already led to PEVs being increasingly employed
across the fleet in both light-duty and medium-duty applications,
largely independent of EPA's prior standards. Although the 2021 rule
projected a PEV penetration rate of 17 percent for 2026, our updated
modeling of the No Action case for this rule suggests a PEV penetration
rate for 2026 of 27 percent, even with no change in the standards. As
noted above. this projection is consistent with, if not more
conservative than, the projections of third-party
analysts.1348 1349 This rule seeks to build on the trends
that these developments and projections indicate, and accelerate the
continued deployment of these technologies to achieve further emissions
reductions in 2027 and beyond.
---------------------------------------------------------------------------
\1348\ In 2021, IHS Markit projected 27.8 percent BEV, PHEV, and
range-extended electric vehicle (REX) for 2027. ``US EPA Proposed
Greenhouse Gas Emissions Standards for Model Years 2023-2026; What
to Expect,'' August 9, 2021. Accessed on October 28, 2021 at https://www.spglobal.com/mobility/en/research-analysis/us-epa-proposed-greenhouse-gas-emissions-standards-my2023-26.html.
\1349\ In early 2023 ICCT projected 39 percent PEVs for 2027
under the moderate IRA impact scenario. See International Council on
Clean Transportation, ``Analyzing the Impact of the Inflation
Reduction Act on Electric Vehicle Uptake in the US,'' ICCT White
Paper, January 2023. Available at https://theicct.org/wp-content/uploads/2023/01/ira-impact-evs-us-jan23.pdf.
---------------------------------------------------------------------------
In developing our PEV penetration estimates, EPA considered a
variety of constraints which have, to date, limited PEV adoption and/or
could limit it in the future, including: cost to manufacturers and
consumers; refresh and redesign cycles for manufacturers; availability
of raw materials, batteries, and other necessary supply chain elements;
adequate electricity supply and distribution; and barriers to consumer
acceptance such as adequate charging infrastructure and a wide range of
vehicle model choices that meet a diverse set of consumer needs.\1350\
We also assessed the potential impact of PEVs on the electric grid, as
discussed in section IV.C.5 of the preamble, and we conclude that the
reliability and resource adequacy of the electric grid will not be
adversely affected by this rule. EPA has fully assessed the public
record including public comments, and has consulted extensively with
analysts from other agencies, including the Federal Energy Regulatory
Commission, DOE and the National Labs, DOT, and the Joint Office for
Energy and Transportation, extensively reviewed published literature
and other data, and, as discussed thoroughly in this preamble and the
accompanying RIA, has incorporated limitations into our
[[Page 28095]]
modeling to address these potential constraints, as appropriate.
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\1350\ Although EPA has considered consumer acceptance
(including consumer costs) in exercising our discretion under the
statute based on the record before us, to assess the feasibility and
appropriateness of the standards, we note that it is not a
statutorily-enumerated factor under section 202(a)(1)-(3).
---------------------------------------------------------------------------
We also developed further analyses, recognizing that there are
uncertainties in our projections. For example, battery costs may turn
out to be higher or lower than we project, and consumers may adopt PEVs
faster or slower than we anticipate. Overall, we identified a range of
potential costs and PEV penetrations which we view as representing a
wider range of possible, and still feasible and reasonable, compliance
pathways under the standards.
Taking both the significant developments in the automotive market
and all of these potential constraints and uncertainties into account,
EPA's analyses found that it would be feasible to reduce net emissions
(compared to the No Action case) by 37 percent for CO2, 22
percent for PM2.5, 25 percent for NOX, and 46
percent for VOCs in 2055, the final year analyzed. EPA also analyzed a
range of standards which are somewhat more stringent and somewhat less
stringent than the final standards.
In particular, EPA carefully considered comments in response to the
range of alternatives for GHG standards presented in the proposal.
Specifically, EPA considered standards somewhat more stringent
(Alternative A, the proposed standards) and somewhat less stringent
(Alternative B) than the final standards, as described in section III.F
of the preamble. EPA's comparison of costs, technology penetrations and
CO2 emissions reductions for these alternatives is presented
in section IV.E of this preamble. We now conclude that Alternative A
would be too stringent before MY 2032. Although EPA anticipates that
the IRA incentives, consumer demand and significant industry
investments will lead to high levels of PEV penetration even in the
absence of revised standards, EPA also recognizes that the industry is
undergoing a significant shift as a result of a number of forces,
including consumer demand, the IRA, automaker strategies and state and
international policy direction. This shift, as noted by commenters,
requires a number of complementary actions, such as increased battery
production (which in turn depends on increased materials supply) and
the scale up of PEV production capabilities.
Based on our review of the entire record, including public comments
and extensive consultation with other agencies such as the Federal
Energy Regulatory Commission, DOE and the National Labs, DOT, and the
Joint Office for Energy and Transportation, EPA concludes it is
reasonable, for the reasons discussed in section IV of the preamble and
the RIA, to anticipate these complementary actions will all occur. EPA
also concludes that it is appropriate to provide more lead time to
achieve reductions to allow for the possibility that additional
flexibility is required for automakers to implement their compliance
strategies. EPA takes note of the very significant investments in
shifting to cleaner technologies that automakers are anticipated to
make before 2030. These standards align with those investments and are
not based on significant additional technology costs in those initial
years. The final standards established in this rule still achieve the
same projected fleet average CO2 target in MY 2032 and
beyond as the proposed standards (Alternative A), and the cumulative
reductions through 2055 are very similar; we estimate the cumulative
CO2 reductions through 2055 to be 7.2 billion metric tons
under the final standards and 7.6 billion metric tons under the
proposed standards curves (Alternative A), as shown in RIA Chapter
8.6.6.1.
EPA finds that the final standards achieve an appropriate level of
emission reduction, but the more gradual phase-in of the standards
between MYs 2027 and 2032 gives more appropriate consideration to costs
and lead-time, particularly in light of the shifts to cleaner
technologies occurring in the automotive industry.
EPA also considered adopting less stringent standards (i.e.,
Alternative B as described in section III.F of the preamble) in this
rule. However, EPA concludes that the final standards, particularly
with the additional flexibility and lead time before MY 2032, resulting
in reduced costs, are feasible and appropriate. EPA notes that for some
vehicles and some pollutants it is required by section 202(a)(3) to set
standards at the maximum achievable level. However, even for pollutants
for which EPA is not required to adopt the maximum achievable
stringency, in light of the need for and public health and welfare
benefits of additional reductions in air pollution (as discussed in
section II of the preamble), EPA finds it appropriate to set standards
that achieve significant pollution reductions taking into consideration
costs and lead time and other relevant factors. EPA takes note that the
less stringent alternative EPA analyzed would result in materially more
cumulative GHG emissions through 2055 and finds that forgoing those
emissions reductions would not be appropriate under section 202(a).
We acknowledge that both those stakeholders pressing for more and
less rapid increases in stringency have submitted considerable
technical studies in support of their positions, including analyses
purportedly demonstrating that a more or less rapid adoption of
emissions reduction technologies, including zero-emissions
technologies, is feasible. These studies account for the vast range of
economic, technology, regulatory, and other factors described
throughout this preamble; draw different assumptions about key
variables; and reach very different conclusions. We have carefully
reviewed all these studies and further discuss them in the RIA and the
RTC. The agency's final standards are premised upon our own extensive
technical assessment, which in turn is based on a wide review of the
literature and test data, extensive expertise with the industry and
with implementation of past standards, peer review, and our modeling
analyses. The data and resulting modeling demonstrate a relatively
moderate rate of adoption of emission reduction technologies, at rates
bounded between the higher and lower rates in studies provided by
commenters.
On balance, we think the various comments and studies pressing for
faster or slower increases in stringency than the final rule each have
their strengths and weaknesses, and we recognize the inherent
uncertainties associated with predicting the future of the highly
dynamic vehicle and related industries up to eight years from today
through MY 2032. This uncertainty pervades both scenarios with lesser
and greater increases in stringency than the final standards. For
example, slower increases in stringency would be more certainly
feasible and less costly for manufacturers, but they would also risk
giving up emissions reductions and consequent benefits to public health
and welfare that are actually achievable. By contrast, faster increases
in stringency would aim to achieve greater emissions reductions and
consequent benefits for public health and welfare, but they would also
run the risk of incurring greater costs of compliance and potentially
being infeasible in light of the lead time provided. The final
standards reflect our technical expertise in discerning a reasoned path
among the varying sources of data, analyses, and other evidence we have
considered, as well as the Administrator's policy judgment as to the
appropriate level of emissions reductions that can be achieved at a
reasonable cost in the available lead time.
While the final standards are more stringent than the prior
standards, EPA applied numerous conservative approaches throughout our
analysis (as identified throughout this section IV of the preamble and
in the RIA) and the final standards additionally are less stringent
than those proposed during the first several years of implementation
leading to MY 2032. As explained above and throughout this notice, EPA
has assessed the appropriateness and feasibility of these standards
taking into consideration the potential benefits to public health and
welfare, existing market trends and financial incentives
[[Page 28096]]
for PEV adoption, and constraints which could shape technology adoption
in the future, including: cost to manufacturers and consumers; refresh
and redesign cycles for manufacturers; availability of raw materials,
batteries, and other necessary supply chain elements; adequate
electricity supply and distribution; and barriers to consumer
acceptance such as adequate charging infrastructure and a wide range of
vehicle model choices that meet a diverse set of consumer needs. As a
result of re-evaluating data and analyses in light of public comments,
we have revised both our cost estimates and our assessment of the
feasibility of more stringent standards, particularly for the early
years of the program. For these years the agency is setting standards
that we judge can be largely met if manufacturers stay on the
technology path we anticipate they would follow in the absence of
revised standards, given the IRA and their own product plans, because
we find that it is important for the standards to provide an degree of
certainty and send appropriate market signals to facilitate the
anticipated investments, not only in technology adoption but also in
complementary areas such as supply chains and charging infrastructure.
In later years of the program, we judge that it will be possible to
build on these investments to achieve greater emissions reductions. The
Administrator concludes that this approach is within the discretion
provided under and consistent with the text and purpose of CAA section
202(a)(1)-(2).
EPA also takes into consideration that this rule is setting
coordinated but separate standards for both GHG and criteria
pollutants. The widespread adoption of electrification technologies
provides an important opportunity for EPA to achieve reductions of
these different pollutants which each pose a continuing threat to
public health and welfare. In other words, electrification technologies
are extremely effective technologies at controlling emissions not only
because they can reduce emissions to zero, but because they
simultaneously reduce the emissions of multiple harmful pollutants.
Thus, as we have noted in section III of the preamble, the
potential compliance strategies we model for the GHG standards would
also be sufficient to achieve compliance with the final
NMOG+NOX standards. However, PEVs are certainly not the only
potential compliance strategies for meeting the final
NMOG+NOX standards. The standards reflect EPA's judgment
about feasible further reductions in NMOG+NOX as a result of
the application of technologies (whether the manufacturer chooses, for
instance, further electrification, further improvements to internal
combustion engines, or further improvements to exhaust aftertreatment).
The technological feasibility of the ICE-based vehicle
NMOG+NOX reductions is discussed in RIA Chapter 3.2.5. EPA
judges that the standards could be met at a reasonable cost in the
relevant lead time by a mix of these technologies, such as additional
PHEVs with additional exhaust aftertreatment.
Likewise, although BEVs are one compliance path to meeting the PM
standards, EPA judges that GPF technology is an alternative compliance
path which is available at a reasonable cost in the relevant lead time
for vehicles that have an internal combustion engine.
Moreover, EPA not only judges the NMOG+NOX and PM
standards to be appropriate under section 202(a)(2) for light duty
vehicles in light of cost and lead time, it judges them as required
under section 202(a)(3) for heavy duty vehicles, as representing the
greatest degree of emissions reduction achievable through the
applicable of technology which will be available, giving consideration
to cost, energy and safety. The Administrator judges that it would not
be consistent with section 202(a)(3) for EPA to set NMOG+NOX
or PM standards for vehicles over 6,000 lbs that are less stringent.
Although EPA finds it appropriate to continue to coordinate GHG and
criteria pollutant standards, taking into consideration that some of
the available control technologies for these pollutants overlap, EPA
has evaluated the feasibility and appropriateness of further GHG and
criteria pollutant reductions separately. Each standard that we have
set is justified in and of itself. As discussed above, for example, the
GHG, NMOG+NOX, and PM standards, for each of light-duty and
medium-duty vehicles, for each year, are independently justified.\1351\
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\1351\ We recognize that our presentation of the rationale for
the final standards in Section V of this preamble largely discusses
the standards as a whole, with select references to specific
standards. We emphasize, however, as discussed further in Section X
of this preamble, that the standards are severable. As noted in the
text here, each standard is set under a separate exercise of EPA's
legal authority, and in some cases under the exercise of a different
authority. For example, light-duty GHG, NMOG+NOX, and PM,
and medium-duty GHG, are each set under a separate exercise of
section 202(a)(1)-(2) authority, while medium-duty
NMOG+NOX and PM, are each set under a separate exercise
of section 202(a)(3)(A)(i) authority. Further, each standard
addresses different air pollution problems and impacts on public
health and welfare, given both the nature of each pollutant at
issue, see Section II of this preamble, as well as the distinct
characteristics of light- and medium-duty vehicles, see Section III
of this preamble. Moreover, while there is partial overlap in the
technology pathways that support the standards (since some
technologies such as electrification control more than one pollutant
simultaneously), we have assessed the technologies supporting and
costs for each standard separately. For example, as noted, the PM
standards can be met entirely through the adoption of gasoline
particulate filters, regardless of the level of electrification, and
EPA estimates the direct manufacturing costs of adopting this
technology at up to $180 per vehicle depending on vehicle's engine
size (see Section III.D.3.viii of this preamble). And while EPA
demonstrated the feasibility of the GHG and NMOG+NOX
based on the same central case technology pathway, consisting of
increases in BEV and PHEV technologies, the NMOG+NOX
standards can be met entirely through increases in ICE technologies
relating to engine and aftertreatment improvements. In addition, EPA
concludes that each set of standards is feasible, including
considering costs, absent the existence of the other standards, and
would conclude that it is appropriate to finalize each standard
independently even in the absence of the other standards. For more
details, see RIA Chapter 3.
---------------------------------------------------------------------------
Taking into consideration the importance of reducing criteria
pollutant and GHG emissions and the primary purpose of CAA section 202
to reduce the threat posed to human health and the environment by air
pollution, the Administrator finds it is appropriate and consistent
with the text and purpose of section 202 to adopt standards that, when
implemented, would result in significant reductions of light- and
medium-duty vehicle emissions both in the near term and over the longer
term, taking into consideration the cost of compliance within the
available lead time. Likewise, the Administrator concludes that these
standards are consistent with the text and purpose of section 202 for
heavy-duty vehicles by achieving significant reductions of GHGs, taking
into consideration the cost of compliance within the available lead
time, and by achieving the greatest degree of emissions reduction
achievable for certain other pollutants, taking into consideration
cost, lead-time, energy and safety factors as specified in section
202(a)(3)(B).
In summary, after consideration of the very significant reductions
in criteria pollutant and GHG emissions, given the technical
feasibility of the final standards and the costs per vehicle in the
available lead time, and taking into account a number of other factors
such as the savings to consumers in operating costs over the lifetime
of the vehicle, safety, the benefits for energy security, and the
greater quantified benefits compared to quantified costs, EPA believes
that the final standards are appropriate under EPA's section 202(a)
authority.
[[Page 28097]]
VI. How will this rule reduce GHG emissions and their associated
effects?
A. Estimating Emission Inventories in OMEGA
To estimate emission inventory effects due to a potential policy,
OMEGA uses as inputs a set of vehicle emission rates generated using
MOVES vehicle inventories and the associated MOVES VMT and fuel
consumption. For refinery emissions, OMEGA uses as inputs the refinery
emission inventories generated in support of our air quality modeling
along with estimates of the liquid fuel refined to calculate refinery
emission rates. Those refinery emissions rates, along with estimates of
how changes in domestic liquid fuel demand impact domestic refining,
then allow OMEGA to estimate refinery emissions for a given policy. For
electricity generating unit (EGU) emissions, OMEGA similarly uses as
inputs a set of EGU inventories generated using EPA's Power Sector
Modeling Platform, v.6.21,1352 1353 along with estimates of
U.S. electricity generation, to calculate EGU emission rates specific
to a given policy. EPA discusses the methodology used to estimate
vehicle, refinery and EGU emissions in greater detail in Chapter 8 of
the RIA.
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\1352\ https://www.epa.gov/power-sector-modeling.
\1353\ https://www.epa.gov/power-sector-modeling/post-ira-2022-reference-case.
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B. Impact on GHG Emissions
Using OMEGA as described in section VI.A of this preamble and in
Chapter 8 of the RIA, we estimated annual GHG emissions impacts
associated with the final standards for the calendar years 2027 through
2055, as shown in Table 204. CO2 equivalent
(CO2e) values use 100-year global warming potential values
of 28 and 265 for CH4 and N2O,
respectively.\1354\ The table shows that the final standards will
result in significant net GHG reductions compared to the No Action
scenario. The cumulative CO2, CH4, N2O
and CO2e emissions reductions from the program total 7,200
MMT, 0.12 MMT, 0.13 MMT and 7,200 MMT, respectively, through 2055.
These reductions represent 21 percent, 15 percent, 23 percent and 21
percent reductions, respectively, relative to the No Action case (see
Chapter 8 of the RIA). In addition, though not quantified, there is the
potential that the final program could result in reductions of
hydrofluorocarbon (HFC) emissions, depending on how manufacturers
respond to the optional A/C leakage credits for MYs 2031 and later (as
described in section III.D.5 of this preamble).
---------------------------------------------------------------------------
\1354\ IPCC, 2014: Climate Change 2014: Synthesis Report.
Contribution of Working Groups I, II and III to the Fifth Assessment
Report of the Intergovernmental Panel on Climate Change [Core
Writing Team, R.K. Pachauri and L.A. Meyer (eds.)], pp 87. Available
online: https://www.ipcc.ch/site/assets/uploads/2018/02/SYR_AR5_FINAL_full.pdf.
Table 204--Estimated GHG Impacts of the Final Standards Relative to the No Action Scenario \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Emission impacts relative to no action (million metric Percent change from no action
tons per year) -------------------------------------------------------
Calendar year ----------------------------------------------------------
CO2 CH4 N2O CO2e CO2 CH4 N2O CO2e
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.................................. -0.41 0.000011 -0.0000064 -0.41 -0.027 0.022 -0.028 -0.027
2028.................................. -3.5 0.000024 -0.000042 -3.5 -0.24 0.052 -0.19 -0.24
2029.................................. -12 -0.000011 -0.00017 -12 -0.83 -0.026 -0.77 -0.83
2030.................................. -24 -0.000057 -0.00039 -24 -1.8 -0.14 -1.9 -1.8
2031.................................. -40 -0.0001 -0.00064 -40 -3 -0.27 -3.2 -3
2032.................................. -58 -0.00023 -0.00097 -58 -4.6 -0.64 -5 -4.6
2033.................................. -85 -0.00054 -0.0015 -86 -7 -1.6 -7.8 -7
2034.................................. -110 -0.00092 -0.002 -110 -9.5 -2.9 -11 -9.5
2035.................................. -140 -0.0013 -0.0025 -140 -12 -4.5 -14 -12
2036.................................. -170 -0.0018 -0.003 -170 -15 -6.3 -17 -15
2037.................................. -200 -0.0023 -0.0035 -200 -18 -8.4 -19 -18
2038.................................. -220 -0.0029 -0.0039 -230 -20 -11 -22 -20
2039.................................. -250 -0.0034 -0.0043 -250 -23 -13 -24 -23
2040.................................. -270 -0.004 -0.0047 -270 -25 -16 -27 -25
2041.................................. -290 -0.0045 -0.0051 -290 -27 -18 -29 -27
2042.................................. -310 -0.005 -0.0054 -310 -29 -21 -31 -29
2043.................................. -330 -0.0055 -0.0057 -330 -31 -23 -33 -31
2044.................................. -340 -0.006 -0.006 -350 -32 -26 -34 -32
2045.................................. -360 -0.0064 -0.0063 -360 -34 -28 -35 -34
2046.................................. -370 -0.0068 -0.0065 -370 -35 -30 -36 -35
2047.................................. -380 -0.007 -0.0066 -380 -36 -31 -37 -36
2048.................................. -390 -0.0073 -0.0068 -390 -36 -32 -37 -36
2049.................................. -390 -0.0075 -0.0069 -400 -37 -33 -38 -37
2050.................................. -400 -0.0077 -0.007 -400 -37 -34 -38 -37
2051.................................. -400 -0.0078 -0.0071 -410 -37 -34 -38 -37
2052.................................. -410 -0.0078 -0.0071 -410 -38 -34 -38 -38
2053.................................. -410 -0.0079 -0.0071 -410 -38 -35 -38 -38
2054.................................. -410 -0.0079 -0.0072 -410 -37 -34 -38 -37
2055.................................. -410 -0.0079 -0.0072 -410 -37 -34 -38 -37
-----------------------------------------------------------------------------------------------------------------
Sum............................... -7,200 -0.12 -0.13 -7,200 -21 -15 -23 -21
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Negative numbers represent emission decreases while positive numbers represent increases. Percent changes reflect changes associated with the light-
and medium-duty fleet, not total U.S. inventories.
The estimated emission impacts include refinery emissions and the
consideration of the impact of reduced liquid fuel demand on domestic
refining. In the NPRM, the central analysis estimated that 93 percent
of the reduced liquid fuel demand resulted in reduced domestic
refining. EPA noted the possibility, through a sensitivity
[[Page 28098]]
analysis, that reduced domestic demand for liquid fuel would have no
impact on domestic refining. In other words, domestic refiners would
continue refining liquid fuel at the same levels and any excess from
reduced domestic demand for liquid fuel would be exported for use
elsewhere. In that event, there would be no decrease in domestic
refinery emissions. In the proposal, EPA requested comment on the
correct portion of reduced liquid fuel demand that would result in
reduced domestic refining. At least one commenter responded by noting
EPA's own statements in the proposal about uncertainty around refinery
emissions impacts under our standards and urged EPA to explain its
basis behind any assumptions. EPA's description of the methodology for
assessing refinery emissions impacts is in Chapter 8.6.4 of the RIA.
Considering the comments and an updated analysis of the domestic
refining industry (see RIA Chapter 8.6), the final analysis estimates
that 50 percent of reduced domestic liquid fuel demand will result in
reduced domestic refining. That estimate is reflected in the results
presented in Table 204. As a sensitivity, EPA also estimated that 20
percent of reduced domestic liquid fuel demand would result in reduced
domestic refining. We chose this sensitivity as an estimate that falls
between our central case where 50 percent of reduced demand would
result in reduced domestic refining and a possible case in which this
final rule would have no impact on domestic refining. EPA presents
these results as a sensitivity given the uncertainty surrounding how
changes in domestic demand for liquid fuel may or may not impact
domestic refining of liquid fuel. The GHG impacts under that
sensitivity are shown in Table 205.
Table 205--Estimated GHG Impacts of the Final Standards Relative to the No Action Scenario Under the Refinery Sensitivity
[20 Percent assumption] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Emission impacts relative to no action (million metric Percent change from no action
tons per year) ---------------------------------------------------
Calendar year ----------------------------------------------------------
CO2 CH4 N2O CO2e CO2 CH4 N2O CO2e
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027...................................... -0.4 0.000011 -0.0000063 -0.4 -0.027 0.024 -0.027 -0.026
2028...................................... -3.4 0.000029 -0.000041 -3.4 -0.23 0.064 -0.18 -0.23
2029...................................... -11 0.0000058 -0.00016 -11 -0.81 0.014 -0.76 -0.81
2030...................................... -23 -0.000024 -0.00038 -24 -1.7 -0.058 -1.8 -1.7
2031...................................... -39 -0.000045 -0.00064 -39 -2.9 -0.12 -3.2 -2.9
2032...................................... -57 -0.00014 -0.00096 -57 -4.5 -0.4 -4.9 -4.5
2033...................................... -83 -0.00042 -0.0015 -84 -6.8 -1.2 -7.7 -6.8
2034...................................... -110 -0.00076 -0.002 -110 -9.3 -2.4 -11 -9.3
2035...................................... -140 -0.0011 -0.0025 -140 -12 -3.8 -14 -12
2036...................................... -170 -0.0016 -0.003 -170 -15 -5.4 -16 -15
2037...................................... -190 -0.002 -0.0034 -190 -17 -7.3 -19 -17
2038...................................... -220 -0.0026 -0.0039 -220 -20 -9.6 -22 -20
2039...................................... -240 -0.0031 -0.0043 -240 -22 -12 -24 -22
2040...................................... -270 -0.0036 -0.0047 -270 -25 -14 -26 -25
2041...................................... -280 -0.0041 -0.005 -290 -26 -17 -28 -26
2042...................................... -300 -0.0046 -0.0054 -310 -28 -19 -30 -28
2043...................................... -320 -0.005 -0.0057 -320 -30 -21 -32 -30
2044...................................... -340 -0.0055 -0.0059 -340 -31 -23 -33 -31
2045...................................... -350 -0.0059 -0.0062 -350 -33 -25 -35 -33
2046...................................... -360 -0.0063 -0.0064 -360 -34 -27 -36 -34
2047...................................... -370 -0.0065 -0.0065 -370 -35 -28 -36 -35
2048...................................... -380 -0.0068 -0.0067 -380 -35 -29 -37 -35
2049...................................... -390 -0.007 -0.0068 -390 -36 -30 -37 -36
2050...................................... -390 -0.0071 -0.0069 -390 -36 -31 -38 -36
2051...................................... -390 -0.0072 -0.007 -400 -36 -31 -38 -36
2052...................................... -400 -0.0073 -0.007 -400 -36 -31 -38 -36
2053...................................... -400 -0.0074 -0.0071 -400 -36 -32 -38 -36
2054...................................... -400 -0.0074 -0.0071 -400 -36 -32 -38 -36
2055...................................... -400 -0.0074 -0.0071 -400 -36 -31 -37 -36
-------------------------------------------------------------------------------------------------------------
Sum................................... -7,000 -0.11 -0.12 -7,100 -21 -13 -23 -21
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Negative numbers represent emission decreases while positive numbers represent increases. Percent changes reflect changes associated with the light-
and medium-duty fleet, not total U.S. inventories.
C. Global Climate Impacts Associated With the Rule's GHG Emissions
Reductions
The transportation sector is the largest U.S. source of GHG
emissions, representing 29 percent of total GHG emissions.\1355\ Within
the transportation sector, light-duty vehicles are the largest
contributor, at 58 percent, and thus comprise 16.5 percent of total
U.S. GHG emissions,\1356\ even before considering the contribution of
medium-duty Class 2b and 3 vehicles which are also included under this
rule. Reducing GHG emissions, including the three GHGs (CO2,
CH4, and N2O) affected by this program, will make
an important contribution to the efforts to limit climate change and
subsequently reducing the probability of severe climate change related
impacts including heat waves, drought, sea level rise, extreme climate
and weather events, coastal flooding, and wildfires. Because of the
long lifetime of GHGs, and in particular CO2, every ton
emitted contributes to an increase in global
[[Page 28099]]
temperatures for decades and centuries in the future: therefore, every
ton abated has benefits for centuries. The warming impacts of GHGs are
cumulative. While the EPA did not conduct modeling to specifically
quantify changes in climate impacts resulting from this rule in terms
of avoided temperature change or sea-level rise, the Agency did
quantify the climate benefits by monetizing the emission reductions
through the application of the social cost of greenhouse gases (SC-
GHGs), as described in section VIII.E of this preamble.
---------------------------------------------------------------------------
\1355\ Inventory of U.S. Greenhouse Gas Emissions and Sinks:
1990-2021. (EPA-430-R-23-002, published April 2023)
\1356\ Ibid.
---------------------------------------------------------------------------
VII. How will the rule impact criteria and air toxics emissions and
their associated effects?
As described in section VI.A of this preamble (and in more detail
in Chapter 8 of the RIA), EPA used OMEGA to estimate criteria air
pollutant and air toxic emission inventories associated with the final
standards. These estimates are presented in section VII.A of this
preamble, and additional estimates for the two alternatives are
presented in RIA Chapter 8.6. OMEGA's emissions estimates include
emissions from vehicles (using MOVES), electricity generation (using
IPM, as described in section IV.B.3 of the preamble), and refineries.
Section VII.B of this preamble discusses the air quality impacts of
the rule, section VII.C of the preamble describes how the rule will
affect human health, and section VII.D of the preamble presents a
summary of a demographic analysis on air quality.
A. Impact on Emissions of Criteria and Air Toxics Pollutants
Table 206 presents changes in criteria air pollutant emissions from
vehicles resulting from the final standards.
Table 207 presents changes in criteria air pollutant emissions from
EGUs and refineries resulting from the final standards. Note that we
were not able to estimate EGU CO emissions.
Table 208 presents net changes in criteria air pollutant emissions
from vehicles, EGUs and refineries resulting from the final standards.
Table 209 presents net changes in criteria air pollutant emissions
from vehicles, EGUs, and refineries resulting from the final standards
using our sensitivity case regarding the changes in U.S. refining in
response to the projected lowered demand for liquid fuel (this
sensitivity case is described in section VI.B of the preamble). EPA
presents these results as a sensitivity given the uncertainty
surrounding how changes in domestic demand for liquid fuel may impact
domestic refining of liquid fuel.
Table 210 presents changes in emissions of air toxic pollutants
from vehicles resulting from the final standards. Note that we were not
able to estimate EGU or refinery toxic emissions.
The vehicle reductions in PM2.5, NOX, NMOG,
and CO emissions shown in Table 206 are related to the final standards
for these pollutants. Vehicle SOX emissions are a function
of the sulfur content of gasoline and diesel fuel. Therefore, the
reductions in SOX emissions from vehicles result from the
decrease in gasoline and diesel fuel consumption associated with the
GHG standards.
Table 206--OMEGA Estimated Vehicle Criteria Emission Impacts of the Final Standards Relative to the No Action
Scenario
[U.S. tons per year] \a\
----------------------------------------------------------------------------------------------------------------
Calendar year PM2.5 NOX NMOG SOX CO
----------------------------------------------------------------------------------------------------------------
2027............................ -110 14 -37 -2.9 -410
2028............................ -290 -88 -470 -21 -6,700
2029............................ -510 -580 -1,700 -66 -25,000
2030............................ -860 -1,600 -3,700 -130 -54,000
2031............................ -1,200 -2,700 -6,400 -220 -91,000
2032............................ -1,600 -4,300 -9,400 -320 -130,000
2033............................ -2,000 -6,400 -14,000 -460 -210,000
2034............................ -2,500 -8,500 -19,000 -600 -290,000
2035............................ -2,900 -11,000 -25,000 -750 -380,000
2036............................ -3,300 -13,000 -31,000 -890 -470,000
2037............................ -3,800 -15,000 -37,000 -1,000 -570,000
2038............................ -4,300 -17,000 -43,000 -1,100 -670,000
2039............................ -4,800 -19,000 -48,000 -1,200 -770,000
2040............................ -5,300 -22,000 -54,000 -1,300 -870,000
2041............................ -5,700 -23,000 -60,000 -1,400 -960,000
2042............................ -6,100 -25,000 -67,000 -1,500 -1,100,000
2043............................ -6,400 -27,000 -73,000 -1,600 -1,200,000
2044............................ -6,700 -28,000 -80,000 -1,700 -1,300,000
2045............................ -7,000 -30,000 -85,000 -1,700 -1,300,000
2046............................ -7,300 -31,000 -92,000 -1,800 -1,400,000
2047............................ -7,500 -32,000 -99,000 -1,800 -1,500,000
2048............................ -7,700 -32,000 -110,000 -1,900 -1,600,000
2049............................ -7,900 -33,000 -110,000 -1,900 -1,600,000
2050............................ -8,000 -33,000 -120,000 -1,900 -1,600,000
2051............................ -8,200 -34,000 -120,000 -1,900 -1,700,000
2052............................ -8,300 -34,000 -130,000 -1,900 -1,700,000
2053............................ -8,300 -34,000 -130,000 -1,900 -1,700,000
2054............................ -8,400 -35,000 -140,000 -1,900 -1,700,000
2055............................ -8,500 -35,000 -140,000 -1,900 -1,700,000
----------------------------------------------------------------------------------------------------------------
\a\ Negative numbers present emission decreases while positive numbers represent increases.
Table 207 shows the ``upstream'' emissions impacts from EGUs and
refineries. As explained in section IV.C.3 of the preamble, our power
sector modeling predicts that EGU emissions will decrease between 2028
and 2055 due to increasing use of clean electricity primarily driven by
provisions of the Inflation Reduction Act (IRA). As a
[[Page 28100]]
result, the increase in EGU emissions associated with the anticipated
increased electricity demand would peak in the late 2030s/early 2040s
(depending on the pollutant) and then generally decrease or level off
through 2055. Chapter 8.6 of the RIA provides more detail on the
estimation of refinery emissions, which EPA predicts will decrease due
to the decreased demand for liquid fuel associated with the final GHG
standards.
Table 207--OMEGA Estimated Upstream Criteria Emission Impacts of the Final Standards Relative to the No Action Scenario
[U.S. tons per year] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
EGU Refinery
Calendar year --------------------------------------------------------------------------------------------------------------------
PM2.5 NOX NMOG SOX PM2.5 NOX NMOG SOX CO
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027............................... 17 110 7.8 110 -2.6 -11 -7.6 -3.2 -7.1
2028............................... 73 500 34 490 -18 -74 -53 -22 -49
2029............................... 180 1,200 92 1,000 -55 -230 -160 -68 -150
2030............................... 370 2,200 190 1,700 -110 -460 -330 -140 -310
2031............................... 630 3,700 310 2,800 -190 -780 -550 -230 -520
2032............................... 860 4,900 430 3,700 -270 -1,100 -800 -340 -740
2033............................... 1,100 6,200 570 4,600 -390 -1,600 -1,200 -490 -1,100
2034............................... 1,400 7,300 700 5,100 -520 -2,200 -1,500 -650 -1,400
2035............................... 1,600 8,000 820 5,300 -650 -2,700 -1,900 -810 -1,800
2036............................... 1,700 8,500 900 5,500 -780 -3,200 -2,300 -970 -2,100
2037............................... 1,800 8,600 950 5,400 -890 -3,700 -2,600 -1,100 -2,500
2038............................... 1,800 8,500 980 5,200 -1,000 -4,200 -3,000 -1,200 -2,800
2039............................... 1,800 8,200 1,000 4,800 -1,100 -4,600 -3,300 -1,400 -3,100
2040............................... 1,800 7,900 1,000 4,300 -1,200 -5,100 -3,600 -1,500 -3,300
2041............................... 1,800 7,800 1,000 4,100 -1,300 -5,400 -3,800 -1,600 -3,600
2042............................... 1,800 7,600 1,100 3,800 -1,400 -5,800 -4,100 -1,700 -3,800
2043............................... 1,800 7,400 1,100 3,500 -1,500 -6,100 -4,300 -1,800 -4,000
2044............................... 1,800 7,000 1,100 3,000 -1,500 -6,400 -4,500 -1,900 -4,200
2045............................... 1,700 6,600 1,100 2,600 -1,600 -6,600 -4,600 -2,000 -4,400
2046............................... 1,700 6,500 1,000 2,400 -1,600 -6,800 -4,800 -2,000 -4,500
2047............................... 1,600 6,300 1,000 2,100 -1,700 -7,000 -4,900 -2,100 -4,600
2048............................... 1,600 6,000 1,000 1,800 -1,700 -7,100 -5,000 -2,100 -4,700
2049............................... 1,500 5,700 960 1,500 -1,700 -7,200 -5,000 -2,100 -4,800
2050............................... 1,500 5,500 940 1,300 -1,700 -7,300 -5,100 -2,200 -4,800
2051............................... 1,500 5,600 940 1,300 -1,800 -7,400 -5,100 -2,200 -4,800
2052............................... 1,500 5,600 950 1,300 -1,800 -7,400 -5,200 -2,200 -4,900
2053............................... 1,500 5,600 950 1,300 -1,800 -7,400 -5,200 -2,200 -4,900
2054............................... 1,500 5,600 940 1,300 -1,800 -7,400 -5,100 -2,200 -4,900
2055............................... 1,500 5,500 930 1,300 -1,800 -7,400 -5,100 -2,200 -4,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Negative numbers present emission decreases while positive numbers represent increases; CO emission rates were not available for calculating CO
inventories from EGUs.
Table 208 shows the net impact of the final standards on emissions
of criteria pollutants, accounting for vehicle, EGU, and refinery
emissions. In 2055, when the fleet will be largely comprised of
vehicles that meet the standards, there will be a net decrease in
emissions of PM2.5, NMOG, NOX, and SOX
(i.e., all the pollutants for which EPA has emissions estimates from
all three source sectors). The rule will result in net reductions of
PM2.5, NOX, NMOG, and CO emissions for all years
between 2030 and 2055. Net SOX emissions will be reduced
beginning in 2043. Until then, the increased electricity generation
associated with the final standards will result in net increases in
SOX emissions, which will peak in the mid-2030s.
Table 208--OMEGA Estimated Net Criteria Emission Impacts of the Final Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty Vehicles, EGUs and Refineries
[U.S. tons per year] \a\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Emission impacts relative to no action (thousand U.S. tons) Percent change from no action
Calendar year ---------------------------------------------------------------------------------------------------------------------------------
PM2.5 NOX NMOG SOX CO PM2.5 NOX NMOG SOX CO
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2027.......................................................... -93 120 -37 110 -420 -0.22 0.023 -0.0054 0.32 -0.0039
2028.......................................................... -230 330 -490 450 -6,700 -0.55 0.072 -0.079 1.3 -0.068
2029.......................................................... -380 350 -1,800 880 -25,000 -0.92 0.085 -0.31 2.6 -0.28
2030.......................................................... -600 170 -3,900 1,500 -54,000 -1.5 0.045 -0.72 4.7 -0.64
2031.......................................................... -770 170 -6,600 2,400 -92,000 -1.9 0.049 -1.3 7.7 -1.2
2032.......................................................... -970 -480 -9,800 3,100 -140,000 -2.4 -0.16 -2 10 -1.9
2033.......................................................... -1,300 -1,700 -15,000 3,600 -210,000 -3.3 -0.63 -3.2 12 -3.2
2034.......................................................... -1,600 -3,400 -20,000 3,800 -300,000 -4.2 -1.3 -4.4 14 -4.7
2035.......................................................... -2,000 -5,400 -26,000 3,800 -380,000 -5.2 -2.3 -6.1 15 -6.6
2036.......................................................... -2,400 -7,500 -32,000 3,700 -470,000 -6.3 -3.5 -7.9 15 -8.9
2037.......................................................... -2,900 -10,000 -38,000 3,300 -570,000 -7.7 -5.1 -10 13 -12
2038.......................................................... -3,500 -13,000 -45,000 2,800 -680,000 -9.3 -7 -12 12 -15
2039.......................................................... -4,100 -16,000 -51,000 2,200 -780,000 -11 -9.1 -14 9.4 -18
2040.......................................................... -4,700 -19,000 -57,000 1,500 -870,000 -13 -11 -17 6.7 -21
2041.......................................................... -5,200 -21,000 -63,000 1,100 -970,000 -14 -13 -19 4.9 -25
2042.......................................................... -5,600 -23,000 -70,000 600 -1,100,000 -15 -15 -22 2.8 -29
2043.......................................................... -6,100 -25,000 -77,000 78 -1,200,000 -16 -17 -24 0.37 -32
2044.......................................................... -6,500 -28,000 -83,000 -510 -1,300,000 -18 -19 -27 -2.5 -36
[[Page 28101]]
2045.......................................................... -6,900 -30,000 -89,000 -1,100 -1,300,000 -19 -20 -29 -5.7 -39
2046.......................................................... -7,200 -31,000 -96,000 -1,400 -1,400,000 -19 -22 -32 -7.5 -42
2047.......................................................... -7,500 -32,000 -100,000 -1,800 -1,500,000 -20 -23 -34 -9.5 -44
2048.......................................................... -7,800 -34,000 -110,000 -2,100 -1,600,000 -21 -23 -36 -12 -46
2049.......................................................... -8,100 -34,000 -120,000 -2,500 -1,600,000 -21 -24 -38 -14 -48
2050.......................................................... -8,300 -35,000 -120,000 -2,800 -1,700,000 -22 -25 -40 -16 -49
2051.......................................................... -8,400 -36,000 -130,000 -2,800 -1,700,000 -22 -25 -41 -16 -50
2052.......................................................... -8,500 -36,000 -130,000 -2,800 -1,700,000 -22 -25 -43 -16 -51
2053.......................................................... -8,600 -36,000 -140,000 -2,800 -1,700,000 -22 -25 -44 -16 -51
2054.......................................................... -8,700 -36,000 -140,000 -2,800 -1,700,000 -22 -25 -45 -16 -51
2055.......................................................... -8,700 -36,000 -150,000 -2,800 -1,700,000 -22 -25 -46 -16 -52
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Negative numbers present emission decreases while positive numbers represent increases; CO emission rates were not available for calculating CO inventories from EGUs, so CO impacts are
from vehicles and refineries only. Percent changes reflect changes associated with the light- and medium-duty fleet, not total U.S. inventories.
The estimated refinery emission impacts include consideration of
the impact of reduced liquid fuel demand on domestic refining. In the
NPRM, the central analysis estimated that impact at 93 percent. In
other words, 93 percent of the reduced liquid fuel demand results in
reduced domestic refining. EPA noted the possibility that reduced
domestic demand for liquid fuel would have no impact on domestic
refining. In other words, domestic refiners would continue refining
liquid fuel at the same levels and any excess would be exported for use
elsewhere. In that event, there would be no decrease in domestic
refinery emissions. In the proposal, EPA requested comment on the
correct portion of reduced liquid fuel demand that would result in
reduced domestic refining. EPA summarized those comments and provided
responses in section VI.B of the preamble.
As discussed in RIA Chapter 8.6, the final analysis estimates that
50 percent of reduced domestic liquid fuel demand will result in
reduced domestic refining. That estimate is reflected in the results
presented in Table 208. As a sensitivity, EPA also estimated that just
20 percent of reduced domestic liquid fuel demand would result in
reduced domestic refining. We chose this sensitivity as an estimate
that falls between our central case where 50 percent of reduced demand
would result in reduced domestic refining and a possible case in which
this final rule would have no impact on domestic refining. The criteria
pollutant impacts under that sensitivity case are shown in Table 209.
Table 209--OMEGA Estimated Net Criteria Emission Impacts of the Final Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty Vehicles, EGUs and Refineries, Under the Refinery
Sensitivity
[U.S. tons per year] \a\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Emission impacts relative to no action (thousand U.S. tons) Percent change from no action
Calendar year ---------------------------------------------------------------------------------------------------------------------------------
PM2.5 NOX NMOG SOX CO PM2.5 NOX NMOG SOX CO
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2027.......................................................... -91 120 -32 110 -410 -0.21 0.024 -0.0048 0.33 -0.0039
2028.......................................................... -220 380 -460 460 -6,700 -0.53 0.081 -0.074 1.3 -0.068
2029.......................................................... -350 490 -1,700 920 -25,000 -0.83 0.12 -0.29 2.7 -0.28
2030.......................................................... -540 450 -3,700 1,500 -54,000 -1.3 0.12 -0.68 4.9 -0.64
2031.......................................................... -660 630 -6,300 2,500 -92,000 -1.6 0.18 -1.2 8 -1.2
2032.......................................................... -810 190 -9,300 3,300 -140,000 -2 0.062 -1.9 10 -1.9
2033.......................................................... -1,100 -760 -14,000 3,900 -210,000 -2.6 -0.27 -3 13 -3.2
2034.......................................................... -1,300 -2,100 -19,000 4,200 -290,000 -3.3 -0.81 -4.2 15 -4.7
2035.......................................................... -1,600 -3,700 -25,000 4,200 -380,000 -4.1 -1.6 -5.8 16 -6.6
2036.......................................................... -1,900 -5,600 -31,000 4,200 -470,000 -5 -2.6 -7.5 16 -8.9
2037.......................................................... -2,400 -7,900 -37,000 3,900 -570,000 -6.2 -3.9 -9.7 16 -12
2038.......................................................... -2,900 -10,000 -43,000 3,600 -670,000 -7.6 -5.5 -12 14 -15
2039.......................................................... -3,400 -13,000 -49,000 3,000 -770,000 -9 -7.4 -14 12 -18
2040.......................................................... -3,900 -16,000 -55,000 2,400 -870,000 -10 -9.2 -16 10 -21
2041.......................................................... -4,400 -18,000 -61,000 2,000 -960,000 -12 -11 -18 8.8 -25
2042.......................................................... -4,800 -20,000 -67,000 1,600 -1,100,000 -13 -13 -21 7.2 -29
2043.......................................................... -5,200 -22,000 -74,000 1,200 -1,200,000 -14 -14 -23 5.3 -32
2044.......................................................... -5,600 -24,000 -80,000 630 -1,300,000 -15 -16 -26 2.9 -36
2045.......................................................... -5,900 -26,000 -86,000 72 -1,300,000 -16 -17 -28 0.35 -39
2046.......................................................... -6,200 -27,000 -93,000 -230 -1,400,000 -16 -18 -30 -1.1 -42
2047.......................................................... -6,500 -28,000 -100,000 -540 -1,500,000 -17 -19 -33 -2.7 -44
2048.......................................................... -6,800 -29,000 -110,000 -870 -1,600,000 -18 -20 -35 -4.4 -46
2049.......................................................... -7,000 -30,000 -110,000 -1,200 -1,600,000 -18 -21 -37 -6.2 -47
2050.......................................................... -7,200 -31,000 -120,000 -1,500 -1,700,000 -19 -21 -38 -7.9 -49
2051.......................................................... -7,300 -31,000 -120,000 -1,500 -1,700,000 -19 -21 -40 -7.9 -50
2052.......................................................... -7,400 -32,000 -130,000 -1,500 -1,700,000 -19 -21 -41 -7.9 -50
2053.......................................................... -7,500 -32,000 -130,000 -1,500 -1,700,000 -19 -21 -43 -7.9 -51
2054.......................................................... -7,600 -32,000 -140,000 -1,500 -1,700,000 -19 -21 -44 -7.9 -51
[[Page 28102]]
2055.......................................................... -7,700 -32,000 -140,000 -1,500 -1,700,000 -19 -21 -44 -7.8 -51
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Negative numbers present emission decreases while positive numbers represent increases; CO emission rates were not available for calculating CO inventories from EGUs, so CO impacts are
from vehicles and refineries only. Percent changes reflect changes associated with the light- and medium-duty fleet, not total U.S. inventories.
Table 210 shows reductions in vehicle emissions of air toxics. EPA
expects this rule will reduce emissions of air toxics from light- and
medium-duty vehicles. The GPF technology that EPA projects
manufacturers will choose to use in meeting the final PM standards will
decrease particle-phase pollutants, and the NMOG+NOX
standards will decrease gas-phase toxics.
For most air toxic emissions, EPA relies on estimates from EPA's
MOVES emissions model. In MOVES, emissions of most gaseous toxic
compounds are estimated as fractions of the emissions of VOC. Toxic
species in the particulate phase (e.g., polycyclic aromatic
hydrocarbons (PAHs)) are estimated as fractions of total organic carbon
smaller than 2.5 [mu]m (OC2.5). Thus, reductions in air
toxic emissions are proportional to modelled reductions in total VOCs
and/or OC2.5.\1357\ Emission measurements of PAHs in EPA's
recent GPF test program (see section III.D.3 of the preamble and RIA
Chapter 3.2.5) suggest this is a conservative estimate, as they
indicate reduction in emissions of particle-phase PAH compounds of over
99 percent, compared to about 95 percent for total PM.
---------------------------------------------------------------------------
\1357\ U. S. EPA (2020) Air Toxic Emissions from Onroad Vehicles
in MOVES3. Assessment and Standards Division, Office of
Transportation and Air Quality, Report No. EPA-420-R-20-022.
November 2020. https://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1010TJM.pdf.
Table 210--OMEGA Estimated Vehicle Air Toxic Emission Impacts of the Final Standards Relative to the No Action Scenario, Light-Duty and Medium-Duty
Vehicles
[U.S. tons per year] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Calendar year Acetaldehyde Benzene Formaldehyde Naphthalene 1,3 Butadiene 15 PAH
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.................................................... -0.74 -2.1 -0.33 -0.093 -0.27 -0.031
2028.................................................... -5.2 -15 -2.6 -0.72 -2.1 -0.093
2029.................................................... -18 -46 -9.5 -2.2 -6.9 -0.18
2030.................................................... -38 -99 -21 -4.4 -15 -0.33
2031.................................................... -64 -170 -35 -7.3 -24 -0.49
2032.................................................... -93 -240 -52 -11 -35 -0.65
2033.................................................... -140 -370 -79 -16 -54 -0.89
2034.................................................... -190 -510 -110 -22 -74 -1.1
2035.................................................... -250 -650 -140 -28 -95 -1.3
2036.................................................... -300 -790 -160 -34 -110 -1.6
2037.................................................... -340 -930 -190 -40 -130 -1.8
2038.................................................... -390 -1,100 -220 -46 -150 -2
2039.................................................... -440 -1,200 -250 -52 -170 -2.3
2040.................................................... -490 -1,300 -280 -57 -190 -2.5
2041.................................................... -520 -1,500 -300 -62 -200 -2.7
2042.................................................... -560 -1,600 -320 -67 -220 -2.9
2043.................................................... -600 -1,700 -340 -71 -230 -3.1
2044.................................................... -630 -1,800 -360 -75 -240 -3.3
2045.................................................... -650 -1,900 -380 -79 -250 -3.4
2046.................................................... -680 -2,000 -400 -82 -260 -3.5
2047.................................................... -700 -2,000 -410 -84 -270 -3.7
2048.................................................... -710 -2,100 -420 -86 -280 -3.8
2049.................................................... -720 -2,100 -430 -87 -280 -3.8
2050.................................................... -730 -2,200 -430 -89 -280 -3.9
2051.................................................... -740 -2,200 -440 -89 -280 -4
2052.................................................... -740 -2,300 -440 -90 -290 -4
2053.................................................... -750 -2,300 -440 -90 -290 -4.1
2054.................................................... -740 -2,300 -440 -90 -290 -4.1
2055.................................................... -740 -2,300 -440 -90 -290 -4.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Negative numbers represent emission decreases while positive numbers represent increases. Note that emission rates were not available for estimating
toxics emissions from EGUs or refineries.
B. How will the rule affect air quality?
As discussed in section VII.A of the preamble, we project that the
standards in the final rule will result in meaningful reductions in
emissions of criteria and toxic pollutants from light- and medium-duty
vehicles. We also project that the final standards will impact
corresponding ``upstream''
[[Page 28103]]
emission sources like EGUs (electric generating units) and refineries.
When feasible, we conduct full-scale photochemical air quality modeling
to estimate levels of criteria and air toxic pollutants, because the
atmospheric chemistry related to ambient concentrations of
PM2.5, ozone, and air toxics is very complex. Air quality
modeling was conducted for this rulemaking for the future year 2055,
when the program will be fully implemented and when most of the
regulated fleet will have turned over. We also modeled a sensitivity
case that examined only the air quality impacts of the onroad emissions
changes from the rule.
On the basis of the air quality modeling for this final rule, which
uses projected emission impacts from the proposed standards,\1358\ we
conclude that the rule will result in widespread decreases in air
pollution in 2055, even when accounting for the impacts of increased
electricity generation. We expect the power sector to become cleaner
over time as a result of the IRA and future policies, which will reduce
the air quality impacts of EGUs. Although the spatial resolution of the
air quality modeling is not sufficient to quantify them, this rule's
emission reductions will also lead to air pollution reductions in close
proximity to major roadways, where people of color and people with low
income are disproportionately exposed to elevated concentrations of
many air pollutants. The emission reductions provided by the final
standards will also be useful in helping areas attain and maintain the
NAAQS and prevent future nonattainment. In addition, the final
standards are expected to result in better visibility and reduced
deposition of air pollutants. Additional information and maps showing
expected changes in ambient concentrations of air pollutants in 2055
are included in Chapter 7 of the RIA and in the Air Quality Modeling
Memo to the Docket.
---------------------------------------------------------------------------
\1358\ Decisions about the emissions and other elements used in
the air quality modeling were made early in the analytical process
for the final rulemaking. Accordingly, the air quality analysis does
not fully represent the final regulatory scenario; however, we
consider the modeling results to be a fair reflection of the impact
the standards will have on air quality in 2055. Chapter 7 of the RIA
has more detail on the modeled scenarios.
---------------------------------------------------------------------------
1. Particulate Matter
We project that the rule will decrease annual average
PM2.5 concentrations by an average of 0.02 [mu]g/m\3\ in
2055, with a maximum decrease of 0.36 [mu]g/m\3\ and a maximum increase
of 0.20 [mu]g/m\3\. The population-weighted average change in annual
average PM2.5 concentrations will be a decrease of 0.04
[mu]g/m\3\ in 2055. In a few isolated areas, this rule is expected to
result in increases in annual average PM2.5, due to
increases in EGU emissions. However, we project that more than 99
percent of the population will experience reductions in annual average
PM2.5 concentrations as a result of this rule.
When only the onroad emissions impacts of the rule are considered,
annual average PM2.5 concentrations will decrease by an
average of 0.02 [mu]g/m\3\ in 2055, with a maximum decrease of 0.13
[mu]g/m\3\. The population-weighted average change in annual average
PM2.5 concentrations attributable to the onroad emissions
reductions will be a decrease of 0.04 [mu]g/m\3\ in 2055.
We received a few comments about the impacts on ambient
PM2.5 from the final standards. These commenters noted that
the air quality improvements from the PM exhaust standards were not
presented separately, and that the reductions in ambient
PM2.5 from the rule are a relatively small improvement
compared to the level of the annual average NAAQS. Additionally, a
commenter noted that we did not present projections of county-level
concentrations in 2055 which could be compared to the level of the
NAAQS. For purposes of the air quality analyses, we model the total
impacts of the standards.\1359\ Chapter 7.4 of the RIA contains more
detail on the impacts of the rule on PM2.5, as well as its
impacts on county-level PM2.5 design value concentrations in
2055. Detailed discussion of the comments we received on the
PM2.5 emissions and air quality impact of the standards can
be found in sections 4 and 11 of the RTC.
---------------------------------------------------------------------------
\1359\ Although the air quality modeling results lend further
support to the rationality of the standards, EPA does not view air
quality modeling as necessary to the justification of any of the
standards. The rationales for the standards, including the
significant emissions reductions from the regulated classes of motor
vehicles, are set forth in section V of this preamble.
---------------------------------------------------------------------------
2. Ozone
We project that the rule will decrease ozone concentrations by an
average of 0.09 ppb in 2055, with a maximum decrease of 0.71 ppb and a
maximum increase of 0.36 ppb. The population-weighted average change in
ozone concentrations will be a decrease of 0.16 ppb in 2055. In a few
isolated areas, this rule is expected to result in increases in annual
average ozone, likely due mainly to increases in EGU emissions.
However, we project that more than 99 percent of the population will
experience reductions in annual average ozone concentrations as a
result of this rule.
When only the onroad emissions impacts of the rule are considered,
ozone concentrations will decrease by an average of 0.09 ppb in 2055,
with a maximum decrease of 0.70 ppb. The population-weighted average
change in ozone concentrations attributable to the onroad emissions
reductions will be a decrease of 0.16 ppb in 2055.
Chapter 7.4 of the RIA contains more detail on the impacts of the
rule on ozone concentrations, as well as its impacts on county-level
ozone design value concentrations in 2055.
3. Nitrogen Dioxide
We project that the rule will decrease annual NO2
concentrations by an average of 0.01 ppb in 2055, with a maximum
decrease of 0.34 ppb and a maximum increase of 0.11 ppb. The
population-weighted average change in annual average NO2
concentrations will be a decrease of 0.08 ppb in 2055. In a few
isolated areas, this rule is expected to result in increases in annual
average NO2, likely due to increases in EGU emissions. However, we
project that more than 99 percent of the population will experience
reductions in annual average NO2 concentrations as a result
of this rule.
When only the onroad emissions impacts of the rule are considered,
NO2 concentrations will decrease by an average of 0.01 ppb
in 2055, with a maximum decrease 0.28 ppb. The population-weighted
average change in ozone concentrations attributable to the onroad
emissions reductions will be a decrease of 0.07 ppb in 2055
Chapter 7.4 of the RIA contains more detail on the impacts of the
rule on NO2 concentrations.
4. Sulfur Dioxide
We project that the rule will decrease annual SO2
concentrations by an average of 0.001 ppb in 2055, with a maximum
decrease of 0.26 ppb and a maximum increase of 0.32 ppb. The
population-weighted average change in annual average SO2
concentrations will be a decrease of 0.003 ppb in 2055. In some areas,
this rule is expected to result in increases in annual average
SO2, likely due to increases in EGU emissions. However, we
project that more than 99 percent of the population will experience
reductions in annual average SO2 concentrations as a result
of this rule.
When only the onroad emissions impacts of the rule are considered,
SO2 concentrations will decrease by an average of 0.0002 ppb
in 2055, with a maximum decrease of 0.01 ppb. The
[[Page 28104]]
population-weighted average change in SO2 concentrations
attributable to the onroad emissions reductions will be a decrease of
0.001 ppb in 2055.
Chapter 7.4 of the RIA contains more detail on the impacts of the
rule on SO2 concentrations.
5. Air Toxics
In general, the air quality modeling results indicate that the rule
will have relatively little impact on national average ambient
concentrations of the modeled air toxics in 2055. Specifically, in
2055, our modeling projects that ambient 1,3-butadiene, benzene, and
naphthalene concentrations will decrease by an average of less than
0.001 ug/m3 across the country. Acetaldehyde and formaldehyde will
generally have small decreases in most areas with average annual
reductions of 0.0021 ug/m3 and 0.0023 ppb for acetaldehyde and
formaldehyde, respectively. We do project slight increases in benzene
and formaldehyde concentrations in a few isolated areas of the country.
Chapter 7.4 of the RIA contains more detail on the impacts of the
modeled scenario on air toxics concentrations.
C. How will the rule affect human health?
As described in section VII.B of this preamble and RIA Chapter 7,
EPA conducted an air quality modeling analysis of a light- and medium-
duty vehicle policy scenario in 2055. The results of that analysis
found that in 2055, consistent with the OMEGA-based analysis, the
standards will result in widespread decreases in criteria pollutant
emissions that will lead to substantial improvements in public health
and welfare. We estimate that in 2055, 1,000 to 2,000 PM2.5-
related premature deaths will be avoided as a result of the modeled
policy scenario, depending on the assumed long-term exposure study of
PM2.5-related premature mortality risk. We also estimate
that the modeled policy scenario will avoid 25 to 550 ozone-related
premature deaths, depending on the assumed study of ozone-related
mortality risk. The monetized benefits of the improvements in public
health in 2055 related to the modeled policy scenario (which include
the monetized benefits of reductions in both mortality and non-fatal
illnesses) are $16 to $36 billion at a 2 percent discount rate. See RIA
Chapter 7.5 for more detail about the PM2.5 and ozone health
benefits analysis. We also note that the rule will result in widespread
decreases in GHG emissions, leading to significant benefits, including
improvements in human health. We discuss climate-related health impacts
in section II.A of the preamble and monetize the Social Cost of GHGs in
section VIII.E of the preamble.
D. Demographic Analysis of Air Quality
As noted in section VIII.J of the preamble, EPA received several
comments related to the environmental justice (EJ) impacts of light-
and medium-duty vehicles in general and the impacts of the proposal
specifically. After consideration of comments, we conducted an EJ
analysis using the 2055 air quality modeling data to evaluate how human
exposure to future air quality varies with population characteristics
relevant to potential environmental justice concerns in scenarios with
and without the rule in place. The analysis is described in detail in
RIA Chapter 7.6.
This rule applies nationally and will be implemented consistently
throughout the nation. Specifically, because this final rule affects
both onroad and upstream emissions, and because PM emission precursors
and ozone can undergo long-range transport, we believe it is
appropriate to conduct a national-scale EJ assessment of the contiguous
U.S. As described in section VII.B of the preamble, and as depicted in
the maps presented in RIA Chapter 7.4, these reductions will be
geographically widespread. However, the spatial resolution of the air
quality modeling data (12km by 12km grid cells) is not sufficient to
capture the very local heterogeneity of human exposures, particularly
the pollution concentration gradients near roads. Taking these factors
into consideration, this analysis evaluates both national population-
weighted average exposures and the distribution of exposure outcomes
that will result from the final rule.
On average, all population groups included in the analysis will
benefit from reductions in exposure to ambient PM2.5 and
ozone due to the final rule. However, we found that projected
disparities in national average PM2.5 and ozone
concentration exposure in 2055 are not likely mitigated or exacerbated
by the rule for most of the population groups evaluated, due to the
relatively similar pollution concentration reductions across
demographic groups, especially for ozone. However, for some population
groups, nationally-averaged exposure disparity is mitigated to a small
degree in both absolute and relative terms.
While national average results can provide some insight when
comparing within and across population groups, they do not provide
information on the full distribution of concentration impacts. This is
because both population groups and ambient concentrations can be
unevenly distributed across the spectrum of exposures, meaning that
average exposures may mask important regional disparities. We therefore
conducted a distributional analysis and found that for most of the
population groups, the small differences in the distribution of
pollution exposure reductions suggest that the rule is not likely to
exacerbate nor mitigate PM2.5 or ozone exposure concerns.
However, differences in the distribution of impacts between some groups
do exist. Most notably, we found that populations who live in large
urban areas and those who are linguistically isolated are more likely
to experience larger reductions in PM2.5 concentrations than
their comparison groups. We also observed that some race/ethnicity
groups, such as Hispanic, Non-Hispanic Black, and Non-Hispanic Asian
populations are more likely to experience larger reductions in
PM2.5 concentration than other race/ethnicity groups.
See RIA Chapter 7.6 for a detailed description of the methods and
results of these analyses, including tables of national population-
weighted average PM2.5 and ozone exposure concentrations for
each population group included in the analysis and plots of the
cumulative distribution of reductions in pollution related to the final
rule for the same population groups.
VIII. Estimated Costs and Benefits and Associated Considerations
This section summarizes our analyses of the rule's estimated costs,
savings, and benefits. Overall, these analyses further support the
reasonableness of the final standards.
Section VIII.A of the preamble summarizes the monetized costs,
benefits, and net benefits of the final standards. Component costs and
benefits, as well as transfers, are further discussed in sections
VIII.B (vehicle technology and other costs), VIII.C (fueling impacts),
V.D (non-emissions benefits), V.E (GHG benefits), V.F (criteria
benefits), and V.G (transfers) of the preamble. Overall, EPA finds that
the final rule creates significant positive net benefits for society.
In addition, even when considering costs alone, this rule creates large
cost savings due to cost increases (principally associated with higher
vehicle technology and EVSE costs) being offset by significantly larger
cost savings (principally associated with repair, maintenance,
[[Page 28105]]
and fuel savings). The benefits for this rule are also significant. The
greatest benefits accrue from GHG and PM2.5 emissions
reductions, but we also find large benefits from energy security and
increased driving value, as well as disbenefits associated with
somewhat greater refueling times.
EPA notes that, consistent with CAA section 202, in evaluating
potential standards we carefully weighed the statutory factors,
including the emissions impacts of the standards and the feasibility of
the standards (including cost of compliance in light of available lead
time). We monetize benefits of the standards and evaluate other costs
in part to enable a comparison of costs and benefits pursuant to E.O.
12866, but we recognize there are benefits that we are currently unable
to fully quantify. EPA's practice has been to set standards to achieve
improved air quality consistent with CAA section 202, and not to rely
on cost-benefit calculations, with their uncertainties and limitations,
in identifying the appropriate standards. Nonetheless, our conclusion
that the estimated benefits exceed the estimated costs of the final
program reinforces our view that the standards are appropriate under
section 202(a).
In sections VIII.H-K of this preamble, we consider additional non-
monetized factors. As with the cost-benefit analysis, we did not rely
on these factors in identifying the appropriate standards, but we find
that these factors further support the reasonableness of this rule. In
section VIII.H of this preamble, we find that this rule would have very
small impacts (less than 0.8 percent) on light-duty vehicle sales, with
increases in some years and decreases in other years. Though we do not
expect this rule to impact new vehicle sales in a large way, as
explained in section VIII.D.1 of this preamble we do expect the final
standards will lead to increases in vehicle efficiency, making it
possible for people to drive more without spending more and thus
benefit from increased access to mobility. In section VIII.I of this
preamble, we assess potential employment impacts, noting that the final
standards are expected to increase employment in some sectors (e.g.,
PEV and battery production), but decrease employment in other sectors
(e.g., ICE vehicle production). While we have not been able to
comprehensively quantify the employment impacts, our partial
quantitative analysis finds the potential for either an increase or
decrease in net employment, with results that lean toward increased
levels of net employment. In section VIII.J of this preamble, we
describe how large GHG emissions reductions resulting from the rule
will positively impact environmental justice. We also describe how the
vehicle-related criteria emissions reductions are also expected to
improve environmental conditions for communities near roadways. As
described in section VII of this preamble, we expect that this rule
will result in widespread decreases in air pollution in 2055, and
associated improvements in human health, even when accounting for the
impacts of increased electricity generation. In section VIII.K of this
preamble, we consider additional factors. Among other things, while we
expect increases in fatalities due to expected increases in driving, we
find that the rule has no statistically significant impact on
fatalities per mile driven. We do find a small, non-statistically
significant decrease of 0.01 percent in annual fatalities per billion
miles driven. On balance, our analysis of all the factors in section
VIII of this preamble further support the reasonableness of the final
standards.
A. Summary of Costs and Benefits
EPA estimates that the total benefits of this action far exceed the
total costs with the annualized value of monetized net benefits to
society estimated at $99 billion through the year 2055, assuming a 2
percent discount rate, as shown in Table 211.\1360\ The annualized
value of monetized emission benefits is $85 billion, with $72 billion
of that attributed to climate-related economic benefits from reducing
emissions of GHGs that contribute to climate change and the remainder
attributed to reduced emissions of criteria pollutants that contribute
to ambient concentrations of smaller particulate matter
(PM2.5). PM2.5 is associated with premature death
and serious health effects such as hospital admissions due to
respiratory and cardiovascular illnesses, nonfatal heart attacks,
aggravated asthma, and decreased lung function.
---------------------------------------------------------------------------
\1360\ All subsequent annualized costs and annualized benefits
cited in this section refer to the values generated at a 2 percent
discount rate.
---------------------------------------------------------------------------
The annualized value of vehicle technology costs is estimated at
$40 billion. Notably, this rule will result in significant savings in
vehicle maintenance and repair for consumers, which we estimate at an
annualized value of $16 billion (note that these values are presented
as negative costs, or savings, in the table). EPA projects generally
lower maintenance and repair costs for electric vehicles and those
societal maintenance and repair savings grow significantly over time.
We also estimate various impacts associated with our assumption that
consumers choose to drive more due to the lower cost of driving under
the standards, called the rebound effect (as discussed further in
section VIII of this preamble and in Chapters 8 and 9 of the RIA).
Increased traffic noise and congestion costs are two such effects due
to the rebound effect, which we estimate at an annualized value of $1.2
billion.
EPA also estimates impacts associated with fueling the vehicles
under our standards. The rule will provide significant savings to
society through reduced fuel expenditures with annualized pre-tax fuel
savings of $46 billion. Somewhat offsetting those fuel savings is the
expected cost of EV chargers, or electric vehicle supply equipment
(EVSE), of $9 billion.
This rule includes other benefits not associated with emission
reductions. Energy security benefits are estimated at an annualized
value of $2.1 billion. The drive value benefit, which is the value of
consumers' choice to drive more under the rebound effect, has an
estimated annualized value of $2.1 billion. The refueling time impact
includes two effects: time saved refueling for ICE vehicles with lower
fuel consumption under our standards, and mid-trip recharging events
for electric vehicles. Our past GHG rules have estimated that refueling
time would be reduced due to the lower fuel consumption of new
vehicles; hence, a benefit. However, in this analysis, we are
estimating that refueling time will increase somewhat overall for the
fleet due to our additional assumption for mid-trip recharging events
for electric vehicles. Therefore, the refueling time impact represents
a disbenefit (a negative benefit) as shown, with an annualized value at
negative $0.8 billion. As noted in section VIII of this preamble and in
RIA Chapter 4, we have updated our refueling time estimates but still
consider them to be conservatively high for electric vehicles
considering the rapid changes taking place in electric vehicle charging
infrastructure driven largely by the Bipartisan Infrastructure Law and
the Inflation Reduction Act.
Note that some costs are shown as negative values in Table 211.
Those entries represent savings but are included under the ``costs''
category because, in past rules, categories such as repair and
maintenance have been viewed as costs of vehicle operation; as
discussed above, under this rule we project significant savings in
repair and maintenance costs for consumers. Where negative values are
shown, we
[[Page 28106]]
are estimating that those costs are lower under the final standards
than in the No Action case.
EPA received several comments related to the benefit-cost analysis.
We summarize and respond to those comments in the Response to Comments
document that accompanies this rulemaking. We have updated our analysis
in light of comments and new data although we have not changed our
general framework for conducting our benefit cost analysis.
Consideration of comments also did not affect our conclusion that the
benefits of the proposed and final rules significantly outweigh the
costs. EPA follows applicable guidance and best practices when
conducting its benefit-cost analyses.\1361\ We therefore consider our
analysis methodologically rigorous and a best estimate of the projected
benefits and costs associated with the final rule.
---------------------------------------------------------------------------
\1361\ Monetized climate benefits are presented under a 2
percent near-term Ramsey discount rate, consistent with EPA's
updated estimates of the SC-GHG. The 2003 version of OMB's Circular
A-4 had generally recommended 3 percent and 7 percent as default
discount rates for costs and benefits, though as part of the
Interagency Working Group on the Social Cost of Greenhouse Gases,
OMB had also long recognized that climate effects should be
discounted only at appropriate consumption-based discount rates.
While we were conducting the analysis for this rule, OMB finalized
an update to Circular A-4, in which it recommended the general
application of a 2 percent discount rate to costs and benefits
(subject to regular updates), as well as the consideration of the
shadow price of capital when costs or benefits are likely to accrue
to capital (OMB 2023). Because the SC-GHG estimates reflect net
climate change damages in terms of reduced consumption (or monetary
consumption equivalents), the use of the social rate of return on
capital (7 percent under OMB Circular A-4 (2003)) to discount
damages estimated in terms of reduced consumption would
inappropriately underestimate the impacts of climate change for the
purposes of estimating the SC-GHG. See section of VIII.E of the
preamble and RIA Chapter 6.2 for more detail.
---------------------------------------------------------------------------
Here we summarize results for the final standards. We present
results for the two alternatives in Chapter 9 of the RIA.
[[Page 28107]]
Table 211--Summary of Costs, Fuel Savings and Benefits of the Final Rule
[Billions of 2022 dollars] \a\ \b\ \c\ \d\
--------------------------------------------------------------------------------------------------------------------------------------------------------
CY 2055 PV, 2% PV, 3% PV, 7% AV, 2% AV, 3% AV, 7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs................ $38 $870 $760 $450 $40 $39 $37
Insurance Costs......................... 1.9 33 28 15 1.5 1.4 1.2
Repair Costs............................ -7.1 -40 -32 -12 -1.8 -1.6 -0.99
Maintenance Costs....................... -35 -300 -250 -110 -14 -13 -9.3
Congestion Costs........................ 2.4 25 21 10 1.2 1.1 0.83
Noise Costs............................. 0.04 0.41 0.34 0.17 0.019 0.018 0.014
---------------------------------------------------------------------------------------------------------------
Sum of Costs........................ 0.59 590 530 350 27 28 29
Pre-tax Fuel Savings.................... 94 1,000 840 420 46 44 34
EVSE Port Costs......................... 8.6 190 160 96 9 8.8 7.9
---------------------------------------------------------------------------------------------------------------
Sum of Fuel Savings less EVSE Port 86 820 680 330 37 35 26
Costs..............................
Drive Value Benefits.................... 4.7 46 38 18 2.1 2 1.5
Refueling Time Benefits................. -1.7 -17 -15 -7.5 -0.8 -0.76 -0.61
Energy Security Benefits................ 4.1 47 39 20 2.1 2 1.6
---------------------------------------------------------------------------------------------------------------
Sum of Non-Emission Benefits........ 7 75 62 30 3.4 3.2 2.5
Climate Benefits, 2% Near-term Ramsey... 150 1,600 1,600 1,600 72 72 72
PM2.5 Health Benefits................... 25 240 200 88 13 10 7.2
---------------------------------------------------------------------------------------------------------------
Sum of Emission Benefits............ 170 1,800 1,800 1,700 85 83 80
Net Benefits.................... 270 2,100 2,000 1,700 99 94 80
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Net benefits are emission benefits, non-emission benefits, and fuel savings (less EVSE port costs) minus the costs of the program. Values rounded to
two significant figures; totals may not sum due to rounding. Present and annualized values are based on the stream of annual calendar year costs and
benefits included in the analysis (2027--2055) and discounted back to year 2027. Climate benefits are based on reductions in GHG emissions and are
calculated using three different SC-GHG estimates that assume either a 1.5 percent, 2.0 percent, or 2.5 percent near-term Ramsey discount rate. See
EPA's Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific Advances (EPA, 2023). For presentational purposes in
this table, we use the climate benefits associated with the SC-GHG under the 2-percent near-term Ramsey discount rate. See section VIII.E of this
preamble for the full range of monetized climate benefit estimates. All other costs and benefits are discounted using either a 2-percent, 3-percent,
or 7-percent constant discount rate. For further discussion of the SC-GHGs and how EPA accounted for these estimates, please refer to section VIII.E
of this preamble and Chapter 6.2 of the RIA.
\b\ To calculate net benefits, we use the monetized suite of total avoided PM2.5-related health effects that includes avoided deaths based on the Pope
III et al., 2019 study, which is the larger of the two PM2.5 health benefits estimates presented in section VIII.F of this preamble.
\c\ The annual PM2.5 health benefits estimate presented in the CY 2055 column reflects the value of certain avoided health outcomes, such as avoided
deaths, that are expected to accrue over more than a single year discounted using a 3-percent discount rate.
\d\ We do not currently have year-over-year estimates of PM2.5 benefits that discount such annual health outcomes using a 2-percent discount rate. We
have therefore discounted the annual stream of health benefits that reflect a 3-percent discount rate lag adjustment using a 2-percent discount rate
to populate the PV, 2 percent and AV, 2 percent columns. The annual stream of PM2.5-related health benefits that reflect a 3-percent and 7-percent
discount rate lag adjustment were used to populate the PV/AV 3 percent and PV/AV 7 percent columns, respectively. See section VIII.F of this preamble
for more details on the annual stream of PM2.5-related benefits associated with this rule.
[[Page 28108]]
B. Vehicle Technology and Other Costs
Table 212 shows the estimated annual costs of the program for the
indicated calendar years (CY). The table also shows the present-values
(PV) of those costs and the annualized values (AV) for the calendar
years 2027-2055 using 2, 3 and 7 percent discount rates.\1362\
---------------------------------------------------------------------------
\1362\ For the estimation of the stream of costs and benefits,
we assume that the MY 2032 standards apply to each year thereafter.
Table 212--Costs Associated With the Final Rule
[Billions of 2022 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vehicle
Calendar year technology Insurance Repair costs Maintenance Congestion Noise costs Sum of costs
costs costs costs costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.................................... $2.6 $0.02 $0.027 $0.042 $0.0013 $0.000015 $2.7
2028.................................... 7.3 0.06 0.081 0.096 0.027 0.00041 7.6
2029.................................... 16 0.15 0.16 0.089 0.05 0.00077 17
2030.................................... 23 0.27 0.26 -0.027 0.073 0.0011 24
2031.................................... 29 0.41 0.35 -0.35 0.094 0.0015 29
2032.................................... 30 0.55 0.38 -$0.9 0.11 0.0017 30
2035.................................... 55 1.5 0.7 -3.3 0.59 0.0095 54
2040.................................... 50 2.1 -0.81 -13 1.3 0.021 40
2045.................................... 46 2.3 -3.4 -24 1.9 0.03 23
2050.................................... 42 2.1 -5.7 -32 2.3 0.037 9.4
2055.................................... 38 1.9 -7.1 -35 2.4 0.04 0.59
PV2..................................... 870 33 -40 -300 25 0.41 590
PV3..................................... 760 28 -32 -250 21 0.34 530
PV7..................................... 450 15 -12 -110 10 0.17 350
AV2..................................... 40 1.5 -1.8 -14 1.2 0.019 27
AV3..................................... 39 1.4 -1.6 -13 1.1 0.018 28
AV7..................................... 37 1.2 -0.99 -9.3 0.83 0.014 29
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Vehicle Technology Costs
We expect the technology costs of the program will result in a rise
in the average purchase price for consumers, for both new and used
vehicles. While we expect that vehicle manufacturers may choose to
strategically price vehicles (e.g., subsidizing a lower price for some
vehicles with a higher price for others), we assume in our modeling
that increased vehicle technology costs will fully impact purchase
prices paid by consumers. The projected vehicle technology costs shown
in Table 212 represent the incremental costs to manufacturers and,
because we are presenting social costs, they exclude cost reductions
available to manufacturers by the IRA battery tax credits (i.e., the
IRC 45X credits). For consumers, projected vehicle technology costs are
offset by savings in reduced operating costs, including fuel savings
and reduced maintenance and repair costs, as discussed in section
VIII.K of this preamble and in Chapter 4 of the RIA. Additionally,
consumers may also benefit from IRA purchase incentives for PEVs.
Our estimated incremental vehicle technology costs have increased
since the NPRM, which we discuss at length throughout this preamble.
The technology cost updates resulted in generally lower cost inputs but
the magnitude of the changes were larger for ICE technologies than for
HEV, PHEV and BEV technologies. As a result, the incremental costs of
our Action scenarios compared to the No Action case have increased.
2. Insurance Costs
Associated with the changing cost of vehicles will be a change in
insurance paid by owners and drivers of those vehicles. We received
comment that we should have included insurance costs in our analysis,
and we agree that it is appropriate to do so. To estimate insurance
costs, we made use of an analysis done by ANL which focused on
insurance costs associated with comprehensive and collision
coverage.\1363\ In that report, ANL presented the data shown in Table
213 which is what we have used in OMEGA to estimate insurance costs.
---------------------------------------------------------------------------
\1363\ ``Comprehensive Total Cost of Ownership Quantification
for Vehicles with Different Size Classes and Powertrains, ANL/ESD-
21/4,'' Argonne National Laboratory, Energy Systems Division, April
2021.
Table 213--Annual Comprehensive and Collision Premium With $500
Deductible, 2019 Dollars \a\
------------------------------------------------------------------------
Body style ICE, HEV, PHEV, BEV powertrains
------------------------------------------------------------------------
Car.................................... (Vehicle value x 0.009 + $220)
x 1.19.
CUV/SUV................................ (Vehicle value x 0.005 + $240)
x 1.19.
Pickup................................. (Vehicle value x 0.006 + $210)
x 1.19.
------------------------------------------------------------------------
\a\ Vehicle value is calculated as the depreciated value of the vehicle
as it ages.
To estimate the vehicle value in calculating insurance costs, we
used a 14.9 percent annual depreciation rate (see Chapter 4.3.6 of the
RIA). That depreciation rate is applied to the estimated price of the
vehicle when new, which we take to be the purchase price calculated
within OMEGA taking into consideration cross-subsidies and any
applicable battery tax credits or, in other words, the estimated price
paid by the consumer prior to receiving a vehicle purchase tax credit.
We did not estimate insurance costs in the NPRM, so these costs are
new and represent increased costs relative to the proposal. As
discussed, our estimated insurance rates differ slightly by body-style,
but not by powertrain type. Note that insurance costs are calculated
for all years of a vehicle's lifetime.
3. Maintenance and Repair Costs
Maintenance and repair (M&R) are significant components of the cost
of ownership for any vehicle. According to Edmunds, maintenance costs
consist of two types of maintenance: scheduled and unscheduled.
Scheduled maintenance is the performance of factory-recommended items
at periodic mileage or calendar intervals. Unscheduled maintenance
includes wheel alignment and the replacement of items subject to wear
and usage such as the low-voltage battery, brakes, headlights, hoses,
exhaust system parts,
[[Page 28109]]
taillight/turn signal bulbs, tires, and wiper blades/inserts.\1364\
Repairs, in contrast, are done to fix malfunctioning parts that inhibit
the use of the vehicle. The differentiation between the items that are
included in unscheduled maintenance versus repairs may be arbitrary,
but the items considered repairs generally follow the systems that are
covered in vehicle comprehensive (i.e., ``bumper-to-bumper'')
warranties offered by automakers, which exclude common ``wear'' items
like tires, brakes, and the low-voltage battery.\1365\
---------------------------------------------------------------------------
\1364\ Edmunds, ``Edmunds.com/tco.html,'' Edmunds, [Online].
Available: Edmunds.com/tco.html. Accessed 24 February 2022.
\1365\ D. Muller, ``Warranties Defined: The Truth behind the
Promises,'' Car and Driver, 29 May 2017.
---------------------------------------------------------------------------
We received comment that replacement of the high-voltage battery in
PEVs should be considered as a maintenance and repair cost. EPA
disagrees that high-voltage batteries will routinely need to be
replaced in this way during the useful life of the vehicle. Based on
current experience with vehicles in use in the field, and consultations
on this topic that EPA has conducted with experts, stakeholders, and
manufacturers, EPA finds no evidence that battery replacements out of
warranty will typically be necessary for PEVs during their useful life,
and therefore we do not include the cost of battery replacement in the
cost of PEV maintenance and repair. We also note that the battery
durability and warranty standards established in this rule provide
greater assurance and transparency regarding battery performance and
the conditions under which a warranty repair or replacement must be
honored.
To estimate maintenance and repair costs, we have used the data
gathered and summarized by Argonne National Laboratory (ANL) in their
evaluation of the total cost of ownership for vehicles of various sizes
and powertrains.\1366\
---------------------------------------------------------------------------
\1366\ ``Comprehensive Total Cost of Ownership Quantification
for Vehicles with Different Size Classes and Powertrains, ANL/ESD-
21/4,'' Argonne National Laboratory, Energy Systems Division, April
2021.
---------------------------------------------------------------------------
i. Maintenance Costs
Maintenance costs are an important consideration in the full
accounting of social benefits and costs and in a consumer's purchase
decision process. In their study, ANL developed a generic maintenance
service schedule for various powertrain types using owner's manuals
from various vehicle makes and models, assuming that drivers would
follow the recommended service intervals. After developing the
maintenance schedules, the authors collected national average costs for
each of the preventative and unscheduled services, noting several
instances where differences in consumer characteristics and in vehicle
attributes were likely important but not quantified/quantifiable.
Using the schedules and costs developed by the ANL authors and
presented in the RIA, OMEGA calculates the cumulative maintenance costs
from mile zero through mile 225,000. Because maintenance costs
typically increase over the life of the vehicle, we estimate
maintenance and repair costs per mile at a constant slope with an
intercept set to $0 per mile such that the cumulative costs per the
maintenance schedule are reached at 225,000 miles. Following this
approach, the maintenance cost per mile curves calculated within OMEGA
are as shown in Figure 44.
[GRAPHIC] [TIFF OMITTED] TR18AP24.042
Figure 44: Maintenance Cost per Mile (2019 Dollars) at Various Odometer
Readings
Using these maintenance cost per mile curves, OMEGA then calculates
the estimated maintenance costs in any given year of a vehicle's life
based on the miles traveled in that year. Table 212 presents the
maintenance costs (savings) associated with the final rule. For a more
detailed discussion of maintenance costs, including costs associated
with the alternative scenarios analyzed in support of this final rule,
see RIA Chapter 4.
Our maintenance savings are lower in the final analysis than in the
NPRM. Because maintenance costs are estimated to depend on both
powertrain type and miles driven, our incremental
[[Page 28110]]
maintenance costs are lower because the central case final analysis has
slightly fewer BEVs and slightly more PHEVs and HEVs than the proposal,
and because we have more rebound driving in the final analysis than in
the NPRM for reasons discussed in Chapter 8.3 of the RIA.
ii. Repair Costs
Repairs are done to fix malfunctioning parts that inhibit the use
of the vehicle and are generally considered to address problems
associated with parts or systems that are covered under typical
manufacturer bumper-to-bumper type warranties. In the ANL study, the
authors were able to develop a repair cost curve for a gasoline car and
a series of scalers that could be applied to that curve to estimate
repair costs for other powertrains and vehicle types.
OMEGA makes use of ANL's cost curve and multipliers to estimate
repair costs per mile at any age in a vehicle's life. Figure 45
provides repair cost per mile for a $35,000 car, van/SUV, and pickup,
and Figure 46 provides the same information for medium-duty vans and
pickups.
[GRAPHIC] [TIFF OMITTED] TR18AP24.043
Figure 45: Repair Cost Per Mile (2019 Dollars) for a $35,000 Car, Van/
SUV, and Pickup With Various Powertrains by Vehicle Age in Years
[GRAPHIC] [TIFF OMITTED] TR18AP24.044
Figure 46: Repair Cost Per Mile (2019 Dollars) for a Medium-Duty Van
and Pickup With Various Powertrains by Vehicle Age in Years
Table 212 presents the repair costs associated with the final rule.
A more detailed discussion of repair costs appears in RIA Chapter 4.
Similar to maintenance savings, our incremental repair savings are
lower in the final analysis compared to the NPRM but for slightly
different reasons. Our estimated repair costs depend on body style,
powertrain type and, importantly, estimated vehicle cost when new.
While our final analysis has more pickups and SUVs than our proposal,
which serves to reduce repair costs, our final analysis also has
slightly fewer BEVs and more HEVs and PHEVs than in our NPRM which
serves to increase costs. More importantly, our incremental vehicle
costs are higher in the final analysis due in part to the updated
technology costs as discussed in Chapters 2.5 and 2.6 of the RIA and
because of inflationary effects on manufacturer suggested retail prices
in our base year analysis fleet.
4. Congestion and Noise Costs
Costs associated with congestion and noise can increase in the
event that drivers with more efficient vehicles drive more than they
otherwise would have. This can occur because more efficient vehicles
have lower fuel costs per mile of driving which allows drivers to drive
more miles while spending the same amount of money they spent while
driving their old, less efficient vehicle. This is known as the
``rebound effect.'' Delays associated with congestion impose higher
costs on road users in the form of increased travel time and operating
expenses. Likewise, vehicles driving more miles on roadways leads to
more road noise from tires, wind, engines, and motors.
As in past rulemakings (i.e., GHG 2010, 2012, and 2021), EPA relies
on estimates of congestion and noise costs developed by the Federal
Highway Administration's (FHWA's), specifically the ``Middle''
estimates for marginal congestion and noise costs, to estimate the
increased external costs caused by added driving due to the rebound
effect. FHWA's congestion and noise cost estimates focus on freeways.
EPA, however, applies the congestion cost to all vehicle miles, freeway
and non-freeway and including rebound miles to ensure that these costs
are not underestimated. Table 214 shows the values used as inputs to
OMEGA and
[[Page 28111]]
adjusted within the model to the dollar basis used in the analysis.
Table 214--Costs Associated With Congestion and Noise
[2018 Dollars per vehicle mile]
----------------------------------------------------------------------------------------------------------------
Sedans/wagons CUVs/SUVs/vans Pickups
----------------------------------------------------------------------------------------------------------------
Congestion.................................................. 0.0634 0.0634 0.0566
Noise....................................................... 0.0009 0.0009 0.0009
----------------------------------------------------------------------------------------------------------------
Both incremental congestion and noise costs are higher in our final
analysis than our NPRM due to the additional rebound miles estimated in
the final analysis which uses the same rebound rates as in the NPRM but
with an updated methodology to more appropriately account for PHEVs
(See Chapter 8.3 of the RIA).
C. Fueling Impacts
1. Fuel Savings
The final standards are projected to reduce liquid fuel consumption
(gasoline and diesel) while simultaneously increasing electricity
consumption. The net effect of these changes in consumption for
consumers is decreased fuel expenditures or fuel savings. For more
information regarding fuel consumption, including other considerations
like rebound driving, see RIA Chapter 4.
Fuel savings arise from reduced expenditures on liquid fuel due to
reduced consumption of those fuels. Electricity consumption is expected
to increase, with a corresponding increase in expenditures on
electricity, due to electric vehicles replacing liquid-fueled vehicles.
We describe how we calculate reduced fuel consumption and increased
electricity consumption in Chapter 8 of the RIA. Table 215 presents
liquid-fuel and electricity consumption impacts.
Table 215--Liquid-Fuel and Electricity Consumption Impacts Associated With the Final Rule
----------------------------------------------------------------------------------------------------------------
Gasoline Diesel
Calendar year (billion (billion Electricity
gallons) gallons) (billion kWh)
----------------------------------------------------------------------------------------------------------------
2027............................................................ -0.068 -0.0025 0.94
2028............................................................ -0.47 -0.0043 4.1
2029............................................................ -1.4 -0.03 13
2030............................................................ -2.9 -0.097 27
2031............................................................ -4.8 -0.17 47
2032............................................................ -6.9 -0.27 67
2035............................................................ -16 -0.54 150
2040............................................................ -29 -0.8 260
2045............................................................ -38 -0.99 330
2050............................................................ -41 -1.1 350
2055............................................................ -42 -1.3 360
-----------------------------------------------
sum......................................................... -760 -21 6,700
----------------------------------------------------------------------------------------------------------------
Table 216 presents the retail fuel savings, net of savings in
liquid fuel expenditures and increases in electricity expenditures.
These represent savings that consumers would realize. The table also
presents the pretax fuel savings, net of savings in liquid fuel
expenditures and increases in electricity expenditures. These represent
the savings included in the net benefit calculation since fuel taxes do
not contribute to the value of the fuel. We present fuel tax impacts
along with other transfers in section VIII.G of this preamble.
Table 216--Fuel Savings Associated With the Final Rule
[Billions of 2022 dollars] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gasoline Diesel Electricity Sum
Calendar year -------------------------------------------------------------------------------------------------------
Retail Pretax Retail Pretax Retail Pretax Retail Pretax
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027............................................ $0.18 $0.14 $0.0092 $0.0079 $0.021 $0.02 $0.21 $0.17
2028............................................ 1.4 1.1 0.016 0.013 -0.26 -0.24 1.1 0.89
2029............................................ 4.3 3.5 0.11 0.095 -1.2 -1.1 3.2 2.5
2030............................................ 8.5 7.1 0.35 0.3 -2.6 -2.5 6.3 4.9
2031............................................ 14 12 0.61 0.52 -4.5 -4.3 10 7.9
2032............................................ 20 17 1 0.86 -6.8 -6.4 14 11
2035............................................ 47 39 2 1.7 -14 -13 35 28
2040............................................ 85 72 3 2.6 -22 -21 66 53
2045............................................ 110 94 3.8 3.3 -27 -26 87 71
2050............................................ 130 110 4.5 3.9 -28 -27 100 86
2055............................................ 140 120 4.9 4.3 -29 -27 110 94
PV2............................................. 1,600 1,300 57 49 -380 -360 1,200 1,000
[[Page 28112]]
PV3............................................. 1,300 1,100 47 41 -320 -300 1,000 840
PV7............................................. 660 560 24 21 -170 -160 520 420
AV2............................................. 72 61 2.6 2.3 -18 -17 57 46
AV3............................................. 68 58 2.5 2.2 -17 -16 54 44
AV7............................................. 54 46 2 1.7 -14 -13 42 34
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Positive values represent monetary savings while negative values represent increased costs.
Our incremental retail fuel savings in the final analysis are lower
than those estimated in the NPRM due to the lower share of BEVs in the
vehicle stock (roughly 42 percent in 2055 versus nearly 50 percent in
the NPRM).
2. EVSE Costs
Another fueling impact included in the net benefits calculation is
the EVSE costs discussed in section IV.C of this preamble and in
Chapter 5 of the RIA. We present our estimated EVSE costs in Table 217.
Note that the costs shown in Table 217 represent costs associated with
the EVSE ports themselves and not the electricity delivered by them.
Those electricity costs are included in Table 216.
Table 217--EVSE Costs Associated With the Final Rule
[Billions of 2022 dollars] \a\
------------------------------------------------------------------------
Calendar year EVSE costs
------------------------------------------------------------------------
2027.................................................... $1.3
2028.................................................... 0.55
2029.................................................... 2.3
2030.................................................... 2.3
2031.................................................... 10
2032.................................................... 10
2035.................................................... 10
2040.................................................... 9
2045.................................................... 12
2050.................................................... 13
2055.................................................... 8.6
PV2..................................................... 190
PV3..................................................... 160
PV7..................................................... 96
AV2..................................................... 9
AV3..................................................... 8.8
AV7..................................................... 7.9
------------------------------------------------------------------------
\a\ Positive values represent costs.
D. Non-Emission Benefits
Table 218 presents the estimated benefits that are not a direct
result of emission inventory changes. Those benefits include the drive
value, reductions in refueling time, and energy security. As shown in
the table, the refueling time benefits are negative, meaning they are
disbenefits. This benefit category in past rules has primarily
represented reduced time spent on refueling due to improved vehicle
efficiency. However, in this rule we're also including an estimate of
mid-trip charging for BEVs, which includes increased time for refueling
compared to ICE vehicles, resulting in more refueling time overall
under the final standards and, therefore, a disbenefit.
Table 218--Non-Emission Benefits Associated With the Final Rule
[Billions of 2022 dollars] \a\
----------------------------------------------------------------------------------------------------------------
Drive value Refueling time Energy security
Calendar year benefits benefits benefits Sum
----------------------------------------------------------------------------------------------------------------
2027......................................... $0.002 $0.0022 $0.0047 $0.0089
2028......................................... 0.042 0.026 0.032 0.1
2029......................................... 0.081 -0.012 0.1 0.17
2030......................................... 0.12 -0.11 0.21 0.22
2031......................................... 0.16 -0.27 0.36 0.26
2032......................................... 0.2 -0.47 0.53 0.26
2035......................................... 1 -0.59 1.3 1.7
2040......................................... 2.3 -0.86 2.5 3.9
2045......................................... 3.3 -1.1 3.4 5.6
2050......................................... 4.2 -1.4 4 6.8
2055......................................... 4.7 -1.7 4.1 7
PV2.......................................... 46 -17 47 75
PV3.......................................... 38 -15 39 62
PV7.......................................... 18 -7.5 20 30
AV2.......................................... 2.1 -0.8 2.1 3.4
AV3.......................................... 2 -0.76 2 3.2
AV7.......................................... 1.5 -0.61 1.6 2.5
----------------------------------------------------------------------------------------------------------------
\a\ Negative values represent disbenefits.
1. Drive Value
Mentioned briefly above and discussed in greater detail in Chapter
4 of the RIA, the rebound effect might occur when an increase in
vehicle efficiency makes it possible for people to choose to drive more
without spending more because of the lower cost per mile of driving.
Additional driving can lead to costs and benefits that can be
monetized. See RIA Chapter 4 for a discussion of our estimates of the
rebound effect. In this section, we take the size of the rebound
effect, as discussed in the RIA, and highlight the costs and benefits
associated with additional driving.
[[Page 28113]]
The increase in travel associated with the rebound effect produces
social and economic opportunities that become accessible with
additional travel. We estimate the economic benefits from increased
rebound-effect driving as the sum of the fuel costs paid to drive those
miles and the owner/operator surplus from the additional accessibility
that driving provides. These benefits are known as the drive value and
appear in Table 218.
The economic value of the increased owner/operator surplus provided
by additional driving is estimated as one half of the product of the
fuel savings per mile and rebound miles.\1367\ Because fuel savings
differ among vehicles in response to standards, the value of benefits
from increased vehicle use differs by model year and varies across our
sensitivity cases and alternative standards considered.
---------------------------------------------------------------------------
\1367\ The fuel costs of the rebound miles driven are simply the
number of rebound miles multiplied by the cost per mile of driving
them.
---------------------------------------------------------------------------
Our incremental drive value benefits are higher in the final
analysis than the NPRM due entirely to revised estimation of rebound
miles used for the final analysis and as discussed in Chapter 8.3 of
the RIA. As noted in section VIII.B.4 of the preamble the change in
rebound miles between the final analysis and the NPRM is the result of
our improved calculation approach within OMEGA and not the result of
any changes to the elasticity parameter used in calculating rebound.
2. Refueling Time
In our analyses, we take into account refueling differences among
liquid fuel vehicles, BEVs, and PHEVs. Provided fuel tanks on liquid
fueled vehicles retain their capacity, lower fuel consumption is
expected to reduce the frequency of refueling events and therefore
reduce the time spent refueling resulting from less time spent seeking
a refueling opportunity. OEMs may also elect to package smaller fuel
tanks, leveraging lower fuel consumption to meet vehicle range, which
would maintain fueling frequency but decrease the time spent refueling
since it takes less time to fill a smaller fuel tank. Consistent with
past analyses, we have estimated the former of these possibilities with
respect to liquid fueled vehicles.
Electric vehicles are fueled via charging events. Many charging
events are expected to occur at an owner's residence via a personally
owned charge point or during work hours using an employer owned charge
point, both of which impose very little time burden on the driver.
However, charging events will also occur in public places where the
burden on the driver's time may be relatively long (e.g., when drivers
are in the midst of an extended road trip). Thus, liquid fueling events
and mid-trip charging events are the focus of our refueling time
analysis. See RIA Chapter 4 for a more detailed discussion of this
analysis.
The estimated incremental refueling time disbenefits are lower in
the final analysis than the NPRM due largely to the updated number of
miles per hour of mid-trip charging where the NPRM used a value of 100
miles per hour of charging and the final analysis uses a value of 400
miles per hour of charging. We discuss this change in more detail in
Chapter 4.3 of the RIA.
3. Energy Security Impacts
In this section, we evaluate the energy security impacts of the
final standards. Energy security is broadly defined as the
uninterrupted availability of energy sources at affordable
prices.\1368\ Energy independence and energy security are distinct but
related concepts, and an analysis of energy independence informs our
assessment of energy security. The goal of U.S. energy independence is
the elimination of all U.S. imports of petroleum and other foreign
sources of energy, but more broadly, it is the elimination of U.S.
sensitivity to variations in the price and supply of foreign sources of
energy.\1369\ Promoting energy independence and security through
reducing demand for refined petroleum use by motor vehicles has long
been a goal of both Congress and the Executive Branch because of both
the economic and national security benefits of reduced dependence on
imported oil, and was an important reason for amendments to the Clean
Air Act in 1990, 2005, and 2007.\1370\ See Chapter 10 of the RIA for a
more detailed assessment of energy security and energy independence
impacts of this final rule. See section IV.C.7.iii of this preamble and
Chapter 3 of the RIA for a discussion of critical materials and PEV
supply chains.
---------------------------------------------------------------------------
\1368\ IEA, Energy Security: ensuring the uninterrupted
availability of energy sources at an affordable price. 2019.
December.
\1369\ Greene, D. 2010. Measuring energy security: Can the
United States achieve oil independence? Energy Policy. 38. pp. 1614-
1621.
\1370\ See e.g., 136 Cong. Rec. 11989 (May 23, 1990) (Rep.
Waxman stating that clean fuel vehicles program is ``tremendously
significant as well for our national security. We are overly
dependent on oil as a monopoly; we need to run our cars on
alternative fuels.''); Remarks by President George W. Bush upon
signing Energy Policy Act of 2005, 2005 U.S.C.C.A.N. S19, 2005 WL
3693179 (``It's an economic bill, but as [Sen. Pete Domenici]
mentioned, it's also a national security bill. . . . Energy
conservation is more than a private virtue; it's a public virtue'');
Energy Independence and Security Act, Public Law 110-140, section
806 (finding ``the production of transportation fuels from renewable
energy would help the United States meet rapidly growing domestic
and global energy demands, reduce the dependence of the United
States on energy imported from volatile regions of the world that
are politically unstable, stabilize the cost and availability of
energy, and safeguard the economy and security of the United
States''); Statement by George W. Bush upon signing, 2007
U.S.C.C.A.N. S25, 2007 WL 4984165 ``One of the most serious long-
term challenges facing our country is dependence on oil--especially
oil from foreign lands. It's a serious challenge. . . . Because this
dependence harms us economically through high and volatile prices at
the gas pump; dependence creates pollution and contributes to
greenhouse gas admissions [sic]. It threatens our national security
by making us vulnerable to hostile regimes in unstable regions of
the world. It makes us vulnerable to terrorists who might attack oil
infrastructure.''
---------------------------------------------------------------------------
The U.S.'s oil consumption had been gradually increasing in recent
years (2015-2019) before the COVID-19 pandemic in 2020 dramatically
decreased U.S. and global oil consumption.\1371\ By July 2021, U.S. oil
consumption had returned to pre-pandemic levels and has remained fairly
stable since then.\1372\ The U.S. has increased its production of oil,
particularly ``tight'' (i.e., shale) oil, over the last decade.\1373\
As a result of the recent increase in U.S. oil production, the U.S.
became a net exporter of crude oil and refined petroleum products in
2020 and is projected to be a net exporter of crude oil and refined
petroleum products for the foreseeable future.\1374\ This is a
significant reversal of the U.S.'s net export position since the U.S.
has been a substantial net importer of crude oil and refined petroleum
products starting in the early 1950s.\1375\
---------------------------------------------------------------------------
\1371\ EIA. Monthly Energy Review. Table 3.1. Petroleum
Overview. December 2022.
\1372\ Ibid.
\1373\ Ibid.
\1374\ EIA. Annual Energy Outlook 2023. Table A11: Petroleum and
Other Liquid Supply and Disposition (Reference Case). 2022.
\1375\ U.S. EIA. Oil and Petroleum Products Explained. November
2, 2022.
---------------------------------------------------------------------------
Oil is a commodity that is globally traded and, as a result, an oil
price shock is transmitted globally. Given that the U.S. is projected
to be a net exporter of crude oil and refined petroleum products for
the time frame of this analysis (2027-2055), one could reason that the
U.S. no longer has a significant energy security problem. However, U.S.
refineries still rely on significant imports of heavy crude oil which
could be subject to supply disruptions. Also, oil exporters with a
large share of global production have the ability to raise or lower the
price of oil by exerting the market power associated with the
[[Page 28114]]
Organization of Petroleum Exporting Countries (OPEC) to alter oil
supply relative to demand. These factors contribute to the
vulnerability of the U.S. economy to episodic oil supply shocks and
price spikes, even when the U.S. is projected to be an overall net
exporter of crude oil and refined products.
We anticipate that U.S. consumption and net imports of petroleum
will be reduced as a result of this final rule, both from an increase
in fuel efficiency of light- and medium-duty vehicles using petroleum-
based fuels and from the greater use of PEVs which are fueled with
electricity. A reduction of U.S. net petroleum imports reduces both the
financial and strategic risks caused by potential sudden disruptions in
the supply of petroleum to the U.S. and global market, thus increasing
U.S. energy security. Table 219 presents the impacts on U.S. imports of
oil for selected years for the final rule. For EPA's assessment of the
U.S. oil impacts of a more stringent and a less stringent alternative
standard, see the Chapter 8 of the RIA.
Table 219--U.S. Oil Import Impacts for Selected Years Associated With
the Final Rule, Light-Duty and Medium-Duty
[Million barrels of imported oil per day in the given year] \a\
------------------------------------------------------------------------
U.S. oil import
Calendar year impacts, final rule
------------------------------------------------------------------------
2027........................................... -0.0035
2030........................................... -0.15
2032........................................... -0.36
2040........................................... -1.5
2050........................................... -2.1
2055........................................... -2.1
------------------------------------------------------------------------
\a\ Negative values represent reduced imports.
It is anticipated that vehicle manufacturers will choose to comply
with the final standards in part with an increased penetration of PEVs.
Compared to the use of petroleum-based fuels to power vehicles,
electricity used in PEVs is anticipated to be generally more affordable
and more stable in its price, i.e., have less price volatility. See
Chapter 10 of the RIA for an analysis of PEV affordability and
electricity price stability compared to gasoline prices. Thus, the
greater use of electricity for PEVs is anticipated to improve the
U.S.'s overall energy security position. Also, since the electricity to
power PEVs will likely be almost exclusively produced in the U.S., this
final rule will move the U.S. towards the goal of energy independence.
See Chapter 10 of the RIA for more discussion of how the final rule
moves the U.S. to the goal of energy independence.
Several commenters claimed that the proposal would improve the
U.S.'s energy security and independence position by increasing the
wider use of electric vehicles. We agree with these commenters that the
wider use of electricity in light- and medium-duty PEVs will improve
the U.S.'s energy security and energy independence position. We respond
to these comments in more detail in section 21 of the RTC document.
In order to understand the energy security implications of reducing
U.S. oil imports, EPA has worked with Oak Ridge National Laboratory
(ORNL), which has developed approaches for evaluating the social costs
and energy security implications of oil use. When conducting this
analysis, ORNL estimates the risk of reductions in U.S. economic output
and disruption to the U.S. economy caused by sudden disruptions in
world oil supply and associated price shocks (i.e., labeled the avoided
macroeconomic disruption/adjustment costs). These risks are quantified
as ``macroeconomic oil security premiums'', i.e., the extra costs of
using oil besides its market price.
One commenter supported the use of the ORNL energy security
methodology being used by EPA to estimate the oil security premiums in
the proposed LMDV rule. Another commenter raised concerns that the ORNL
oil security premium estimates that EPA is using in this proposed LMDV
GHG rule are too high. This commenter claimed that the energy security
methodology developed by ORNL is outdated and is no longer applicable
to the current structure of global oil markets. In response, EPA notes
that the ORNL model is continually updated to the current structure of
global oil markets. Also, EPA and ORNL have worked together to revise
the macroeconomic oil security premiums based upon the recent energy
security literature. Based on the above, EPA concludes that the
macroeconomic oil security premiums used in this final rulemaking are
reasonable. We respond to these comments in more detail in the RTC
document (see RTC section 21).
For this final rule, EPA is using macroeconomic oil security
premiums estimated using ORNL's methodology, which incorporates updated
oil price projections and energy market and economic trends from the
U.S. Department of Energy's Energy Information Administration's (EIA)
Annual Energy Outlook (AEO) 2023. To calculate the macroeconomic oil
security benefits of this final rule, EPA is using the ORNL
macroeconomic oil security premium methodology with: (1) estimated oil
savings calculated by EPA and (2) an oil import reduction factor of
94.8 percent, which reflects our estimate of how much changes in U.S.
oil consumption anticipated under the final standards will be reflected
in changes in U.S. net oil imports. Based upon comments EPA received on
this proposal and in consultation with DOE and NHTSA, the oil import
reduction factor is being updated for this final rule to be consistent
with revised estimates that U.S. refineries will operate at higher
production levels than EPA estimated in the proposed rule. See Chapter
8 of the RIA and section 12 of the RTC document for more discussion of
how EPA is updating its refinery throughput assumptions and, in turn,
air quality impacts from refinery emissions, as a result of this rule.
See Chapter 10 of the RIA and section 21 of the RTC document for EPA's
discussion of how EPA is updating the oil import reduction factor to be
consistent with new estimates of refinery throughput for this final
rule. Below EPA presents macroeconomic oil security premiums for
selected years being used for the final standards in Table 220. The
energy security benefits for selected years for this final rule are
presented in Table 218 and Table 9-7 in Chapter 9 of the RIA. For EPA's
assessment of the energy security benefits of a more and a less
[[Page 28115]]
stringent alternative for this final rule, see the Chapter 9.6 of the
RIA.
Table 220--Macroeconomic Oil Security Premiums for Selected Years for
This Final Rule
[2022$/barrel] \a\
------------------------------------------------------------------------
Macroeconomic oil
Calendar year security premiums
(range)
------------------------------------------------------------------------
2027............................................... $3.73 ($0.51-$7.02)
2030............................................... 3.92 (0.51-7.46)
2032............................................... 4.05 (0.53-7.77)
2040............................................... 4.62 (0.65-8.85)
2050............................................... 5.22 (0.91-9.89)
2055 \b\........................................... 5.22 (0.91-9.89)
------------------------------------------------------------------------
\a\ Top values in each cell are the mid-points; the values in
parentheses are the 90 percent confidence intervals.
\b\ Annual oil security premia are estimated using data from Annual
Energy Outlook projections, which are only available through 2050. For
the years 2051 through 2055 we use the 2050 premium estimates as a
proxy.
Some commenters suggested that the proposal would reduce the demand
for renewable fuels since the proposal focused on the promotion of the
wider use of PEVs. These commenters asserted that EPA should instead
focus upon achieving U.S. energy security and energy independence
objectives by increasing the use of flexible-fueled vehicles/higher
ethanol blends and the greater use of renewable fuels (e.g., renewable
diesel). Further, one commenter claimed that the proposed rule was at
odds with the Congressional intent of the Renewable Fuel Standard
Program (RFS) of mandating renewable fuels to achieve energy security/
energy independence objectives. EPA agrees with the commenters that the
increased use of renewable fuels in the U.S. transportation sector will
improve the U.S.'s energy security/energy independence position. EPA
addresses the issue of the role that renewable fuels can play in
reducing GHG emissions in the U.S. transportation sector in the
recently finalized RFS Set rule. On June 21, 2023, EPA announced a
final rule to establish renewable fuel volume requirements and
associated percentage standards for cellulosic biofuel, biomass-based
diesel, advanced biofuels, and total renewable fuel for the 2023-2025
timeframe.\1376\ The recently finalized RFS Set Rule and this final
rule are complimentary in achieving GHG reductions in the U.S.
transportation sector. We respond to these comments in more detail in
the RTC document (see RTC section 21).
---------------------------------------------------------------------------
\1376\ Renewable Fuel Standard (RFS) Program: Standards for
2023-2025 and Other Changes. Federal Register/Vol. 88, No. 132/
Wednesday, July 12, 2023.
---------------------------------------------------------------------------
Many commenters asserted that while EPA focuses on the energy
security benefits of reduced dependence on U.S. oil imports, EPA fails
to address the energy security threats of the U.S.'s increasing
dependence on imports of minerals and PEV battery supply chains as a
result of this rule. For this rule, EPA distinguishes between energy
security, mineral/metal security and security issues associated with
the importation of PEV batteries and component parts. Since energy
security, metal/mineral security and issues associated with the
importation of PEV batteries and various components are distinct issues
in terms of their characteristics and potential impacts, EPA separates
these types of security issues in this rulemaking. We address energy
security issues associated with this final rule in section 21 of the
RTC document. Comments associated with wider use of PEVs impacts on the
U.S.'s mineral/metal security and security issues associated with the
importation of PEV batteries and their component parts are addressed in
separate EPA responses in this rule's RTC document (see RTC section
15).
In light of the public comments and consideration of the
information in the public record, it continues to be our assessment
that the energy security benefits of the final standards are
substantial and, as discussed in section IV.C.7.iii of this preamble,
we do not find that compliance with the standards will lead to a long-
term dependence on foreign imports of critical minerals or components
that would adversely impact national security.
E. Greenhouse Gas Emission Reduction Benefits
1. Climate Benefits
EPA estimates the climate benefits of GHG emissions reductions
expected from the final rule using estimates of the social cost of
greenhouse gases (SC-GHG) that reflect recent advances in the
scientific literature on climate change and its economic impacts and
incorporate recommendations made by the National Academies of Science,
Engineering, and Medicine.\1377\ EPA published and used these estimates
in the RIA for the Final Oil and Gas NSPS/EG Rulemaking, ``Standards of
Performance for New, Reconstructed, and Modified Sources and Emissions
Guidelines for Existing Sources: Oil and Natural Gas Sector Climate
Review'', which was signed by the EPA Administrator on December 2nd,
2023.\1378\ EPA solicited public comment on the methodology and use of
these estimates in the RIA for the agency's December 2022 Oil and Gas
NSPS/EG Supplemental Proposal and has conducted an external peer review
of these estimates, as described further below. Chapter 9.4 of the RIA
lays out the details of the updated SC-GHG used within this final rule.
---------------------------------------------------------------------------
\1377\ National Academies of Sciences, Engineering, and Medicine
(National Academies). 2017. Valuing Climate Damages: Updating
Estimation of the Social Cost of Carbon Dioxide. National Academies
Press.
\1378\ U.S. EPA. (2023f). Supplementary Material for the
Regulatory Impact Analysis for the Final Rulemaking, ``Standards of
Performance for New, Reconstructed, and Modified Sources and
Emissions Guidelines for Existing Sources: Oil and Natural Gas
Sector Climate Review'': EPA Report on the Social Cost of Greenhouse
Gases: Estimates Incorporating Recent Scientific Advances.
Washington, DC: U.S. EPA.
---------------------------------------------------------------------------
The SC-GHG is the monetary value of the net harm to society
associated with a marginal increase in GHG emissions in a given year,
or the benefit of avoiding that increase. In principle, SC-GHG includes
the value of all climate change impacts (both negative and positive),
including (but not limited to) changes in net agricultural
productivity, human health effects, property damage from increased
flood risk and natural disasters, disruption of energy systems, risk of
conflict, environmental migration, and the value of ecosystem
[[Page 28116]]
services. The SC-GHG, therefore, reflects the societal value of
reducing emissions of the gas in question by one metric ton and is the
theoretically appropriate value to use in conducting benefit-cost
analyses of policies that affect GHG emissions. In practice, data and
modeling limitations restrain the ability of SC-GHG estimates to
include all physical, ecological, and economic impacts of climate
change, implicitly assigning a value of zero to the omitted climate
damages. The estimates are, therefore, a partial accounting of climate
change impacts and likely underestimate the marginal benefits of
abatement.
Since 2008, EPA has used estimates of the social cost of various
greenhouse gases (i.e., SC-CO2, SC-CH4, and SC-
N2O), collectively referred to as the SC-GHG, in analyses of
actions that affect GHG emissions. The values used by EPA from 2009 to
2016 and since 2021--including in the proposal for this rulemaking--
have been consistent with those developed and recommended by the IWG on
the SC-GHG; and the values used from 2017 to 2020 were consistent with
those required by Executive Order (E.O.) 13783, which disbanded the
IWG. During 2015-2017, the National Academies conducted a comprehensive
review of the SC-CO2 and issued a final report in 2017
recommending specific criteria for future updates to the SC-
CO2 estimates, a modeling framework to satisfy the specified
criteria, and both near-term updates and longer-term research needs
pertaining to various components of the estimation process (National
Academies, 2017). The IWG was reconstituted in 2021 and E.O. 13990
directed it to develop a comprehensive update of its SC-GHG estimates,
recommendations regarding areas of decision-making to which SC-GHG
should be applied, and a standardized review and updating process to
ensure that the recommended estimates continue to be based on the best
available economics and science going forward.
EPA is a member of the IWG and is participating in the IWG's work
under E.O. 13990. As noted in previous EPA RIAs--including in the
proposal RIA for this rulemaking-, while that process continues, EPA is
continuously reviewing developments in the scientific literature on the
SC-GHG, including more robust methodologies for estimating damages from
emissions, and looking for opportunities to further improve SC-GHG
estimation. In the December 2022 Oil and Gas Supplemental Proposal
RIA,\1379\ the Agency included a sensitivity analysis of the climate
benefits of that rule using a new set of SC-GHG estimates that
incorporates recent research addressing recommendations of the National
Academies \1380\ in addition to using the interim SC-GHG estimates
presented in the Technical Support Document: Social Cost of Carbon,
Methane, and Nitrous Oxide Interim Estimates under Executive Order
13990 \1381\ that the IWG recommended for use until updated estimates
that address the National Academies' recommendations are available.
---------------------------------------------------------------------------
\1379\ U.S. EPA. (2023). Supplementary Material for the
Regulatory Impact Analysis for the Final Rulemaking, ``Standards of
Performance for New, Reconstructed, and Modified Sources and
Emissions Guidelines for Existing Sources: Oil and Natural Gas
Sector Climate Review'': EPA Report on the Social Cost of Greenhouse
Gases: Estimates Incorporating Recent Scientific Advances.
Washington, DC: U.S. EPA.
\1380\ Ibid.
\1381\ Interagency Working Group on Social Cost of Carbon (IWG).
2021 (February). Technical Support Document: Social Cost of Carbon,
Methane, and Nitrous Oxide: Interim Estimates under Executive Order
13990. United States Government.
---------------------------------------------------------------------------
EPA solicited public comment on the sensitivity analysis and the
accompanying draft technical report, External Review Draft of Report on
the Social Cost of Greenhouse Gases: Estimates Incorporating Recent
Scientific Advances, which explains the methodology underlying the new
set of estimates and was included as supplementary material to the RIA
for the December 2022 Supplemental Oil and Gas Proposal.\1382\ The
response to comments document can be found in the docket for that
action.\1383\
---------------------------------------------------------------------------
\1382\ https://www.epa.gov/environmental-economics/scghg-tsd-peer-review.
\1383\ Supplementary Material for the Regulatory Impact Analysis
for the Final Rulemaking, ``Standards of Performance for New,
Reconstructed, and Modified Sources and Emissions Guidelines for
Existing Sources: Oil and Natural Gas Sector Climate Review'', EPA
Report on the Social Cost of Greenhouse Gases: Estimates
Incorporating Recent Scientific Advances, Docket ID No. EPA-HQ-OAR-
2021-0317, November 2023.
---------------------------------------------------------------------------
As we noted in the light- and medium-duty vehicle NPRM, to ensure
that the methodological updates adopted in the technical report are
consistent with economic theory and reflect the latest science, EPA
also initiated an external peer review panel to conduct a high-quality
review of the technical report (see 88 FR 29372, noting this peer
review process was ongoing at the time of our proposal); this peer
review was completed in May 2023. The peer reviewers commended the
agency on its development of the draft update, calling it a much-needed
improvement in estimating the SC-GHG and a significant step towards
addressing the National Academies' recommendations with defensible
modeling choices based on current science. The peer reviewers provided
numerous recommendations for refining the presentation and for future
modeling improvements, especially with respect to climate change
impacts and associated damages that are not currently included in the
analysis. Additional discussion of omitted impacts and other updates
were incorporated in the technical report to address peer reviewer
recommendations. Complete information about the external peer review,
including the peer reviewer selection process, the final report with
individual recommendations from peer reviewers, and EPA's response to
each recommendation is available on EPA's website.\1384\
---------------------------------------------------------------------------
\1384\ https://www.epa.gov/environmental-economics/scghg-tsd-peer-review.
---------------------------------------------------------------------------
Chapter 6.1 of the RIA provides an overview of the methodological
updates incorporated into the SC-GHG estimates used in this final rule.
A more detailed explanation of each input and the modeling process is
provided in the final technical report, EPA Report on the Social Cost
of Greenhouse Gases: Estimates Incorporating Recent Scientific Advances
(U.S. EPA, 2023e).
Commenters on our LMDV NPRM brought up issues regarding baseline
scenarios, climate modeling (e.g., equilibrium climate sensitivity) and
IAMS, claiming that they all used outdated assumptions. Other
commenters suggested that EPA use lower discount rates as well as
utilize the latest research and values from the December 2022
Supplemental Oil and Gas Proposal. EPA's decision to use the updated
SC-GHG values from U.S. EPA (2023f) addresses several of the concerns
voiced within the comments. See RTC section 20 for further detail on
the comments received and EPA's responses. For a detailed description
of the updated modeling please see RIA Chapter 7 for the final rule as
well as U.S. EPA (2023f).
Table 221 through Table 224 present the estimated annual,
undiscounted climate benefits of the net GHG emissions reductions
associated with the final rule, and consequently the annual quantified
benefits (i.e., total GHG benefits), for each of the three SC-GHG
values estimated by the 2023 Report on SC-GHG for the stream of years
beginning with the first year of rule implementation, 2027, through
2055. Also shown are the present values (PV) and equivalent annualized
values
[[Page 28117]]
(AV) associated with each of the three SC-GHG values. For a thorough
discussion of the SC-GHG methodology, limitations and uncertainties see
Chapter 9.4 of the RIA.
Table 221--Climate Benefits From Reduction in CO2 Emissions Associated With the Final Rule
[Billions of 2022 dollars]
----------------------------------------------------------------------------------------------------------------
Near-term Ramsey discount rate
Calendar year -----------------------------------------------
2.5% 2% 1.5%
----------------------------------------------------------------------------------------------------------------
2027............................................................ $0.063 $0.1 $0.17
2028............................................................ 0.54 0.87 1.5
2029............................................................ 1.8 3 5
2030............................................................ 3.9 6.2 10
2031............................................................ 6.5 10 17
2032............................................................ 9.7 15 26
2035............................................................ 25 40 66
2040............................................................ 53 81 130
2045............................................................ 76 110 180
2050............................................................ 92 140 220
2055............................................................ 100 150 230
PV.............................................................. 940 1,600 2,800
AV.............................................................. 46 72 120
----------------------------------------------------------------------------------------------------------------
Notes: Climate benefits are based on changes (reductions) in CO2, CH4, and N2O emissions and are calculated
using three different estimates of the social cost of carbon (SC-CO2), the social cost of methane (SC-CH4),
and the social cost of nitrous oxide (SC-N2O) (model average at 1.5-percent, 2-percent, and 2.5-percent Ramsey
discount rates). See EPA's Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent
Scientific Advances (EPA, 2023). We emphasize the importance and value of considering the benefits calculated
using all three SC-CO2, SC-CH4, and SC-N2O estimates. We use constant discount rates (1.5-percent, 2-percent,
and 2.5-percent) similar to the near-term Ramsey discount rates to calculate the present and annualized value
of SC-GHGs for internal consistency. Annual benefits shown are undiscounted values.
Table 222--Climate Benefits From Reduction in CH4 Emissions Associated With the Final Rule
[Billions of 2022 dollars]
----------------------------------------------------------------------------------------------------------------
Near-term Ramsey discount rate
Calendar year -----------------------------------------------
2.5% 2% 1.5%
----------------------------------------------------------------------------------------------------------------
2027............................................................ -$0.000021 -$0.000026 -$0.000035
2028............................................................ -0.000048 -0.00006 -0.00008
2029............................................................ 0.000023 0.000028 0.000038
2030............................................................ 0.00012 0.00015 0.0002
2031............................................................ 0.00023 0.00028 0.00037
2032............................................................ 0.00053 0.00065 0.00085
2035............................................................ 0.0035 0.0043 0.0055
2040............................................................ 0.012 0.015 0.019
2045............................................................ 0.022 0.027 0.034
2050............................................................ 0.03 0.036 0.045
2055............................................................ 0.035 0.041 0.051
PV.............................................................. 0.26 0.35 0.48
AV.............................................................. 0.013 0.016 0.021
----------------------------------------------------------------------------------------------------------------
Notes: See prior table.
Table 223--Climate Benefits From Reduction in N2O Emissions Associated With the Final Rule
[Billions of 2022 dollars]
----------------------------------------------------------------------------------------------------------------
Near-term Ramsey discount rate
Calendar year -----------------------------------------------
2.5% 2% 1.5%
----------------------------------------------------------------------------------------------------------------
2027............................................................ $0.0003 $0.00045 $0.0007
2028............................................................ 0.002 0.003 0.0047
2029............................................................ 0.0081 0.012 0.019
2030............................................................ 0.019 0.029 0.045
2031............................................................ 0.033 0.049 0.075
2032............................................................ 0.051 0.075 0.12
2035............................................................ 0.14 0.2 0.31
2040............................................................ 0.29 0.42 0.63
2045............................................................ 0.42 0.6 0.9
2050............................................................ 0.51 0.73 1.1
2055............................................................ 0.57 0.8 1.2
PV.............................................................. 5.2 8.2 13
[[Page 28118]]
AV.............................................................. 0.26 0.38 0.58
----------------------------------------------------------------------------------------------------------------
Notes: See prior table.
Table 224--Climate Benefits From Reduction in GHG Emissions Associated With the Final Rule
[Billions of 2022 dollars]
----------------------------------------------------------------------------------------------------------------
Near-term Ramsey discount rate
Calendar year -----------------------------------------------
2.5% 2% 1.5%
----------------------------------------------------------------------------------------------------------------
2027............................................................ $0.063 $0.1 $0.17
2028............................................................ 0.54 0.87 1.5
2029............................................................ 1.9 3 5
2030............................................................ 3.9 6.2 10
2031............................................................ 6.6 10 17
2032............................................................ 9.8 15 26
2035............................................................ 26 40 66
2040............................................................ 53 82 130
2045............................................................ 76 120 180
2050............................................................ 92 140 220
2055............................................................ 100 150 230
PV.............................................................. 950 1,600 2,800
AV.............................................................. 46 72 120
----------------------------------------------------------------------------------------------------------------
Notes: See prior table.
F. Criteria Pollutant Health and Environmental Benefits
The light-duty passenger cars and light trucks and medium-duty
vehicles subject to the standards are significant sources of mobile
source air pollution, including directly-emitted PM2.5 as
well as NOX and VOC emissions (both precursors to ozone
formation and secondarily-formed PM2.5). The final program
will reduce exhaust emissions of these pollutants from the regulated
vehicles, which will in turn reduce ambient concentrations of ozone and
PM2.5. Emissions from upstream sources will likely increase
in some cases (e.g., power plants) and decrease in others (e.g.,
refineries). We project that in total, the final standards will result
in substantial net reductions of emissions of pollutants like
PM2.5, NOX and VOCs. Criteria and toxic pollutant
emissions changes attributable to the final standards are presented in
section VII of this preamble. Exposures to ambient pollutants such as
PM2.5 and ozone are linked to adverse environmental and
human health impacts, such as premature deaths and non-fatal illnesses
(as explained in section II.C of this preamble). Reducing human
exposure to these pollutants results in significant and measurable
health benefits. Changes in ambient concentrations of ozone,
PM2.5, and air toxics that will result from the standards
are expected to improve human health by reducing premature deaths and
other serious human health effects, and they are also expected to
result in other important improvements in public health and welfare
(see section II of this preamble). Children, especially, benefit from
reduced exposures to criteria and toxic pollutants because they tend to
be more sensitive to the effects of these respiratory pollutants. Ozone
and particulate matter have been associated with increased incidence of
asthma and other respiratory effects in children, and particulate
matter has been associated with a decrease in lung maturation.
This section discusses the economic benefits from reductions in
adverse health and environmental impacts resulting from criteria
pollutant emission reductions that can be expected to occur as a result
of the final emission standards. When feasible, EPA conducts full-scale
photochemical air quality modeling to demonstrate how its national
mobile source regulatory actions affect ambient concentrations of
regional pollutants throughout the United States. The estimation of the
human health impacts of a regulatory action requires national-scale
photochemical air quality modeling to conduct a full-scale assessment
of PM2.5 and ozone-related health benefits.
EPA conducted an air quality modeling analysis of a regulatory
scenario in 2055 involving light- and medium-duty vehicle emission
reductions and corresponding changes in ``upstream'' emission sources
like EGU (electric generating unit) emissions and refinery emissions.
The results of this analysis are summarized in section VII of this
preamble and discussed in more detail in RIA Chapter 7. Year 2055 was
selected as a year that best represents the fleet turning over to
nearly full implementation of the final standards. Decisions about the
emissions and other elements used in the air quality modeling were made
early in the analytical process for the final rulemaking. Accordingly,
the air quality analysis does not fully represent the final regulatory
scenario; however, we consider the modeling results to be a fair
reflection of the impact the standards will have on PM2.5
and ozone air quality, as well as associated health impacts, in the
snapshot year of 2055. Because the air quality analysis only represents
projected conditions with and without the standards in 2055, we used
the OMEGA-based emissions analysis (see section VII.A of this preamble)
and benefit-per-ton (BPT) values to estimate the criteria pollutant
(PM2.5) health benefits of the standards for the benefit-
cost analysis of the final emission standards.
The BPT approach estimates the monetized economic value of
PM2.5-related emission reductions or increases (such as
direct PM, NOX, and SO2) due
[[Page 28119]]
to implementation of the program. Similar to the SC-GHG approach for
monetizing reductions in GHGs, the BPT approach monetizes the health
benefits of avoiding one ton of PM2.5-related emissions from
a particular onroad mobile or upstream source. The value of health
benefits from reductions (or increases) in PM2.5 emissions
associated with this rule were estimated by multiplying
PM2.5-related BPT values by the corresponding annual
reduction (or increase) in tons of directly-emitted PM2.5
and PM2.5 precursor emissions (NOX and
SO2). As explained in Chapter 6.4 in the RIA, the
PM2.5 BPT values represent the monetized value of human
health benefits, including reductions in both premature mortality and
morbidity.
For the analysis of the final standards, we use the same mobile
sector BPT estimates that were used in the proposal, except the
constant dollar year they represent has been updated from year 2020
dollars to year 2022 dollars. The mobile sector BPTs were first
published in 2019 and then updated to be consistent with the suite of
premature mortality and morbidity studies used by EPA for the 2023 PM
NAAQS Reconsideration Proposal.1385 1386 The upstream BPT
estimates used in this final rule are also the same as those used in
the proposal, and were also updated to year 2022 dollars.\1387\ The
health benefits Technical Support Document (Benefits TSD) that
accompanied the 2023 PM NAAQS Proposal details the approach used to
estimate the PM2.5-related benefits reflected in these
BPTs.\1388\ For more detailed information about the benefits analysis
conducted for this rule, including the BPT unit values used in this
analysis, please refer to Chapter 6.4 of the RIA.
---------------------------------------------------------------------------
\1385\ Wolfe, P.; Davidson, K.; Fulcher, C.; Fann, N.; Zawacki,
M.; Baker, K. R. 2019. Monetized Health Benefits Attributable to
Mobile Source Emission Reductions across the United States in 2025.
Sci. Total Environ. 650, 2490-2498. Available at: https://doi.org/10.1016/J.SCITOTENV.2018.09.273.
\1386\ U.S. Environmental Protection Agency (U.S. EPA). 2022. PM
NAAQS Reconsideration Proposal RIA. EPA-HQ-OAR-2019-0587.
\1387\ U.S. Environmental Protection Agency (U.S. EPA). 2023.
Technical Support Document: Estimating the Benefit per Ton of
Reducing Directly-Emitted PM2.5, PM2.5
Precursors and Ozone Precursors from 21 Sectors.
\1388\ U.S. Environmental Protection Agency (U.S. EPA). 2023.
Estimating PM2.5- and Ozone-Attributable Health Benefits.
Technical Support Document (TSD) for the PM NAAQS Reconsideration
Proposal RIA. EPA-HQ-OAR-2019-0587.
---------------------------------------------------------------------------
A chief limitation to using PM2.5-related BPT values is
that they do not reflect benefits associated with reducing ambient
concentrations of ozone. The PM2.5-related BPT values also
do not capture the benefits associated with reductions in direct
exposure to NO2 and mobile source air toxics, nor do they
account for improved ecosystem effects or visibility. The estimated
benefits of this rule would be larger if we were able to monetize these
unquantified benefits at this time.
Table 225 presents the annual, undiscounted PM2.5-
related health benefits estimated for the stream of years beginning
with the first year of rule implementation, 2027, through 2055 for the
final standards. Benefits are presented by source (onroad and upstream)
and are estimated using either a 3 percent or 7 percent discount rate
to account for annual avoided health outcomes that are expected to
accrue over more than a single year (the ``cessation'' lag between the
change in PM exposures and the total realization of changes in health
effects). Because premature mortality typically constitutes the vast
majority of monetized benefits in a PM2.5 benefits
assessment, we present benefits based on risk estimates reported from
two different long-term exposure studies using different cohorts to
account for uncertainty in the benefits associated with avoiding PM-
related premature deaths.1389 1390 Table 225 also presents
the present and annualized value of PM2.5-related health
benefits using a 3-percent and 7-percent discount rate. The total
annualized value of PM2.5-related benefits for the final
program between 2027 and 2055 (discounted back to 2027) is $5.3 to $10
billion assuming a 3-percent discount rate and $3.6 to $7.2 billion
assuming a 7-percent discount rate. Results for the alternative
scenarios estimated in support of the final standards can be found in
Chapter 9.6 of the RIA.
---------------------------------------------------------------------------
\1389\ Wu, X, Braun, D, Schwartz, J, Kioumourtzoglou, M and
Dominici, F (2020). Evaluating the impact of long-term exposure to
fine particulate matter on mortality among the elderly. Science
advances 6(29): eaba5692.
\1390\ Pope III, CA, Lefler, JS, Ezzati, M, Higbee, JD,
Marshall, JD, Kim, S-Y, Bechle, M, Gilliat, KS, Vernon, SE and
Robinson, AL (2019). Mortality risk and fine particulate air
pollution in a large, representative cohort of U.S. adults.
Environmental health perspectives 127(7): 077007.
Table 225--Monetized PM2.5 Health Benefits of Onroad and Upstream Emissions Reductions Associated With the Final Rule, Light-Duty and Medium-Duty
[Billions of 2022 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Onroad Upstream Total
Calendar year ---------------------------------------------------------------------------------------------------------------------
3% Discount rate 7% Discount rate 3% Discount rate 7% Discount rate 3% Discount rate 7% Discount rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.............................. 0.078 to 0.17 0.07 to 0.15 -0.0087 to -0.019 -0.0078 to -0.017 0.069 to 0.15 0.062 to 0.13
2028.............................. 0.21 to 0.45 0.19 to 0.41 -0.034 to -0.072 -0.03 to -0.064 0.18 to 0.38 0.16 to 0.34
2029.............................. 0.38 to 0.81 0.34 to 0.73 -0.064 to -0.14 -0.057 to -0.12 0.31 to 0.67 0.28 to 0.61
2030.............................. 0.74 to 1.5 0.66 to 1.4 -0.12 to -0.25 -0.11 to -0.23 0.61 to 1.3 0.55 to 1.1
2031.............................. 1 to 2.1 0.93 to 1.9 -0.2 to -0.42 -0.18 to -0.38 0.84 to 1.7 0.75 to 1.6
2032.............................. 1.3 to 2.8 1.2 to 2.5 -0.26 to -0.53 -0.23 to -0.47 1.1 to 2.2 0.98 to 2
2035.............................. 2.9 to 5.9 2.6 to 5.3 -0.28 to -0.55 -0.25 to -0.5 2.6 to 5.3 2.4 to 4.8
2040.............................. 6 to 12 5.4 to 11 0.21 to 0.43 0.19 to 0.38 6.2 to 12 5.5 to 11
2045.............................. 8.7 to 17 7.8 to 15 0.7 to 1.4 0.63 to 1.3 9.4 to 18 8.5 to 17
2050.............................. 11 to 21 9.7 to 19 0.99 to 2 0.9 to 1.8 12 to 23 11 to 21
2055.............................. 12 to 23 11 to 21 1 to 2 0.91 to 1.8 13 to 25 12 to 23
PV................................ 97 to 190 43 to 86 4.6 to 9.3 1.3 to 2.6 100 to 200 45 to 88
[[Page 28120]]
AV................................ 5.1 to 10 3.5 to 7 0.24 to 0.49 0.11 to 0.22 5.3 to 10 3.6 to 7.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: The benefits in this table reflect two separate but equally plausible premature mortality estimates derived from the Medicare study (Wu et al.,
2020) and the NHIS study (Pope et al., 2019), respectively. All benefits estimates are rounded to two significant figures. Annual benefit values
presented here are not discounted. Negative values are health disbenefits related to increases in estimated emissions. The present value of benefits
is the total aggregated value of the series of discounted annual benefits that occur between 2027-2055 (in 2022 dollars) using either a 3 percent or 7
percent discount rate. The upstream impacts associated with the standards presented here include health benefits associated with reduced criteria
pollutant emissions from refineries and health disbenefits associated with increased criteria pollutant emissions from EGUs. The benefits in this
table also do not include the full complement of health and environmental benefits (such as health benefits related to reduced ozone exposure) that,
if quantified and monetized, would increase the total monetized benefits.
We use a constant 3-percent and 7-pecent discount rate to calculate
present and annualized values in Table 225, consistent with current
applicable OMB Circular A-4 guidance. For the purposes of presenting
total net benefits (see section VIII.A of this preamble), we also use a
constant 2-percent discount rate to calculate present and annualized
values. We note that we do not currently have BPT estimates that use a
2-percent discount rate to account for the value of those avoided
health outcomes that are expected to accrue over more than a single
year. If we discount the stream of annual benefits in Table 225 based
on the 3-percent cessation lag BPT using a constant 2-percent discount
rate, the present value of total PM2.5-related benefits
would be $120 to $240 billion and the annualized value of total
PM2.5-related benefits would be $6.4 to $13 billion,
depending on the assumed long-term exposure study of PM2.5-
related premature mortality risk.
We believe the PM2.5-related benefits presented here are
our best estimate of benefits associated with the final standards from
2027 through 2055 absent air quality modeling and we have confidence in
the BPT approach and the appropriateness of relying on BPT health
estimates for this rulemaking. Please refer to RIA Chapter 6 for more
information on the uncertainty associated with the benefits presented
here.
G. Transfers
There are four types of transfers included in our analysis. Two of
these transfers come in the form of tax credits arising from the
Inflation Reduction Act to encourage investment in battery technology
and the purchase of electrified vehicles. These are transfers from the
government to producers of vehicles (the 45X battery production tax
credits), or to purchasers of vehicles (the 30D tax credit) or to
lessors or commercial purchasers (the 45W tax credit). There are also
transfers from the government to individuals and businesses who install
EVSE (the 30C tax credit) \1391\ though we don't quantify these
transfers as part of our analysis. The third, new for the final rule,
is state taxes on the purchase of new, higher cost vehicles which
represents transfers from purchasers to government. The fourth is fuel
and electricity taxes which are transfers from purchasers of fuel and
electricity to the government. The final rule results in less liquid-
fuel consumed and, therefore, less money transferred from purchasers of
liquid-fuel to the government while the reverse is true for electricity
consumption where the increase associated with PEVs results in more
money transferred from purchasers to the government. For more detail on
the IRC section 45X, 30D and 45W tax credits please see section IV of
this preamble and Chapter 2.6.8 of the RIA.
---------------------------------------------------------------------------
\1391\ The IRA extends the Internal Revenue Code 30C Alternative
Fuel Refueling Property Tax Credit through Dec 31, 2032, with
modifications. See section IV.C.4 of the preamble and RIA Chapter 5
for more details.
Table 226--Transfers Associated With the Final Rule, From the Vehicle Purchaser Perspective
[Billions of 2022 dollars] \a\
----------------------------------------------------------------------------------------------------------------
Vehicle
Calendar year Battery tax purchase tax State sales Fuel taxes Sum
credits credit taxes
----------------------------------------------------------------------------------------------------------------
2027............................ $0.25 $0.4 -$0.12 $0.036 $0.56
2028............................ 1.4 2 -0.27 0.23 3.4
2029............................ 4.1 5.4 -0.61 0.69 9.5
2030............................ 5.1 9.2 -0.9 1.4 15
2031............................ 5.4 15 -1.2 2.2 22
2032............................ 3.6 20 -1.3 3.2 25
2035............................ 0 0 -2.7 7.3 4.5
2040............................ 0 0 -2.5 13 10
2045............................ 0 0 -2.3 16 13
2050............................ 0 0 -2.1 18 16
2055............................ 0 0 -1.9 18 16
PV2............................. 18 47 -43 230 250
PV3............................. 17 45 -37 190 220
PV7............................. 15 38 -22 98 130
AV2............................. 0.83 2.2 -2 10 11
AV3............................. 0.91 2.4 -1.9 9.9 11
[[Page 28121]]
AV7............................. 1.2 3.1 -1.8 7.9 10
----------------------------------------------------------------------------------------------------------------
\a\ Negative values reflect transfers from taxpayers to governments; positive values reflect transfers from
government to taxpayers.
H. U.S. Vehicle Sales Impacts
1. Light-Duty Vehicle Sales Impacts
As discussed in section IV.A of this preamble, EPA used the OMEGA
model to analyze projected impacts of this rule, including impacts on
vehicle sales. The OMEGA model accounts for interactions in producer
and consumer decisions in total sales and in the share of ICE and PEV
vehicles in the market. As in the proposal, the sales impacts are based
on a set of assumptions and inputs, including assumptions about the
role of fuel consumption in vehicle purchase decisions, and assumptions
on consumers' demand elasticity.\1392\ Our analysis indicates that this
rule will have very small impacts on light-duty vehicle sales, with
minor decreases from the No Action case estimated between 2027 and
2032. However, as explained in section VIII.D.1 of this preamble above,
even though there are minor decreases in sales from the No Action case,
consumers will benefit from increased access to mobility due to
increased vehicle efficiency.
---------------------------------------------------------------------------
\1392\ The demand elasticity is the percent change in quantity
associated with percent increase in price. For price, we use net
price, where net price is the difference in technology costs less an
estimate of the change in fuel costs over the number of years we
assume fuel costs are taken into account. PEV purchase incentives
from the IRA are also accounted for in the net consumer prices used
in OMEGA. See RIA Chapter 2.6.8 for more information.
---------------------------------------------------------------------------
As in the proposal, for this final rule EPA separately represents
the producer's perception of the purchase decision and the consumer's
purchase decision. Focusing on producers, EPA assumes that automakers
believe that LD vehicle buyers account for about 2.5 years of fuel
consumption in their purchase decision.\1393\ This is based on the 2021
National Academy of Sciences (NAS) report,\1394\ citing the 2015 NAS
report, which observed that automakers ``perceive that typical
consumers would pay upfront for only one to four years of fuel
savings'' (pp. 9-10). However, as discussed in the proposal and in the
2021 rule,\1395\ there is not a consensus around the role of fuel
consumption in vehicle purchase decisions. Based on how consumers
actually behave, Greene et al. (2018) estimate the mean willingness to
pay for a one cent per mile reduction in fuel costs over the lifetime
of the vehicle to be $1,880 with very large standard deviation, and a
median of $990. For the purpose of comparison, saving one cent per mile
on fuel, assuming 15,000 vehicle miles traveled per year, yields
roughly $375 of savings over 2.5 years (or $150 to $600 over 1 to 4
years). Thus, automakers seem to operate under a perception of consumer
willingness to pay for additional fuel economy that is substantially
less than the mean and median values estimated by Greene et al. (2018),
indicating that automakers do not appear to fully account for how
consumers actually behave. We did not receive any public comments on
the use of 2.5 years of fuel savings in our analysis.
---------------------------------------------------------------------------
\1393\ For a discussion of the purchase decision from the
perspective of the consumer, see RIA Chapter 4.1.
\1394\ National Academies of Sciences, Engineering, and
Medicine. 2021. Assessment of Technologies for Improving Light-Duty
Vehicle Fuel Economy--2025-2035. Washington, DC: The National
Academies Press. https://doi.org/10.17226/26092.
\1395\ 86 FR 74434, December 30, 2021, ``Revised 2023 and Later
Model Year Light-Duty Vehicle Greenhouse Gas Emissions Standards.''
---------------------------------------------------------------------------
In OMEGA, we use an estimate of demand elasticity to model the
change in vehicle demand due to this rule. The demand elasticity is the
percent change in quantity of vehicles demanded associated with a one
percent change in vehicle price. This is explained further in Chapter
4.4.1 of the RIA. We received comment on the use of a demand elasticity
of -0.4 in the proposal, with one commenter stating that it was too
small. The commenter urged us to use an elasticity of at least -1.0,
similar to what was used for previous rules and what NHTSA has used for
previous rules. Continuing the approach in the proposal, however, EPA
is using a demand elasticity for new LD vehicles of -0.4. The choice of
elasticity is based on a 2021 EPA peer reviewed report, which included
a literature review on and estimates of the effects of new vehicle
price changes on the new vehicle market,\1396\ and the commenter did
not provide data that would support a shift away from the conclusions
of the report. As noted in EPA's report, -0.4 appears to be the largest
estimate (in absolute value) for a long-run new vehicle demand
elasticity in recent studies. EPA's report examining the relationship
between new and used vehicle markets shows that, for plausible values
reflecting that interaction, the new vehicle demand elasticity varies
from -0.15 to -0.4. We chose the larger value of this range for our
analysis because it will lead to more conservative estimates (a larger
change in demand for the same change in vehicle price) that are still
within the range estimated within the report.
---------------------------------------------------------------------------
\1396\ U.S. EPA. 2021. The Effects of New-Vehicle Price Changes
on New- and Used-Vehicle Markets and Scrappage. EPA-420-R-21-019.
https://cfpub.epa.gov/si/si_public_record_Report.cfm?dirEntryId=352754&Lab=OTAQ.
---------------------------------------------------------------------------
Under the final standards, there is a small change projected in
total new LD vehicle sales compared to sales under the No Action
scenario for each year under from MY 2027 through MY 2032.\1397\ See
Table 227 for total new vehicle sales impacts under the final rule.
These impacts range from a decrease of about 0.18 percent in MY 2027,
to a decrease of about 0.92 percent in MY 2032. These impacts are
generally smaller than those estimated for the 2021 rulemaking,\1398\
where sales impacts were estimated to range from a decrease of about 1
percent in 2027 to a decrease of 0.9 percent in 2032.
---------------------------------------------------------------------------
\1397\ The No Action scenario consists of the 2021 rule
standards and IRA provisions as explained in section IV.B of this
preamble.
\1398\ 86 FR 74434, December 30, 2021, ``Revised 2023 and Later
Model Year Light-Duty Vehicle Greenhouse Gas Emissions Standards.''
[[Page 28122]]
Table 227--Total New LD Sales Impacts in the Final Rule
----------------------------------------------------------------------------------------------------------------
No action Final rule
---------------------------------------------------------
Year Change from no action
Total sales Total sales (%)
----------------------------------------------------------------------------------------------------------------
2027.................................................. 16,046,000 16,017,000 -29,000 (-0.18)
2028.................................................. 15,848,000 15,790,000 -58,000 (-0.37)
2029.................................................. 15,923,000 15,840,000 -83,000 (-0.52)
2030.................................................. 15,792,000 15,670,000 -122,000 (-0.78)
2031.................................................. 15,669,000 15,534,000 -135,000 (-0.86)
2032.................................................. 15,585,000 15,442,000 -143,000 (-0.92)
----------------------------------------------------------------------------------------------------------------
Similar to the sales impacts of the final rule, total new vehicle
sales impacts under the alternative scenarios analyzed show a very
small change in sales compared to the No Action scenario. For more
information on the estimates of sales impacts under the more and less
stringent alternatives analyzed for this final rule, see Chapter 4.4 of
the RIA.
2. Medium-Duty Sales Impacts
In contrast to the light-duty market, the medium-duty vehicle
market largely serves commercial applications. Thus, the assumptions in
our analysis of the MD sales response are specific to that market, and
do not arise from studies focused on the LD vehicle market.\1399\
Commercial vehicle owners purchase vehicles based on the needs of their
business, and we expect them to be less sensitive to changes in vehicle
price than personal vehicle owners.\1400\ These MD vehicle purchasers
will not do without the MDV that meets their needs. In addition, as
pointed out by commenters in section 14.2 of the RTC, there are factors
that MD vehicle commercial purchasers consider more strongly in their
purchase decision than consumers purchasing a light-duty vehicle,
including maintenance costs, fuel efficiency, and warranty
considerations. The elasticity of demand affects the sensitivity of
vehicle buyers to a change in the price of vehicles: The smaller the
elasticity, in absolute value, the smaller the estimated change in
sales due to a change in vehicle price. Therefore, as explained in
Chapter 4.4 of the RIA, the estimates of a change in sales due to this
rule depend on the elasticity of demand assumptions. For this final
rule, we are assuming an elasticity of 0 for the MD vehicle sales
impacts estimates, and we are not projecting any differences in the
number of MD vehicles sold between the No Action and the final
standards. This implicitly assumes that the buyers of MD vehicles are
not going to change purchase decisions if the price of the vehicle
changes, all else equal. In other words, as long as the characteristics
of the vehicle do not change, commercial buyers will still purchase the
vehicle that fits their needs. See RIA Chapter 4.4.1 and RTC section
14.2 for more on the elasticity of demand for MD vehicle sales impacts.
---------------------------------------------------------------------------
\1399\ Similarly, the literature referenced for light-duty sales
impacts pertains to light-duty vehicles, primarily purchased and
used as personal vehicles by individuals and households.
\1400\ See RIA Chapter 4.1.1 for more information.
---------------------------------------------------------------------------
A possible, though unlikely, sales effect on commercial medium-duty
vehicles is pre-buy and low-buy. Pre-buy occurs when a purchaser makes
a planned purchase sooner than originally intended in anticipation of
EPA regulation that may make a future vehicle, under new regulations,
have a higher upfront or operational cost, or have reduced reliability.
Low-buy occurs when a vehicle that would have been purchased after the
implementation of a regulation is either not purchased at all, or the
purchase is delayed. Low-buy may occur directly as a function of pre-
buy (where a vehicle was instead purchased prior to implementation of
the new regulation), or due to a vehicle purchaser delaying the
purchase of a vehicle due to cost or uncertainty. Pre- and low-buy are
short-term effects, with research indicating that effects are seen for
one year or less before and after a regulation is implemented.\1401\
Current research on this phenomenon is focused on larger heavy-duty
vehicles, mainly Class 8 ICE vehicles (traditional semi-trucks, for
example). An EPA report on HD sales effects \1402\ found no evidence of
pre- or low-buy impacts of previous HD rules for Class 6
vehicles.\1403\ This may be due to many reasons, including the
generally lower price of smaller class vehicles and less data available
to analyze. MD vehicles subject to this rule are predominantly
commercial vehicles, with private purchasers representing a smaller
portion of the market. In our analysis of the central case, we project
an increase in electrification for both MD and LD vehicles, which is
associated with operational costs savings (including fuel, maintenance
and repair), as discussed in sections VII.B.3 and VII.C.1 of this
preamble. In addition, it should be noted that many studies estimating
how large or expensive purchases are made, purchase decisions are
heavily influenced by macroeconomic factors unrelated to regulations,
for example, interest rates, economic activity, and the general state
of the economy.\1404\ Based on this combined information, we expect any
possible pre- or low-buy that may occur in the medium-duty segment as a
result of this rule would be small and short lived.
---------------------------------------------------------------------------
\1401\ See the EPA report ``Analysis of Heavy-Duty Vehicle Sales
Impacts Due to New Regulation'' at https://cfpub.epa.gov/si/si_public_pra_view.cfm?dirEntryID=349838&Lab=OTAQ for a literature
review and EPA analysis of pre-buy and low-buy due to HD
regulations.
\1402\ ``Analysis of Heavy-Duty Vehicle Sales Impacts Due to New
Regulation'' at https://cfpub.epa.gov/si/si_public_pra_view.cfm?dirEntryID=349838&Lab=OTAQ.
\1403\ Results for Class 7 vehicles was mixed, with some results
showing no evidence of pre- or low-buy, and other results indicating
increased purchases after promulgation, and decreased purchases
beforehand.
\1404\ See the literature review found in the ERG, ``Analysis of
Heavy-Duty Vehicle Sales Impacts Due to New Regulation.'' Found at
https://cfpub.epa.gov/si/si_public_pra_view.cfm?dirEntryID=349838&Lab=OTAQ for more
information.
---------------------------------------------------------------------------
In the NPRM, we asked for comment on our assumptions for MD vehicle
sales impacts. One commenter stated that the assumption of an
elasticity of 0 for MD vehicle sales impacts was not appropriate,
suggesting that we use an elasticity of at least -1.0. The commenter
did not provide research or data to support a change in our assumption
for this rule, especially not to increase the price sensitivity of
medium-duty vehicle buyers to be greater than that of light-duty
vehicle purchasers. Though there may be impacts in the short term that
are not captured by our demand assumptions, in the long term, we assume
that commercial vehicle buyers will purchase the vehicle that fits
their
[[Page 28123]]
needs, regardless of this rule, and the elasticity measures we use for
our analyses are long-term elasticities.
I. Employment Impacts
In this section, we assess the employment impacts associated with
this rule. As we explain in sections I and IV of this preamble,
manufacturers are already rapidly shifting production away from ICE
vehicles and toward PEVs, a trend that is occuring independent of this
rulemaking and strongly supported by the Inflation Reduction Act. This
shift is associated with decreased employment in some sectors (e.g.,
ICE vehicle manufacturing) and increased employment in other sectors
(e.g., PEV and battery manufacturing). We expect manufacturers to
increase their deployment of PEVs in response to this rule, which will
accentuate any employment shifts that may occur due to changes in the
share of PEVs produced. While it is not possible to comprehensively
quantify the nature of the employment shifts, our research and
estimations presented in this section indicate that there are
opportunities for increased employment due to an increase in the share
of PEVs produced and sold.
First, given the rapid surge in PEVs expected over the next decade,
there is a tremendous opportunity for increases in domestic
manufacturing and employment associated with PEVs and their components,
such as batteries. Congress strongly supported these increases in
domestic manufacturing through the BIL, CHIPS Act, and IRA as described
further in section VIII.I.1 of this preamble, below. Consistent with
Congressional policy, this rulemaking further signals strong demand for
PEVs domestically to meet GHG emissions reduction targets and
contributes to a favorable regulatory environment for the United States
to capture the increased manufacturing and employment associated with
PEVs and their components. This positive impact is consistent with the
history of EPA's Clean Air Act programs, where strong emission
standards have historically contributed to the U.S. being a global
leader in the supply of air pollution control equipment, with
corresponding benefits for U.S. global competitiveness and domestic
employment. In addition, there are extensive opportunities related to
PEV charging infrastructure build-out and maintenance. These
opportunities are enhanced by many projects and efforts put forth by
Federal and State agencies and other public and private groups, as
described throughout this section, as well as in Chapter 4.5 of the RIA
and section 20 of the RTC.
Second, while EPA has not been able to comprehensively quantify the
net changes in employment associated with this rule, we do estimate a
partial quantitative analysis of employment impacts associated with
this rule. The partial analysis finds that there is greater potential
for overall job growth in the sectors included in the analysis for this
rule than potential job losses, and that the potential for positive
employment impacts increases over time.
1. Background on Employment Effects
If the U.S. economy is at full employment, even a large-scale
environmental regulation is unlikely to have a noticeable impact on
aggregate net employment. Instead, labor would primarily be reallocated
from one productive use to another, and net national employment effects
from environmental regulation would be small and transitory (e.g., as
workers move from one job to another). In sectors experiencing
transitory effects, some workers may retrain or relocate in
anticipation of new requirements or require time to search for new
jobs, while shortages in some sectors or regions could bid up wages to
attract workers. These adjustment costs can lead to local labor
disruptions. As of 2020, although the three largest automakers in the
U.S. provide employment opportunities in the automotive supply chain in
31 states,\1405\ the majority of jobs in the U.S. automotive sector are
concentrated in a handful of states including Michigan, Alabama,
Indiana, Ohio, and Kentucky.\1406\ Even if the net change in the
national workforce is small, localized reductions in employment may
adversely impact individuals and communities just as localized
increases may have positive impacts. If the economy is operating at
less than full employment, economic theory does not clearly indicate
the direction or magnitude of the net impact of environmental
regulation on employment; it could cause either a short-run net
increase or short-run net decrease. Research on domestic employment in
the EV transition funded by the Department of Energy (DOE) indicates
that a wide range of jobs in the ICE vehicle sector have a relatively
high similarity in needed skill sets to jobs in the EV sector, as well
as in other sectors.\1407\ The research also indicates that higher-wage
jobs with more specialized skills may be better positioned to
transition their skill sets from ICE sectors to EV sectors, although
thy are more geographically concentrated and hence dependent on co-
location of EV production capacity with automotive production for
transition opportunities.
---------------------------------------------------------------------------
\1405\ https://www.americanautomakers.org/sites/default/files/AAPC%20ECR%20Q3%202020.pdf.
\1406\ Based on information on automotive industry employment,
earning and hours from the Bureau of Labor Statistics: https://www.bls.gov/iag/tgs/iagauto.htm#emp_state.
\1407\ Workforce Analytic Approaches to Find Degrees of Freedom
in the EV Transition; https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4699308.
---------------------------------------------------------------------------
Economic theory of labor demand indicates that employers affected
by environmental regulation may change their demand for different types
of labor in different ways. They may increase their demand for some
types, decrease demand for other types, or maintain demand for still
other types. The uncertain direction of labor impacts is due to the
different channels by which regulations affect labor demand. A variety
of conditions can affect employment impacts of environmental
regulation, including baseline labor market conditions, employer and
worker characteristics, industry, and region. In general, the
employment effects of environmental regulation are difficult to
disentangle from other economic changes (especially the state of the
macroeconomy) and business decisions that affect employment, both over
time and across regions and industries. In light of these difficulties,
we look to economic theory to provide a constructive framework for
approaching these assessments and for better understanding the inherent
complexities in such assessments.
In the proposal and previous rules (for example the 2021 rule), we
estimated a partial employment effect on LD ICE vehicle manufacturing
due to the increase in technology costs of the rule. In addition, the
increasing penetration of electric vehicles in the market is likely to
affect both the number and the nature of employment in the auto and
parts sectors and related sectors, such as providers of charging
infrastructure. Over time, as PEVs become a greater portion of the new
vehicle fleet, the kinds of jobs in auto manufacturing are expected to
change. For instance, there is no need for engine and exhaust system
assembly for BEVs, while many assembly tasks for BEVs involve
electrical rather than mechanical fitting. In addition, batteries
represent a significant portion of the manufacturing content of an
electrified vehicle, both BEVs and PHEVs, and some automakers are
likely to purchase the cells, if not
[[Page 28124]]
pre-assembled modules or packs, from suppliers. According to the U.S.
Energy and Employment Report (USEER), jobs related to the energy sector
increased from 2020 to 2021, and at a faster rate than the workforce
overall.\1408\ These energy-sector-related jobs include electric power
generation; transmission, distribution and storage; fuels; energy
efficiency; and motor vehicles and component parts. The report states
that employment in motor vehicles and component parts increased about
2.5 percent from 2020 to 2021, and jobs in clean energy vehicles
increased by almost 21 percent, with BEVs increasing by 27 percent and
PHEVs increasing by 10 percent. Employment in producing, building and
maintaining charging infrastructure needed to support the ever-
increasing number of PEVs on the road is also expected to affect the
nature of employment in automotive and related sectors. For many of
these effects, there is considerable uncertainty in the data to
quantitatively assess how employment might change as a function of the
increased electrification expected to result under the final standards.
---------------------------------------------------------------------------
\1408\ https://www.energy.gov/sites/default/files/2022-06/USEER%202022%20Fact%20Sheet_0.pdf.
---------------------------------------------------------------------------
In comments on the proposed rule, California Air Resources Board
(CARB) stated that the proposed standards present opportunities for
growth in many sectors across the U.S., including auto manufacturing,
electricity in general and ZEV supply chains. A report by the Economic
Policy Institute suggests that U.S. employment in the auto sector could
increase if the share of vehicles, or powertrains, sold in the United
States that are produced in the United States increases.\1409\ The
BlueGreen Alliance (BGA) also states that though BEVs have fewer parts
than their ICE counterparts, there is potential for job growth in
electric vehicle component manufacturing, including batteries, electric
motors, regenerative braking systems and semiconductors, and
manufacturing those components in the United States can lead to an
increase in jobs.\1410\ BGA goes on to state that if the United States
does not become a major producer for these components, there is risk of
job loss. In addition, a recent report from the World Resources
Institute indicates that if the right investments are made in
manufacturing and infrastructure, autoworkers and communities will
benefit from job growth, lower auto related costs, and reduced air
pollution.\1411\ The report focused on effects that would be felt in
Michigan, which, as of 2023 has the most clean energy jobs in the
Midwest, and the ranks 5th nationally.\1412\ Michigan also ranks
second, behind California, for the most hybrid and electric vehicle
employment. Taking Michigan as an example, clean energy jobs grew by
almost 4.6 percent in 2022, which was twice as fast as the overall
economy. Electric vehicle-related jobs, specifically, grew by about 14
percent in the state in 2022. In addition to the 21 percent increase in
employment in 2021 that USEER reported in clean energy vehicles, EDF
also reports that the job growth and investment in the EV sector that
has been seen nationally over the last eight years is expected to
continue, with new factories or production lines for EVs, batteries,
components and chargers supporting more than 125,000 jobs being
announced across 26 states.\1413\ EDF reports that more than 140,000
new jobs have been announced in the U.S. since 2015, with 60,000 jobs
being created in U.S. battery manufacturing.\1414\ They also point out
that 66 percent of those job announcements were made in the time after
BIL was passed, and 32 percent of those jobs were announced after the
IRA was passed, and 86 percent of those jobs announcements were
concentrated in ten states: Michigan, Tennessee, Georgia, Nevada,
Kentucky, South Carolina, Ohio, North Carolina, Indiana and Kansas. DOE
reports that more than 80,000 potential jobs in U.S. battery
manufacturing and supply chain, and more than 50,000 potential jobs in
U.S. EV component and assembly have been announced since 2020.\1415\
---------------------------------------------------------------------------
\1409\ https://www.epi.org/publication/ev-policy-workers.
\1410\ BGA stated this in a report found at https://www.bluegreenalliance.org/wp-content/uploads/2021/04/Backgrounder-EVs-Are-Coming.-Will-They-Be-Made-in-the-USA-vFINAL.pdf as well as
in their public comments on the proposed rule found in Section 20 of
the RTC.
\1411\ https://www.wri.org/insights/michigan-electric-vehicle-job-creation, https://www.wri.org/research/michigan-ev-future-assessment-employment-just-transition.
\1412\ https://www.governing.com/work/michigan-leads-electric-
vehicle-jobs-but-lags-in-
sales#:~:text=More%20than%2032%2C000%20Michigan%20workers,involved%20
%E2%80%9Cin%20this%20ecosystem.%E2%80%9D.
\1413\ EDF. (2023). New climate laws drive boom in electric
vehicle jobs. Retrieved November 1, 2023 from https://vitalsigns.edf.org/story/new-climate-laws-drive-boom-electric-vehicle-jobs.
\1414\ EDF. (2023). U.S. Electric Vehicle Manufacturing
Investments and Jobs. https://www.edf.org/sites/default/files/2023-03/State-Electric-Vehicle-Policy-Landscape.pdf.
\1415\ https://www.energy.gov/invest.
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The UAW states that re-training programs will be needed to support
auto workers in a market with an increasing share of electric vehicles
in order to prepare workers that might be displaced by the shift to the
new technology.\1416\ In their comments on the proposed rule, UAW
stated that job loss or creation in the auto industry depends on
whether EV assembly and parts production is expanded in the U.S. or
not. In 2020, Volkswagen stated that labor requirements for ICE
vehicles are about 70 percent higher than their electric counterpart,
but these changes in employment intensities in the manufacturing of the
vehicles can be offset by shifting to the production of new components,
for example batteries or battery cells.\1417\ More recently, Volkswagen
announced it will start construction of a new electric vehicle battery
gigafactory supporting up to 3,000 direct jobs in Canada, as well as
supporting a new EV manufacturing plant in South Carolina.\1418\
Research from the Seattle Jobs Initiative indicates that employment in
a collection of sectors related to both PEV and ICE vehicle
manufacturing is expected to grow slightly through 2029.\1419\ Climate
Nexus also states that the increasing penetration of electric vehicles
will lead to a net increase in jobs, a claim that is partially
supported by the rising investment in batteries, vehicle manufacturing
and charging stations.\1420\
---------------------------------------------------------------------------
\1416\ https://uaw.org/wp-content/uploads/2019/07/190416-EV-White-Paper-REVISED-January-2020-Final.pdf.
\1417\ https://www.volkswagenag.com/presence/stories/2020/12/frauenhofer-studie/6095_EMDI_VW_Summary_um.pdf.
\1418\ Volkswagen-backed PowerCo SE reaches significant
milestone in St. Thomas gigafactory project: https://www.volkswagen-group.com/en/press-releases/volkswagen-backed-powerco-se-reaches-significant-milestone-in-st-thomas-gigafactory-project-17962; South
Carolina Offers $1.3B to new Scout Electric SUV maker: https://apnews.com/article/scout-electric-vehicle-plant-south-carolina-07c565669e13985738db503a86e323b0.
\1419\ https://www.seattle.gov/Documents/Departments/OSE/ClimateDocs/TE/EV%20Field%20in%20OR%20and%20WA_February20.pdf.
\1420\ https://climatenexus.org/climate-issues/energy/ev-job-impacts/.
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This expected private investment is also supported by recent
Federal investment which will encourage increased investment along the
vehicle supply chain, including domestic critical minerals, materials
processing, battery manufacturing, charging infrastructure, and vehicle
assembly and vehicle component manufacturing. This investment includes
the BIL, the CHIPS Act, and the IRA. The BIL was signed in November
2021 and provides over $24 billion in investment in electric vehicle
chargers, critical minerals, and battery components needed by domestic
manufacturers of EV batteries and for
[[Page 28125]]
clean transit and school buses.\1421\ The CHIPS and Science Act, signed
in August, 2022, invests in expanding America's manufacturing capacity
for the semiconductors used in electric vehicles and chargers.\1422\
The IRA provides incentives for producers to expand domestic
manufacturing of PEVs and domestic sourcing of components and critical
minerals needed to produce them. The Act also provides incentives for
consumers to purchase both new and used PEVs. These laws create
domestic employment opportunities along the full automotive sector
supply chain, from components and equipment manufacturing and
processing to final assembly, as well as incentivize the development of
reliable EV battery supply chains, as indicated by the evidence we
present in section VIII.I.1 of the preamble.\1423\
---------------------------------------------------------------------------
\1421\ The Bipartisan Infrastructure Law is officially titled
the Infrastructure Investment and Jobs Act. More information can be
found at https://www.fhwa.dot.gov/bipartisan-infrastructure-law.
\1422\ The CHIPS and Science Act was signed by President Biden
in August, 2022 to boost investment in, and manufacturing of,
semiconductors in the U.S. The fact sheet can be found at https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/09/fact-sheet-chips-and-science-act-will-lower-costs-create-jobs-strengthen-supply-chains-and-counter-china.
\1423\ ``Building a Clean Energy Economy: A Guidebook to the
Inflation Reduction Act's Investments in Clean Energy and Climate
Action.'' January 2023. Whitehouse.gov. https://www.whitehouse.gov/wp-content/uploads/2022/12/Inflation-Reduction-Act-Guidebook.pdf.
---------------------------------------------------------------------------
In addition, the IRA is expected to lead to increased demand for
PEVs through tax credits for purchasers of PEVs. The BlueGreen Alliance
and the Political Economy Research Institute estimate that IRA will
create over 9 million jobs over the next decade, with about 400,000 of
those jobs being attributed directly to the battery and fuel cell
vehicle provisions in the act.\1424\ Additional studies find similar
results: the IRA and BIL have the potential to lead to significant job
increases in transportation, electricity and manufacturing, with some
estimates almost 700,000 new jobs through 2030. EDF reports that more
than 46,000 jobs in EV manufacturing have already been announced since
the passage of the IRA.
---------------------------------------------------------------------------
\1424\ Political Economy Research Institute. (2022). Job
Creation Estimates Through Proposed Inflation Reduction Act.
University of Massachusetts Amherst. Retrieved from https://www.bluegreenalliance.org/site/9-million-good-jobs-from-climate-action-the-inflation-reduction-act.
---------------------------------------------------------------------------
It is important to note that investments from the IRA have, so far,
been focused in more economically disadvantages counties. The U.S.
Department of Treasury states that as of November 2023, 70 percent of
post-IRA investments in clean energy have happened in counties with a
smaller share of the population employed than the U.S. average; almost
80 percent have happened in counties with below-average medium
household incomes; more than 80 percent of have happened in counties
with below-average wages; and more than 85 percent have gone to
counties with below-average college graduation rates.\1425\
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\1425\ The Inflation Reduction Act: A Place-Based Analysis:
https://home.treasury.gov/news/featured-stories/the-inflation-reduction-act-a-place-based-analysis.
---------------------------------------------------------------------------
It is also important to note that though the majority of this
discussion focuses on possible direct impacts these Federal Acts may
have on jobs along the vehicle supply chain (including domestic
critical minerals, materials processing, battery manufacturing,
charging infrastructure, and vehicle assembly and vehicle component
manufacturing), there may also be indirect job creation and support,
for example, in constructing the new manufacturing facilities.\1426\
---------------------------------------------------------------------------
\1426\ The U.S. Department of Treasury reports that
manufacturing spending has increased significantly since the BIL,
IRA and CHIPS Act were passed. Unpacking the Boom in U.S.
Construction of Manufacturing Facilities: https://home.treasury.gov/news/featured-stories/unpacking-the-boom-in-us-construction-of-manufacturing-facilities.
---------------------------------------------------------------------------
In the proposal, we asked for comment on our employment analysis.
Some commenters, including the UAW, BlueGreen Alliance and the United
Steelworkers Union, provided comments on possible impacts on both job
quality and geographic impacts of the rule making the point that not
all jobs should be treated as equal. The commenters stated that the
rule will lead to a reduction in job quality, citing current
differences in job quality for those working in plants manufacturing
ICE vehicles, and those working in plants manufacturing BEVs or vehicle
batteries. Commenters stated that the BEV and battery plant workers
receive lower pay, fewer benefits, and are not unionized in comparison
to those working at ICE manufacturing plants. In addition, commenters
state that even if the number of jobs at the national level does not
change, there will be local community level impacts due to the location
of those jobs changing. For example, employment at an ICE plant in one
community might be reduced while employment at a BEV or battery plant
in another community might increase. Though the number of jobs might
not change, employment in the ``losing'' community will decrease, or
workers from that community might have to relocate if they are able.
The UAW, in comments on the proposed rule stated support for emission
reductions, though they also indicate a slower phase in of ZEVs into
the market than that projected in the proposal would better support
employees in auto manufacturing and supporting industries.
Even with expected increases in employment in component production
and new domestic jobs related to ZEVs, these shifts in production may
negatively affect workers currently employed in production of ICE
vehicles. We acknowledge the possibility of geographically localized
effects, and that there may be job quality impacts associated with this
rule, especially in the short term. We note that there are Federal
programs to assist workers in the transition to low or zero emitting
vehicles, including a DOE funding package which makes $2 billion in
grants, and up to $10 billion in loans available to support projects
converting existing automotive manufacturing facilities to support
electric vehicle production.\1427\ The funding package is expected to
result in retention of high-quality, high-paying jobs in communities
that currently host these manufacturing facilities, and along the full
supply chain for the automotive sector, from components to assembly.
The grants available give priority to refurbishing and retooling
manufacturing facilities, especially for those likely to retain
collective bargaining agreements and/or an existing higher-quality,
high-wage hourly production workforce.\1428\ The program aims to
support a just transition for workers and communities in the transition
to electrified transportation, and to strengthen domestic supply chains
and support disadvantaged communities. DOE has also announced funding
to support clean energy supply chains, with the funding going toward
projects to support domestic clean energy manufacturing (including
projects supporting battery production) in, or near, nine communities
that were formerly tied to coal mining, and are expected to create
almost 1,500 jobs.\1429\
[[Page 28126]]
We also note that during and after the comment period, several major
U.S. automakers were negotiating new labor contracts, with an emphasis
on workers in facilities that support the production of electrified
vehicles.\1430\ The negotiations resulted in many workers in EV
production, including EV battery workers, becoming newly eligible to
join the union, as well as in raising wages for those employed by
unionized automakers, and those employed by non-unionized
automakers.\1431\ Research from the Economic Policy Institute indicates
the U.S. auto sector and its employees would benefit from increasing
electrification if there are policies to support domestic
manufacturing, to automotive supply chain, and workers throughout the
sector.\1432\ As discussed in RTC section 20, there are many existing
and planned projects focused on training new and existing employees in
fields related to green jobs, and specifically green jobs associated
with electric vehicle production, maintenance and repair, and the
associated charging infrastructure. This includes work by the Joint
Office of Energy and Transportation (JOET), created by the BIL, which
supports efforts related to deploying infrastructure, chargers and zero
emission vehicles. In addition, the IRA is expected to lead to
increased demand in PEVs through tax credits for purchasers of PEVs.
These ongoing actions supporting green jobs, including those by DOE,
the Department of Labor (DOL), the Office of Energy Jobs, and others,
are particularly focused on jobs with high standards and the right to
collective bargaining. Additional programs are described in RIA Chapter
4.5, including programs and initiatives focused on community-level
impacts. Jobs that may be lost due to reductions in ICE vehicle
production may transition to fields related to EV production, but may
also transition to other sectors. As mentioned above, a 2023 study
funded by DOE indicates that there is a wide range of ICE automotive
production jobs with similar skill sets to those required for jobs in
EV automotive production and other industries, including the heat pump,
solar panel manufacturing and transformer industry.\1433\ Also, we
point out that even though vehicle manufacturing and battery
manufacturing may create more localized employment effects,
infrastructure work is, and will continue to be, a nation-wide effort.
---------------------------------------------------------------------------
\1427\ https://www.energy.gov/articles/biden-harris-administration-announces-155-billion-support-strong-and-just-transition.
\1428\ U.S. Department of Energy Office of Manufacturing and
Energy Supply Chains Inflation Reduction Act Domestic Manufacturing
Conversion Grants Funding Opportunity Announcement. DE-FOA-
0003106_FOA Doc_Amendment 000006_IRA 50143. https://infrastructure-exchange.energy.gov/Default.aspx#FoaIdf9eb1c8a-9922-46b6-993e-78972d823cb2.
\1429\ https://www.energytech.com/energy-efficiency/article/21278185/doe-announces-275m-for-7-projects-to-strengthen-clean-energy-supply-chains-and-manufacturing-in-former-coal-communities.
\1430\ UAW: Bargaining 2023 UAW-GM, https://uaw.org/gm2023/;
UAW: UAW National Negotiators Reach Tentative Agreement with Ford on
Record Contract, https://uaw.org/uaw-national-negotiators-reach-
tentative-agreement-with-ford-on-record-contract/
#:~:text=Some%20of%20our%20lower-
tier%20members%20at%20Sterling%20Axle,workers%20will%20receive%20an%2
0immediate%2011%25%20wage%20increase.; UAW: UAW reaches a Tentative
Agreement with Stellantis, https://uaw-newsroom.prgloo.com/press-release/uaw-reaches-a-tentative-agreement-with-stellantis.
\1431\ Bloomberg: UAW Scores Victory in EV Worker Battle Even
with Wage Compromise, https://news.bloomberglaw.com/daily-labor-report/uaw-scores-victory-in-ev-worker-battle-even-with-wage-compromise; The Washington Post: UAW members ratify record contracts
with Big 3 automakers, https://www.washingtonpost.com/business/2023/11/20/uaw-contract-ford-general-motors-stellantis.
\1432\ Economic Policy Institute: The stakes for workers in how
policymakers manage the coming shift to all-electric vehicles,
https://www.epi.org/publication/ev-policy-workers.
\1433\ See footnote 106.
---------------------------------------------------------------------------
We do not have data to estimate current or future job quality. Nor
are we able to determine the future location of vehicle manufacturing
and supporting industries beyond the public announcements made as of
the publication of this rule. We note that, compared to the proposal,
we are finalizing standards that extend flexibilities and provide a
slower increase in the stringency of the standards in the early years
of the program. The more gradual shift allows for a more moderate pace
in the industry's scale up to the battery supply chain and
manufacturing, which in turn should help to reduce any potential
impacts in employment across all sectors impacted by this rule. In
addition, as illustrated by the range of sensitivity analyses which
demonstrate alternative technology pathways manufacturers might choose
to comply with the standards, as shown in sections IV.E and F of the
preamble, there are multiple ways OEMs can choose to meet the
standards, including through a wide range of BEV and PHEV technologies.
These pathways continue to provide ICE technologies including base ICE,
advanced ICE and HEVs in addition to PHEVs and BEVs.
2. Factor Shift, Demand, and Cost Effect on Employment
Consistent with the proposal, in RIA Chapter 4.5 we describe three
ways employment at the firm level might be affected by changes in a
firm's production costs due to environmental regulation: A factor-shift
effect, in which post-regulation production technologies may have
different labor intensities than their pre-regulation counterparts; a
demand effect, caused by higher production costs increasing market
prices and decreasing demand; and a cost effect, caused by additional
environmental protection costs leading regulated firms to increase
their use of inputs.1434 1435 Due to data limitations, EPA
is not quantifying the impacts of the final regulation on firm-level
employment for affected companies, although we acknowledge these
potential impacts. Instead, we discuss factor-shift, demand, and cost
employment effects for the regulated sector at the industry level.
---------------------------------------------------------------------------
\1434\ Morgenstern, Richard D., William A. Pizer, and Jhih-
Shyang Shih (2002). ``Jobs Versus the Environment: An Industry-Level
Perspective.'' Journal of Environmental Economics and Management 43:
412-436.
\1435\ Berman and Bui have a similar framework in which they
consider output and substitution effects that are similar to
Morgenstern et al.'s three effect (Berman, E. and L. T. M. Bui
(2001). ``Environmental Regulation and Labor Demand: Evidence from
the South Coast Air Basin.'' Journal of Public Economics 79(2): 265-
295).
---------------------------------------------------------------------------
Factor-shift effects are due to changes in labor intensity of
production due to the standards. We do not have data on how the
regulation might affect labor intensity of production within ICE
vehicle production. There is ongoing research on the different labor
intensity of production between BEV and ICE vehicle production, with
inconsistent results. Some research indicates that the labor hours
needed to produce a BEV are fewer than those needed to produce an ICE
vehicle, while other research indicates there are no real differences.
EPA worked with a research group to produce a peer-reviewed tear-down
study of a BEV (Volkswagen ID.4) to its comparable ICE vehicle
counterpart (Volkswagen Tiguan).\1436\ Peer reviewed study results were
delivered in May 2023. Included in this study are estimates of labor
intensity needed to produce each vehicle under three different
assumptions of vertical integration of manufacturing scenarios ranging
from a scenario where most of the assemblies and components are sourced
from outside suppliers to a scenario where most of the assemblies and
components are assembled in house. Under the low and moderate levels of
vertical integration, results indicate that assembly time of the BEV at
the plant is reduced compared to assembly time of the ICE vehicle.
Under a scenario of high vertical integration, which includes the BEV
battery assembly, results show an increase in time needed to assemble
the BEV. When powertrain systems are ignored (battery, drive units,
transmission and engine assembly), the BEV requires more time to
assemble under all three vertical integration scenarios. The results
[[Page 28127]]
indicate that the largest difference in assembly comes from the
building of the battery pack assembly. When the battery cells are built
in-house, the BEV will require more hours to build at the assembly
plant. It also indicates that if the labor input to manufacture
batteries is included in the estimated labor needs to build a BEV,
regardless of the vertical integration decisions to build batteries in-
house, BEVs will require more labor to build.
---------------------------------------------------------------------------
\1436\ See RIA Chapter 2.5.2.2.3 for more information.
---------------------------------------------------------------------------
Data on the labor intensity of PHEV production compared to ICE
vehicle production is also very sparse. PHEVs share features with both
ICE vehicles, including engines and exhaust assemblies, and BEVs,
including motors and batteries. If labor is a function of the number of
components, PHEVs might have a higher labor intensity of production
compared to both BEV and ICE vehicles, and if they are produced in the
U.S. may provide labor demand. The labor needs of battery production
are also a factor of the total labor needs to build a PHEV.
Given the current lack of data and inconsistency in the existing
literature, we are unable to estimate a quantitative factor-shift
effect of increasing relative PEV production as a function of this
rule. However, we can say, generally, that research indicates that if
production of PEVs and their power supplies are done in the U.S. at the
same rates as ICE vehicles, we do not expect employment to fall, and it
may likely increase. Electric vehicle manufacturing plants and battery
plants are being built and announced in the U.S., as discussed in
section IV of this preamble. In addition, states are making efforts to
support increasing domestic production of electric vehicles and
batteries, including support for the workforce. An Executive Order
issued in South Carolina prioritized implementing a strategic
initiative to explore opportunities related to ongoing economic
development, business support and recruitment efforts with electric
vehicle and automotive manufacturers.\1437\ A study from Ohio estimates
that there will be more than 25,000 new jobs in EV manufacturing and
maintenance, battery development and charging station installation and
operations in the state by 2030.\1438\ California has a Workforce
Development Board that has been focused on furthering the development
of an equitable ZEV industry, including high quality jobs and access to
them, since at least 2021.\1439\ Illinois has invested in EV training
programs, research and development in the EV industry, and in workforce
development and community support in the clean energy sector.\1440\ The
Nevada Battery Coalition is tasked with identifying gaps in, and
developing solutions for, workforce and economic development supporting
the lithium industry in Nevada.\1441\ Kentucky has been the location
for at least two recent automotive sector development projects, and it
is providing resources toward upgrading industrial sites throughout the
state, with funding evaluated based on factors including workforce
availability.\1442\ Tennessee is co-locating a new Tennessee College of
Applied Technology with a new EV manufacturing facility Ford is
building in the state to provide specialized technical training.\1443\
In Michigan, the Department of Labor and Economic Opportunity created
the Electric Vehicle Jobs Academy to assist with tuition and other
supportive services for those training to be in the advanced automotive
mobility and electrification industry, and the University of Michigan
contracted with the state to open the University of Michigan Electric
Vehicle Center focusing on research and development and developing a
highly skilled workforce.1444 1445
---------------------------------------------------------------------------
\1437\ SCpowersEV: State support--Driving the Future, https://scpowersev.com/state-support.
\1438\ Accelerating Ohio's Auto & Advanced Mobility Workforce,
Auto and Advanced Mobility Workforce Strategy, 2023. https://workforce.ohio.gov/wps/wcm/connect/gov/2e9f6e52-a4bc-4ef6-9080-e6b06f067a1a/Ohio%27s+Electric+Vehicle+Workforce+Strategy.pdf?MOD=AJPERES.
\1439\ California Workforce Development Board, 2021. https://business.ca.gov/wp-content/uploads/2021/03/CWDB_ZEV-Plan.pdf.
\1440\ Illinois Drive Electric: Abundant Workforce, https://ev.illinois.gov/grow-your-business/abundant-workforce.html.
\1441\ Nevada Battery Coalition: https://nevadabatterycoalition.com/about.
\1442\ Kentucky: Leading the Charge, https://ced.ky.gov/Newsroom/Article/20230816_Leading_th.
\1443\ Area Development: Tennessee: A growing Capital of
Electric Vehicle Production, https://www.areadevelopment.com/ContributedContent/Q4-2021/tennessee-growing-capital-of-electric-vehicle-production.shtm.
\1444\ MI Labor and Economic Opportunity: Electric Vehicle Jobs
Academy, https://www.michigan.gov/leo/bureaus-agencies/wd/industry-business/mobility/electric-vehicle-jobs-academy.
\1445\ Michigan Engineering News, $130M Electric Vehicle Center
launches at U-Michigan, https://news.engin.umich.edu/2023/04/130m-electric-vehicle-center-launches-at-u-michigan.
---------------------------------------------------------------------------
Factor shift effects do not account for a change in the total
number of vehicles sold. Demand effects on employment are due to
changes in labor due to changes in demand. In general, if the
regulation causes total sales of new vehicles to increase, more workers
will be needed to assemble vehicles and manufacture their components.
However, if BEVs, PHEVs and ICE vehicles have different labor
intensities of production, the relative change in BEV, PHEV, and ICE
vehicles sales will impact the demand effect on employment. As a simple
example, assume that sales of BEV, PHEV and ICE vehicles increase. This
would mean that the change in employment due to an increase demand will
depend on the labor intensity of BEV, PHEV and ICE vehicle production
and the increase in their respective sales. Now assume that PEV sales
increased while ICE vehicle sales decreased. If total sales increase,
that would indicate that PEVs replaced ICE vehicles, but there was new
sales demand as well. For ease of illustration, ignore PHEVs for now,
and assume that all PEV vehicles in this scenario are BEVs. The change
in employment under this scenario would depend on the factor shift
effect (the relative BEV and ICE vehicle labor intensity) for the
replaced ICE vehicles, and the demand effect (labor intensity of BEVs)
for the new sales demand. Under this same scenario (PEV sales are
increasing while ICE sales are decreasing, with increased total sales)
where PEVs are both replacing ICE vehicles, and there is new sales
demand for PEVs, there is additional complexity when those PEVs are
broken up unto BEVs and PHEVs. The factor shift effect for the replaced
ICE vehicles would depend on whether PHEVs or BEVs are replacing them.
In addition, there may be situations where BEVs are being replaced by
PHEVs, or vice versa, and that effect would depend on the relative
labor intensities of BEV and PHEV production. The demand effect for the
new sales will depend on the labor intensity of the new BEVs and the
new PHEVs, as well as the share of each that are being introduced into
the market each model year.
For the same reason we cannot estimate a factor-shift effect,
namely that we do not know the labor intensity of BEV or PHEV vs ICE
vehicle production, we are not currently able to estimate a demand-
shift effect on employment.
The cost effects on employment are due to changes in labor
associated with increases in costs of production. BEVs, PHEVs and ICE
vehicles require different inputs and have different costs of
production, though there are interchangeable, common, parts as well. In
previous LD and HD rules, we have estimated a partial employment effect
due to the change in costs of production. We estimated the cost effect
using the historic share of labor in the cost of production to
extrapolate future estimates of impacts on labor due to new compliance
activities in response to the regulations. Specifically, we multiplied
the share of labor in
[[Page 28128]]
production costs by the production cost increase estimated as an impact
of the rule. This provided a sense of the magnitude of potential
impacts on employment.
As described in Chapter 4.6 of the RIA, we used historical data on
the number of employees per $1 million in expenditures from the
Employment Requirements Matrix (ERM) provided by the U.S. Bureau of
Labor Statistics (BLS) to examine labor needs of six manufacturing
sectors related to ICE and BEV vehicle production to determine trends
over time. Three of these sectors (Electrical equipment and
manufacturing, Other electrical equipment and component manufacturing
and Semiconductor and other electronic component manufacturing) are
more closely related to battery electric production, while the other
three (Motor vehicle manufacturing, Motor vehicle body and trailer
manufacturing, and Motor vehicle parts manufacturing) are sectors that
are more generally related to both battery electric and ICE vehicle
production.
Over time, the amount of labor needed in the motor vehicle industry
has changed: Automation and improved methods have led to significant
productivity increases, which is reflected in the estimates from the
BLS ERM. For example, in 1997 about 1.2 workers in the Motor vehicle
manufacturing sector were needed per $1 million, but only 0.7 workers
by 2022 (in 2022$).\1446\ Though two sectors mainly associated with BEV
manufacturing, Electrical equipment manufacturing, and Other electrical
equipment and component manufacturing, show an increase in recent
years.
---------------------------------------------------------------------------
\1446\ http://www.bls.gov/emp/ep_data_emp_requirements.htm; this
analysis used data for the sectors electrical equipment and
manufacturing, other electrical equipment and component
manufacturing, motor vehicle manufacturing, motor vehicle body and
trailer manufacturing, and motor vehicle parts manufacturing from
``Chain-weighted (2012 dollars) real domestic employment
requirements tables;'' see the excel file ``Final Cost Effect
Employment Impacts Calculation'' in the docket.
---------------------------------------------------------------------------
3. Partial Employment Effect
We attempt to estimate partial employment effects of this rule by
separating out costs mainly associated with electrified portions of
vehicle production (for example, batteries) and the ICE vehicle portion
of production (for example, engines), as well as the costs that are
common between them (for example, gliders.\1447\) We apply the
electrified portions of cost changes only to sectors primarily focused
on electrified portions of vehicle production, the ICE vehicle portion
of costs only to sectors primarily focused on the ICE vehicle portions
of production, and the costs common to both the electrified portions
and ICE portions of vehicle production to sectors that are common to
the electrified and ICE portions of vehicle production.\1448\ For more
information on how we estimated this partial employment effect, see RIA
Chapter 4.5.4.
---------------------------------------------------------------------------
\1447\ In this context, a glider is a vehicle without a
powertrain. It includes the body, chassis, interior and non-
propulsion related electrical components.
\1448\ A report from the Seattle Jobs Initiative examined how
electrification in the automotive industry might advance workforce
development in Oregon and Washington. As part of that study, the
authors identified the sectors classified by the North American
Industry Classification System (NAICS) codes most strongly
associated with automotive production in general, those exclusive to
ICE vehicles, and those primarily associated with electrified
portions of vehicle production. The report can be found at: https://www.seattle.gov/Documents/Departments/OSE/ClimateDocs/TE/EV%20Field%20in%20OR%20and%20WA_February20.pdf.
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In previous rules, we have estimated the cost effect, which is done
while keeping sales constant. However, OMEGA estimates costs and
changes in sales concurrently. Therefore, as we did in the proposal,
the partial employment effect we estimate here is a combined cost and
demand effect, and is meant to give a sense of possible partial
employment effects, including directionality and relative magnitude.
The estimate includes effects due to both LD and MD cost changes, as
the costs used in the analysis were the combined estimated costs for
the light- and medium-duty sectors, as well as the change in new
vehicle sales in the LD market.\1449\ It does not include economy-wide
labor effects, possible factor intensity effects, or effects from
possible changes to domestic production.
---------------------------------------------------------------------------
\1449\ We do not estimate a change in new medium-duty vehicle
sales. See section VIII.C of this preamble, or RIA Chapter 4.4.2 for
more information on the change in sales estimated due to this rule.
---------------------------------------------------------------------------
Table 228 shows our estimates of partial employment results for the
final rule for each year for the three sector groups. See Chapter 4.5.4
of the RIA for more information on the employment analysis.
Table 228--Estimated Partial Employment Effects for Sectors Focused on the Electrified, ICE, and Common Portions of Vehicle Production
--------------------------------------------------------------------------------------------------------------------------------------------------------
Common portions Electrified portion ICE portion
-----------------------------------------------------------------------------------------------
Year Smallest Smallest Smallest
effect Largest effect effect Largest effect effect Largest effect
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027.................................................... -370 -3,600 3,000 6,900 2,200 2,900
2028.................................................... -900 -8,600 15,700 36,600 -800 -1,100
2029.................................................... -1,300 -13,000 36,800 89,100 -7,600 -9,800
2030.................................................... -1,900 -19,800 54,800 140,200 -13,600 -17,500
2031.................................................... -2,100 -22,600 67,700 182,600 -18,800 -24,200
2032.................................................... -2,600 -27,700 75,100 213,900 -23,200 -29,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
These results show negative employment effects in the ICE focused
sectors (except for 2027) and the sectors common to the ICE and
electrified portions of production. There are positive employment
effects in the sectors focused on the electrified portions of
production.
Table 229 shows the range from the smallest estimated employment
gain across the combination of sector groups to the largest estimated
potential employment gain across the combination of sector groups. This
is not a straight sum of the smallest and largest effects as seen in
Table 228 above, which are based on absolute value (closest to and
furthest from zero) and are not affected by the direction of the
effect, but a sum of the minimum and maximum estimated effects, which
include direction of the effect. The estimated range shows an expected
increase in employment from 2027 through 2032. In addition, these
estimates indicate that possible job growth over time in PEV related
sectors will be greater than possible job loss in ICE or common
sectors, and those gains are increasing over time.
[[Page 28129]]
Table 229--Estimated Maximum Combined Range of Estimated Partial
Employment Effects Across all Sectors
------------------------------------------------------------------------
------------------------------------------------------------------------
Year Maximum combined range
------------------------------------------------------------------------
2027.................................... 1,600 9,400
2028.................................... 6,000 34,900
2029.................................... 14,000 80,200
2030.................................... 17,600 124,700
2031.................................... 20,800 161,700
2032.................................... 17,400 188,100
------------------------------------------------------------------------
These results are consistent with the results of the FEV tear-down
study, discussed in section VIII.I.2 of this preamble, and indicate
that even if fewer labor hours are needed at the assembly plant,
increased labor hours will be needed elsewhere in the supply chain for
the electrified portions of production, for example in building and
assembling battery packs.
4. Employment in Related Sectors
With respect to possible employment effects in other sectors,
economy-wide impacts on employment are generally driven by broad
macroeconomic effects. However, employment impacts, both positive and
negative, in sectors upstream and downstream from the regulated sector,
or in sectors producing substitute or complementary products, may also
occur as a result of this rule. For example, changes in electricity
generation may have consequences for labor demand in those upstream
industries. Lower per-mile fuel costs could lead to labor effects in
ride-sharing or ride-hailing services through an increase in demand for
those services. Increased mobility related to the lower cost per mile
of driving, as discussed in section VIII.D.1 of this preamble may also
benefit drivers or owner/operators in other ways, including through MD
fleets being able to service a greater range of customers, or consumers
having access to a larger geographic area for employment opportunities.
Reduced demand for gasoline may lead to impacts on demand for labor in
the gas station sector, although the fact that many gas stations
provide other goods, such as food and car washes, will moderate
possible losses in this sector. There may also be an increase in demand
for labor in sectors that manufacture, build and maintain charging
stations. To that end, the BIL is investing in the build out of EV
chargers along America's major roads, freeways and interstates,
focusing on domestically produced iron and steel, and domestically
manufactured chargers.\1450\ The magnitude of all of these impacts
depends on a variety of factors including the labor intensities of the
related sectors, as well as the nature of the linkages (which can be
reflected in measures of elasticity) between them and the regulated
firms.
---------------------------------------------------------------------------
\1450\ The White house: Full Charge: The Economics of Building a
National EV Charging Network, https://www.whitehouse.gov/briefing-room/blog/2023/12/11/full-charge-the-economics-of-building-a-national-ev-charging-network.
---------------------------------------------------------------------------
Electrification of the vehicle fleet is likely to affect both the
number and the nature of employment in the auto and parts sectors and
related sectors, such as providers of charging infrastructure and
utilities supporting grid enhancements. ICCT estimated that charging
infrastructure growth in the U.S. could create about 160,000 jobs by
2032, in sectors ranging from electrical installation, maintenance and
repair, charger assembly, general construction, software maintenance
and repair, planning and design, and administration and legal.\1451\ As
mentioned above, JOET has funded initiatives related to job training
for many sectors related to charging resiliency and performance,
including those in the electrical industry.\1452\ In addition, the type
and number of jobs related to vehicle maintenance are expected to
change as well, though we expect this to happen over a longer time span
due to the nature of fleet turnover. Given the timeline, we expect
opportunities for workers to retrain from ICE vehicle maintenance to
other positions, for example within PEV maintenance, charging station
infrastructure, or elsewhere in the economy.
---------------------------------------------------------------------------
\1451\ ICCT: Charging Up America, https://theicct.org/wp-content/uploads/2024/01/ID-28-%E2%80%93-U.S.-infra-jobs-report-letter-70112-ALT-v6.pdf.
\1452\ JOET: New Funding Enhances EV Charging Resiliency,
Reliability, Equity and Workforce Development, https://driveelectric.gov/news/workforce-development-ev-projects.
---------------------------------------------------------------------------
Reduced consumption of petroleum fuel represents fuel savings for
purchasers of fuel, as well as a potential loss in value of output for
the petroleum refining industry, fuel distributors, and gasoline
stations, which may result in reduced employment in these sectors.
These impacts may also pass up the supply chain to, for example,
pipeline construction, operation and maintenance, and domestic oil
production. However, because the fuel production sector is material-
intensive, and we estimate that only part of the reduction in liquid
fuel consumption will be met by reduced refinery production in the U.S.
(see RIA Chapter 10), the employment effect is not expected to be
large. In addition, it may be difficult to distinguish these effects
from other trends, such as increases in petroleum sector labor
productivity that may also lower labor demand.
As discussed in section I of this preamble, there have been several
legislative and administrative efforts enacted since 2021 aimed at
improving the domestic supply chain for electric vehicles, including
electric vehicle chargers, critical minerals, and components needed by
domestic manufacturers of EV batteries. These actions are also expected
to provide opportunities for domestic employment in these associated
sectors.
The standards may affect employment for auto dealers through a
change in vehicles sold, with increasing sales being associated with an
increase in labor demand. However, vehicle sales are also affected by
macroeconomic effects, and it is difficult to separate out the effects
of the standards on sales from effects due to macroeconomic conditions.
In addition, auto dealers may also be affected by changes in
maintenance and service costs, as well as through changes in the
maintenance needs of the vehicles sold. For example, reduced
maintenance needs of BEVs would lead to reduced demand for maintenance
labor.
Commenters on the proposal stated concerns about a lack of
available technicians qualified to service electric vehicles and
charging infrastructure. We do not agree that there will be a
significant lack of technicians in the timeframe of this rule given
investments and programs focused on training for EV sector positions
(including those
[[Page 28130]]
discussed in section VIII.I.1 of this preamble and section 20 of the
RTC, as well as other programs, including those at many community
colleges, supporting jobs related to EV technology, including
technicians).\1453\ Additionally, the phase-in of this final rule,
described in section III of this preamble, will allow time for
technicians to be trained. Commenters also stated that refinery jobs
and gas station employees are at risk if the share of BEVs in the
market increases as projected in the proposal. However, traditional gas
stations and liquid fuel providers are already incorporating electric
vehicle charging into their business plans. For example, investments by
Chevron have been made to expand reliable, profitable EV charging
stations to existing convenience stores and gas stations across the
county; \1454\ Shell is offering ``Shell Recharge,'' which is focused
on providing charging solutions for electric vehicle fleets; \1455\ and
Love's Travel Stops, a national travel stop network, is working with
Electrify America to provide ultra-fast EV charging at seven existing
travel stops, which also have helped Electrify America to complete a
cross-country charging route from LA to DC \1456\ In addition, some gas
stations have converted from providing liquid fuel to electric
charging.\1457\ Overall, nearly three quarters of existing gas stations
are located in census tracts eligible for the Alternative Fuel Vehicle
Refueling Tax Credit (Internal Revenue Code 30C), encouraging the
continuation of private sector employment in these communities.\1458\
---------------------------------------------------------------------------
\1453\ For a list of some of the community college and other
programs that support the electric vehicle industry, see the
Community College and Other EV Training Programs memo to the docket.
\1454\ Businesswire: Electric Era Announces Investment from
Chevron Technology Ventures to Scale Adoption of it PowerNode
Electric Vehicle Charging Stations.https://www.businesswire.com/news/home/20231003932625/en/Electric-Era-Announces-Investment-from-Chevron-Technology-Ventures-to-Scale-Adoption-of-its-PowerNode%E2%84%A2-Electric-Vehicle-Charging-Stations.
\1455\ Shell Recharge: https://www.shell.us/business-customers/shell-fleet-solutions/shell-recharge?msclkid=b112711a7f16131508b614da1ed439cf&utm_source=bing&utm_medium=cpc&utm_campaign=US_RCG_EN_NB_PM_BNG_Fleet_Recharge_Product&utm_term=ev%20charging&utm_content=Recharge%20Solution#iframe=L0xlYWRfR2VuX0Zvcm0_SUQ9VUhKdlpIVmpkRDFUWld4bUlITmxiR1ZqZEdWa0preGxZV1JUYjNWeVkyVTlUM0puWVc1cFl3PT0.
\1456\ Love's: Electrify America Announces Collaboration with
Love's Travel Stops:https://www.loves.com/en/news/2020/august/electrify-america-announces-collaboration-with-loves-travel-stops.
\1457\ NPR: Gas Station Converts to Electric Charging Station
and Speeds Ahead of Curve.https://www.npr.org/2019/10/26/773446805/gas-station-converts-to-electric-charging-station-and-speeds-ahead-of-curve.
\1458\ Gohlke, David, Zhou, Yan, and Wu, Xinyi. 2024.
``Refueling Infrastructure Deployment in Low-Income and Non-Urban
Communities''. United States. https://doi.org/10.2172/2318956.
https://www.osti.gov/servlets/purl/2318956.
---------------------------------------------------------------------------
Commenters discussed possible transitory effects on impacted
industries, noting that there will not be a one-to-one job replacement,
in part because battery processing operations are largely conducted
overseas and workers trained in one field may not necessarily be able
to move into another field, stating that the U.S. labor pool supporting
the automotive industry will be redefined. As noted earlier in this
section, and in section VIII.I.1 of this preamble, there are many
programs and targeted investments through federal, state and private
programs to support and enhance employment opportunities in the U.S.
related to the automotive industry, battery manufacturing, and charging
infrastructure and support across the supply chains.\1459\ Commenters
stated that moving to BEVs will result in loss of jobs due to increased
automation and fewer components in a BEV compared to an ICE vehicle,
and that jobs in the specialty aftermarket industry will be lost. One
commenter stated that there will be reduced demand due to higher
upfront vehicle costs, which will lead to job losses across the
industry.
---------------------------------------------------------------------------
\1459\ DOE: Biden-Harris Administration announces $3.5 Billion
to strengthen domestic battery manufacturing, https://www.energy.gov/articles/biden-harris-administration-announces-35-billion-strengthen-domestic-battery-manufacturing; White House: Fact
Sheet: Biden-Harris Administration Driving U.S. Battery
Manufacturing and Good-Paying Jobs,https://www.whitehouse.gov/briefing-room/statements-releases/2022/10/19/fact-sheet-biden-harris-administration-driving-u-s-battery-manufacturing-and-good-paying-jobs.
---------------------------------------------------------------------------
Some commenters appear to ignore that the market share of new PEVs
sold is increasing over time, while other commenters point out that the
IRA has already led to new jobs in the automotive industry, including
in battery manufacturing, and additional research shows job creation in
charging infrastructure industry. We agree that a shift in the
automotive industry is already underway and, as reflected in our No
Action scenario modeling, this shift is occurring independent of this
rule.\1460\ Also, the PEV share of the total on-road fleet will change
more slowly than new vehicle shares. In 2032, over 80 percent of the
on-road fleet will use an internal combustion engine, and even in 2055
such vehicles will be a majority of the fleet.\1461\ In addition, we
are finalizing standards that incorporate additional flexibilities and
a slower increase in the stringency of the standards compared to the
proposal. We recognize that the ongoing transition in the vehicles
market will result in shifts of patterns of employment, with increases
in employment in component production and new domestic jobs related to
PEVs offset at least in part by losses in production of ICE vehicles.
We also recognize that commenters are concerned about job quality and
geographic location. However, for the reasons discussed above, we think
the net effects of the rule are likely to be positive and we see no
basis for concluding that these final standards will cause significant
economic dislocation.
---------------------------------------------------------------------------
\1460\ For more information on the No Action case, see section
IV.B of the preamble.
\1461\ See Figure 8-5: Share of ICE (including HEV), PHEV, and
BEV in the total light- and medium-duty stock under the Final
standards in Chapter 8.2 in the RIA.
---------------------------------------------------------------------------
J. Environmental Justice
1. Overview
Communities with environmental justice concerns, which can include
a range of communities and populations, face relatively greater
cumulative impacts associated with environmental exposures of multiple
types, as well as impacts from non-chemical stressors. Numerous studies
have found that environmental hazards such as air pollution are more
prevalent in areas where people of color and low-income populations
represent a higher fraction of the population compared with the general
population.1462 1463 1464 1465 1466 1467
1468 1469 1470 As described in section II.C.8 of this
preamble, there is some literature to suggest that different
sociodemographic factors may increase susceptibility to the effects of
traffic-associated air pollution. In addition, compared to non-Hispanic
Whites, some other racial groups experience greater levels of health
problems during some life stages. For example, in 2018-2020,
[[Page 28131]]
about 12 percent of non-Hispanic Black; 9 percent of non-Hispanic
American Indian/Alaska Native; and 7 percent of Hispanic children were
estimated to currently have asthma, compared with 6 percent of non-
Hispanic White children.\1471\ Nationally, on average, non-Hispanic
Black and non-Hispanic American Indian or Alaska Native people also
have lower than average life expectancy based on 2019 data.\1472\
---------------------------------------------------------------------------
\1462\ Rowangould, G.M. (2013) A census of the near-roadway
population: public health and environmental justice considerations.
Trans Res D 25: 59-67. http://dx.doi.org/10.1016/j.trd.2013.08.003.
\1463\ Marshall, J.D. (2000) Environmental inequality: Air
pollution exposures in California's South Coast Air Basin. Atmos
Environ 21: 5499-5503. https://doi.org/10.1016/j.atmosenv.2008.02.005.
\1464\ Marshall, J.D. (2008) Environmental inequality: air
pollution exposures in California's South Coast Air Basin. Atmos
Environ 21: 5499-5503. https://doi.org/10.1016/j.atmosenv.2008.02.005.
\1465\ Mohai, P.; Pellow, D.; Roberts Timmons, J. (2009)
Environmental justice. Annual Reviews 34: 405-430. https://doi.org/10.1146/annurev-environ82508-094348.
\1466\ Jbaily A, Zhou X, Liu J, Lee TH, Kamareddine L, Verguet
S, Dominici F. Air pollution exposure disparities across US
population and income groups. Nature. 2022 Jan;601(7892):228-233.''
\1467\ Collins TW, Grineski SE. Racial/Ethnic Disparities in
Short-Term PM2.5 Air Pollution Exposures in the United
States. Environ Health Perspect. 2022 Aug;130(8):87701.
\1468\ Weaver GM, Gauderman WJ. Traffic-Related Pollutants:
Exposure and Health Effects Among Hispanic Children. Am J Epidemiol.
2018 Jan 1;187(1):45-52.
\1469\ C.W. Tessum, D.A. Paolella, S.E. Chambliss, J.S. Apte,
J.D. Hill, J.D. Marshall, PM2.5 polluters
disproportionately and systemically affect people of color in the
United States. Sci. Adv. 7, eabf4491 (2021)).
\1470\ Valencia, A.; Cerre, M.; Arunachalam, S. A hyperlocal
hybrid data fusion near-road PM2.5 and NO2 annual risk
and environmental justice assessment across the United States, 18
PLOS ONE 1 (2023).
\1471\ Current Asthma Prevalence by Race and Ethnicity (2018-
2020). Online at https://www.cdc.gov/asthma/most_recent_national_asthma_data.htm.
\1472\ Arias, E. Xu, J. (2022) United States Life Tables, 2019.
National Vital Statistics Report, Volume 70, Number 19. Online at
https://www.cdc.gov/nchs/data/nvsr/nvsr70/nvsr70-19.pdf.
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EPA's 2016 ``Technical Guidance for Assessing Environmental Justice
in Regulatory Analysis'' provides recommendations on conducting the
highest quality analysis feasible of environmental justice (EJ) issues
associated with a given regulatory decision, though it is not
prescriptive, recognizing that data limitations, time and resource
constraints, and analytic challenges will vary by media and regulatory
context. Where applicable and practicable, the Agency endeavors to
conduct such an EJ analysis. There is evidence that communities with EJ
concerns are disproportionately and adversely impacted by vehicle
emissions.\1473\
---------------------------------------------------------------------------
\1473\ Demetillo, M.A.; Harkins, C.; McDonald, B.C.; et al.
(2021) Space-based observational constraints on NO2 air
pollution inequality from diesel traffic in major US cities. Geophys
Res Lett 48, e2021GL094333.
---------------------------------------------------------------------------
In section VIII.J.2 of the preamble, we discuss the EJ impacts of
this final rule's GHG emission standards from the anticipated reduction
of GHGs. We also discuss in section VIII.J.3 of the preamble the
potential additional EJ impacts from the non-GHG (criteria pollutant
and air toxic) emissions changes we estimate would result from
compliance with the emission standards, including impacts near roadways
and from upstream sources. EPA did not consider potential adverse
disproportionate impacts of vehicle emissions in selecting the emission
standards, but we provide information about adverse impacts of vehicle
emissions for the public's understanding of this rulemaking, which
addresses the need to protect public health consistent with CAA section
202(a)(1)-(2). When assessing the potential for disproportionate and
adverse health or environmental impacts of regulatory actions on
populations with potential EJ concerns, EPA strives to answer the
following three broad questions, for purposes of the EJ analysis. (1)
Is there evidence of potential EJ concerns in the baseline (the state
of the world absent the regulatory action)? Assessing the baseline will
allow EPA to determine whether pre-existing disparities are associated
with the pollutant(s) under consideration (e.g., if the effects of the
pollutant(s) are more concentrated in some population groups); (2) Is
there evidence of potential EJ concerns for the regulatory option(s)
under consideration? Specifically, how are the pollutant(s) and its
effects distributed for the regulatory options under consideration?;
and (3) Do the regulatory option(s) under consideration exacerbate or
mitigate EJ concerns relative to the baseline? It is not always
possible to provide quantitative answers to these questions.
EPA received several comments related to the environmental justice
impacts of light- and medium-duty vehicles in general and the impacts
of the proposal specifically. We summarize and respond to those
comments in section 9 of the RTC document that accompanies this
rulemaking. After consideration of comments, EPA updated our review of
the literature, while maintaining our general approach to the
environmental justice analysis. We note that the analyses in this
section are based on data that was the most appropriate recent data at
the time we undertook the analyses. We intend to continue analyzing
data concerning disproportionate impacts of pollution in the future,
using the latest available data. We also note that after consideration
of comments, we conducted an analysis of how human exposure to future
air quality varies with sociodemographic characteristics relevant to
potential environmental justice concerns in scenarios with and without
the rule in place. The results of this analysis are presented in
section VII.D of this preamble and in RIA Chapter 7.6
2. GHG Impacts on Environmental Justice and Vulnerable or Overburdened
Populations
In the 2009 Endangerment Finding, the Administrator considered how
climate change threatens the health and welfare of the U.S. population.
As part of that consideration, she also considered risks to various
populations and communities, finding that certain parts of the U.S.
population may be especially vulnerable based on their characteristics
or circumstances. These groups include economically and socially
disadvantaged communities; individuals at vulnerable life stages, such
as the elderly, the very young, and pregnant or nursing women; those
already in poor health or with comorbidities; the disabled; those
experiencing homelessness, mental illness, or substance abuse; and
Indigenous or other populations dependent on limited resources for
subsistence due to factors including but not limited to geography,
access, and mobility.
Scientific assessment reports produced over the past decade by the
USGCRP,1474 1475 1476 the
IPCC,1477 1478 1479 1480 the National
[[Page 28132]]
Academies of Science, Engineering, and Medicine,1481 1482
and EPA \1483\ add more evidence that the impacts of climate change
raise potential EJ concerns. These reports conclude that less-affluent,
traditionally marginalized and predominantly non-White communities can
be especially vulnerable to climate change impacts because they tend to
have limited resources for adaptation, are more dependent on climate-
sensitive resources such as local water and food supplies or have less
access to social and information resources. Some communities of color,
specifically populations defined jointly by ethnic/racial
characteristics and geographic location (e.g., African-American, Black,
and Hispanic/Latino communities; Native Americans, particularly those
living on tribal lands and Alaska Natives), may be uniquely vulnerable
to climate change health impacts in the U.S., as discussed below. In
particular, the 2016 scientific assessment on the Impacts of Climate
Change on Human Health \1484\ found with high confidence that
vulnerabilities are place- and time-specific, lifestages and ages are
linked to immediate and future health impacts, and social determinants
of health are linked to greater extent and severity of climate change-
related health impacts. The GHG emission reductions from this final
rule would contribute to efforts to reduce the probability of severe
impacts related to climate change.
---------------------------------------------------------------------------
\1474\ USGCRP, 2018: Impacts, Risks, and Adaptation in the
United States: Fourth National Climate Assessment, Volume II
[Reidmiller, D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M.
Lewis, T.K. Maycock, and B.C. Stewart (eds.)]. U.S. Global Change
Research Program, Washington, DC, USA, 1515 pp. doi:10.7930/
NCA4.2018.
\1475\ USGCRP, Impacts in the United States: Assessment C..E.
M.C. U.S. Global Change Research Program, Washington, DC.
\1476\ Jay, A.K., A.R. Crimmins, C.W. Avery, T.A. Dahl, R.S.
Dodder, B.D. Hamlington, A. Lustig, K. Marvel, P.A. M[eacute]ndez-
Lazaro, M.S. Osler, A. Terando, E.S. Weeks, and A. Zycherman, 2023:
Ch. 1. Overview: Understanding risks, impacts, and responses. In:
Fifth National Climate Assessment. Crimmins, A.R., C.W. Avery, D.R.
Easterling, K.E. Kunkel, B.C. Stewart, and T.K. Maycock, Eds. U.S.
Global Change Research Program, Washington, DC, USA. https://
doi.org/10.7930/NCA5.2023.CH1.
\1477\ Oppenheimer, M., M. Campos, R. Warren, J. Birkmann, G.
Luber, B. O'Neill, and K. Takahashi, 2014: Emergent risks and key
vulnerabilities. In: Climate Change 2014: Impacts, Adaptation, and
Vulnerability. Part A: Global and Sectoral Aspects. Contribution of
Working Group II to the Fifth Assessment Report of the
Intergovernmental Panel on Climate Change [Field, C.B., V.R. Barros,
D.J. Dokken, K.J. Mach, M.D. Mastrandrea, T.E. Bilir, M. Chatterjee,
K.L. Ebi, Y.O. Estrada, R.C. Genova, B. Girma, E.S. Kissel, A.N.
Levy, S. MacCracken, P.R. Mastrandrea, and L.L. White (eds.)].
Cambridge University Press, Cambridge, United Kingdom and New York,
NY, USA, pp. 1039-1099.
\1478\ Porter, J.R., L. Xie, A.J. Challinor, K. Cochrane, S.M.
Howden, M.M. Iqbal, D.B. Lobell, and M.I. Travasso, 2014: Food
security and food production systems. In: Climate Change 2014:
Impacts, Adaptation, and Vulnerability. Part A: Global and Sectoral
Aspects. Contribution of Working Group II to the Fifth Assessment
Report of the Intergovernmental Panel on Climate Change [Field,
C.B., V.R. Barros, D.J. Dokken, K.J. Mach, M.D. Mastrandrea, T.E.
Bilir, M. Chatterjee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. Girma,
E.S. Kissel, A.N. Levy, S. MacCracken, P.R. Mastrandrea, and L.L.
White (eds.)]. Cambridge University Press, Cambridge, United Kingdom
and New York, NY, USA, pp. 485-533.
\1479\ Smith, K.R., A. Woodward, D. Campbell-Lendrum, D.D.
Chadee, Y. Honda, Q. Liu, J.M. Olwoch, B. Revich, and R. Sauerborn,
2014: Human health: impacts, adaptation, and co-benefits. In:
Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part A:
Global and Sectoral Aspects. Contribution of Working Group II to the
Fifth Assessment Report of the Intergovernmental Panel on Climate
Change [Field, C.B., V.R. Barros, D.J. Dokken, K.J. Mach, M.D.
Mastrandrea, T.E. Bilir, M. Chatterjee, K.L. Ebi, Y.O. Estrada, R.C.
Genova, B. Girma, E.S. Kissel, A.N. Levy, S. MacCracken, P.R.
Mastrandrea, and L.L. White (eds.)]. Cambridge University Press,
Cambridge, United Kingdom and New York, NY, USA, pp. 709-754.
\1480\ IPCC, 2018: Global Warming of 1.5 [deg]C. An IPCC Special
Report on the impacts of global warming of 1.5 [deg]C above pre-
industrial levels and related global greenhouse gas emission
pathways, in the context of strengthening the global response to the
threat of climate change, sustainable development, and efforts to
eradicate poverty [Masson-Delmotte, V., P. Zhai, H.-O. P[ouml]rtner,
D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C.
P[eacute]an, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X.
Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T.
Waterfield (eds.)]. In Press.
\1481\ National Research Council. 2011. America's Climate
Choices. Washington, DC: The National Academies Press. https://doi.org/10.17226/12781.
\1482\ National Academies of Sciences, Engineering, and
Medicine. 2017. Communities in Action: Pathways to Health Equity.
Washington, DC: The National Academies Press. https://doi.org/10.17226/24624.
\1483\ EPA. 2021. Climate Change and Social Vulnerability in the
United States: A Focus on Six Impacts. U.S. Environmental Protection
Agency, EPA 430-R-21-003.
\1484\ USGCRP, 2016: The Impacts of Climate Change on Human
Health in the United States: A Scientific Assessment.
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Effects on Specific Communities and Populations
Per the Fourth National Climate Assessment (NCA4), ``Climate change
affects human health by altering exposures to heat waves, floods,
droughts, and other extreme events; vector-, food- and waterborne
infectious diseases; changes in the quality and safety of air, food,
and water; and stresses to mental health and well-being.'' \1485\ Many
health conditions such as cardiopulmonary or respiratory illness and
other health impacts are associated with and exacerbated by an increase
in GHGs and climate change outcomes, which is problematic as these
diseases occur at higher rates within vulnerable communities.
Importantly, negative public health outcomes include those that are
physical in nature, as well as mental, emotional, social, and economic.
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\1485\ 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.
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The scientific assessment literature, including the aforementioned
reports, demonstrates that there are myriad ways in which these
particular communities and populations may be affected at the
individual and community levels. Individuals face differential exposure
to criteria pollutants, in part due to the proximities of highways,
trains, factories, and other major sources of pollutant-emitting
sources to less-affluent residential areas. Outdoor workers, such as
construction or utility crews and agricultural laborers, who frequently
are comprised of already at-risk groups, are exposed to poor air
quality and extreme temperatures without relief. Furthermore, people in
communities with EJ concerns face greater housing, clean water, and
food insecurity and bear disproportionate and adverse economic impacts
and health burdens associated with climate change effects. They have
less or limited access to healthcare and affordable, adequate health or
homeowner insurance.\1486\ Finally, resiliency and adaptation are more
difficult for economically vulnerable communities; these communities
have less liquidity, individually and collectively, to move or to make
the types of infrastructure or policy changes to limit or reduce the
hazards they face. They frequently are less able to self-advocate for
resources that would otherwise aid in building resilience and hazard
reduction and mitigation.
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\1486\ USGCRP, 2016: The Impacts of Climate Change on Human
Health in the United States: A Scientific Assessment.
---------------------------------------------------------------------------
The assessment literature cited in EPA's 2009 and 2016 Endangerment
and Cause or Contribute Findings, as well as Impacts of Climate Change
on Human Health, also concluded that certain populations and life
stages, including children, are most vulnerable to climate-related
health effects.\1487\ The assessment literature produced from 2016 to
the present strengthens these conclusions by providing more detailed
findings regarding related vulnerabilities and the projected impacts
youth may experience. These assessments--including the NCA5 and The
Impacts of Climate Change on Human Health in the United States (2016)--
describe how children's unique physiological and developmental factors
contribute to making them particularly vulnerable to climate change.
Impacts to children are expected from heat waves, air pollution,
infectious and waterborne illnesses, and mental health effects
resulting from extreme weather events. In addition, children are among
those especially susceptible to allergens, as well as health effects
associated with heat waves, storms, and floods. Additional health
concerns may arise in low-income households, especially those with
children, if climate change reduces food availability and increases
prices, leading to food insecurity within households. More generally,
these reports note that extreme weather and flooding can cause or
exacerbate poor health outcomes by affecting mental health because of
stress; contributing to or worsening existing conditions, again due to
stress or also as a consequence of exposures to water and air
pollutants; or by impacting hospital and emergency services
operations.\1488\ Further, in
[[Page 28133]]
urban areas in particular, flooding can have significant economic
consequences due to effects on infrastructure, pollutant exposures, and
drowning dangers. The ability to withstand and recover from flooding is
dependent in part on the social vulnerability of the affected
population and individuals experiencing an event.\1489\ In addition,
children are among those especially susceptible to allergens, as well
as health effects associated with heat waves, storms, and floods.
Additional health concerns may arise in low-income households,
especially those with children, if climate change reduces food
availability and increases prices, leading to food insecurity within
households.
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\1487\ 74 FR 66496, December 15, 2009; 81 FR 54422, August 15,
2016.
\1488\ 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.
\1489\ National Academies of Sciences, Engineering, and Medicine
2019. Framing the Challenge of Urban Flooding in the United States.
Washington, DC: The National Academies Press. https://doi.org/10.17226/25381.
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The Impacts of Climate Change on Human Health \1490\ also found
that some communities of color, low-income groups, people with limited
English proficiency, and certain immigrant groups (especially those who
are undocumented) are subject to many factors that contribute to
vulnerability to the health impacts of climate change. While difficult
to isolate from related socioeconomic factors, race appears to be an
important factor in vulnerability to climate-related stress, with
elevated risks for mortality from high temperatures reported for Black
or African American individuals compared to White individuals after
controlling for factors such as air conditioning use. Moreover, people
of color are disproportionately more exposed to air pollution based on
where they live, and disproportionately vulnerable due to higher
baseline prevalence of underlying diseases such as asthma. As explained
earlier, climate change can exacerbate local air pollution conditions
so this increase in air pollution is expected to have disproportionate
and adverse effects on these communities. Locations with greater health
threats include urban areas (due to, among other factors, the ``heat
island'' effect where built infrastructure and lack of green spaces
increases local temperatures), areas where airborne allergens and other
air pollutants already occur at higher levels, and communities
experienced depleted water supplies or vulnerable energy and
transportation infrastructure.
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\1490\ USGCRP, 2016: The Impacts of Climate Change on Human
Health in the United States: A Scientific Assessment. Crimmins, A.,
J. Balbus, J.L. Gamble, C.B. Beard, J.E. Bell, D. Dodgen, R.J.
Eisen, N. Fann, M.D. Hawkins, S.C. Herring, L. Jantarasami, D.M.
Mills, S. Saha, M.C. Sarofim, J. Trtanj, and L. Ziska, Eds. U.S.
Global Change Research Program, Washington, DC, 312 pp. http://dx.doi.org/10.7930/J0R49NQX.
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The recent EPA report on climate change and social vulnerability
\1491\ examined four socially vulnerable groups (individuals who are
low income, minority, without high school diplomas, and/or 65 years and
older) and their exposure to several different climate impacts (air
quality, coastal flooding, extreme temperatures, and inland flooding).
This report found that Black and African-American individuals were 40
percent more likely to currently live in areas with the highest
projected increases in mortality rates due to climate-driven changes in
extreme temperatures, and 34 percent more likely to live in areas with
the highest projected increases in childhood asthma diagnoses due to
climate-driven changes in particulate air pollution. The report found
that Hispanic and Latino individuals are 43 percent more likely to live
in areas with the highest projected labor hour losses in weather-
exposed industries due to climate-driven warming, and 50 percent more
likely to live in coastal areas with the highest projected increases in
traffic delays due to increases in high-tide flooding. The report found
that American Indian and Alaska Native individuals are 48 percent more
likely to live in areas where the highest percentage of land is
projected to be inundated due to sea level rise, and 37 percent more
likely to live in areas with high projected labor hour losses. Asian
individuals were found to be 23 percent more likely to live in coastal
areas with projected increases in traffic delays from high-tide
flooding. Persons with low income or no high school diploma are about
25 percent more likely to live in areas with high projected losses of
labor hours, and 15 percent more likely to live in areas with the
highest projected increases in asthma due to climate-driven increases
in particulate air pollution, and in areas with high projected
inundation due to sea level rise.
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\1491\ EPA. 2021. Climate Change and Social Vulnerability in the
United States: A Focus on Six Impacts. U.S. Environmental Protection
Agency, EPA 430-R-21-003.
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In a more recent 2023 report, Climate Change Impacts on Children's
Health and Well-Being in the U.S., EPA considered the degree to which
children's health and well-being may be impacted by five climate-
related environmental hazards--extreme heat, poor air quality, changes
in seasonality, flooding, and different types of infectious
diseases.\1492\ The report found that children's academic achievement
is projected to be reduced by 4-7 percent per child, as a result of
moderate and higher levels of warming, impacting future income levels.
The report also projects increases in the numbers of annual emergency
department visits associated with asthma, and that the number of new
asthma diagnoses increases by 4-11 percent due to climate-driven
increases in air pollution relative to current levels. In addition,
more than 1 million children in coastal regions are projected to be
temporarily displaced from their homes annually due to climate-driven
flooding, and infectious disease rates are similarly anticipated to
rise, with the number of new Lyme disease cases in children living in
22 states in the eastern and midwestern U.S. increasing by
approximately 3,000-23,000 per year compared to current levels.
Overall, the report confirmed findings of broader climate science
assessments that children are uniquely vulnerable to climate-related
impacts and that in many situations, children in the U.S. who identify
as Black, Indigenous, and People of Color, are limited English-
speaking, do not have health insurance, or live in low-income
communities may be disproportionately more exposed to the most severe
adverse impacts of climate change.
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\1492\ EPA. 2023. Climate Change Impacts on Children's Health
and Well-Being in the U.S., EPA EPA 430-R-23-001.
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Tribes and Indigenous communities face disproportionate and adverse
risks from the impacts of climate change, particularly those
communities impacted by degradation of natural and cultural resources
within established reservation boundaries and threats to traditional
subsistence lifestyles. Indigenous communities whose health, economic
well-being, and cultural traditions depend upon the natural environment
will likely be affected by the degradation of ecosystem goods and
services associated with climate change. The IPCC indicates that losses
of customs and historical knowledge may cause communities to be less
resilient or adaptable.\1493\ The NCA4 noted that while Tribes and
Indigenous Peoples are diverse and will be impacted by the climate
changes universal to all Americans, there are several ways in which
climate change uniquely
[[Page 28134]]
threatens Tribes and Indigenous Peoples' livelihoods and
economies.\1494\ In addition, as noted in the following paragraph,
there can be institutional barriers (including policy-based limitations
and restrictions) to their management of water, land, and other natural
resources that could impede adaptive measures.
---------------------------------------------------------------------------
\1493\ Porter, et al., 2014: Food security and food production
systems.
\1494\ Jantarasami, L.C., R. Novak, R. Delgado, E. Marino, S.
McNeeley, C. Narducci, J. Raymond-Yakoubian, L. Singletary, and K.
Powys Whyte, 2018: Tribes and Indigenous Peoples. In Impacts, Risks,
and Adaptation in the United States: Fourth National Climate
Assessment, Volume II [Reidmiller, D.R., C.W. Avery, D.R.
Easterling, K.E. Kunkel, K.L.M. Lewis, T.K. Maycock, and B.C.
Stewart (eds.)]. U.S. Global Change Research Program, Washington,
DC, USA, pp. 572-603. doi:10.7930/NCA4. 2018. CH15.
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For example, Indigenous agriculture in the Southwest is already
being adversely affected by changing patterns of flooding, drought,
dust storms, and rising temperatures leading to increased soil erosion,
irrigation water demand, and decreased crop quality and herd sizes. The
Confederated Tribes of the Umatilla Indian Reservation in the Northwest
have identified climate risks to salmon, elk, deer, roots, and
huckleberry habitat. Housing and sanitary water supply infrastructure
are vulnerable to disruption from extreme precipitation events.
Additionally, NCA4 noted that Tribes and Indigenous Peoples generally
experience poor infrastructure, diminished access to quality
healthcare, and greater risk of exposure to pollutants. Consequently,
Native Americans often have disproportionately higher rates of asthma,
cardiovascular disease, Alzheimer's disease, diabetes, and obesity.
These health conditions and related effects (disorientation, heightened
exposure to PM2.5, etc.) can all contribute to increased
vulnerability to climate-driven extreme heat and air pollution events,
which also may be exacerbated by stressful situations, such as extreme
weather events, wildfires, and other circumstances.
NCA4 and IPCC's Fifth Assessment Report \1495\ also highlighted
several impacts specific to Alaskan Indigenous Peoples. Coastal erosion
and permafrost thaw will lead to more coastal erosion, rendering winter
travel riskier and exacerbating damage to buildings, roads, and other
infrastructure--impacts on archaeological sites, structures, and
objects that will lead to a loss of cultural heritage for Alaska's
Indigenous people. In terms of food security, the NCA4 discussed
reductions in suitable ice conditions for hunting, warmer temperatures
impairing the use of traditional ice cellars for food storage, and
declining shellfish populations due to warming and acidification. While
the NCA4 also noted that climate change provided more opportunity to
hunt from boats later in the fall season or earlier in the spring, the
assessment found that the net impact was an overall decrease in food
security. In addition, the U.S. Pacific Islands and the Indigenous
communities that live there are also uniquely vulnerable to the effects
of climate change due to their remote location and geographic
isolation. They rely on the land, ocean, and natural resources for
their livelihoods, but they face challenges in obtaining energy and
food supplies that need to be shipped in at high costs. As a result,
they face higher energy costs than the rest of the nation and depend on
imported fossil fuels for electricity generation and diesel. These
challenges exacerbate the climate impacts that the Pacific Islands are
experiencing. NCA4 notes that Tribes and Indigenous Peoples of the
Pacific are threatened by rising sea levels, diminishing freshwater
availability, and negative effects to ecosystem services that threaten
these individuals' health and well-being.
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\1495\ Porter, et al., 2014: Food security and food production
systems.
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3. Non-GHG Impacts
In section VII of this preamble, in addition to GHG emissions
impacts, we also discuss potential additional emission changes of non-
GHGs (i.e., criteria and air toxic pollutants) that we project from
compliance with the final emission standards. This section describes
evidence that communities with EJ concerns are disproportionately and
adversely impacted by relevant non-GHG emissions. We discuss the
potential impact of non-GHG emissions for two specific contexts: near-
roadway (section VIII.J.3.i of the preamble) and upstream sources
(section VIII.J.3.ii of the preamble).
i. Near-Roadway Analysis
As described in section II.C.8 of this preamble, concentrations of
many air pollutants are elevated near high-traffic roadways. We
recently conducted an analysis of the populations within the
continental U.S. living in close proximity to truck freight routes as
identified in USDOT's FAF4.\1496\ FAF4 is a model from the USDOT's
Bureau of Transportation Statistics and Federal Highway Administration,
which provides data associated with freight movement in the United
States.\1497\ Relative to the rest of the population, people living
near FAF4 truck routes are more likely to be people of color and have
lower incomes than the general population. People living near FAF4
truck routes are also more likely to live in metropolitan areas. Even
controlling for region of the country, county characteristics,
population density, and household structure, race, ethnicity, and
income are significant determinants of whether someone lives near a
FAF4 truck route.
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\1496\ U.S. EPA (2021). Estimation of Population Size and
Demographic Characteristics among People Living Near Truck Routes in
the Conterminous United States. Memorandum to the Docket.
\1497\ FAF4 includes data from the 2012 Commodity Flow Survey
(CFS), the Census Bureau on international trade, as well as data
associated with construction, agriculture, utilities, warehouses,
and other industries. FAF4 estimates the modal choices for moving
goods by trucks, trains, boats, and other types of freight modes. It
includes traffic assignments, including truck flows on a network of
truck routes. https://ops.fhwa.dot.gov/freight/freight_analysis/faf.
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We additionally analyzed other national databases that allowed us
to evaluate whether homes and schools were located near a major road
and whether disparities in exposure may be occurring in these
environments. Until 2009, the U.S. Census Bureau's American Housing
Survey (AHS) included descriptive statistics of over 70,000 housing
units across the nation and asked about transportation infrastructure
near respondents' homes every two years.1498 1499 We also
analyzed the U.S. Department of Education's Common Core of Data, which
includes enrollment and location information for schools across the
United States.\1500\
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\1498\ U.S. Department of Housing and Urban Development, & U.S.
Census Bureau. (n.d.). Age of other residential buildings within 300
feet. In American Housing Survey for the United States: 2009 (pp. A-
1). Retrieved from https://www.census.gov/programs-surveys/ahs/data/2009/ahs-2009-summary-tables0/h150-09.html.
\1499\ The 2013 AHS again included the ``etrans'' question about
highways, airports, and railroads within half a block of the housing
unit but has not maintained the question since then.
\1500\ http://nces.ed.gov/ccd.
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In analyzing the 2009 AHS, we focused on whether a housing unit was
located within 300 feet of a ``4-or-more lane highway, railroad, or
airport'' (this distance was used in the AHS analysis).\1501\ We
analyzed whether there were differences between households in such
locations compared with those in locations farther from these
transportation facilities.\1502\ We
[[Page 28135]]
included other variables, such as land use category, region of country,
and housing type. We found that homes with a non-White householder were
22-34 percent more likely to be located within 300 feet of these large
transportation facilities than homes with White householders. Homes
with a Hispanic householder were 17-33 percent more likely to be
located within 300 feet of these large transportation facilities than
homes with non-Hispanic householders. Households near large
transportation facilities were, on average, lower in income and
educational attainment and more likely to be a rental property and
located in an urban area compared with households more distant from
transportation facilities.
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\1501\ This variable primarily represents roadway proximity.
According to the Central Intelligence Agency's World Factbook, in
2010, the United States had 6,506,204 km of roadways, 224,792 km of
railways, and 15,079 airports. Highways thus represent the
overwhelming majority of transportation facilities described by this
factor in the AHS.
\1502\ Bailey, C. (2011) Demographic and Social Patterns in
Housing Units Near Large Highways and other Transportation Sources.
Memorandum to docket.
---------------------------------------------------------------------------
In examining schools near major roadways, we used the Common Core
of Data from the U.S. Department of Education, which includes
information on all public elementary and secondary schools and school
districts nationwide.\1503\ To determine school proximities to major
roadways, we used a geographic information system to map each school
and roadways based on the U.S. Census's TIGER roadway file.\1504\ We
estimated that about 10 million students attend schools within 200
meters of major roads, about 20 percent of the total number of public
school students in the United States.\1505\ About 800,000 students
attend public schools within 200 meters of primary roads, or about 2
percent of the total. We found that students of color were
overrepresented at schools within 200 meters of primary roadways, and
schools within 200 meters of primary roadways had a disproportionately
greater population of students eligible for free or reduced-price
lunches.\1506\ Black students represent 22 percent of students at
schools located within 200 meters of a primary road, compared to 17
percent of students in all U.S. schools. Hispanic students represent 30
percent of students at schools located within 200 meters of a primary
road, compared to 22 percent of students in all U.S. schools.
---------------------------------------------------------------------------
\1503\ http://nces.ed.gov/ccd.
\1504\ Pedde, M.; Bailey, C. (2011) Identification of Schools
within 200 Meters of U.S. Primary and Secondary Roads. Memorandum to
the docket.
\1505\ Here, ``major roads'' refer to those TIGER classifies as
either ``Primary'' or ``Secondary.'' The Census Bureau describes
primary roads as ``generally divided limited-access highways within
the Federal interstate system or under state management.'' Secondary
roads are ``main arteries, usually in the U.S. highway, state
highway, or county highway system.''
\1506\ For this analysis we analyzed a 200-meter distance based
on the understanding that roadways generally influence air quality
within a few hundred meters from the vicinity of heavily traveled
roadways or along corridors with significant trucking traffic. See
U.S. EPA, 2014. Near Roadway Air Pollution and Health: Frequently
Asked Questions. EPA-420-F-14-044.
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We also reviewed existing scholarly literature examining the
potential for disproportionately high exposure to these pollutants
among people of color and people with low socioeconomic status (SES).
Numerous studies evaluating the demographics and socioeconomic status
of populations or schools near roadways have found that they include a
greater percentage of residents of color, as well as lower SES
populations (as indicated by variables such as median household
income). Locations in these studies include Los Angeles, CA; Seattle,
WA; Wayne County, MI; Orange County, FL; Tampa, FL; the State of
California; the State of Texas; and
nationally.1507 1508 1509 1510 1511 1512 1513
1514 1515 1516 1517 1518 Such disparities may be due to
multiple factors, such as historic segregation, redlining, residential
mobility, and daily mobility.1519 1520 1521 1522 1523 1524
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\1507\ Marshall, J.D. (2008) Environmental inequality: air
pollution exposures in California's South Coast Air Basin. Atmos
Environ 42: 5499-5503. doi:10.1016/j.atmosenv.2008.02.00.
\1508\ Su, J.G.; Larson, T.; Gould, T.; Cohen, M.; Buzzelli, M.
(2010) Transboundary air pollution and environmental justice:
Vancouver and Seattle compared. GeoJournal 57: 595-608. doi:10.1007/
s10708-009-9269-6.
\1509\ Chakraborty, J.; Zandbergen, P.A. (2007) Children at
risk: measuring racial/ethnic disparities in potential exposure to
air pollution at school and home. J Epidemiol Community Health 61:
1074-1079. doi:10.1136/jech.2006.054130.
\1510\ Green, R.S.; Smorodinsky, S.; Kim, J.J.; McLaughlin, R.;
Ostro, B. (2004) Proximity of California public schools to busy
roads. Environ Health Perspect 112: 61-66. doi:10.1289/ehp.6566.
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\1511\ Wu, Y; Batterman, S.A. (2006) Proximity of schools in
Detroit, Michigan to automobile and truck traffic. J Exposure Sci &
Environ Epidemiol. doi:10.1038/sj.jes.7500484.
\1512\ Su, J.G.; Jerrett, M.; de Nazelle, A.; Wolch, J. (2011) Does
exposure to air pollution in urban parks have socioeconomic, racial, or
ethnic gradients? Environ Res 111: 319-328.
\1513\ Jones, M.R.; Diez-Roux, A.; Hajat, A.; et al. (2014) Race/
ethnicity, residential segregation, and exposure to ambient air
pollution: The Multi-Ethnic Study of Atherosclerosis (MESA). Am J
Public Health 104: 2130-2137. Online at: https://doi.org/10.2105/AJPH.2014.302135.
\1514\ Stuart A.L., Zeager M. (2011) An inequality study of ambient
nitrogen dioxide and traffic levels near elementary schools in the
Tampa area. Journal of Environmental Management. 92(8): 1923-1930.
https://doi.org/10.1016/j.jenvman.2011.03.003.
\1515\ Stuart A.L., Mudhasakul S., Sriwatanapongse W. (2009) The
Social Distribution of Neighborhood-Scale Air Pollution and Monitoring
Protection. Journal of the Air & Waste Management Association. 59(5):
591-602. https://doi.org/10.3155/1047-3289.59.5.591.
\1516\ Willis M.D., Hill E.L., Kile M.L., Carozza S., Hystad P.
(2020) Assessing the effectiveness of vehicle emission regulations on
improving perinatal health: a population-based accountability study.
International Journal of Epidemiology. 49(6): 1781-1791. https://doi.org/10.1093/ije/dyaa137.
\1517\ Collins, T.W., Grineski, SE, Nadybal, S. (2019) Social
disparities in exposure to noise at public schools in the contiguous
United States. Environ. Res. 175, 257-265. https://doi.org/10.1016/j.envres.2019.05.024.
\1518\ Kingsley S., Eliot M., Carlson L., Finn J., MacIntosh D.L.,
Suh H.H., Wellenius G.A. (2014) Proximity of US schools to major
roadways: a nationwide assessment. J Expo Sci Environ Epidemiol. 24:
253-259. https://doi.org/10.1038/jes.2014.5.
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\1519\ Depro, B.; Timmins, C. (2008) Mobility and environmental
equity: do housing choices determine exposure to air pollution? Duke
University Working Paper.
\1520\ Rothstein, R. The Color of Law: A Forgotten History of
How Our Government Segregated America. New York: Liveright, 2018.
\1521\ Lane, H.J.; Morello-Frosch, R.; Marshall, J.D.; Apte,
J.S. (2022) Historical redlining is associated with present-day air
pollution disparities in US Cities. Environ Sci & Technol Letters 9:
345-350. DOI: Online at: https://doi.org/10.1021/acs.estlett.1c01012.
\1522\ Ware, L. (2021) Plessy's legacy: the government's role in
the development and perpetuation of segregated neighborhoods. RSF:
The Russel Sage Foundation Journal of the Social Sciences, 7:92-109.
DOI: DOI: 10.7758/RSF.2021.7.1.06.
\1523\ Archer, D.N. (2020) ``White Men's Roads through Black
Men's Homes'': advancing racial equity through highway
reconstruction. Vanderbilt Law Rev 73: 1259.
\1524\ Park, Y.M.; Kwan, M.-P. (2020) Understanding Racial
Disparities in Exposure to Traffic-Related Air Pollution:
Considering the Spatiotemporal Dynamics of Population Distribution.
Int. J. Environ. Res. Public Health. 17 (3): 908. https://doi.org/10.3390/ijerph17030908.
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Several publications report nationwide analyses that compare the
demographic patterns of people who do or do not live near major
roadways.1525 1526 1527 1528 1529 1530 Three
[[Page 28136]]
of these studies found that people living near major roadways are more
likely to be people of color or of low SES.1531 1532 1533
They also found that the outcomes of their analyses varied between
regions within the United States. However, only one such study looked
at whether such conclusions were confounded by living in a location
with higher population density and looked at how demographics differ
between locations nationwide.\1534\ That study generally found that
higher density areas have higher proportions of low-income residents
and people of color. In other publications assessing a city, county, or
state, the results are similar.1535 1536 1537
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\1525\ Rowangould, G.M. (2013) A census of the U.S. near-roadway
population: public health and environmental justice considerations.
Transportation Research Part D; 59-67.
\1526\ Tian, N.; Xue, J.; Barzyk. T.M. (2013) Evaluating
socioeconomic and racial differences in traffic-related metrics in
the United States using a GIS approach. J Exposure Sci Environ
Epidemiol 23: 215-222.
\1527\ CDC (2013) Residential proximity to major highways--
United States, 2010. Morbidity and Mortality Weekly Report 62(3):
46-50.
\1528\ Clark, L.P.; Millet, D.B.; Marshall, J.D. (2017) Changes
in transportation-related air pollution exposures by race-ethnicity
and socioeconomic status: outdoor nitrogen dioxide in the United
States in 2000 and 2010. Environ Health Perspect https://doi.org/10.1289/EHP959.
\1529\ Mikati, I.; Benson, A.F.; Luben, T.J.; Sacks, J.D.;
Richmond-Bryant, J. (2018) Disparities in distribution of
particulate matter emission sources by race and poverty status. Am J
Pub Health https://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2017.304297?journalCode=ajph.
\1530\ Alotaibi, R.; Bechle, M.; Marshall, J.D.; Ramani, T.;
Zietsman, J.; Nieuwenhuijsen, M.J.; Khreis, H. (2019) Traffic
related air pollution and the burden of childhood asthma in the
continuous United States in 2000 and 2010. Environ International
127: 858-867. https://www.sciencedirect.com/science/article/pii/S0160412018325388.
\1531\ Tian, N.; Xue, J.; Barzyk. T.M. (2013) Evaluating
socioeconomic and racial differences in traffic-related metrics in
the United States using a GIS approach. J Exposure Sci Environ
Epidemiol 23: 215-222.
\1532\ Rowangould, G.M. (2013) A census of the U.S. near-roadway
population: public health and environmental justice considerations.
Transportation Research Part D; 59-67.
\1533\ CDC (2013) Residential proximity to major highways--
United States, 2010. Morbidity and Mortality Weekly Report 62(3):
46-50.
\1534\ Rowangould, G.M. (2013) A census of the U.S. near-roadway
population: public health and environmental justice considerations.
Transportation Research Part D; 59-67.
\1535\ Pratt, G.C.; Vadali, M.L.; Kvale, D.L.; Ellickson, K.M.
(2015) Traffic, air pollution, minority, and socio-economic status:
addressing inequities in exposure and risk. Int J Environ Res Public
Health 12: 5355-5372. http://dx.doi.org/10.3390/ijerph120505355.
\1536\ Sohrabi, S.; Zietsman, J.; Khreis, H. (2020) Burden of
disease assessment of ambient air pollution and premature mortality
in urban areas: the role of socioeconomic status and transportation.
Int J Env Res Public Health doi:10.3390/ijerph17041166.
\1537\ Aizer A., Currie J. (2019) Lead and Juvenile Delinquency:
New Evidence from Linked Birth, School, and Juvenile Detention
Records. The Review of Economics and Statistics. 101 (4): 575-587.
https://doi.org/10.1162/rest_a_00814.
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Overall, there is substantial evidence that people who live or
attend school near major roadways are more likely to be of a non-White
race, Hispanic, and/or have a low SES. As described in section II.C.8
of the preamble, traffic-related air pollution may have
disproportionate and adverse impacts on health across racial and
sociodemographic groups. We expect communities near roads will benefit
from the reduced vehicle emissions of PM, NOX,
SO2, VOC, CO, and mobile source air toxics projected to
result from this final rule. Although we were not able to conduct air
quality modeling of the estimated emission reductions, we believe it a
fair inference that because vehicular emissions affect communities with
environmental justice concerns disproportionately and adversely due to
roadway proximity, and because we project this rule will result in
significant reductions in vehicular emissions, these communities'
exposures to non-GHG air pollutants will be reduced. EPA is considering
how to better estimate the near-roadway air quality impacts of its
regulatory actions and how those impacts are distributed across
populations.
ii. Upstream Source Impacts
As described in Chapter 4.5 of the RIA, we expect some non-GHG
emissions reductions from sources related to refining petroleum fuels
and increases in emissions from EGUs, both of which would lead to
changes in exposure for people living in communities near these
facilities. The EGU emissions increases become smaller over time
because of changes in the projected power generation mix as electricity
generation uses less fossil fuels.
Analyses of communities in close proximity to EGUs have found that
a higher percentage of communities of color and low-income communities
live near these sources when compared to national averages.\1538\ EPA
compared the percentages of people of color and low-income populations
living within three miles of fossil fuel-fired power plants regulated
under EPA's Acid Rain Program and/or EPA's Cross-State Air Pollution
Rule to the national average and found that there is a greater
percentage of people of color and low-income individuals living near
these power plants than in the rest of the country on average.\1539\
According to 2020 Census data, on average, the U.S. population is
comprised of 40 percent people of color and 30 percent low-income
individuals. In contrast, the population living near fossil fuel-fired
power plants is comprised of 53 percent people of color and 34 percent
low-income individuals.\1540\ Historically redlined neighborhoods are
more likely to be downwind of fossil fuel power plants and to
experience higher levels of exposure to relevant emissions than non-
redlined neighborhoods.\1541\ Analysis of populations near refineries
and oil and gas wells also indicates there may be potential disparities
in pollution-related health risk from these
sources.1542 1543 1544 1545 Section VII.B of the preamble
and RIA Chapter 7.4 discuss the air quality impacts of the emissions
changes associated with the rule. See also section VII.A of this
preamble, discussing issues pertaining to lifecycle emissions more
generally.
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\1538\ See 80 FR 64662, 64915-64916 (October 23, 2015).
\1539\ U.S. EPA (2023) 2021 Power Sector Programs--Progress
Report. https://www3.epa.gov/airmarkets/progress/reports.
\1540\ U.S. EPA (2023) 2021 Power Sector Programs--Progress
Report. https://www3.epa.gov/airmarkets/progress/reports.
\1541\ Cushing L.J., Li S., Steiger B.B., Casey J.A. (2023)
Historical red-lining is associated with fossil fuel power plant
siting and present-day inequalities in air pollutant emissions.
Nature Energy. 8: 52-61. https://doi.org/10.1038/s41560-022-01162-y.
\1542\ U.S. EPA (2014). Risk and Technology Review--Analysis of
Socio-Economic Factors for Populations Living Near Petroleum
Refineries. Office of Air Quality Planning and Standards, Research
Triangle Park, North Carolina. January.
\1543\ Carpenter, A., and M. Wagner. Environmental justice in
the oil refinery industry: A panel analysis across United States
counties. J. Ecol. Econ. V. 159 (2019).
\1544\ Gonzalez, J.X., et al. Historic redlining and the siting
of oil and gas wells in the United States. J. Exp. Sci. & Env. Epi.
V. 33. (2023). p. 76-83.
\1545\ In comparison to the national population, the EPA
publication reports higher proportions of the following population
groups in block groups with higher cancer risk associated with
emissions from refineries: ``minority,'' ``African American,''
``Other and Multiracial,'' ``Hispanic or Latino,'' ``Ages 0-17,''
``Ages 18-64,'' ``Below the Poverty Level,'' ``Over 25 years old
without a HS diploma,'' and ``Linguistic isolations.''
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K. Additional Non-Monetized Considerations Associated With Benefits and
Costs
1. Energy Efficiency Gap
The topic of the ``energy paradox'' or ``energy efficiency gap''
has been extensively discussed in many previous vehicle GHG standards'
analyses.\1546\ The idea of the energy efficiency gap is that existing
technologies that reduce fuel consumption enough to pay for themselves
in short periods were not widely adopted, even though conventional
economic principles suggest that, because the benefits to vehicle
buyers would outweigh the costs to those buyers of the new
technologies, automakers would provide
[[Page 28137]]
them and people would buy them. However, as described in previous EPA
GHG vehicle rules (most recently in the 2021 rulemaking) engineering
analyses identified technologies, such as downsized-turbocharged
engines, gasoline direct injection, and improved aerodynamics, where
the additional cost of the technology is quickly covered by the fuel
savings it provides, but they were not widely adopted until after the
issuance of EPA vehicle standards. As explained in detail in previous
rulemakings, research suggests the presence of fuel-saving technologies
does not lead to adverse effects on other vehicle attributes, such as
performance and noise.\1547\ Additionally, research shows that there
are technologies that exist that provide improvements in both
performance and fuel economy, or at least in improved fuel economy
without hindering performance.
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\1546\ For two of the most recent examples, see 86 FR 74434,
December 30, 2021, ``Revised 2023 and Later Model Year Light-Duty
Vehicle Greenhouse Gas Emissions Standards'' and 85 FR 24174, April
30, 2020, ``The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule
for Model Years 2021-2026 Passenger Cars and Light Trucks,'' and the
respective RIAs. Although there are differences between personal
consumption and commercial purchases, we have also identified an
energy efficiency gap for vehicles used in commercial applications.
See 81 FR at 73859-62 (HD Phase 2 rule discussing the gap as it
relates to HD vehicles and also discussing related findings in the
HD Phase 1 rule).
\1547\ For example, as seen in Figure 3.8 of the 2023 EPA
Automotive Trends Report, average new vehicle horsepower has
increased by 88 percent since MY 1975. https://www.epa.gov/system/files/documents/2023-12/420r23033.pdf.
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While evidence exists to substantiate agreement upon the existence
of the efficiency gap, there is less agreement on the reasons for its
existence and its magnitude. There are a number of hypotheses in the
literature that attempt to explain the existence of the energy
efficiency gap, including both consumer and producer side
reasons.\1548\ For example, some researchers posit that consumers take
up-front costs into account in purchase decisions more than future fuel
savings, consumers may not fully understand potential cost savings, or
they may not prioritize fuel consumption in their set of important
attributes in the vehicle purchase process. On the producer side,
suggested explanations include shifting of priorities from a long-
standing product mix to a new product or mix, fixed costs in switching
to new technologies and the uncertainty involved in technological
innovation and adoption. Broadly, these explanations encompass
constraints on access to capital for investment, imperfect or
asymmetrical information about the new technology (for example, real-
world operational cost savings, durability, or performance), and
uncertainty about supporting infrastructure (for example, ease of
charging a PEV).
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\1548\ Note that the literature surrounding the energy
efficiency gap in LD vehicles is based on historical data, which is
focused on ICE vehicles.
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Part of the uncertainty surrounding reasons behind the energy
efficiency gap is that most of the technologies applied to existing ICE
vehicles were ``invisible'' to the consumer, both literally and also
possibly in effect. For example, the technology itself was not
something the mainstream consumer would know about, or the technology
was applied to a vehicle at the same time as multiple other changes,
making it unclear to the consumer what changes in vehicle attributes,
if any, could be attributed to a specific technology. At the first
purchase of a PEV, the energy efficiency technology is clearly apparent
to the consumer (i.e., consumer-facing), in which case the above
``invisibility'' rationale does not apply. However, as PEV technology
continues to evolve and as precedent with ICE vehicle technology
suggests, technologies that improve PEV efficiency may again become
invisible to the consumer, making the value of those improvements less
apparent at the time of purchase, even if operating savings are.
Though the energy paradox is likely to persist for the reasons
discussed above, including future fuel and electricity prices,
uncertainty about charging infrastructure and availability, perceptions
of comparisons of quality and durability of different powertrains, and
other factors discussed in this section and in RIA Chapter 4.4, there
are factors that may mitigate it. Uncertainties will be resolved over
time (e.g., growing familiarity with PEVs and EVSE, durability),
systems will evolve (e.g., infrastructure growth and expansion, fuel
and electricity prices, supply chains), and the nature and balance of
information will change Another factor that may reduce the magnitude of
an energy efficiency gap are the incentives provided in the BIL and IRA
which provide support for the development, production and purchase of
PEVs and the supporting infrastructure. For more information, see RIA
Chapter 4.4.
2. Safety Impacts
EPA has long considered the safety implications of its emission
standards. Section 202(a)(4) of the CAA specifically prohibits the use
of an emission control device, system or element of design that will
cause or contribute to an unreasonable risk to public health, welfare,
or safety. With respect to its light-duty greenhouse gas emission
regulations, EPA has historically considered the potential impacts of
GHG standards on safety in its light-duty GHG rulemakings.
The potential relationship between GHG emissions standards and
safety is multi-faceted, and can be influenced not only by control
technologies, but also by consumer decisions about vehicle ownership
and use. EPA has estimated the impacts of this rule on safety by
accounting for changes in new vehicle purchase, fleet turnover and VMT,
and changes in vehicle weight that occur either as an emissions control
strategy or as a result of the adoption of emissions control
technologies such as vehicle electrification. Safety impacts related to
changes in the use of vehicles in the fleet, relative mass changes, and
the turnover of fleet to newer and safer vehicles have been estimated
and analyzed as part of the standard setting process.
The GHG emissions standards are attribute-based standards, using
vehicle footprint as the attribute. Footprint is defined as a vehicle's
wheelbase multiplied by its average track width--in other words, the
area enclosed by the points at which the wheels meet the ground. The
standards are therefore generally based on a vehicle's size: larger
vehicles have numerically higher GHG emissions targets and smaller
vehicles have numerically lower GHG emissions targets. Footprint-based
standards help to distribute the burden of compliance across all
vehicle footprints and across all manufacturers. Manufacturers are not
compelled to build vehicles of any particular size or type, and each
manufacturer has its own fleetwide standard for its car and truck
fleets in each year that reflects the light-duty vehicles it chooses to
produce. EPA has evaluated the relationship between vehicle footprint
and GHG emissions targets and is finalizing GHG standards that are
intended to minimize incentives to change footprint as a compliance
strategy. EPA is not projecting any changes in vehicle safety due to
changes in footprint as a result of this rule.
While EPA has not conducted new studies on the safety implications
of electrified vehicles, we have consulted with NHTSA on potential
safety issues and they have provided a number of studies to us. NHTSA's
Office of Crashworthiness Standards has also informed us that NHTSA is
not aware of differences in crash outcomes between electric and non-
electric vehicles, although NHTSA is closely monitoring and conducting
extensive research on this topic closely. EPA notes there is strong
reason to believe that PEVs are at least as safe as ICE vehicles,\1549\
if not more so. For example, the PEV architecture often lends itself to
the addition of a ``frunk'' or front trunk. The frunk can provide
additional crush space and occupant protection in frontal or front
offset impacts. In addition, high
[[Page 28138]]
voltage, large capacity batteries are often packaged under the vehicle
and are integral to the vehicle construction. The increase in mass low
in the vehicle provides additional vehicle stability and could reduce
the propensity for vehicle rollover, especially in vehicles with a
higher ride height, such as SUVs. In addition, the battery is typically
an integral part of the body design and can provide additional side
impact protection. For each of these reasons EPA believes that applying
the historical relationship between mass and safety is appropriate for
this rulemaking and may be conservative given the potential safety
improvements provided by vehicle electrification.
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\1549\ https://www.iihs.org/news/detail/with-more-electric-vehicles-comes-more-proof-of-safety.
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Consistent with previous light-duty GHG analyses, EPA conducted a
quantitative assessment of the potential of the standards to affect
vehicle safety. EPA applied the same historical relationships between
mass, size, and fatality risk that were established and documented in
NHTSA's 2023 proposed rulemaking. These relationships are based on the
statistical analysis of historical crash data, which included an
analysis performed by using the most recently available crash studies
based on data for model years 2007 to 2011. EPA used these findings to
estimate safety impacts of the modeled adoption of mass reduction as
technology to reduce emissions, and the adoption of PEVs that result in
some vehicle weights that are higher than comparable ICE vehicles due
to the addition of the battery. Based on the findings of our safety
analysis, we concluded there are no changes to the vehicles themselves,
nor the combined effects of fleet composition and vehicle design, that
will have a statistically significant impact on safety.\1550\ The only
fatality projections presented here that are statistically significant
are due to changes in use (VMT) rather than changes to the vehicles
themselves. When including non-significant effects, EPA estimates that
the final standards have no impact on the annual fatalities per billion
miles driven in the 27-year period from 2027 through 2055 (4.599
fatalities per billion miles under both the final standards and the No
Action case.)
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\1550\ None of the mass-safety coefficients that were developed
for the 2020 and 2021 Rulemakings are statistically significant at
the 95th percentile confidence level. EPA is including the
presentation of non-significant changes in fatality rate here for
the purpose of comparison with previous rulemaking assessments.
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EPA has also estimated, over the same 27-year period, that total
fatalities will increase by 2,602, with all of those attributed to
increased driving. Our analysis projects that there will be an increase
in vehicle miles traveled (VMT) under the standards of 567 billion
miles compared to the No Action case in 2027 through 2055 (an increase
of under 0.6 percent). As noted, the only statistically significant
changes in the fatalities projected are the result from the projected
increased driving--i.e., people choosing to drive more due to the lower
operating costs of more efficient vehicles. Our cost-benefit analysis
accounts for the value of this additional driving, which we assume is
an important consideration in the decision to drive.
On the whole, EPA considers safety impacts in the context of all
projected health impacts from the rule including public health benefits
from the projected reductions in air pollution. Considering these
estimates in the context of public health benefits anticipated from the
final standards, EPA notes that the estimated annualized value of
monetized health benefits of reduced PM2.5 through 2055 is
between $3.6 billion and $10 billion (depending on study and discount
rate), and that the air quality modeling which, as discussed further in
Chapter 7.5 of the RIA, assesses a regulatory scenario with lower rates
of PEV penetration than EPA is projecting for the final rule, estimates
that in 2055 such a scenario would prevent between 1,000 and 2,000
premature deaths associated with exposure to PM2.5 and
prevent between 25 and 550 premature deaths associated with exposure to
ozone. By comparison, the safety analysis estimates 118 more highway
fatalities in calendar year 2055, far fewer than the decrease estimated
from exposure to PM2.5. We expect that the cumulative number
of premature deaths avoided that would occur during the entire period
from 2027 to 2055 would be much larger than the estimate of deaths
avoided projected to occur in 2055.
3. Other Non-Monetized Considerations
In addition to the energy paradox, safety, and the effects that we
monetize, we also look more closely into, but do not monetize, the
effects of the standards on low-income households, on consumers of low-
priced new vehicles and used vehicles, and on PEV consumers without
access to home or work charging. These effects depend, in large part,
on three elements of vehicle ownership, namely (a) the purchase prices
of vehicles, (b) fueling expenditures, and (c) maintenance and repair.
Typically, the introduction of more stringent standards leads to higher
purchase prices and lower fuel expenditures, on average. These
standards also yield reductions on average in vehicle maintenance and
repair costs, especially among buyers of PEVs. The net effect varies
across households. Regarding purchase price, the IRA provides tax
credits for both new and used PEVs. The reduction in fuel expenditures
may be especially beneficial for low-income households and consumers in
the used and low-priced new vehicle markets. First, fuel expenditures
are a larger portion of expenses for low-income households compared to
higher income households. Second, lower-priced new vehicles have
historically been more fuel efficient. Third, fuel economy and
therefore fuel savings do not decline as vehicles age even though the
price paid for vehicles typically declines as vehicles age and are
resold. Fourth, low-income households are more likely to purchase
lower-priced new vehicles and used vehicles, capturing their associated
fuel savings.\1551\ In addition, savings on maintenance and repair
costs may also be especially beneficial for consumers in the used
vehicle market. Finally, EPA expects that automakers will continue to
produce a wide variety of vehicles, including price points,
technologies, and body styles, to satisfy diverse vehicle consumers.
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\1551\ Hutchens, A., Cassidy, A., Burmeister, G., Helfand, G.
(2021). ``Impacts of Light-Duty Greenhouse Gas Emission Standards on
Vehicle Affordability.''
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Furthermore, for many vehicle consumers, access to credit for
vehicle purchases is essential and may be of particular concern for
low-income households. The effects of the standards on access to credit
is influenced by the potentially countervailing forces of vehicle
purchase costs and fuel costs. However, the degree of influence and the
net effect is not clear (see RIA Chapter 8.4.3 of the 2021 rule).
Increased purchase prices and presumably higher loan principal may, in
some cases, discourage lending, while reduced fuel expenditures may, in
some cases, improve lenders' perceptions of borrowers' repayment
reliability.
Finally, while access to gasoline and diesel can be assumed for the
most part, the number and density of charging stations varies
considerably.\1552\ Public and private charging infrastructure has been
expanding alongside PEV adoption and is generally expected to continue
to grow, particularly in light of public and private investments and
consistent with local level priorities.1553 1554 This
[[Page 28139]]
includes home charging events, which are likely to continue to grow
with PEV adoption but are also expected to represent a declining
proportion of charging events as PEV share increases and more drivers
without easy access to home charging adopt PEVs and therefore use
public charging.\1555\ Thus, publicly accessible charging is an
important consideration, especially for some renters and among
residents of multi-family housing and others who charge away from
home.\1556\ Households without access to charging at home or the
workplace may incur additional charging costs, though there is ongoing
interest in and development of alternative charging solutions (e.g.,
curbside charging or use of mobile charging units) and business models
(e.g., providing charging as an amenity or as a subscription service
for multi-family housing).\1557\ Though the higher price of public
charging is important, especially among consumers who rely upon public
charging, improvements in access and availability to both public and
private charging are expected, bolstered by private and public
investment in charging infrastructure, including the recent Federal
investments provided by the CHIPS Act, the BIL and the IRA, which will
allow for increased investment along the vehicle supply chain,
including charging infrastructure.\1558\ Please see section IV.C.4 of
this preamble and Chapter 5 of the RIA for a more detailed discussion
of public and private investments in charging infrastructure, and our
assessment of infrastructure needs and costs under this rulemaking.
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\1552\ https://afdc.energy.gov/fuels/electricity_locations.html,
accessed 3/8/2022.
\1553\ Bui, Anh, Peter Slowik, and Nic Lutsey. 2020. Update on
electric vehicle adoption across U.S. cities. International Council
on Clean Transportation. https://theicct.org/wp-content/uploads/2021/06/EV-cities-update-aug2020.pdf.
\1554\ Greschak, Tressa, Matilda Kreider, and Nathan Legault.
2022. ``Consumer Adoption of Electric Vehicles: An Evaluation of
Local Programs in the United States.'' School for Environment and
Sustainability, University of Michigan, Ann Arbor, MI. https://deepblue.lib.umich.edu/handle/2027.42/172221.
\1555\ Ge, Yanbo, Christina Simeone, Andrew Duvall, and Andrew
Wood. 2021. There's No Place Like Home: Residential Parking,
Electrical Access, and Implications for the Future of Electric
Vehicle Charging Infrastructure. NREL/TP-5400-81065, Golden, CO:
National Renewable Energy Laboratory. https://www.nrel.gov/docs/fy22osti/81065.pdf.
\1556\ https://advocacy.consumerreports.org/wp-content/uploads/2022/09/EV-Demographic-Survey-English-final.pdf.
\1557\ Matt Alexander, Noel Crisostomo, Wendell Krell, Jeffrey
Lu, Raja Ramesh, ``Assembly Bill 2127: Electric Vehicle Charging
Infrastructure Assessment,'' July 2021, California Energy
Commission. Accessed March 9, 2023, at https://www.energy.ca.gov/programs-and-topics/programs/electric-vehicle-charging-infrastructure-assessment-ab-2127.
\1558\ More information on these three acts can be found in the
January, 2023 White House publication ``Building a Clean Energy
Economy: A Guidebook to the Inflation Reduction Act's Investments in
Clean Energy and Climate Action.'' found online at https://www.whitehouse.gov/wp-content/uploads/2022/12/Inflation-Reduction-Act-Guidebook.pdf.
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IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 14094: Modernizing Regulatory Review
This action is a ``significant regulatory action,'' as defined
under section 3(f)(1) of Executive Order 12866, as amended by Executive
Order 14094. Accordingly, EPA submitted this action to the Office of
Management and Budget (OMB) for Executive Order 12866 review.
Documentation of any changes made in response to the Executive Order
12866 review is available in the docket. EPA prepared an analysis of
the potential costs and benefits associated with this action. This
analysis is in the Regulatory Impact Analysis, which can be found in
the docket for this rule and is briefly summarized in section VIII of
this preamble.
B. Paperwork Reduction Act (PRA)
The information collection activities in this rule have been
submitted for approval to the Office of Management and Budget (OMB)
under the PRA. The Information Collection Request (ICR) document that
EPA prepared has been assigned EPA ICR number 2750.02. You can find a
copy of the ICR in the docket for this rule, and it is briefly
summarized here. The information collection requirements are not
enforceable until OMB approves them.
The Agency is adopting requirements for manufacturers to submit
information to ensure compliance with the provisions in this rule. This
includes a variety of requirements for vehicle manufacturers. Section
208(a) of the CAA requires that vehicle manufacturers provide
information the Administrator may reasonably require to determine
compliance with the regulations; submission of the information is
therefore mandatory. We will consider confidential all information
meeting the requirements of section 208(c) of the CAA for
confidentiality.
Many of the information activities associated with the rule are
covered by existing emission certification and reporting requirements
for EPA's light-duty and medium-duty vehicle emission control program.
Therefore, this ICR only covers the incremental burden associated with
the updated regulatory requirements as described in this rule.
The total annual reporting burden associated with this rule is
about 40,136 hours and $(6,213) million, based on a projection of 35
respondents. The estimated burden for vehicle manufacturers is a total
estimate for new reporting requirements incremental to the current
program. Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; modify existing technology and systems
for the purposes of collecting, validating, and verifying newly
required information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
Respondents/affected entities: Light- and medium-duty vehicle
manufacturers, alternative fuel converters, and independent commercial
importers.
Respondent's obligation to respond: Manufacturers must respond as
part of their annual model year vehicle certification under section
208(a) of the CAA which is required prior to entering vehicles into
commerce. Participation in some programs is voluntary; but once a
manufacturer has elected to participate, it must submit the required
information.
Estimated number of respondents: 35.
Frequency of response: Annually or on occasion, depending on the
type of response.
Total estimated burden: 40,136 hours (per year). Burden is defined
at 5 CFR 1320.3(b).
Total estimated cost: $(6,212,838) per year, which is a net burden
reduction because the total new burden measures are offset by burden
reduction measures and reduced light- and medium duty vehicle testing
and reporting due to the switch from ICE to EVs. The total estimated
cost includes an estimated $(6,483,593) annualized capital or operation
& maintenance cost savings.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR part 9. When OMB approves this ICR,
the Agency will announce that approval in the Federal Register and
publish a technical amendment to 40 CFR part 9 to display the OMB
control
[[Page 28140]]
number for the approved information collection activities contained in
this final rule.
C. Regulatory Flexibility Act
I certify that this action will not have a significant economic
impact on a substantial number of small entities (SISNOSE) under the
Regulatory Flexibility Act (RFA).
EPA has focused its assessment of potential small business impacts
on three key aspects of the standards, including GHG emissions
standards, criteria pollutant standards (including NMOG+NOX
fleet-average standards and PM emissions standards), and EV battery
warranty and durability. Details of EPA's No SISNOSE assessment are
included in RIA Chapter 11.
There are three types of small entities under the RFA that could
potentially be impacted by the GHG standards: (1) small entity vehicle
manufacturers; (2) alternative fuel converters, which are companies
that take a vehicle for which an OEM has already accounted for GHG
compliance and convert it to operate on a cleaner fuel such as natural
gas or propane; and (3) independent commercial importers (ICIs), which
are firms that import vehicles from other countries for individual
vehicle purchasers.
Under the current light-duty GHG program, small entities are exempt
from the GHG standards. EPA is continuing the current exemption for all
three types of small entities, including small entity manufacturers,
alternate fuel converters, and ICIs. In contrast, current regulations
require small entities making new medium-duty vehicles to meet the same
GHG emission standards that apply for other companies. In this rule, we
are not adopting new or revised GHG emission standards for medium-duty
vehicles for small entities. As a result, medium-duty vehicles produced
by small entities will continue to be subject to the MY 2026 standards
indefinitely, instead of being subject to the new GHG emission
standards for MY 2027 and later vehicles that we are adopting in this
rule. However, EPA is finalizing its proposal to add some environmental
protections for imported vehicles, as described below in this
paragraph. EPA is continuing the current provision allowing small
entity manufacturers to opt into the GHG program to earn credits, which
they can then choose to sell in the credit market. The small entity
vehicle manufacturers in the market at this time produce only electric
vehicles. EPA received comments that there were small entity
manufacturers that made internal combustion engine vehicles. EPA had
previously reviewed those entities and determined that they did not
qualify for consideration under the RFA (for further details see the
Response to Comments document.) EPA requested comment on the potential
need for small entity light-duty and medium-duty manufacturers to have
an annual production cap (e.g., 200-500 vehicles per year) on vehicles
eligible for the exemption. EPA noted that this cap could be an
important environmental safeguard. It balances eliminating GHG
compliance burdens for small manufacturers with safeguards to avoid
undermining the environmental benefits of the standards. A group of
small OEMs opposed the imposition of such a cap, although the group did
not provide data or explanation as to why such a cap would not be a
reasonable means of ensuring environmental benefits without restricting
small manufacturers from producing volumes consistent with what they
have produced in the past. EPA is finalizing an annual limit of the
first 500 vehicles produced by a small business being exempted from the
light- and medium-duty GHG standards.
Under existing EPA regulations, each ICI is currently limited to
importing 50 vehicles per year. EPA is finalizing, as proposed, a
reduced limit of 25 vehicles per year, which is well above historical
sales, as a means of limiting the potential environmental impact of
importing vehicles with potentially high GHG emissions. Importing of
BEVs and fuel cell vehicles would not count against the 25 vehicles
limit. EPA believes this lower vehicle limit is important for capping
the potential for high-emitting imported vehicles, because unlike with
criteria pollutant emissions, there are very limited add-on emissions
control options for reducing the GHG emissions of an imported vehicle.
To ease the burden required for ICIs to certify electric vehicles, EPA
is finalizing its proposal to remove the requirement that the vehicle
have a fuel economy label. Production electric vehicles do not normally
have high voltage wiring accessible, so it is not practical for ICIs to
measure the energy in and out of the battery, which is necessary when
measuring energy for the fuel economy label.
EPA also has evaluated the potential impacts on small businesses
for criteria pollutant emissions standards, including both the
NMOG+NOX standard and the PM standard. EPA's
NMOG+NOX standards should have no impact on the existing RFA
qualified small entity manufacturers, which currently produce only
electric vehicles. The standards are expected to have minimal impact on
both the alternate fuel converters and ICIs, as discussed in RIA
Chapter 11. EPA estimates that the PM standard will have no significant
financial impact on any of the three types of RFA qualified small
entities. Existing small entity manufacturers all produce only battery
electric vehicles, which have no tailpipe emissions and therefore would
be able to comply with the PM standard without any additional burden.
Alternative fuel vehicles are exempted from cold temperature testing
requirements under existing EPA regulations, and EPA is continuing this
exemption for the final rule; as such there is no impact on alternative
fuel converters. To minimize the testing burden on ICIs, EPA is
finalizing the exemption for ICIs from measuring PM during cold
testing; ICIs would only need to comply with the new PM levels on the
FTP75 and US06 tests. EPA also notes that it is finalizing an extended
phase-in for ICI's in meeting the new NMOG+NOX and PM
standards.
The final aspect of the final rule that could have potential
impacts on small entities is battery durability (section III.G.2 of the
preamble). EPA finds it appropriate to exempt small entities from
battery durability requirements at this time while we implement the
requirement for larger manufacturers. Based on our experience with
larger manufacturers we will be in a better position to judge whether
the requirements are appropriate to extend to smaller manufacturers in
a future rulemaking.
D. Unfunded Mandates Reform Act
This action contains Federal mandates under UMRA, 2 U.S.C. 1531-
1538, that may result in expenditures of $100 million or more for
state, local, and Tribal governments, in the aggregate, or the private
sector in any one year. Accordingly, EPA has prepared a written
statement of the costs and benefits associated with this action as
required under section 202 of UMRA. This is discussed in section VIII
of this preamble and Chapter 10 of the RIA. This action is not subject
to the requirements of section 203 of UMRA because it contains no
regulatory requirements that might significantly or uniquely affect
small governments.
E. Executive Order 13132: ``Federalism''
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.
[[Page 28141]]
F. Executive Order 13175: ``Consultation and Coordination With Indian
Tribal Governments''
This action does not have tribal implications as specified in
Executive Order 13175. Thus, Executive Order 13175 does not apply to
this action. However, EPA has engaged with our Tribal stakeholders in
the development of this rulemaking by offering a Tribal workshop and
offering government-to-government consultation upon request.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
This action is subject to Executive Order 13045 because it is a
significant regulatory action under section 3(f)(1) of Executive Order
12866, and EPA believes that the environmental health or safety risks
of the pollutants addressed by this action may have a disproportionate
effect on children. The 2021 Policy on Children's Health also applies
to this action.\1559\ Accordingly, we have evaluated the environmental
health or safety effects of air pollutants affected by this final rule
on children. The results of this evaluation are described in section II
of this preamble. The protection offered by these standards may be
especially important for children because childhood represents a life
stage associated with increased susceptibility to air pollutant-related
health effects.
---------------------------------------------------------------------------
\1559\ U.S. Environmental Protection Agency (2021). 2021 Policy
on Children's Health. Washington, DC. https://www.epa.gov/system/files/documents/2021-10/2021-policy-on-childrens-health.pdf.
---------------------------------------------------------------------------
Children make up a substantial fraction of the U.S. population, and
often have unique factors that contribute to their increased risk of
experiencing a health effect from exposures to ambient air pollutants
because of their continuous growth and development. Children are more
susceptible than adults to many air pollutants because they have (1) a
developing respiratory system, (2) increased ventilation rates relative
to body mass compared with adults, (3) an increased proportion of oral
breathing, particularly in boys, relative to adults, and (4) behaviors
that increase chances for exposure. Even before birth, the developing
fetus may be exposed to air pollutants through the mother that affect
development and permanently harm the individual when the mother is
exposed.
GHG emissions contribute to climate change and the GHG emissions
reductions described in section VI of this preamble resulting from this
rule will contribute to mitigation of climate change. The assessment
literature cited in EPA's 2009 and 2016 Endangerment Findings concluded
that certain populations and life stages, including children, the
elderly, and the poor, are most vulnerable to climate-related health
effects. The assessment literature since 2016 strengthens these
conclusions by providing more detailed findings regarding these groups'
vulnerabilities and the projected impacts they may experience. These
assessments describe how children's unique physiological and
developmental factors contribute to making them particularly vulnerable
to climate change. Impacts to children are expected from heat waves,
air pollution, infectious and waterborne illnesses, and mental health
effects resulting from extreme weather events. In addition, children
are among those especially susceptible to most allergic diseases, as
well as health effects associated with heat waves, storms, and floods.
Additional health concerns may arise in low-income households,
especially those with children, if climate change reduces food
availability and increases prices, leading to food insecurity within
households. More detailed information on the impacts of climate change
to human health and welfare is provided in section II of this preamble.
In addition to reducing GHGs, this final rule will also reduce
onroad emissions of criteria pollutants and air toxics. section VII of
this preamble presents the estimated onroad emissions reductions from
the rule. Certain motor vehicle emissions present greater risks to
children. Early lifestages (e.g., children) are thought to be more
susceptible to tumor development than adults when exposed to
carcinogenic chemicals that act through a mutagenic mode of
action.\1560\ Exposure at a young age to these carcinogens could lead
to a higher risk of developing cancer later in life. Section II.C.8 of
this preamble describes a systematic review and meta-analysis conducted
by the U.S. Centers for Disease Control and Prevention that reported a
positive association between proximity to traffic and the risk of
leukemia in children. Also, section II.C.8 of this preamble discusses a
number of childhood health outcomes associated with proximity to
roadways, including evidence for exacerbation of asthma symptoms and
suggestive evidence for new onset asthma.
---------------------------------------------------------------------------
\1560\ U.S. Environmental Protection Agency (2005). Supplemental
guidance for assessing susceptibility from early-life exposure to
carcinogens. Washington, DC: Risk Assessment Forum. EPA/630/R-03/
003F. https://www3.epa.gov/airtoxics/childrens_supplement_final.pdf.
---------------------------------------------------------------------------
In addition to reduced onroad emissions of criteria pollutants and
air toxics, we expect the rule will also lead to reductions in
petroleum-sector emissions and increases in pollutant emissions from
EGUs (see section VII of the preamble). As described in section II of
this preamble, the Integrated Science Assessments for a number of
pollutants affected by this rule, including those for SO2,
NO2, PM, ozone and CO, describe children as a group with
greater susceptibility.
There is substantial evidence that people who live or attend school
near major roadways are more likely to be people of color, Hispanic
ethnicity, and/or low socioeconomic status. Analyses of communities in
close proximity to sources such as EGUs and refineries have also found
that a higher percentage of communities of color and low-income
communities live near these sources when compared to national averages.
Within these highly exposed groups, children's exposure and
susceptibility to health effects is greater than adults due to school-
related and seasonal activities, behavior, and physiological factors.
Children are not expected to experience greater ambient
concentrations of air pollutants compared to the general population.
However, because of their greater susceptibility to air pollution,
including the impacts of a changing climate, and their increased time
spent outdoors, it is likely that these standards will have particular
benefits for children's health.
H. Executive Order 13211: Energy Effects
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy. EPA has outlined the energy effects in
Table 8-8 in Chapter 8 of the RIA, which is available in the docket for
this action and is briefly summarized here.
This action reduces CO2 emissions for light-duty and
medium-duty vehicles under revised GHG standards, which will result in
significant reductions of the consumption of petroleum, increase
electricity consumption, achieve energy security benefits, and have no
adverse energy effects. Because the GHG emission standards result in
significant fuel savings, this rule encourages more efficient use of
fuels. As shown in Table 8-8 in the RIA, EPA projects that through 2055
these standards will result in a reduction of 780 billion gallons of
retail gasoline consumption (about 15 billion barrels of oil) and an
increase of
[[Page 28142]]
6,100 Terawatt hours (TWh) of electricity consumption. As discussed in
section IV.C.5 of this preamble, we do not expect the increased
electricity consumption under this rule to have significant adverse
impacts on the electric grid.
I. National Technology Transfer and Advancement Act (NTTAA) and 1 CFR
Part 51
This rulemaking involves technical standards. Except for the
standards discussed in this section, the standards included in the
regulatory text as incorporated by reference were all previously
approved for incorporation by reference (IBR) and no change is included
in this action.
In accordance with the requirements of 1 CFR 51.5, we are
incorporating by reference the use of standards and test methods from
the California Air Resources Board (CARB). The referenced standards and
test methods may be obtained through the CARB website (www.arb.ca.gov)
or by calling (916) 322-2884. We are incorporating by reference the
following CARB documents:
----------------------------------------------------------------------------------------------------------------
Standard or test method Regulation Summary
----------------------------------------------------------------------------------------------------------------
CARB's 2022 OBD regulation--13 CCR 40 CFR 86.1 and 86.1806-27................ The CARB standards establish
1968.2, Malfunction and Diagnostic updated requirements for
System Requirements--2004 and manufacturers to design
Subsequent Model-Year Passenger their light-duty and medium-
Cars, Light-Duty Trucks, and Medium- duty vehicles with onboard
Duty Vehicles and Engines; operative diagnostic systems that
November 22, 2022. detect malfunctions in
emission controls. This is a
newly referenced standard.
California 2026 and Subsequent Model 40 CFR 1066.801 and 1066.1010............. The CARB regulation
Year Criteria Pollutant Exhaust establishes test procedures
Emission Standards and Test for measuring emissions from
Procedures for Passenger Cars, Light- light-duty and medium-duty
Duty Trucks, And Medium-Duty vehicles that are not plug-
Vehicles (``CARB's LMDV Test in hybrid electric vehicles.
Procedures''); adopted August 25, This is a newly referenced
2022. standard.
California Test Procedures for 2026 40 CFR 1066.801 and 1066.1010............. The CARB regulation
and Subsequent Model Year Zero- establishes test procedures
Emission Vehicles and Plug-In Hybrid for measuring emissions from
Electric Vehicles, in the Passenger plug-in hybrid electric
Car, Light-Duty Truck and Medium- vehicles. This is a newly
Duty Vehicle Classes (``CARB's PHEV referenced standard.
Test Procedures''); adopted August
25, 2022.
CARB's battery durability standards-- 40 CFR 86.1 and 86.1815-27................ The CARB regulation describes
13 CCR 1962.5 Data Standardization a standardized protocol for
Requirements for 2026 and Subsequent retrieving and evaluating
Model Year Light-Duty Zero Emission data related to monitor
Vehicles and Plug-in Hybrid Electric accuracy and battery
Vehicles; operative November 30, durability for electric
2022. vehicles and plug-in hybrid
electric vehicles. This is a
newly referenced standard.
CARB's battery durability standards-- 40 CFR 86.1 and 86.1815-27................ The CARB regulation
13 CCR 1962.7 In-Use Compliance, establishes performance
Corrective Action and Recall requirements and testing
Protocols for 2026 and Subsequent procedures related to
Model Year Zero-Emission and Plug-in monitor accuracy and battery
Hybrid Electric Passenger Cars and durability for electric
Light-Duty Trucks; operative vehicles and plug-in hybrid
November 30, 2022. electric vehicles. This is a
newly referenced standard.
----------------------------------------------------------------------------------------------------------------
In accordance with the requirements of 1 CFR 51.5, we are
incorporating by reference the use of standards and test methods from
the United Nations. The referenced standards and test methods may be
obtained from the UN Economic Commission for Europe, Information
Service at Palais des Nations, CH-1211 Geneva 10, Switzerland;
[email protected]; www.unece.org. We are incorporating by reference the
following UN Economic Commission for Europe document:
----------------------------------------------------------------------------------------------------------------
Standard or test method Regulation Summary
----------------------------------------------------------------------------------------------------------------
Addendum 22: United Nations Global 40 CFR 86.1 and 86.1815-27................ GTR No. 22 establishes design
Technical Regulation No. 22, United protocols and procedures for
Nations Global Technical Regulation measuring durability and
on In-vehicle Battery Durability for performance for batteries
Electrified Vehicles, April 14, 2022. used with electric vehicles
and plug-in hybrid-electric
vehicles.
----------------------------------------------------------------------------------------------------------------
In accordance with the requirements of 1 CFR 51.5, we are
incorporating by reference the use of standards and test methods from
SAE International. The referenced standards and test methods may be
obtained from SAE International, 400 Commonwealth Dr., Warrendale, PA
15096-0001, (877) 606-7323 (U.S. and Canada) or (724) 776-4970 (outside
the U.S. and Canada), or www.sae.org. We are incorporating by reference
the following documents from SAE International:
----------------------------------------------------------------------------------------------------------------
Standard or test method Regulation Summary
----------------------------------------------------------------------------------------------------------------
SAE J1711 FEB2023, Recommended 40 CFR 86.1, 86.1866-12, 600.011, 600.114- This updated document
Practice for Measuring the Exhaust 12, 600.116-12, 600.311-12, 1066.501, and specifies emission
Emissions and Fuel Economy of Hybrid- 1066.1010. measurement procedures for
Electric Vehicles, Including Plug-In hybrid electric vehicles.
Hybrid Vehicles, revised February
2023.
SAE J2727 SEP2023, Mobile Air 40 CFR 86.1, 86.1819-14, 86.1867-12, and This updated document
Conditioning System Refrigerant 86.1867-31. describes a methodology for
Emissions Estimate for Mobile Air calculating leakage rates
Conditioning Refrigerants, revised from automotive air
September 2023. conditioning systems.
SAE J2807 FEB2020, Performance 40 CFR 86.1 and 86.1845-04................ This newly referenced
Requirements for Determining Tow- document includes
Vehicle Gross Combination Weight specifications for trailers
Rating and Trailer Weight Rating, and describes how to
revised February 2020. determine a vehicle's gross
combination weight rating.
----------------------------------------------------------------------------------------------------------------
In accordance with the requirements of 1 CFR 51.5, we are
incorporating by reference the use of standards and test methods from
ASTM International. The referenced standards and test methods may be
obtained from ASTM International, 100 Barr Harbor Drive, P.O. Box C700,
West Conshohocken, PA 19428-2959, (610) 832-9585, or www.astm.org. We
are incorporating by reference the following standards from ASTM
International:
[[Page 28143]]
----------------------------------------------------------------------------------------------------------------
Standard or test method Regulation Summary
----------------------------------------------------------------------------------------------------------------
ASTM D86-23, Standard Test Method for 40 CFR 600.011 and 600.113-12............. This newly referenced
Distillation of Petroleum Products standard describes
and Liquid Fuels at Atmospheric procedures for measuring
Pressure, approved March 1, 2023. fuel distillation
parameters.
ASTM D1319-20a, Standard Test Method 40 CFR 600.011 and 600.113-12............. This newly referenced
for Hydrocarbon Types in Liquid standard describes
Petroleum Products by Fluorescent procedures for measuring
Indicator Adsorption, approved aromatic content of
August 1, 2020. gasoline.
ASTM D3338/D3338M-20a, Standard Test 40 CFR 600.011 and 600.113-12............. This updated standard
Method for Estimation of Net Heat of describes procedures for
Combustion of Aviation Fuels, measuring the net heat of
approved December 1, 2020. combustion for gasoline.
ASTM D3343-22, Standard Test Method 40 CFR 600.011 and 600.113-12............. This updated standard
for Estimation of Hydrogen Content describes procedures for
of Aviation Fuels, approved November measuring the hydrogen and
1, 2022. carbon mass fractions of
gasoline.
ASTM D4052-22, Standard Test Method 40 CFR 600.011 and 600.113-12............. This newly referenced
for Density, Relative Density, and standard describes
API Gravity of Liquids by Digital procedures for measuring the
Density Meter, approved May 1, 2022. specific gravity of
gasoline.
ASTM D4815-22, Standard Test Method 40 CFR 600.011 and 600.113-12............. This newly referenced
for Determination of MTBE, ETBE, standard describes
TAME, DIPE, tertiary-Amyl Alcohol procedures for measuring
and C1 to C4 Alcohols in Gasoline by ethanol concentrations in
Gas Chromatography, approved April gasoline.
1, 2022.
ASTM D5599-22, Standard Test Method 40 CFR 600.011 and 600.113-12............. This newly referenced
for Determination of Oxygenates in standard describes
Gasoline by Gas Chromatography and procedures for measuring
Oxygen Selective Flame Ionization ethanol concentrations in
Detection, approved April 1, 2022. gasoline.
ASTM D5769-22, Standard Test Method 40 CFR 600.011 and 600.113-12............. This newly referenced
for Determination of Benzene, standard describes
Toluene, and Total Aromatics in procedures for measuring
Finished Gasolines by Gas aromatic content of
Chromatography/Mass Spectrometry, gasoline.
approved July 1, 2022.
----------------------------------------------------------------------------------------------------------------
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations and
Executive Order 14096: Revitalizing Our Nation's Commitment to
Environmental Justice for All
EPA believes that the human health or environmental conditions that
exist prior to this action result in or have the potential to result in
disproportionate and adverse human health or environmental effects on
communities with environmental justice concerns.
EPA provides a summary of the evidence for potentially
disproportionate and adverse effects among various populations analyzed
prior to implementation of the action in sections II.C.8, VII.D, and
VIII.J of the preamble for this rule.
EPA believes that this action is likely to reduce existing
disproportionate and adverse effects on many communities with
environmental justice concerns. The air pollutant emission reductions
that will be achieved by this rule will improve air quality for the
people who reside in close proximity to major roadways and who are
disproportionately represented by people of color and people with low
income, as described in section II.C.8 and section VIII.J of this
preamble. We expect that localized increases in criteria and toxic
pollutant emissions from EGUs and reductions in petroleum-sector
emissions could lead to changes in exposure to these pollutants for
people living in the communities near these facilities. Analyses of
communities in close proximity to these sources (such as EGUs and
refineries) have found that a higher percentage of communities of color
and low-income communities live near these sources when compared to
national averages.
Section VIII.J.2 of this preamble discusses the environmental
justice issues associated with climate change. People of color, low-
income populations and/or indigenous peoples may be especially
vulnerable to the impacts of climate change. The GHG emission
reductions from this action will contribute to efforts to reduce the
probability of severe impacts related to climate change.
EPA is additionally identifying and addressing environmental
justice concerns by providing just treatment and meaningful involvement
with Environment Justice groups in developing this action and
soliciting input for this rulemaking.
The information supporting this impacts review is contained in
sections II.C.8, VII.D, and VIII.J of the preamble for this rule, and
all supporting documents have been placed in the public docket for this
action.
K. Congressional Review Act (CRA)
This action is subject to the CRA, and EPA will submit a rule
report to each House of Congress and to the Comptroller General of the
United States. This action meets the criteria set forth in 5 U.S.C.
804(2).
L. Judicial Review
This final action is ``nationally applicable'' within the meaning
of CAA section 307(b)(1) because it is expressly listed in the section
(i.e., ``any standard under section [202] of this title''). Under
section 307(b)(1) of the CAA, petitions for judicial review of this
action must be filed in the U.S. Court of Appeals for the District of
Columbia Circuit within 60 days from the date this final action is
published in the Federal Register. Filing a petition for
reconsideration by the Administrator of this final action does not
affect the finality of the action for the purposes of judicial review,
nor does it extend the time within which a petition for judicial review
must be filed and shall not postpone the effectiveness of such rule or
action.
M. Severability
This final rule includes new and revised requirements for numerous
provisions under various aspects of the highway on-road emission
control program, including revised standards for both criteria
pollutants and GHG, test procedures, emission-related warranty, and
other requirements. Therefore, this final rule is a multifaceted rule
that addresses many separate things for independent reasons, as
detailed in each respective portion of this preamble. We intend each
portion of this rule to be severable from each other, though we took
the approach of including all the parts in one rulemaking rather than
promulgating multiple rules to ensure the changes are properly
coordinated, even though the changes are not inter-dependent. We have
noted the independence of various pieces of this package both in the
proposal and in earlier sections of the preamble but we reiterate it
here for clarity.
For example, as EPA noted in the proposal, although we are
coordinating the GHG and criteria pollutant
[[Page 28144]]
standards we are setting in this rulemaking, and although some of the
available control technologies for GHG also control criteria
pollutants, we are establishing GHG standards separately (i.e., for
separate reasons based on a separate assessment of available control
technologies and their feasibility in light of lead time and cost),
from the standards we are setting for criteria pollutants. Furthermore,
although EPA believes it is appropriate to offer a small A/C credit to
encourage low GWP refrigerants and the low leakage designs, EPA does
not consider the small A/C credit as integral to selection of the GHG
standards. Similarly, although EPA is establishing both light-duty and
medium-duty standards in this rulemaking, these are based on distinct
statutory authorities (applicable based on the vehicle and pollutant).
The two sets of standards are set with consideration of these statutory
authorities and the distinct purposes of these classes of vehicles.
Even within these classes, EPA notes that our judgments regarding
feasibility of the standards for earlier years largely reflect
anticipated changes in the motor vehicle market (which are driven by
other factors, such as the IRA, consumer demand and manufacturers'
global market plans), while our judgment regarding feasibility of the
standards in later years reflects those trends plus the additional lead
time for further adoption of control technologies. Accordingly, EPA
finds that the standards for each individual year are severable from
standards for each of the other years.
Finally, EPA notes that there are a host of issues which are
significant for implementation of any standards. For example, EPA is
making changes to compliance testing (including requirements for fuels)
and other certification procedures, as well as establishing battery
durability and battery warranty provisions. Each of these issues has
been considered and adopted independently of the level of the
standards, and indeed of each other.
Thus, EPA has independently considered and adopted each of these
portions of the final rule (including but not limited to the standards
for LD GHG, LD NMOG+NOX, LD PM, LD CO, LD HCHO, MD GHG, MD
NMOG+NOX, MD PM, MD CO, MD HCHO; in-use standards for high-
GCWR MDV; trading and A/C credits; compliance testing and certification
procedures; battery durability; and battery warranty) and each is
severable should there be judicial review. If a court were to
invalidate any one of these elements of the final rule, we intend the
remainder of this action to remain effective, as we have designed the
program to function sensibly and find each portion appropriate even if
one or more other parts of the rule has been set aside. For example, if
a reviewing court were to invalidate any of the criteria or GHG
standards, we intend the other regulatory amendments, including not
only the other pollutant standards but also the changes to
certification procedures, and battery durability and warranty, to
remain effective. Moreover, this list is not intended to be exhaustive,
and should not be viewed as an intention by EPA to consider other parts
of the rule not explicitly listed here as not severable from other
parts of the rule.
X. Statutory Provisions and Legal Authority
Statutory authority for this final rule is found at 42 U.S.C. 7401-
7675 and 49 U.S.C. 32901-32919q.
List of Subjects
40 CFR Part 85
Environmental protection, Confidential business information,
Greenhouse gases, Imports, Labeling, Motor vehicle pollution, Reporting
and recordkeeping requirements, Research, Warranties.
40 CFR Part 86
Environmental protection, Administrative practice and procedure,
Confidential business information, Incorporation by reference,
Labeling, Motor vehicle pollution, Reporting and recordkeeping
requirements.
40 CFR Part 600
Environmental protection, Administrative practice and procedure,
Electric power, Fuel economy, Incorporation by reference, Labeling,
Reporting and recordkeeping requirements.
40 CFR Part 1036
Environmental protection, Administrative practice and procedure,
Air pollution control, Confidential business information, Greenhouse
gases, Labeling, Motor vehicle pollution, Reporting and recordkeeping
requirements, Warranties.
40 CFR Part 1037
Environmental protection, Administrative practice and procedure,
Air pollution control, Confidential business information, Labeling,
Motor vehicle pollution, Reporting and recordkeeping requirements,
Warranties.
40 CFR Part 1066
Environmental protection, Air pollution control, Incorporation by
reference, Reporting and recordkeeping requirements.
40 CFR Part 1068
Environmental protection, Administrative practice and procedure,
Air pollution control, Confidential business information, Imports,
Motor vehicle pollution, Penalties, Reporting and recordkeeping
requirements, Warranties.
Michael S. Regan,
Administrator.
For the reasons set out in the preamble, EPA is amending title 40,
chapter I of the Code of Federal Regulations as set forth below.
PART 85--CONTROL OF AIR POLLUTION FROM MOBILE SOURCES
0
1. The authority citation for part 85 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.
0
2. Amend Sec. 85.505 by revising paragraph (f) to read as follows:
Sec. 85.505 Overview.
* * * * *
(f) If you have previously used small volume conversion
manufacturer or qualified small volume test group/engine family
procedures and you may exceed the volume thresholds using the sum
described in Sec. 85.535(f) to determine small volume status in 40 CFR
86.1838-01 or 1036.150(d), as appropriate, you must satisfy the
requirements for conversion manufacturers who do not qualify for small
volume exemptions or your exemption from tampering is no longer valid.
* * * * *
0
3. Revise and republish Sec. 85.510 to read as follows:
Sec. 85.510 Exemption provisions for new and relatively new vehicles/
engines.
(a) You are exempted from the tampering prohibition with respect to
new and relatively new vehicles/engines if you certify the conversion
system to the emission standards specified in Sec. 85.525 as described
in paragraph (b) in this section; you meet the labeling and packaging
requirements in Sec. 85.530 before you sell, import or otherwise
facilitate the use of a clean alternative fuel conversion system; and
you meet the liability, recordkeeping, and end of year reporting
requirements in Sec. 85.535.
(b) Certification under this section must be based on the
certification
[[Page 28145]]
procedures such as those specified in 40 CFR part 86, subparts A, B,
and S, and 40 CFR part 1065, as applicable, subject to the following
exceptions and special provisions:
(1) Test groups and evaporative/refueling families for light-duty
and heavy-duty chassis certified vehicles.
(i) Small volume conversion manufacturers and qualified small
volume test groups.
(A) If criteria for small volume manufacturer or qualified small
volume test groups are met as defined in 40 CFR 86.1838-01, you may
combine light-duty vehicles or heavy-duty vehicles which can be chassis
certified under 40 CFR part 86, subpart S using good engineering
judgment into conversion test groups if the following criteria are
satisfied instead of those specified in 40 CFR 86.1827-01.
(1) Same OEM and OEM model year.
(2) Same OBD group.
(3) Same vehicle classification (e.g., light-duty vehicle, heavy-
duty vehicle).
(4) Engine displacement is within 15% of largest displacement or 50
CID, whichever is larger.
(5) Same number of cylinders or combustion chambers.
(6) Same arrangement of cylinders or combustion chambers (e.g., in-
line, v-shaped).
(7) Same combustion cycle (e.g., two stroke, four stroke, Otto-
cycle, diesel-cycle).
(8) Same engine type (e.g., piston, rotary, turbine, air cooled vs.
water cooled).
(9) Same OEM fuel type (except otherwise similar gasoline and E85
flexible-fuel vehicles may be combined into dedicated alternative fuel
vehicles).
(10) Same fuel metering system (e.g., throttle body injection vs.
port injection).
(11) Same catalyst construction (e.g., metal vs. ceramic
substrate).
(12) All converted vehicles are subject to the most stringent
emission standards used in certifying the OEM test groups within the
conversion test group.
(B) EPA-established scaled assigned deterioration factors for both
exhaust and evaporative emissions may be used for vehicles with over
10,000 miles if the criteria for small volume manufacturer or qualified
small volume test groups are met as defined in 40 CFR 86.1838-01. This
deterioration factor will be adjusted according to vehicle or engine
miles of operation. The deterioration factor is intended to predict the
vehicle's emission levels at the end of the useful life. EPA may adjust
these scaled assigned deterioration factors if we find the rate of
deterioration non-constant or if the rate differs by fuel type.
(C) As part of the conversion system description provided in the
application for certification, conversion manufacturers using EPA
assigned deterioration factors must present detailed information to
confirm the durability of all relevant new and existing components and
to explain why the conversion system will not harm the emission control
system or degrade the emissions.
(ii) Conversion evaporative/refueling families are identical to the
OEM evaporative/refueling families unless the OEM evaporative emission
system is no longer functionally necessary. You must create any new
evaporative families according to 40 CFR 86.1821-01.
(2) Engine families and evaporative/refueling families for heavy-
duty engines.
(i) Small volume conversion manufacturers and qualified small
volume heavy-duty engine families.
(A) If criteria for small volume manufacturer or qualified small
volume engine families are met as defined in 40 CFR 1036.150(d), you
may combine heavy-duty engines using good engineering judgment into
conversion engine families if the following criteria are satisfied
instead of those specified in 40 CFR 1036.230.
(1) Same OEM.
(2) Same OBD group after MY 2013.
(3) Same service class (e.g., light heavy-duty diesel engines,
medium heavy-duty diesel engines, heavy heavy-duty diesel engines).
(4) Engine displacement is within 15% of largest displacement or 50
CID, whichever is larger.
(5) Same number of cylinders.
(6) Same arrangement of cylinders.
(7) Same combustion cycle.
(8) Same method of air aspiration.
(9) Same fuel type (e.g., diesel/gasoline).
(10) Same fuel metering system (e.g., mechanical direct or
electronic direct injection).
(11) Same catalyst/filter construction (e.g., metal vs. ceramic
substrate).
(12) All converted engines are subject to the most stringent
emission standards. For example, 2005 and 2007 heavy-duty diesel
engines may be in the same family if they meet the most stringent
(2007) standards.
(13) Same emission control technology (e.g., internal or external
EGR).
(B) EPA-established scaled assigned deterioration factors for both
exhaust and evaporative emissions may be used for engines with over
10,000 miles if the criteria for small volume manufacturer or qualified
small volume engine families are met as defined in 40 CFR 1036.150(d).
This deterioration factor will be adjusted according to vehicle or
engine miles of operation. The deterioration factor is intended to
predict the engine's emission levels at the end of the useful life. EPA
may adjust these scaled assigned deterioration factors if we find the
rate of deterioration non-constant or if the rate differs by fuel type.
(C) As part of the conversion system description provided in the
application for certification, conversion manufacturers using EPA
assigned deterioration factors must present detailed information to
confirm the durability of all relevant new and existing components and
to explain why the conversion system will not harm the emission control
system or degrade the emissions.
(ii) Conversion evaporative/refueling families are identical to the
OEM evaporative/refueling families unless the OEM evaporative emission
system is no longer functionally necessary. You must create any new
evaporative families according to 40 CFR 86.1821.
(3) Conversion test groups/engine families for small volume
conversion manufacturers and qualified small volume test groups/engine
families may include vehicles/engines that are subject to different OEM
emission standards; however, all the vehicles/engines certified under
this subpart in a single conversion test group/engine family are
subject to the most stringent standards that apply for vehicles/engines
included in the conversion test group/engine family. For example, if
OEM vehicle test groups originally certified to Tier 2, Bin 4 and Bin 5
standards are in the same conversion test group for purposes of fuel
conversion, all the vehicles certified in the conversion test group
under this subpart are subject to the Tier 2, Bin 4 standards.
Conversion manufacturers may choose to certify a conversion test group/
engine family to a more stringent standard than the OEM did. The
optional, more stringent standard would then apply to all OEM test
groups/engine families within the conversion test group/engine family.
This paragraph (b)(3) does not apply to conversions to dual-fuel/mixed-
fuel vehicles/engines, as provided in paragraph (b)(7) of this section.
(4)-(5) [Reserved]
(6) Durability testing is required unless the criteria for small
volume manufacturer or qualified small volume test groups/engine
families are met as defined in 40 CFR 86.1838-01 or 1036.150(d), as
applicable.
(7) Conversion test groups/engine families for conversions to dual-
fuel or
[[Page 28146]]
mixed-fuel vehicles/engines cannot include vehicles/engines subject to
different emission standards unless applicable exhaust and OBD
demonstrations are also conducted for the original fuel(s)
demonstrating compliance with the most stringent standard represented
in the test group. However, for small volume conversion manufacturers
and qualified small volume test groups/engine families the data
generated from exhaust emission testing on the new fuel for dual-fuel
or mixed-fuel test vehicles/engines may be carried over to vehicles/
engines which otherwise meet the test group/engine family criteria and
for which the test vehicle/engine data demonstrate compliance with the
application vehicle/engine standard. Clean alternative fuel conversion
evaporative families for dual-fuel or mixed-fuel vehicles may not
include vehicles/engines which were originally certified to different
evaporative emissions standards unless evaporative/refueling
demonstrations are also conducted for the original fuel(s)
demonstrating compliance with the most stringent standard represented
in the evaporative/refueling family.
(8) The vehicle/engine selected for testing must qualify as a
worst-case vehicle/engine under 40 CFR 86.1828-01 or 1036.235(a)(2), as
applicable.
(9) The following requirements apply for OBD systems:
(i) The OBD system must properly detect and identify malfunctions
in all monitored emission-related powertrain systems or components
including any new monitoring capability necessary to identify potential
emission problems associated with the new fuel.
(ii) Conduct OBD testing as needed to demonstrate that the vehicle/
engine continues to comply with emission thresholds and other
requirements that apply based on the original certification.
(iii) Submit the applicable OBD reporting information for vehicles
as set forth in 40 CFR 86.1806-17. Submit the applicable OBD reporting
information for engines as set forth in 40 CFR 86.010-18 or 1036.110,
as appropriate. Submit the following statement of compliance if the OEM
vehicles/engines were required to be OBD-equipped:
The test group/engine family converted to an alternative fuel
has fully functional OBD systems and therefore meets the OBD
requirements specified in [40 CFR part 86 or part 1036, as
applicable] when operating on the alternative fuel.
(10) In lieu of specific certification test data, you may submit
the following attestations for the appropriate statements of
compliance, if you have sufficient basis to prove the statement is
valid.
(i) The test group/engine family converted to an alternative fuel
has properly exercised the optional and applicable statements of
compliance or waivers in the certification regulations. Attest to each
statement or waiver in your application for certification.
(ii) The test group/engine family converted to dual-fuel or mixed-
fuel operation retains all the OEM fuel system, engine calibration, and
emission control system functionality when operating on the fuel with
which the vehicle/engine was originally certified.
(iii) The test group/engine family converted to dual fuel or mixed-
fuel operation retains all the functionality of the OEM OBD system (if
so equipped) when operating on the fuel with which the vehicle/engine
was originally certified.
(iv) The test group/engine family converted to dual-fuel or mixed-
fuel operation properly purges hydrocarbon vapor from the evaporative
emission canister when the vehicle/engine is operating on the
alternative fuel.
(11) Certification fees apply as described in 40 CFR part 1027.
(12) A certificate issued under this section is valid starting with
the indicated effective date and expires on December 31 of the
conversion model year for which it is issued. You may apply for a
certificate of conformity for the next conversion model year using the
applicable provisions for carryover certification. Even after the
certificate expires, your exemption from the prohibition on tampering
remains valid for the applicable conversion test group/engine family
and/or evaporative/refueling family, as long as the conditions under
which the certificate was issued remain unchanged, such as small volume
manufacturer or qualified small volume test group/engine family status.
Your exemption from tampering is valid only if the conversion is
installed on the OEM test groups/engine families and/or evaporative
emissions/refueling families listed on the certificate. For example, if
you have received a clean alternative fuel conversion certificate of
conformity in conversion model year 2011 for converting a 2010 model
year OEM test group/evaporative/refueling family, your exemption from
tampering continues to apply for the conversion of the same 2010 model
year OEM test group/evaporative/refueling family as long as the
conditions under which the certificate was issued remain unchanged,
such as small volume manufacturer status.
(13) Conversion systems must be properly installed and adjusted
such that the vehicle/engine operates consistent with the principles of
good engineering judgment and in accordance with all applicable
regulations.
0
4. Revise and republish Sec. 85.515 to read as follows:
Sec. 85.515 Exemption provisions for intermediate age vehicles/
engines.
(a) You are exempted from the tampering prohibition with respect to
intermediate age vehicles/engines if you properly test, document and
notify EPA that the conversion system complies with the emission
standards specified in Sec. 85.525 as described in paragraph (b) of
this section; you meet the labeling requirements in Sec. 85.530 before
you sell, import or otherwise facilitate the use of a clean alternative
fuel conversion system; and you meet the liability, recordkeeping, and
end of year reporting requirements in Sec. 85.535. You may also meet
the requirements under this section by complying with the requirements
in Sec. 85.510.
(b) Documenting and notifying EPA under this section includes
demonstrating compliance with all the provisions in this section and
providing all notification information to EPA. You may notify us as
described in this section instead of certifying the clean alternative
fuel conversion system. You must demonstrate compliance with all
exhaust and evaporative emissions standards by conducting all exhaust
and evaporative emissions and durability testing as required for OEM
certification subject to the exceptions and special provisions
permitted in Sec. 85.510. This paragraph (b) provides additional
special provisions applicable to intermediate age vehicles/engines.
Paragraph (b) is applicable to all conversion manufacturers unless
otherwise specified.
(1) Conversion test groups for light-duty and heavy-duty chassis
certified vehicles may be grouped together into an exhaust conversion
test group using the criteria described in Sec. 85.510(b)(1)(i)(A),
except that the same OBD group is not a criterion. Evaporative/
refueling families may be grouped together using the criteria described
in Sec. 85.510(b)(1)(ii).
(2) Conversion engine families for heavy-duty engines may be
grouped together into an exhaust conversion engine family using the
criteria described in Sec. 85.510(b)(2)(i)(A), except that the same
OBD group is not a criterion. Evaporative/refueling families may be
grouped together using the criteria described in Sec.
85.510(b)(2)(ii).
[[Page 28147]]
(3) Conversion test groups/engine families may include vehicles/
engines that are subject to different OEM emission standards; however,
all vehicles/engines in a single conversion test group/engine family
are subject to the most stringent standards that apply for vehicles/
engines included in the conversion test group/engine family. For
example, if OEM vehicle test groups originally certified to Tier 2, Bin
4 and Bin 5 standards are in the same conversion test group for
purposes of fuel conversion, all the vehicles in the conversion test
group under this subpart are subject to the Tier 2, Bin 4 standards.
This paragraph (b)(3) does not apply to conversions to dual-fuel/mixed-
fuel vehicles/engines, as provided in paragraph (b)(7).
(4) EPA-established scaled assigned deterioration factors for both
exhaust and evaporative emissions may be used for vehicles/engines with
over 10,000 miles if the criteria for small volume manufacturer or
qualified small volume test groups/engine families are met as defined
in 40 CFR 86.1838-01 or 40 CFR 1036.150(d), as appropriate. This
deterioration factor will be adjusted according to vehicle/engine miles
or hours of operation. The deterioration factor is intended to predict
the vehicle/engine's emission level at the end of the useful life. EPA
may adjust these scaled assigned deterioration factors if we find the
rate of deterioration non-constant or if the rate differs by fuel type.
(5) As part of the conversion system description required by
paragraph (b)(10)(i) of this section, small volume conversion
manufacturers and qualified small volume test groups/engine families
using EPA assigned deterioration factors must present detailed
information to confirm the durability of all relevant new and existing
components and explain why the conversion system will not harm the
emission control system or degrade the emissions.
(6) Durability testing is required unless the criteria for small
volume manufacturer or qualified small volume test groups/engine
families are met as defined in 40 CFR 86.1838-01 or 40 CFR 1036.150(d),
as applicable. Durability procedures for large volume conversion
manufacturers of intermediate age light-duty and heavy-duty chassis
certified vehicles that follow provisions in 40 CFR 86.1820-01 may
eliminate precious metal composition and catalyst grouping statistic
when creating clean alternative fuel conversion durability groupings.
(7) Conversion test groups/engine families for conversions to dual-
fuel or mixed-fuel vehicles/engines may not include vehicles/engines
subject to different emissions standards unless applicable exhaust and
OBD demonstrations are also conducted for the original fuel(s)
demonstrating compliance with the most stringent standard represented
in the test group/engine family. However, the data generated from
testing on the new fuel for dual-fuel or mixed/fuel test vehicles/
engines may be carried over to vehicles/engines that otherwise meet the
conversion test group/engine family criteria and for which the test
vehicle/engine data demonstrate compliance with the applicable vehicle/
engine standards. Clean alternative fuel conversion evaporative
families for dual-fuel or mixed-fuel vehicles/engines cannot include
vehicles/engines that were originally certified to different
evaporative emissions standards unless evaporative/refueling
demonstrations are also conducted for the original fuel(s)
demonstrating compliance with the most stringent standard represented
in the evaporative/refueling family.
(8) You must conduct all exhaust and all evaporative and refueling
emissions testing with a worst-case vehicle/engine to show that the
conversion test group/engine family complies with exhaust and
evaporative/refueling emission standards, based on the certification
procedures.
(9)(i) The OBD system must properly detect and identify
malfunctions in all monitored emission-related powertrain systems or
components including any new monitoring capability necessary to
identify potential emission problems associated with the new fuel.
These include but are not limited to: Fuel trim lean and rich monitors,
catalyst deterioration monitors, engine misfire monitors, oxygen sensor
deterioration monitors, EGR system monitors, if applicable, and vapor
leak monitors, if applicable. No original OBD system monitor that is
still applicable to the vehicle/engine may be aliased, removed,
bypassed, or turned-off. No MILs shall be illuminated after the
conversion. Readiness flags must be properly set for all monitors that
identify any malfunction for all monitored components.
(ii) Subsequent to the vehicle/engine fuel conversion, you must
clear all OBD codes and reset all OBD monitors to not-ready status
using an OBD scan tool appropriate for the OBD system in the vehicle/
engine in question. You must operate the vehicle/engine with the new
fuel on representative road operation or chassis dynamometer/engine
dynamometer testing cycles to satisfy the monitors' enabling criteria.
When all monitors have reset to a ready status, you must submit an OBD
scan tool report showing that with the vehicle/engine operating in the
key-on/engine-on mode, all supported monitors have reset to a ready
status and no emission related ``pending'' (or potential) or
``confirmed'' (or MIL-on) diagnostic trouble codes (DTCs) have been
set. The MIL must not be commanded ``On'' or be illuminated. A MIL
check must also be conducted in a key-on/engine-off mode to verify that
the MIL is functioning properly. You must include the VIN/EIN number of
the test vehicle/engine. If necessary, the OEM evaporative emission
readiness monitor may remain unset for dedicated gaseous fuel
conversion systems.
(iii) In addition to conducting OBD testing described in this
paragraph (b)(9), you must submit to EPA the following statement of
compliance if the OEM vehicles/engines were required to be OBD-
equipped:
The test group/engine family converted to an alternative fuel
has fully functional OBD systems and therefore meets the OBD
requirements specified in [40 CFR part 86 or part 1036, as
applicable] when operating on the alternative fuel.
(10) You must notify us by electronic submission in a format
specified by the Administrator with all required documentation. The
following must be submitted:
(i) You must describe how your conversion system qualifies as a
clean alternative fuel conversion. You must include emission test
results from the required exhaust, evaporative emissions, and OBD
testing, applicable exhaust and evaporative emissions standards and
deterioration factors. You must also include a description of how the
test vehicle/engine selected qualifies as a worst-case vehicle/engine
under 40 CFR 86.1828-01 or 1036.235(a)(2), as applicable.
(ii) You must describe the group of vehicles/engines (conversion
test group/conversion engine family) that are covered by your
notification based on the criteria specified in paragraph (b)(1) or
(b)(2) of this section.
(iii) In lieu of specific test data, you may submit the following
attestations for the appropriate statements of compliance, if you have
sufficient basis to prove the statement is valid.
(A) The test group/engine family converted to an alternative fuel
has properly exercised the optional and applicable statements of
compliance or waivers in the certification regulations. Attest to each
statement or waiver in your notification.
(B) The test group/engine family converted to dual-fuel or mixed-
fuel
[[Page 28148]]
operation retains all the OEM fuel system, engine calibration, and
emission control system functionality when operating on the fuel with
which the vehicle/engine was originally certified.
(C) The test group/engine family converted to dual-fuel or mixed-
fuel operation retains all the functionality of the OEM OBD system (if
the OEM vehicles/engines were required to be OBD equipped) when
operating on the fuel for which the vehicle/engine was originally
certified.
(D) The test group/engine family converted to dual-fuel or mixed-
fuel operation properly purges hydrocarbon vapor from the evaporative
emission canister when the vehicle/engine is operating on the
alternative fuel.
(iv) Include any other information as the Administrator may deem
appropriate to establish that the conversion system is for the purpose
of conversion to a clean alternative fuel and meets applicable emission
standards.
(11) [Reserved]
(12) Your exemption from the prohibition on tampering remains valid
for the applicable conversion test group/engine family and/or
evaporative/refueling family, as long as the conditions under which you
previously complied remain unchanged, such as small volume manufacturer
or qualified small volume test group/engine family status. Your
exemption from tampering is valid only if the conversion is installed
on the OEM test groups/engine families and/or evaporative emissions/
refueling families listed on the notification. For example, if you have
complied properly with the provisions in this section in calendar year
2011 for converting a model year 2006 OEM test group/evaporative/
refueling family, your exemption from tampering continues to apply for
the conversion of the same model year 2006 OEM test group/evaporative/
refueling family as long as the conditions under which the notification
was submitted remain unchanged.
(13) Conversion systems must be properly installed and adjusted
such that the vehicle/engine operates consistent with the principles of
good engineering judgment and in accordance with all applicable
regulations.
0
5. Amend Sec. 85.520 by revising and republishing paragraphs (b)(4)
and (6) to read as follows:
Sec. 85.520 Exemption provisions for outside useful life vehicles/
engines.
* * * * *
(b) * * *
(4) The following requirements apply for OBD systems:
(i) The OBD system must properly detect and identify malfunctions
in all monitored emission-related powertrain systems or components,
including any new monitoring capability necessary to identify potential
emission problems associated with the new fuel. These include but are
not limited to: Fuel trim lean and rich monitors, catalyst
deterioration monitors, engine misfire monitors, oxygen sensor
deterioration monitors, EGR system monitors, if applicable, and
evaporative system leak monitors, if applicable. No original OBD system
monitor that is still applicable to the vehicle/engine may be aliased,
removed, bypassed, or turned-off. No MILs shall be illuminated after
the conversion. Readiness flags must be properly set for all monitors
that identify any malfunction for all monitored components.
(ii) Subsequent to the vehicle/engine fuel conversion, you must
clear all OBD codes and reset all OBD monitors to not-ready status
using an OBD scan tool appropriate for the OBD system in the vehicle/
engine in question. You must operate the vehicle/engine with the new
fuel on representative road operation or chassis dynamometer/engine
dynamometer testing cycles to satisfy the monitors' enabling criteria.
When all monitors have reset to a ready status, you must submit an OBD
scan tool report showing that with the vehicle/engine operating in the
key-on/engine-on mode, all supported monitors have reset to a ready
status and no emission related ``pending'' (or potential) or
``confirmed'' (or MIL-on) diagnostic trouble codes (DTCs) have been
stored. The MIL must not be commanded ``On'' or be illuminated. A MIL
check must also be conducted in a key-on/engine-off mode to verify that
the MIL is functioning properly. You must include the VIN/EIN of the
test vehicle/engine. If necessary, the OEM evaporative emission
readiness monitor may remain unset for dedicated gaseous fuel
conversion systems.
(iii) In addition to conducting OBD testing described in this
paragraph (b)(4), you must submit to EPA the following statement of
compliance if the OEM vehicles/engines were required to be OBD-
equipped:
The test group/engine family converted to an alternative fuel has
fully functional OBD systems and therefore meets the OBD requirements
specified in [40 CFR part 86 or 40 CFR part 1036, as applicable] when
operating on the alternative fuel.
* * * * *
(6) You must notify us by electronic submission in a format
specified by the Administrator with all required documentation. The
following must be submitted.
(i) You must describe how your conversion system complies with the
good engineering judgment criteria in paragraph (b)(3) of this section
and/or other requirements under this subpart or other applicable
subparts such that the conversion system qualifies as a clean
alternative fuel conversion. The submission must provide a level of
technical detail sufficient for EPA to confirm the conversion system's
ability to maintain or improve on emission levels in a worst-case
vehicle/engine. The submission of technical information must include a
complete characterization of exhaust and evaporative emissions control
strategies, the fuel delivery system, durability, and specifications
related to OBD system functionality. You must present detailed
information to confirm the durability of all relevant new and existing
components and to explain why the conversion system will not harm the
emission control system or degrade the emissions. EPA may ask you to
supply additional information, including test data, to support the
claim that the conversion system does not increase emissions and
involves good engineering judgment that is being applied for purposes
of conversion to a clean alternative fuel.
(ii) You must describe the group of vehicles/engines (conversion
test group/conversion engine family) that is covered by your
notification based on the criteria specified in paragraph (b)(2) of
this section.
(iii) In lieu of specific test data, you may submit the following
attestations for the appropriate statements of compliance, if you have
sufficient basis to prove the statement is valid.
(A) The test group/engine family converted to an alternative fuel
has properly exercised the optional and applicable statements of
compliance or waivers in the certification regulations. Attest to each
statement or waiver in your notification.
(B) The test group/engine family converted to dual-fuel or mixed-
fuel operation retains all the OEM fuel system, engine calibration, and
emission control system functionality when operating on the fuel with
which the vehicle/engine was originally certified.
(C) The test group/engine family converted to dual-fuel or mixed-
fuel operation retains all the functionality of the OEM OBD system (if
the OEM vehicles/engines were required to be OBD equipped) when
operating on the fuel with which the vehicle/engine was originally
certified.
[[Page 28149]]
(D) The test group/engine family converted to dual-fuel or mixed-
fuel operation properly purges hydrocarbon vapor from the evaporative
emission canister when the vehicle/engine is operating on the
alternative fuel.
(E) The test group/engine family converted to an alternative fuel
uses fueling systems, evaporative emission control systems, and engine
powertrain components that are compatible with the alternative fuel and
designed with the principles of good engineering judgment.
(iv) You must include any other information as the Administrator
may deem appropriate, which may include test data, to establish the
conversion system is for the purpose of conversion to a clean
alternative fuel.
* * * * *
Sec. 85.524 [Removed]
0
6. Remove Sec. 85.524.
0
7. Amend Sec. 85.525 by revising paragraph (b)(3) introductory text to
read as follows:
Sec. 85.525 Applicable standards.
* * * * *
(b) * * *
(3) Subject to the following exceptions and special provisions,
compliance with greenhouse gas emission standards for medium-duty
vehicles and heavy-duty vehicles subject to 40 CFR 86.1819-14 is
demonstrated by complying with the N2O and CH4
standards and provisions set forth in 40 CFR 86.1819-14 and the in-use
CO2 exhaust emission standard set forth in 40 CFR 86.1819-
14(b) as determined by the OEM for the subconfiguration that is
identical to the fuel conversion emission data vehicle (EDV):
* * * * *
0
8. Amend Sec. 85.535 by revising paragraph (f) to read as follows:
Sec. 85.535 Liability, recordkeeping, and end of year reporting.
* * * * *
(f) Clean alternative fuel conversion manufacturers must submit an
end of the year sales report to EPA describing the number of clean
alternative fuel conversions by fuel type(s) and vehicle test group/
engine family by January 31 of the following year. The number of
conversions is the sum of the calendar year intermediate age
conversions, outside useful life conversions, and the same conversion
model year certified clean alternative fuel conversions. The number of
conversions will be added to any other vehicle and engine sales
accounted for using 40 CFR 86.1838-01 or 1036.150(d), as appropriate to
determine small volume manufacturer or qualified small volume test
group/engine family status.
* * * * *
0
9. Amend Sec. 85.1503 by revising paragraphs (a) and (c) to read as
follows:
Sec. 85.1503 General requirements for importation of nonconforming
vehicles and engines.
(a) A nonconforming vehicle or engine offered for importation into
the United States must be imported by an ICI who is a current holder of
a valid certificate of conformity unless an exemption or exclusion is
granted by the Administrator under Sec. 85.1511 or the vehicle is
eligible for entry under Sec. 85.1512.
* * * * *
(c) In any one certificate year (e.g., the current model year), an
ICI may finally admit no more than the following numbers of
nonconforming vehicles into the United States under the provisions of
Sec. Sec. 85.1505 and 85.1509, except as allowed by paragraph (e) of
this section:
(1) [Reserved]
(2) A total of 25 light-duty vehicles, light-duty trucks, and
medium-duty passenger vehicles. This limit applies for vehicles with
engines, including plug-in hybrid electric vehicles. This limit does
not apply for electric vehicles.
(3) 50 highway motorcycles.
* * * * *
0
10. Amend Sec. 85.1509 by:
0
a. Revising paragraph (a) introductory text.
0
b. Removing and reserving paragraphs (b) through (f).
0
c. Removing the paragraph headings from paragraphs (j), (k), and (l).
The revision reads as follows:
Sec. 85.1509 Final admission of modification and test vehicles.
(a) A motor vehicle or motor vehicle engine may be imported under
this section by a certificate holder possessing a currently valid
certificate of conformity only if--
* * * * *
0
11. Amend Sec. 85.1510 by revising paragraphs (d)(1) and (f) to read
as follows:
Sec. 85.1510 Maintenance instructions, warranties, emission labeling
and fuel economy requirements.
* * * * *
(d) * * *
(1) The certificate holder shall affix a fuel economy label that
complies with the requirements of 40 CFR part 600, subpart D. The
requirement for fuel economy labels does not apply for electric
vehicles.
* * * * *
(f) Corporate Average Fuel Economy (CAFE). Certificate holders
shall comply with any applicable CAFE requirements of the Energy Policy
and Conservation Act, 15 U.S.C. 2001 et seq., and 40 CFR part 600, for
all vehicles imported under Sec. Sec. 85.1505 and 85.1509.
0
12. Revise and republish Sec. 85.1515 to read as follows:
Sec. 85.1515 Emission standards and test procedures applicable to
imported nonconforming motor vehicles and motor vehicle engines.
(a) Notwithstanding any other requirements of this subpart, any
motor vehicle or motor vehicle engine conditionally imported pursuant
to Sec. 85.1505 or Sec. 85.1509 and required to be emission tested
shall be tested using the FCT at 40 CFR part 86 applicable to current
model year motor vehicles and motor vehicle engines at the time of
testing or reduced testing requirements as follows:
(1) ICIs are eligible for reduced testing under this paragraph (a)
subject to the following conditions:
(i) The OEM must have a valid certificate of conformity covering
the vehicle.
(ii) The vehicle must be in its original configuration as certified
by the OEM. This applies for all emission-related components, including
the electronic control module, engine calibrations, and all
evaporative/refueling control hardware. It also applies for OBD
software and hardware, including all sensors and actuators.
(iii) The vehicle modified as described in paragraph (a)(1)(ii) of
this section must fully comply with all applicable emission standards
and requirements.
(iv) Vehicles must have the proper OBD systems installed and
operating. When faults are present, the ICI must test and verify the
system's ability to find the faults (such as disconnected components),
set codes, and illuminate the light, and set readiness codes as
appropriate for each vehicle. When no fault is present, the ICI must
verify that after sufficient prep driving (typically one FTP test
cycle), all OBD readiness codes are set and the OBD system does not
indicate a malfunction (i.e., no codes set and no light illuminated).
(v) The ICI may not modify more than 300 vehicles in any given
model year using reduced testing provisions in this paragraph (a).
(vi) The ICI must state in the application for certification that
it will
[[Page 28150]]
meet all the conditions in this paragraph (a)(1).
(2) The following provisions allow for ICIs to certify vehicles
with reduced testing:
(i) In addition to the test waivers specified in 40 CFR 86.1829,
you may provide a statement in the application for certification,
supported by engineering analysis, that vehicles comply with any of the
following standards that apply instead of submitting test data:
(A) Cold temperature CO, NMHC, NMOG+NOX, and PM emission
standards specified in 40 CFR 86.1811.
(B) SFTP emission standards specified in 40 CFR 86.1811 and 86.1816
for all pollutants, and separate emission standards that apply for US06
and SC03 duty cycles.
(C) For anything other than diesel-fueled vehicles, PM emission
standards specified in 40 CFR 86.1811 and 86.1816.
(D) Any running loss, refueling, spitback, bleed emissions, and
leak standards specified in 40 CFR part 86, subparts A and S.
(ii) You must perform testing and submit test data as follows to
demonstrate compliance with emission standards:
(A) Exhaust and fuel economy tests. You must measure emissions over
the FTP driving cycle and the highway fuel economy driving cycle as
specified in 40 CFR 1066.801 to meet the fuel economy requirements in
40 CFR part 600 and demonstrate compliance with the exhaust emission
standards in 40 CFR part 86 (other than PM). Measure exhaust emissions
and fuel economy with the same test procedures used by the original
manufacturer to test the vehicle for certification. However, you must
use an electric dynamometer meeting the requirements of 40 CFR part
1066, subpart B, unless we approve a different dynamometer based on
excessive compliance costs. If you certify based on testing with a
different dynamometer, you must state in the application for
certification that all vehicles in the emission family will comply with
emission standards if tested on an electric dynamometer.
(B) Evaporative emission test. You may measure evaporative
emissions as specified in this paragraph (a)(2)(ii)(B) to demonstrate
compliance with the evaporative emission standards in 40 CFR part 86
instead of the otherwise specified procedures. Use measurement
equipment for evaporative measurements specified in 40 CFR part 86,
subpart B, except that the evaporative emission enclosure does not need
to accommodate varying ambient temperatures. The evaporative
measurement procedure is integral to the procedure for measuring
exhaust emissions over the FTP driving cycle as described in paragraph
(a)(ii)(2)(A) of this section. Perform canister preconditioning using
the same procedure used by the original manufacturer to certify the
vehicle; perform this canister loading before the initial
preconditioning drive. Perform a diurnal emission test at the end of
the stabilization period before the exhaust emission test by heating
the fuel from 60 to 84 [deg]F, either by exposing the vehicle to
increasing ambient temperatures or by applying heat directly to the
fuel tank. Measure hot soak emissions as described in 40 CFR 86.138-
96(k). We may approve alternative measurement procedures that are
equivalent to or more stringent than the specified procedures if the
specified procedures are impractical for particular vehicle models or
measurement facilities. The sum of the measured diurnal and hot soak
values must meet the appropriate emission standard as specified in this
section.
(b) [Reserved]
(c) Nonconforming motor vehicles conditionally imported pursuant to
Sec. 85.1505 or Sec. 85.1509 must meet all the emission standards
specified in 40 CFR part 86 for the OP year of the vehicle, with the
following exceptions and clarifications:
(1) The useful life specified in 40 CFR part 86 for the OP year of
the motor vehicle is applicable where useful life is not designated in
this subpart.
(2)(i) Nonconforming light-duty vehicles and light light-duty
trucks (LDV/LLDTs) originally manufactured in OP years 2004, 2005 or
2006 must meet the FTP exhaust emission standards of bin 9 in Tables
S04-1 and S04-2 in 40 CFR 86.1811-04 and the evaporative emission
standards for light-duty vehicles and light light-duty trucks specified
in 40 CFR 86.1811-01(e)(5).
(ii) Nonconforming LDT3s and LDT4s (HLDTs) and medium-duty
passenger vehicles (MDPVs) originally manufactured in OP years 2004
through 2006 must meet the FTP exhaust emission standards of bin 10 in
Tables S04-1 and S04-2 in 40 CFR 86.1811-04 and the applicable
evaporative emission standards specified in 40 CFR 86.1811-04(e)(5).
For 2004 OP year HLDTs and MDPVs where modifications commence on the
first vehicle of a test group before December 21, 2003, this
requirement does not apply to the 2004 OP year. ICIs opting to bring
all their 2004 OP year HLDTs and MDPVs into compliance with the exhaust
emission standards of bin 10 in Tables S04-1 and S04-2 in 40 CFR
86.1811-04, may use the optional higher NMOG values for their 2004-2006
OP year LDT2s and 2004-2008 LDT4s.
(iii) Nonconforming LDT3s and LDT4s (HLDTs) and medium-duty
passenger vehicles (MDPVs) originally manufactured in OP years 2007 and
2008 must meet the FTP exhaust emission standards of bin 8 in Tables
S04-1 and S04-2 in 40 CFR 86.1811-04 and the applicable evaporative
standards specified in 40 CFR 86.1811-04(e)(5).
(iv) Nonconforming LDV/LLDTs originally manufactured in OP years
2007 through 2021 and nonconforming HLDTs and MDPVs originally
manufactured in OP year 2009 through 2021 must meet the FTP exhaust
emission standards of bin 5 in Tables S04-1 and S04-2 in 40 CFR
86.1811-04, and the evaporative standards specified in 40 CFR 86.1811-
04(e)(1) through (4).
(v) ICIs are exempt from the Tier 2 and the interim non-Tier 2
phase-in intermediate percentage requirements for exhaust, evaporative,
and refueling emissions described in 40 CFR 86.1811-04.
(vi) In cases where multiple standards exist in a given model year
in 40 CFR part 86 due to phase-in requirements of new standards, the
applicable standards for motor vehicle engines required to be certified
to engine-based standards are the least stringent standards applicable
to the engine type for the OP year.
(vii) Nonconforming LDV/LLDTs originally manufactured in OP years
2009 through 2021 must meet the evaporative emission standards in Table
S09-1 in 40 CFR 86.1811-09(e). However, LDV/LLDTs originally
manufactured in OP years 2009 and 2010 and imported by ICIs who qualify
as small-volume manufacturers as defined in 40 CFR 86.1838-01 are
exempt from the LDV/LLDT evaporative emission standards in Table S09-1
in 40 CFR 86.1811-09(e), but must comply with the Tier 2 evaporative
emission standards in Table S04-3 in 40 CFR 86.1811-04(e).
(viii) Nonconforming HLDTs and MDPVs originally manufactured in OP
years 2010 through 2021 must meet the evaporative emission standards in
Table S09-1 in 40 CFR 86.1811-09(e). However, HLDTs and MDPVs
originally manufactured in OP years 2010 and 2011 and imported by ICIs,
who qualify as small-volume manufacturers as defined in 40 CFR 86.1838-
01, are exempt from the HLDTs and MDPVs evaporative emission standards
in Table S09-1 in 40 CFR 86.1811-09(e), but must comply with the Tier 2
[[Page 28151]]
evaporative emission standards in Table S04-3 in 40 CFR 86.1811-04(e).
(ix) Nonconforming LDV/LLDTs originally manufactured in OP years
2013 through 2021 must meet the cold temperature NMHC emission
standards in Table S10-1 in 40 CFR 86.1811-10(g). Nonconforming HLDTs
and MDPVs originally manufactured in OP years 2015 through 2021 must
meet the cold temperature NMHC emission standards in Table S10-1 in 40
CFR 86.1811-10(g).
(x) Nonconforming vehicles subject to the provisions of 40 CFR part
86, subpart S, originally manufactured in OP years 2022 through 2031
must meet the Tier 3 and related exhaust emission standards in 40 CFR
86.1811-17 and 86.1816-18, the Tier 3 evaporative emission standards in
40 CFR 86.1813-17, and the refueling emission standards in 40 CFR
86.1813-17(b) and have an OBD system meeting the requirements of 40 CFR
86.1806-17. In cases where the standard allows or requires
demonstrating compliance using emission credits, each vehicle imported
under this paragraph (c) is subject to the specified fleet average
standard.
(xi) Nonconforming vehicles subject to the provisions of 40 CFR
part 86, subpart S, originally manufactured in OP years 2032 and later
must meet the Tier 4 exhaust emission standards in 40 CFR 86.1811-27,
the Tier 3 evaporative emission standards in 86.1813-17, and the
refueling emission standards in 40 CFR 86.1813-17(b) and have an OBD
system meeting the requirements of 40 CFR 86.1806-27. In cases where
the standard allows or requires demonstrating compliance using emission
credits, each vehicle imported under this paragraph (c) is subject to
the specified fleet average standard.
(3) The following provisions apply for demonstrating compliance
with the Tier 2 fleet average NOX standard in 40 CFR
86.1811-04:
(i) As an option to the requirements of paragraph (c)(2)(i) through
(viii) of this section, independent commercial importers may elect to
meet lower bins in Tables S04-1 and S04-2 of 40 CFR 86.1811-04 than
specified in paragraph (c)(2) of this section and bank or sell
NOX credits as permitted in 40 CFR 86.1860-04 and 40 CFR
86.1861-04. An ICI may not meet higher bins in Tables S04-1 and S04-2
of 40 CFR 86.1811-04 than specified in paragraph (c)(2) of this section
unless it demonstrates to the Administrator at the time of
certification that it has obtained appropriate and sufficient
NOX credits from another manufacturer, or has generated them
in a previous model year or in the current model year and not
transferred them to another manufacturer or used them to address other
vehicles as permitted in 40 CFR 86.1860-04 and 40 CFR 86.1861-04.
(ii) Where an ICI desires to obtain a certificate of conformity
using a bin higher than specified in paragraph (c)(2) of this section,
but does not have sufficient credits to cover vehicles produced under
such certificate, the Administrator may issue such certificate if the
ICI has also obtained a certificate of conformity for vehicles
certified using a bin lower than that required under paragraph (c)(2)
of this section. The ICI may then produce vehicles to the higher bin
only to the extent that it has generated sufficient credits from
vehicles certified to the lower bin during the same model year.
(iii) Except for the situation where an ICI desires to bank, sell
or use NOX credits as described in this paragraph (c)(3),
the requirements of 40 CFR 86.1811-04 related to fleet average
NOX standards and requirements to comply with such standards
do not apply to vehicles modified under this subpart.
(iv) ICIs using bins higher than those specified in paragraph
(c)(2) of this section must monitor their production so that they do
not produce more vehicles certified to the standards of such bins than
their available credits can cover. ICIs must not have a credit deficit
at the end of a model year and are not permitted to use the deficit
carryforward provisions provided in 40 CFR 86.1860-04(e).
(v) The Administrator may condition the certificates of conformity
issued to ICIs as necessary to ensure that vehicles subject to this
paragraph (c) comply with the appropriate average NOX
standard for each model year.
(4) The following provisions apply for demonstrating compliance
with the cold temperature NMHC fleet average standards in 40 CFR
86.1811-10 through 2021:
(i) As an alternative to the requirements of paragraphs (c)(2)(ix)
of this section, ICIs may elect to meet a cold temperature NMHC family
emission level below the cold temperature NMHC fleet average standards
specified in Table S10-1 of 40 CFR 86.1811-10 and bank or sell credits
as permitted in 40 CFR 86.1864-10. An ICI may not meet a higher cold
temperature NMHC family emission level than the fleet average standards
in Table S10-1 of 40 CFR 86.1811-10, unless it demonstrates to the
Administrator at the time of certification that it has obtained
appropriate and sufficient NMHC credits from another manufacturer, or
has generated them in a previous model year or in the current model
year and not traded them to another manufacturer or used them to
address other vehicles as permitted in 40 CFR 86.1864-10.
(ii) Where an ICI desires to obtain a certificate of conformity
using a higher cold temperature NMHC family emission level than
specified in paragraph (c)(2)(ix) of this section, but does not have
sufficient credits to cover vehicles imported under such certificate,
the Administrator may issue such certificate if the ICI has also
obtained a certificate of conformity for vehicles certified using a
cold temperature NMHC family emission level lower than that required
under paragraph (c)(2)(ix) of this section. The ICI may then import
vehicles to the higher cold temperature NMHC family emission level only
to the extent that it has generated sufficient credits from vehicles
certified to a family emission level lower than the cold temperature
NMHC fleet average standard during the same model year.
(iii) ICIs using cold temperature NMHC family emission levels
higher than the cold temperature NMHC fleet average standards specified
in paragraph (c)(2)(ix) of this section must monitor their imports so
that they do not import more vehicles certified to such family emission
levels than their available credits can cover. ICIs must not have a
credit deficit at the end of a model year and are not permitted to use
the deficit carryforward provisions provided in 40 CFR 86.1864-10.
(iv) The Administrator may condition the certificates of conformity
issued to ICIs as necessary to ensure that vehicles subject to this
paragraph (c)(8) comply with the applicable cold temperature NMHC fleet
average standard for each model year.
(5) In cases where a vehicle is subject to a Tier 3 or Tier 4
credit-based standard as described in paragraphs (c)(2)(x) and (xi) of
this section, an ICI may import a vehicle with emissions higher than
the applicable standard if it first arranges to purchase appropriate
and sufficient emission credits from a manufacturer that has generated
the emission credits as specified in 40 CFR part 86, subpart S. A
vehicle's emissions may not exceed the specified values for the highest
available NMOG + NOX bin or the evaporative emissions FEL
cap. Vehicles subject to this paragraph (c)(5) may not generate
emission credits.
(6) An ICI may comply with the cold temperature PM standard in 40
CFR 86.1811-27(c) based on an engineering evaluation.
(d) An ICI may not certify using nonconformance penalties and may
not
[[Page 28152]]
participate in the averaging, banking, and trading program for GHG
emissions.
0
13. Revise Sec. 85.1702 to read as follows:
Sec. 85.1702 Definitions.
As used in this subpart, all terms not defined herein shall have
the meaning given them in the Act:
Certificate holder has the meaning given in 40 CFR 1068.30.
Export exemption means an exemption granted by statute under 42
U.S.C. 7522(b)(3) for the purpose of exporting new motor vehicles or
new motor vehicle engines.
National security exemption means an exemption which may be granted
under 42 U.S.C. 7522(b)(1) of the Act for the purpose of national
security.
Pre-certification vehicle means an uncertified vehicle that a
certificate holder employs in fleets from year to year in the ordinary
course of business for product development, production method
assessment, and market promotion, but not involving lease or sale.
Pre-certification vehicle engine means an uncertified heavy-duty
engine owned by a manufacturer and used in a manner not involving lease
or sale in a vehicle employed from year to year in the ordinary course
of business for product development, production method assessment and
market promotion purposes.
Testing exemption means an exemption which may be granted under 42
U.S.C. 7522(b)(1) for the purpose of research investigations, studies,
demonstrations or training, but not including national security.
0
14. Amend Sec. 85.1716 by revising the introductory text to read as
follows:
Sec. 85.1716 Approval of an emergency vehicle field modification
(EVFM).
This section describes how you may implement design changes for an
emergency vehicle that has already been placed into service to ensure
that the vehicle will perform properly in emergency situations. This
applies for any light-duty vehicle, light-duty truck, or heavy-duty
vehicle meeting the definition of emergency vehicle in 40 CFR 86.1803-
01 or 1036.801. In this section, ``you'' refers to the certifying
manufacturer and ``we'' refers to the EPA Administrator and any
authorized representatives.
* * * * *
0
15. Amend Sec. 85.1803 by adding paragraph (e) to read as follows:
Sec. 85.1803 Remedial Plan.
* * * * *
(e) A remedial plan for an alternative remedy under 40 CFR 86.1865-
12(j)(3) that does not involve vehicle repairs may omit items from this
section that do not apply. For example, such a remedial plan will
generally omit information related to proper maintenance, vehicle
repairs, and vehicle labeling.
0
16. Amend Sec. 85.1805 by:
0
a. Revising paragraph (a) introductory text.
0
b. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d),
respectively.
0
c. Adding new paragraph (b).
The revision and addition read as follows:
Sec. 85.1805 Notification to vehicle or engine owners.
(a) Except as specified in paragraph (b) of this section, the
notification of vehicle or engine owners shall contain the following:
* * * * *
(b) In the case of manufacturers submitting an alternative remedy
under 40 CFR 86.1865-12(j)(3) that does not involve vehicle repairs,
the proposed remedy must also include a proposal for notifying owners
of the nonconformity. The notification must contain the following:
(1) The statement: ``The Administrator of the U.S. Environmental
Protection Agency has determined that your vehicle or engine may be
emitting pollutants in excess of the Federal emission standards as
defined in 40 CFR part 86. These emission standards were established to
protect the public health or welfare from the dangers of air
pollution.''
(2) A clear description of the measures to be taken to correct the
nonconformity.
* * * * *
0
17. Revise Sec. 85.2101 to read as follows:
Sec. 85.2101 General applicability.
(a) Sections 85.2101 through 85.2111 are applicable to all 1981 and
later model year vehicles subject to standards under 40 CFR part 86,
subpart S.
(b) References in this subpart to engine families and emission
control systems shall be deemed to apply to durability groups and test
groups as applicable.
0
18. Amend Sec. 85.2102 by revising paragraph (a) introductory text and
paragraphs (a)(4), (10), and (11) to read as follows:
Sec. 85.2102 Definitions.
(a) As used in Sec. Sec. 85.2101 through 85.2111 all terms not
defined herein shall have the meaning given them in the Act. All terms
additionally not defined in the Act shall have the meaning given in 40
CFR 86.1803-01, 1065.1001, or 1068.30:
* * * * *
(4) Emission performance warranty means that warranty described in
Sec. 85.2103(c) and 42 U.S.C. 7541(b).
* * * * *
(10) Useful life means that period established under 40 CFR
86.1805.
(11) Vehicle means any vehicle subject to standards under 40 CFR
part 86, subpart S.
* * * * *
0
19. Revise Sec. 85.2103 to read as follows:
Sec. 85.2103 Emission warranty.
(a) The manufacturer of each vehicle to which this subpart applies
must provide a written commitment to meet warranty requirements as
described in this section.
(b) The warranty periods under this section apply based on the
vehicle's age in years and on the vehicle's odometer reading. The
warranty period expires based on the specified age or mileage,
whichever comes first. The warranty period for a particular vehicle
begins on the date the vehicle is delivered to its ultimate purchaser
or, if the vehicle is first placed in service as a ``demonstrator'' or
``company'' car prior to delivery, on the date it is first placed in
service.
(c) Under the emission performance warranty, in the case of a
vehicle failing to conform at any time during its useful life to the
applicable emission standards or family emission limits as determined
by an EPA-approved emission test, the manufacturer must remedy that
nonconformity at no cost to the owner if such nonconformity results or
will result in the vehicle owner having to bear any penalty or other
sanction (including the denial of the right to use the vehicle) under
local, State, or Federal law. The following warranty periods apply:
(1) For light-duty vehicles, light-duty trucks, and medium-duty
passenger vehicles, the warranty period for the emission performance
warranty is 24 months or 24,000 miles, except that the warranty period
is 8 years or 80,000 miles for any nonconformity resulting from a
failed specified major emission control component identified in
paragraph (d) and (e) of this section.
(2) For medium-duty vehicles, the warranty period for the emission
performance warranty is 5 years or 50,000 miles, except that the
warranty period is 8 years or 80,000 miles for any
[[Page 28153]]
nonconformity resulting from a failed specified major emission control
component identified in paragraph (d) and (e) of this section.
(d) An emission defect warranty applies as follows:
(1) An emission defect warranty applies for light-duty vehicles,
light-duty trucks, and medium-duty passenger vehicles for a warranty
period of two years or 24,000 miles, except that the following
specified major emission control components have a warranty period of
eight years or 80,000 miles:
(i) Catalytic converters and SCR catalysts, and related components.
(ii) Particulate filters and particulate traps, used with both
spark-ignition and compression-ignition engines.
(iii) Components related to exhaust gas recirculation with
compression-ignition engines.
(iv) Emission control module.
(v) Batteries serving as a Renewable Energy Storage System for
electric vehicles and plug-in hybrid electric vehicles, along with all
components needed to charge the system, store energy, and transmit
power to move the vehicle. This paragraph (d)(1)(v) is optional for
vehicles not yet subject to battery monitoring requirements under 40
CFR 86.1815-27.
(2) An emission defect warranty applies for medium-duty vehicles
for a warranty period of five years or 50,000 miles, except that the
specific major emission control components identified in paragraph
(d)(1) of this section have a warranty period of eight years or 80,000
miles.
(3) An electric vehicle or plug-in hybrid electric vehicle fails to
meet the manufacturer-defined value for percentage usable battery
energy for the specified period as determined by the State of Certified
Energy monitor required under 40 CFR 86.1815-27, subject to the
warranty claim procedures in Sec. 85.2106.
0
20. Amend Sec. 85.2104 by revising paragraphs (d) through (g) to read
as follows:
Sec. 85.2104 Owners' compliance with instructions for proper
maintenance and use.
* * * * *
(d) The time/mileage interval for scheduled maintenance services
shall be the service interval specified for the part in the written
instructions for proper maintenance and use. However, in the case of
certified parts having a maintenance or replacement interval different
from that specified in the written instructions for proper maintenance
and use, the time/mileage interval shall be the service interval for
which the part was certified.
(e) The owner may perform maintenance or have maintenance performed
more frequently than required in the maintenance instructions.
(f) Written instruction for proper use of battery electric vehicles
and plug-in hybrid electric vehicles may identify certain behaviors or
vehicle operating modes expected to unreasonably or artificially
shorten battery durability. For example, exceeding a vehicle's towing
capacity might be considered improper use. However, the manufacturer
should not consider actions to be improper use if the vehicle can be
designed to prevent the targeted behaviors or operating modes. Evidence
of compliance with the requirement to properly use vehicles under this
paragraph (f) is generally limited to onboard data logging, though
manufacturers may also request vehicle owners to make a statement
regarding specific behaviors or vehicle operating modes.
(g) Except as provided in paragraph (h) of this section, a
manufacturer may deny an emission warranty claim on the basis of
noncompliance with the written instructions for proper maintenance and
use if and only if:
(1) An owner is not able to comply with a request by a manufacturer
for evidence pursuant to paragraph (c) or (f) of this section; or
(2) Notwithstanding the evidence presented pursuant to paragraph
(c) of this section, the manufacturer can prove that the vehicle failed
because of any of the following conditions:
(i) The vehicle was abused.
(ii) An instruction for the proper maintenance and use was
performed in a manner resulting in a component's being improperly
installed or a component or related parameter's being adjusted
substantially outside of the manufacturer's specifications.
(iii) Unscheduled maintenance was performed on a vehicle which
resulted in the removing or rendering inoperative of any component
affecting the vehicle's emissions.
* * * * *
0
21. Amend Sec. 85.2105 by revising paragraph (b)(3) to read as
follows:
Sec. 85.2105 Aftermarket parts.
* * * * *
(b) * * *
(3) List all objective evidence as defined in Sec. 85.2102 that
was used in the determination to deny warranty. This evidence must be
made available to the vehicle owner or EPA upon request.
* * * * *
0
22. Amend Sec. 85.2109 by revising paragraph (a) to read as follows:
Sec. 85.2109 Inclusion of warranty provisions in owners' manuals and
warranty booklets.
(a) A manufacturer shall furnish with each new motor vehicle, a
full explanation of the emission warranties required by 42 U.S.C.
7541(a) and (b), including at a minimum the following information:
(1) A basic statement of the coverage of the emissions performance
warranty as set out in Sec. 85.2103. This shall be separated from any
other warranty given by the manufacturer and shall be prefaced by the
title ``Emissions Performance Warranty'' set in bold face type.
(2) A list of all items which are covered by the emission
performance warranty for the full useful life of the vehicle. This list
shall contain all specified major emission control components. All
items listed pursuant to this subsection shall be described in the same
manner as they are likely to be described on a service facility work
receipt for that vehicle.
(3) A list or a reference to the location of the instructions for
proper maintenance and use, together with the time and/or mileage
interval at which such instructions are to be performed.
(4) An explanation of the effect that the use of certified parts
will have on the emission performance warranty. This explanation shall
comport with the provisions of Sec. 85.2105 (b) and (c), including a
statement in boldface type that maintenance, replacement, or repair of
the emission control devices and systems may be performed by any
automotive repair establishment or individual using any certified part.
(5) Complete instructions as to when and how an owner may bring a
claim under the emissions performance warranty, as governed by
Sec. Sec. 85.2104 and 85.2106. These instructions shall include all
the following:
(i) An explanation of the point in time at which a claim may be
raised.
(ii) Complete procedures as to the manner in which a claim may be
raised.
(iii) The provisions for manufacturer liability contained in Sec.
85.2106(f) if the manufacturer fails to respond within the time period
set in accordance with Sec. 85.2106(d).
(iv) For battery electric vehicles and plug-in hybrid electric
vehicles, the manufacturer-defined value for percentage usable battery
energy specified in Sec. 85.2103(d)(3).
(6) An explanation that an owner may obtain further information
concerning the emission warranties or that an owner may report
violations of the
[[Page 28154]]
terms of the emission warranties provided under 42 U.S.C. 7541(a) and
(b) by contacting the Director, Compliance Division, Environmental
Protection Agency, 2000 Traverwood Dr., Ann Arbor, MI 48105 (Attention:
Warranty) or email to: [email protected].
* * * * *
0
23. Revise Sec. 85.2110 to read as follows:
Sec. 85.2110 Submission of owners' manuals and warranty statements to
EPA.
(a) The manufacturer of each vehicle to which this subpart applies
must send to EPA an owner's manual and warranty booklet (if applicable)
in electronic format for each model vehicle that completely and
accurately represent the warranty terms for that vehicle.
(1) The owner's manuals and warranty booklets should be received by
EPA 60 days prior to the introduction of the vehicle for sale.
(2) If the manuals and warranty booklets are not in their final
format 60 days prior to the introduction of the vehicle for sale, a
manufacturer may submit the most recent draft at that time, provided
that the manufacturer promptly submits final versions when they are
complete.
(b) All materials described in paragraph (a) of this section shall
be sent to the Designated Compliance Officer as specified at 40 CFR
1068.30 (Attention: Warranty Booklet).
PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES
AND ENGINES
0
24. The authority citation for part 86 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.
0
25. Revise and republish Sec. 86.1 to read as follows:
Sec. 86.1 Incorporation by reference.
Certain material is incorporated by reference into this part with
the approval of the Director of the Federal Register under 5 U.S.C.
552(a) and 1 CFR part 51. To enforce any edition other than that
specified in this section, EPA must publish a document in the Federal
Register and the material must be available to the public. All approved
incorporation by reference (IBR) material is available for inspection
at EPA and at the National Archives and Records Administration (NARA).
Contact EPA at: U.S. EPA, Air and Radiation Docket Center, WJC West
Building, Room 3334, 1301 Constitution Ave. NW, Washington, DC 20004;
www.epa.gov/dockets; (202) 202-1744. For information on inspecting this
material at NARA, visit www.archives.gov/federal-register/cfr/ibr-locations.html or email [email protected]. The material may be
obtained from the following sources:
(a) ASTM International (ASTM). ASTM International, 100 Barr Harbor
Drive, P.O. Box C700, West Conshohocken, PA, 19428-2959; (610) 832-
9585; www.astm.org.
(1) ASTM C1549-09, Standard Test Method for Determination of Solar
Reflectance Near Ambient Temperature Using a Portable Solar
Reflectometer, approved August 1, 2009 (``ASTM C1549''); IBR approved
for Sec. 86.1869-12(b).
(2) ASTM D86-12, Standard Test Method for Distillation of Petroleum
Products at Atmospheric Pressure, approved December 1, 2012 (``ASTM
D86''); IBR approved for Sec. Sec. 86.113-04(a); 86.113-94(b);
86.213(a); 86.513(a).
(3) ASTM D93-13, Standard Test Methods for Flash Point by Pensky-
Martens Closed Cup Tester, approved July 15, 2013 (``ASTM D93''); IBR
approved for Sec. 86.113-94(b).
(4) ASTM D445-12, Standard Test Method for Kinematic Viscosity of
Transparent and Opaque Liquids (and Calculation of Dynamic Viscosity),
approved April 15, 2012 (``ASTM D445''); IBR approved for Sec. 86.113-
94(b).
(5) ASTM D613-13, Standard Test Method for Cetane Number of Diesel
Fuel Oil, approved December 1, 2013 (``ASTM D613''); IBR approved for
Sec. 86.113-94(b).
(6) ASTM D975-13a, Standard Specification for Diesel Fuel Oils,
approved December 1, 2013 (``ASTM D975''); IBR approved for Sec.
86.1910(c).
(7) ASTM D976-06 (Reapproved 2011), Standard Test Method for
Calculated Cetane Index of Distillate Fuels, approved October 1, 2011
(``ASTM D976''); IBR approved for Sec. 86.113-94(b).
(8) ASTM D1319-13, Standard Test Method for Hydrocarbon Types in
Liquid Petroleum Products by Fluorescent Indicator Adsorption, approved
May 1, 2013 (``ASTM D1319''); IBR approved for Sec. Sec. 86.113-04(a);
86.213(a); 86.513(a).
(9) ASTM D1945-03 (reapproved 2010), Standard Test Method for
Analysis of Natural Gas by Gas Chromatography, approved January 1, 2010
(``ASTM D1945''); IBR approved for Sec. Sec. 86.113-94(e); 86.513(d).
(10) ASTM D2163-07, Standard Test Method for Determination of
Hydrocarbons in Liquefied Petroleum (LP) Gases and Propane/Propene
Mixtures by Gas Chromatography, approved December 1, 2007 (``ASTM
D2163''); IBR approved for Sec. Sec. 86.113-94(f).
(11) ASTM D2622-10, Standard Test Method for Sulfur in Petroleum
Products by Wavelength Dispersive X-ray Fluorescence Spectrometry,
approved February 15, 2010 (``ASTM D2622''); IBR approved for
Sec. Sec. 86.113-04(a); 86.113-94(b); 86.213(a); 86.513(a).
(12) ASTM D2699-13b, Standard Test Method for Research Octane
Number of Spark-Ignition Engine Fuel, approved October 1, 2013 (``ASTM
D2699''); IBR approved for Sec. Sec. 86.113-04(a); 86.213(a).
(13) ASTM D2700-13b, Standard Test Method for Motor Octane Number
of Spark-Ignition Engine Fuel, approved October 1, 2013 (``ASTM
D2700''); IBR approved for Sec. Sec. 86.113-04(a); 86.213(a).
(14) ASTM D3231-13, Standard Test Method for Phosphorus in
Gasoline, approved June 15, 2013 (``ASTM D3231''); IBR approved for
Sec. Sec. 86.113-04(a); 86.213(a); 86.513(a).
(15) ASTM D3237-12, Standard Test Method for Lead in Gasoline by
Atomic Absorption Spectroscopy, approved June 1, 2012 (``ASTM D3237'');
IBR approved for Sec. Sec. 86.113-04(a); 86.213(a); 86.513(a).
(16) ASTM D4052-11, Standard Test Method for Density, Relative
Density, and API Gravity of Liquids by Digital Density Meter, approved
October 15, 2011 (``ASTM D4052''); IBR approved for Sec. 86.113-94(b).
(17) ASTM D5186-03 (Reapproved 2009), Standard Test Method for
Determination of the Aromatic Content and Polynuclear Aromatic Content
of Diesel Fuels and Aviation Turbine Fuels by Supercritical Fluid
Chromatography, approved April 15, 2009 (``ASTM D5186''); IBR approved
for Sec. 86.113-94(b).
(18) ASTM D5191-13, Standard Test Method for Vapor Pressure of
Petroleum Products (Mini Method), approved December 1, 2013 (``ASTM
D5191''); IBR approved for Sec. Sec. 86.113-04(a); 86.213(a);
86.513(a).
(19) ASTM D5769-20, Standard Test Method for Determination of
Benzene, Toluene, and Total Aromatics in Finished Gasolines by Gas
Chromatography/Mass Spectrometry, approved June 1, 2020 (``ASTM5769'');
IBR approved for Sec. Sec. 86.113-04(a); 86.213(a); 86.513(a).
(20) ASTM D6550-20, Standard Test Method for Determination of
Olefin Content of Gasolines by Supercritical-Fluid Chromatography,
approved July 1, 2020 (``ASTM D6550''); IBR approved for Sec. Sec.
86.113-04(a); 86.213(a); 86.513(a).
(21) ASTM E29-93a, Standard Practice for Using Significant Digits
in
[[Page 28155]]
Test Data to Determine Conformance with Specifications, approved March
15, 1993 (``ASTM E29''); IBR approved for Sec. Sec. 86.004-15(c);
86.007-11(a); 86.007-15(m); 86.1803-01; 86.1823-01(a); 86.1824-01(c);
86.1825-01(c).
(22) ASTM E903-96, Standard Test Method for Solar Absorptance,
Reflectance, and Transmittance of Materials Using Integrating Spheres,
approved April 10, 1996 (``ASTM E903''); IBR approved for Sec.
86.1869-12(b).
(23) ASTM E1918-06, Standard Test Method for Measuring Solar
Reflectance of Horizontal and Low-Sloped Surfaces in the Field,
approved August 15, 2006 (``ASTM E1918''); IBR approved for Sec.
86.1869-12(b).
(b) American National Standards Institute (ANSI). American National
Standards Institute, 25 W 43rd Street, 4th Floor, New York, NY 10036;
(212) 642-4900; www.ansi.org.
(1) ANSI NGV1-2006, Standard for Compressed Natural Gas Vehicle
(NGV) Fueling Connection Devices, 2nd edition, reaffirmed and
consolidated March 2, 2006; IBR approved for Sec. 86.1813-17(f).
(2) CSA IR-1-15, Compressed Natural Gas Vehicle (NGV) High Flow
Fueling Connection Devices--Supplement to NGV 1-2006, ANSI approved
August 26, 2015; IBR approved for Sec. 86.1813-17(f).
(c) California Air Resources Board (California ARB). California Air
Resources Board, 1001 I Street, Sacramento, CA 95812; (916) 322-2884;
www.arb.ca.gov.
(1) California Requirements Applicable to the LEV III Program,
including the following documents:
(i) LEV III exhaust emission standards are in Title 13 Motor
Vehicles, Division 3 Air Resources Board, Chapter 1 Motor Vehicle
Pollution Control Devices, Article 2 Approval of Motor Vehicle
Pollution Control Devices (New Vehicles), Sec. 1961.2 Exhaust Emission
Standards and Test Procedures--2015 and Subsequent Model Passenger
Cars, Light-Duty Trucks, and Medium-Duty Vehicles, effective as of
December 31, 2012; IBR approved for Sec. 86.1803-01.
(ii) LEV III evaporative emission standards for model year 2015 and
later vehicles are in Title 13 Motor Vehicles, Division 3 Air Resources
Board, Chapter 1 Motor Vehicle Pollution Control Devices, Article 2
Approval of Motor Vehicle Pollution Control Devices (New Vehicles)
Sec. 1976 Standards and Test Procedures for Motor Vehicle Fuel
Evaporative Emissions, effective as of December 31, 2012; IBR approved
for Sec. 86.1803-01.
(2) 13 CCR 1962.5, Title 13, Motor Vehicles, Division 3, Air
Resources Board, Chapter 1, Motor Vehicle Pollution Control Devices,
Article 2, Approval of Motor Vehicle Pollution Control Devices (New
Vehicles), Sec. 1962.5 Data Standardization Requirements for 2026 and
Subsequent Model Year Light-Duty Zero Emission Vehicles and Plug-in
Hybrid Electric Vehicles; Operative November 30, 2022; IBR approved for
Sec. 86.1815-27(h).
(3) 13 CCR 1962.7, Title 13, Motor Vehicles, Division 3, Air
Resources Board, Chapter 1, Motor Vehicle Pollution Control Devices,
Article 2, Approval of Motor Vehicle Pollution Control Devices (New
Vehicles), Sec. 1962.7 In-Use Compliance, Corrective Action and Recall
Protocols for 2026 and Subsequent Model Year Zero-Emission and Plug-in
Hybrid Electric Passenger Cars and Light-Duty Trucks; Operative
November 30, 2022; IBR approved for Sec. 86.1815-27(h).
(4) 13 CCR 1968.2 (known as Onboard Diagnostics II (OBD-II)), Title
13, Motor Vehicles, Division 3, Air Resources Board, Chapter 1, Motor
Vehicle Pollution Control Devices, Article 2, Approval of Motor Vehicle
Pollution Control Devices (New Vehicles), Sec. 1968.2 Malfunction and
Diagnostic System Requirements--2004 and Subsequent Model-Year
Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles and
Engines, effective as of July 31, 2013; IBR approved for Sec. 86.1806-
17(a).
(5) 13 CCR 1968.2 (known as Onboard Diagnostics II (OBD-II)), Title
13, Motor Vehicles, Division 3, Air Resources Board, Chapter 1, Motor
Vehicle Pollution Control Devices, Article 2, Approval of Motor Vehicle
Pollution Control Devices (New Vehicles), Sec. 1968.2 Malfunction and
Diagnostic System Requirements--2004 and Subsequent Model-Year
Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles and
Engines; Operative November 30, 2022; IBR approved for Sec. 86.1806-
27(a).
(d) International Organization for Standardization (ISO).
International Organization for Standardization, Case Postale 56, CH-
1211 Geneva 20, Switzerland; 41-22-749-01-11; www.iso.org.
(1) ISO 13837:2008(E), Road Vehicles--Safety glazing materials--
Method for the determination of solar transmittance, First edition,
April 15, 2008; IBR approved for Sec. 86.1869-12(b).
(2) ISO 15765-4:2005(E), Road Vehicles--Diagnostics on Controller
Area Networks (CAN)--Part 4: Requirements for emissions-related
systems, January 15, 2005; IBR approved for Sec. 86.010-18(k).
(e) National Institute of Standards and Technology (NIST). National
Institute of Standards and Technology, 100 Bureau Drive, Gaithersburg,
MD 20899; [email protected]; www.nist.gov.
(1) NIST Special Publication 811, 2008 Edition, Guide for the Use
of the International System of Units (SI), March 2008; IBR approved for
Sec. 86.1901(d).
(2) [Reserved]
(f) SAE International (SAE). SAE International, 400 Commonwealth
Dr., Warrendale, PA 15096-0001; (877) 606-7323 (U.S. and Canada) or
(724) 776-4970 (outside the U.S. and Canada); www.sae.org.
(1) SAE J1151, Methane Measurement Using Gas Chromatography,
stabilized September 2011; IBR approved for Sec. 86.111-94(b).
(2) SAE J1349, Engine Power Test Code--Spark Ignition and
Compression Ignition--As Installed Net Power Rating, revised September
2011; IBR approved for Sec. 86.1803-01.
(3) SAE J1711 FEB2023, Recommended Practice for Measuring the
Exhaust Emissions and Fuel Economy of Hybrid-Electric Vehicles,
Including Plug-In Hybrid Vehicles; Revised February 2023; IBR approved
for Sec. 86.1866-12(b).
(4) SAE J1877, Recommended Practice for Bar-Coded Vehicle
Identification Number Label, July 1994; IBR approved for Sec. 86.1807-
01(f).
(5) SAE J1930, Electrical/Electronic Systems Diagnostic Terms,
Definitions, Abbreviations, and Acronyms, Revised May 1998; IBR
approved for Sec. Sec. 86.1808-01(f); 86.1808-07(f).
(6) SAE J1930, Electrical/Electronic Systems Diagnostic Terms,
Definitions, Abbreviations, and Acronyms--Equivalent to ISO/TR 15031-2,
April 30, 2002, Revised April 2002; IBR approved for Sec. 86.010-
18(k).
(7) SAE J1939, Recommended Practice for a Serial Control and
Communications Vehicle Network, Revised October 2007; IBR approved for
Sec. 86.010-18(k).
(8) SAE J1939-13, Off-Board Diagnostic Connector, Revised March
2004; IBR approved for Sec. 86.010-18(k).
(9) SAE J1939-71, Vehicle Application Layer (Through February
2007), Revised January 2008; IBR approved for Sec. 86.010-38(j).
(10) SAE J1939-73, Application Layer--Diagnostics, Revised
September 2006; IBR approved for Sec. Sec. 86.010-18(k); 86.010-38(j).
(11) SAE J1939-81, Network Management, Revised May 2003; IBR
approved for Sec. 86.010-38(j).
[[Page 28156]]
(12) SAE J1962, Diagnostic Connector Equivalent to ISO/DIS 15031-3,
December 14, 2001, Revised April 2002; IBR approved for Sec. 86.010-
18(k).
(13) SAE J1978, OBD II Scan Tool--Equivalent to ISO/DIS 15031-4,
December 14, 2001, Revised April 2002; IBR approved for Sec. 86.010-
18(k).
(14) SAE J1979, E/E Diagnostic Test Modes, Revised September 1997;
IBR approved for Sec. Sec. 86.1808-01(f) and 86.1808-07(f).
(15) SAE J1979, (R) E/E Diagnostic Test Modes, Revised May 2007;
IBR approved for Sec. 86.010-18(k).
(16) SAE J2012, (R) Diagnostic Trouble Code Definitions Equivalent
to ISO/DIS 15031-6, April 30, 2002, Revised April 2002; IBR approved
for Sec. 86.010-18(k).
(17) SAE J2064 FEB2011, R134a Refrigerant Automotive Air-
Conditioned Hose, Revised February 2011; IBR approved for Sec.
86.1867-12(a).
(18) SAE J2284-3, High Speed CAN (HSC) for Vehicle Applications at
500 KBPS, May 2001; IBR approved for Sec. Sec. 86.1808-01(f); 86.1808-
07(f).
(19) SAE J2403, Medium/Heavy-Duty E/E Systems Diagnosis
Nomenclature--Truck and Bus; Revised August 2007; IBR approved for
Sec. Sec. 86.010-18(k); 86.010-38(j).
(20) SAE J2534, Recommended Practice for Pass-Thru Vehicle
Programming, February 2002; IBR approved for Sec. Sec. 86.1808-01(f);
86.1808-07(f).
(21) SAE J2727 FEB2012, Mobile Air Conditioning System Refrigerant
Emission Charts for R-134a and R-1234yf, Revised February 2012; IBR
approved for Sec. 86.1867-12(a).
(22) SAE J2727 SEP2023, Mobile Air Conditioning System Refrigerant
Emissions Estimate for Mobile Air Conditioning Refrigerants, Revised
September 2023; IBR approved for Sec. Sec. 86.1819-14(h); 86.1867-
12(a); 86.1867-31(a).
(23) SAE J2765 OCT2008, Procedure for Measuring System COP
[Coefficient of Performance] of a Mobile Air Conditioning System on a
Test Bench, Issued October 2008; IBR approved for Sec. 86.1868-12(h).
(24) SAE J2807 FEB2020, Performance Requirements for Determining
Tow-Vehicle Gross Combination Weight Rating and Trailer Weight Rating,
Revised February 2020; IBR approved for Sec. 86.1845-04(h).
(g) Truck and Maintenance Council (TMC). Truck and Maintenance
Council, 950 North Glebe Road, Suite 210, Arlington, VA 22203-4181;
(703) 838-1754; [email protected]; tmc.trucking.org.
(1) TMC RP 1210B, Revised June 2007, WINDOWSTMCOMMUNICATION API;
IBR approved for Sec. 86.010-38(j).
(2) [Reserved]
(h) UN Economic Commission for Europe (UNECE). UN Economic
Commission for Europe, Information Service, Palais des Nations, CH-1211
Geneva 10, Switzerland; [email protected]; www.unece.org.
(1) ECE/TRANS/180/Add.22, Addendum 22: United Nations Global
Technical Regulation, No. 22, United Nations Global Technical
Regulation on In-vehicle Battery Durability for Electrified Vehicles;
Adopted April 14, 2022, (``GTR No. 22''); IBR approved for Sec.
86.1815-27.
(2) [Reserved]
Sec. 86.113-04 [Amended]
0
26. Amend Sec. 86.113-04 by removing and reserving paragraph
(a)(2)(i).
0
27. Amend Sec. 86.113-15 by:
0
a. Removing the introductory text.
0
b. Adding paragraphs (b) and (c).
0
c. Removing paragraphs (d) through (g).
The revisions read as follows:
Sec. 86.113-15 Fuel specifications.
* * * * *
(b) Diesel fuel. For diesel-fueled engines, use the ultra low-
sulfur diesel fuel specified in 40 CFR 1065.703.
(c) Other fuels. For fuels other than gasoline or diesel fuel, use
the appropriate test fuel as specified in 40 CFR part 1065, subpart H.
0
28. Add Sec. 86.113-27 to read as follows:
Sec. 86.113-27 Fuel specifications.
Use the fuels specified in 40 CFR part 1065 to perform valid tests,
as follows:
(a) For service accumulation, use the test fuel or any commercially
available fuel that is representative of the fuel that in-use vehicles
will use.
(b) For diesel-fueled engines, use the ultra low-sulfur diesel fuel
specified in 40 CFR part 1065.703 for emission testing.
(c) The following fuel requirements apply for gasoline-fueled
engines:
(1) Use the appropriate E10 fuel specified in 40 CFR part
1065.710(b) to demonstrate compliance with all exhaust, evaporative,
and refueling emission standards under subpart S of this part.
(2) For vehicles certified for 50-state sale, you may instead use
California Phase 3 gasoline (E10) as adopted in California's LEV III
program as follows:
(i) You may use California Phase 3 gasoline (E10) as adopted in
California's LEV III program for exhaust emission testing.
(ii) If you certify vehicles to LEV III evaporative emission
standards with California Phase 3 gasoline (E10), you may use that
collection of data to certify to evaporative emission standards. For
evaporative emission testing with California test fuels, perform tests
based on the test temperatures specified by the California Air
Resources Board. Note that this paragraph (c)(2)(ii) does not apply for
refueling, spitback, high-altitude, or leak testing.
(iii) If you certify using fuel meeting California's
specifications, we may perform testing with E10 test fuel meeting
either California or EPA specifications.
(d) Interim test fuel specifications apply for model years 2027
through 2029 as described in 40 CFR 600.117.
(e) Additional test fuel specifications apply as specified in
subpart S of this part.
0
29. Amend Sec. 86.132-96 by revising paragraphs (a), (b), (f), (g),
(h) introductory text, and (j) introductory text to read as follows:
Sec. 86.132-96 Vehicle preconditioning.
(a) Prepare the vehicle for testing as described in this section.
Store the vehicle before testing in a way that prevents fuel
contamination and preserves the integrity of the fuel system. The
vehicle shall be moved into the test area and the following operations
performed.
(b)(1) Gasoline- and Methanol-Fueled Vehicles. Drain the fuel
tank(s) and fill with test fuel, as specified in Sec. 86.113, to the
``tank fuel volume'' defined in Sec. 86.082-2. Install the fuel cap(s)
within one minute after refueling.
(2) Gaseous-Fueled Vehicles. Fill fuel tanks with fuel that meets
the specifications in Sec. 86.113. Fill the fuel tanks to a minimum of
75 percent of service pressure for natural gas-fueled vehicles or a
minimum of 75 percent of available fill volume for liquefied petroleum
gas-fueled vehicles. However, if you omit the refueling event in
paragraph (f) of this section, refuel the vehicles to 85 percent
instead of 75 percent. Draining the fuel tanks at the start of the test
is not required if the fuel in the tanks already meets the
specifications in Sec. 86.113.
* * * * *
(f) Drain and then fill the vehicle's fuel tank(s) with test fuel,
as specified in Sec. 86.113, to the ``tank fuel volume'' defined in
Sec. 86.082-2. Refuel the vehicle within 1 hour after completing the
preconditioning drive. Install fuel cap(s) within 1 minute after
refueling.
[[Page 28157]]
Park the vehicle within five minutes after refueling. However, for the
following vehicles you may omit this refueling event and instead drive
the vehicle off the dynamometer and park it within five minutes after
the preconditioning drive:
(1) Diesel-fueled vehicles.
(2) Gaseous-fueled vehicles.
(3) Fuel economy data vehicles.
(4) In-use vehicles subject to testing under Sec. 86.1845.
(g) The vehicle shall be soaked for not less than 12 hours nor more
than 36 hours before the cold start exhaust emission test. The soak
period starts at the end of the refueling event, or at the end of the
previous drive if there is no refueling.
(h) During the soak period for the three-diurnal test sequence
described in Sec. 86.130-96, precondition any evaporative canisters as
described in this paragraph (h); however, canister preconditioning is
not required for fuel economy data vehicles. For vehicles with multiple
canisters in a series configuration, the set of canisters must be
preconditioned as a unit. For vehicles with multiple canisters in a
parallel configuration, each canister must be preconditioned
separately. If production evaporative canisters are equipped with a
functional service port designed for vapor load or purge steps, the
service port shall be used during testing to precondition the canister.
In addition, for model year 1998 and later vehicles equipped with
refueling canisters, these canisters shall be preconditioned for the
three-diurnal test sequence according to the procedure in paragraph
(j)(1) of this section. If a vehicle is designed to actively control
evaporative or refueling emissions without a canister, the manufacturer
shall devise an appropriate preconditioning procedure, subject to the
approval of the Administrator.
* * * * *
(j) During the soak period for the supplemental two-diurnal test
sequence described in Sec. 86.130-96, precondition any evaporative
canisters using one of the methods described in this paragraph (j);
however, canister preconditioning is not required for fuel economy data
vehicles. For vehicles with multiple canisters in a series
configuration, the set of canisters must be preconditioned as a unit.
For vehicles with multiple canisters in a parallel configuration, each
canister must be preconditioned separately. In addition, for model year
1998 and later vehicles equipped with refueling canisters, these
canisters shall be preconditioned for the supplemental two-diurnal test
sequence according to the procedure in paragraph (j)(1) of this
section. Canister emissions are measured to determine breakthrough.
Breakthrough is here defined as the point at which the cumulative
quantity of hydrocarbons emitted is equal to 2 grams.
* * * * *
0
30. Amend Sec. 86.134-96 by revising paragraph (g)(1)(xvi) to read as
follows:
Sec. 86.134-96 Running loss test.
* * * * *
(g) * * *
(1) * * *
(xvi) Fuel tank pressure may exceed 10 inches of water during the
running loss test only if the manufacturer demonstrates that vapor
would not be vented to the atmosphere upon fuel cap removal. Note that
this allows for temporary pressure exceedances for vehicles whose tank
pressure otherwise remains below 10 inches of water.
* * * * *
Sec. 86.165-12 [Removed]
0
31. Remove Sec. 86.165-12.
Sec. 86.213 [Amended]
0
32. Amend Sec. 86.213 by removing and reserving paragraph (b).
Sec. 86.1801-01 [Removed]
0
33. Remove Sec. 86.1801-01.
0
34. Revise and republish Sec. 86.1801-12 to read as follows:
Sec. 86.1801-12 Applicability.
(a) Applicability. The provisions of this subpart apply to certain
types of new vehicles as described in this paragraph (a). Where the
provisions apply for a type of vehicle, they apply for vehicles powered
by any fuel, unless otherwise specified. In cases where a provision
applies only to a certain vehicle group based on its model year,
vehicle class, motor fuel, engine type, or other distinguishing
characteristics, the limited applicability is cited in the appropriate
section. Testing references in this subpart generally apply to Tier 2
and older vehicles, while testing references to 40 CFR part 1066
generally apply to Tier 3 and newer vehicles; see Sec. 86.101 for
detailed provisions related to this transition. The provisions of this
subpart apply to certain vehicles as follows:
(1) The provisions of this subpart apply for light-duty vehicles
and light-duty trucks.
(2) The provisions of this subpart apply for medium-duty passenger
vehicles. The provisions of this subpart also apply for medium-duty
vehicles at or below 14,000 pounds GVWR, except as follows:
(i) The provisions of this subpart are optional for diesel-cycle
vehicles through model year 2017; however, if you are using the
provisions of Sec. 86.1811-17(b)(9) or Sec. 86.1816-18(b)(8) to
transition to the Tier 3 exhaust emission standards, the provisions of
this subpart are optional for those diesel-cycle vehicles until the
start of the Tier 3 phase-in for those vehicles.
(ii) The exhaust emission standards of this part are optional for
vehicles above 22,000 pounds GCWR and for all incomplete medium-duty
vehicles. Certain requirements in this subpart apply for such vehicles
even if they are not certified to the exhaust emission standards of
this subpart as follows:
(A) Such vehicles remain subject to the evaporative and refueling
emission standards of this subpart.
(B) Such vehicles may remain subject to the greenhouse gas
standards in Sec. 86.1819-14 as specified in 40 CFR 1036.635.
(C) Such vehicles may remain subject to onboard diagnostic
requirements a specified in 40 CFR 1036.110.
(iii) The provisions of this subpart are optional for diesel-fueled
Class 3 heavy-duty vehicles in a given model year if those vehicles are
equipped with engines certified to the appropriate standards in Sec.
86.007-11 or 40 CFR 1036.104 for which less than half of the engine
family's sales for the model year in the United States are for complete
Class 3 heavy-duty vehicles. This includes engines sold to all vehicle
manufacturers. If you are the original manufacturer of the engine and
the vehicle, base this showing on your sales information. If you
manufacture the vehicle but are not the original manufacturer of the
engine, you must use your best estimate of the original manufacturer's
sales information.
(3) The provisions of this subpart do not apply to heavy-duty
vehicles above 14,000 pounds GVWR (see Sec. 86.016-1 and 40 CFR parts
1036 and 1037), except as follows:
(i) Heavy-duty vehicles above 14,000 pounds GVWR may be optionally
certified to the exhaust emission standards in this subpart, including
the greenhouse gas emission standards, if they are properly included in
a test group with similar vehicles at or below 14,000 pounds GVWR.
Emission standards apply to these vehicles as if they were Class 3
medium-duty vehicles. The work factor for these vehicles may not be
greater than the largest work factor that applies for vehicles in the
test group that are at or below 14,000 pounds GVWR (see Sec. 86.1819-
14).
[[Page 28158]]
(ii) The greenhouse gas standards apply for certain vehicles above
14,000 pounds GVWR as specified in Sec. 86.1819-14.
(iii) Evaporative and refueling emission standards apply for heavy-
duty vehicles above 14,000 pounds GVWR as specified in 40 CFR 1037.103.
(4) If you optionally certify vehicles to standards under this
subpart, those vehicles are subject to all the regulatory requirements
as if the standards were mandatory.
(b) Relationship to 40 CFR parts 1036 and 1037. If any heavy-duty
vehicle is not subject to standards and certification requirements
under this subpart, the vehicle and its installed engine are instead
subject to standards and certification requirements under 40 CFR parts
1036 and 1037, as applicable. If you optionally certify engines or
vehicles to standards under 40 CFR part 1036 or 40 CFR part 1037,
respectively, those engines or vehicles are subject to all the
regulatory requirements in 40 CFR parts 1036 and 1037 as if they were
mandatory. Note that heavy-duty engines subject to greenhouse gas
standards under 40 CFR part 1036 before model year 2027 are also
subject to standards and certification requirements under subpart A of
this part 86.
(c) Clean alternative fuel conversions. The provisions of this
subpart also apply to clean alternative fuel conversions as defined in
40 CFR 85.502 of all vehicles described in paragraph (a) of this
section.
(d) Small-volume manufacturers. Special certification procedures
are available for small-volume manufacturers as described in Sec.
86.1838.
(e) You. The term ``you'' in this subpart refers to manufacturers
subject to the emission standards and other requirements of this
subpart.
(f) Vehicle. The term ``vehicle'', when used generically, does not
exclude any type of vehicle for which the regulations apply (such as
light-duty trucks).
(g) Complete and incomplete vehicles. Several provisions in this
subpart, including the applicability provisions described in this
section, are different for complete and incomplete vehicles. We
differentiate these vehicle types as described in 40 CFR 1037.801.
(h) Applicability of provisions of this subpart to light-duty
vehicles, light-duty trucks, medium-duty passenger vehicles, and heavy-
duty vehicles. Numerous sections in this subpart provide requirements
or procedures applicable to a ``vehicle'' or ``vehicles.'' Unless
otherwise specified or otherwise determined by the Administrator, the
term ``vehicle'' or ``vehicles'' in those provisions apply equally to
light-duty vehicles (LDVs), light-duty trucks (LDTs), medium-duty
passenger vehicles (MDPVs), and heavy-duty vehicles (HDVs), as those
terms are defined in Sec. 86.1803-01. Note that this subpart also
identifies heavy-duty vehicles at or below 14,000 pounds GVWR that are
not medium-duty passenger vehicles as medium-duty vehicles.
(i) Types of pollutants. Emission standards and related
requirements apply for different types of pollutants as follows:
(1) Criteria pollutants. Criteria pollutant standards apply for
NOX, NMOG, HC, formaldehyde, PM, and CO, including exhaust,
evaporative, and refueling emission standards. These pollutants are
sometimes described collectively as ``criteria pollutants'' because
they are either criteria pollutants under the Clean Air Act or
precursors to the criteria pollutants ozone and PM.
(2) Greenhouse gas emissions. This subpart contains standards and
other regulations applicable to the emission of the air pollutant
defined as the aggregate group of six greenhouse gases: carbon dioxide,
nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and
sulfur hexafluoride.
(3) Nomenclature. Numerous sections in this subpart refer to
requirements relating to ``exhaust emissions.'' Unless otherwise
specified or otherwise determined by the Administrator, the term
``exhaust emissions'' refers at a minimum to emissions of all
pollutants described by emission standards in this subpart, including
carbon dioxide (CO2), nitrous oxide (N2O), and
methane (CH4).
(j) Exemption from greenhouse gas emission standards for small
businesses. Manufacturers that qualify as a small business under the
Small Business Administration regulations in 13 CFR part 121 are exempt
from certain standards and associated provisions as specified in
Sec. Sec. 86.1815, 86.1818, and 86.1819 and in 40 CFR part 600. This
exemption applies to both U.S.-based and non-U.S.-based businesses. The
following categories of businesses (with their associated NAICS codes)
may be eligible for exemption based on the Small Business
Administration size standards in 13 CFR 121.201:
(1) Vehicle manufacturers (NAICS code 336111).
(2) Independent commercial importers (NAICS codes 811111, 811112,
811198, 423110, 424990, and 441120).
(3) Alternate fuel vehicle converters (NAICS codes 335312, 336312,
336322, 336399, 454312, 485310, and 811198).
(k) Conditional exemption from greenhouse gas emission standards.
Manufacturers may request a conditional exemption from compliance with
the emission standards described in Sec. 86.1818-12(c) through (e) and
associated provisions in this part and in part 600 of this chapter for
model years 2012 through 2016. For the purpose of determining
eligibility the sales of related companies shall be aggregated
according to the provisions of Sec. 86.1838-01(b)(3) or, if a
manufacturer has been granted operational independence status under
Sec. 86.1838-01(d), eligibility shall be based on that manufacturer's
vehicle production.
(1) [Reserved]
(2) Maintaining eligibility for exemption from greenhouse gas
emission standards. To remain eligible for exemption under this
paragraph (k) the manufacturer's average sales for the three most
recent consecutive model years must remain below 5,000. If a
manufacturer's average sales for the three most recent consecutive
model years exceeds 4999, the manufacturer will no longer be eligible
for exemption and must meet applicable emission standards according to
the provisions in this paragraph (k)(2).
(i) If a manufacturer's average sales for three consecutive model
years exceeds 4999, and if the increase in sales is the result of
corporate acquisitions, mergers, or purchase by another manufacturer,
the manufacturer shall comply with the emission standards described in
Sec. 86.1818-12(c) through (e), as applicable, beginning with the
first model year after the last year of the three consecutive model
years.
(ii) If a manufacturer's average sales for three consecutive model
years exceeds 4999 and is less than 50,000, and if the increase in
sales is solely the result of the manufacturer's expansion in vehicle
production, the manufacturer shall comply with the emission standards
described in Sec. 86.1818-12(c) through (e), as applicable, beginning
with the second model year after the last year of the three consecutive
model years.
(iii) If a manufacturer's average sales for three consecutive model
years exceeds 49,999, the manufacturer shall comply with the emission
standards described in Sec. 86.1818-12(c) through (e), as applicable,
beginning with the first model year after the last year of the three
consecutive model years.
0
35. Amend Sec. 86.1803-01 by:
0
a. Revising the definitions for ``Banking'' and ``Defeat device''.
0
b. Removing the definition for ``Durability useful life''.
[[Page 28159]]
0
c. Revising the definition for ``Electric vehicle''.
0
d. Removing the definitions for ``Fleet average cold temperature NMHC
standard'' and ``Fleet average NOX standard''.
0
e. Adding definitions for ``Incomplete vehicle'' and ``Light-duty
program vehicle'' in alphabetical order.
0
f. Revising the definitions for ``Light-duty truck'' and ``Medium-duty
passenger vehicle (MDPV)''.
0
g. Adding definitions for ``Medium-duty vehicle'', ``Rechargeable
Energy Storage System (RESS)'', and ``Revoke'' in alphabetical order.
0
h. Revising the definition for ``Supplemental FTP (SFTP)''.
0
i. Adding definitions for ``Suspend'', ``Tier 4'', and ``United
States'' in alphabetical order.
0
j. Removing the definition for ``Useful life''.
0
k. Adding a definition for ``Void'' in alphabetical order.
The revisions and additions read as follows:
Sec. 86.1803-01 Definitions.
* * * * *
Banking means the retention of emission credits by the manufacturer
generating the emission credits, for use in future model year
certification programs as permitted by regulation.
* * * * *
Defeat device means an auxiliary emission control device (AECD)
that reduces the effectiveness of the emission control system under
conditions which may reasonably be expected to be encountered in normal
vehicle operation and use, unless:
(1) Such conditions are substantially included in driving cycles
specified in this subpart, the fuel economy test procedures in 40 CFR
part 600, and the air conditioning efficiency test in 40 CFR 1066.845;
(2) The need for the AECD is justified in terms of protecting the
vehicle against damage or accident;
(3) The AECD does not go beyond the requirements of engine
starting; or
(4) The AECD applies only for emergency vehicles and the need is
justified in terms of preventing the vehicle from losing speed, torque,
or power due to abnormal conditions of the emission control system, or
in terms of preventing such abnormal conditions from occurring, during
operation related to emergency response. Examples of such abnormal
conditions may include excessive exhaust backpressure from an
overloaded particulate trap, and running out of diesel exhaust fluid
for engines that rely on urea-based selective catalytic reduction.
* * * * *
Electric vehicle means a motor vehicle that is powered solely by an
electric motor drawing current from a rechargeable energy storage
system, such as from storage batteries or other portable electrical
energy storage devices, including hydrogen fuel cells, provided that:
(1) The vehicle is capable of drawing recharge energy from a source
off the vehicle, such as residential electric service; and
(2) The vehicle must be certified to Bin 0 emission standards.
(3) The vehicle does not have an onboard combustion engine/
generator system as a means of providing electrical energy.
* * * * *
Incomplete vehicle has the meaning given in 40 CFR 1037.801.
* * * * *
Light-duty program vehicle means any medium-duty passenger vehicle
and any vehicle subject to standards under this subpart that is not a
heavy-duty vehicle. This definition generally applies for model year
2027 and later vehicles.
Light-duty truck has one of the following meanings:
(1) Except as specified in paragraph (2) of this definition, light-
duty truck means any motor vehicle that is not a heavy-duty vehicle,
but is:
(i) Designed primarily for purposes of transportation of property
or is a derivation of such a vehicle; or
(ii) Designed primarily for transportation of persons and has a
capacity of more than 12 persons; or
(iii) Available with special features enabling off-street or off-
highway operation and use.
(2) Starting in model year 2027, light-duty truck has the meaning
given for ``Light truck'' in 40 CFR 600.002. Vehicles that qualify as
emergency vehicles for any reason under Sec. 86.1803-01 are light-duty
trucks if they are derived from light-duty trucks.
* * * * *
Medium-duty passenger vehicle (MDPV) has one of the following
meanings:
(1) Except as specified in paragraph (2) of this definition,
Medium-duty passenger vehicle means any heavy-duty vehicle (as defined
in this subpart) with a gross vehicle weight rating (GVWR) of less than
10,000 pounds that is designed primarily for the transportation of
persons. The MDPV definition does not include any vehicle which:
(i) Is an ``incomplete vehicle'' as defined in this subpart; or
(ii) Has a seating capacity of more than 12 persons; or
(iii) Is designed for more than 9 persons in seating rearward of
the driver's seat; or
(iv) Is equipped with an open cargo area (for example, a pick-up
truck box or bed) of 72.0 inches in interior length or more. A covered
box not readily accessible from the passenger compartment will be
considered an open cargo area for purposes of this definition.
(2) Starting with model year 2027, or earlier at the manufacturer's
discretion, Medium-duty passenger vehicle means any heavy-duty vehicle
subject to standards under this subpart that is designed primarily for
the transportation of persons, with seating rearward of the driver,
except that the MDPV definition does not include any vehicle that has
any of the following characteristics:
(i) Is an ``incomplete vehicle'' as defined in this subpart.
(ii) Has a seating capacity of more than 12 persons.
(iii) Is designed for more than 9 persons in seating rearward of
the driver's seat.
(iv) Is equipped with an open cargo area (for example, a pick-up
truck box or bed) with an interior length of 72.0 inches or more for
vehicles above 9,500 pounds GVWR with a work factor above 4,500 pounds.
A covered box not readily accessible from the passenger compartment
will be considered an open cargo area for purposes of this definition.
For purposes of this definition, measure the cargo area's interior
length from front to back at floor level with all gates and doors
closed.
(v) Is equipped with an open cargo area with an interior length of
94.0 inches or more for vehicles at or below 9,500 pounds GVWR and for
all vehicles with a work factor at or below 4,500 pounds.
(vi) Is a van in a configuration with greater cargo-carrying volume
than passenger-carrying volume at the point of first retail sale.
Determine cargo-carrying volume accounting for any installed second-row
seating, even if the manufacturer has not described that as an
available feature.
Medium-duty vehicle means any heavy-duty vehicle subject to
standards under this subpart, excluding medium-duty passenger vehicles.
This definition generally applies for model year 2027 and later
vehicles.
* * * * *
Rechargeable Energy Storage System (RESS) has the meaning given in
40 CFR 1065.1001. For electric vehicles and
[[Page 28160]]
hybrid electric vehicles, this may also be referred to as a
Rechargeable Electrical Energy Storage System.
* * * * *
Revoke has the meaning given in 40 CFR 1068.30.
* * * * *
Supplemental FTP (SFTP) means the test procedures designed to
measure emissions during aggressive and microtransient driving over the
US06 cycle and during driving while the vehicle's air conditioning
system is operating over the SC03 cycle as described in Sec. 86.1811-
17.
Suspend has the meaning given in 40 CFR 1068.30.
* * * * *
Tier 4 means relating to the Tier 4 emission standards described in
Sec. 86.1811-27. Note that a Tier 4 vehicle continues to be subject to
Tier 3 evaporative emission standards.
* * * * *
United States has the meaning given in 40 CFR 1068.30.
* * * * *
Void has the meaning given in 40 CFR 1068.30.
* * * * *
0
36. Amend Sec. 86.1805-17 by revising paragraphs (c) and (d) and
removing paragraph (f).
The revisions read as follows:
Sec. 86.1805-17 Useful life.
* * * * *
(c) Cold temperature emission standards. The cold temperature NMHC
emission standards in Sec. 86.1811-17 apply for a useful life of 10
years or 120,000 miles for LDV and LLDT, and 11 years or 120,000 miles
for HLDT and HDV. The cold temperature CO emission standards in Sec.
86.1811-17 apply for a useful life of 5 years or 50,000 miles.
(d) Criteria pollutants. The useful life provisions of this
paragraph (d) apply for all emission standards not covered by paragraph
(b) or (c) of this section. This paragraph (d) applies for the cold
temperature emission standards in Sec. 86.1811-27(c). Except as
specified in paragraph (f) of this section and in Sec. Sec. 86.1811,
86.1813, and 86.1816, the useful life for LDT2, HLDT, MDPV, and HDV is
15 years or 150,000 miles. The useful life for LDV and LDT1 is 10 years
or 120,000 miles. Manufacturers may optionally certify LDV and LDT1 to
a useful life of 15 years or 150,000 miles, in which case the longer
useful life would apply for all the standards and requirements covered
by this paragraph (d).
* * * * *
Sec. 86.1806-05 [Removed]
0
37. Remove Sec. 86.1806-05.
0
38. Amend Sec. 86.1806-17 by revising and republishing paragraph
(b)(4) and revising paragraph (e) to read as follows:
Sec. 86.1806-17 Onboard diagnostics.
* * * * *
(b) * * *
(4) For vehicles with installed compression-ignition engines that
are subject to standards and related requirements under 40 CFR 1036.104
and 1036.111, you must comply with the following additional
requirements:
(i) Make parameters related to engine derating and other
inducements available for reading with a generic scan tool as specified
in 40 CFR 1036.110(b)(9)(vi).
(ii) Design your vehicles to display information related to engine
derating and other inducements in the cab as specified in 40 CFR
1036.110(c)(1) and 1036.601(c).
* * * * *
(e) Onboard diagnostic requirements apply for alternative-fuel
conversions as described in 40 CFR part 85, subpart F.
* * * * *
0
39. Add Sec. 86.1806-27 to read as follows:
Sec. 86.1806-27 Onboard diagnostics.
Model year 2027 and later vehicles must have onboard diagnostic
(OBD) systems as described in this section. OBD systems must generally
detect malfunctions in the emission control system, store trouble codes
corresponding to detected malfunctions, and alert operators
appropriately. Vehicles may optionally comply with the requirements of
this section instead of the requirements of Sec. 86.1806-17 before
model year 2027.
(a) Vehicles must comply with the 2022 OBD requirements adopted for
California as described in this paragraph (a). California's 2022 OBD-II
requirements are part of Title 13, section 1968.2 of the California
Code of Regulations, operative November 30, 2022 (incorporated by
reference, see Sec. 86.1). We may approve your request to certify an
OBD system meeting a later version of California's OBD requirements if
you demonstrate that it complies with the intent of this section. The
following clarifications and exceptions apply for vehicles certified
under this subpart:
(1) For vehicles not certified in California, references to
vehicles meeting certain California Air Resources Board emission
standards are understood to refer to the corresponding EPA emission
standards for a given family, where applicable. Use good engineering
judgment to correlate the specified standards with the bin standards
that apply under this subpart.
(2) Vehicles must comply with OBD requirements throughout the
useful life as specified in Sec. 86.1805. If the specified useful life
is different for evaporative and exhaust emissions, the useful life
specified for evaporative emissions applies for monitoring related to
fuel-system leaks and the useful life specified for exhaust emissions
applies for all other parameters.
(3) The purpose and applicability statements in 13 CCR 1968.2(a)
and (b) do not apply.
(4) The anti-tampering provisions in 13 CCR 1968.2(d)(1.4) do not
apply.
(5) The requirement to verify proper alignment between the camshaft
and crankshaft described in 13 CCR 1968.2(e)(15.2.1)(C) applies only
for vehicles equipped with variable valve timing.
(6) The deficiency provisions described in paragraph (c) of this
section apply instead of 13 CCR 1968.2(k).
(7) Apply thresholds for exhaust emission malfunctions from Tier 4
vehicles based on the thresholds calculated for the corresponding bin
standards in the California LEV III program as prescribed for the
latest model year in 13 CCR 1968.2(d). For example, for Tier 4 Bin 10
standards, apply the threshold that applies for the LEV standards. For
cases involving Tier 4 standards that have no corresponding bin
standards from the California LEV III program, use the monitor
threshold for the next highest LEV III bin. For example, for Tier 4 Bin
5 and Bin 10 standards, apply a threshold of 50 mg/mile (15 mg/mile x
3.33). You may apply thresholds that are more stringent than we require
under this paragraph (a)(7).
(8) Apply thresholds and testing requirements as specified in 40
CFR 1036.110(b)(5), (6) and (11) for engines certified to emission
standards under 40 CFR part 1036.
(b) For vehicles with installed compression-ignition engines that
are subject to standards and related requirements under 40 CFR 1036.104
and 1036.111, you must comply with the following additional
requirements:
(1) Make parameters related to engine derating and other
inducements available for reading with a generic scan tool as specified
in 40 CFR 1036.110(b)(9)(vi).
(2) Design your vehicles to display information related to engine
derating and other inducements in the cab as
[[Page 28161]]
specified in 40 CFR 1036.110(c)(1) and 1036.601(c).
(c) You may ask us to accept as compliant a vehicle that does not
fully meet specific requirements under this section. Such deficiencies
are intended to allow for minor deviations from OBD standards under
limited conditions. We expect vehicles to have functioning OBD systems
that meet the objectives stated in this section. The following
provisions apply regarding OBD system deficiencies:
(1) Except as specified in paragraph (d) of this section, we will
not approve a deficiency that involves the complete lack of a major
diagnostic monitor, such as monitors related to exhaust aftertreatment
devices, oxygen sensors, air-fuel ratio sensors, NOX
sensors, engine misfire, evaporative leaks, and diesel EGR (if
applicable).
(2) We will approve a deficiency only if you show us that full
compliance is infeasible or unreasonable considering any relevant
factors, such as the technical feasibility of a given monitor, or the
lead time and production cycles of vehicle designs and programmed
computing upgrades.
(3) Our approval for a given deficiency applies only for a single
model year, though you may continue to ask us to extend a deficiency
approval in renewable one-year increments. We may approve an extension
if you demonstrate an acceptable level of effort toward compliance and
show that the necessary hardware or software modifications would pose
an unreasonable burden.
(d) For alternative-fuel vehicles, manufacturers may request a
waiver from specific requirements for which monitoring may not be
reliable for operation with the alternative fuel. However, we will not
waive requirements that we judge to be feasible for a particular
manufacturer or vehicle model.
(e) OBD-related requirements for alternative-fuel conversions apply
as described in 40 CFR part 85, subpart F.
(f) You may ask us to waive certain requirements in this section
for emergency vehicles. We will approve your request for an appropriate
duration if we determine that the OBD requirement in question could
harm system performance in a way that would impair a vehicle's ability
to perform its emergency functions.
(g) The following interim provisions describe an alternate
implementation schedule for the requirements of this section in certain
circumstances:
(1) Manufacturers may delay complying with all the requirements of
this section, and instead meet all the requirements that apply under
Sec. 86.1806-17 for any vehicles above 6,000 pounds GVWR that are not
yet subject to all the Tier 4 standards in Sec. 86.1811.
(2) Except as specified in this paragraph (g)(2), small-volume
manufacturers may delay complying with all the requirements of this
section until model year 2030, and instead meet all the requirements
that apply under Sec. 86.1806-17 during those years.
0
40. Amend Sec. 86.1807-01 by adding paragraph (a)(3)(iv) and revising
paragraph (d) to read as follows:
Sec. 86.1807-01 Vehicle labeling.
(a) * * *
(3) * * *
(iv) Monitor family and battery durability family as specified in
Sec. 86.1815-27, if applicable;
* * * * *
(d) The following provisions apply for incomplete vehicles
certified under this subpart:
(1) Incomplete light-duty trucks must have the following prominent
statement printed on the label required by paragraph (a)(3)(v) of this
section: ``This vehicle conforms to U.S. EPA regulations applicable to
20xx Model year Light-Duty Trucks when it does not exceed XXX pounds in
curb weight, XXX pounds in gross vehicle weight rating, and XXX square
feet in frontal area.''
(2) Incomplete heavy-duty vehicles must have the following
prominent statement printed on the label required by paragraph
(a)(3)(v) of this section: ``This vehicle conforms to U.S. EPA
regulations applicable to 20xx Model year Heavy-Duty Vehicles when it
does not exceed XXX pounds in curb weight, XXX pounds in gross vehicle
weight rating, and XXX square feet in frontal area.''
* * * * *
Sec. 86.1808-01 [Amended]
0
41. Amend Sec. 86.1808-01 by removing and reserving paragraph (e).
Sec. Sec. 86.1809-01 and 86.1809-10 [Removed]
0
42. Remove Sec. Sec. 86.1809-01 and 86.1809-10.
0
43. Revise Sec. 86.1809-12 to read as follows:
Sec. 86.1809-12 Prohibition of defeat devices.
(a) No new vehicle shall be equipped with a defeat device.
(b) EPA may test or require testing on any vehicle at a designated
location, using driving cycles and conditions that may reasonably be
expected to be encountered in normal operation and use, for the
purposes of investigating a potential defeat device.
(c) For cold temperature CO, NMHC, and NMOG+NOX emission
control, EPA will use a guideline to determine the appropriateness of
the CO emission control and the NMHC or NMOG+NOX emission
control at ambient temperatures between 25 [deg]F (the upper bound of
the range for cold temperature testing) and 68 [deg]F (the lower bound
of the FTP test temperature range). The guideline for CO and
NMOG+NOX emission congruity across the intermediate
temperature range is the linear interpolation between the CO or
NMOG+NOX standard applicable at 25 [deg]F and the
corresponding standard applicable at 68 [deg]F. The guideline for NMHC
emission congruity across the intermediate temperature range is the
linear interpolation between the NMHC FEL pass limit (e.g., 0.3499 g/mi
for a 0.3 g/mi FEL) applicable at 20 [deg]F and the Tier 2 NMOG
standard or the Tier 3 or Tier 4 NMOG+NOX bin standard to
which the vehicle was certified at 68 [deg]F, where the intermediate
temperature NMHC level is rounded to the nearest 0.01 g/mile for
comparison to the interpolated line. The following provisions apply for
vehicles that exceed the specified emission guideline during
intermediate temperature testing:
(1) If the CO emission level is greater than the 20 [deg]F emission
standard, the vehicle will automatically be considered to be equipped
with a defeat device without further investigation. If the intermediate
temperature NMHC or NMOG+NOX emission level, rounded to the
nearest 0.01 g/mile or the nearest 10 mg/mile, is greater than the 20
[deg]F FEL pass limit, the vehicle will be presumed to have a defeat
device unless the manufacturer provides evidence to EPA's satisfaction
that the cause of the test result in question is not due to a defeat
device.
(2) If the conditions in paragraph (c)(1) of this section do not
apply, EPA may investigate the vehicle design for the presence of a
defeat device under paragraph (d) of this section.
(d) The following provisions apply for vehicle designs EPA
designates for investigation as possible defeat devices:
(1) The manufacturer must show to EPA's satisfaction that the
vehicle design does not incorporate strategies that unnecessarily
reduce emission control effectiveness exhibited over the driving cycles
specified in this subpart, the fuel economy test procedures in 40 CFR
part 600, or the air conditioning efficiency test in 40 CFR 1066.845,
when the vehicle is operated under conditions that may reasonably be
[[Page 28162]]
expected to be encountered in normal operation and use.
(2) [Reserved]
(3) The following information requirements apply:
(i) Upon request by EPA, the manufacturer must provide an
explanation containing detailed information regarding test programs,
engineering evaluations, design specifications, calibrations, on-board
computer algorithms, and design strategies incorporated for operation
both during and outside of the Federal emission test procedures.
(ii) For purposes of investigation of possible cold temperature CO,
NMHC, or NMOG+NOX defeat devices under this paragraph (d),
the manufacturer must provide an explanation to show to EPA's
satisfaction that CO emissions and NMHC or NMOG+NOX
emissions are reasonably controlled in reference to the linear
guideline across the intermediate temperature range.
(e) For each test group the manufacturer must submit an engineering
evaluation with the Part II certification application demonstrating to
EPA's satisfaction that a discontinuity in emissions of non-methane
organic gases, particulate matter, carbon monoxide, carbon dioxide,
oxides of nitrogen, nitrous oxide, methane, and formaldehyde measured
on the Federal Test Procedure (40 CFR 1066.801(c)(1)) and on the
Highway Fuel Economy Test Procedure (40 CFR 1066.801(c)(5)) does not
occur in the temperature range of 20 to 86 [deg]F.
0
44. Amend Sec. 86.1810-17 by revising paragraph (g) and revising and
republishing paragraph (h) to read as follows:
Sec. 86.1810-17 General requirements.
* * * * *
(g) The cold temperature standards in this subpart refer to test
procedures set forth in subpart C of this part and 40 CFR part 1066,
subpart H. All other emission standards in this subpart rely on test
procedures set forth in subpart B of this part and 40 CFR part 1066,
subpart H. These procedures rely on the test specifications in 40 CFR
parts 1065 and 1066 as described in subparts B and C of this part.
(h) Multi-fueled vehicles (including dual-fueled and flexible-
fueled vehicles) must comply with all the requirements established for
each consumed fuel (and blend of fuels for flexible-fueled vehicles).
The following specific provisions apply for flexible-fueled vehicles
that operate on ethanol and gasoline:
(1) For criteria exhaust emissions, we may identify the worst-case
fuel blend for testing in addition to what is required for gasoline-
fueled vehicles. The worst-case fuel blend may be the fuel specified in
40 CFR 1065.725, or it may consist of a combination of the fuels
specified in 40 CFR 1065.710(b) and 1065.725. We may waive testing with
the worst-case blended fuel for US06 and/or SC03 duty cycles; if we
waive only SC03 testing for Tier 3 vehicles, substitute the SC03
emission result using the standard test fuel for gasoline-fueled
vehicles to calculate composite SFTP emissions.
(2) For evaporative and refueling emissions, test using the fuel
specified in 40 CFR 1065.710(b).
(3) No additional spitback or evaporative emission testing is
required beyond the emission measurements with the gasoline test fuel
specified in 40 CFR 1065.710.
* * * * *
0
45. Amend Sec. 86.1811-17 by revising paragraphs (b)(8)(iii)(B), (d)
introductory text, and (g)(2)(ii) to read as follows:
Sec. 86.1811-17 Exhaust emission standards for light-duty vehicles,
light-duty trucks and medium-duty passenger vehicles.
* * * * *
(b) * * *
(8) * * *
(iii) * * *
(B) You may continue to use the E0 test fuel specified in Sec.
86.113 as described in 40 CFR 600.117.
* * * * *
(d) Special provisions for Otto-cycle engines. The following
special provisions apply for vehicles with Otto-cycle engines:
* * * * *
(g) * * *
(2) * * *
(ii) The manufacturer must calculate its fleet average cold
temperature NMHC emission level(s) as described in Sec. 86.1864-10(b).
* * * * *
0
46. Add Sec. 86.1811-27 to read as follows:
Sec. 86.1811-27 Criteria exhaust emission standards.
(a) Applicability and general provisions. The criteria exhaust
emission standards of this section apply for both light-duty program
vehicles and medium-duty vehicles, starting with model year 2027.
(1) A vehicle meeting all the requirements of this section is
considered a Tier 4 vehicle meeting the Tier 4 standards. Vehicles
meeting some but not all requirements are considered interim Tier 4
vehicles as described in paragraph (b)(6)(iv) of this section.
(2) The Tier 4 standards include testing over a range of driving
schedules and ambient temperatures. The standards for 25 [deg]C or 35
[deg]C testing in paragraph (b) of this section apply separate from the
-7 [deg]C testing in paragraph (c) of this section. We may identify
these standards based on nominal ambient test temperatures. Note that -
7 [deg]C testing is also identified as cold temperature testing
elsewhere in this subpart.
(3) See Sec. 86.1813 for evaporative and refueling emission
standards.
(4) See Sec. 86.1818 for greenhouse gas emission standards.
(b) Exhaust emission standards for 25 and 35 [deg]C testing.
Exhaust emissions may not exceed standards over several driving cycles
as follows:
(1) Measure emissions using the chassis dynamometer procedures of
40 CFR part 1066, as follows:
(i) Establish appropriate load settings based on loaded vehicle
weight for light-duty program vehicles and adjusted loaded vehicle
weight for medium-duty vehicles (see Sec. 86.1803).
(ii) Emission standards under this paragraph (b) apply for all the
following driving cycles unless otherwise specified:
------------------------------------------------------------------------
The driving cycle . . . is identified in . . .
------------------------------------------------------------------------
(A) FTP................................ 40 CFR 1066.801(c)(1).
(B) US06............................... 40 CFR 1066.801(c)(2).
(C) SC03............................... 40 CFR 1066.801(c)(3).
(D) HFET............................... 40 CFR 1066.801(c)(5).
(E) ACC II--Mid-temperature 40 CFR 1066.801(c)(8).
intermediate soak.
(F) ACC II--Early driveaway............ 40 CFR 1066.801(c)(9).
(G) ACC II High-load PHEV engine starts 40 CFR 1066.801(c)(10).
------------------------------------------------------------------------
[[Page 28163]]
(iii) Testing occurs at (20-30) [deg]C ambient temperatures, except
that a nominal ambient temperature of 35.0 [deg]C applies for testing
over the SC03 driving cycle. See paragraph (c) of this section for
emission standards and measurement procedures that apply for cold
temperature testing.
(iv) Hydrocarbon emission standards are expressed as NMOG; however,
for certain vehicles you may measure exhaust emissions based on
nonmethane hydrocarbon instead of NMOG as described in 40 CFR 1066.635.
(v) Measure emissions from hybrid electric vehicles (including
plug-in hybrid electric vehicles) as described in 40 CFR part 1066,
subpart F, except that these procedures do not apply for plug-in hybrid
electric vehicles during charge-depleting operation.
(2) Fully phased-in standards apply as specified in the following
table:
Table 1--To Paragraph (b)(2)--Fully Phased-In Tier 4 Criteria Exhaust Emission Standards \a\
----------------------------------------------------------------------------------------------------------------
NMOG+NOX (mg/ PM (mg/mile) CO (g/mile) Formaldehyde
mile) \b\ \c\ \d\ (mg/mile) \e\
----------------------------------------------------------------------------------------------------------------
Light-duty program vehicles..................... 15 0.5 1.7 4
Medium-duty vehicles............................ 75 0.5 3.2 6
----------------------------------------------------------------------------------------------------------------
\a\ Paragraphs (b)(6) and (f) of this section describe how these standards phase in for model year 2027 and
later vehicles.
\b\ The NMOG+NOX standards apply on a fleet-average basis using discrete bin standards as described in
paragraphs (b)(4) and (6) of this section.
\c\ PM standards do not apply for the SC03, HFET, and ACC II driving cycles specified in paragraphs
(b)(1)(ii)(C) through (G) of this section.
\d\ Alternative CO standards of 9.6 and 25 g/mile apply for the US06 driving cycle for light-duty program
vehicles and medium-duty vehicles, respectively. CO standards do not apply for the ACC II driving cycles
specified in paragraph (b)(1)(ii)(E) through (G) of this section.
\e\ Formaldehyde standards apply only for the FTP driving cycle.
(3) The FTP standards specified in this paragraph (b) apply equally
for testing at low-altitude conditions and high-altitude conditions.
The US06, SC03, and HFET standards apply only for testing at low-
altitude conditions.
(4) The NMOG+NOX emission standard is based on a fleet
average for a given model year.
(i) You must specify a family emission limit (FEL) for each test
group based on the FTP emission standard corresponding to each named
bin. The FEL serves as the emission standard for the test group with
respect to all specified driving cycles. Calculate your fleet average
emission level as described in Sec. 86.1860 to show that you meet the
specified fleet average standard. For multi-fueled vehicles, calculate
fleet average emission levels based only on emission levels for testing
with gasoline or diesel fuel. You may generate emission credits for
banking and trading, and you may use banked or traded credits as
described in Sec. 86.1861 for demonstrating compliance with the fleet
average NMOG+NOX emission standard. You comply with the
fleet average emission standard for a given model year if you have
enough credits to show that your fleet average emission level is at or
below the applicable standard.
(ii) Select one of the identified values from table 2 of this
section for demonstrating that your fleet average emission level for
light-duty program vehicles complies with the fleet average
NMOG+NOX emission standard. These FEL values define emission
bins that also determine corresponding emission standards for
NMOG+NOX emission standards for ACC II driving cycles, as
follows:
Table 2 to Paragraph (b)(4)(ii)--Tier 4 NMOG+NOX Bin Standards for Light-Duty Program Vehicles
[mg/mile]
--------------------------------------------------------------------------------------------------------------------------------------------------------
ACC II--Mid- ACC II--Mid- ACC II--Mid-
temperature temperature temperature ACC II-- ACC II-- High-
FEL name FTP, US06, intermediate intermediate intermediate Early power PHEV
SC03, HFET soak (3-12 soak (40 soak (10 driveaway \b\ engine starts
hours) minutes) \a\ minutes) \b\ \c\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Bin 70................................................ 70 70 54 35 82 200
Bin 65................................................ 65 65 50 33 77 188
Bin 60................................................ 60 60 46 30 72 175
Bin 55................................................ 55 55 42 28 67 163
Bin 50................................................ 50 50 38 25 62 150
Bin 45................................................ 45 45 35 23 57 138
Bin 40................................................ 40 40 31 20 52 125
Bin 35................................................ 35 35 27 18 47 113
Bin 30................................................ 30 30 23 15 42 100
Bin 25................................................ 25 25 19 13 37 84
Bin 20................................................ 20 20 15 10 32 67
Bin 15................................................ 15 15 12 8 27 51
Bin 10................................................ 10 10 8 5 22 34
Bin 5................................................. 5 5 4 3 17 17
Bin 0................................................. 0 .............. ................ .............. .............. ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Calculate the bin standard for a soak time between 10 and 40 minutes based on a linear interpolation between the corresponding bin values for a 10-
minute soak and a 40-minute soak. Similarly, calculate the bin standard for a soak time between 40 minutes and 3 hours based on a linear interpolation
between the corresponding bin values for a 40-minute soak and a 3-hour soak.
\b\ Qualifying vehicles are exempt from standards for early driveaway and high-power PHEV engine starts as described in paragraph (b)(5) of this
section.
\c\ Alternative standards apply for high-power PHEV engine starts for model years 2027 through 2029 as described in paragraph (b)(6)(v) of this section.
[[Page 28164]]
(iii) You may select one of the identified values from table 2 to
paragraph (b)(4)(ii) of this section for demonstrating that your fleet
average emission level for medium-duty vehicles complies with the fleet
average NMOG+NOX emission standard. The following additional
NMOG+NOX bin standards are also available for medium-duty
vehicles: 75, 85, 100, 125, 150, and 170 mg/mile. Medium-duty vehicles
are not subject to standards based on the ACC II driving cycles
specified in paragraphs (b)(1)(ii)(E) through (G) of this section.
(5) Qualifying vehicles are exempt from certain ACC II bin
standards as follows:
(i) Vehicles are exempt from the ACC II bin standards for early
driveaway if the vehicle prevents engine starting during the first 20
seconds of a cold-start FTP test interval and the vehicle does not use
an electrically heated catalyst or other technology to precondition the
engine or emission controls such that NMOG+NOX emissions
would be higher during the first 505 seconds of the early driveaway
driving cycle compared to the first 505 seconds of the conventional FTP
driving cycle.
(ii) Vehicles are exempt from the ACC II bin standards for high-
power PHEV engine starts if their all-electric range on the cold-start
US06 driving cycles is at or above 10 miles for model years 2027
through 2029, and at or above 40 miles for model year 2030 and later.
(6) The Tier 4 standards phase in over several years, as follows:
(i) Light-duty program vehicles. Include all light-duty program
vehicles at or below 6,000 pounds GVWR in the calculation to comply
with the Tier 4 fleet average NMOG+NOX standard for 25
[deg]C testing in paragraph (b)(2) of this section. You must meet all
the other Tier 4 requirements with 20, 40, 60, and 100 percent of your
projected nationwide production volumes in model years 2027 through
2030, respectively. A vehicle counts toward meeting the phase-in
percentage only if it meets all the requirements of this section. Fleet
average NMOG+NOX standards apply as follows for model year
2027 through 2032 light-duty program vehicles:
Table 3 to Paragraph (b)(6)(i)--Declining Fleet Average NMOG+NOX
Standards for Light-Duty Program Vehicles
------------------------------------------------------------------------
Fleet average
NMOG+NOX
Model year standard (mg/
mile)
------------------------------------------------------------------------
2027................................................... 25
2028................................................... 23
2029................................................... 21
2030................................................... 19
2031................................................... 17
2032................................................... 15
------------------------------------------------------------------------
(ii) Default phase-in for vehicles above 6,000 pounds GVWR. The
default approach for phasing in the Tier 4 standards for vehicle above
6,000 pounds GVWR is for all those vehicles to meet the fully phased in
Tier 4 standards of this section starting in model year 2030 for light-
duty program vehicles and in model year 2031 for medium-duty vehicles.
Manufacturers using this default phase-in for medium-duty vehicles may
not use credits generated from earlier model years for demonstrating
compliance with the Tier 4 NMOG+NOX standards under this
paragraph (b).
(iii) Alternative early phase-in for vehicles above 6,000 pounds
GVWR. Manufacturers may use the following alternative early phase-in
provisions to transition to the Tier 4 exhaust emission standards on an
earlier schedule for vehicles above 6,000 pounds GVWR.
(A) If you select the alternative early phase-in for light-duty
program vehicles above 6,000 pounds GVWR, you must demonstrate that you
meet the phase-in requirements in paragraph (b)(6)(i) of this section
based on all your light-duty program vehicles.
(B) If you select the alternative early phase-in for medium-duty
vehicles, include all medium-duty vehicles in the calculation to comply
with the Tier 4 fleet average NMOG+NOX standard starting in
model year 2027. You must meet all the other Tier 4 requirements with
20, 40, 60, 80, and 100 percent of a manufacturer's projected
nationwide production volumes in model years 2027 through 2031,
respectively. A vehicle counts toward meeting the phase-in percentage
only if it meets all the requirements of this section. Medium-duty
vehicles complying with the alternative early phase-in are subject to
the following fleet average NMOG+NOX standards for model
years 2027 through 2033:
Table 4 to Paragraph (b)(6)(iii)(B)--Declining Fleet Average NMOG+NOX
Standards for Medium-Duty Vehicles
------------------------------------------------------------------------
Fleet average
NMOG+NOX
Model year standard (mg/
mile)
------------------------------------------------------------------------
2027................................................... 175
2028................................................... 160
2029................................................... 140
2030................................................... 120
2031................................................... 100
2032................................................... 80
2033................................................... 75
------------------------------------------------------------------------
(C) If you select the alternative early phase-in but are unable to
meet all the requirements that apply in any model year before model
year 2030 for light-duty program vehicles and model year 2031 for
medium-duty vehicles, you may switch to the default phase-in. Switching
to the default phase-in does not affect certification or compliance
obligations for model years before you switch to the default phase-in.
(iv) Interim Tier 4 vehicles. Vehicles not meeting all the
requirements of this section during the phase-in are considered
``interim Tier 4 vehicles''. Interim Tier 4 vehicles are subject to all
the requirements of this subpart that apply for Tier 3 vehicles except
for the fleet average NMOG+NOX standards in Sec. Sec.
86.1811-17 and 86.1816-18. Interim Tier 4 vehicles may certify to the
25 [deg]C fleet average NMOG+NOX standard under this section
using all available Tier 3 bins under Sec. Sec. 86.1811-17 and
86.1816-18. Interim Tier 4 vehicles are subject to the whole collection
of Tier 3 bin standards, and they are not subject to any of the Tier 4
bin standards specified in this section. Note that manufacturers
complying with the default phase-in specified in paragraph (b)(6)(ii)
of this section for Interim Tier 4 light-duty program vehicles above
6,000 pounds GVWR will need to meet a Tier 3 fleet average
NMOG+NOX standard in model years 2027 through 2029 in
addition to the Tier 4 fleet average NMOG+NOX standard for
vehicles at or below 6,000 pounds GVWR in those same years. Note that
emission credits from those Tier 3 and Tier 4 light-duty program
vehicles remain in the same averaging set.
(v) Phase-in for high-power PHEV engine starts. The following bin
standards apply for high-power PHEV engine starts in model years 2027
through 2029 instead of the analogous standards specified in paragraph
(b)(4)(ii) of this section:
[[Page 28165]]
Table 5 to Paragraph (b)(6)(v)--Model Year 2027 Through 2029 Bin
Standards for High-Power PHEV Engine Starts
------------------------------------------------------------------------
ACC II-- High-
power PHEV
FEL name engine starts
(mg/mile)
------------------------------------------------------------------------
Bin 70................................................ 320
Bin 65................................................ 300
Bin 60................................................ 280
Bin 55................................................ 260
Bin 50................................................ 240
Bin 45................................................ 220
Bin 40................................................ 200
Bin 35................................................ 175
Bin 30................................................ 150
Bin 25................................................ 125
Bin 20................................................ 100
Bin 15................................................ 75
Bin 10................................................ 50
Bin 5................................................. 25
------------------------------------------------------------------------
(vi) MDPV. Any vehicle that becomes an MDPV as a result of the
revised definition in Sec. 86.1803-01 starting in model 2027 remains
subject to the heavy-duty Tier 3 standards in Sec. 86.1816-18 under
the default phase-in specified in paragraph (b)(6)(ii) of this section
for model years 2027 through 2030.
(vii) Keep records as needed to show that you meet the requirements
specified in this paragraph (b) for phasing in standards and for
complying with declining fleet average average standards.
(c) Exhaust emission standards for -7 [deg]C testing. Exhaust
emissions may not exceed standards for -7 [deg]C testing, as follows:
(1) Measure emissions as described in 40 CFR 1066.801(c)(1) and
(6).
(2) The standards apply to gasoline-fueled and diesel-fueled
vehicles, except as specified. Multi-fuel, bi-fuel or dual-fuel
vehicles must comply with requirements using only gasoline and diesel
fuel, as applicable. Testing with other fuels such as electricity or a
high-level ethanol-gasoline blend is not required.
(3) The following standards apply equally for light-duty program
vehicles and medium-duty vehicles:
(i) Gasoline-fueled vehicles must meet a fleet average
NMOG+NOX standard of 300 mg/mile. Calculate fleet average
emission levels as described in Sec. 86.1864. There is no
NMOG+NOX standard for diesel-fueled vehicles, but
manufacturers must measure and report emissions as described in Sec.
86.1829-15(g).
(ii) The PM standard is 0.5 mg/mile.
(iii) The CO standard is 10.0 g/mile.
(4) The CO standard applies at both low-altitude and high-altitude
conditions. The NMOG+NOX and PM standards apply only at low-
altitude conditions. However, manufacturers must submit an engineering
evaluation indicating that common calibration approaches are utilized
at high altitudes. Any deviation from low altitude emission control
practices must be included in the auxiliary emission control device
(AECD) descriptions submitted at certification. Any AECD specific to
high altitude must require engineering emission data for EPA evaluation
to quantify any emission impact and validity of the AECD.
(5) Phase-in requirements for standards under this paragraph (c)
apply as described in paragraphs (b)(6) and (f) of this section.
(d) Special provisions for spark-ignition engines. The following A/
C-on specific calibration provisions apply for vehicles with spark-
ignition engines:
(1) A/C-on specific calibrations (e.g., air-fuel ratio, spark
timing, and exhaust gas recirculation) that differ from A/C-off
calibrations may be used for a given set of engine operating conditions
(e.g., engine speed, manifold pressure, coolant temperature, air charge
temperature, and any other parameters). Such calibrations must not
unnecessarily reduce emission control effectiveness during A/C-on
operation when the vehicle is operated under conditions that may
reasonably be expected during normal operation and use. If emission
control effectiveness decreases as a result of such calibrations, the
manufacturer must describe in the Application for Certification the
circumstances under which this occurs and the reason for using these
calibrations.
(2) For AECDs involving commanded enrichment, these AECDs must not
operate differently for A/C-on operation than for A/C-off operation.
This includes both the sensor inputs for triggering enrichment and the
degree of enrichment employed.
(e) Off-cycle emission standards for high-GCWR vehicles. Model year
2031 and later medium-duty vehicles above 22,000 pounds GCWR must meet
off-cycle emission standards as follows:
(1) The engine-based off-cycle emission standards in 40 CFR
1036.104(a)(3) apply for vehicles with compression-ignition engines
based on measurement procedures with 2-bin moving average windows.
Manufacturers may instead meet the following alternative standards for
measurement procedures with 3-bin moving average windows:
Table 6 to Paragraph (e)(1)--Alternative Off-Cycle Standards for High-GCWR Vehicles With Compression-Ignition
Engines \a\
----------------------------------------------------------------------------------------------------------------
HC mg/ PM mg/ CO g/
Off-cycle bin NOX \b\ hp[middot]hr hp[middot]hr hp[middot]hr
----------------------------------------------------------------------------------------------------------------
Bin 1.............................. 7.5 g/hr................... .............. .............. ..............
Bin 2a............................. 75 mg/hp[middot]hr......... 210 7.5 23.25
Bin 2b............................. 30 mg/hp[middot]hr......... 210 7.5 23.25
----------------------------------------------------------------------------------------------------------------
\a\ Listed standards include a conformity factor of 1.5. Accuracy margins apply as described in Sec. 86.1845-
04(h).
\b\ There is no temperature-based adjustment to the off-cycle NOX standard for testing with three-bin moving
average windows.
(2) The following emission standards apply for spark-ignition
engines:
Table 7 to Paragraph (e)(2)--Off-Cycle Emission Standards for High-GCWR
Vehicles With Spark-Ignition Engines \a\
------------------------------------------------------------------------
Pollutant Off-cycle emission standard
------------------------------------------------------------------------
NOX \b\................................ 30 mg/hp[middot]hr.
HC..................................... 210 mg/hp[middot]hr.
PM..................................... 7.5 mg/hp[middot]hr.
[[Page 28166]]
CO..................................... 21.6 g/hp[middot]hr.
------------------------------------------------------------------------
\a\ Listed standards include a conformity factor of 1.5.
\b\ There is no temperature-based adjustment to the off-cycle NOX
standard for vehicles with spark-ignition engines.
(3) In-use testing requirements and measurement procedures apply as
described in Sec. 86.1845-04(h).
(f) Small-volume manufacturers. Small-volume manufacturers may use
the following phase-in provisions for light-duty program vehicles:
(1) Instead of the 25 [deg]C fleet average NMOG+NOX
standards specified in this section, small-volume manufacturers may
meet alternate fleet average standards of 51 mg/mile for model year
2027 and 30 mg/mile for model years 2028 through 2031. The 15 mg/mile
standard applies starting in model year 2032.
(2) Instead of the phase-in specified in paragraph (b)(6)(i) of
this section, small-volume manufacturers may comply with all the
requirements of this section other than the NMOG+NOX
standards starting in model year 2032.
0
47. Amend Sec. 86.1813-17 by:
0
a. Revising paragraph (a)(2)(i) introductory text;
0
b. Adding paragraphs (a)(2)(iv) and (v); and
0
c. Revising paragraphs (b)(1) and (g)(2)(ii)(B).
The revisions and additions read as follows:
Sec. 86.1813-17 Evaporative and refueling emission standards.
* * * * *
(a) * * *
(2) * * *
(i) The emission standard for the sum of diurnal and hot soak
measurements from the two-diurnal test sequence and the three-diurnal
test sequence is based on a fleet average in a given model year. You
must specify a family emission limit (FEL) for each evaporative family.
The FEL serves as the emission standard for the evaporative family with
respect to all required diurnal and hot soak testing. Calculate your
fleet average emission level as described in Sec. 86.1860 based on the
FEL that applies for low-altitude testing to show that you meet the
specified standard. For multi-fueled vehicles, calculate fleet average
emission levels based only on emission levels for testing with
gasoline. You may generate emission credits for banking and trading,
and you may use banked or traded credits for demonstrating compliance
with the diurnal plus hot soak emission standard for vehicles required
to meet the Tier 3 standards, other than gaseous-fueled or electric
vehicles, as described in Sec. 86.1861 starting in model year 2017.
You comply with the emission standard for a given model year if you
have enough credits to show that your fleet average emission level is
at or below the applicable standard. You may exchange credits between
or among evaporative families within an averaging set as described in
Sec. 86.1861. Separate diurnal plus hot soak emission standards apply
for each evaporative/refueling emission family as shown for high-
altitude conditions. The sum of diurnal and hot soak measurements may
not exceed the following Tier 3 standards:
* * * * *
(iv) Vehicles that become light-duty vehicles based on the change
in the definition for ``light-duty truck'' for Tier 4 vehicles may
continue to meet the same evaporative emission standards under this
paragraph (a) through model year 2031 as long as they qualify for
carryover certification as described in Sec. 86.1839.
(v) Vehicles that are no longer medium-duty vehicles based on the
change in the definition for ``medium-duty passenger vehicles'' for
Tier 4 vehicles may continue to meet the same evaporative emission
standards under this paragraph (a) through model year 2031 as long as
they qualify for carryover certification as described in Sec. 86.1839.
* * * * *
(b) * * *
(1) The following implementation dates apply for incomplete heavy-
duty vehicles:
(i) Refueling standards apply starting with model year 2027 for
incomplete heavy-duty vehicles certified under 40 CFR part 1037 and in
model year 2030 for incomplete heavy-duty vehicles certified under this
subpart, unless the manufacturer complies with the alternate phase-in
specified in paragraph (b)(1)(iii) of this section. If you do not meet
the alternative phase-in requirement for model year 2026, you must
certify all your incomplete heavy-duty vehicles above 14,000 pounds
GVWR to the refueling standard in model year 2027.
(ii) Refueling standards are optional for incomplete heavy-duty
vehicles at or below 14,000 pounds GVWR through model year 2029, unless
the manufacturer uses the alternate phase-in specified in paragraph
(b)(1)(iii) of this section to meet standards together for heavy-duty
vehicles above and below 14,000 pounds GVWR.
(iii) Manufacturers may comply with an alternate phase-in of the
refueling standard for incomplete heavy-duty vehicles as described in
this paragraph (b)(1)(iii). Manufacturers must meet the refueling
standard during the phase-in based on their projected nationwide
production volume of all incomplete heavy-duty vehicles subject to
standards under this subpart and under 40 CFR part 1037 as described in
Table 4 of this section. Keep records as needed to show that you meet
phase-in requirements.
Table 4 of Sec. 86.1813-17--Alternative Phase-In Schedule for
Refueling Emission Standards for Incomplete Heavy-Duty Vehicles
------------------------------------------------------------------------
Minimum percentage of
heavy-duty vehicles
Model year subject to the
refueling standard
------------------------------------------------------------------------
2026........................................... 40
2027........................................... 40
2028........................................... 80
2029........................................... 80
2030........................................... 100
------------------------------------------------------------------------
* * * * *
(g) * * *
(2) * * *
(ii) * * *
(B) All the vehicles meeting the leak standard must also meet the
Tier 3 evaporative emission standards. Through model year 2026, all
vehicles meeting the leak standard must also meet the OBD requirements
in Sec. 86.1806-17(b)(1).
* * * * *
0
48. Add Sec. 86.1815-27 to read as follows:
[[Page 28167]]
Sec. 86.1815-27 Battery-related requirements for battery electric
vehicles and plug-in hybrid electric vehicles.
Except as specified in paragraph (h) of this section, battery
electric vehicles and plug-in hybrid electric vehicles must meet
requirements related to batteries serving as a Rechargeable Energy
Storage System from GTR No. 22 (incorporated by reference, see Sec.
86.1). The requirements of this section apply starting in model year
2027 for vehicles at or below 6,000 pounds GVWR. The requirements of
this section start to apply for vehicles above 6,000 pounds GVWR when
they are first certified to Tier 4 NMOG+NOX bin standards
under Sec. 86.1811-27(b), not later than model year 2031. The
following clarifications and adjustments to GTR No. 22 apply for
vehicles subject to this section:
(a) Manufacturers must install an operator-accessible display that
monitors, estimates, and communicates the vehicle's State of Certified
Energy (SOCE) and include information in the application for
certification as described in Sec. 86.1844. Display SOCE as a
percentage expressed at least to the nearest whole number.
Manufacturers that qualify as small businesses under Sec. 86.1801-
12(j)(1) must meet the requirements of this paragraph (a) but are not
subject to the requirements in paragraphs (c) through (g) of this
section; however, small businesses may trade credits they generate from
battery electric vehicles and plug-in hybrid electric vehicles for a
given model year only if they meet requirements in paragraphs (c)
through (g) of this section.
(b) Requirements in GTR No. 22 related to State of Certified Range
do not apply.
(c) Evaluate SOCE based on measured Usable Battery Energy (UBE)
values. Use the Multi-Cycle Range and Energy Consumption Test described
in 40 CFR 600.116-12(a) for battery electric vehicles and either the
UDDS Full Charge Test (FCT) or the HFET FCT as described in 40 CFR
600.116-12(c)(11) for plug-in hybrid electric vehicles. For medium-duty
vehicles, perform testing with test weight set to Adjusted Loaded
Vehicle Weight.
(d) In-use vehicles must display SOCE values that are accurate
within 5 percent of measured values as calculated in GTR No. 22.
(e) Batteries installed in light-duty program vehicles must meet a
Minimum Performance Requirement such that measured usable battery
energy is at least 80 percent of the vehicle's certified usable battery
energy after 5 years or 62,000 miles, and at least 70 percent of
certified usable battery energy at 8 years or 100,000 miles.
(f) Manufacturers must divide test groups into families and perform
testing and submit reports as follows:
(1) Identify battery durability families and monitor families as
specified in Section 6.1 of GTR No. 22. Include vehicles in the same
battery durability family only if there are no chemistry differences
that would be expected to influence durability, such as proportional
metal composition of the cathode, composition of the anode, or
differences in particle size or morphology of cathode or anode active
materials.
(2) Perform Part A testing to verify that SOCE monitors meet
accuracy requirements as described in Sec. 86.1845-04. Test the number
of vehicles and determine a pass or fail result as specified in Section
6.3 of GTR No. 22.
(3) For light-duty program vehicles, perform Part B verification
for each battery durability family included in a monitor family subject
to Part A testing to verify that batteries have SOCE meeting the
Minimum Performance Requirement. Determine performance by reading SOCE
monitors with a physical inspection, remote inspection using wireless
technology, or any other appropriate means.
(i) Randomly select test vehicles from at least 10 different U.S.
states or territories, with no more than 50 percent of selected
vehicles coming from any one state or territory. Select vehicles to
represent a wide range of climate conditions and operating
characteristics.
(ii) Select at least 500 test vehicles per year from each from each
battery durability family, except that we may approve your request to
select fewer vehicles for a given battery durability family based on
limited production volumes. If you test fewer than 500 vehicles, you
may exclude up to 5 percent of the tested vehicles to account for the
limited sample size. Test vehicles may be included from year to year,
or test vehicles may change over the course of testing for the battery
durability family.
(iii) A battery durability family passes if 90 percent or more of
sampled vehicles have reported values at or above the Minimum
Performance Requirement.
(iv) Continue testing for eight years after the end of production
for vehicles included in the battery durability family. Note that
testing will typically require separate testing from multiple model
years in a given calendar year.
(4) You may request our approval to group monitors and batteries
differently, or to adjust testing specifications. Submit your request
with your proposed alternative specifications, along with technical
justification. In the case of broadening the scope of a monitor family,
include data demonstrating that differences within the proposed monitor
family do not cause error in estimating SOCE.
(5) Submit electronic reports to document the results of testing as
described in Sec. 86.1847.
(g) If vehicles do not comply with monitor accuracy requirements
under this section, the recall provisions in 40 CFR part 85, subpart S,
apply for each affected monitor family. If battery electric and plug-in
hybrid electric vehicles do not comply with battery durability
requirements under this section, the manufacturer must account for the
nonconformity by forfeiting GHG credits calculated for all the vehicles
within the battery durability group (see Sec. 86.1865-12(j)(3)).
Manufacturers must similarly adjust NMOG+NOX credits for
battery electric vehicles (see Sec. 86.1861-17(f)).
(h) Manufacturers may meet the requirements of this section for
battery electric vehicles by instead complying with monitor accuracy
and battery durability requirements based on the procedures specified
in 13 CCR 1962.7 (incorporated by reference, see Sec. 86.1), subject
to the following exceptions and clarifications:
(1) References to the California ARB Executive Officer are deemed
to mean the EPA Administrator. References to California are deemed to
mean the United States. Test vehicles may be registered in any U.S.
state or territory.
(2) Model year 2027 through 2029 vehicles must be designed to
maintain 70 percent or more of the certification range value for at
least 70 percent of the vehicles in a test group. Model year 2030 and
later vehicles must be designed to maintain 80 percent or more of the
certification range value as an average value for all vehicles in a
test group. These requirements apply for a useful life of 10 years or
150,000 miles, whichever occurs first. If vehicles do not comply with
these battery durability requirements, the manufacturer must adjust all
credit balances to account for the nonconformity by forfeiting GHG
credits calculated for all the vehicles within the test group (see
Sec. 86.1865-12(j)(3)). Manufacturers must similarly adjust
NMOG+NOX credits (see Sec. 86.1861-17(f)).
(3) EPA may perform compliance and enforcement testing to support a
finding of nonconformity as described in 13 CCR 1962.7(e).
(4) A minimum nationwide sampling rate of 500 in-use vehicles
applies under
[[Page 28168]]
13 CCR 1962.7(d)(1). Select vehicles as described in paragraph
(f)(3)(i) of this section.
(5) Manufacturers must meet the data standardization requirements
in 13 CCR 1962.5 (incorporated by reference, see Sec. 86.1).
(6) Vehicles continue to be subject to warranty requirements as
specified in 40 CFR part 85, subpart V.
(7) Meeting requirements under this paragraph (h) does not depend
on creating battery durability families and monitor families. The Part
A testing requirements for monitor accuracy also do not apply.
(8) Include the following information in the application for
certification for each test group instead of the information specified
in Sec. 86.1844-01(d)(19):
(i) The worst-case certified range value to represent the test
group, instead of certified usable battery energy.
(ii) A statement attesting that the SOCE monitor meets the accuracy
requirement appropriate for the model year.
(iii) A statement that each test group meets the design targets in
paragraph (h)(2) of this section.
0
49. Amend Sec. 86.1816-18 by revising paragraph (a) introductory text
and adding paragraph (b)(14) to read as follows:
Sec. 86.1816-18 Emission standards for heavy-duty vehicles.
(a) Applicability and general provisions. This section describes
Tier 3 exhaust emission standards for complete heavy-duty vehicles.
These standards are optional for incomplete heavy-duty vehicles and for
heavy-duty vehicles above 14,000 pounds GVWR as described in Sec.
86.1801. Greenhouse gas emission standards are specified in Sec.
86.1818 for MDPV and in Sec. 86.1819 for other HDV. See Sec. 86.1813
for evaporative and refueling emission standards. This section starts
to apply in model year 2018, except that the provisions may apply to
vehicles before model year 2018 as specified in paragraph (b)(11) of
this section. This section applies for model year 2027 and later
vehicles only as specified in Sec. 86.1811-27. Separate requirements
apply for MDPV as specified in Sec. 86.1811. See subpart A of this
part for requirements that apply for incomplete heavy-duty vehicles and
for heavy-duty engines certified independent of the chassis. The
following general provisions apply:
* * * * *
(b) * * *
(14) Starting in model year 2027, you may certify vehicles using
the following transitional Tier 4 bins as part of the compliance
demonstration for meeting the Tier 4 declining fleet average
NMOG+NOX standard in Sec. 86.1811-27(b)(6):
Table 8 of Sec. 86.1816-18--Transitional Tier 4 Bin Standards--Class 2b
[g/mile]
----------------------------------------------------------------------------------------------------------------
NMOG+NOX CO
FEL name ---------------------------------------------------------------
FTP (FEL) HD-SFTP FTP HD-SFTP
----------------------------------------------------------------------------------------------------------------
Bin 125......................................... 0.125 0.125 3.2 12.0
Bin 100......................................... 0.100 0.100 3.2 12.0
Bin 85.......................................... 0.085 0.085 3.2 12.0
Bin 75.......................................... 0.075 0.075 3.2 12.0
----------------------------------------------------------------------------------------------------------------
Table 9 of Sec. 86.1816-18--Transitional Tier 4 Bin Standards--Class 3
[g/mile]
----------------------------------------------------------------------------------------------------------------
NMOG+NOX CO
FEL name ---------------------------------------------------------------
FTP (FEL) HD-SFTP FTP HD-SFTP
----------------------------------------------------------------------------------------------------------------
Bin 170......................................... 0.170 0.170 3.7 4.0
Bin 150......................................... 0.150 0.150 3.7 4.0
Bin 125......................................... 0.125 0.125 3.7 4.0
Bin 100......................................... 0.100 0.100 3.7 4.0
Bin 85.......................................... 0.085 0.085 3.7 4.0
Bin 75.......................................... 0.075 0.075 3.7 4.0
----------------------------------------------------------------------------------------------------------------
* * * * *
Sec. Sec. 86.1817-05 and 86.1817-08 [Removed]
0
50. Remove Sec. Sec. 86.1817-05 and 86.1817-08.
0
51. Amend Sec. 86.1818-12 by:
0
a. Revising and republishing paragraph (a),;
0
b. Revising paragraphs (b) introductory text and (c);
0
c. Removing and reserving paragraph (e);
0
d. Revising paragraph (f) introductory text;
0
e. Revising and republishing paragraph (g); and
0
f. Revising paragraph (h).
The revisions read as follows:
Sec. 86.1818-12 Greenhouse gas emission standards for light-duty
vehicles, light-duty trucks, and medium-duty passenger vehicles.
(a) Applicability. (1) The greenhouse gas standards and related
requirements in this section apply to 2012 and later model year LDV,
LDT, and MDPV, including multi-fuel vehicles, vehicles fueled with
alternative fuels, hybrid electric vehicles, plug-in hybrid electric
vehicles, electric vehicles, and fuel cell vehicles. Unless otherwise
specified, multi-fuel vehicles must comply with all requirements
established for each consumed fuel.
(2) The standards specified in this section apply for testing at
both low-altitude conditions and high-altitude conditions. However,
manufacturers must submit an engineering evaluation indicating that
common calibration approaches are utilized at high altitude instead of
performing testing for certification, consistent with Sec. 86.1829.
Any deviation from low altitude emission control practices must be
included in the auxiliary emission control device (AECD) descriptions
submitted at certification. Any AECD
[[Page 28169]]
specific to high altitude requires engineering emission data for EPA
evaluation to quantify any emission impact and determine the validity
of the AECD.
(3) A manufacturer that qualifies as a small business according to
Sec. 86.1801-12(j) is exempt from the emission standards in this
section and the associated provisions in 40 CFR part 600; however,
manufacturers may trade emission credits generated in a given model
year only by certifying to emission standards that apply for that model
year. Starting in model year 2027, manufacturers may produce no more
than 500 exempt vehicles in any model year under this paragraph (a)(3).
This limit applies for vehicles with engines, including plug-in hybrid
electric vehicles; this limit does not apply for electric vehicles.
Vehicles that are not exempt under this paragraph (a)(3) must meet
emission standards as specified in this section.
(b) Definitions. The following definitions apply for this section:
* * * * *
(c) Fleet average CO2 standards. Fleet average
CO2 standards apply as follows for passenger automobiles and
light trucks:
(1) Each manufacturer must comply with separate fleet average
CO2 standards for passenger automobiles and light trucks. To
calculate the fleet average CO2 standards for passenger
automobiles for a given model year, multiply each CO2 target
value by the production volume of passenger automobiles for the
corresponding model type-footprint combination, then sum those products
and divide the sum by the total production volume of passenger
automobiles in that model year. Repeat this calculation using
production volumes of light trucks to determine the separate fleet
average CO2 standards for light trucks. Round the resulting
fleet average CO2 emission standards to the nearest whole
gram per mile. Averaging calculations and other compliance provisions
apply as described in Sec. 86.1865.
(2) A CO2 target value applies for each unique
combination of model type and footprint. The CO2 target
serves as the emission standard that applies throughout the useful life
for each vehicle. Determine the CO2 target values from the
following table for model year 2032 and later, or from paragraph (h) of
this section for model year 2031 and earlier:
Table 1 to Paragraph (c)(2)--Footprint-Based CO2 Target Values
--------------------------------------------------------------------------------------------------------------------------------------------------------
Footprint cutpoints (ft\2\) CO2 target value (g/mile)
---------------------------------------------------------------------------------------------------------
Vehicle type Below low Above high
Low High cutpoint Between cutpoints \a\ cutpoint
--------------------------------------------------------------------------------------------------------------------------------------------------------
Passenger automobile.......................... 45 56 71.8 0.35 x f + 56.2......................... 75.6
Light truck................................... 45 70.0 75.7 1.38 x f + 13.8......................... 110.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Calculate the CO2 target value for vehicles between the footprint cutpoints as shown, using vehicle footprint, f, and rounding the result to the
nearest 0.1 g/mile.
* * * * *
(f) Nitrous oxide (N2O) and methane (CH4)
exhaust emission standards for passenger automobiles and light trucks.
Each manufacturer's fleet of combined passenger automobiles and light
trucks must comply with N2O and CH4 standards
using either the provisions of paragraph (f)(1), (2), or (3) of this
section. Except with prior EPA approval, a manufacturer may not use the
provisions of both paragraphs (f)(1) and (2) of this section in a model
year. For example, a manufacturer may not use the provisions of
paragraph (f)(1) of this section for their passenger automobile fleet
and the provisions of paragraph (f)(2) for their light truck fleet in
the same model year. The manufacturer may use the provisions of both
paragraphs (f)(1) and (3) of this section in a model year. For example,
a manufacturer may meet the N2O standard in paragraph
(f)(1)(i) of this section and an alternative CH4 standard
determined under paragraph (f)(3) of this section.
* * * * *
(g) Alternative fleet average standards for manufacturers with
limited sales. Manufacturers meeting the criteria in this paragraph (g)
may request alternative fleet average CO2 standards for
model year 2031 and earlier vehicles.
(1) Eligibility for alternative standards. Eligibility as
determined in this paragraph (g) shall be based on the total nationwide
sales of combined passenger automobiles and light trucks. The terms
``sales'' and ``sold'' as used in this paragraph (g) shall mean
vehicles produced for sale in the states and territories of the United
States. For the purpose of determining eligibility the sales of related
companies shall be aggregated according to the provisions of Sec.
86.1838-01(b)(3), or, if a manufacturer has been granted operational
independence status under Sec. 86.1838-01(d), eligibility shall be
based on that manufacturer's vehicle sales. To be eligible for
alternative standards established under this paragraph (g), the
manufacturer's average sales for the three most recent consecutive
model years must remain below 5,000. If a manufacturer's average sales
for the three most recent consecutive model years exceeds 4999, the
manufacturer will no longer be eligible for exemption and must meet
applicable emission standards starting with the model year according to
the provisions in this paragraph (g)(1).
(i) If a manufacturer's average sales for three consecutive model
years exceeds 4999, and if the increase in sales is the result of
corporate acquisitions, mergers, or purchase by another manufacturer,
the manufacturer shall comply with the emission standards described in
paragraph (c) of this section, as applicable, beginning with the first
model year after the last year of the three consecutive model years.
(ii) If a manufacturer's average sales for three consecutive model
years exceeds 4999 and is less than 50,000, and if the increase in
sales is solely the result of the manufacturer's expansion in vehicle
production (not the result of corporate acquisitions, mergers, or
purchase by another manufacturer), the manufacturer shall comply with
the emission standards described in paragraph (c), of this section, as
applicable, beginning with the second model year after the last year of
the three consecutive model years.
(2) Requirements for new entrants into the U.S. market. New
entrants are those manufacturers without a prior record of automobile
sales in the United States and without prior certification to
greenhouse gas emission standards in this section. In addition to the
eligibility requirements stated in paragraph (g)(1) of this section,
new entrants must meet the following requirements:
[[Page 28170]]
(i) In addition to the information required under paragraph (g)(4)
of this section, new entrants must provide documentation that shows a
clear intent by the company to actually enter the U.S. market in the
years for which alternative standards are requested. Demonstrating such
intent could include providing documentation that shows the
establishment of a U.S. dealer network, documentation of work underway
to meet other U.S. requirements (e.g., safety standards), or other
information that reasonably establishes intent to the satisfaction of
the Administrator.
(ii) Sales of vehicles in the U.S. by new entrants must remain
below 5,000 vehicles for the first three model years in the U.S.
market, and in subsequent years the average sales for any three
consecutive years must remain below 5,000 vehicles. Vehicles sold in
violation of these limits within the first five model years will be
considered not covered by the certificate of conformity and the
manufacturer will be subject to penalties on an individual-vehicle
basis for sale of vehicles not covered by a certificate. In addition,
violation of these limits will result in loss of eligibility for
alternative standards until such point as the manufacturer demonstrates
two consecutive model years of sales below 5,000 automobiles. After the
first five model years, the eligibility provisions in paragraph (g)(1)
of this section apply, where violating the sales thresholds is no
longer a violation of the condition on the certificate, but is instead
grounds for losing eligibility for alternative standards.
(iii) A manufacturer with sales in the most recent model year of
less than 5,000 automobiles, but where prior model year sales were not
less than 5,000 automobiles, is eligible to request alternative
standards under this paragraph (g). However, such a manufacturer will
be considered a new entrant and subject to the provisions regarding new
entrants in this paragraph (g), except that the requirement to
demonstrate an intent to enter the U.S. market in paragraph (g)(2)(i)
of this section shall not apply.
(3) How to request alternative fleet average standards. Eligible
manufacturers may petition for alternative standards for up to five
consecutive model years if sufficient information is available on which
to base such standards.
(i) To request alternative standards starting with the 2017 model
year, eligible manufacturers must submit a completed application no
later than July 30, 2013.
(ii) To request alternative standards starting with a model year
after 2017, eligible manufacturers must submit a completed request no
later than 36 months prior to the start of the first model year to
which the alternative standards would apply.
(iii) The request must contain all the information required in
paragraph (g)(4) of this section, and must be signed by a chief officer
of the company. If the Administrator determines that the content of the
request is incomplete or insufficient, the manufacturer will be
notified and given an additional 30 days to amend the request.
(4) Data and information submittal requirements. Eligible
manufacturers requesting alternative standards under this paragraph (g)
must submit the following information to the Environmental Protection
Agency. The Administrator may request additional information as she
deems appropriate. The completed request must be sent to the
Environmental Protection Agency at the following address: Director,
Compliance and Innovative Strategies Division, U.S. Environmental
Protection Agency, 2000 Traverwood Drive, Ann Arbor, Michigan 48105.
(i) Vehicle model and fleet information. (A) The model years to
which the requested alternative standards would apply, limited to five
consecutive model years.
(B) Vehicle models and projections of sales volumes for each model
year.
(C) Detailed description of each model, including the vehicle type,
vehicle mass, power, footprint, powertrain, and expected pricing.
(D) The expected production cycle for each model, including new
model introductions and redesign or refresh cycles.
(ii) Technology evaluation information. (A) The CO2
reduction technologies employed by the manufacturer on each vehicle
model, or projected to be employed, including information regarding the
cost and CO2 -reducing effectiveness. Include technologies
that improve air conditioning efficiency and reduce air conditioning
system leakage, and any ``off-cycle'' technologies that potentially
provide benefits outside the operation represented by the Federal Test
Procedure and the Highway Fuel Economy Test.
(B) An evaluation of comparable models from other manufacturers,
including CO2 results and air conditioning credits generated
by the models. Comparable vehicles should be similar, but not
necessarily identical, in the following respects: vehicle type,
horsepower, mass, power-to-weight ratio, footprint, retail price, and
any other relevant factors. For manufacturers requesting alternative
standards starting with the 2017 model year, the analysis of comparable
vehicles should include vehicles from the 2012 and 2013 model years,
otherwise the analysis should at a minimum include vehicles from the
most recent two model years.
(C) A discussion of the CO2-reducing technologies
employed on vehicles offered outside of the U.S. market but not
available in the U.S., including a discussion as to why those vehicles
and/or technologies are not being used to achieve CO2
reductions for vehicles in the U.S. market.
(D) An evaluation, at a minimum, of the technologies projected by
the Environmental Protection Agency in a final rulemaking as those
technologies likely to be used to meet greenhouse gas emission
standards and the extent to which those technologies are employed or
projected to be employed by the manufacturer. For any technology that
is not projected to be fully employed, explain why this is the case.
(iii) Alternative fleet average CO2 standards. (A) The
most stringent CO2 level estimated to be feasible for each
model, in each model year, and the technological basis for this
estimate.
(B) For each model year, a projection of the lowest feasible sales-
weighted fleet average CO2 value, separately for passenger
automobiles and light trucks, and an explanation demonstrating that
these projections are reasonable.
(C) A copy of any application, data, and related information
submitted to NHTSA in support of a request for alternative Corporate
Average Fuel Economy standards filed under 49 CFR part 525.
(iv) Information supporting eligibility. (A) U.S. sales for the
three previous model years and projected sales for the model years for
which the manufacturer is seeking alternative standards.
(B) Information regarding ownership relationships with other
manufacturers, including details regarding the application of the
provisions of Sec. 86.1838-01(b)(3) regarding the aggregation of sales
of related companies.
(5) Alternative standards. Alternative standards apply as follows:
(i) Where EPA has exercised its regulatory authority to
administratively specify alternative standards, those alternative
standards approved for model year 2021 continue to apply through model
year 2026. Starting in model year 2027, manufacturers must certify to
the standards in paragraph (h)
[[Page 28171]]
of this section on a delayed schedule, as follows:
------------------------------------------------------------------------
Manufacturers must
certify to the
In model year . . . standards that would
otherwise apply in . .
.
------------------------------------------------------------------------
(A) 2027....................................... 2025
(B) 2028....................................... 2025
(C) 2029....................................... 2027
(D) 2030....................................... 2028
(E) 2031....................................... 2030
------------------------------------------------------------------------
(ii) EPA may approve a request from other manufacturers for
alternative fleet average CO2 standards under this paragraph
(g). The alternative standards for those manufacturers will apply by
model year as specified in paragraph (g)(5)(i) of this section.
(6) Restrictions on credit trading. Manufacturers subject to
alternative standards approved by the Administrator under this
paragraph (g) may not trade credits to another manufacturer. Transfers
between car and truck fleets within the manufacturer are allowed, and
the carry-forward provisions for credits and deficits apply.
Manufacturers may generate credits in a given model year for trading to
another manufacturer by certifying to the standards in paragraph (h) of
this section for the current model year across the manufacturer's full
product line. A manufacturer certifying to the standards in paragraph
(h) of this section will no longer be eligible to certify to the
alternative standards under this paragraph (g) in later model years.
(7) Starting in model year 2032, all manufacturers must certify to
the standards in paragraph (c) of this section.
(h) Historical and interim standards. The following CO2
target values apply for model year 2031 and earlier vehicles:
(1) CO2 target values apply as follows for passenger
automobiles:
Table 2 to Paragraph (h)(1)--Historical and Interim CO2 Target Values for Passenger Automobiles
--------------------------------------------------------------------------------------------------------------------------------------------------------
Footprint cutpoints (ft\2\) CO2 target value (g/mile)
---------------------------------------------------------------------------------------------------------
Model year Below low Above high
Low High cutpoint Between cutpoints \a\ cutpoint
--------------------------------------------------------------------------------------------------------------------------------------------------------
2012.......................................... 41 56 244.0 4.72 x f + 50.5......................... 315.0
2013.......................................... 41 56 237.0 4.72 x f + 43.3......................... 307.0
2014.......................................... 41 56 228.0 4.72 x f + 34.8......................... 299.0
2015.......................................... 41 56 217.0 4.72 x f + 23.4......................... 288.0
2016.......................................... 41 56 206.0 4.72 x f + 12.7......................... 277.0
2017.......................................... 41 56 195.0 4.53 x f + 8.9.......................... 263.0
2018.......................................... 41 56 185.0 4.35 x f + 6.5.......................... 250.0
2019.......................................... 41 56 175.0 4.17 x f + 4.2.......................... 238.0
2020.......................................... 41 56 166.0 4.01 x f + 1.9.......................... 226.0
2021.......................................... 41 56 161.8 3.94 x f + 0.2.......................... 220.9
2022.......................................... 41 56 159.0 3.88 x f--0.1........................... 217.3
2023.......................................... 41 56 145.6 3.56 x f--0.4........................... 199.1
2024.......................................... 41 56 138.6 3.39 x f--0.4........................... 189.5
2025.......................................... 41 56 130.5 3.26 x f--3.2........................... 179.4
2026.......................................... 41 56 114.3 3.11 x f--13.1.......................... 160.9
2027.......................................... 42 56 135.9 0.66 x f + 108.0........................ 145.2
2028.......................................... 43 56 123.8 0.60 x f + 97.9......................... 131.6
2029.......................................... 44 56 110.6 0.54 x f + 87.0......................... 117.0
2030.......................................... 45 56 98.2 0.47 x f + 76.9......................... 103.4
2031.......................................... 45 56 85.3 0.41 x f + 66.8......................... 89.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Calculate the CO2 target value for vehicles between the footprint cutpoints as shown, using vehicle footprint, f, and rounding the result to the
nearest 0.1 g/mile.
(2) CO2 target values apply as follows for light trucks:
Table 3 to paragraph (h)(2)--Historical and Interim CO2 Target Values for Light Trucks
--------------------------------------------------------------------------------------------------------------------------------------------------------
Footprint cutpoints (ft\2\) CO2 target value (g/mile)
---------------------------------------------------------------------------------------------------------
Model year Below low Above high
Low High cutpoint Between cutpoints \a\ cutpoint
--------------------------------------------------------------------------------------------------------------------------------------------------------
2012.......................................... 41 66.0 294.0 4.04 x f + 128.6........................ 395.0
2013.......................................... 41 66.0 284.0 4.04 x f + 118.7........................ 385.0
2014.......................................... 41 66.0 275.0 4.04 x f + 109.4........................ 376.0
2015.......................................... 41 66.0 261.0 4.04 x f + 95.1......................... 362.0
2016.......................................... 41 66.0 247.0 4.04 x f + 81.1......................... 348.0
2017.......................................... 41 50.7 238.0 4.87 x f + 38.3......................... --
2017.......................................... 50.8 66.0 -- 4.04 x f + 80.5......................... 347.0
2018.......................................... 41 60.2 227.0 4.76 x f + 31.6......................... --
2018.......................................... 60.3 66.0 .............. 4.04 x f + 75.0......................... 342.0
2019.......................................... 41 66.4 220.0 4.68 x f + 27.7......................... 339.0
2020.......................................... 41 68.3 212.0 4.57 x f + 24.6......................... 337.0
2021.......................................... 41 68.3 206.5 4.51 x f + 21.5......................... 329.4
2022.......................................... 41 68.3 203.0 4.44 x f + 20.6......................... 324.1
[[Page 28172]]
2023.......................................... 41 74.0 181.1 3.97 x f + 18.4......................... 312.1
2024.......................................... 41 74.0 172.1 3.77 x f + 17.4......................... 296.5
2025.......................................... 41 74.0 159.3 3.58 x f + 12.5......................... 277.4
2026.......................................... 41 74.0 141.8 3.41 x f + 1.9.......................... 254.4
2027.......................................... 42 73.0 150.3 2.89 x f + 28.9......................... 239.9
2028.......................................... 43 72.0 136.8 2.58 x f + 25.8......................... 211.7
2029.......................................... 44 71.0 122.7 2.27 x f + 22.7......................... 184.0
2030.......................................... 45 70.0 108.8 1.98 x f + 19.8......................... 158.3
2031.......................................... 45 70.0 91.8 1.67 x f + 16.7......................... 133.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Calculate the CO2 target value for vehicles between the footprint cutpoints as shown, using vehicle footprint, f, and rounding the result to the
nearest 0.1 g/mile.
0
52. Amend Sec. 86.1819-14 by:
0
a. Revising the section heading, the introductory text, and paragraphs
(a)(2), (d)(10), (d)(13), (d)(15), (d)(17), and (h).
0
b. Revising and republishing paragraphs (j) and (k).
The revisions and republications read as follows:
Sec. 86.1819-14 Greenhouse gas emission standards for medium-duty and
heavy-duty vehicles.
This section describes exhaust emission standards for
CO2, CH4, and N2O for medium-duty
vehicles. The standards of this section apply for model year 2014 and
later vehicles that are chassis-certified with respect to criteria
pollutants under this subpart S. Additional medium-duty and heavy-duty
vehicles may be subject to the standards of this section as specified
in paragraph (j) of this section. Any medium-duty or heavy-duty
vehicles not subject to standards under this section are instead
subject to greenhouse gas standards under 40 CFR part 1037, and engines
installed in these vehicles are subject to standards under 40 CFR part
1036. If you are not the engine manufacturer, you must notify the
engine manufacturer that its engines are subject to 40 CFR part 1036 if
you intend to use their engines in vehicles that are not subject to
standards under this section. Vehicles produced by small businesses may
be exempted from the standards of this section as described in
paragraph (k)(5) of this section.
(a) * * *
(2) CO2 target values apply as described in this
paragraph (a)(2) for model year 2032 and later. See paragraph (k)(4) of
this section for model year 2031 and earlier:
(i) For vehicles with work factor at or below 5,500 pounds, use the
appropriate work factor in the following equation to calculate a target
value for each vehicle subconfiguration (or group of subconfigurations
as allowed under paragraph (a)(4) of this section), rounding to the
nearest whole g/mile:
CO2 Target = 0.0221 x WF + 170
(ii) For vehicles with work factor above 5,500 pounds, the
CO2 target value is 292 g/mile.
* * * * *
(d) * * *
(10) For dual-fuel, multi-fuel, and flexible-fuel vehicles, perform
exhaust testing on each fuel type (for example, gasoline and E85).
(i) Use either the conventional-fueled CO2 emission rate
or a weighted average of your emission results as specified in 40 CFR
600.510-12(k) for light-duty trucks.
(ii) If you certify to an alternate standard for N2O or
CH4 emissions, you may not exceed the alternate standard
when tested on either fuel.
* * * * *
(13) This paragraph (d)(13) applies for CO2 reductions
resulting from technologies that were not in common use before 2010
that are not reflected in the specified test procedures. While you are
not required to prove that such technologies were not in common use
with heavy-duty vehicles before model year 2010, we will not approve
your request if we determine they do not qualify. These may be
described as off-cycle or innovative technologies. We may allow you to
generate emission credits consistent with the provisions of Sec.
86.1869-12(c) and (d), but only through model year 2026. The 5-cycle
methodology is not presumed to be preferred over alternative
methodologies described in Sec. 86.1869-12(d).
* * * * *
(15) You must submit a final report within 90 days after the end of
the model year. Unless we specify otherwise, include applicable
information identified in Sec. 86.1865-12(l), 40 CFR 600.512, and 49
CFR 535.8(e). The final report must include at least the following
information:
(i) Model year.
(ii) Applicable fleet average CO2 standard.
(iii) Calculated fleet average CO2 value and all the
values required to calculate the CO2 value.
(iv) Number of credits or debits incurred and all values required
to calculate those values.
(v) Resulting balance of credits or debits.
(vi) N2O emissions.
(vii) CH4 emissions.
(viii) Total and percent leakage rates under paragraph (h) of this
section (through model year 2026 only).
* * * * *
(17) You may calculate emission rates for weight increments less
than the 500-pound increment specified for test weight. This does not
change the applicable test weights.
(i) Use the ADC equation in paragraph (g) of this section to adjust
your emission rates for vehicles in increments of 50, 100, or 250
pounds instead of the 500 pound test-weight increments. Adjust
emissions to the midpoint of each increment. This is the equivalent
emission weight. For example, vehicles with a test weight basis of
11,751 to 12,250 pounds (which have an equivalent test weight of 12,000
pounds) could be regrouped into 100-pound increments as follows:
[[Page 28173]]
Table 1 to paragraph (d)(17)(i)--Example of Test-Weight Groupings
------------------------------------------------------------------------
Equivalent Equivalent
Test weight basis emission weight test weight
------------------------------------------------------------------------
11,751-11,850........................ 11,800 12,000
11,851-11,950........................ 11,900 12,000
11,951-12,050........................ 12,000 12,000
12,051-12,150........................ 12,100 12,000
12,151-12,250........................ 12,200 12,000
------------------------------------------------------------------------
(ii) You must use the same increment for all equivalent test weight
classes across your whole product line in a given model year. You must
also specify curb weight for calculating the work factor in a way that
is consistent with your approach for determining test weight for
calculating ADCs under this paragraph (d)(17).
* * * * *
(h) Air conditioning leakage. Loss of refrigerant from your air
conditioning systems may not exceed a total leakage rate of 11.0 grams
per year or a percent leakage rate of 1.50 percent per year, whichever
is greater. This applies for all refrigerants. Calculate the annual
rate of refrigerant leakage according to the procedures specified in
SAE J2727 SEP2023 (incorporated by reference, see Sec. 86.1) or as
specified in Sec. 86.1867-12(a). Calculate the percent leakage rate
as: [total leakage rate (g/yr)] / [total refrigerant capacity (g)] x
100. Round your percent leakage rate to the nearest one-hundredth of a
percent. For purpose of this requirement, ``refrigerant capacity'' is
the total mass of refrigerant recommended by the vehicle manufacturer
as representing a full charge. Where full charge is specified as a
pressure, use good engineering judgment to convert the pressure and
system volume to a mass.
* * * * *
(j) GHG certification of additional vehicles under this subpart.
You may certify certain complete or cab-complete vehicles to the GHG
standards of this section. Certain high-GCWR vehicles may also be
subject to the GHG standards of this section. All vehicles optionally
certified under this paragraph (j) are deemed to be subject to the GHG
standards of this section. Note that for vehicles above 14,000 pounds
GVWR and at or below 26,000 pounds GVWR, GHG certification under this
paragraph (j) does not affect how you may or may not certify with
respect to criteria pollutants.
(1) For GHG compliance, you may certify any complete or cab-
complete spark-ignition vehicles above 14,000 pounds GVWR and at or
below 26,000 pounds GVWR to the GHG standards of this section even
though this section otherwise specifies that you may certify vehicles
to the GHG standards of this section only if they are chassis-certified
for criteria pollutants. This paragraph (j)(1) also applies for
vehicles at or below 14,000 pounds GVWR with GCWR above 22,000 pounds
with installed engines that have been certified under 40 CFR part 1036
as described in 40 CFR 1036.635.
(2) You may apply the provisions of this section to cab-complete
vehicles based on a complete sister vehicle. In unusual circumstances,
you may ask us to apply these provisions to Class 2b or Class 3
incomplete vehicles that do not meet the definition of cab-complete.
(i) Except as specified in paragraph (j)(3) of this section, for
purposes of this section, a complete sister vehicle is a complete
vehicle of the same vehicle configuration as the cab-complete vehicle.
You may not apply the provisions of this paragraph (j) to any vehicle
configuration that has a four-wheel rear axle if the complete sister
vehicle has a two-wheel rear axle.
(ii) Calculate the target value for fleet average CO2
emissions under paragraph (a) or (k)(4) of this section based on the
work factor value that applies for the complete sister vehicle.
(iii) Test these cab-complete vehicles using the same equivalent
test weight and other dynamometer settings that apply for the complete
vehicle from which you used the work factor value (the complete sister
vehicle). For GHG certification, you may submit the test data from that
complete sister vehicle instead of performing the test on the cab-
complete vehicle.
(iv) You are not required to produce the complete sister vehicle
for sale to use the provisions of this paragraph (j)(2). This means the
complete sister vehicle may be a carryover vehicle from a prior model
year or a vehicle created solely for the purpose of testing.
(3) For GHG purposes, if a cab-complete vehicle is not of the same
vehicle configuration as a complete sister vehicle due only to certain
factors unrelated to coastdown performance, you may use the road-load
coefficients from the complete sister vehicle for certification testing
of the cab-complete vehicle, but you may not use emission data from the
complete sister vehicle for certifying the cab-complete vehicle.
(4) The GHG standards of this section and related provisions apply
for vehicles above 22,000 pounds GCWR as described in 40 CFR 1036.635.
(k) Interim provisions. The following provisions apply instead of
other provisions in this subpart:
(1) Incentives for early introduction. Manufacturers may
voluntarily certify in model year 2013 (or earlier model years for
electric vehicles) to the greenhouse gas standards that apply starting
in model year 2014 as specified in 40 CFR 1037.150(a).
(2) Early credits. To generate early credits under this paragraph
(k)(2) for any vehicles other than electric vehicles, you must certify
your entire U.S.-directed fleet to these standards. If you calculate a
separate fleet average for advanced-technology vehicles under paragraph
(k)(7) of this section, you must certify your entire U.S.-directed
production volume of both advanced and conventional vehicles within the
fleet. If some test groups are certified after the start of the model
year, you may generate credits only for production that occurs after
all test groups are certified. For example, if you produce three test
groups in an averaging set and you receive your certificates for those
test groups on January 4, 2013, March 15, 2013, and April 24, 2013, you
may not generate credits for model year 2013 for vehicles from any of
the test groups produced before April 24, 2013. Calculate credits
relative to the standard that would apply in model year 2014 using the
applicable equations in this subpart and your model year 2013 U.S.-
directed production volumes. These credits may be used to show
compliance with the standards of this subpart for 2014 and later model
years. We recommend that you notify us of your intent to use this
provision before submitting your applications.
(3) Compliance date. Compliance with the standards of this section
was optional before January 1, 2014 as specified in 40 CFR 1037.150(g).
[[Page 28174]]
(4) Historical and interim standards. The following CO2
target values apply for model year 2031 and earlier vehicles:
(i) CO2 target values apply as follows for model years
2014 through 2027, except as specified in paragraph (k)(4)(ii) of this
section:
Table 2 to paragraph (k)(4)(i)--CO2 Target Values for Model years 2014
Through 2027
------------------------------------------------------------------------
CO2 target (g/mile) \a\
---------------------------------------
Model year Compression-
Spark-ignition ignition
------------------------------------------------------------------------
2014............................ 0.0482 x WF + 371. 0.0478 x WF + 368.
2015............................ 0.0479 x WF + 369. 0.0474 x WF + 366.
2016............................ 0.0469 x WF + 362. 0.0460 x WF + 354.
2017............................ 0.0460 x WF + 354. 0.0445 x WF + 343.
2018-2020....................... 0.0440 x WF + 339. 0.0416 x WF + 320.
2021............................ 0.0429 x WF + 331. 0.0406 x WF + 312.
2022............................ 0.0418 x WF + 322. 0.0395 x WF + 304.
2023............................ 0.0408 x WF + 314. 0.0386 x WF + 297.
2024............................ 0.0398 x WF + 306. 0.0376 x WF + 289.
2025............................ 0.0388 x WF + 299. 0.0367 x WF + 282.
2026............................ 0.0378 x WF + 291. 0.0357 x WF + 275.
2027............................ 0.0348 x WF + 268. 0.0348 x WF + 268.
------------------------------------------------------------------------
\a\ Electric vehicles are subject to the compression-ignition CO2 target
values.
(ii) The following optional alternative CO2 target
values apply for model years 2014 through 2020:
Table 3 to paragraph (k)(4)(ii)--Alternative CO2 Target Values for Model
Years 2014 Through 2020
------------------------------------------------------------------------
CO2 target (g/mile)
---------------------------------------
Model year Compression-
Spark-ignition ignition.
------------------------------------------------------------------------
2014............................ 0.0482 x WF + 371. 0.0478 x WF + 368.
2015............................ 0.0479 x WF + 369. 0.0474 x WF + 366.
2016-2018....................... 0.0456 x WF + 352. 0.0440 x WF + 339.
2019-2020....................... 0.0440 x WF + 339. 0.0416 x WF + 320.
------------------------------------------------------------------------
(iii) CO2 target values apply as follows for all engine
types for model years 2028 through 2031:
Table 4 to paragraph (k)(4)(iii)--CO2 Target Values for Model Years 2028 Through 2031
----------------------------------------------------------------------------------------------------------------
Work factor CO2 target value (g/mile)
Model year cutpoint --------------------------------------------------------
(pounds) Below cutpoint Above cutpoint
----------------------------------------------------------------------------------------------------------------
2028................................... 8,000 0.0339 x WF + 270.................... 541
2029................................... 6,800 0.0310 x WF + 246.................... 457
2030................................... 5,500 0.0280 x WF + 220.................... 374
2031................................... 5,500 0.0251 x WF + 195.................... 333
----------------------------------------------------------------------------------------------------------------
(5) Provisions for small manufacturers. Standards apply on a
delayed schedule for manufacturers meeting the small business criteria
specified in 13 CFR 121.201 (NAICS code 336111); the employee and
revenue limits apply to the total number employees and total revenue
together for affiliated companies. Qualifying small manufacturers are
not subject to the greenhouse gas standards of this section for
vehicles with a date of manufacture before January 1, 2022, as
specified in 40 CFR 1037.150(c). In addition, small manufacturers
producing vehicles that run on any fuel other than gasoline, E85, or
diesel fuel may delay complying with every later standard under this
part by one model year through model year 2026. The following
provisions apply starting with model year 2027:
(i) Qualifying small manufacturers remain subject to the model year
2026 greenhouse gas standards; however, small manufacturers may trade
emission credits generated in a given model year only by certifying to
standards that apply for that model year.
(ii) Small manufacturers may produce no more than 500 exempt
vehicles in any model year under paragraph (k)(5)(i) of this section.
This limit applies for vehicles with engines, including plug-in hybrid
electric vehicles; this limit does not apply for electric vehicles.
Vehicles that are not exempt under this paragraph (k)(5) must meet
emission standards as specified in this section.
[[Page 28175]]
(6) Alternate N2O standards. Manufacturers may show compliance with
the N2O standards using an engineering analysis. This
allowance also applies for model year 2015 and later test groups
carried over from model 2014 consistent with the provisions of Sec.
86.1839. You may not certify to an N2O FEL different than
the standard without measuring N2O emissions.
(7) Advanced-technology credits. Provisions for advanced-technology
credits apply as described in 40 CFR 1037.615. If you generate credits
from Phase 1 vehicles certified with advanced technology (in model
years 2014 through 2020), you may multiply these credits by 1.50. If
you generate credits from model year 2021 through 2026 vehicles
certified with advanced technology, you may multiply these credits by
3.5 for plug-in hybrid electric vehicles, 4.5 for battery electric
vehicles, and 5.5 for fuel cell vehicles. Advanced-technology credits
from Phase 1 vehicles may be used to show compliance with any standards
of this part or 40 CFR part 1036 or part 1037, subject to the
restrictions in 40 CFR 1037.740. Similarly, you may use up to 60,000 Mg
per year of advanced-technology credits generated under 40 CFR 1036.615
or 1037.615 (from Phase 1 vehicles) to demonstrate compliance with the
CO2 standards in this section. Include vehicles generating
credits in separate fleet average calculations (and exclude them from
your conventional fleet average calculation). You must first apply
these advanced-technology vehicle credits to any deficits for other
vehicles in the averaging set before applying them to other averaging
sets. The provisions of this paragraph (k)(7) do not apply for credits
generated from model year 2027 and later vehicles.
(8) Loose engine sales. This paragraph (k)(8) applies for model
year 2023 and earlier spark-ignition engines with identical hardware
compared with engines used in vehicles certified to the standards of
this section, where you sell such engines as loose engines or as
engines installed in incomplete vehicles that are not cab-complete
vehicles. You may include such engines in a test group certified to the
standards of this section, subject to the following provisions:
(i) Engines certified under this paragraph (k)(8) are deemed to be
certified to the standards of 40 CFR 1036.108 as specified in 40 CFR
1036.150(j).
(ii) For 2020 and earlier model years, the maximum allowable U.S.-
directed production volume of engines you sell under this paragraph
(k)(8) in any given model year is ten percent of the total U.S-directed
production volume of engines of that design that you produce for heavy-
duty applications for that model year, including engines you produce
for complete vehicles, cab-complete vehicles, and other incomplete
vehicles. The total number of engines you may certify under this
paragraph (k)(8), of all engine designs, may not exceed 15,000 in any
model year. Engines produced in excess of either of these limits are
not covered by your certificate. For example, if you produce 80,000
complete model year 2017 Class 2b pickup trucks with a certain engine
and 10,000 incomplete model year 2017 Class 3 vehicles with that same
engine, and you do not apply the provisions of this paragraph (k)(8) to
any other engine designs, you may produce up to 10,000 engines of that
design for sale as loose engines under this paragraph (k)(8). If you
produced 11,000 engines of that design for sale as loose engines, the
last 1,000 of them that you produced in that model year 2017 would be
considered uncertified.
(iii) For model years 2021 through 2023, the U.S.-directed
production volume of engines you sell under this paragraph (k)(8) in
any given model year may not exceed 10,000 units.
(iv) This paragraph (k)(8) does not apply for engines certified to
the standards of 40 CFR 1036.108.
(v) Label the engines as specified in 40 CFR 1036.135 including the
following compliance statement: ``THIS ENGINE WAS CERTIFIED TO THE
ALTERNATE GREENHOUSE GAS EMISSION STANDARDS OF 40 CFR 1036.150(j).''
List the test group name instead of an engine family name.
(vi) Vehicles using engines certified under this paragraph (k)(8)
are subject to the emission standards of 40 CFR 1037.105.
(vii) For certification purposes, your engines are deemed to have a
CO2 target value and test result equal to the CO2
target value and test result for the complete vehicle in the applicable
test group with the highest equivalent test weight, except as specified
in paragraph (k)(8)(vii)(B) of this section. Use these values to
calculate your target value, fleet average emission rate, and in-use
emission standard. Where there are multiple complete vehicles with the
same highest equivalent test weight, select the CO2 target
value and test result as follows:
(A) If one or more of the CO2 test results exceed the
applicable target value, use the CO2 target value and test
result of the vehicle that exceeds its target value by the greatest
amount.
(B) If none of the CO2 test results exceed the
applicable target value, select the highest target value and set the
test result equal to it. This means that you may not generate emission
credits from vehicles certified under this paragraph (k)(8).
(viii) Production and in-use CO2 standards apply as
described in paragraph (b) of this section.
(ix) N2O and CH4 standards apply as described
in paragraph (c) of this section.
(x) State in your applications for certification that your test
group and engine family will include engines certified under this
paragraph (k)(8). This applies for your greenhouse gas vehicle test
group and your criteria pollutant engine family. List in each
application the name of the corresponding test group/engine family.
(9) Credit adjustment for useful life. For credits that you
calculate based on a useful life of 120,000 miles, multiply any banked
credits that you carry forward for use in model year 2021 and later by
1.25.
(10) CO2 rounding. For model year 2014 and earlier vehicles, you
may round measured and calculated CO2 emission levels to the
nearest 0.1 g/mile, instead of the nearest whole g/mile as specified in
paragraphs (a), (b), and (g) of this section.
0
53. Amend Sec. 86.1820-01 by revising paragraphs (b) introductory text
and (b)(7) and adding paragraph (b)(8) to read as follows:
Sec. 86.1820-01 Durability group determination.
* * * * *
(b) To be included in the same durability group, vehicles must be
identical in all the respects listed in paragraphs (b)(1) through (7)
of this section and meet one of the criteria specified in paragraph
(b)(8) of this section:
* * * * *
(7) Type of particulate filter (none, catalyzed, noncatalyzed).
(8) The manufacturer must choose one of the following two criteria:
(i) Grouping statistic:
(A) Vehicles are grouped based upon the value of the grouping
statistic determined using the following equation:
[GRAPHIC] [TIFF OMITTED] TR18AP24.045
Where:
GS = Grouping Statistic used to evaluate the range of precious metal
loading rates and relative sizing of the catalysts compared to the
engine displacement that are
[[Page 28176]]
allowable within a durability group. The grouping statistic shall be
rounded to a tenth of a gram/liter.
Cat Vol = Total volume of the catalyst(s) in liters. Include the
volume of any catalyzed particulate filters.
Disp = Displacement of the engine in liters.
Loading rate = The mass of total precious metal(s) in the catalyst
(or the total mass of all precious metal(s) of all the catalysts if
the vehicle is equipped with multiple catalysts) in grams divided by
the total volume of the catalyst(s) in liters. Include the mass of
precious metals in any catalyzed particulate filters.
(B) Engine-emission control system combinations which have a
grouping statistic which is either less than 25 percent of the largest
grouping statistic value, or less than 0.2 g/liter (whichever allows
the greater coverage of the durability group) shall be grouped into the
same durability group.
(ii) The manufacturer may elect to use another procedure which
results in at least as many durability groups as required using
criteria in paragraph (b)(8)(i) of this section providing that only
vehicles with similar emission deterioration or durability are combined
into a single durability group.
* * * * *
0
54. Amend Sec. 86.1821-01 by revising paragraph (b)(10) to read as
follows:
Sec. 86.1821-01 Evaporative/refueling family determination.
* * * * *
(b) * * *
(10) Evaporative emission standard or family emission limit (FEL)
for testing at low-altitude conditions.
* * * * *
Sec. 86.1823-01 [Removed]
0
55. Remove Sec. 86.1823-01.
0
56. Amend Sec. 86.1823-08 by revising and republishing paragraph (f)
and revising paragraph (n) to read as follows:
Sec. 86.1823-08 Durability demonstration procedures for exhaust
emissions.
* * * * *
(f) Use of deterioration program to determine compliance with the
standard. A manufacturer may select from two methods for using the
results of the deterioration program to determine compliance with the
applicable emission standards. Either a deterioration factor (DF) is
calculated and applied to the emission data vehicle (EDV) emission
results or aged components are installed on the EDV prior to emission
testing.
(1) Deterioration factors. (i) Deterioration factors are calculated
using all FTP emission test data generated during the durability
testing program except as noted:
(A) Multiple tests at a given mileage point are averaged together
unless the same number of tests are conducted at each mileage point.
(B) Before and after maintenance test results are averaged
together.
(C) Zero-mile test results are excluded from the calculation.
(D) Total hydrocarbon (THC) test points beyond the 50,000-mile
(useful life) test point are excluded from the intermediate useful life
deterioration factor calculation.
(E) A procedure may be employed to identify and remove from the DF
calculation those test results determined to be statistical outliers
providing that the outlier procedure is consistently applied to all
vehicles and data points and is approved in advance by the
Administrator.
(ii) The deterioration factor must be based on a linear regression,
or another regression technique approved in advance by the
Administrator. The deterioration must be a multiplicative or additive
factor. Separate factors will be calculated for each regulated emission
constituent and for the full and intermediate useful life periods as
applicable. Separate DF's are calculated for each durability group
except as provided in Sec. 86.1839.
(A) A multiplicative DF will be calculated by taking the ratio of
the full or intermediate useful life mileage level, as appropriate
(rounded to four decimal places), divided by the stabilized mileage
(reference Sec. 86.1831-01(c), e.g., 4000-mile) level (rounded to four
decimal places) from the regression analysis. The result must be
rounded to three-decimal places of accuracy. The rounding required in
this paragraph must be conducted in accordance with Sec. 86.1837.
Calculated DF values of less than one must be changed to one for the
purposes of this paragraph.
(B) An additive DF will be calculated to be the difference between
the full or intermediate useful life mileage level (as appropriate)
minus the stabilized mileage (reference Sec. 86.1831-01(c), e.g.,
4000-mile) level from the regression analysis. The full useful life
regressed emission value, the stabilized mileage regressed emission
value, and the DF result must be rounded to the same precision and
using the same procedures as the raw emission results according to the
provisions of Sec. 86.1837-01. Calculated DF values of less than zero
must be changed to zero for the purposes of this paragraph.
(iii) For Tier 3 vehicles, the DF calculated by these procedures
will be used for determining full and intermediate useful life
compliance with FTP exhaust emission standards, SFTP exhaust emission
standards, and cold CO emission standards. At the manufacturer's option
and using procedures approved by the Administrator, a separate DF may
be calculated exclusively using cold CO test data to determine
compliance with cold CO emission standards. Also, at the manufacturer's
option and using procedures approved by the Administrator, a separate
DF may be calculated exclusively using US06 and/or air conditioning
(SC03) test data to determine compliance with the SFTP emission
standards.
(iv) For Tier 4 vehicles, the DF calculated by these procedures may
be used for determining compliance with all the standards identified in
Sec. 86.1811-27. At the manufacturer's option and using procedures
approved by the Administrator, manufacturers may calculate a separate
DF for the following standards and driving schedules:
(A) Testing to determine compliance with cold temperature emission
standards.
(B) US06 testing.
(C) SC03 testing.
(D) HFET.
(E) Mid-temperature intermediate soak testing.
(F) Early driveaway testing.
(G) High-power PHEV engine starts.
(2) Installation of aged components on emission data vehicles. For
full and intermediate useful life compliance determination, the
manufacturer may elect to install aged components on an EDV prior to
emission testing rather than applying a deterioration factor. Different
sets of components may be aged for full and intermediate useful life
periods. Components must be aged using an approved durability procedure
that complies with paragraph (b) of this section. The list of
components to be aged and subsequently installed on the EDV must
selected using good engineering judgment.
* * * * *
(n) Emission component durability. The manufacturer shall use good
engineering judgment to determine that all emission-related components
are designed to operate properly for the full useful life of the
vehicles in actual use.
Sec. Sec. 86.1824-01 and 86.1824-07 [Removed]
0
57. Remove Sec. Sec. 86.1824-01 and 86.1824-07.
0
58. Amend Sec. 86.1824-08 by revising paragraphs (c)(1) and (k) to
read as follows:
[[Page 28177]]
Sec. 86.1824-08 Durability demonstration procedures for evaporative
emissions.
* * * * *
(c) * * *
(1) Mileage accumulation must be conducted using the SRC or any
road cycle approved under the provisions of Sec. 86.1823-08(e)(1).
* * * * *
(k) Emission component durability. The manufacturer shall use good
engineering judgment to determine that all emission-related components
are designed to operate properly for the full useful life of the
vehicles in actual use.
Sec. 86.1825-01 [Removed]
0
59. Remove Sec. 86.1825-01.
0
60. Amend Sec. 86.1825-08 by revising the introductory text and
paragraphs (c)(1) and (h) to read as follows:
Sec. 86.1825-08 Durability demonstration procedures for refueling
emissions.
The durability-related requirements of this section apply for
vehicles subject to refueling standards under this subpart. Refer to
the provisions of Sec. Sec. 86.1801 and 86.1813 to determine
applicability of the refueling standards to different classes of
vehicles. Diesel-fueled vehicles may be exempt from the requirements of
this section under Sec. 86.1829.
* * * * *
(c) * * *
(1) Mileage accumulation must be conducted using the SRC or a road
cycle approved under the provisions of Sec. 86.1823-08(e)(1).
* * * * *
(h) Emission component durability. The manufacturer shall use good
engineering judgment to determine that all emission-related components
are designed to operate properly for the full useful life of the
vehicles in actual use.
* * * * *
0
61. Amend Sec. 86.1827-01 by revising paragraph (a)(5) to read as
follows:
Sec. 86.1827-01 Test group determination.
* * * * *
(a) * * *
(5) Subject to the same emission standards (except for
CO2), or FEL in the case of cold temperature NMHC or
NMOG+NOX standards, except that a manufacturer may request
to group vehicles into the same test group as vehicles subject to more
stringent standards, so long as all the vehicles within the test group
are certified to the most stringent standards applicable to any vehicle
within that test group. For example, manufacturers may include medium-
duty vehicles at or below 22,000 pounds GCWR in the same test group
with medium-duty vehicles above 22,000 pounds GCWR, but all vehicles
included in the test group are then subject to the off-cycle emission
standards and testing requirements described in Sec. 86.1811-27(e).
Light-duty trucks and light-duty vehicles may be included in the same
test group if all vehicles in the test group are subject to the same
criteria exhaust emission standards.
* * * * *
0
62. Revise and republish Sec. 86.1828-01 to read as follows:
Sec. 86.1828-01 Emission data vehicle selection.
(a) Criteria exhaust testing. Within each test group, the vehicle
configuration shall be selected which is expected to be worst-case for
exhaust emission compliance on candidate in-use vehicles, considering
all criteria exhaust emission constituents, all exhaust test
procedures, and the potential impact of air conditioning on test
results. For vehicles meeting Tier 4 standards, include consideration
of cold temperature testing. See paragraph (c) of this section for cold
temperature testing with vehicles not yet subject to Tier 4 standards.
The selected vehicle will include an air conditioning engine code
unless the worst-case vehicle configuration selected is not available
with air conditioning. This vehicle configuration will be used as the
EDV calibration.
(b) Evaporative/Refueling testing. Vehicles of each evaporative/
refueling family will be divided into evaporative/refueling emission
control systems.
(1) The vehicle configuration expected to exhibit the highest
evaporative and/or refueling emission on candidate in-use vehicles
shall be selected for each evaporative/refueling family and evaporative
refueling emission system combination from among the corresponding
vehicles selected for testing under paragraph (a) of this section.
Separate vehicles may be selected to be tested for evaporative and
refueling testing.
(2) Each test group must be represented by both evaporative and
refueling testing (provided that the refueling standards are
applicable) before it may be certified. That required testing may have
been conducted on a vehicle in another test group provided the tested
vehicle is a member of the same evaporative/refueling family and
evaporative/refueling emission system combination and it was selected
for testing in accordance with the provisions of paragraph (b)(1) of
this section.
(3) For evaporative/refueling emission testing, the vehicle(s)
selected shall be equipped with the worst-case evaporative/refueling
emission hardware available on that vehicle considering such items as
canister size and material, fuel tank size and material, purge strategy
and flow rates, refueling characteristics, and amount of vapor
generation.
(c) Cold temperature testing--Tier 3. For vehicles subject to Tier
3 standards, select test vehicles for cold temperature testing as
follows:
(1) For cold temperature CO exhaust emission compliance for each
durability group, the vehicle expected to emit the highest CO emissions
at 20 degrees F on candidate in-use vehicles shall be selected from the
test vehicles selected in accordance with paragraph (a) of this
section.
(2) For cold temperature NMHC exhaust emission compliance for each
durability group, the manufacturer must select the vehicle expected to
emit the highest NMHC emissions at 20 [deg]F on candidate in-use
vehicles from the test vehicles specified in paragraph (a) of this
section. When the expected worst-case cold temperature NMHC vehicle is
also the expected worst-case cold temperature CO vehicle as selected in
paragraph (c)(1) of this section, then cold temperature testing is
required only for that vehicle; otherwise, testing is required for both
the worst-case cold temperature CO vehicle and the worst-case cold
temperature NMHC vehicle.
(d) [Reserved]
(e) Alternative configurations. The manufacturer may use good
engineering judgment to select an equivalent or worst-case
configuration in lieu of testing the vehicle selected in paragraphs (a)
through (c) of this section. Carryover data satisfying the provisions
of Sec. 86.1839 may also be used in lieu of testing the configuration
selected in paragraphs (a) through (c) of this section.
(f) Good engineering judgment. The manufacturer shall use good
engineering judgment in making selections of vehicles under this
section.
Sec. 86.1829-01 [Removed]
0
63. Remove Sec. 86.1829-01.
0
64. Amend Sec. 86.1829-15 by revising paragraphs (a), (b), (d), and
(f) and adding paragraph (g) to read as follows:
Sec. 86.1829-15 Durability and emission testing requirements;
waivers.
* * * * *
(a) Durability requirements apply as follows:
(1) One durability demonstration is required for each durability
group. The
[[Page 28178]]
configuration of the DDV is determined according to Sec. 86.1822. The
DDV shall be tested and accumulate service mileage according to the
provisions of Sec. Sec. 86.1823, 86.1824, 86.1825, and 86.1831. Small-
volume manufacturers and small-volume test groups may optionally use
the alternative durability provisions of Sec. 86.1838.
(2) Manufacturers may provide a statement in the application for
certification that vehicles comply with the monitor accuracy and
battery durability requirements of Sec. 86.1815-27 instead of
submitting test data for certification. The following durability
testing requirements apply for battery electric vehicles and plug-in
hybrid electric vehicles after certification:
(i) Manufacturers must perform monitor accuracy testing on in-use
vehicles as described in Sec. 86.1845-04(g) for each monitor family.
Carryover provisions apply as described in Sec. 86.1839-01(c).
(ii) Manufacturers must perform battery durability testing as
described in Sec. 86.1815-27(f)(2).
(b) The manufacturer must test EDVs as follows to demonstrate
compliance with emission standards:
(1) Except as specified in this section, test one EDV in each test
group using the test procedures specified in this subpart to
demonstrate compliance with other exhaust emission standards.
(2) Test one EDV in each test group using the test procedures in 40
CFR part 1066 to demonstrate compliance with cold temperature exhaust
emission standards.
(3) Test one EDV in each test group to each of the three discrete
mid-temperature intermediate soak standards identified in Sec.
86.1811-27.
(4) Test one EDV in each evaporative/refueling family and
evaporative/refueling emission control system combination using the
test procedures in subpart B of this part to demonstrate compliance
with evaporative and refueling emission standards.
* * * * *
(d) Manufacturers may omit exhaust testing for certification in
certain circumstances as follows:
(1) For vehicles subject to the Tier 3 PM standards in Sec.
86.1811-17 (not the Tier 4 PM standards in Sec. 86.1811-27), a
manufacturer may provide a statement in the application for
certification that vehicles comply with applicable PM standards instead
of submitting PM test data for a certain number of vehicles. However,
each manufacturer must test vehicles from a minimum number of
durability groups as follows:
(i) Manufacturers with a single durability group subject to the
Tier 3 PM standards in Sec. 86.1811 must submit PM test data for that
group.
(ii) Manufacturers with two to eight durability groups subject to
the Tier 3 PM standards in Sec. 86.1811 must submit PM test data for
at least two durability groups each model year. EPA will work with the
manufacturer to select durability groups for testing, with the general
expectation that testing will rotate to cover a manufacturer's whole
product line over time. If a durability group has been certified in an
earlier model year based on submitted PM data, and that durability
group is eligible for certification using carryover test data, that
carryover data may count toward meeting the requirements of this
paragraph (d)(1), subject to the selection of durability groups.
(iii) Manufacturers with nine or more durability groups subject to
the Tier 3 PM standards in Sec. 86.1811 must submit PM test data for
at least 25 percent of those durability groups each model year. We will
work with the manufacturer to select durability groups for testing as
described in paragraph (d)(1)(ii) of this section.
(2) Small-volume manufacturers may provide a statement in the
application for certification that vehicles comply with the applicable
Tier 3 PM standard instead of submitting test data. Small-volume
manufacturers must submit PM test data for vehicles that are subject to
Tier 4 PM standards.
(3) Manufacturers may omit PM measurements for fuel economy and GHG
testing conducted in addition to the testing needed to demonstrate
compliance with the PM emission standards.
(4) Manufacturers may provide a statement in the application for
certification that vehicles comply with the applicable formaldehyde
standard instead of submitting test data.
(5) When conducting Selective Enforcement Audit testing, a
manufacturer may petition the Administrator to waive the requirement to
measure PM emissions and formaldehyde emissions.
(6) For model years 2012 through 2016, a manufacturer may provide a
statement in its application for certification that vehicles comply
with the applicable standards instead of measuring N2O
emissions. Such a statement may also be used for model year 2017 and
2018 vehicles only if the application for certification for those
vehicles is based upon data carried over from a prior model year, as
allowed under this subpart. No model year 2019 and later vehicles may
be waived from testing for N2O emissions. Vehicles certified
to N2O standards using a compliance statement instead of
submitting test data are not required to collect and submit
N2O emission data under the in-use testing requirements of
Sec. 86.1845.
(7) Manufacturers may provide a statement in the application for
certification that vehicles comply with the mid-temperature
intermediate soak standards for soak times not covered by testing.
(8) Manufacturers may provide a statement in the application for
certification that medium-duty vehicles above 22,000 pounds GCWR comply
with the off-cycle emission standards in Sec. 86.1811-27(e) for all
normal operation and use when tested as specified. Describe in the
application for certification under Sec. 86.1844-01(d)(8) any relevant
testing, engineering analysis, or other information in sufficient
detail to support the statement. We may direct you to include emission
measurements representing typical engine in-use operation at a range of
ambient conditions. For example, we may specify certain transient and
steady-state engine operation that is typical for your vehicles. Also
describe the procedure you used to determine a reference CO2
emission rate, eCO2FTPFCL, under Sec. 86.1845-04(h)(6).
(9) For model year 2027 and 2028 vehicles subject to the Tier 4 PM
standards in Sec. 86.1811-27, a manufacturer may provide a statement
in the application for certification that vehicles comply with the PM
standard for -7 [deg]C temperature testing instead of submitting PM
test data.
* * * * *
(f) For electric vehicles and fuel cell vehicles, manufacturers may
provide a statement in the application for certification that vehicles
comply with all the emission standards and related requirements of this
subpart instead of submitting test data. Tailpipe emissions of
regulated pollutants from vehicles powered solely by electricity are
deemed to be zero.
(g) Manufacturers must measure NMOG+NOX emissions from -
7 [deg]C testing with Tier 4 diesel-fueled emission data vehicles and
report values corresponding to submitted CO and PM test results in the
application for certification. Note that it is not necessary to repeat
NMOG+NOX measurements for fuel economy, confirmatory, or in-
use testing.
0
65. Amend Sec. 86.1834-01 by revising paragraph (h) to read as
follows:
Sec. 86.1834-01 Allowable maintenance.
* * * * *
[[Page 28179]]
(h) When air conditioning exhaust emission tests are required, the
manufacturer must document that the vehicle's air conditioning system
is operating properly and in a representative condition. Required air
conditioning system maintenance is performed as unscheduled maintenance
and does not require the Administrator's approval.
0
66. Amend Sec. 86.1835-01 by revising paragraphs (a)(1)(i), (a)(4),
(b)(1), and (d) introductory text to read as follows:
Sec. 86.1835-01 Confirmatory certification testing.
(a) * * *
(1) * * *
(i) The Administrator may adjust or cause to be adjusted any
adjustable parameter of an emission-data vehicle which the
Administrator has determined to be subject to adjustment for
certification testing in accordance with Sec. 86.1833-01(a)(1), to any
setting within the physically adjustable range of that parameter, as
determined by the Administrator in accordance with Sec. 86.1833-
01(a)(3), prior to the performance of any tests to determine whether
such vehicle or engine conforms to applicable emission standards,
including tests performed by the manufacturer. However, if the idle
speed parameter is one which the Administrator has determined to be
subject to adjustment, the Administrator shall not adjust it to a
setting which causes a higher engine idle speed than would have been
possible within the physically adjustable range of the idle speed
parameter on the engine before it accumulated any dynamometer service,
all other parameters being identically adjusted for the purpose of the
comparison. The Administrator, in making or specifying such
adjustments, will consider the effect of the deviation from the
manufacturer's recommended setting on emissions performance
characteristics as well as the likelihood that similar settings will
occur on in-use light-duty vehicles, light-duty trucks, or complete
heavy-duty vehicles. In determining likelihood, the Administrator will
consider factors such as, but not limited to, the effect of the
adjustment on vehicle performance characteristics and surveillance
information from similar in-use vehicles.
* * * * *
(4) Retesting for fuel economy reasons or for compliance with
greenhouse gas exhaust emission standards in Sec. 86.1818-12 may be
conducted under the provisions of 40 CFR 600.008-08.
(b) * * *
(1) If the Administrator determines not to conduct a confirmatory
test under the provisions of paragraph (a) of this section,
manufacturers will conduct a confirmatory test at their facility after
submitting the original test data to the Administrator under either of
the following circumstances:
(i) The vehicle configuration has previously failed an emission
standard.
(ii) The test exhibits high emission levels determined by exceeding
a percentage of the standards specified by the Administrator for that
model year.
* * * * *
(d) Conditional certification. Upon request of the manufacturer,
the Administrator may issue a conditional certificate of conformity for
a test group which has not completed the Administrator testing required
under paragraph (a) of this section. Such a certificate will be issued
based upon the conditions that the confirmatory testing be completed in
an expedited manner and that the results of the testing are in
compliance with all standards and procedures.
* * * * *
0
67. Amend Sec. 86.1838-01 by revising and republishing paragraph (b)
to read as follows:
Sec. 86.1838-01 Small-volume manufacturer certification procedures.
* * * * *
(b) Eligibility requirements--(1) Small-volume manufacturers. (i)
Optional small-volume manufacturer certification procedures apply for
vehicles produced by manufacturers with the following number of
combined sales of vehicles subject to standards under this subpart in
all states and territories of the United States in the model year for
which certification is sought, including all vehicles and engines
imported under the provisions of 40 CFR 85.1505 and 85.1509:
(A) At or below 5,000 units for the Tier 3 standards described in
Sec. Sec. 86.1811-17, 86.1813-17, and 86.1816-18 and the Tier 4
standards described in Sec. 86.1811-27. This volume threshold applies
for phasing in the Tier 3 and Tier 4 standards and for determining the
corresponding deterioration factors.
(B) No small-volume sales threshold applies for the heavy-duty
greenhouse gas standards; alternative small-volume criteria apply as
described in Sec. 86.1819-14(k)(5).
(C) At or below 15,000 units for all other requirements. See Sec.
86.1845 for separate provisions that apply for in-use testing.
(ii) If a manufacturer's aggregated sales in the United States, as
determined in paragraph (b)(3) of this section are fewer than the
number of units specified in paragraph (b)(1)(i) of this section, the
manufacturer (or each manufacturer in the case of manufacturers in an
aggregated relationship) may certify under the provisions of paragraph
(c) of this section.
(iii) A manufacturer that qualifies as a small business under the
Small Business Administration regulations in 13 CFR part 121 is
eligible for all the provisions that apply for small-volume
manufacturers under this subpart. See Sec. 86.1801-12(j) to determine
whether companies qualify as small businesses.
(iv) The sales volumes specified in this section are based on
actual sales, unless otherwise specified.
(v) Except for delayed implementation of new emission standards, an
eligible manufacturer must transition out of the special provisions
that apply for small-volume manufacturers as described in Sec.
86.1801-12(k)(2)(i) through (iii) if sales volumes increase above the
applicable threshold.
(2) Small-volume test groups and small-volume monitor families. (i)
If the aggregated sales in all states and territories of the United
States, as determined in paragraph (b)(3) of this section are equal to
or greater than 15,000 units, then the manufacturer (or each
manufacturer in the case of manufacturers in an aggregated
relationship) will be allowed to certify a number of units under the
small-volume test group certification procedures in accordance with the
criteria identified in paragraphs (b)(2)(ii) through (iv) of this
section. Similarly, the manufacturer will be exempt from Part A testing
for monitor accuracy as described in Sec. 86.1845-04(g) in accordance
with the criteria identified in paragraphs (b)(2)(ii) through (iv) of
this section for individual monitor families with aggregated sales up
to 5,000 units in the current model year.
(ii) If there are no additional manufacturers in an aggregated
relationship meeting the provisions of paragraph (b)(3) of this
section, then the manufacturer may certify whole test groups whose
total aggregated sales (including heavy-duty engines) are less than
15,000 units using the small-volume provisions of paragraph (c) of this
section.
(iii) If there is an aggregated relationship with another
manufacturer which satisfies the provisions of paragraph (b)(3) of this
section, then the following provisions shall apply:
(A) If none of the manufacturers own 50 percent or more of another
manufacturer in the aggregated relationship, then each manufacturer
[[Page 28180]]
may certify whole test groups whose total aggregated sales (including
heavy-duty engines) are less than 15,000 units using the small-volume
provisions of paragraph (c) of this section.
(B) If any of the manufacturers own 50 percent or more of another
manufacturer in the aggregated relationship, then the limit of 14,999
units must be shared among the manufacturers in such a relationship. In
total for all the manufacturers involved in such a relationship,
aggregated sales (including heavy-duty engines) of up to 14,999 units
may be certified using the small-volume provisions of paragraph (c) of
this section. Only whole test groups shall be eligible for small-volume
status under paragraph (c) of this section.
(iv) In the case of a joint venture arrangement (50/50 ownership)
between two manufacturers, each manufacturer retains its eligibility
for 14,999 units under the small-volume test group certification
procedures, but the joint venture must draw its maximum 14,999 units
from the units allocated to its parent manufacturers. Only whole test
groups shall be eligible for small-volume status under paragraph (c) of
this section.
(3) Sales aggregation for related manufacturers. The projected or
actual sales from different firms shall be aggregated in the following
situations:
(i) Vehicles and/or engines produced by two or more firms, one of
which is 10 percent or greater part owned by another.
(ii) Vehicles and/or engines produced by any two or more firms if a
third party has equity ownership of 10 percent or more in each of the
firms.
(iii) Vehicles and/or engines produced by two or more firms having
a common corporate officer(s) who is (are) responsible for the overall
direction of the companies.
(iv) Vehicles and/or engines imported or distributed by all firms
where the vehicles and/or engines are manufactured by the same entity
and the importer or distributor is an authorized agent of the entity.
* * * * *
0
68. Revise and republish Sec. 86.1839-01 to read as follows:
Sec. 86.1839-01 Carryover of certification and battery monitoring
data.
(a) In lieu of testing an emission-data or durability vehicle
selected under Sec. 86.1822, Sec. 86.1828, or Sec. 86.1829, and
submitting data therefrom, a manufacturer may submit exhaust emission
data, evaporative emission data and/or refueling emission data, as
applicable, on a similar vehicle for which certification has been
obtained or for which all applicable data required under Sec. 86.1845
has previously been submitted. To be eligible for this provision, the
manufacturer must use good engineering judgment and meet the following
criteria:
(1) In the case of durability data, the manufacturer must determine
that the previously generated durability data represent a worst case or
equivalent rate of deterioration for all applicable emission
constituents compared to the configuration selected for durability
demonstration. Prior to certification, the Administrator may require
the manufacturer to provide data showing that the distribution of
catalyst temperatures of the selected durability configuration is
effectively equivalent or lower than the distribution of catalyst
temperatures of the vehicle configuration which is the source of the
previously generated data.
(2) In the case of emission data, the manufacturer must determine
that the previously generated emissions data represent a worst case or
equivalent level of emissions for all applicable emission constituents
compared to the configuration selected for emission compliance
demonstration.
(b) In lieu of using newly aged hardware on an EDV as allowed under
the provisions of Sec. 86.1823-08(f)(2), a manufacturer may use
similar hardware aged for an EDV previously submitted, provided that
the manufacturer determines that the previously aged hardware
represents a worst case or equivalent rate of deterioration for all
applicable emission constituents for durability demonstration.
(c) In lieu of testing battery electric vehicles or plug-in hybrid
electric vehicles for monitor accuracy under Sec. 86.1822-01(a) and
submitting the test data, a manufacturer may rely on previously
conducted testing on a similar vehicle for which such test data have
previously been submitted to demonstrate compliance with monitor
accuracy requirements. For vehicles to be eligible for this provision,
they must have designs for battery monitoring that are identical in all
material respects to the vehicles tested under Sec. 86.1845-04(g). If
a monitor family fails to meet accuracy requirements, repeat the
testing under Sec. 86.1845-04(g) as soon as practicable.
0
69. Revise Sec. 86.1840-01 to read as follows:
Sec. 86.1840-01 Special test procedures.
Provisions for special test procedures apply as described in 40 CFR
1065.10 and 1066.10. For example, manufacturers must propose a
procedure for EPA's review and advance approval for testing and
certifying vehicles equipped with periodically regenerating
aftertreatment devices, including sufficient documentation and data for
EPA to fully evaluate the request.
0
70. Amend Sec. 86.1841-01 by revising and republishing paragraph (a)
and revising paragraph (e) to read as follows:
Sec. 86.1841-01 Compliance with emission standards for the purpose of
certification.
(a) Certification levels of a test vehicle will be calculated for
each emission constituent applicable to the test group for both full
and intermediate useful life as appropriate.
(1) If the durability demonstration procedure used by the
manufacturer under the provisions of Sec. 86.1823, Sec. 86.1824, or
Sec. 86.1825 requires a DF to be calculated, the DF shall be applied
to the official test results determined in Sec. 86.1835-01(c) for each
regulated emission constituent and for full and intermediate useful
life, as appropriate, using the following procedures:
(i) For additive DF's, the DF will be added to the emission result.
The sum will be rounded to the same level of precision as the standard
for the constituent at full and/or intermediate useful life, as
appropriate. This rounded sum is the certification level for that
emission constituent and for that useful life mileage.
(ii) For multiplicative DFs, the DF will be multiplied by the
emission result for each regulated constituent. The product will be
rounded to the same level of precision as the standard for the
constituent at full and intermediate useful life, as appropriate. This
rounded product is the certification level for that emission
constituent and for that useful life mileage.
(iii) For a composite standard of NMHC+NOX, the measured
results of NMHC and NOX must each be adjusted by their
corresponding deterioration factors before the composite
NMHC+NOX certification level is calculated. Where the
applicable FTP exhaust hydrocarbon emission standard is an NMOG
standard, the applicable NMOG deterioration factor must be used in
place of the NMHC deterioration factor, unless otherwise approved by
the Administrator.
(2) If the durability demonstration procedure used by the
manufacturer under the provisions of Sec. 86.1823, Sec. 86.1824, or
Sec. 86.1825, as applicable, requires testing of the EDV with aged
emission components, the official results of that testing determined
under
[[Page 28181]]
the provisions of Sec. 86.1835-01(c) shall be rounded to the same
level of precision as the standard for each regulated constituent at
full and intermediate useful life, as appropriate. This rounded
emission value is the certification level for that emission constituent
at that useful life mileage.
(3) Compliance with full useful life CO2 exhaust
emission standards shall be demonstrated at certification by the
certification levels on the duty cycles specified for carbon-related
exhaust emissions according to Sec. 600.113 of this chapter.
(4) The rounding required in paragraph (a) of this section shall be
conducted in accordance with the provisions of Sec. 86.1837-01.
* * * * *
(e) Unless otherwise approved by the Administrator, manufacturers
must not use Reactivity Adjustment Factors (RAFs) in their calculation
of the certification level of any pollutant for any vehicle.
0
71. Amend Sec. 86.1844-01 by:
0
a. Revising and republishing paragraphs (d) and (e);
0
b. Revising paragraphs (g)(11) and (h); and
0
c. Removing paragraph (i).
The revisions and republication read as follows:
Sec. 86.1844-01 Information requirements: Application for
certification and submittal of information upon request.
* * * * *
(d) Part 1 Application. Part 1 must contain the following items:
(1) Correspondence and communication information, such as names,
mailing addresses, phone and fax numbers, and email addresses of all
manufacturer representatives authorized to be in contact with EPA
compliance staff. The address where official documents, such as
certificates of conformity, are to be mailed must be clearly
identified. At least one U.S. contact must be provided.
(2) A description of the durability group in accordance with the
criteria listed in Sec. 86.1820-01, or as otherwise used to group a
product line.
(3) A description of applicable evaporative/refueling families and
leak families in accordance with the criteria listed in Sec. 86.1821-
01, or as otherwise used to group a product line.
(4) Include the following durability information:
(i) A description of the durability method used to establish useful
life durability, including exhaust and evaporative/refueling emission
deterioration factors as required in Sec. Sec. 86.1823, 86.1824 and
86.1825 when applicable.
(ii) The equivalency factor required to be calculated in Sec.
86.1823-08(e)(1)(iii)(B), when applicable.
(5) A description of each test group in accordance with the
criteria listed in Sec. 86.1827-01 or as otherwise used to group a
product line.
(6) Identification and description of all vehicles for which
testing is required by Sec. Sec. 86.1822-01 and 86.1828-01 to obtain a
certificate of conformity.
(7) A comprehensive list of all test results, including official
certification levels, and the applicable intermediate and full useful
life emission standards to which the test group is to be certified as
required in Sec. 86.1829. Include the following additional information
related to testing:
(i) For vehicles certified to any Tier 3 or Tier 4 emission
standards, include a comparison of drive-cycle metrics as specified in
40 CFR 1066.425(j) for each drive cycle or test phase, as appropriate.
(ii) For gasoline-fueled vehicles subject to Tier 3 evaporative
emission standards, identify the method of accounting for ethanol in
determining evaporative emissions, as described in Sec. 86.1813.
(iii) Identify any aspects of testing for which the regulations
obligate EPA testing to conform to your selection of test methods.
(iv) For heavy-duty vehicles subject to air conditioning standards
under Sec. 86.1819, include the refrigerant leakage rates (leak
scores), describe the type of refrigerant, and identify the refrigerant
capacity of the air conditioning systems. If another company will
install the air conditioning system, also identify the corporate name
of the final installer.
(v) For vehicles with pressurized fuel tanks, attest that vehicles
subject to EPA testing with the partial refueling test will meet the
refueling emission standard for that testing. Include engineering
analysis showing that canister capacity is adequate to account for the
increased vapor load from venting the pressurized fuel tank upon fuel
cap removal.
(8) A statement that all applicable vehicles will conform to the
emission standards for which emission data is not being provided, as
allowed under Sec. 86.1806 or Sec. 86.1829. The statement shall
clearly identify the standards for which emission testing was not
completed and include supporting information as specified in Sec.
86.1806 or Sec. 86.1829.
(9) Information describing each emission control diagnostic system
required by Sec. 86.1806, including all of the following:
(i) A description of the functional operation characteristics of
the diagnostic system, with additional information demonstrating that
the system meets the requirements specified in Sec. 86.1806. Include
all testing and demonstration data submitted to the California Air
Resources Board for certification.
(ii) The general method of detecting malfunctions for each
emission-related powertrain component.
(iii) Any deficiencies, including resolution plans and schedules.
(iv) A statement that the diagnostic system is adequate for the
performance warranty test described in 40 CFR part 85, subpart W.
(v) For vehicles certified to meet the leak standard in Sec.
86.1813, a description of the anticipated test procedure. The
description must include, at a minimum, a method for accessing the fuel
system for measurements and a method for pressurizing the fuel system
to perform the procedure specified in 40 CFR 1066.985. The recommended
test method must include at least two separate points for accessing the
fuel system, with additional access points as appropriate for multiple
fuel tanks and multiple evaporative or refueling canisters.
(10) A description of all flexible or dedicated alternate fuel
vehicles including, but not limited to, the fuel and/or percentage of
alternate fuel for all such vehicles.
(11) A list of all auxiliary emission control devices (AECD)
installed on any applicable vehicles, including a justification for
each AECD, the parameters they sense and control, a detailed
justification of each AECD that results in a reduction in effectiveness
of the emission control system, and rationale for why it is not a
defeat device as defined under Sec. 86.1809. The following specific
provisions apply for AECDs:
(i) For any AECD uniquely used at high altitudes, EPA may request
engineering emission data to quantify any emission impact and validity
of the AECD.
(ii) For any AECD uniquely used on multi-fuel vehicles when
operated on fuels other than gasoline, EPA may request engineering
emission data to quantify any emission impact and validity of the AECD.
(iii) For Tier 3 vehicles with spark-ignition engines, describe how
AECDs are designed to comply with the requirements of Sec. 86.1811-
17(d). Identify which components need protection through enrichment
[[Page 28182]]
strategies; describe the temperature limitations for those components;
and describe how the enrichment strategy corresponds to those
temperature limitations. We may also require manufacturers to submit
this information for certification related to Tier 2 vehicles.
(iv) For Tier 4 vehicles with spark-ignition engines, describe how
AECDs comply with the requirements of Sec. Sec. 86.1809-12(d)(2) and
86.1811-27(d).
(12) Identification and description of all vehicles covered by each
certificate of conformity to be produced and sold within the U.S. The
description must be sufficient to identify whether any given in-use
vehicle is, or is not, covered by a given certificate of conformity,
the test group and the evaporative/refueling family to which it belongs
and the standards that are applicable to it, by matching readily
observable vehicle characteristics and information given in the
emission control information label (and other permanently attached
labels) to indicators in the Part 1 Application. In addition, the
description must be sufficient to determine for each vehicle covered by
the certificate, all appropriate test parameters and any special test
procedures necessary to conduct an official certification exhaust or
evaporative emission test as was required by this subpart to
demonstrate compliance with applicable emission standards. The
description shall include, but is not limited to, information such as
model name, vehicle classification (light-duty vehicle, light-duty
truck, or complete heavy-duty vehicle), sales area, engine
displacement, engine code, transmission type, tire size and parameters
necessary to conduct exhaust emission tests such as equivalent test
weight, curb and gross vehicle weight, test horsepower (with and
without air conditioning adjustment), coast down time, shift schedules,
cooling fan configuration, etc. and evaporative tests such as canister
working capacity, canister bed volume and fuel temperature profile. The
Part 1 may include ranges for test parameters in lieu of actual values.
(13) Projected U.S. vehicle sales volumes for each test group and
evaporative/refueling family combination organized in such a way to
determine projected compliance with any applicable implementation
schedules or minimum sales requirements as specified in Sec. 86.1810
or as otherwise required by this chapter.
(14) A request for a certificate of conformity for each test group
after all required testing has been completed. The request must be
signed by an authorized manufacturer representative and include a
statement that the test group complies with all applicable regulations
contained within this chapter.
(15) For vehicles with fuel-fired heaters, describe the control
system logic of the fuel-fired heater, including an evaluation of the
conditions under which it can be operated and an evaluation of the
possible operational modes and conditions under which evaporative
emissions can exist. Use good engineering judgment to establish an
estimated exhaust emission rate from the fuel-fired heater in grams per
mile for each pollutant subject to a fleet average standard. Adjust
fleet average compliance calculations in Sec. Sec. 86.1861, 86.1864,
and 86.1865 as appropriate to account for emissions from fuel-fired
heaters. Describe the testing used to establish the exhaust emission
rate.
(16) A statement indicating that the manufacturer has conducted an
engineering analysis of the complete exhaust system.
(i) The engineering analysis must ensure that the exhaust system
has been designed--
(A) To facilitate leak-free assembly, installation and operation
for the full useful life of the vehicle; and
(B) To facilitate that such repairs as might be necessary on a
properly maintained and used vehicle can be performed in such a manner
as to maintain leak-free operation, using tools commonly available in a
motor vehicle dealership or independent repair shop for the full useful
life of the vehicle.
(ii) The analysis must cover the exhaust system and all related and
attached components including the air injection system, if present,
from the engine block manifold gasket surface to a point sufficiently
past the last catalyst and oxygen sensor in the system to assure that
leaks beyond that point will not permit air to reach the oxygen sensor
or catalyst under normal operating conditions.
(iii) A ``leak-free'' system is one in which leakage is controlled
so that it will not lead to a failure of the certification exhaust
emission standards in-use.
(17) The name of an agent for service located in the United States.
Service on this agent constitutes service on you or any of your
officers or employees for any action by EPA or otherwise by the United
States related to the requirements of this part.
(18) For vehicles equipped with RESS, the recharging procedures and
methods for determining battery performance, such as state of charge
and charging capacity.
(19) For battery electric vehicles and plug-in hybrid electric
vehicles, a description of each monitor family and battery durability
family as described in Sec. 86.1815-27(f)(1). Note that a single test
group may include multiple monitor families and battery durability
families, and conversely that individual monitor families and battery
durability families may be associated with multiple test groups. Note
also that provisions related to monitor families and battery durability
families do not apply for certain vehicles as specified in Sec.
86.1815-27(h)(8). Include the following information for each monitor
family:
(i) The monitor, battery, and other specifications that are
relevant to establishing monitor families and battery durability
families to comply with the requirements of this section.
(ii) The certified usable battery energy for each battery
durability family. For plug-in hybrid electric vehicles, identify
whether the UDDS Full Charge Test or HFET Full Charge Test was used for
battery measurements.
(iii) A statement attesting that the SOCE monitor meets the 5
percent accuracy requirement.
(iv) For light-duty program vehicles, a statement that each battery
durability family meets the Minimum Performance Requirement.
(20) Acknowledgement, if applicable, that you are including
vehicles with engines certified under 40 CFR part 1036 in your
calculation to demonstrate compliance with the fleet average
CO2 standard in this subpart as described in Sec. 86.1819-
14(j).
(21) Measured NMOG+NOX emission levels from -7 [deg]C
testing with Tier 4 diesel-fueled vehicles as described in Sec.
86.1829-15(g).
(e) Part 2 Application. Part 2 must contain the following items:
(1) Identify all emission-related components, including those that
can affect GHG emissions. Also identify software, AECDs, and other
elements of design that are used to control criteria, GHG, or
evaporative/refueling emissions. Identify the emission-related
components by part number. Identify software by part number or other
convention, as appropriate. Organize part numbers by engine code or
other similar classification scheme.
(2) Basic calibration information, organized by engine code (or
other similar classification scheme), for the major components of the
fuel system, EGR system, ignition system, oxygen sensor(s) and
thermostat. Examples of major components and associated calibration
information include, but are not limited to; fuel pump and fuel pump
[[Page 28183]]
flow rate, fuel pressure regulator and regulated fuel pressure, EGR
valve and EGR exhaust gas flow rate at specified vacuum levels, EGR
vacuum regulator and regulated vacuum, EGR orifice and orifice
diameter, basic engine timing, timing RPM, idle rpm, spark plug gap,
oxygen sensor output (mV), and thermostat opening temperature.
(3) Identification and description of all vehicles covered by each
certificate of conformity to be produced and sold within the U.S. The
description must be sufficient to identify whether any given in-use
vehicle is, or is not, covered by a given certificate of conformity,
the test group and the evaporative/refueling family to which it belongs
and the standards that are applicable to it, by matching readily
observable vehicle characteristics and information given in the
emission control information label (and other permanently attached
labels) to indicators in the Part 1 Application. For example, the
description must include any components or features that contribute to
measured or demonstrated control of emissions for meeting criteria,
GHG, or evaporative/refueling standards under this subpart. In
addition, the description must be sufficient to determine for each
vehicle covered by the certificate, all appropriate test parameters and
any special test procedures necessary to conduct an official
certification exhaust or evaporative emission test as was required by
this subpart to demonstrate compliance with applicable emission
standards. The description shall include, but is not limited to,
information such as model name, vehicle classification (light-duty
vehicle, light-duty truck, or complete heavy-duty vehicle), sales area,
engine displacement, engine code, transmission type, tire size and
parameters necessary to conduct exhaust emission tests such as
equivalent test weight, curb and gross vehicle weight, test horsepower
(with and without air conditioning adjustment), coast down time, shift
schedules, cooling fan configuration, etc. and evaporative tests such
as canister working capacity, canister bed volume, and fuel temperature
profile. Actual values must be provided for all parameters.
(4) Final U.S. vehicle sales volumes for each test group and
evaporative/refueling family combination organized in such a way to
verify compliance with any applicable implementation schedules. Final
sales are not required until the final update to the Part 2 Application
at the end of the model year.
(i) The manufacturer may petition the Administrator to allow actual
volume produced for U.S. sale to be used in lieu of actual U.S. sales.
The petition must establish that production volume is functionally
equivalent to sales volume.
(ii) The U.S. sales volume shall be based on the location of the
point of sale to a dealer, distributor, fleet operator, broker, or any
other entity which comprises the point of first sale.
(5) Copies of all service manuals, service bulletins and
instructions regarding the use, repair, adjustment, maintenance, or
testing of such vehicles relevant to the control of crankcase, exhaust
or evaporative emissions, as applicable, issued by the manufacturer for
use by other manufacturers, assembly plants, distributors, dealers, and
ultimate purchasers. These shall be submitted in electronic form to the
Agency when they are made available to the public and must be updated
as appropriate throughout the useful life of the corresponding
vehicles.
(6) The NMOG-to-NMHC and HCHO-to-NMHC ratios established according
to Sec. 86.1845-04.
(7) The results of any production vehicle evaluation testing
required for OBD systems under Sec. 86.1806.
* * * * *
(g) * * *
(11) A description of all procedures, including any special
procedures, used to comply with applicable test requirements of this
subpart. Any special procedures used to establish durability data or
emission deterioration factors required to be determined under
Sec. Sec. 86.1823, 86.1824 and 86.1825 and to conduct emission tests
required to be performed on applicable emission data vehicles under
Sec. 86.1829 according to test procedures contained within this Title
must also be included.
* * * * *
(h) Manufacturers must submit the in-use testing information
required in Sec. 86.1847.
0
72. Revise and republish Sec. 86.1845-04 to read as follows:
Sec. 86.1845-04 Manufacturer in-use verification testing
requirements.
(a) General requirements. (1) Manufacturers of LDV, LDT, MDPV and
complete HDV must test, or cause to have tested, a specified number of
vehicles. Such testing must be conducted in accordance with the
provisions of this section.
(2) Unless otherwise approved by the Administrator, no emission
measurements made under the requirements of this section may be
adjusted by Reactivity Adjustment Factors (RAFs).
(3) The following provisions apply regarding the possibility of
residual effects from varying fuel sulfur levels:
(i) Vehicles certified under Sec. 86.1811 must always measure
emissions over the FTP, then over the HFET (if applicable), then over
the US06. If a vehicle meets all the applicable emission standards
except the FTP or HFET emission standard for NMOG+NOX, and a
fuel sample from the tested vehicle (representing the as-received
condition) has a measured fuel sulfur level exceeding 15 ppm when
measured as described in 40 CFR 1065.710, the manufacturer may repeat
the FTP and HFET measurements and use the new emission values as the
official results for that vehicle. For all other cases, measured
emission levels from the first test will be considered the official
results for the test vehicle, regardless of any test results from
additional test runs. Where repeat testing is allowed, the vehicle may
operate for up to two US06 cycles (with or without measurement) before
repeating the FTP and HFET measurements. The repeat measurements must
include both FTP and HFET, even if the vehicle failed only one of those
tests, unless the HFET is not required for a particular vehicle.
Vehicles may not undergo any other vehicle preconditioning to eliminate
fuel sulfur effects on the emission control system, unless we approve
it in advance. This paragraph (a)(3)(i) does not apply for Tier 2
vehicles.
(ii) Upon a manufacturer's written request, prior to in-use
testing, that presents information to EPA regarding pre-conditioning
procedures designed solely to remove the effects of high sulfur in
gasoline from vehicles produced through the 2007 model year, EPA will
consider allowing such procedures on a case-by-case basis. EPA's
decision will apply to manufacturer in-use testing conducted under this
section and to any in-use testing conducted by EPA. Such procedures are
not available for complete HDV. For model year 2007 and later Tier 2
vehicles, this provision can be used only in American Samoa, Guam, and
the Commonwealth of the Northern Mariana Islands, and then only if low
sulfur gasoline is determined by the Administrator to be unavailable in
that specific location.
(4) Battery-related in-use testing requirements apply for battery
electric vehicles and plug-in hybrid electric vehicles as described in
paragraph (g) of this section.
(5) Certain medium-duty vehicles are also subject to in-use testing
requirements to demonstrate compliance with off-cycle emission
[[Page 28184]]
standards as described in paragraph (h) of this section.
(b) Low-mileage testing--(1) Test groups. Testing must be conducted
for each test group and evaporative/refueling family as specified.
(2) Vehicle mileage. All test vehicles must have a minimum odometer
mileage of 10,000 miles.
(3) Procuring test vehicles. For each test group, the minimum
number of vehicles that must be tested is specified in table 1 (Table
S04-06) and table 2 (Table S04-07) to this paragraph (b)(3). After
testing the minimum number of vehicles of a specific test group as
specified in Table S04-06 or S04-07, a manufacturer may test additional
vehicles upon request and approval by the Agency prior to the
initiation of the additional testing. Any additional testing must be
completed within the testing completion requirements shown in Sec.
86.1845-04(b)(4). The request and Agency approval (if any) shall apply
to test groups on a case-by-case basis and apply only to testing under
this paragraph (b). Separate approval will be required to test
additional vehicles under paragraph (c) of this section. In addition to
any testing that is required under Table S04-06 and Table S04-07, a
manufacturer shall test one vehicle from each evaporative/refueling
family for evaporative/refueling emissions. If a manufacturer believes
it is unable to procure the required number of test vehicles meeting
the specifications of this section, the manufacturer may request
Administrator approval to either test a smaller number of vehicles or
include vehicles that don't fully meet specifications. The request
shall include a description of the methods the manufacturer has used to
procure the required number of vehicles meeting specifications. The
approval of any such request will be based on a review of the
procurement efforts made by the manufacturer to determine if all
reasonable steps have been taken to procure the required number of test
vehicles meeting the specifications of this section.
Table 1 to Paragraph (b)(3)--Table S04-06--Small Volume Manufacturers
------------------------------------------------------------------------
49 and 50 State total sales\1\ 1-5000 5001-14,999
------------------------------------------------------------------------
Low Mileage....................... Voluntary........... 0
High Mileage...................... Voluntary........... 2
------------------------------------------------------------------------
\1\ Manufacturer's total annual sales.
Table 2 to Paragraph (b)(3)--Table S04-07--Large Volume Manufacturers
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-50,000
49 and 50 State annual sales \1\ 1-5000 \2\ 5001-14,999 \2\ \3\ 50,001-250,000 >250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low Mileage.................................... Voluntary................................. 0 2 3 4
High Mileage................................... Voluntary................................. 2 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Sales by test group.
\2\ Total annual production of groups eligible for testing under small volume sampling plan is capped at a maximum of 14,999 vehicle 49 or 50 state
annual sales, or a maximum of 4,500 vehicle California only sales per model year, per large volume manufacturer.
\3\ Sampling plan applies to all of a manufacturer's remaining groups in this sales volume category when the maximum annual cap on total sales of small
groups eligible for the small volume sampling plan is exceeded.
(4) Completion of testing. Testing of the vehicles in a test group
and evaporative/refueling family must be completed within 12 months of
the end of production of that test group (or evaporative/refueling
family) for that model year or a later date that we approve.
(5) Testing. (i) Each test vehicle of a test group shall be tested
in accordance with the FTP and the US06 as described in subpart B of
this part, when such test vehicle is tested for compliance with
applicable exhaust emission standards under this subpart. Test vehicles
subject to applicable exhaust CO2 emission standards under
this subpart shall also be tested in accordance with the HFET as
described in 40 CFR 1066.840.
(ii) For vehicles subject to Tier 3 p.m. standards, manufacturers
must measure PM emissions over the FTP and US06 driving schedules for
at least 50 percent of the vehicles tested under paragraph (b)(5)(i) of
this section. For vehicles subject to Tier 4 p.m. standards, this test
rate increases to 100 percent.
(iii) Starting with model year 2018 vehicles, manufacturers must
demonstrate compliance with the Tier 3 leak standard specified in Sec.
86.1813, if applicable, as described in this paragraph (b)(5)(iii).
Manufacturers must evaluate each vehicle tested under paragraph
(b)(5)(i) of this section, except that leak testing is not required for
vehicles tested under paragraph (b)(5)(iv) of this section for diurnal
emissions. In addition, manufacturers must evaluate at least one
vehicle from each leak family for a given model year. Manufacturers may
rely on OBD monitoring instead of testing as follows:
(A) A vehicle is considered to pass the leak test if the OBD system
completed a leak check within the previous 750 miles of driving without
showing a leak fault code.
(B) Whether or not a vehicle's OBD system has completed a leak
check within the previous 750 miles of driving, the manufacturer may
operate the vehicle as needed to force the OBD system to perform a leak
check. If the OBD leak check does not show a leak fault, the vehicle is
considered to pass the leak test.
(C) If the most recent OBD leak check from paragraph (b)(5)(iii)(A)
or (B) of this section shows a leak-related fault code, the vehicle is
presumed to have failed the leak test. Manufacturers may perform the
leak measurement procedure described in 40 CFR 1066.985 for an official
result to replace the finding from the OBD leak check.
(D) Manufacturers may not perform repeat OBD checks or leak
measurements to over-ride a failure under paragraph (b)(5)(iii)(C) of
this section.
(iv) For vehicles other than gaseous-fueled vehicles and electric
vehicles, one test vehicle of each evaporative/refueling family shall
be tested in accordance with the supplemental 2-diurnal-plus-hot-soak
evaporative emission and refueling emission procedures described in
subpart B of this part, when such test vehicle is tested for compliance
with applicable evaporative emission and refueling standards under this
subpart. For gaseous-fueled vehicles, one test vehicle of each
evaporative/refueling family shall be tested in accordance with the 3-
[[Page 28185]]
diurnal-plus-hot-soak evaporative emission and refueling emission
procedures described in subpart B of this part, when such test vehicle
is tested for compliance with applicable evaporative emission and
refueling standards under this subpart. The test vehicles tested to
fulfill the evaporative/refueling testing requirement of this paragraph
(b)(5)(iv) will be counted when determining compliance with the minimum
number of vehicles as specified in Table S04-06 and Table S04-07
(tables 1 and 2 to paragraph (b)(3) of this section) for testing under
paragraph (b)(5)(i) of this section only if the vehicle is also tested
for exhaust emissions under the requirements of paragraph (b)(5)(i) of
this section.
(6) Test condition. Each test vehicle not rejected based on the
criteria specified in appendix II to this subpart shall be tested in
as-received condition.
(7) Diagnostic maintenance. A manufacturer may conduct subsequent
diagnostic maintenance and/or testing of any vehicle. Any such
maintenance and/or testing shall be reported to the Agency as specified
in Sec. 86.1847.
(c) High-mileage testing--(1) Test groups. Testing must be
conducted for each test group and evaporative/refueling family as
specified.
(2) Vehicle mileage. All test vehicles must have a minimum odometer
mileage of 50,000 miles. At least one vehicle of each test group must
have a minimum odometer mileage of 105,000 miles or 75 percent of the
full useful life mileage, whichever is less. See Sec. 86.1838-01(c)(2)
for small-volume manufacturer mileage requirements.
(3) Procuring test vehicles. For each test group, the minimum
number of vehicles that must be tested is specified in Table S04-06 and
Table S04-07 (tables 1 and 2 to paragraph (b)(3) of this section).
After testing the minimum number of vehicles of a specific test group
as specified in Table S04-06 and Table S04-07, a manufacturer may test
additional vehicles upon request and approval by the Agency prior to
the initiation of the additional testing. Any additional testing must
be completed within the testing completion requirements shown in Sec.
86.1845-04(c)(4). The request and Agency approval (if any) shall apply
to test groups on a case-by-case basis and apply only to testing under
this paragraph (c). In addition to any testing that is required under
Table S04-06 and Table S04-07, a manufacturer shall test one vehicle
from each evaporative/refueling family for evaporative/refueling
emissions. If a manufacturer believes it is unable to procure the
required number of test vehicles meeting the specifications of this
section, the manufacturer may request Administrator approval to either
test a smaller number of vehicles or include vehicles that don't fully
meet specifications. The request shall include a description of the
methods the manufacturer has used to procure the required number of
vehicles meeting specifications. The approval of any such request will
be based on a review of the procurement efforts made by the
manufacturer to determine if all reasonable steps have been taken to
procure the required number of test vehicles meeting the specifications
of this section.
(4) Initiation and completion of testing. Testing of a test group
(or evaporative refueling family) must commence within 4 years of the
end of production of the test group (or evaporative/refueling family)
and be completed within 5 years of the end of production of the test
group (or evaporative/refueling family) or a later date that we
approve.
(5) Testing. (i) Each test vehicle shall be tested in accordance
with the FTP and the US06 as described in subpart B of this part when
such test vehicle is tested for compliance with applicable exhaust
emission standards under this subpart. Test vehicles subject to
applicable exhaust CO2 emission standards under this subpart
shall also be tested in accordance with the HFET as described in 40 CFR
1066.840. One test vehicle from each test group shall be tested over
the FTP at high altitude. The test vehicle tested at high altitude is
not required to be one of the same test vehicles tested at low
altitude. The test vehicle tested at high altitude is counted when
determining the compliance with the requirements shown in Table S04-06
and Table S04-07 (tables 1 and 2 to paragraph (b)(3) of this section)
or the expanded sample size as provided for in this paragraph (c).
(ii) For vehicles subject to Tier 3 p.m. standards, manufacturers
must measure PM emissions over the FTP and US06 driving schedules for
at least 50 percent of the vehicles tested under paragraph (c)(5)(i) of
this section. For vehicles subject to Tier 4 p.m. standards, this test
rate increases to 100 percent.
(iii) Starting with model year 2018 vehicles, manufacturers must
evaluate each vehicle tested under paragraph (c)(5)(i) of this section
to demonstrate compliance with the Tier 3 leak standard specified in
Sec. 86.1813, except that leak testing is not required for vehicles
tested under paragraph (c)(5)(iv) of this section for diurnal
emissions. In addition, manufacturers must evaluate at least one
vehicle from each leak family for a given model year. Manufacturers may
rely on OBD monitoring instead of testing as described in paragraph
(b)(5)(iii) of this section.
(iv) For vehicles other than gaseous-fueled vehicles and electric
vehicles, one test vehicle of each evaporative/refueling family shall
be tested in accordance with the supplemental 2-diurnal-plus-hot-soak
evaporative emission procedures described in subpart B of this part,
when such test vehicle is tested for compliance with applicable
evaporative emission and refueling standards under this subpart. For
gaseous-fueled vehicles, one test vehicle of each evaporative/refueling
family shall be tested in accordance with the 3-diurnal-plus-hot-soak
evaporative emission procedures described in subpart B of this part,
when such test vehicle is tested for compliance with applicable
evaporative emission and refueling standards under this subpart. The
vehicles tested to fulfill the evaporative/refueling testing
requirement of this paragraph (c)(5)(iv) will be counted when
determining compliance with the minimum number of vehicles as specified
in Tables S04-06 and S04-07 (tables 1 and 2 to paragraph (b)(3) of this
section) for testing under paragraph (c)(5)(i) of this section only if
the vehicle is also tested for exhaust emissions under the requirements
of paragraph (c)(5)(i) of this section .
(6) Test condition. Each test vehicle not rejected based on the
criteria specified in appendix II to this subpart shall be tested in
as-received condition.
(7) Diagnostic maintenance. A manufacturer may conduct subsequent
diagnostic maintenance and/or testing on any vehicle. Any such
maintenance and/or testing shall be reported to the Agency as specified
in Sec. 86.1847-01.
(d) Test vehicle procurement. Vehicles tested under this section
shall be procured as follows:
(1) Vehicle ownership. Vehicles shall be procured from the group of
persons who own or lease vehicles registered in the procurement area.
Vehicles shall be procured from persons which own or lease the vehicle,
excluding commercial owners/lessees owned or controlled by the vehicle
manufacturer, using the procedures described in appendix I to this
subpart. See Sec. 86.1838-01(c)(2)(i) for small volume manufacturer
requirements.
(2) Geographical limitations. (i) Test groups certified to 50-state
standards: For low altitude testing no more than fifty percent of the
test vehicles may be procured from California. The test vehicles
procured from the 49-state area
[[Page 28186]]
must be procured from a location with a heating degree day 30-year
annual average equal to or greater than 4,000.
(ii) Test groups certified to 49-state standards: The test vehicles
procured from the 49-state area must be procured from a location with a
heating degree day 30-year annual average equal to or greater than
4,000.
(iii) Vehicles procured for high altitude testing may be procured
from any area located above 4,000 feet.
(3) Rejecting candidate vehicles. Vehicles may be rejected for
procurement or testing under this section if they meet one or more of
the rejection criteria in appendix II to this subpart. Vehicles may
also be rejected after testing under this section if they meet one or
more of the rejection criteria in appendix II to this subpart. Any
vehicle rejected after testing must be replaced in order that the
number of test vehicles in the sample comply with the sample size
requirements of this section. Any post-test vehicle rejection and
replacement procurement and testing must take place within the testing
completion requirements of this section.
(e) Testing facilities, procedures, quality assurance and quality
control -- (1) Lab equipment and procedural requirements. The
manufacturer shall utilize a test laboratory that is in accordance with
the equipment and procedural requirements of subpart B of this part to
conduct the testing required by this section.
(2) Notification of test facility. The manufacturer shall notify
the Agency of the name and location of the testing laboratory(s) to be
used to conduct testing of vehicles of each model year conducted
pursuant to this section. Such notification shall occur at least thirty
working days prior to the initiation of testing of the vehicles of that
model year.
(3) Correlation. The manufacturer shall document correlation
traceable to the Environmental Protection Agency's National Vehicle and
Fuel Emission Laboratory for its test laboratory utilized to conduct
the testing required by this section.
(f) NMOG and formaldehyde. The following provisions apply for
measuring NMOG and formaldehyde:
(1) A manufacturer must conduct in-use testing on a test group by
determining NMOG exhaust emissions using the same methodology used for
certification, as described in 40 CFR 1066.635.
(2) For flexible-fueled vehicles certified to NMOG (or
NMOG+NOX) standards, the manufacturer may ask for EPA
approval to demonstrate compliance using an equivalent NMOG emission
result calculated from a ratio of ethanol NMOG exhaust emissions to
gasoline NMHC exhaust emissions. Ethanol NMOG exhaust emissions are
measured values from testing with the ethanol test fuel, expressed as
NMOG. Gasoline NMHC exhaust emissions are measured values from testing
with the gasoline test fuel, expressed as NMHC. This ratio must be
established during certification for each emission-data vehicle for the
applicable test group. Use good engineering judgment to establish a
different ratio for each duty cycle or test interval as appropriate.
Identify the ratio values you develop under this paragraph (f)(2) and
describe the duty cycle or test interval to which they apply in the
Part II application for certification. Calculate the equivalent NMOG
emission result by multiplying the measured gasoline NMHC exhaust
emissions for a given duty cycle or test interval by the appropriate
ratio.
(3) If the manufacturer measures NMOG as described in 40 CFR
1066.635(a), it must also measure and report HCHO emissions. As an
alternative to measuring the HCHO content, if the manufacturer measures
NMOG as permitted in 40 CFR 1066.635(c), the Administrator may approve,
upon submission of supporting data by a manufacturer, the use of HCHO
to NMHC ratios. To request the use of HCHO to NMHC ratios, the
manufacturer must establish during certification testing the ratio of
measured HCHO exhaust emissions to measured NMHC exhaust emissions for
each emission-data vehicle for the applicable test group. The results
must be submitted to the Administrator with the Part II application for
certification. Following approval of the application for certification,
the manufacturer may conduct in-use testing on the test group by
measuring NMHC exhaust emissions rather than HCHO exhaust emissions.
The measured NMHC exhaust emissions must be multiplied by the HCHO to
NMHC ratio submitted in the application for certification for the test
group to determine the equivalent HCHO exhaust emission values for the
test vehicle. The equivalent HCHO exhaust emission values must be
compared to the HCHO exhaust emission standard applicable to the test
group.
(g) Battery testing. Manufacturers of battery electric vehicles and
plug-in hybrid electric vehicles must perform in-use testing related to
battery monitor accuracy and battery durability for those vehicles as
described in Sec. 86.1815-27. Except as otherwise provided in Sec.
86.1815-27(h), perform Part A testing for each monitor family as
follows to verify that SOCE monitors meet accuracy requirements:
(1) Determine accuracy by measuring SOCE from in-use vehicles using
the procedures specified in Sec. 86.1815-27(c) and comparing the
measured values to the SOCE value displayed on the monitor at the start
of testing.
(2) Perform low-mileage testing of the vehicles in a monitor family
within 24 months of the end of production of that monitor family for
that model year. All test vehicles must have a minimum odometer mileage
of 20,000 miles.
(3) Perform high-mileage testing of the vehicles in a monitor
family by starting the test program within 4 years of the end of
production of the monitor family and completing the test program within
5 years of the end of production of the monitor family. All test
vehicles must have a minimum odometer mileage of 40,000 miles.
(4) Select test vehicles as described in paragraphs (b)(6), (c)(6),
and (d)(1) and (3) of this section from the United States. Send
notification regarding test location as described in paragraph (e)(2)
of this section.
(5) You may perform diagnostic maintenance as specified in
paragraph (b)(7) and (c)(7) of this section.
(6) See Sec. 86.1838-01(b)(2) for a testing exemption that applies
for small-volume monitor families.
(h) Off-cycle testing for high-GCWR medium-duty vehicles. Medium-
duty vehicles that are subject to off-cycle standards under Sec.
86.1811-27(e) are subject to in-use testing requirements described in
40 CFR part 1036, subpart E, and 40 CFR 1036.530, with the following
exceptions and clarifications:
(1) In-use testing requirements apply for both vehicles with spark-
ignition engines and vehicles with compression-ignition engines.
(2) References to ``engine family'' should be understood to mean
``test group''.
(3) In our test order we may include the following requirements and
specifications:
(i) We may select any vehicle configuration for testing. We may
also specify that the selected vehicle have certain optional features.
(ii) We may allow the vehicle manufacturer to arrange for the
driver of a test vehicle to be an employee or a hired contractor,
rather than the vehicle owner.
(iii) We may specify certain routes or types of driving.
(4) Within 45 days after we direct you to perform testing under
this paragraph (h), send us a proposed test plan that meets the
provisions in this paragraph
[[Page 28187]]
(h)(4) in addition to what we specify in 40 CFR 1036.410. EPA must
approve the test plan before the manufacturer may start testing. EPA
approval will be based on a determination that the test plan meets all
applicable requirements. The test plan must include the following
information:
(i) Describe how you will select vehicles, including consideration
of available options and features, to properly represent in-use
performance for the selected vehicle configuration.
(ii) Describe any planned inspection or maintenance before testing
the vehicle, along with any criteria for rejecting a candidate vehicle.
(iii) Describe test routes planned for testing. The test route must
target a specific total duration or distance, including at least three
hours of driving with non-idle engine operation. The test route must
represent normal driving, including a broad range of vehicle speeds and
accelerations and a reasonable amount of operation at varying grades.
If the completed test route does not include enough windows for any bin
as specified in paragraph (h)(8) of this section, repeat the drive over
the approved test route.
(iv) Describe your plan for vehicle operation to include at least
50 percent of non-idle operation with gross combined weight at least 70
percent of GCWR. Trailers used for testing must meet certain
specifications as follows:
(A) Trailers must comply with requirements in Row D through Row L
of Table 1 of SAE J2807 (incorporated by reference, see Sec. 86.1);
however, the frontal area of the trailer may not exceed the vehicle
manufacturer's specified maximum frontal area for towing. Trailers over
24,000 pounds must have a frontal area between 60 and 75 ft\2\.
(B) You may ask us to approve the use of a trailer not meeting SAE
J2807 specifications. This may apply, for example, if the trailer has
tires that are different than but equivalent to the specified tires. In
your request, describe the alternative trailer's specifications, why
you are using it, and how it is more representative of in-use operation
than a trailer meeting the specifications in paragraph (h)(4)(iv)(A) of
this section. Rather than demonstrating representativeness, you may
instead describe why it is infeasible to use a trailer meeting the
specifications in paragraph (h)(4)(iv)(A) of this section. We will
consider whether your request is consistent with good engineering
judgment.
(5) The accuracy margins in 40 CFR 1036.420(a) do not apply for
vehicles with spark-ignition engines, or for vehicles with compression-
ignition engines for demonstrating compliance with standards based on
measurement procedures with 3-bin moving average windows.
(6) Determine a reference CO2 emission rate,
eCO2FTPFCL, as described in 40 CFR 1036.635(a)(1) or based
on measured values from any chassis FTP driving cycles under 40 CFR
part 1066, subpart I, that is used for reporting data from an emission
data vehicle or a fuel economy data vehicle, as follows:
Equation 1 to Paragraph (h)(6)
[GRAPHIC] [TIFF OMITTED] TR18AP24.046
Where:
mCO2FTP = CO2 emission mass in grams emitted
over the FTP driving cycle.
dFTP = measured driving distance in miles.
WFTP = work performed over the FTP.
[GRAPHIC] [TIFF OMITTED] TR18AP24.047
i = an indexing variable that represents a 1 Hz OBD time counter
over the course of the FTP drive.
N = total number of measurements over the FTP duty cycle = 1874.
fn = engine speed for each point, i, starting from the
start of the FTP drive at i = 1, collected from OBD PID $0C.
T = engine torque in N[middot]m for each point, i, starting from i =
1. Calculate T by subtracting Friction Torque (PID $8E) from
Indicated Torque (PID $62) (both PIDs are percentages) and then
multiplying by the reference torque (PID $63). Set torque to zero if
friction torque is greater than indicated torque.
[Delta]t = 1/frecord
frecord = the data recording frequency.
Example:
mCO2FTP = 10,961 g
N = 1874
f1 = 687.3 r/min = 71.97 rad/s
f2 = 689.7 r/min = 72.23 rad/s
T1 = 37.1 ft[middot]lbf = 50.3 N[middot]m
T2 = 37.2 ft[middot]lbf = 50.4 N[middot]m
frecord = 1 Hz
[Delta]t = 1/1 = 1 s = 0.000277 hr
WFTP = 71.97 [middot] 50.3 [middot] 1.0 + 72.23 [middot]
50.4 [middot] 1.0 + [middot] [middot] [middot] [fnof]n1874
[middot] T1874 [middot] [Delta]t1874
WFTP = 53,958,852 W[middot]s = 20.1 hp[middot]hr
[GRAPHIC] [TIFF OMITTED] TR18AP24.048
eCO2FTPFCL = 545.3 g/hp[middot]hr
(7) For testing based on the 3-bin moving average windows, identify
the appropriate bin for each of the 300 second test intervals based on
its normalized CO2 emission mass,
mCO2,norm,testinterval, instead of the bin definitions in 40
CFR 1036.530(f), as follows:
Table 3 to paragraph (h)(7) of Sec. 86.1845-04--Criteria for Off-Cycle
Bins for 3-Bin Moving Average Windows
------------------------------------------------------------------------
Normalized CO2 emission mass
Bin over the 300 second test
interval
------------------------------------------------------------------------
Bin 1..................................... mCO2,norm,testinterval <=
6.00%
Bin 2a.................................... 6.00% <
mCO2,norm,testinterval <=
20.00%
Bin 2b.................................... mCO2,norm,testinterval >
20.00%
------------------------------------------------------------------------
(8) For testing based on 3-bin moving average windows, calculate
the off-cycle emissions quantity for Bin 2a and Bin 2b using the method
described in 40 CFR 1036.530 for Bin 2. Each bin is valid for
evaluating test results only if it has at least 2,400 windows.
0
73. Amend Sec. 86.1846-01 by revising paragraphs (a), (b), (e), and
(j) to read as follows:
Sec. 86.1846-01 Manufacturer in-use confirmatory testing
requirements.
(a) General requirements. (1) Manufacturers must test, or cause
testing to be conducted, under this section when the emission levels
shown by a test group sample from testing under Sec. 86.1845 exceeds
the criteria specified in paragraph (b) of this section. The testing
required under this section applies separately to each test group and
at each test point (low and high mileage) that meets the specified
criteria. The testing requirements apply separately for each model
year. These provisions do not apply to emissions of CH4 or
N2O.
(2) The provisions of Sec. 86.1845-04(a)(3) regarding fuel sulfur
effects apply equally to testing under this section.
(b) Criteria for additional testing. (1) A manufacturer shall test
a test group, or a subset of a test group, as described in paragraph
(j) of this section when the results from testing conducted under Sec.
86.1845 show mean exhaust emissions of any criteria pollutant for that
test group to be at or above 1.30 times the applicable in-use standard
for at least 50 percent of vehicles tested from the test group.
However, under an interim alternative approach for PM emissions,
additional testing is required if 80 percent of vehicles from the test
group exceed 1.30 times the in-use standard through model year 2030 for
light-duty program vehicles and through 2031 for medium-duty vehicles.
(2) A manufacturer shall test a test group, or a subset of a test
group, as described in paragraph (j) of this section when the results
from testing conducted under Sec. 86.1845 show mean exhaust
[[Page 28188]]
emissions of CO2 (City-highway combined CREE) for that test
group to be at or above the applicable in-use standard for at least 50
percent of vehicles tested from the test group.
(3) Additional testing is not required under this paragraph (b)
based on evaporative/refueling testing or based on low-mileage US06
testing conducted under Sec. 86.1845-04(b)(5)(i). Testing conducted at
high altitude under the requirements of Sec. 86.1845-04(c) will be
included in determining if a test group meets the criteria triggering
the testing required under this section.
(4) The vehicle designated for testing under the requirements of
Sec. 86.1845-04(c)(2) with a minimum odometer reading of 105,000 miles
or 75% of useful life, whichever is less, will not be included in
determining if a test group meets the triggering criteria.
(5) The SFTP composite emission levels for Tier 3 vehicles shall
include the IUVP FTP emissions, the IUVP US06 emissions, and the values
from the SC03 Air Conditioning EDV certification test (without DFs
applied). The calculations shall be made using the equations prescribed
in Sec. 86.164. If more than one set of certification SC03 data exists
(due to running change testing or other reasons), the manufacturer
shall choose the SC03 result to use in the calculation from among those
data sets using good engineering judgment.
(6) If fewer than 50 percent of the vehicles from a leak family
pass either the leak test or the diurnal test under Sec. 86.1845, EPA
may require further leak testing under this paragraph (b)(6). Testing
under this section must include five vehicles from the family. If all
five of these vehicles fail the test, the manufacturer must test five
additional vehicles.
EPA will determine whether to require further leak testing under
this section after providing the manufacturer an opportunity to discuss
the results, including consideration of any of the following
information, or other items that may be relevant:
(i) Detailed system design, calibration, and operating information,
technical explanations as to why the individual vehicles tested failed
the leak standard.
(ii) Comparison of the subject vehicles to other similar models
from the same manufacturer.
(iii) Data or other information on owner complaints, technical
service bulletins, service campaigns, special policy warranty programs,
warranty repair data, state I/M data, and data available from other
manufacturer-specific programs or initiatives.
(iv) Evaporative emission test data on any individual vehicles that
did not pass leak testing during IUVP.
* * * * *
(e) Emission testing. Each test vehicle of a test group or Agency-
designated subset shall be tested in accordance with the driving cycles
performed under Sec. 86.1845 corresponding to emission levels
requiring testing under this section) as described in subpart B of this
part, when such test vehicle is tested for compliance with applicable
exhaust emission standards under this subpart.
* * * * *
(j) Testing a subset. EPA may designate a subset of the test group
for testing under this section in lieu of testing the entire test group
when the results for the entire test group from testing conducted under
Sec. 86.1845 show mean emissions and a failure rate which meet these
criteria for additional testing.
0
74. Amend Sec. 86.1847-01 by adding paragraphs (g) and (h) to read as
follows:
Sec. 86.1847-01 Manufacturer in-use verification and in-use
confirmatory testing; submittal of information and maintenance of
records.
* * * * *
(g) Manufacturers of battery electric vehicles and plug-in hybrid
electric vehicles certified under this subpart must meet the following
reporting and recordkeeping requirements related to testing performed
under Sec. Sec. 86.1815-27(f)(2) and (3):
(1) Submit the following records organized by monitor family and
battery durability family related to Part A testing to verify accuracy
of SOCE monitors within 30 days after completing low-mileage,
intermediate-mileage, or high-mileage testing:
(i) A complete record of all tests performed, the dates and
location of testing, measured SOCE values for each vehicle, along with
the corresponding displayed SOCE values at the start of testing.
(ii) Test vehicle information, including model year, make, model,
and odometer reading.
(iii) A summary of statistical information showing whether the
testing shows a pass or fail result.
(2) Keep the following records related to testing under paragraph
(g)(1) of this section:
(i) Test reports submitted under paragraph (g)(1) of this section.
(ii) Test facility information.
(iii) Routine testing records, such as dynamometer trace, and
temperature and humidity during testing.
(3) Submit an annual report related to Part B testing to verify
compliance with the Minimum Performance Requirement for SOCE, as
applicable. Submit the report by October 1 for testing you perform over
the preceding year or ask us to approve a different annual reporting
period based on your practice for starting a new model year. Include
the following information in your annual reports, organized by monitor
family and battery durability family:
(i) Displayed values of SOCE for each sampled vehicle, along with a
description of each vehicle to identify its model year, make, model,
odometer reading, and state of registration. Also include the date for
assessing each selected vehicle.
(ii) A summary of results to show whether 90 percent of sampled
vehicles from each battery durability family meet the Minimum
Performance Requirement.
(iii) A description of how you randomly selected vehicles for
testing, including a demonstration that you meet the requirement to
select test vehicles from different U.S. states or territories. Provide
a more detailed description of your random selection if you test more
than 500 vehicles.
(iv) A description of any selected vehicles excluded from the test
results and the justification for excluding them.
(v) Information regarding warranty claims and statistics on repairs
for batteries and for other components or systems for each battery
durability family that might influence a vehicle's electric energy
consumption.
(4) Keep the following records related to testing under paragraph
(g)(3) of this section:
(i) Test reports submitted under paragraph (g)(3) of this section.
(ii) Documentation related to the method of selecting vehicles.
(5) Keep records required under this paragraph (g) for eight years
after submitting reports to EPA.
(h) Manufacturers of high-GCWR vehicles subject to in-use testing
under Sec. 86.1845-04(j) must meet the reporting and recordkeeping
requirements of 40 CFR 1036.430 and 1036.435 and include the following
additional information:
(1) Describe the trailer used for testing.
(2) Identify the driving route, including total time and distance,
and explain any departure from the planned driving route.
(3) Demonstrate that you met the specification for loaded
operation.
Sec. 86.1848-01 [Removed]
0
75. Remove Sec. 86.1848-01.
0
76. Revise Sec. 86.1848-10 to read as follows:
[[Page 28189]]
Sec. 86.1848-10 Compliance with emission standards for the purpose of
certification.
(a)(1) If, after a review of the manufacturer's submitted Part I
application, information obtained from any inspection, such other
information as the Administrator may require, and any other pertinent
data or information, the Administrator determines that the application
is complete and that all vehicles within a test group and evaporative/
refueling family as described in the application meet the requirements
of this part and the Clean Air Act, the Administrator shall issue a
certificate of conformity.
(2) If, after review of the manufacturer's application, request for
certification, information obtained from any inspection, such other
information as the Administrator may require, and any other pertinent
data or information, the Administrator determines that the application
is not complete or the vehicles within a test group or evaporative/
refueling family as described in the application, do not meet
applicable requirements or standards of the Act or of this part, the
Administrator may deny the issuance of, suspend, or revoke a previously
issued certificate of conformity. The Administrator will notify the
manufacturer in writing, setting forth the basis for the determination.
The manufacturer may request a hearing on the Administrator's
determination.
(b) A certificate of conformity will be issued by the Administrator
for a period not to exceed one model year and upon such terms as deemed
necessary or appropriate to assure that any new motor vehicle covered
by the certificate will meet the requirements of the Act and of this
part.
(c) Failure to meet any of the following conditions will be
considered a failure to satisfy a condition upon which a certificate
was issued, and any affected vehicles are not covered by the
certificate:
(1) The manufacturer must supply all required information according
to the provisions of Sec. Sec. 86.1843 and 86.1844.
(2) The manufacturer must comply with all certification and in-use
emission standards contained in subpart S of this part both during and
after model year production. This includes monitor accuracy and battery
durability requirements for battery electric vehicles and plug-in
hybrid electric vehicles as described in Sec. 86.1815.
(3) The manufacturer must comply with all implementation schedules
sales percentages as required in this subpart.
(4) New incomplete vehicles must, when completed by having the
primary load-carrying device or container attached, conform to the
maximum curb weight and frontal area limitations described in the
application for certification as required in Sec. 86.1844.
(5) The manufacturer must meet the in-use testing and reporting
requirements contained in Sec. Sec. 86.1815, 86.1845, 86.1846, and
86.1847, as applicable.
(6) Vehicles must in all material respects be as described in the
manufacturer's application for certification (Part I and Part II).
(7) Manufacturers must meet all the provisions of Sec. Sec.
86.1811, 86.1813, 86.1816, and 86.1860 through 86.1862 both during and
after model year production, including compliance with the applicable
fleet average standard and phase-in requirements. The manufacturer
bears the burden of establishing to the satisfaction of the
Administrator that the terms and conditions upon which each certificate
was issued were satisfied. For recall and warranty purposes, vehicles
not covered by a certificate of conformity will continue to be held to
the standards stated or referenced in the certificate that otherwise
would have applied to the vehicles. A manufacturer may not sell credits
it has not generated.
(8) Manufacturers must meet all provisions related to cold
temperature standards in Sec. Sec. 86.1811 and 86.1864 both during and
after model year production, including compliance with the applicable
fleet average standard and phase-in requirements. The manufacturer
bears the burden of establishing to the satisfaction of the
Administrator that the terms and conditions upon which each certificate
was issued were satisfied. For recall and warranty purposes, vehicles
not covered by a certificate of conformity will continue to be held to
the standards stated or referenced in the certificate that otherwise
would have applied to the vehicles. A manufacturer may not sell credits
it has not generated.
(9) Manufacturers must meet all the provisions of Sec. Sec.
86.1818, 86.1819, and 86.1865 both during and after model year
production, including compliance with the applicable fleet average
standard. The manufacturer bears the burden of establishing to the
satisfaction of the Administrator that the terms and conditions upon
which the certificate(s) was (were) issued were satisfied. For recall
and warranty purposes, vehicles not covered by a certificate of
conformity will continue to be held to the standards stated or
referenced in the certificate that otherwise would have applied to the
vehicles. A manufacturer may not sell credits it has not generated.
(i) Manufacturers that are determined to be operationally
independent under Sec. 86.1838-01(d) must report a material change in
their status within 60 days as required by Sec. 86.1838-01(d)(2).
(ii) Manufacturers subject to an alternative fleet average
greenhouse gas emission standard approved under Sec. 86.1818-12(g)
must comply with the annual sales thresholds that are required to
maintain use of those standards, including the thresholds required for
new entrants into the U.S. market.
(10) Manufacturers must meet all the provisions of Sec. 86.1815
both during and after model year production. The manufacturer bears the
burden of establishing to the satisfaction of the Administrator that
the terms and conditions related to issued certificates were satisfied.
(d) One certificate will be issued for each test group and
evaporative/refueling family combination. For diesel fueled vehicles
and electric vehicles, one certificate will be issued for each test
group. A certificate of conformity is deemed to cover the vehicles
named in such certificate and produced during the model year.
(e) A manufacturer of new light-duty vehicles, light-duty trucks,
and complete heavy-duty vehicles must obtain a certificate of
conformity covering such vehicles from the Administrator prior to
selling, offering for sale, introducing into commerce, delivering for
introduction into commerce, or importing into the United States the new
vehicle. Vehicles produced prior to the effective date of a certificate
of conformity may also be covered by the certificate, once it is
effective, if the following conditions are met:
(1) The vehicles conform in all respects to the vehicles described
in the application for the certificate of conformity.
(2) The vehicles are not sold, offered for sale, introduced into
commerce, or delivered for introduction into commerce prior to the
effective date of the certificate of conformity.
(3) EPA is notified prior to the beginning of production when such
production will start, and EPA is provided a full opportunity to
inspect and/or test the vehicles during and after their production. EPA
must have the opportunity to conduct SEA production line testing as if
the vehicles had been produced after the effective date of the
certificate.
(f) Vehicles imported by an original equipment manufacturer after
December 31 of the calendar year for which the model year is named are
still covered by the certificate of conformity as long as
[[Page 28190]]
the production of the vehicle was completed before December 31 of that
year.
(g) For test groups required to have an emission control diagnostic
system, certification will not be granted if, for any emission data
vehicle or other test vehicle approved by the Administrator in
consultation with the manufacturer, the malfunction indicator light
does not illuminate as required under Sec. 86.1806.
(h) Vehicles equipped with aftertreatment technologies such as
catalysts, otherwise covered by a certificate, which are driven outside
the United States, Canada, and Mexico will be presumed to have been
operated on leaded gasoline resulting in deactivation of such
components as catalysts and oxygen sensors. If these vehicles are
imported or offered for importation without retrofit of the catalyst or
other aftertreatment technology, they will be considered not to be
within the coverage of the certificate unless included in a catalyst or
other aftertreatment technology control program operated by a
manufacturer or a United States Government agency and approved by the
Administrator.
Sec. 86.1860-04 [Removed]
0
77. Remove Sec. 86.1860-04.
0
78. Amend Sec. 86.1860-17 by:
0
a. Revising the section heading and paragraphs (a) and (b); and
0
b. Removing paragraph (c)(4).
The revisions read as follows:
Sec. 86.1860-17 How to comply with the Tier 3 and Tier 4 fleet
average standards.
(a) You must show that you meet the applicable Tier 3 fleet average
NMOG+NOX standards from Sec. Sec. 86.1811-17 and 86.1816-
18, the Tier 3 fleet average evaporative emission standards from Sec.
86.1813-17, and the Tier 4 fleet average NMOG+NOX standards
from Sec. 86.1811-27 as described in this section. Note that separate
fleet average calculations are required for Tier 3 FTP and SFTP exhaust
emission standards under Sec. 86.1811-17.
(b) Calculate your fleet average value for each model year for all
vehicle models subject to a separate fleet average standard using the
following equation, rounded to the nearest 0.001 g/mile for
NMOG+NOX emissions and the nearest 0.001 g/test for
evaporative emissions:
Equation 1 to Paragraph (b)
[GRAPHIC] [TIFF OMITTED] TR18AP24.049
Where:
i = A counter associated with each separate test group or
evaporative family.
b = The number of separate test groups or evaporative families from
a given averaging set to which you certify your vehicles.
Ni = The actual nationwide sales for the model year for
test group or evaporative family i. Include allowances for
evaporative emissions as described in Sec. 86.1813.
FELi = The FEL selected for test group or evaporative
family i. Disregard any separate standards that apply for in-use
testing or for testing under high-altitude conditions.
Ntotal = The actual nationwide sales for the model year
for all vehicles from the averaging set, except as described in
paragraph (c) of this section. The pool of vehicle models included
in Ntotal may vary by model year, and it may be different
for evaporative standards, FTP exhaust standards, and SFTP exhaust
standards in a given model year.
* * * * *
Sec. 86.1861-04 [Removed]
0
79. Remove Sec. 86.1861-04.
0
80. Revise and republish Sec. 86.1861-17 to read as follows:
Sec. 86.1861-17 How do the NMOG+NOX and evaporative
emission credit programs work?
You may use emission credits for purposes of certification to show
compliance with the applicable fleet average NMOG+NOX
standards from Sec. Sec. 86.1811 and 86.1816 and the fleet average
evaporative emission standards from Sec. 86.1813 as described in 40
CFR part 1037, subpart H, with certain exceptions and clarifications as
specified in this section. MDPVs are subject to the same provisions of
this section that apply to LDT4.
(a) Calculate emission credits as described in this paragraph (a)
instead of using the provisions of 40 CFR 1037.705. Calculate positive
or negative emission credits relative to the applicable fleet average
standard. Calculate positive emission credits if your fleet average
level is below the standard. Calculate negative emission credits if
your fleet average value is above the standard. Calculate credits
separately for each applicable fleet average standard and calculate
total credits for each averaging set as specified in paragraph (b) of
this section. Convert units from mg/mile to g/mile as needed for
performing calculations. Calculate emission credits using the following
equation, rounded to the nearest whole number:
Equation 1 to Paragraph (a)
Emission credit = Volume [middot] [Fleet average standard-Fleet average
value]
Where:
Emission credit = The positive or negative credit for each discrete
fleet average standard, in units of vehicle-grams per mile for
NMOG+NOx and vehicle-grams per test for evaporative emissions.
Volume = Sales volume in a given model year from the collection of
test groups or evaporative families covered by the fleet average
value, as described in Sec. 86.1860.
(b) The following restrictions apply instead of those specified in
40 CFR 1037.740:
(1) Except as specified in paragraph (b)(2) of this section,
emission credits may be exchanged only within an averaging set, as
follows:
(i) HDV represent a separate averaging set with respect to all
emission standards.
(ii) Except as specified in paragraph (b)(1)(iii) of this section,
light-duty program vehicles represent a single averaging set with
respect to all emission standards. Note that FTP and SFTP credits for
Tier 3 vehicles are not interchangeable.
(iii) LDV and LDT1 certified to standards based on a useful life of
120,000 miles and 10 years together represent a single averaging set
with respect to NMOG+NOX emission standards. Note that FTP
and SFTP credits for Tier 3 vehicles are not interchangeable.
(iv) The following separate averaging sets apply for evaporative
emission standards:
(A) LDV and LDT1 together represent a single averaging set.
(B) LDT2 represents a single averaging set.
(C) HLDT represents a single averaging set.
[[Page 28191]]
(D) HDV represents a single averaging set.
(2) You may exchange evaporative emission credits across averaging
sets as follows if you need additional credits to offset a deficit
after the final year of maintaining deficit credits as allowed under
paragraph (c) of this section:
(i) You may exchange LDV/LDT1 and LDT2 emission credits.
(ii) You may exchange HLDT and HDV emission credits.
(3) Except as specified in paragraph (b)(4) of this section,
credits expire after five years.
For example, credits you generate in model year 2018 may be used
only through model year 2023.
(4) For the Tier 3 declining fleet average FTP and SFTP emission
standards for NMOG+NOX described in Sec. 86.1811-17(b)(8),
credits generated in model years 2017 through 2024 expire after eight
years, or after model year 2030, whichever comes first; however, these
credits may not be traded after five years. This extended credit life
also applies for small-volume manufacturers generating credits under
Sec. 86.1811-17(h)(1) in model years 2022 through 2024. Note that the
longer credit life does not apply for heavy-duty vehicles, for vehicles
certified under the alternate phase-in described in Sec. 86.1811-
17(b)(9), or for vehicles generating early Tier 3 credits under Sec.
86.1811-17(b)(11) in model year 2017.
(5) Tier 3 credits for NMOG+NOX may be used to
demonstrate compliance with Tier 4 standards without adjustment, except
as specified in Sec. 86.1811-27(b)(6)(ii).
(6) A manufacturer may generate NMOG+NOX credits from
model year 2027 through 2032 electric vehicles that qualify as MDPV and
use those credits for certifying medium-duty vehicles, as follows:
(i) Calculate generated credits separately for qualifying vehicles.
Calculate generated credits by multiplying the applicable standard for
light-duty program vehicles by the sales volume of qualifying vehicles
in a given model year.
(ii) Apply generated credits to eliminate any deficit for light-
duty program vehicles before using them to certify medium-duty
vehicles.
(iii) Apply the credit provisions of this section as specified,
except that you may not buy or sell credits generated under this
paragraph (b)(6).
(iv) Describe in annual credit reports how you are generating
certain credit quantities under this paragraph (b)(6). Also describe in
your end of year credit report how you will use those credits for
certifying light-duty program vehicles or medium-duty vehicles in a
given model year.
(c) The credit-deficit provisions 40 CFR 1037.745 apply to the
NMOG+NOX and evaporative emission standards for Tier 3 and
Tier 4 vehicles. Credit-deficit provisions are not affected by the
transition from Tier 3 to Tier 4 standards.
(d) The reporting and recordkeeping provisions of Sec. 86.1862
apply instead of those specified in 40 CFR 1037.730 and 1037.735.
(e) The provisions of 40 CFR 1037.645 do not apply.
(f) The enforcement provisions described in Sec. 86.1865-12(j)(3)
apply with respect to NMOG+NOX emission credits under this
section for battery electric vehicles that do not conform to battery
durability requirements in Sec. 86.1815-27.
0
81. Amend Sec. 86.1862-04 by revising the section heading and
paragraphs (a), (c)(2), and (d) to read as follows:
Sec. 86.1862-04 Maintenance of records and submittal of information
relevant to compliance with fleet average standards.
(a) Overview. This section describes reporting and recordkeeping
requirements for vehicles subject to the following standards:
(1) Tier 4 criteria exhaust emission standards, including cold
temperature NMOG+NOX standards, in Sec. 86.1811-27.
(2) Tier 3 evaporative emission standards in Sec. 86.1813-17.
(3) Tier 3 FTP emission standard for NMOG+NOX for LDV
and LDT in Sec. 86.1811-17.
(4) Tier 3 SFTP emission standard for NMOG+NOX for LDV
and LDT (including MDPV) in Sec. 86.1811-17.
(5) Tier 3 FTP emission standard for NMOG+NOX for HDV
(other than MDPV) in Sec. 86.1816-18.
(6) Cold temperature NMHC standards in Sec. 86.1811-17 for
vehicles subject to Tier 3 NMOG+NOX standards.
* * * * *
(c) * * *
(2) When a manufacturer calculates compliance with the fleet
average standard using the provisions in Sec. 86.1860-17(f), the
annual report must state that the manufacturer has elected to use such
provision and must contain the fleet average standard as the fleet
average value for that model year.
* * * * *
(d) Notice of opportunity for hearing. Any voiding of the
certificate under this section will be made only after EPA has offered
the manufacturer concerned an opportunity for a hearing conducted in
accordance with 40 CFR part 1068, subpart G, and, if a manufacturer
requests such a hearing, will be made only after an initial decision by
the Presiding Officer.
Sec. 86.1863-07 [Removed]
0
82. Remove Sec. 86.1863-07.
0
83. Revise Sec. 86.1864-10 to read as follows:
Sec. 86.1864-10 How to comply with cold temperature fleet average
standards.
(a) Applicability. Cold temperature fleet average standards apply
for NMHC or NMOG+NOX emissions as described in Sec.
86.1811. Certification testing provisions described in this subpart
apply equally for meeting cold temperature exhaust emission standards
except as specified.
(b) Calculating the cold temperature fleet average standard.
Manufacturers must compute separate sales-weighted cold temperature
fleet average emissions at the end of the model year using actual sales
and certifying test groups to FELs, as defined in Sec. 86.1803-01. The
FEL becomes the standard for each test group, and every test group can
have a different FEL. The certification resolution for the FEL is 0.1
grams/mile for NMHC and 0.010 grams/mile for NMOG+NOX.
Determine fleet average emissions separately for each set of vehicles
subject to different fleet average emission standards. Do not include
electric vehicles or fuel cell vehicles when calculating fleet average
emissions. Starting with Tier 4 vehicles, determine fleet average
emissions based on separate averaging sets for light-duty program
vehicles and medium-duty vehicles. Convert units between mg/mile and g/
mile as needed for performing calculations. Calculate the sales-
weighted cold temperature fleet averages using the following equation,
rounded to the nearest 0.1 grams/mile for NMHC and to the nearest 0.001
grams/mile for NMOG+NOX:
Equation 1 to Paragraph (b)
[GRAPHIC] [TIFF OMITTED] TR18AP24.050
[[Page 28192]]
Where:
N = The number of vehicles subject to a given fleet average emission
standard based on vehicles counted at the point of first sale.
FEL = Family Emission Limit (grams/mile).
Volume = Total number of vehicles sold from the applicable cold
temperature averaging set.
(c) Certification compliance and enforcement requirements for cold
temperature fleet average standards. Each manufacturer must comply on
an annual basis with fleet average standards as follows:
(1) Manufacturers must report in their annual reports to the Agency
that they met the relevant fleet average standard by showing that their
sales-weighted cold temperature fleet average emissions are at or below
the applicable fleet average standard for each averaging set.
(2) If the sales-weighted average is above the applicable fleet
average standard, manufacturers must obtain and apply sufficient
credits as permitted under paragraph (d)(8) of this section. A
manufacturer must show via the use of credits that they have offset any
exceedance of the cold temperature fleet average standard.
Manufacturers must also include their credit balances or deficits.
(3) If a manufacturer fails to meet the cold temperature fleet
average standard for two consecutive years, the vehicles causing the
exceedance will be considered not covered by the certificate of
conformity (see paragraph (d)(8) of this section). A manufacturer will
be subject to penalties on an individual-vehicle basis for sale of
vehicles not covered by a certificate.
(4) EPA will review each manufacturer's sales to designate the
vehicles that caused the exceedance of the fleet average standard. EPA
will designate as nonconforming those vehicles in test groups with the
highest certification emission values first, continuing until reaching
a number of vehicles equal to the calculated number of noncomplying
vehicles as determined above. In a group where only a portion of
vehicles would be deemed nonconforming, EPA will determine the actual
nonconforming vehicles by counting backwards from the last vehicle
produced in that test group. Manufacturers will be liable for penalties
for each vehicle sold that is not covered by a certificate.
(d) Requirements for the cold temperature averaging, banking, and
trading (ABT) program. (1) Manufacturers must average the cold
temperature fleet average emissions of their vehicles and comply with
the cold temperature fleet average standard. A manufacturer whose cold
temperature fleet average emissions exceed the applicable standard must
complete the calculation in paragraph (d)(4) of this section to
determine the size of its credit deficit. A manufacturer whose cold
temperature fleet average emissions are less than the applicable
standard must complete the calculation in paragraph (d)(4) of this
section to generate credits.
(2) There are no property rights associated with cold temperature
credits generated under this subpart. Credits are a limited
authorization to emit the designated amount of emissions. Nothing in
this part or any other provision of law should be construed to limit
EPA's authority to terminate or limit this authorization through
rulemaking.
(3) The following transition provisions apply:
(i) Cold temperature NMHC credits may be used to demonstrate
compliance with the cold temperature NMOG+NOX emission
standards for Tier 4 vehicles. The value of a cold temperature NMHC
credit is deemed to be equal to the value of a cold temperature
NMOG+NOX credit.
(ii) Credits earned from any light-duty vehicles, light-duty
trucks, and medium-duty passenger vehicles may be used for any light-
duty program vehicles, even if they were originally generated for a
narrower averaging set.
(4) Credits are earned on the last day of the model year.
Manufacturers must calculate, for a given model year, the number of
credits or debits it has generated according to the following equation,
rounded to the nearest 0.1 vehicle-grams/mile:
Equation 2 to Paragraph (d)(4)
Fleet average Credits or Debits = (Standard-Emissions) x Volume
Where:
Standard = the cold temperature NMHC or NMOG+NOX
standard.
Emissions = the manufacturer's sales-weighted cold temperature fleet
average emissions, calculated according to paragraph (b) of this
section.
Volume = total number of 50-state vehicles sold, based on the point
of first sale.
(5) NMHC and NMOG+NOX credits are not subject to any
discount or expiration date except as required under the deficit
carryforward provisions of paragraph (d)(8) of this section. There is
no discounting of unused credits. NMHC and NMOG+NOX credits
have unlimited lives, subject to the limitations of paragraph (d)(2) of
this section.
(6) Credits may be used as follows:
(i) Credits generated and calculated according to the method in
paragraph (d)(4) of this section may be used only to offset deficits
accrued with respect to the standard in Sec. 86.1811-10(g)(2). Credits
may be banked and used in a future model year in which a manufacturer's
average cold temperature fleet average level exceeds the applicable
standard. Credits may be exchanged only within averaging sets. Credits
may also be traded to another manufacturer according to the provisions
in paragraph (d)(9) of this section. Before trading or carrying over
credits to the next model year, a manufacturer must apply available
credits to offset any credit deficit, where the deadline to offset that
credit deficit has not yet passed.
(ii) The use of credits shall not be permitted to address Selective
Enforcement Auditing or in-use testing failures. The enforcement of the
averaging standard occurs through the vehicle's certificate of
conformity. A manufacturer's certificate of conformity is conditioned
upon compliance with the averaging provisions. The certificate will be
void ab initio if a manufacturer fails to meet the corporate average
standard and does not obtain appropriate credits to cover its
shortfalls in that model year or in the subsequent model year (see
deficit carryforward provision in paragraph (d)(8) of this section).
Manufacturers must track their certification levels and sales unless
they produce only vehicles certified with FELs at or below the
applicable to cold temperature fleet average levels below the standard
and have chosen to forgo credit banking.
(7) The following provisions apply if debits are accrued:
(i) If a manufacturer calculates that it has negative credits (also
called ``debits'' or a ``credit deficit'') for a given model year, it
may carry that deficit forward into the next model year. Such a carry-
forward may only occur after the manufacturer exhausts any supply of
banked credits. At the end of that next model year, the deficit must be
covered with an appropriate number of credits that the manufacturer
generates or purchases. Any remaining deficit is subject to an
enforcement action, as described in this paragraph (d)(8).
Manufacturers are not permitted to have a credit deficit for two
consecutive years.
(ii) If debits are not offset within the specified time period, the
number of vehicles not meeting the cold temperature fleet average
standards (and therefore not covered by the certificate) must be
calculated by dividing the total amount of debits for the model year by
the cold temperature fleet average standard applicable for the model
year in which the debits were first incurred.
[[Page 28193]]
(iii) EPA will determine the number of vehicles for which the
condition on the certificate was not satisfied by designating vehicles
in those test groups with the highest certification cold temperature
NMHC or NMOG+NOX emission values first and continuing until
reaching a number of vehicles equal to the calculated number of
noncomplying vehicles as determined above. If this calculation
determines that only a portion of vehicles in a test group contribute
to the debit, EPA will designate actual vehicles in that test group as
not covered by the certificate, starting with the last vehicle produced
and counting backwards.
(iv)(A) If a manufacturer ceases production of vehicles affected by
a debit balance, the manufacturer continues to be responsible for
offsetting any debits outstanding within the required time period. Any
failure to offset the debits will be considered a violation of
paragraph (d)(8)(i) of this section and may subject the manufacturer to
an enforcement action for sale of vehicles not covered by a
certificate, pursuant to paragraphs (d)(8)(ii) and (iii) of this
section.
(B) If a manufacturer is purchased by, merges with, or otherwise
combines with another manufacturer, the controlling entity is
responsible for offsetting any debits outstanding within the required
time period. Any failure to offset the debits will be considered a
violation of paragraph (d)(8)(i) of this section and may subject the
manufacturer to an enforcement action for sale of vehicles not covered
by a certificate, pursuant to paragraphs (d)(8)(ii) and (iii) of this
section.
(v) For purposes of calculating the statute of limitations, a
violation of the requirements of paragraph (d)(8)(i) of this section, a
failure to satisfy the conditions upon which a certificate(s) was
issued and hence a sale of vehicles not covered by the certificate, all
occur upon the expiration of the deadline for offsetting debits
specified in paragraph (d)(8)(i) of this section.
(8) The following provisions apply for trading cold temperature
credits:
(i) EPA may reject credit trades if the involved manufacturers fail
to submit the credit trade notification in the annual report. A
manufacturer may not sell credits that are not available for sale
pursuant to the provisions in paragraphs (d)(7)(i) of this section.
(ii) In the event of a negative credit balance resulting from a
transaction that a manufacturer could not cover by the reporting
deadline for the model year in which the trade occurred, both the buyer
and seller are liable, except in cases involving fraud by either the
buyer or seller. EPA may void ab initio the certificates of conformity
of all engine families participating in such a trade.
(iii) A manufacturer may only trade credits that it has generated
pursuant to paragraph (d)(4) of this section or acquired from another
party.
0
84. Amend Sec. 86.1865-12 by:
0
a. Revising paragraphs (h)(1) and (j);
0
b. Removing and reserving paragraph (k)(7)(iii); and
0
c. Adding paragraph (k)(10).
The revisions and addition read as follows:
Sec. 86.1865-12 How to comply with the fleet average CO2 standards.
* * * * *
(h) * * *
(1) The test procedures for demonstrating compliance with
CO2 exhaust emission standards are described at Sec. 86.101
and 40 CFR part 600, subpart B. Note that these test procedures involve
measurement of carbon-related exhaust emissions to demonstrate
compliance with the fleet average CO2 standards in Sec.
86.1818-12.
* * * * *
(j) Certification compliance and enforcement requirements for
CO2 exhaust emission standards. (1) Compliance and
enforcement requirements are provided in this section and Sec.
86.1848-10.
(2) The certificate issued for each test group requires all model
types within that test group to meet the in-use emission standards to
which each model type is certified. The in-use standards for passenger
automobiles and light trucks (including MDPV) are described in Sec.
86.1818-12(d). The in-use standards for medium-duty vehicles are
described in Sec. 86.1819-14(b).
(3) EPA will issue a notice of nonconformity as described in 40 CFR
part 85, subpart S, if EPA or the manufacturer determines that a
substantial number of a class or category of vehicles produced by that
manufacturer, although properly maintained and used, do not conform to
in-use CO2 emission standards, or do not conform to the
monitor accuracy and battery durability requirements in Sec. 86.1815-
27. The manufacturer must submit a remedial plan in response to a
notice of nonconformity as described in 40 CFR 85.1803. The
manufacturer's remedial plan would generally be a recall intended to
remedy repairable problems to bring nonconforming vehicles into
compliance; however, if there is no demonstrable, repairable problem
that could be remedied to bring the vehicles into compliance, the
manufacturer must submit an alternative plan to address the
noncompliance and notify owners. For example, manufacturers may need to
calculate a correction to its emission credit balance based on the GHG
emissions of the actual number of vehicles produced. Manufacturers may
voluntarily recall vehicles to remedy a noncompliance and submit a
voluntary recall report as described in 40 CFR part 85, subpart T.
Manufacturers may also voluntarily pursue a credit-based or other
alternative approach to remedy a noncompliance where appropriate.
(4) Any remedial plan under paragraph (j)(3) of this section,
whether voluntary or in response to a notice of nonconformity, must
fully correct the difference between the measured in-use CREE of the
affected class or category of vehicles and the reported CREE used to
calculate the manufacturer's fleet average and credit balances.
(5) The manufacturer may request a hearing under 40 CFR part 1068,
subpart G, regarding any voiding of credits or adjustment of debits
under paragraph (j)(3) of this section. Manufacturers must submit such
a request in writing describing the objection and any supporting data
within 30 days after we make a decision.
(6) Each manufacturer must comply with the applicable
CO2 fleet average standard on a production-weighted average
basis, at the end of each model year. Use the procedure described in
paragraph (i) of this section for passenger automobiles and light
trucks (including MDPV). Use the procedure described in Sec. 86.1819-
14(d)(9)(iv) for medium-duty vehicles.
(7) Each manufacturer must comply on an annual basis with the fleet
average standards as follows:
(i) Manufacturers must report in their annual reports to the Agency
that they met the relevant corporate average standard by showing that
the applicable production-weighted average CO2 emission
levels are at or below the applicable fleet average standards; or
(ii) If the production-weighted average is above the applicable
fleet average standard, manufacturers must obtain and apply sufficient
CO2 credits as authorized under paragraph (k)(8) of this
section. A manufacturer must show that they have offset any exceedance
of the corporate average standard via the use of credits. Manufacturers
must also include their credit balances or deficits in their annual
report to the Agency.
(iii) If a manufacturer fails to meet the corporate average
CO2 standard for four consecutive years, the vehicles
causing the corporate average exceedance will be considered not covered
by the certificate of conformity (see paragraph
[[Page 28194]]
(k)(8) of this section). A manufacturer will be subject to penalties on
an individual-vehicle basis for sale of vehicles not covered by a
certificate.
(iv) EPA will review each manufacturer's production to designate
the vehicles that caused the exceedance of the corporate average
standard. EPA will designate as nonconforming those vehicles in test
groups with the highest certification emission values first, continuing
until reaching a number of vehicles equal to the calculated number of
noncomplying vehicles as determined in paragraph (k)(8) of this
section. In a group where only a portion of vehicles would be deemed
nonconforming, EPA will determine the actual nonconforming vehicles by
counting backwards from the last vehicle produced in that test group.
Manufacturers will be liable for penalties for each vehicle sold that
is not covered by a certificate.
(k) * * *
(10) A manufacturer may generate CO2 credits from model
year 2027 through 2032 electric vehicles that qualify as MDPV and use
those credits for certifying medium-duty vehicles, as follows:
(i) Determine the emission standards from Sec. 86.1818-12 for
qualifying vehicles based on the CO2 target values for light
trucks and the footprint for each vehicle.
(ii) Calculate generated credits separately for qualifying vehicles
as described in paragraph (k)(4) of this section based on the emission
standards from paragraph (k)(10)(i) of this section, the mileage values
for light trucks, and the total number of qualifying vehicles produced,
with fleet average CO2 emissions set to 0.
(iii) Apply generated credits to eliminate any deficit for light
trucks before using them to certify medium-duty vehicles.
(iv) Apply the credit provisions of this section as specified,
except that you may not buy or sell credits generated under this
paragraph (k)(10).
(v) Describe in the annual credit reports how you are generating
certain credit quantities under this paragraph (k)(10). Also describe
in your end of year credit report how you will use those credits for
certifying light trucks or medium-duty vehicles in a given model year.
* * * * *
0
85. Amend Sec. 86.1866-12 by revising paragraphs (a) and (c)(3) to
read as follows:
Sec. 86.1866-12 CO2 credits for advanced technology vehicles.
* * * * *
(a) Battery electric vehicles, plug-in hybrid electric vehicles,
and fuel cell vehicles that are certified and produced for sale in the
states and territories of the United States may use a value of zero
grams CO2 per mile to represent the proportion of electric
operation of a vehicle that is derived from electricity generated from
sources that are not onboard the vehicle.
* * * * *
(c) * * *
(3) Multiplier-based credits for model years 2022 through 2024 may
not exceed credit caps, as follows:
(i) Calculate a nominal annual credit cap in Mg using the following
equation, rounded to the nearest whole number:
[GRAPHIC] [TIFF OMITTED] TR18AP24.051
Where:
Pauto = total number of certified passenger automobiles
the manufacturer produced in a given model year for sale in any
state or territory of the United States.
Ptruck = total number of certified light trucks
(including MDPV) the manufacturer produced in a given model year for
sale in any state or territory of the United States.
(ii) Calculate an annual g/mile equivalent value for the
multiplier-based credits using the following equation, rounded to the
nearest 0.1 g/mile:
[GRAPHIC] [TIFF OMITTED] TR18AP24.052
Where:
annual credits = a manufacturer's total multiplier-based credits in
a given model year from all passenger automobiles and light trucks
as calculated under this paragraph (c).
(iii) Calculate a cumulative g/mile equivalent value for the
multiplier-based credits in each year by adding the annual g/mile
equivalent values calculated under paragraph (c)(3)(ii) of this
section.
(iv) The cumulative g/mile equivalent value may not exceed 10.0 in
any year.
(v) For every year of certifying with multiplier-based credits, the
annual credit report must include the calculated values for the nominal
annual credit cap in Mg and the cumulative g/mile equivalent value.
0
86. Revise and republish Sec. 86.1867-12 to read as follows:
Sec. 86.1867-12 CO2 credits for reducing leakage of air conditioning
refrigerant.
Manufacturers may generate credits applicable to the CO2
fleet average program described in Sec. 86.1865-12 by implementing
specific air conditioning system technologies designed to reduce air
conditioning refrigerant leakage over the useful life of their
passenger automobiles and/or light trucks (including MDPV); only the
provisions of paragraph (a) of this section apply for non-MDPV heavy-
duty vehicles. Credits shall be calculated according to this section
for each air conditioning system that the manufacturer is using to
generate CO2 credits.
(a) Calculate an annual rate of refrigerant leakage from an air
conditioning system as follows, expressed to the nearest 0.1 grams per
year:
(1) Through model year 2026, calculate leakage rates according to
the procedures specified in SAE J2727 FEB2012 (incorporated by
reference, see Sec. 86.1). In doing so, the refrigerant permeation
rates for hoses shall be determined using the procedures specified in
SAE J2064 (incorporated by reference, Sec. 86.1). The procedures of
SAE J2727 may be used to determine leakage rates for HFC-134a and HFO-
1234yf; manufacturers should contact EPA regarding procedures for other
refrigerants.
(2) For model years 2027 through 2030, calculate leakage rates
according to the procedures specified in SAE J2727 SEP2023
(incorporated by reference, Sec. 86.1).
(b) The CO2-equivalent gram per mile leakage reduction
used to calculate the total leakage credits generated by an air
[[Page 28195]]
conditioning system shall be determined according to this paragraph
(b), separately for passenger automobiles and light trucks, and rounded
to the nearest tenth of a gram per mile:
(1) Passenger automobile leakage credit for an air conditioning
system:
Equation 1 to Paragraph (b)(1)
[GRAPHIC] [TIFF OMITTED] TR18AP24.053
Where:
MaxCredit is 12.6 (grams CO2-equivalent/mile) for air
conditioning systems using HFC-134a, and 13.8 (grams CO2-
equivalent/mile) for air conditioning systems using a refrigerant
with a lower global warming potential.
LeakScore means the annual refrigerant leakage rate determined
according to paragraph (a) of this section. If the calculated rate
is less than 8.3 grams/year (or 4.1 grams/year for systems using
only electric compressors), the rate for the purpose of this formula
shall be 8.3 grams/year (or 4.1 grams/year for systems using only
electric compressors).
GWPREF means the global warming potential of the
refrigerant as indicated in paragraph (e) of this section or as
otherwise determined by the Administrator.
HiLeakDis means the high leak disincentive, which is determined
using the following equation, except that if GWPREF is
greater than 150 or if the calculated result of the equation is less
than zero, HiLeakDis shall be set equal to zero, or if the
calculated result of the equation is greater than 1.8 g/mi,
HiLeakDis shall be set to 1.8 g/mi:
Equation 2 to Paragraph (b)(1)
[GRAPHIC] [TIFF OMITTED] TR18AP24.054
Where:
LeakThreshold = 11.0 for air conditioning systems with a refrigerant
capacity less than or equal to 733 grams; or LeakThreshold =
[Refrigerant Capacity x 0.015] for air conditioning systems with a
refrigerant capacity greater than 733 grams, where Refrigerant
Capacity is the maximum refrigerant capacity specified for the air
conditioning system, in grams.
(2) Light truck leakage credit for an air conditioning system:
Equation 3 to Paragraph (b)(2)
[GRAPHIC] [TIFF OMITTED] TR18AP24.055
Where:
MaxCredit is 15.6 (grams CO2-equivalent/mile) for air
conditioning systems using HFC-134a, and 17.2 (grams CO2-
equivalent/mile) for air conditioning systems using a refrigerant
with a lower global warming potential.
LeakScore means the annual refrigerant leakage rate determined
according to paragraph (a) of this section. If the calculated rate
is less than 10.4 grams/year (or 5.2 grams/year for systems using
only electric compressors), the rate for the purpose of this formula
shall be 10.4 grams/year (or 5.2 grams/year for systems using only
electric compressors).
GWPREF means the global warming potential of the
refrigerant as indicated in paragraph (e) of this section or as
otherwise determined by the Administrator.
HiLeakDis means the high leak disincentive, which is determined
using the following equation, except that if GWPREF is
greater than 150 or if the calculated result of the equation is less
than zero, HiLeakDis shall be set equal to zero, or if the
calculated result of the equation is greater than 2.1 g/mi,
HiLeakDis shall be set to 2.1 g/mi:
Equation 4 to Paragraph (b)(2)
[GRAPHIC] [TIFF OMITTED] TR18AP24.056
Where:
LeakThreshold = 11.0 for air conditioning systems with a refrigerant
capacity less than or equal to 733 grams; or LeakThreshold =
[Refrigerant Capacity x 0.015] for air conditioning systems with a
refrigerant capacity greater than 733 grams, where Refrigerant
Capacity is the maximum refrigerant capacity specified for the air
conditioning system, in grams.
(c) Calculate the total leakage credits generated by the air
conditioning system as follows:
(1) Calculate a total leakage credit in megagrams separately for
passenger automobiles and light trucks using the following equation:
Equation 5 to Paragraph (c)(1)
[GRAPHIC] [TIFF OMITTED] TR18AP24.057
Where:
Leakage = the CO2-equivalent leakage credit value in
grams per mile determined in paragraph (b) of this section, subject
to the maximum values specified in paragraph (c)(2) of this section.
Production = The total number of passenger automobiles or light
trucks, whichever is applicable, produced with the air
[[Page 28196]]
conditioning system to which to the leakage credit value from
paragraph (b)(1) or (2) of this section applies.
VLM = vehicle lifetime miles, which for passenger automobiles shall
be 195,264 and for light trucks shall be 225,865.
(2) Total leakage credits may not exceed the following maximum per-
vehicle values in model years 2027 through 2030:
Table 1 to Paragraph (c)(2)--Maximum Leakage Credit Values
[g/mile]
------------------------------------------------------------------------
Passenger Light
Model year automobiles trucks
------------------------------------------------------------------------
2027............................................. 11.0 13.8
2028............................................. 8.3 10.3
2029............................................. 5.5 6.9
2030............................................. 2.8 3.4
------------------------------------------------------------------------
(d) The results of paragraph (c) of this section, rounded to the
nearest whole number, shall be included in the manufacturer's credit/
debit totals calculated in Sec. 86.1865-12(k)(5).
(e) The following values for refrigerant global warming potential
(GWPREF), or alternative values as determined by the
Administrator, shall be used in the calculations of this section. The
Administrator will determine values for refrigerants not included in
this paragraph (e) upon request by a manufacturer.
(1) For HFC-134a, GWPREF = 1430;
(2) For HFC-152a, GWPREF = 124;
(3) For HFO-1234yf, GWPREF 1; and
(4) For CO2, GWPREF = 1.
0
87. Add Sec. 86.1867-31 to read as follows:
Sec. 86.1867-31 CO2 credits for reducing leakage of air conditioning
refrigerant.
Manufacturers may generate credits applicable to the CO2
fleet average program described in Sec. 86.1865-12 by implementing
specific air conditioning system technologies designed to reduce air
conditioning refrigerant leakage over the useful life of their
passenger automobiles and light trucks (including MDPV). Calculate
credits for each air conditioning system used to generate
CO2 credits. This section applies starting with model year
2031.
(a) Calculate an annual rate of refrigerant leakage from an air
conditioning system in grams per year for refrigerants with GWP at or
below 150 according to the procedures specified in SAE J2727 SEP2023
(incorporated by reference, see Sec. 86.1).
(b) Determine the CO2-equivalent gram per mile leakage
reduction separately for passenger automobiles and light trucks, as
follows:
(1) Calculate the leakage credit to the nearest 0.1 g/mile using
the following equation:
Equation 1 to Paragraph (b)(1)
[GRAPHIC] [TIFF OMITTED] TR18AP24.058
Where:
MaxCredit is the maximum per-vehicle value of the leakage credit.
Use 1.6 g/mile for passenger automobiles and 2.0 g/mile for light
trucks.
GWPREF means the global warming potential of the
refrigerant as indicated in paragraph (e) of this section.
HiLeakDis is the high leak disincentive, as determined in paragraph
(b)(2) of this section.
(2) Calculate the high leak disincentive, HiLeakDis, using the
following equation, except that if the calculated result is less than
zero, set HiLeakDis equal to zero:
Equation 2 to Paragraph (b)(2)
[GRAPHIC] [TIFF OMITTED] TR18AP24.059
Where:
K = a constant. Use 1.6 for passenger automobiles and 2.0 for light
trucks.
LeakScore means the annual refrigerant leakage rate as described in
paragraph (a) of this section, expressed to the nearest 0.1 grams
per year. If the calculated rate for passenger automobiles is less
than 8.3 grams/year (or 4.1 grams/year for systems using only
electric compressors), use 8.3 grams/year (or 4.1 grams/year for
systems using only electric compressors). If the calculated rate for
light trucks is less than 10.4 grams/year (or 5.2 grams/year for
systems using only electric compressors), use 10.4 grams/year (or
5.2 grams/year for systems using only electric compressors).
LeakThreshold = 11.0 or [Refrigerant Capacity x 0.015], whichever is
greater, where Refrigerant Capacity is the maximum refrigerant
capacity specified for the air conditioning system, in grams.
(c) Calculate the total leakage reduction credits generated by the
air conditioning system separately for passenger automobiles and light
trucks to the nearest whole megagram using the following equation:
Equation 3 to Paragraph (c)
[GRAPHIC] [TIFF OMITTED] TR18AP24.060
Where:
Leakage = the CO2-equivalent leakage credit value in
grams per mile determined in paragraph (b) of this section for
passenger automobiles or light trucks.
Production = The total number of passenger automobiles or light
trucks, produced with the air conditioning system to which to the
leakage credit value from paragraph (b) of this section applies.
VLM = vehicle lifetime miles. Use 195,264 for passenger automobiles
and 225,865 for light trucks.
(d) Include the results of paragraph (c) of this section in your
credit totals calculated in Sec. 86.1865-12(k)(5).
(e) Calculate leakage credits using values for refrigerant global
warming potential (GWPREF) as follows:
(1) Use the following values for the specific refrigerants:
(i) For HFC-152a, GWPREF = 124.
(ii) For HFO-1234yf, GWPREF = 1.
(iii) For CO2, GWPREF = 1.
(2) EPA will assign values for GWPREF, up to a value of
150, for other refrigerants upon request.
[[Page 28197]]
0
88. Revise and republish Sec. 86.1868-12 to read as follows:
Sec. 86.1868-12 CO2 credits for improving the efficiency of air
conditioning systems.
Manufacturers may generate credits applicable to the CO2
fleet average program described in Sec. 86.1865-12 by implementing
specific air conditioning system technologies designed to reduce air
conditioning-related CO2 emissions over the useful life of
their passenger automobiles and light trucks (including MDPV). The
provisions of this section do not apply for medium-duty vehicles.
Credits shall be calculated according to this section for each air
conditioning system that the manufacturer is using to generate
CO2 credits. Manufacturers must validate credits under this
section based on testing as described in paragraph (g) of this section.
Starting in model year 2027, manufacturers may generate credits under
this section only for vehicles propelled by internal combustion
engines.
(a) Air conditioning efficiency credits are available for the
following technologies in the gram per mile amounts indicated for each
vehicle category in the following table:
Table 1 to Paragraph (a)--Technology-Specific Air Conditioning
Efficiency Credits
[g/mile]
------------------------------------------------------------------------
Passenger
Air conditioning technology automobiles Light trucks
------------------------------------------------------------------------
Reduced reheat, with externally 1.5 2.2
controlled, variable-displacement
compressor (e.g., a compressor that
controls displacement based on
temperature setpoint and/or cooling
demand of the air conditioning system
control settings inside the passenger
compartment)...........................
Reduced reheat, with externally 1.0 1.4
controlled, fixed-displacement or
pneumatic variable displacement
compressor (e.g., a compressor that
controls displacement based on
conditions within, or internal to, the
air conditioning system, such as head
pressure, suction pressure, or
evaporator outlet temperature).........
Default to recirculated air with closed- 1.5 2.2
loop control of the air supply (sensor
feedback to control interior air
quality) whenever the ambient
temperature is 75 [deg]F or higher: Air
conditioning systems that operated with
closed-loop control of the air supply
at different temperatures may receive
credits by submitting an engineering
analysis to the Administrator for
approval...............................
Default to recirculated air with open- 1.0 1.4
loop control air supply (no sensor
feedback) whenever the ambient
temperature is 75 [deg]F or higher. Air
conditioning systems that operate with
open-loop control of the air supply at
different temperatures may receive
credits by submitting an engineering
analysis to the Administrator for
approval...............................
Blower motor controls which limit wasted 0.8 1.1
electrical energy (e.g., pulse width
modulated power controller)............
Internal heat exchanger (e.g., a device 1.0 1.4
that transfers heat from the high-
pressure, liquid-phase refrigerant
entering the evaporator to the low-
pressure, gas-phase refrigerant exiting
the evaporator)........................
Improved condensers and/or evaporators 1.0 1.4
with system analysis on the
component(s) indicating a coefficient
of performance improvement for the
system of greater than 10% when
compared to previous industry standard
designs)...............................
Oil separator. The manufacturer must 0.5 0.7
submit an engineering analysis
demonstrating the increased improvement
of the system relative to the baseline
design, where the baseline component
for comparison is the version which a
manufacturer most recently had in
production on the same vehicle design
or in a similar or related vehicle
model. The characteristics of the
baseline component shall be compared to
the new component to demonstrate the
improvement............................
Advanced technology air conditioning 1.1 1.1
compressor with improved efficiency
relative to fixed-displacement
compressors achieved through the
addition of a variable crankcase
suction valve..........................
------------------------------------------------------------------------
(b) Air conditioning efficiency credits are determined on an air
conditioning system basis. For each air conditioning system that is
eligible for a credit based on the use of one or more of the items
listed in paragraph (a) of this section, the total credit value is the
sum of the gram per mile values for the appropriate model year listed
in paragraph (a) for each item that applies to the air conditioning
system. The total credit value for an air conditioning system may not
be greater than 5.0 grams per mile for any passenger automobile or 7.2
grams per mile for any light truck.
(c) The total efficiency credits generated by an air conditioning
system shall be calculated in megagrams separately for passenger
automobiles and light trucks according to the following formula:
Equation 1 to Paragraph (c)
[GRAPHIC] [TIFF OMITTED] TR18AP24.061
Where:
Credit = the CO2 efficiency credit value in grams per
mile determined in paragraph (b) of this section, whichever is
applicable. Starting in model year 2027, multiply the credit value
for PHEV by (1-UF), where UF = the fleet utility factor established
under 40 CFR 600.116-12(c)(1) or (c)(10)(iii) (weighted 55 percent
city, 45 percent highway.
Production = The total number of passenger automobiles or light
trucks, whichever is applicable, produced with the air conditioning
system to which to the efficiency credit value from paragraph (b) of
this section applies.
VLM = vehicle lifetime miles, which for passenger automobiles shall
be 195,264 and for light trucks shall be 225,865.
(d) The results of paragraph (c) of this section, rounded to the
nearest whole number, shall be included in the manufacturer's credit/
debit totals calculated in Sec. 86.1865-12(k)(5).
(e)-(f) [Reserved]
(g) For AC17 validation testing and reporting requirements,
manufacturers must validate air conditioning credits by
[[Page 28198]]
using the AC17 Test Procedure in 40 CFR 1066.845 as follows:
(1) For each air conditioning system (as defined in Sec. 86.1803)
selected by the manufacturer to generate air conditioning efficiency
credits, the manufacturer shall perform the AC17 Air Conditioning
Efficiency Test Procedure specified in 40 CFR 1066.845, according to
the requirements of this paragraph (g).
(2) Complete the following testing and calculations:
(i) Perform the AC17 test on a vehicle that incorporates the air
conditioning system with the credit-generating technologies.
(ii) Perform the AC17 test on a vehicle which does not incorporate
the credit-generating technologies. The tested vehicle must be similar
to the vehicle tested under paragraph (g)(2)(i) of this section and
selected using good engineering judgment. The tested vehicle may be
from an earlier design generation. If the manufacturer cannot identify
an appropriate vehicle to test under this paragraph (g)(2)(ii), they
may submit an engineering analysis that describes why an appropriate
vehicle is not available or not appropriate, and includes data and
information supporting specific credit values, using good engineering
judgment.
(iii) Subtract the CO2 emissions determined from testing
under paragraph (g)(1)(i) of this section from the CO2
emissions determined from testing under paragraph (g)(1)(ii) of this
section and round to the nearest 0.1 grams/mile. If the result is less
than or equal to zero, the air conditioning system is not eligible to
generate credits. If the result is greater than or equal to the total
of the gram per mile credits determined in paragraph (b) of this
section, then the air conditioning system is eligible to generate the
maximum allowable value determined in paragraph (b) of this section. If
the result is greater than zero but less than the total of the gram per
mile credits determined in paragraph (b) of this section, then the air
conditioning system is eligible to generate credits in the amount
determined by subtracting the CO2 emissions determined from
testing under paragraph (g)(1)(i) of this section from the
CO2 emissions determined from testing under paragraph
(g)(1)(ii) of this section and rounding to the nearest 0.1 grams/mile.
(3) For the first model year for which an air conditioning system
is expected to generate credits, the manufacturer must select for
testing the projected highest-selling configuration within each
combination of vehicle platform and air conditioning system (as those
terms are defined in Sec. 86.1803). The manufacturer must test at
least one unique air conditioning system within each vehicle platform
in a model year, unless all unique air conditioning systems within a
vehicle platform have been previously tested. A unique air conditioning
system design is a system with unique or substantially different
component designs or types and/or system control strategies (e.g.,
fixed-displacement vs. variable displacement compressors, orifice tube
vs. thermostatic expansion valve, single vs. dual evaporator, etc.). In
the first year of such testing, the tested vehicle configuration shall
be the highest production vehicle configuration within each platform.
In subsequent model years the manufacturer must test other unique air
conditioning systems within the vehicle platform, proceeding from the
highest production untested system until all unique air conditioning
systems within the platform have been tested, or until the vehicle
platform experiences a major redesign. Whenever a new unique air
conditioning system is tested, the highest production configuration
using that system shall be the vehicle selected for testing. Credits
may continue to be generated by the air conditioning system installed
in a vehicle platform provided that:
(i) The air conditioning system components and/or control
strategies do not change in any way that could be expected to cause a
change in its efficiency;
(ii) The vehicle platform does not change in design such that the
changes could be expected to cause a change in the efficiency of the
air conditioning system; and
(iii) The manufacturer continues to test at least one unique air
conditioning system within each platform using the air conditioning
system, in each model year, until all unique air conditioning systems
within each platform have been tested.
(4) Each air conditioning system must be tested and must meet the
testing criteria in order to be allowed to generate credits. Credits
may continue to be generated by an air conditioning system in
subsequent model years if the manufacturer continues to test at least
one unique air conditioning system within each platform on an annual
basis, unless all systems have been previously tested, as long as the
air conditioning system and vehicle platform do not change
substantially.
(5) AC17 testing requirements apply as follows for electric
vehicles and plug-in hybrid electric vehicles:
(i) Manufacturers may omit AC17 testing for electric vehicles.
Electric vehicles may qualify for air conditioning efficiency credits
based on identified technologies, without testing. The application for
certification must include a detailed description of the vehicle's air
conditioning system and identify any technology items eligible for air
conditioning efficiency credits. Include additional supporting
information to justify the air conditioning credit for each technology.
(ii) The provisions of paragraph (g)(5)(i) of this section also
apply for plug-in hybrid electric vehicles if they have an all electric
range of at least 60 miles (combined city and highway) after adjustment
to reflect actual in-use driving conditions (see 40 CFR 600.311(j)),
and they do not rely on the engine to cool the vehicle's cabin for the
ambient and driving conditions represented by the AC17 test.
(iii) If AC17 testing is required for plug-in hybrid electric
vehicles, perform this testing in charge-sustaining mode.
(h) The following definitions apply to this section:
(1) Reduced reheat, with externally-controlled, variable
displacement compressor means a system in which compressor displacement
is controlled via an electronic signal, based on input from sensors
(e.g., position or setpoint of interior temperature control, interior
temperature, evaporator outlet air temperature, or refrigerant
temperature) and air temperature at the outlet of the evaporator can be
controlled to a level at 41 [deg]F, or higher.
(2) Reduced reheat, with externally-controlled, fixed-displacement
or pneumatic variable displacement compressor means a system in which
the output of either compressor is controlled by cycling the compressor
clutch off-and-on via an electronic signal, based on input from sensors
(e.g., position or setpoint of interior temperature control, interior
temperature, evaporator outlet air temperature, or refrigerant
temperature) and air temperature at the outlet of the evaporator can be
controlled to a level at 41 [deg]F, or higher.
(3) Default to recirculated air mode means that the default
position of the mechanism which controls the source of air supplied to
the air conditioning system shall change from outside air to
recirculated air when the operator or the automatic climate control
system has engaged the air conditioning system (i.e., evaporator is
removing heat), except under those conditions where dehumidification is
required for visibility (i.e., defogger mode). In vehicles equipped
with interior air quality sensors (e.g., humidity sensor, or carbon
dioxide sensor), the controls may
[[Page 28199]]
determine proper blend of air supply sources to maintain freshness of
the cabin air and prevent fogging of windows while continuing to
maximize the use of recirculated air. At any time, the vehicle operator
may manually select the non-recirculated air setting during vehicle
operation but the system must default to recirculated air mode on
subsequent vehicle operations (i.e., next vehicle start). The climate
control system may delay switching to recirculation mode until the
interior air temperature is less than the outside air temperature, at
which time the system must switch to recirculated air mode.
(4) Blower motor controls which limit waste energy means a method
of controlling fan and blower speeds which does not use resistive
elements to decrease the voltage supplied to the motor.
(5) Improved condensers and/or evaporators means that the
coefficient of performance (COP) of air conditioning system using
improved evaporator and condenser designs is 10 percent higher, as
determined using the bench test procedures described in SAE J2765
(incorporated by reference, see Sec. 86.1), when compared to a system
using standard, or prior model year, component designs. The
manufacturer must submit an engineering analysis demonstrating the
increased improvement of the system relative to the baseline design,
where the baseline component(s) for comparison is the version which a
manufacturer most recently had in production on the same vehicle design
or in a similar or related vehicle model. The dimensional
characteristics (e.g., tube configuration/thickness/spacing, and fin
density) of the baseline component(s) shall be compared to the new
component(s) to demonstrate the improvement in coefficient of
performance.
(6) Oil separator means a mechanism which removes at least 50
percent of the oil entrained in the oil/refrigerant mixture exiting the
compressor and returns it to the compressor housing or compressor
inlet, or a compressor design which does not rely on the circulation of
an oil/refrigerant mixture for lubrication.
(7) Advanced technology air conditioning compressor means an air
conditioning compressor with improved efficiency relative to fixed-
displacement compressors. Efficiency gains are derived from improved
internal valve systems that optimize the internal refrigerant flow
across the range of compressor operator conditions through the addition
of a variable crankcase suction valve.
0
89. Amend Sec. 86.1869-12 by revising the introductory text and
paragraphs (b)(2) and (f) to read as follows:
Sec. 86.1869-12 CO2 credits for off-cycle CO2 reducing technologies.
This section describes how manufacturers may generate credits for
off-cycle CO2-reducing technologies through model year 2032.
The provisions of this section do not apply for medium-duty vehicles,
except that Sec. 86.1819-14(d)(13) describes how to apply paragraphs
(c) and (d) of this section for those vehicles. Manufacturers may no
longer generate credits under this section starting in model year 2027
for vehicles deemed to have zero tailpipe emissions and in model year
2033 for all other vehicles. Manufacturers may no longer generate
credits under paragraphs (c) and (d) of this section for any type of
vehicle starting in model year 2027.
* * * * *
(b) * * *
(2) The maximum allowable decrease in the manufacturer's combined
passenger automobile and light truck fleet average CO2
emissions attributable to use of the default credit values in paragraph
(b)(1) of this section is specified in paragraph (b)(2)(v) of this
section. If the total of the CO2 g/mi credit values from
paragraph (b)(1) of this section does not exceed the specified off-
cycle credit cap for any passenger automobile or light truck in a
manufacturer's fleet, then the total off-cycle credits may be
calculated according to paragraph (f) of this section. If the total of
the CO2 g/mi credit values from paragraph (b)(1) of this
section exceeds the specified off-cycle credit cap for any passenger
automobile or light truck in a manufacturer's fleet, then the gram per
mile decrease for the combined passenger automobile and light truck
fleet must be determined according to paragraph (b)(2)(ii) of this
section to determine whether the applicable limitation has been
exceeded.
(i) Determine the gram per mile decrease for the combined passenger
automobile and light truck fleet using the following formula:
[GRAPHIC] [TIFF OMITTED] TR18AP24.062
Where:
Credits = The total of passenger automobile and light truck credits,
in Megagrams, determined according to paragraph (f) of this section
and limited to those credits accrued by using the default gram per
mile values in paragraph (b)(1) of this section.
ProdC = The number of passenger automobiles produced by
the manufacturer and delivered for sale in the United States.
Starting in model year 2027, include only vehicles with internal
combustion engines.
ProdT = The number of light trucks produced by the
manufacturer and delivered for sale in the United States. Starting
in model year 2027, include only vehicles with internal combustion
engines.
(ii) If the value determined in paragraph (b)(2)(i) of this section
is greater than the off-cycle credit cap specified in paragraph
(b)(2)(v) of this section, the total credits, in Megagrams, that may be
accrued by a manufacturer using the default gram per mile values in
paragraph (b)(1) of this section shall be determined using the
following formula:
[GRAPHIC] [TIFF OMITTED] TR18AP24.063
Where:
cap = the off-cycle credit cap specified in paragraph (b)(2)(v) of
this section.
(iii) If the value determined in paragraph (b)(2)(i) of this
section is not greater than the off-cycle credit cap specified in
paragraph (b)(2)(v) of this section, then the credits that may be
accrued by a manufacturer using the
[[Page 28200]]
default gram per mile values in paragraph (b)(1) of this section do not
exceed the allowable limit, and total credits may be determined for
each category of vehicles according to paragraph (f) of this section.
(iv) If the value determined in paragraph (b)(2)(i) of this section
is greater than the off-cycle credit cap specified in paragraph
(b)(2)(v) of this section, then the combined passenger automobile and
light truck credits, in Megagrams, that may be accrued using the
calculations in paragraph (f) of this section must not exceed the value
determined in paragraph (b)(2)(ii) of this section. This limitation
should generally be done by reducing the amount of credits attributable
to the vehicle category that caused the limit to be exceeded such that
the total value does not exceed the value determined in paragraph
(b)(2)(ii) of this section.
(v) The manufacturer's combined passenger automobile and light
truck fleet average CO2 emissions attributable to use of the
default credit values in paragraph (b)(1) of this section may not
exceed the following specific values:
------------------------------------------------------------------------
Off-cycle
Model year credit cap
(g/mile)
------------------------------------------------------------------------
(A) 2023-2026.............................................. 15
(B) 2027-2030.............................................. 10
(C) 2031................................................... 8.0
(D) 2032................................................... 6.0
------------------------------------------------------------------------
* * * * *
(f) Calculation of total off-cycle credits. Total off-cycle credits
in Megagrams of CO2 (rounded to the nearest whole megagram)
shall be calculated separately for passenger automobiles and light
trucks according to the following formula:
[GRAPHIC] [TIFF OMITTED] TR18AP24.064
Where:
Credit = the credit value in grams per mile determined in paragraph
(b), (c), or (d) of this section. Starting in model year 2027,
multiply the credit value for PHEV by (1-UF), where
UF = the fleet utility factor established under 40 CFR 600.116-
12(c)(1) or (c)(10)(iii) (weighted 55 percent city, 45 percent
highway).
Production = The total number of passenger automobiles or light
trucks, whichever is applicable, produced with the off-cycle
technology to which to the credit value determined in paragraph (b),
(c), or (d) of this section applies.
VLM = vehicle lifetime miles, which for passenger automobiles shall
be 195,264 and for light trucks shall be 225,865.
Sec. 86.1871-12 [Removed]
0
90. Remove Sec. 86.1871-12.
PART 600--FUEL ECONOMY AND GREENHOUSE GAS EXHAUST EMISSIONS OF
MOTOR VEHICLES
0
91. The authority citation for part 600 continues to read as follows:
Authority: 49 U.S.C. 32901-23919q, Pub. L. 109-58.
0
92. Amend Sec. 600.001 by revising paragraph (a) to read as follows:
Sec. 600.001 General applicability.
(a) The provisions of this part apply to 2008 and later model year
automobiles that are not medium duty passenger vehicles
(MDPVFE), and to 2011 and later model year automobiles
including MDPVFE. The test procedures in subpart B of this
part also apply to 2014 and later heavy-duty vehicles subject to
standards under 40 CFR part 86, subpart S.
* * * * *
0
93. Amend Sec. 600.002 by revising the definitions for ``Engine
code'', ``Light truck'', ``Medium-duty passenger vehicle'',
``Subconfiguration'', and ``Vehicle configuration'' to read as follows:
Sec. 600.002 Definitions.
* * * * *
Engine code means one of the following:
(1) For LDV, LDT, and MDPVFE, engine code means a unique
combination, within a test group (as defined in Sec. 86.1803 of this
chapter), of displacement, fuel injection (or carburetion or other fuel
delivery system), calibration, distributor calibration, choke
calibration, auxiliary emission control devices, and other engine and
emission control system components specified by the Administrator. For
electric vehicles, engine code means a unique combination of
manufacturer, electric traction motor, motor configuration, motor
controller, and energy storage device.
(2) For HDV, engine code has the meaning given in Sec. 86.1819-
14(d)(12) of this chapter.
* * * * *
Light truck means an automobile that is not a passenger automobile,
as defined by the Secretary of Transportation at 49 CFR 523.5. This
term is interchangeable with ``non-passenger automobile.'' The term
``light truck'' includes medium-duty passenger vehicles
(MDPVFE) manufactured during 2011 and later model years.
Medium-duty passenger vehicle (MDPVFE) means a vehicle that would
satisfy the criteria for light trucks as defined by the Secretary of
Transportation at 49 CFR 523.5 but for its gross vehicle weight rating
or its curb weight, is rated at more than 8,500 lbs GVWR or has a
vehicle curb weight of more than 6,000 pounds or has a basic vehicle
frontal area in excess of 45 square feet, and is designed primarily to
transport passengers, but does not include a vehicle that--
(1) Is an ``incomplete truck'' as defined in 40 CFR 86.1803-01; or
(2) Has a seating capacity of more than 12 persons; or
(3) Is designed for more than 9 persons in seating rearward of the
driver's seat; or
(4) Is equipped with an open cargo area (for example, a pick-up
truck box or bed) of 72.0 inches in interior length or more. A covered
box not readily accessible from the passenger compartment will be
considered an open cargo area for purposes of this definition.
* * * * *
Subconfiguration means one of the following:
(1) For LDV, LDT, and MDPVFE, subconfiguration means a
unique combination within a vehicle configuration of equivalent test
weight, road-load horsepower, and any other operational characteristics
or parameters which the Administrator determines may significantly
affect fuel economy or CO2 emissions within a vehicle
configuration.
(2) For HDV, subconfiguration has the meaning given in Sec.
86.1819-14(d)(12) of this chapter.
* * * * *
Vehicle configuration means one of the following:
(1) For LDV, LDT, and MDPVFE, vehicle configuration
means a unique combination of basic engine, engine code, inertia weight
class, transmission configuration, and axle ratio within a base level.
[[Page 28201]]
(2) For HDV, vehicle configuration has the meaning given for
``configuration'' in Sec. 86.1819-14(d)(12) of this chapter.
* * * * *
0
94. Amend Sec. 600.007 by revising paragraph (b)(4) introductory text
to read as follows:
Sec. 600.007 Vehicle acceptability.
* * * * *
(b) * * *
(4) Each fuel economy data vehicle must meet the same exhaust
emission standards as certification vehicles of the respective engine-
system combination during the test in which the fuel economy test
results are generated. This may be demonstrated using one of the
following methods:
* * * * *
Sec. 600.008 [Amended]
0
95. Amend Sec. 600.008 by removing paragraphs (b)(1)(iii), (iv), and
(v).
0
96. Revise and republish Sec. 600.011 to read as follows:
Sec. 600.011 Incorporation by reference.
Certain material is incorporated by reference into this part with
the approval of the Director of the Federal Register under 5 U.S.C.
552(a) and 1 CFR part 51. To enforce any edition other than that
specified in this section, EPA must publish a document in the Federal
Register and the material must be available to the public. All approved
incorporation by reference (IBR) material is available for inspection
at EPA and at the National Archives and Records Administration (NARA).
Contact EPA at: U.S. EPA, Air and Radiation Docket Center, WJC West
Building, Room 3334, 1301 Constitution Ave. NW, Washington, DC 20004;
www.epa.gov/dockets; (202) 202-1744. For information on inspecting this
material at NARA, visit www.archives.gov/federal-register/cfr/ibr-locations.html or email [email protected]. The material may be
obtained from the following sources:
(a) ASTM International (ASTM). ASTM International, 100 Barr Harbor
Drive, P.O. Box C700, West Conshohocken, PA 19428-2959; (610) 832-9585;
www.astm.org.
(1) ASTM D86-23, Standard Test Method for Distillation of Petroleum
Products and Liquid Fuels at Atmospheric Pressure; Approved March 1,
2023; IBR approved for Sec. 600.113-12(f).
(2) ASTM D975-13a, Standard Specification for Diesel Fuel Oils,
Approved December 1, 2013; IBR approved for Sec. 600.107-08(b).
(3) ASTM D1298-12b, Standard Test Method for Density, Relative
Density, or API Gravity of Crude Petroleum and Liquid Petroleum
Products by Hydrometer Method, Approved June 1, 2012; IBR approved for
Sec. Sec. 600.113-12(f); 600.510-12(g).
(4) ASTM D1319-20a, Standard Test Method for Hydrocarbon Types in
Liquid Petroleum Products by Fluorescent Indicator Adsorption, Approved
August 1, 2020; IBR approved for Sec. 600.113-12(f).
(5) ASTM D1945-03 (Reapproved 2010), Standard Test Method for
Analysis of Natural Gas By Gas Chromatography, Approved January 1,
2010; IBR approved for Sec. 600.113-12(f) and (k).
(6) ASTM D3338/D3338M-20a, Standard Test Method for Estimation of
Net Heat of Combustion of Aviation Fuels, Approved December 1, 2020;
IBR approved for Sec. 600.113-12(f).
(7) ASTM D3343-22, Standard Test Method for Estimation of Hydrogen
Content of Aviation Fuels, Approved November 1, 2022; IBR approved for
Sec. 600.113-12(f).
(8) ASTM D4052-22, Standard Test Method for Density, Relative
Density, and API Gravity of Liquids by Digital Density Meter, Approved
May 1, 2022; IBR approved for Sec. 600.113-12(f).
(9) ASTM D4815-22, Standard Test Method for Determination of MTBE,
ETBE, TAME, DIPE, tertiary-Amyl Alcohol and C1 to
C4 Alcohols in Gasoline by Gas Chromatography, Approved
April 1, 2022; IBR approved for Sec. 600.113-12(f).
(10) ASTM D5599-22, Standard Test Method for Determination of
Oxygenates in Gasoline by Gas Chromatography and Oxygen Selective Flame
Ionization Detection, Approved April 1, 2022; IBR approved for Sec.
600.113-12(f).
(11) ASTM D5769-22, Standard Test Method for Determination of
Benzene, Toluene, and Total Aromatics in Finished Gasolines by Gas
Chromatography/Mass Spectrometry, Approved July 1, 2022; IBR approved
for Sec. 600.113-12(f).
(b) International Organization for Standardization (ISO).
International Organization for Standardization, Case Postale 56, CH-
1211 Geneva 20, Switzerland; (41) 22749 0111; [email protected];
www.iso.org.
(1) ISO/IEC 18004:2006(E), Information technology--Automatic
identification and data capture techniques--QR Code 2005 bar code
symbology specification, Second Edition, September 1, 2006; IBR
approved for Sec. 600.302-12(b).
(2) [Reserved]
(c) SAE International (SAE). SAE International, 400 Commonwealth
Dr., Warrendale, PA 15096-0001; (877) 606-7323 (U.S. and Canada) or
(724) 776-4970 (outside the U.S. and Canada); www.sae.org.
(1) Motor Vehicle Dimensions--Recommended Practice SAE 1100a
(Report of Human Factors Engineering Committee, Society of Automotive
Engineers, approved September 1973 as revised September 1975); IBR
approved for Sec. 600.315-08(c).
(2) SAE J1634 JUL2017, Battery Electric Vehicle Energy Consumption
and Range Test Procedure, Revised July 2017; IBR approved for
Sec. Sec. 600.116-12(a); 600.210-12(d); 600.311-12(j) and (k).
(3) SAE J1711 FEB2023, Recommended Practice for Measuring the
Exhaust Emissions and Fuel Economy of Hybrid-Electric Vehicles,
Including Plug-In Hybrid Vehicles; Revised February 2023; IBR approved
for Sec. Sec. 600.114-12(c) and (f); 600.116-12(b) and (c); 600.311-
12(c), (j), and (k).
0
97. Add Sec. 600.101 to subpart B to read as follows:
Sec. 600.101 Testing overview.
Perform testing under this part as described in Sec. 600.111. This
involves the following specific requirements:
(a) Perform the following tests and calculations for LDV, LDT, and
MDPVFE:
(1) Testing to demonstrate compliance with Corporate Average Fuel
Economy standards and greenhouse gas emission standards generally
involves a combination of two cycles--the Federal Test Procedure and
the Highway Fuel Economy Test (see 40 CFR 1066.801). Testing to
determine values for fuel economy labeling under subpart D of this part
generally involves testing with three additional test cycles; Sec.
600.210 describes circumstances in which testing with these additional
test cycles does not apply for labeling purposes.
(2) Calculate fuel economy and CREE values for vehicle
subconfigurations, configurations, base levels, and model types as
described in Sec. Sec. 600.206 and 600.208. Calculate fleet average
values for fuel economy and CREE as described in Sec. 600.510.
(3) Determine fuel economy values for labeling as described in
Sec. 600.210 using either the vehicle-specific 5-cycle method or the
derived 5-cycle method as described in Sec. 600.115.
(i) For vehicle-specific 5-cycle labels, the test vehicle
(subconfiguration) data are adjusted to better represent in-use fuel
economy and CO2 emissions based on the vehicle-specific
equations in Sec. 600.114. Sections 600.207 and 600.209
[[Page 28202]]
describe how to use the ``adjusted'' city and highway subconfiguration
values to calculate adjusted values for the vehicle configuration, base
level, and the model type. These ``adjusted'' city, highway, and
combined fuel economy estimates and the combined CO2
emissions for the model type are shown on fuel economy labels.
(ii) For derived 5-cycle labels, calculate ``unadjusted'' fuel
economy and CO2 values for vehicle subconfigurations,
configurations, base levels, and model types as described in Sec. Sec.
600.206 and 600.208. Section 600.210 describes how to use the
unadjusted model type values to calculate ``adjusted'' model type
values for city, highway, and combined fuel economy and CO2
emissions using the derived 5-cycle equations for the fuel economy
label.
(4) Diesel-fueled Tier 3 vehicles are not subject to cold
temperature emission standards; however, you must test at least one
vehicle in each test group over the cold temperature FTP to comply with
requirements of this part. This paragraph (a)(4) does not apply for
Tier 4 vehicles.
(b) Perform the following tests and calculations for all chassis-
tested vehicles other than LDV, LDT, and MDPVFE that are
subject to standards under 40 CFR part 86, subpart S:
(1) Test vehicles as described in 40 CFR 86.1811, 86.1816, and
86.1819. Testing to demonstrate compliance with CO2 emission
standards generally involves a combination of two cycles for each test
group--the Federal Test Procedure and the Highway Fuel Economy Test
(see 40 CFR 1066.801). Fuel economy labeling requirements do not apply
for vehicles above 8,500 pounds GVWR, except for MDPVFE.
(2) Determine fleet average CO2 emissions as described
in 40 CFR 86.1819-14(d)(9). These CO2 emission results are
used to calculate corresponding fuel consumption values to demonstrate
compliance with fleet average fuel consumption standards under 49 CFR
part 535.
(c) Manufacturers must use E10 gasoline test fuel as specified in
40 CFR 1065.710(b) for new testing to demonstrate compliance with all
emission standards and to determine fuel economy values. This
requirement starts in model year 2027. Interim provisions related to
test fuel apply as described in Sec. 600.117.
0
98. Amend Sec. 600.113-12 by:
0
a. Revising the introductory text and paragraphs (f)(1) and (n).
0
b. Redesignating paragraph (o) as paragraph (p).
0
c. Adding new paragraph (o).
The revisions and addition read as follows:
Sec. 600.113-12 Fuel economy, CO2 emissions, and carbon-related
exhaust emission calculations for FTP, HFET, US06, SC03 and cold
temperature FTP tests.
The Administrator will use the calculation procedure set forth in
this section for all official EPA testing of vehicles fueled with
gasoline, diesel, alcohol-based or natural gas fuel. The calculations
of the weighted fuel economy and carbon-related exhaust emission values
require input of the weighted grams/mile values for total hydrocarbons
(HC), carbon monoxide (CO), and carbon dioxide (CO2); and,
additionally for methanol-fueled automobiles, methanol
(CH3OH) and formaldehyde (HCHO); and, additionally for
ethanol-fueled automobiles, methanol (CH3OH), ethanol
(C2H5OH), acetaldehyde
(C2H4O), and formaldehyde (HCHO); and
additionally for natural gas-fueled vehicles, non-methane hydrocarbons
(NMHC) and methane (CH4). For manufacturers selecting the
fleet averaging option for N2O and CH4 as allowed
under Sec. 86.1818 of this chapter the calculations of the carbon-
related exhaust emissions require the input of grams/mile values for
nitrous oxide (N2O) and methane (CH4). Emissions
shall be determined for the FTP, HFET, US06, SC03, and cold temperature
FTP tests. Additionally, the specific gravity, carbon weight fraction
and net heating value of the test fuel must be determined. The FTP,
HFET, US06, SC03, and cold temperature FTP fuel economy and carbon-
related exhaust emission values shall be calculated as specified in
this section. An example fuel economy calculation appears in appendix
II to this part.
* * * * *
(f) * * *
(1) Gasoline test fuel properties shall be determined by analysis
of a fuel sample taken from the fuel supply. A sample shall be taken
after each addition of fresh fuel to the fuel supply. Additionally, the
fuel shall be resampled once a month to account for any fuel property
changes during storage. Less frequent resampling may be permitted if
EPA concludes, on the basis of manufacturer-supplied data, that the
properties of test fuel in the manufacturer's storage facility will
remain stable for a period longer than one month. The fuel samples
shall be analyzed to determine fuel properties as follows for neat
gasoline (E0) and for a low-level ethanol-gasoline blend (E10):
(i) Specific gravity. Determine specific gravity using ASTM D4052
(incorporated by reference, see Sec. 600.011). Note that ASTM D4052
refers to specific gravity as relative density.
(ii) Carbon mass fraction. (A) For E0, determine hydrogen mass
percent using ASTM D3343 (incorporated by reference, see Sec.
600.011), then determine carbon mass fraction as CMF = 1-0.01 x
hydrogen mass percent.
(B) For E10, determine carbon mass fraction of test fuel,
CMFf, using the following equation, rounded to three decimal
places:
[GRAPHIC] [TIFF OMITTED] TR18AP24.065
Where:
VFe = volume fraction of ethanol in the test fuel as
determined from ASTM D4815 or ASTM D5599 (both incorporated by
reference, see Sec. 600.011). Calculate the volume fraction by
dividing the volume percent of ethanol by 100.
SGe = specific gravity of pure ethanol. Use
SGe = 0.7939.
SGf = specific gravity of the test fuel as determined by
ASTM D1298 or ASTM D4052 (both incorporated by reference, see Sec.
600.011).
CMFe = carbon mass fraction of pure ethanol. Use
CMFe = 0.5214.
CMFh = carbon mass fraction of the hydrocarbon fraction
of the test fuel as determined using ASTM D3343 (incorporated by
reference, see Sec. 600.011) with the following inputs, using
VTier3 or VLEVIII as appropriate:
[[Page 28203]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.066
Where:
VParo,f = volume percent aromatics in the test fuel as
determined by ASTM D1319 (incorporated by reference, see Sec.
600.011). An acceptable alternative method is ASTM D5769
(incorporated by reference, see Sec. 600.011), as long as the
result is bias-corrected as described in ASTM D1319.
[GRAPHIC] [TIFF OMITTED] TR18AP24.067
T10, T50, T90 = the 10, 50, and 90
percent distillation temperatures of the test fuel, respectively, in
degrees Fahrenheit, as determined by ASTM D86 (incorporated by
reference, see Sec. 600.011).
(iii) Net heat of combustion. (A) For E0, determine net heat of
combustion in MJ/kg using ASTM D3338/D3338M (incorporated by reference,
see Sec. 600.011).
(B) For E10, determine net heat of combustion, NHCf, in
MJ/kg using the following equation, rounding the result to the nearest
whole number:
[GRAPHIC] [TIFF OMITTED] TR18AP24.068
Where:
NHCe = net heat of combustion of pure ethanol. Use
NHCe = 11,530 Btu/lb.
NHCh = net heat of combustion of the hydrocarbon fraction
of the test fuel as determined using ASTM D3338 (incorporated by
reference, see Sec. 600.011) using input values as specified in
paragraph (f)(1)(ii) of this section.
* * * * *
(n) Manufacturers may use a value of 0 grams CO2 and
CREE per mile to represent the emissions of electric vehicles and the
electric operation of plug-in hybrid electric vehicles derived from
electricity generated from sources that are not onboard the vehicle.
(o)(1) For testing with E10, calculate fuel economy using the
following equation, rounded to the nearest 0.1 miles per gallon:
[GRAPHIC] [TIFF OMITTED] TR18AP24.069
Where:
CMFtestfuel = carbon mass fraction of the test fuel,
expressed to three decimal places.
SGtestfuel = the specific gravity of the test fuel as
obtained in paragraph (f)(1) of this section, expressed to three
decimal places.
rH2O = the density of pure water at 60 [deg]F. Use
rH2O = 3781.69 g/gal.
SGbasefuel = the specific gravity of the 1975 base fuel.
Use SGbasefuel = 0.7394.
NHCbasefuel = net heat of combustion of the 1975 base
fuel. Use NHCbasefuel = 43.047 MJ/kg.
NMOG = NMOG emission rate over the test interval or duty cycle in
grams/mile.
CH4 = CH4 emission rate over the test interval or duty
cycle in grams/mile.
CO = CO emission rate over the test interval or duty cycle in grams/
mile.
CO2 = measured tailpipe CO2 emission rate over the test
interval or duty cycle in grams/mile.
Ra = sensitivity factor that represents the response of a
typical vehicle's fuel economy to changes in fuel properties, such
as volumetric energy content. Use Ra = 0.81.
NHCtestfuel = net heat of combustion by mass of test fuel
as obtained in paragraph (f)(1) of this section, expressed to three
decimal places.
(2) Use one of the following methods to calculate the carbon-
related exhaust emissions for testing model year 2027 and later
vehicles with the E10 test fuel specified in 40 CFR 1065.710(b):
(i) For manufacturers not complying with the fleet averaging option
for N2O and CH4 as allowed under 40 CFR 86.1818-
12(f)(2), calculate CREE using
[[Page 28204]]
the following equation, rounded to the nearest whole gram per mile:
CREE = (CMF/0.273 [middot] NMOG) + (1.571 [middot] CO) + CO2 + (0.749
[middot] CH4)
Where:
CREE = carbon-related exhaust emissions.
CMF = carbon mass fraction of test fuel as obtained in paragraph
(f)(1) of this section and rounded according to paragraph (g)(3) of
this section.
NMOG = NMOG emission rate obtained in 40 CFR 1066.635 in grams/mile.
CO = CO emission rate obtained in paragraph (g)(2) of this section
in grams/mile.
CO2 = measured tailpipe CO2 emission rate obtained in
paragraph (g)(2) of this section in grams/mile.
CH4 = CH4 emission rate obtained in paragraph (g)(2) of
this section in grams/mile.
(ii) For manufacturers complying with the fleet averaging option
for N2O and CH4 as allowed under 40 CFR 86.1818-
12(f)(2), calculate CREE using the following equation, rounded to the
nearest whole gram per mile:
CREE = [(CMF/0.273) [middot] NMOG] + (1.571 [middot] CO) + CO2 + (298
[middot] N2O) + (25 [middot] CH4)
Where:
CREE = the carbon-related exhaust emissions as defined in Sec.
600.002.
NMOG = NMOG emission rate obtained in 40 CFR 1066.635 in grams/mile.
CO = CO emission rate obtained in paragraph (g)(2) of this section
in grams/mile.
CO2 = measured tailpipe CO2 emission rate obtained in
paragraph (g)(2) of this section in grams/mile.
N2O = N2O emission rate obtained in paragraph (g)(2) of
this section in grams/mile.
CH4 = CH4 emission rate obtained in paragraph (g)(2) of
this section in grams/mile.
CMF = carbon mass fraction of test fuel as obtained in paragraph
(f)(1) of this section and rounded according to paragraph (g)(3) of
this section.
* * * * *
0
99. Amend Sec. 600.114-12 by revising paragraphs (d)(2), (e)(3),
(f)(1) introductory text, (f)(2) introductory text, and (f)(4) to read
as follows:
Sec. 600.114-12 Vehicle-specific 5-cycle fuel economy and carbon-
related exhaust emission calculations.
* * * * *
(d) * * *
(2) To determine City CO2 emissions, use the appropriate
CO2 gram/mile values expressed to the nearest 0.1 gram/mile
instead of CREE values in the equations in this paragraph (d). The
appropriate CO2 values for fuel economy labels based on
testing with E10 test fuel are the measured tailpipe CO2
emissions for the test cycle multiplied by 1.0166.
* * * * *
(e) * * *
(3) To determine Highway CO2 emissions, use the
appropriate CO2 gram/mile values expressed to the nearest
0.1 gram/mile instead of CREE values in the equations in this paragraph
(e) The appropriate CO2 values for fuel economy labeling
based on testing with E10 test fuel are the measured tailpipe
CO2 emissions for the test cycle multiplied by 1.0166.
* * * * *
(f) * * *
(1) If the 4-bag sampling method is used, manufacturers may use the
equations in paragraphs (a) and (b) of this section to determine city
and highway CO2 and carbon-related exhaust emissions values.
The appropriate CO2 emission input values for fuel economy
labeling based on testing with E10 test fuel are the measured tailpipe
CO2 emissions for the test cycle multiplied by 1.0166. If
this method is chosen, it must be used to determine both city and
highway CO2 emissions and carbon-related exhaust emissions.
Optionally, the following calculations may be used, provided that they
are used to determine both city and highway CO2 and carbon-
related exhaust emissions values:
* * * * *
(2) If the 2-bag sampling method is used for the 75 [deg]F FTP
test, it must be used to determine both city and highway CO2
emissions and carbon-related exhaust emissions. The appropriate
CO2 emission input values for fuel economy labeling based on
testing with E10 test fuel are the measured tailpipe CO2
emissions for the test cycle multiplied by 1.0166. The following
calculations must be used to determine both city and highway
CO2 emissions and carbon-related exhaust emissions:
* * * * *
(4) To determine City and Highway CO2 emissions, use the
appropriate CO2 gram/mile values expressed to the nearest
0.1 gram/mile instead of CREE values in the equations in paragraphs
(f)(1) through (3) of this section.
* * * * *
0
100. Amend Sec. 600.115-11 by revising the introductory text to read
as follows:
Sec. 600.115-11 Criteria for determining the fuel economy label
calculation method.
This section provides the criteria to determine if the derived 5-
cycle method for determining fuel economy label values, as specified in
Sec. 600.210-08(a)(2) or (b)(2) or Sec. 600.210-12(a)(2) or (b)(2),
as applicable, may be used to determine label values. Separate criteria
apply to city and highway fuel economy for each test group. The
provisions of this section are optional. If this option is not chosen,
or if the criteria provided in this section are not met, fuel economy
label values must be determined according to the vehicle-specific 5-
cycle method specified in Sec. 600.210-08(a)(1) or (b)(1) or Sec.
600.210-12(a)(1) or (b)(1), as applicable. However, dedicated
alternative-fuel vehicles (other than battery electric vehicles and
fuel cell vehicles), dual fuel vehicles when operating on the
alternative fuel, MDPVFE, and vehicles imported by
Independent Commercial Importers may use the derived 5-cycle method for
determining fuel economy label values whether or not the criteria
provided in this section are met. Manufacturers may alternatively
account for this effect for battery electric vehicles, fuel cell
vehicles, and plug-in hybrid electric vehicles (when operating in the
charge-depleting mode) by multiplying 2-cycle fuel economy values by
0.7 and dividing 2-cycle CO2 emission values by 0.7.
* * * * *
0
101. Amend Sec. 600.116-12 by revising paragraphs (b), (c)(1), (2),
(5), (6), (7), and (10), and adding paragraph (c)(11) to read as
follows:
Sec. 600.116-12 Special procedures related to electric vehicles and
hybrid electric vehicles.
* * * * *
(b) Determine performance values for hybrid electric vehicles that
have no plug-in capability as specified in Sec. Sec. 600.210 and
600.311 using the procedures for charge-sustaining operation from SAE
J1711 (incorporated by reference in Sec. 600.011). We may approve
alternate measurement procedures with respect to these vehicles if that
is necessary or appropriate for meeting the objectives of this part.
For example, we may approve alternate Net Energy Change/Fuel Ratio
tolerances for charge-sustaining operation as described in paragraph
(c)(5) of this section.
(c) * * *
(1) To determine CREE values to demonstrate compliance with GHG
standards, calculate composite values representing combined operation
during charge-depleting and charge-sustaining operation using the
following utility factors, except as otherwise specified in this
paragraph (c):
[[Page 28205]]
Table 1 to Paragraph (c)(1)--Fleet Utility Factors for Urban ``City'' Driving
----------------------------------------------------------------------------------------------------------------
Model year 2030 and earlier Model year 2031 and later
Schedule range for UDDS phases, miles -----------------------------------------------------------------------
Cumulative UF Sequential UF Cumulative UF Sequential UF
----------------------------------------------------------------------------------------------------------------
3.59.................................... 0.125 0.125 0.062 0.062
7.45.................................... 0.243 0.117 0.125 0.062
11.04................................... 0.338 0.095 0.178 0.054
14.90................................... 0.426 0.088 0.232 0.053
18.49................................... 0.497 0.071 0.278 0.046
22.35................................... 0.563 0.066 0.324 0.046
25.94................................... 0.616 0.053 0.363 0.040
29.80................................... 0.666 0.049 0.403 0.040
33.39................................... 0.705 0.040 0.437 0.034
37.25................................... 0.742 0.037 0.471 0.034
40.84................................... 0.772 0.030 0.500 0.029
44.70................................... 0.800 0.028 0.530 0.029
48.29................................... 0.822 0.022 0.555 0.025
52.15................................... 0.843 0.021 0.580 0.025
55.74................................... 0.859 0.017 0.602 0.022
59.60................................... 0.875 0.016 0.624 0.022
63.19................................... 0.888 0.013 0.643 0.019
67.05................................... 0.900 0.012 0.662 0.019
70.64................................... 0.909 0.010 0.679 0.017
----------------------------------------------------------------------------------------------------------------
Table 2 to paragraph (c)(1)--Fleet Utility Factors for Highway Driving
----------------------------------------------------------------------------------------------------------------
Model year 2030 and earlier Model year 2031 and later
Schedule range for HFET, miles -----------------------------------------------------------------------
Cumulative UF Sequential UF Cumulative UF Sequential UF
----------------------------------------------------------------------------------------------------------------
10.3.................................... 0.123 0.123 0.168 0.168
20.6.................................... 0.240 0.117 0.303 0.136
30.9.................................... 0.345 0.105 0.414 0.110
41.2.................................... 0.437 0.092 0.503 0.090
51.5.................................... 0.516 0.079 0.576 0.073
61.8.................................... 0.583 0.067 0.636 0.060
72.1.................................... 0.639 0.056 0.685 0.049
----------------------------------------------------------------------------------------------------------------
(2) Determine fuel economy values to demonstrate compliance with
CAFE standards as follows:
(i) For vehicles that are not dual fueled automobiles, determine
fuel economy using the utility factors specified in paragraph (c)(1) of
this section for model year 2030 and earlier vehicles. Do not use the
petroleum-equivalence factors described in 10 CFR 474.3.
(ii) Except as described in paragraph (c)(2)(iii) of this section,
determine fuel economy for dual fueled automobiles from the following
equation, separately for city and highway driving:
Equation 2 to Paragraph (c)(2)(ii)
[GRAPHIC] [TIFF OMITTED] TR18AP24.070
Where:
MPGgas = The miles per gallon measured while operating on
gasoline during charge-sustaining operation as determined using the
procedures of SAE J1711.
MPGeelec = The miles per gallon equivalent measured while
operating on electricity. Calculate this value by dividing the
equivalent all-electric range determined from the equation in Sec.
86.1866-12(b)(2)(ii) by the corresponding measured Watt-hours of
energy consumed; apply the appropriate petroleum-equivalence factor
from 10 CFR 474.3 to convert Watt-hours to gallons equivalent. Note
that if vehicles use no gasoline during charge-depleting operation,
MPGeelec is the same as the charge-depleting fuel economy
specified in SAE J1711.
(iii) For 2016 and later model year dual fueled automobiles, you
may determine fuel economy based on the following equation, separately
for city and highway driving:
Equation 3 to Paragraph (c)(2)(iii)
[GRAPHIC] [TIFF OMITTED] TR18AP24.071
Where:
UF = The appropriate utility factor for city or highway driving
specified in paragraph (c)(1) of this section for model year 2030
and earlier vehicles.
* * * * *
(5) Instead of the utility factors specified in paragraphs (c)(1)
through (3) of this section, calculate utility factors using the
following equation for vehicles whose maximum speed is less than the
maximum speed specified in the driving schedule, where the vehicle's
maximum speed is determined, to the nearest 0.1 mph, from observing the
highest speed over the first duty cycle (FTP, HFET, etc.):
Equation 4 to Paragraph (c)(5)
[[Page 28206]]
[GRAPHIC] [TIFF OMITTED] TR18AP24.072
Where:
UFi = the utility factor for phase i. Let UF0
= 0.
j = a counter to identify the appropriate term in the summation
(with terms numbered consecutively).
k = the number of terms in the equation (see Table 5 of this
section).
di = the distance driven in phase i.
ND = the normalized distance. Use 399 for both FTP and HFET
operation for CAFE and GHG fleet values, except that ND = 583 for
both FTP and HFET operation for GHG fleet values starting in model
year 2031. Use 399 for both FTP and HFET operation for multi-day
individual values for labeling.
Cj = the coefficient for term j from the following table:
Table 5 to Paragraph (c)(5)--City/Highway Specific Utility Factor Coefficients
----------------------------------------------------------------------------------------------------------------
Fleet values for CAFE for all Fleet values for Multi-day
model years, and for GHG GHG starting in individual values
j through MY 2030 MY 2031 for labeling
---------------------------------------------------------------------
City Highway City or highway City or highway
----------------------------------------------------------------------------------------------------------------
1......................................... 14.86 4.8 10.52 13.1
2......................................... 2.965 13 -7.282 -18.7
3......................................... -84.05 -65 -26.37 5.22
4......................................... 153.7 120 79.08 8.15
5......................................... -43.59 -100.00 -77.36 3.53
6......................................... -96.94 31.00 26.07 -1.34
7......................................... 14.47 .............. ................. -4.01
8......................................... 91.70 .............. ................. -3.90
9......................................... -46.36 .............. ................. -1.15
10........................................ .............. .............. ................. 3.88
----------------------------------------------------------------------------------------------------------------
n = the number of test phases (or bag measurements) before the
vehicle reaches the end-of-test criterion.
(6) Determine End-of-Test as follows:
(i) Base End-of-Test on a 2 percent State of Charge as specified in
Section 3.5.1 of SAE J1711.
(ii) Base End-of-Test on a 1 percent Net Energy Change/Fuel Ratio
as specified in Section 3.5.2 of SAE J1711.
(iii) For charge-sustaining tests, we may approve alternate Net
Energy Change/Fuel Ratio tolerances as specified in Appendix C of SAE
J1711 to correct final fuel economy values, CO2 emissions,
and carbon-related exhaust emissions. For charge-sustaining tests, do
not use alternate Net Energy Change/Fuel Ratio tolerances to correct
emissions of criteria pollutants. Additionally, if we approve an
alternate End-of-Test criterion or Net Energy Change/Fuel Ratio
tolerances for a specific vehicle, we may use the alternate criterion
or tolerances for any testing we conduct on that vehicle.
(7) Use the vehicle's Actual Charge-Depleting Range, Rcda, as
specified in Section 7.1.4 of SAE J1711 for evaluating the end-of-test
criterion.
* * * * *
(10) The utility factors described in this paragraph (c) and in
Sec. 600.510 are derived from equations in SAE J2841. You may
alternatively calculate utility factors from the corresponding
equations in SAE J2841 as follows:
(i) Calculate utility factors for labeling directly from the
equation in SAE J2841 Section 6.2 using the Table 2 MDIUF Fit
Coefficients (C1 through C10) and a normalized distance (norm_dist) of
399 miles.
(ii) Calculate utility factors for fuel economy standards from the
equation in SAE J2841 Section 6.2 using the Table 5 Fit Coefficients
for city/Hwy Specific FUF curves weighted 55 percent city, 45 percent
highway and a normalized distance (norm_dist) of 399 miles.
(iii) Starting in model year 2031, calculate utility factors for
GHG compliance with emission standards from the equation in SAE J2841
Section 6.2 using the Table 2 FUF Fit Coefficients (C1 through C6) and
a normalized distance (norm_dist) of 583 miles. For model year 2026 and
earlier, calculate utility factors for compliance with GHG emission
standards as described in paragraph (c)(10)(ii) of this section.
(11) The following methodology is used to determine the usable
battery energy (UBE) for a PHEV using data obtained during either the
UDDS Full Charge Test (FCT) or the HFET FCT as described in SAE J1711:
(i) Perform the measurements described in SAE J1711 Section
5.1.3.d. Record initial and final SOC of the RESS for each cycle in the
FCT.
(ii) Perform the measurements described in SAE J1711 Section
5.1.3.c. Continuously measure the voltage of the RESS throughout the
entire cycle, or record initial and final voltage measurements of the
RESS for each test cycle.
(iii) Determine average voltage of the RESS during each FCT cycle
by averaging the results of the continuous voltage measurement or by
determining the average of the initial and final voltage measurement.
(iv) Determine the DC discharge energy for each cycle of the FCT by
multiplying the change in SOC of each cycle by the average voltage for
the cycle.
(v) Instead of independently measuring current and voltage and
calculating the resulting DC discharge energy, you may use a DC
wideband Watt-hour meter (power analyzer) to directly measure the DC
discharge energy of the RESS during each cycle of the FCT. The meter
used for this measurement must meet the requirements in SAE J1711
Section 4.4.
(vi) After completing the FCT, determine the cycles comprising the
Charge-Depleting Cycle Range (Rcdc) as described in SAE J1711 Section
3.1.14. Charge-sustaining cycles are not included in the Rcdc. Rcdc
includes any number of transitional cycles where the vehicle may have
operated in both charge-depleting and charge-sustaining modes.
[[Page 28207]]
(vii) Determine the UBE of the PHEV by summing the measured DC
discharge energy for each cycle comprising Rcdc. Following the charge-
depleting cycles and during the transition to charge-sustaining
operation, one or more of the transition cycles may result in negative
DC discharge energy measurements that result from the vehicle charging
and not discharging the RESS. Include these negative discharge results
in the summation.
* * * * *
0
102. Revise Sec. 600.117 to read as follows:
Sec. 600.117 Interim provisions.
(a) The following provisions apply instead of other provisions
specified in this part through model year 2026:
(1) Except as specified in paragraphs (a)(5) and (6) of this
section, manufacturers must demonstrate compliance with greenhouse gas
emission standards and determine fuel economy values using E0 gasoline
test fuel as specified in 40 CFR 86.113-04(a)(1), regardless of any
testing with E10 test fuel specified in 40 CFR 1065.710(b) under
paragraph (a)(2) of this section.
(2) Manufacturers may demonstrate that vehicles comply with
emission standards for criteria pollutants as specified in 40 CFR part
86, subpart S, during fuel economy measurements using the E0 gasoline
test fuel specified in 40 CFR 86.113-04(a)(1), as long as this test
fuel is used in fuel economy testing for all applicable duty cycles
specified in 40 CFR part 86, subpart S. If a vehicle fails to meet an
emission standard for a criteria pollutant using the E0 gasoline test
fuel specified in 40 CFR 86.113-04(a)(1), the manufacturer must retest
the vehicle using the E10 test fuel specified in 40 CFR 1065.710(b) (or
the equivalent LEV III test fuel for California) to demonstrate
compliance with all applicable emission standards over that test cycle.
(3) If a manufacturer demonstrates compliance with emission
standards for criteria pollutants over all five test cycles using the
E10 test fuel specified in 40 CFR 1065.710(b) (or the equivalent LEV
III test fuel for California), the manufacturer may use test data with
the same test fuel to determine whether a test group meets the criteria
described in Sec. 600.115 for derived 5-cycle testing for fuel economy
labeling. Such vehicles may be tested over the FTP and HFET cycles with
the E0 gasoline test fuel specified in 40 CFR 86.113-04(a)(1) under
this paragraph (a)(3); the vehicles must meet the emission standards
for criteria pollutants over those test cycles as described in
paragraph (a)(2) of this section.
(4) Manufacturers may perform testing with the appropriate gasoline
test fuels specified in 40 CFR 86.113-04(a)(1), 40 CFR 86.213(a)(2),
and in 40 CFR 1065.710(b) to evaluate whether their vehicles meet the
criteria for derived 5-cycle testing under Sec. 600.115. All five
tests must use test fuel with the same nominal ethanol concentration.
(5) For IUVP testing under 40 CFR 86.1845, manufacturers may
demonstrate compliance with greenhouse gas emission standards using a
test fuel meeting specifications for demonstrating compliance with
emission standards for criteria pollutants.
(6) Manufacturers may alternatively demonstrate compliance with
greenhouse gas emission standards and determine fuel economy values
using E10 gasoline test fuel as specified in 40 CFR 1065.710(b).
However, manufacturers must then multiply measured CO2
results by 1.0166 and round to the nearest 0.01 g/mile and calculate
fuel economy using the equations appropriate equation for testing with
E10 test fuel.
(7) If a vehicle uses an E10 test fuel for evaporative emission
testing and E0 is the applicable test fuel for exhaust emission
testing, exhaust measurement and reporting requirements apply over the
course of the evaporative emission test, but the vehicle need not meet
the exhaust emission standards during the evaporative emission test
run.
(b) Manufacturers may certify model year 2027 through 2029 vehicles
to greenhouse gas emission standards using data with E0 test fuel from
testing for earlier model years, subject to the carryover provisions of
40 CFR 86.1839. In the case of the fleet average CO2
standard, manufacturers must divide the measured CO2 results
by 1.0166 and round to the nearest 0.01 g/mile.
(c) Manufacturers may perform testing under Sec. 600.115-11 using
E0 gasoline test fuel as specified in 40 CFR 86.113-04(a)(1) or E10
test fuel as specified in 40 CFR 1065.710(b) until EPA publishes
guidance under Sec. 600.210-12(a)(2)(iv) describing when and how to
apply 5-cycle adjustment factors based on testing with the E10 test
fuel.
0
103. Amend Sec. 600.206-12 by revising and republishing paragraph (a)
to read as follows:
Sec. 600.206-12 Calculation and use of FTP-based and HFET-based fuel
economy, CO2 emissions, and carbon-related exhaust emission values for
vehicle configurations.
(a) Fuel economy, CO2 emissions, and carbon-related
exhaust emissions values determined for each vehicle under Sec.
600.113-08(a) and (b) and as approved in Sec. 600.008(c), are used to
determine FTP-based city, HFET-based highway, and combined FTP/Highway-
based fuel economy, CO2 emissions, and carbon-related
exhaust emission values for each vehicle configuration for which data
are available. Note that fuel economy for some alternative fuel
vehicles may mean miles per gasoline gallon equivalent and/or miles per
unit of fuel consumed. For example, electric vehicles will determine
miles per kilowatt-hour in addition to miles per gasoline gallon
equivalent, and fuel cell vehicles will determine miles per kilogram of
hydrogen.
(1) If only one set of FTP-based city and HFET-based highway fuel
economy values is accepted for a subconfiguration at which a vehicle
configuration was tested, these values, rounded to the nearest tenth of
a mile per gallon, comprise the city and highway fuel economy values
for that subconfiguration. If only one set of FTP-based city and HFET-
based highway CO2 emissions and carbon-related exhaust
emission values is accepted for a subconfiguration at which a vehicle
configuration was tested, these values, rounded to the nearest gram per
mile, comprise the city and highway CO2 emissions and
carbon-related exhaust emission values for that subconfiguration. The
appropriate CO2 values for fuel economy labels based on
testing with E10 test fuel are the measured tailpipe CO2
emissions for the test cycle multiplied by 1.0166.
(2) If more than one set of FTP-based city and HFET-based highway
fuel economy and/or carbon-related exhaust emission values are accepted
for a vehicle configuration:
(i) All data shall be grouped according to the subconfiguration for
which the data were generated using sales projections supplied in
accordance with Sec. 600.208-12(a)(3).
(ii) Within each group of data, all fuel economy values are
harmonically averaged and rounded to the nearest 0.0001 of a mile per
gallon and all CO2 emissions and carbon-related exhaust
emission values are arithmetically averaged and rounded to the nearest
tenth of a gram per mile in order to determine FTP-based city and HFET-
based highway fuel economy, CO2 emissions, and carbon-
related exhaust emission values for each subconfiguration at which the
vehicle configuration was tested. The appropriate CO2 values
for fuel economy labels based on testing with E10 test fuel are the
measured tailpipe
[[Page 28208]]
CO2 emissions for the test cycle multiplied by 1.0166.
(iii) All FTP-based city fuel economy, CO2 emissions,
and carbon-related exhaust emission values and all HFET-based highway
fuel economy and carbon-related exhaust emission values calculated in
paragraph (a)(2)(ii) of this section are (separately for city and
highway) averaged in proportion to the sales fraction (rounded to the
nearest 0.0001) within the vehicle configuration (as provided to the
Administrator by the manufacturer) of vehicles of each tested
subconfiguration. Fuel economy values shall be harmonically averaged,
and CO2 emissions and carbon-related exhaust emission values
shall be arithmetically averaged. The resultant fuel economy values,
rounded to the nearest 0.0001 mile per gallon, are the FTP-based city
and HFET-based highway fuel economy values for the vehicle
configuration. The resultant CO2 emissions and carbon-
related exhaust emission values, rounded to the nearest tenth of a gram
per mile, are the FTP-based city and HFET-based highway CO2
emissions and carbon-related exhaust emission values for the vehicle
configuration. Note that the appropriate vehicle subconfiguration
CO2 values for fuel economy labels based on testing with E10
test fuel are adjusted as described in paragraph (a)(1) or (a)(2)(ii)
of this section.
(3)(i) For the purpose of determining average fuel economy under
Sec. 600.510, the combined fuel economy value for a vehicle
configuration is calculated by harmonically averaging the FTP-based
city and HFET-based highway fuel economy values, as determined in
paragraph (a)(1) or (2) of this section, weighted 0.55 and 0.45
respectively, and rounded to the nearest 0.0001 mile per gallon. A
sample of this calculation appears in appendix II to this part.
(ii) For the purpose of determining average carbon-related exhaust
emissions under Sec. 600.510, the combined carbon-related exhaust
emission value for a vehicle configuration is calculated by
arithmetically averaging the FTP-based city and HFET-based highway
carbon-related exhaust emission values, as determined in paragraph
(a)(1) or (2) of this section, weighted 0.55 and 0.45 respectively, and
rounded to the nearest tenth of gram per mile.
(4) For alcohol dual fuel automobiles and natural gas dual fuel
automobiles the procedures of paragraphs (a)(1) or (2) of this section,
as applicable, shall be used to calculate two separate sets of FTP-
based city, HFET-based highway, and combined values for fuel economy,
CO2 emissions, and carbon-related exhaust emissions for each
configuration.
(i) Calculate the city, highway, and combined fuel economy,
CO2 emissions, and carbon-related exhaust emission values
from the tests performed using gasoline or diesel test fuel.
(ii) Calculate the city, highway, and combined fuel economy,
CO2 emissions, and carbon-related exhaust emission values
from the tests performed using alcohol or natural gas test fuel.
* * * * *
0
104. Amend Sec. 600.207-12 by revising the section heading and
revising and republishing paragraph (a) to read as follows:
Sec. 600.207-12 Calculation and use of vehicle-specific 5-cycle-based
fuel economy and CO2 emission values for vehicle configurations.
(a) Fuel economy and CO2 emission values determined for
each vehicle under Sec. 600.114 and as approved in Sec. 600.008(c),
are used to determine vehicle-specific 5-cycle city and highway fuel
economy and CO2 emission values for each vehicle
configuration for which data are available.
(1) If only one set of 5-cycle city and highway fuel economy and
CO2 emission values is accepted for a vehicle configuration,
these values, where fuel economy is rounded to the nearest 0.0001 of a
mile per gallon and the CO2 emission value in grams per mile
is rounded to the nearest tenth of a gram per mile, comprise the city
and highway fuel economy and CO2 emission values for that
configuration. Note that the appropriate vehicle-specific
CO2 values for fuel economy labels based on 5-cycle testing
with E10 test fuel are adjusted as described in Sec. 600.114-12.
(2) If more than one set of 5-cycle city and highway fuel economy
and CO2 emission values are accepted for a vehicle
configuration:
(i) All data shall be grouped according to the subconfiguration for
which the data were generated using sales projections supplied in
accordance with Sec. 600.209-12(a)(3).
(ii) Within each subconfiguration of data, all fuel economy values
are harmonically averaged and rounded to the nearest 0.0001 of a mile
per gallon in order to determine 5-cycle city and highway fuel economy
values for each subconfiguration at which the vehicle configuration was
tested, and all CO2 emissions values are arithmetically
averaged and rounded to the nearest tenth of gram per mile to determine
5-cycle city and highway CO2 emission values for each
subconfiguration at which the vehicle configuration was tested. Note
that the appropriate vehicle-specific CO2 values for fuel
economy labels based on 5-cycle testing with E10 test fuel are adjusted
as described in Sec. 600.114-12.
(iii) All 5-cycle city fuel economy values and all 5-cycle highway
fuel economy values calculated in paragraph (a)(2)(ii) of this section
are (separately for city and highway) averaged in proportion to the
sales fraction (rounded to the nearest 0.0001) within the vehicle
configuration (as provided to the Administrator by the manufacturer) of
vehicles of each tested subconfiguration. The resultant values, rounded
to the nearest 0.0001 mile per gallon, are the 5-cycle city and 5-cycle
highway fuel economy values for the vehicle configuration.
(iv) All 5-cycle city CO2 emission values and all 5-
cycle highway CO2 emission values calculated in paragraph
(a)(2)(ii) of this section are (separately for city and highway)
averaged in proportion to the sales fraction (rounded to the nearest
0.0001) within the vehicle configuration (as provided to the
Administrator by the manufacturer) of vehicles of each tested
subconfiguration. The resultant values, rounded to the nearest 0.1
grams per mile, are the 5-cycle city and 5-cycle highway CO2
emission values for the vehicle configuration.
(3) [Reserved]
(4) For alcohol dual fuel automobiles and natural gas dual fuel
automobiles, the procedures of paragraphs (a)(1) and (2) of this
section shall be used to calculate two separate sets of 5-cycle city
and highway fuel economy and CO2 emission values for each
configuration.
(i) Calculate the 5-cycle city and highway fuel economy and
CO2 emission values from the tests performed using gasoline
or diesel test fuel.
(ii) Calculate the 5-cycle city and highway fuel economy and
CO2 emission values from the tests performed using alcohol
or natural gas test fuel, if 5-cycle testing has been performed.
Otherwise, the procedure in Sec. 600.210-12(a)(3) or (b)(3) applies.
* * * * *
0
105. Amend Sec. 600.208-12 by revising paragraph (a)(4) and adding
paragraph (b)(3)(iii)(C) to read as follows:
Sec. 600.208-12 Calculation of FTP-based and HFET-based fuel economy,
CO2 emissions, and carbon-related exhaust emissions for a model type.
(a) * * *
(4) Vehicle configuration fuel economy, CO2 emissions,
and carbon-related exhaust emissions, as determined in Sec. 600.206-
12(a), (b) or (c),
[[Page 28209]]
as applicable, are grouped according to base level.
(i) If only one vehicle configuration within a base level has been
tested, the fuel economy, CO2 emissions, and carbon-related
exhaust emissions from that vehicle configuration will constitute the
fuel economy, CO2 emissions, and carbon-related exhaust
emissions for that base level. Note that the appropriate vehicle
subconfiguration CO2 values for fuel economy labels based on
testing with E10 test fuel are adjusted as referenced in Sec. 600.206-
12(a)(2)(iii); those values are used to calculate the base level
CO2 values in this paragraph (a)(4)(i).
(ii) If more than one vehicle configuration within a base level has
been tested, the vehicle configuration fuel economy values are
harmonically averaged in proportion to the respective sales fraction
(rounded to the nearest 0.0001) of each vehicle configuration and the
resultant fuel economy value rounded to the nearest 0.0001 mile per
gallon; and the vehicle configuration CO2 emissions and
carbon-related exhaust emissions are arithmetically averaged in
proportion to the respective sales fraction (rounded to the nearest
0.0001) of each vehicle configuration and the resultant carbon-related
exhaust emission value rounded to the nearest tenth of a gram per mile.
Note that the appropriate vehicle subconfiguration CO2
values for fuel economy labels based on testing with E10 test fuel are
adjusted as referenced in Sec. 600.206-12(a)(2)(iii); those values are
used to calculate the base level CO2 values in this
paragraph (a)(4)(ii).
* * * * *
(b) * * *
(3) * * *
(iii) * * *
(C) Note that the appropriate base level CO2 values for
fuel economy labels based on testing with E10 test fuel are adjusted as
referenced in paragraph (a)(4)(i) and (ii) of this section; those
values are used to calculate the model type FTP-based city
CO2 values in this paragraph (b)(3)(iii).
* * * * *
0
106. Amend Sec. 600.209-12 by revising paragraphs (a) introductory
text and (b) introductory text to read as follows:
Sec. 600.209-12 Calculation of vehicle-specific 5-cycle fuel economy
and CO2 emission values for a model type.
(a) Base level. 5-cycle fuel economy and CO2 emission
values for a base level are calculated from vehicle configuration 5-
cycle fuel economy and CO2 emission values as determined in
Sec. 600.207 for low-altitude tests. Note that the appropriate
vehicle-specific CO2 values for fuel economy labels based on
5-cycle testing with E10 test fuel are adjusted as described in Sec.
600.114-12.
* * * * *
(b) Model type. For each model type, as determined by the
Administrator, city and highway fuel economy and CO2
emissions values will be calculated by using the projected sales and
fuel economy and CO2 emission values for each base level
within the model type. Separate model type calculations will be done
based on the vehicle configuration fuel economy and CO2
emission values as determined in Sec. 600.207-12, as applicable. Note
that the appropriate vehicle-specific CO2 values for fuel
economy labels based on 5-cycle testing with E10 test fuel are adjusted
as described in Sec. 600.114-12.
* * * * *
0
107. Amend Sec. 600.210-12 by revising paragraphs (a)(2)(i)(B),
(a)(2)(ii)(B), (b)(2)(i)(B), and (b)(2)(ii)(B) to read as follows:
Sec. 600.210-12 Calculation of fuel economy and CO2 emission values
for labeling.
(a) * * *
(2) * * *
(i) * * *
(B) For each model type, determine the derived five-cycle city
CO2 emissions using the following equation and coefficients
determined by the Administrator:
Derived 5-cycle City CO2 = City Intercept [middot] A + City
Slope [middot] MT FTP CO2
Where:
City Intercept = Intercept determined by the Administrator based on
historic vehicle-specific 5-cycle city fuel economy data.
A = 8,887 for gasoline-fueled vehicles, 10,180 for diesel-fueled
vehicles, or an appropriate value specified by the Administrator for
other fuels.
City Slope = Slope determined by the Administrator based on historic
vehicle-specific 5-cycle city fuel economy data.
MT FTP CO2 = the model type FTP-based city CO2
emissions determined under Sec. 600.208-12(b), rounded to the
nearest 0.1 grams per mile. Note that the appropriate MT FTP
CO2 input values for fuel economy labels based on testing
with E10 test fuel are adjusted as referenced in Sec. 600.208-
12(b)(3)(iii).
(ii) * * *
(B) For each model type, determine the derived five-cycle highway
CO2 emissions using the equation below and coefficients
determined by the Administrator:
Derived 5-cycle Highway CO2 = Highway Intercept [middot] A + Highway
Slope [middot] MT HFET CO2
Where:
Highway Intercept = Intercept determined by the Administrator based
on historic vehicle-specific 5-cycle highway fuel economy data.
A = 8,887 for gasoline-fueled vehicles, 10,180 for diesel-fueled
vehicles, or an appropriate value specified by the Administrator for
other fuels.
Highway Slope = Slope determined by the Administrator based on
historic vehicle-specific 5-cycle highway fuel economy data.
MT HFET CO2 = the model type highway CO2 emissions
determined under Sec. 600.208-12(b), rounded to the nearest 0.1
grams per mile. Note that the appropriate the MT HFET CO2
input values for fuel economy labels based on testing with E10 test
fuel are adjusted as referenced in Sec. 600.208-12(b)(3)(iii) and
(b)(4).
* * * * *
(b) * * *
(2) * * *
(i) * * *
(B) Determine the derived five-cycle city CO2 emissions
of the configuration using the equation below and coefficients
determined by the Administrator:
Derived 5-cycle City CO2 = City Intercept + City Slope
[middot]Config FTP CO2
Where:
City Intercept = Intercept determined by the Administrator based on
historic vehicle-specific 5-cycle city fuel economy data.
City Slope = Slope determined by the Administrator based on historic
vehicle-specific 5-cycle city fuel economy data.
Config FTP CO2 = the configuration FTP-based city
CO2 emissions determined under Sec. 600.206, rounded to
the nearest 0.1 grams per mile. Note that the appropriate Config FTP
CO2 input values for fuel economy labels based on testing
with E10 test fuel are adjusted as referenced in Sec. 600.206-
12(a)(2)(iii).
(ii) * * *
(B) Determine the derived five-cycle highway CO2
emissions of the configuration using the equation below and
coefficients determined by the Administrator:
Derived 5-cycle city Highway CO2 = Highway Intercept + Highway Slope
[middot] Config HFET CO2
Where:
Highway Intercept = Intercept determined by the Administrator based
on historic vehicle-specific 5-cycle highway fuel economy data.
Highway Slope = Slope determined by the Administrator based on
historic vehicle-specific 5-cycle highway fuel economy data.
Config HFET CO2 = the configuration highway fuel economy determined
under Sec. 600.206, rounded to the nearest tenth. Note that the
appropriate Config HFET CO2 input values for fuel economy
labels
[[Page 28210]]
based on testing with E10 test fuel are adjusted as referenced in
Sec. 600.206-12(a)(2)(iii).
* * * * *
0
108. Amend Sec. 600.311-12 by revising paragraph (g) to read as
follows:
Sec. 600.311-12 Determination of values for fuel economy labels.
* * * * *
(g) Smog rating. Establish a rating for exhaust emissions other
than CO2 based on the applicable emission standards for the
appropriate model year as shown in tables 1 through 3 to this paragraph
(g). Unless specified otherwise, use the California emission standards
to select the smog rating only for vehicles not certified to any EPA
standards. For Independent Commercial Importers that import vehicles
not subject to the identified emission standards, the vehicle's smog
rating is 1. Similarly, if a manufacturer certifies vehicles to
emission standards that are less stringent than all the identified
standards for any reason, the vehicle's smog rating is 1. If EPA or
California emission standards change in the future, we may revise the
emission levels corresponding to each rating for future model years as
appropriate to reflect the changed standards. If this occurs, we would
publish the revised ratings as described in Sec. 600.302-12(k),
allowing sufficient lead time to make the changes; we would also expect
to initiate a rulemaking to update the smog rating in the regulation.
Table 1 to Paragraph (g)--Criteria for Establishing Smog Rating for
Model Year 2030 and Later
------------------------------------------------------------------------
California Air
Rating U.S. EPA emission Resources Board
standard emission standard
------------------------------------------------------------------------
1........................... .................... ULEV 125.
2........................... Bin 65 or Bin 70.... ULEV70.
3........................... Bin 55 or Bin 60.... ULEV60.
4........................... Bin 45 or Bin 50.... ULEV50.
5........................... Bin 35 or Bin 40.... ULEV40.
6........................... Bin 25 or Bin 30.... SULEV25 or SULEV30.
7........................... Bin 15 or Bin 20.... SULEV15 or SULEV20.
8........................... Bin 10..............
9........................... Bin 5...............
10.......................... Bin 0............... ZEV.
------------------------------------------------------------------------
Table 2 to Paragraph (g)--Criteria for Establishing Smog Rating for
Model Years 2025 Through 2029
------------------------------------------------------------------------
California Air
U.S. EPA Tier 3 or Resources Board LEV
Rating Tier 4 emission III or LEV IV
standard emission standard
------------------------------------------------------------------------
1........................... Bin 160............. LEV 160.
2........................... Bin 125............. ULEV125.
4........................... Bin 55 through Bin ULEV70 or ULEV60.
70.
5........................... Bin 35 through Bin ULEV50 or ULEV40.
50.
6........................... Bin 25 or Bin 30.... SULEV 25 or SULEV30.
7........................... Bin 15 or Bin 20.... SULEV 15 or SULEV20.
8........................... Bin 10..............
9........................... Bin 5...............
10.......................... Bin 0............... ZEV.
------------------------------------------------------------------------
Table 3 to Paragraph (g)--Criteria for Establishing Smog Rating for Model Years 2018 Through 2024
----------------------------------------------------------------------------------------------------------------
California Air Resources
Rating U.S. EPA Tier 3 emission U.S EPA Tier 2 emission Board LEV III emission
standard standard standard
----------------------------------------------------------------------------------------------------------------
1................................ Bin 160.................. Bin 5 through Bin 8..... LEV 160.
3................................ Bin 125, Bin 110......... Bin 4................... ULEV125.
5................................ Bin 85, Bin 70........... Bin 3................... ULEV70.
6................................ Bin 50................... ........................ ULEV50.
7................................ Bin 30................... Bin 2................... SULEV30.
8................................ Bin 20................... ........................ SULEV20.
10............................... Bin 0.................... Bin 1................... ZEV.
----------------------------------------------------------------------------------------------------------------
* * * * *
PART 1036--CONTROL OF EMISSIONS FROM NEW AND IN-USE HEAVY-DUTY
HIGHWAY ENGINES
0
109. The authority citation for part 1036 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.
0
110. Amend Sec. 1036.110 by revising paragraph (a) to read as follows:
Sec. 1036.110 Diagnostic controls.
* * * * *
(a) The requirements of this section apply for engines certified
under this part, except in the following circumstances:
(1) Heavy-duty engines intended to be installed in heavy-duty
vehicles at or below 14,000 pounds GVWR must meet the OBD requirements
in 40 CFR 86.1806-27. Note that 40 CFR 86.1806-27 allows for using
later versions of specified OBD requirements from the California Air
Resources Board, which includes meeting the 2019 heavy-duty OBD
requirements adopted for California and updated emission thresholds as
described in this section.
(2) Heavy-duty spark-ignition engines intended to be installed in
heavy-duty vehicles above 14,000 pounds GVWR may instead meet the OBD
requirements in 40 CFR 86.1806-27 if the same engines are also
installed in vehicles
[[Page 28211]]
certified under 40 CFR part 86, subpart S, where both sets of vehicles
share similar emission controls.
* * * * *
0
111. Add Sec. 1036.635 to read as follows:
Sec. 1036.635 Certification requirements for high-GCWR medium-duty
vehicles.
Engines that will be installed in Vehicles at or below 14,000
pounds GVWR that have GCWR above 22,000 pounds may be optionally
certified under this part instead of vehicle certification under 40 CFR
part 86, subpart S.
(a) Affected engines must meet the criteria pollutant standards
specified in Sec. 1036.104. The following specific provisions apply if
engines are exempt from greenhouse gas standards under paragraph (b) or
(c) of this section:
(1) Determine brake-specific CO2 emissions over the FTP,
eCO2FTPFCL, from the emission-data engine used for
demonstrating compliance with criteria pollutant standards. You may
alternatively determine eCO2FTPFCL based on chassis testing
as described in 40 CFR 86.1845-04(h)(6). Use eCO2FTPFCL for
calculating emission rates from in-use engines under Sec. 1036.530.
Report the measured CO2 emission rate and the method of
testing in your application for certification.
(2) For plug-in hybrid electric vehicles, meet battery monitor
requirements under 40 CFR 1037.115(f) instead of the battery-related
requirements under 40 CFR 86.1815-27.
(b) Affected engines that will be installed in complete vehicles
are exempt from the greenhouse gas emission standards in Sec.
1036.108, but engine certification under this part 1036 depends on the
following conditions:
(1) The vehicles in which the engines are installed must meet the
following vehicle-based standards under 40 CFR part 86, subpart S:
(i) Evaporative and refueling emission standards as specified in 40
CFR 86.1813-17.
(ii) Greenhouse gas emission standards as specified in 40 CFR
86.1819-14.
(2) Additional provisions related to relevant requirements from 40
CFR part 86, subpart S, apply for certifying engines under this part,
as illustrated in the following examples:
(i) The engine's emission control information label must state that
the vehicle meets evaporative and refueling emission standards under 40
CFR 86.1813-17 and greenhouse gas emission standards under 40 CFR
86.1819-14.
(ii) The application for certification must include the information
related to complying with evaporative, refueling, and greenhouse gas
emission standards.
(iii) We may require you to perform testing on in-use vehicles and
report test results as specified in 40 CFR 86.1845-04, 86.1846-01, and
86.1847-01.
(iv) Demonstrate compliance with the fleet average CO2
standard as described in 40 CFR 86.1865-12 by including vehicles
certified under this section in the compliance calculations as part of
the fleet averaging calculation for medium-duty vehicles certified
under 40 CFR part 86, subpart S.
(3) State in the application for certification that you are using
the provisions of this section to meet the fleet average CO2
standard in 40 CFR 86.1819-14 instead of meeting the standards of Sec.
1036.108 and instead of certifying the vehicle to standards under 40
CFR part 1037.
(c) The provisions in paragraph (b) of this section are optional
for affected engines that will be installed in incomplete vehicles. If
vehicles do not meet all the requirements described in paragraph (b) of
this section, the engines must meet the greenhouse gas emission
standards of Sec. 1036.108 and the vehicles must be certified under 40
CFR part 1037.
PART 1037--CONTROL OF EMISSIONS FROM NEW HEAVY-DUTY MOTOR VEHICLES
0
112. The authority citation for part 1037 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.
0
113. Amend Sec. 1037.150 by revising paragraph (l) to read as follows:
Sec. 1037.150 Interim provisions.
* * * * *
(l) Optional certification to GHG standards under 40 CFR part 86.
The greenhouse gas standards in 40 CFR part 86, subpart S, may apply
instead of the standards of Sec. 1037.105 as follows:
(1) Complete or cab-complete vehicles may optionally meet
alternative standards as described in 40 CFR 86.1819-14(j).
(2) Complete high-GCWR vehicles must meet the greenhouse gas
standards of 40 CFR part 86, subpart S, as described in 40 CFR
1036.635.
(3) Incomplete high-GCWR vehicles may meet the greenhouse gas
standards of 40 CFR part 86, subpart S, as described in 40 CFR
1036.635.
* * * * *
PART 1066--VEHICLE-TESTING PROCEDURES
0
114. The authority citation for part 1066 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.
0
115. Amend Sec. 1066.301 by revising paragraph (b) to read as follows:
Sec. 1066.301 Overview of road-load determination procedures.
* * * * *
(b) The general procedure for determining road-load force is
performing coastdown tests and calculating road-load coefficients. This
procedure is described in SAE J1263 and SAE J2263 (incorporated by
reference, see Sec. 1066.1010). Continued testing based on the 2008
version of SAE J2263 is optional, except that it is no longer available
for testing starting with model year 2026. This subpart specifies
certain deviations from those procedures for certain applications.
* * * * *
0
116. Amend Sec. 1066.305 by revising paragraph (a) to read as follows:
Sec. 1066.305 Procedures for specifying road-load forces for motor
vehicles at or below 14,000 pounds GVWR.
(a) For motor vehicles at or below 14,000 pounds GVWR, develop
representative road-load coefficients to characterize each vehicle
covered by a certificate of conformity. Calculate road-load
coefficients by performing coastdown tests using the provisions of SAE
J1263 and SAE J2263 (incorporated by reference, see Sec. 1066.1010).
This protocol establishes a procedure for determination of vehicle road
load force for speeds between 115 and 15 km/hr (71.5 and 9.3 mi/hr);
the final result is a model of road-load force (as a function of speed)
during operation on a dry, level road under reference conditions of 20
[deg]C, 98.21 kPa, no wind, no precipitation, and the transmission in
neutral. You may use other methods that are equivalent to SAE J2263,
such as equivalent test procedures or analytical modeling, to
characterize road load using good engineering judgment. Determine
dynamometer settings to simulate the road-load profile represented by
these road-load target coefficients as described in Sec. 1066.315.
Supply representative road-load forces for each vehicle at speeds above
15 km/hr (9.3 mi/hr), and up to 115 km/hr (71.5 mi/hr), or the highest
speed from the range of applicable duty cycles.
* * * * *
0
117. Amend Sec. 1066.310 by revising paragraph (b) introductory text
to read as follows:
[[Page 28212]]
Sec. 1066.310 Coastdown procedures for vehicles above 14,000 pounds
GVWR.
* * * * *
(b) Follow the provisions of Sections 1 through 9 of SAE J1263 and
SAE J2263 (incorporated by reference, see Sec. 1066.1010), except as
described in this paragraph (b). The terms and variables identified in
this paragraph (b) have the meaning given in SAE J1263 or J2263 unless
specified otherwise.
* * * * *
0
118. Revise Sec. 1066.315 to read as follows:
Sec. 1066.315 Dynamometer road-load setting.
Determine dynamometer road-load settings for chassis testing by
following SAE J2264 (incorporated by reference, see Sec. 1066.1010).
0
119. Amend Sec. 1066.425 by revising paragraph (j)(1) introductory
text to read as follows:
Sec. 1066.425 Performing emission tests.
* * * * *
(j) * * *
(1) Compare the following drive-cycle metrics, based on measured
vehicle speeds, to a reference value based on the target cycle that
would have been generated by driving exactly to the target trace as
described in SAE J2951 (incorporated by reference, see Sec.
1066.1010):
* * * * *
0
120. Amend Sec. 1066.501 by revising paragraph (a) to read as follows:
Sec. 1066.501 Overview.
* * * * *
(a) Correct the results for Net Energy Change of the RESS as
follows:
(1) For all sizes of EV, follow SAE J1634 (incorporated by
reference, see Sec. 1066.1010).
(2) For HEV at or below 14,000 pounds GVWR, follow SAE J1711
(incorporated by reference, see Sec. 1066.1010) except as described in
this paragraph (a). Disregard provisions of SAE J1711 that differ from
this part or the standard-setting part if they are not specific to HEV.
Apply the following adjustments and clarifications to SAE J1711:
(i) If the procedure calls for charge-sustaining operation, start
the drive with a State of Charge that is appropriate to ensure charge-
sustaining operation for the duration of the drive. Take steps other
than emission measurements to confirm that vehicles are in charge-
sustaining mode for the duration of the drive.
(ii) You may use Appendix C of SAE J1711 for charge-sustaining
tests to correct final fuel economy values, CO2 emissions,
and carbon-related exhaust emissions, but not to correct measured
values for criteria pollutant emissions.
(iii) You may test subject to a measurement accuracy of 0.3% of full scale in place of the measurement accuracy specified
in Section 4.4 of SAE J1711.
(3) For HEV above 14,000 pounds GVWR, follow SAE J2711
(incorporated by reference, see Sec. 1066.1010) for requirements
related to charge-sustaining operation.
* * * * *
0
121. Amend Sec. 1066.630 by revising paragraph (a)(2) to read as
follows:
Sec. 1066.630 PDP, SSV, and CFV flow rate calculations.
* * * * *
(a) * * *
(2) Calculate Vrev using the following equation:
[GRAPHIC] [TIFF OMITTED] TR18AP24.073
Eq. 1066.630-2
Where:
pout = static absolute pressure at the PDP outlet.
Example:
a1 = 0.8405 m\3\/s
fnPDP = 12.58 r/s
pout = 99.950 kPa
pin = 98.575 kPa
a0 = 0.056 m\3\/r
Tin = 323.5 K
[GRAPHIC] [TIFF OMITTED] TR18AP24.074
* * * * *
0
122. Amend Sec. 1066.635 by revising the introductory text to read as
follows:
Sec. 1066.635 NMOG determination.
For vehicles subject to an NMOG standard, determine NMOG as
described in paragraph (a) of this section. Except as specified in the
standard-setting part, you may alternatively calculate NMOG results
based on measured NMHC emissions as described in paragraphs (c) through
(f) of this section. Note that references to the FTP in this section
apply for testing over the FTP test cycle at any ambient temperature.
* * * * *
0
123. Amend Sec. 1066.710 by revising the section heading, introductory
text, and paragraphs (a)(6), (b)(2), and (d)(2) to read as follows:
Sec. 1066.710 Cold temperature testing procedures for measuring NMOG,
NOX, PM, and CO emissions and determining fuel economy.
This section describes procedures for measuring emissions of
nonmethane organic gas (NMOG), oxides of nitrogen (NOX),
particulate matter (PM), and carbon monoxide (CO) and determining fuel
economy on a cold day using the FTP test cycle (see Sec. 1066.801).
For Tier 3 and earlier motor vehicles, measurement procedures are based
on nonmethane hydrocarbon (NMHC) emissions instead of NMOG emissions;
NOX and PM measurement requirements do not apply.
(a) * * *
(6) Analyze samples for NMOG, NOX, PM, CO, and
CO2.
[[Page 28213]]
(b) * * *
(2) Ambient temperature for preconditioning. Instantaneous ambient
temperature values may be above -4.0 [deg]C or below -9.0 [deg]C but
not for more than 3 minutes at a time during the preconditioning
period. At no time may ambient temperatures be below -12.0 [deg]C or
above -1.0 [deg]C. The average ambient temperature during
preconditioning must be (-7.0 2.8) [deg]C. You may
precondition vehicles at temperatures above -7.0 [deg]C or with a
temperature tolerance greater than that described in this section (or
both) if you determine that this will not cause NMOG, NOX,
PM, CO, or CO2 emissions to decrease; if you modify the
temperature specifications for vehicle preconditioning, adjust the
procedures described in this section appropriately for your testing.
* * * * *
(d) * * *
(2) Fill the fuel tank to approximately 40% of the manufacturer's
nominal fuel tank capacity. Use the appropriate gasoline test fuel for
low-temperature testing as specified 40 CFR 1065.710 or use ultra low-
sulfur diesel fuel as specified in 40 CFR 1065.703. However, you may
ask us to approve an alternative formulation of diesel fuel under 40
CFR 1065.10(c)(1) if that better represents in-use diesel fuel in
winter conditions. The temperature of the dispensed test fuel must be
at or below 15.5 [deg]C. If the leftover fuel in the fuel tank before
the refueling event does not meet these specifications, drain the fuel
tank before refueling. You may operate the vehicle prior to the
preconditioning drive to eliminate fuel effects on adaptive memory
systems.
* * * * *
0
124. Revise and republish Sec. 1066.801 to read as follows:
Sec. 1066.801 Applicability and general provisions.
This subpart I specifies how to apply the test procedures of this
part for light-duty vehicles, light-duty trucks, and heavy-duty
vehicles at or below 14,000 pounds GVWR that are subject to chassis
testing for exhaust emissions under 40 CFR part 86, subpart S. For
these vehicles, references in this part 1066 to the standard-setting
part include subpart H of this part and this subpart I.
(a) Use the procedures detailed in this subpart to measure vehicle
emissions over a specified drive schedule in conjunction with subpart E
of this part. Where the procedures of subpart E of this part differ
from this subpart I, the provisions in this subpart I take precedence.
(b) Collect samples of every pollutant for which an emission
standard applies, unless specified otherwise.
(c) This subpart covers the following test procedures:
(1) The Federal Test Procedure (FTP), which includes the general
driving cycle. This procedure is also used for measuring evaporative
emissions. This may be called the conventional test since it was
adopted with the earliest emission standards.
(i) The FTP consists of one Urban Dynamometer Driving Schedule
(UDDS) as specified in paragraph (a) of appendix I to 40 CFR part 86,
followed by a 10-minute soak with the engine off and repeat driving
through the first 505 seconds of the UDDS. Note that the UDDS
represents about 7.5 miles of driving in an urban area. Engine startup
(with all accessories turned off), operation over the initial UDDS, and
engine shutdown make a complete cold-start test. The hot-start test
consists of the first 505 seconds of the UDDS following the 10-minute
soak and a hot-running portion of the UDDS after the first 505 seconds.
The first 505 seconds of the UDDS is considered the transient portion;
the remainder of the UDDS is considered the stabilized (or hot-
stabilized) portion. The hot-stabilized portion for the hot-start test
is generally measured during the cold-start test; however, in certain
cases, the hot-start test may involve a second full UDDS following the
10-minute soak, rather than repeating only the first 505 seconds. See
Sec. Sec. 1066.815 and 1066.820.
(ii) Evaporative emission testing includes a preconditioning drive
with the UDDS and a full FTP cycle, including exhaust measurement,
followed by evaporative emission measurements. In the three-day diurnal
test sequence, the exhaust test is followed by a running loss test
consisting of a UDDS, then two New York City Cycles as specified in
paragraph (e) of appendix I to 40 CFR part 86, followed by another
UDDS; see 40 CFR 86.134. Note that the New York City Cycle represents
about 1.18 miles of driving in a city center. The running loss test is
followed by a high-temperature hot soak test as described in 40 CFR
86.138 and a three-day diurnal emission test as described in 40 CFR
86.133. In the two-day diurnal test sequence, the exhaust test is
followed by a low-temperature hot soak test as described in 40 CFR
86.138-96(k) and a two-day diurnal emission test as described in 40 CFR
86.133-96(p).
(iii) Refueling emission tests for vehicles that rely on integrated
control of diurnal and refueling emissions includes vehicle operation
over the full FTP test cycle corresponding to the three-day diurnal
test sequence to precondition and purge the evaporative canister. For
non-integrated systems, there is a preconditioning drive over the UDDS
and a refueling event, followed by repeated UDDS driving to purge the
evaporative canister. The refueling emission test procedures are
described in 40 CFR 86.150 through 86.157.
(2) The US06 driving cycle is specified in paragraph (g) of
appendix I to 40 CFR part 86. Note that the US06 driving cycle
represents about 8.0 miles of relatively aggressive driving.
(3) The SC03 driving cycle is specified in paragraph (h) of
appendix I to 40 CFR part 86. Note that the SC03 driving schedule
represents about 3.6 miles of urban driving with the air conditioner
operating.
(4) The hot portion of the LA-92 driving cycle is specified in
paragraph (c) of appendix I to 40 CFR part 86. Note that the hot
portion of the LA-92 driving cycle represents about 9.8 miles of
relatively aggressive driving for commercial trucks. This driving cycle
applies for heavy-duty vehicles above 10,000 pounds GVWR and at or
below 14,000 pounds GVWR only for vehicles subject to Tier 3 standards.
(5) The Highway Fuel Economy Test (HFET) is specified in appendix I
to 40 CFR part 600. Note that the HFET represents about 10.2 miles of
rural and freeway driving with an average speed of 48.6 mi/hr and a
maximum speed of 60.0 mi/hr. See Sec. 1066.840.
(6) Cold temperature standards apply for NMOG+NOX (or
NMHC), PM, and CO emissions when vehicles operate over the FTP at a
nominal temperature of -7 [deg]C. See subpart H of this part.
(7) Emission measurement to determine air conditioning credits for
greenhouse gas standards. In this optional procedure, manufacturers
operate vehicles over repeat runs of the AC17 test sequence to allow
for calculating credits as part of demonstrating compliance with
CO2 emission standards. The AC17 test sequence consists of a
UDDS preconditioning drive, followed by emission measurements over the
SC03 and HFET driving cycles. See Sec. 1066.845.
(8) The mid-temperature intermediate soak FTP is specified as the
procedure for Partial Soak Emission Testing in Section E4.4 of
California ARB's PHEV Test Procedures for plug-in hybrid electric
vehicles, in Part II Section I.7 of California ARB's LMDV Test
Procedures for other hybrid electric vehicles, and in Part II, Section
B.9.1 and B.9.3 of California ARB's LMDV Test Procedures
[[Page 28214]]
for other vehicles (both incorporated by reference, see Sec.
1066.1010).
(9) The early driveaway FTP is specified as the procedure for Quick
Drive-Away Emission Testing in Section E4.5 of California ARB's PHEV
Test Procedures for plug-in hybrid electric vehicles, in Part II
Section I.8 of California ARB's LMDV Test Procedures for other hybrid
electric vehicles, and in Part II, Section B.9.2 and B.9.4 of
California ARB's LMDV Test Procedures for other vehicles (both
incorporated by reference, see Sec. 1066.1010). Additionally, vehicle
speed may not exceed 0.0 mi/hr until 7.0 seconds into the driving
schedule and vehicle speed may not exceed 2.0 mi/hr from 7.1 through
7.9 seconds.
(10) The high-load PHEV engine starts US06 is specified in Section
E7.2 of California ARB's PHEV Test Procedures using the cold-start US06
Charge-Depleting Emission Test (incorporated by reference, see Sec.
1066.1010).
(d) The following provisions apply for all testing:
(1) Ambient temperatures encountered by the test vehicle must be
(20 to 30) [deg]C, unless otherwise specified. Where ambient
temperature specifications apply before or between test measurements,
the vehicle may be exposed to temperatures outside of the specified
range for up to 10 minutes to account for vehicle transport or other
actions to prepare for testing. The temperatures monitored during
testing must be representative of those experienced by the test
vehicle. For example, do not measure ambient temperatures near a heat
source.
(2) Do not operate or store the vehicle at an incline if good
engineering judgment indicates that it would affect emissions.
(3) If a test is void after collecting emission data from previous
test segments, the test may be repeated to collect only those data
points needed to complete emission measurements. You may combine
emission measurements from different test runs to demonstrate
compliance with emission standards.
(4) Prepare vehicles for testing as described in Sec. 1066.810.
(e) The following figure illustrates the FTP test sequence for
measuring exhaust and evaporative emissions:
Figure 1 to Paragraph (e)--FTP Test Sequence
[GRAPHIC] [TIFF OMITTED] TR18AP24.075
0
125. Amend Sec. 1066.805 by revising paragraph (c) to read as follows:
Sec. 1066.805 Road-load power, test weight, and inertia weight class
determination.
* * * * *
(c) For FTP, US06, SC03, New York City Cycle, HFET, and LA-92
testing, determine road-load forces for each test vehicle at speeds
between 9.3 and 71.5 miles per hour. The road-load force must represent
vehicle operation on a smooth, level road with no wind or calm winds,
no precipitation, an ambient temperature of approximately 20 [deg]C,
and atmospheric pressure of
[[Page 28215]]
98.21 kPa. You may extrapolate road-load force for speeds below 9.3 mi/
hr.
0
126. Revise Sec. 1066.830 to read as follows:
Sec. 1066.830 Supplemental Federal Test Procedures; overview.
Sections 1066.831 and 1066.835 describe the detailed procedures for
the Supplemental Federal Test Procedure (SFTP). This testing applies
for Tier 3 vehicles subject to the SFTP standards in 40 CFR 86.1811-17
or 86.1816-18. The SFTP test procedure consists of FTP testing and two
additional test elements--a sequence of vehicle operation with more
aggressive driving and a sequence of vehicle operation that accounts
for the impact of the vehicle's air conditioner. Tier 4 vehicles
subject to 40 CFR 86.1811-27 must meet standards for each individual
driving cycle.
(a) The SFTP standard applies as a composite representing the three
test elements. The emission results from the aggressive driving test
element (Sec. 1066.831), the air conditioning test element (Sec.
1066.835), and the FTP test element (Sec. 1066.820) are analyzed
according to the calculation methodology and compared to the applicable
SFTP emission standards as described in 40 CFR part 86, subpart S.
(b) The test elements of the SFTP may be run in any sequence that
includes the specified preconditioning steps.
0
127. Amend Sec. 1066.831 by revising paragraph (e)(2) to read as
follows:
Sec. 1066.831 Exhaust emission test procedures for aggressive
driving.
* * * * *
(e) * * *
(2) Operate the vehicle over the full US06 driving schedule, with
the following exceptions that apply only for Tier 3 vehicles:
(i) For heavy-duty vehicles above 10,000 pounds GVWR, operate the
vehicle over the Hot LA-92 driving schedule.
(ii) Heavy-duty vehicles at or below 10,000 pounds GVWR with a
power-to-weight ratio at or below 0.024 hp/pound may be certified using
only the highway portion of the US06 driving schedule as described in
40 CFR 86.1816.
* * * * *
0
128. Amend Sec. 1066.1001 by removing the definition for ``SFTP'' and
adding a definition for ``Supplemental FTP (SFTP)'' in alphabetical
order to read as follows:
Sec. 1066.1001 Definitions.
* * * * *
Supplemental FTP (SFTP) means the collection of test cycles as
given in Sec. 1066.830.
* * * * *
0
129. Amend Sec. 1066.1010 by:
0
a. Revising paragraph (b)(3); and
0
b. Adding paragraph (c).
The revision and addition read as follows:
Sec. 1066.1010 Incorporation by reference.
* * * * *
(b) * * *
(3) SAE J1711 FEB2023, Recommended Practice for Measuring the
Exhaust Emissions and Fuel Economy of Hybrid-Electric Vehicles,
Including Plug-In Hybrid Vehicles; Revised February 2023, (``SAE
J1711''); IBR approved for Sec. Sec. 1066.501(a); 1066.1001.
* * * * *
(c) California Air Resources Board (California ARB). California Air
Resources Board, 1001 I Street, Sacramento, CA 95812; (916) 322-2884;
www.arb.ca.gov:
(1) California 2026 and Subsequent Model Year Criteria Pollutant
Exhaust Emission Standards and Test Procedures for Passenger Cars,
Light-Duty Trucks, And Medium-Duty Vehicles (``California ARB's LMDV
Test Procedures''); Adopted August 25, 2022; IBR approved for Sec.
1066.801(c).
(2) California Test Procedures for 2026 and Subsequent Model Year
Zero-Emission Vehicles and Plug-In Hybrid Electric Vehicles, in the
Passenger Car, Light-Duty Truck and Medium-Duty Vehicle Classes
(``California ARB's PHEV Test Procedures''); Adopted August 25, 2022;
IBR approved for Sec. 1066.801(c).
PART 1068--GENERAL COMPLIANCE PROVISIONS FOR HIGHWAY, STATIONARY,
AND NONROAD PROGRAMS
0
130. The authority citation for part 1068 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.
0
131. Amend Sec. 1068.30 by revising the definitions for ``Family'' and
``Void'' to read as follows:
Sec. 1068.30 Definitions.
* * * * *
Family means engine family, emission family, or test group, as
applicable, under the standard-setting part.
* * * * *
Void means, with respect to a certificate of conformity or an
exemption, to invalidate the certificate or the exemption ab initio
(``from the beginning''). If we void a certificate, all the engines/
equipment introduced into U.S. commerce under that family for that
model year are considered uncertified (or nonconforming) and are
therefore not covered by a certificate of conformity, and you are
liable for all engines/equipment introduced into U.S. commerce under
the certificate and may face civil or criminal penalties or both. This
applies equally to all engines/equipment in the family, including
engines/equipment introduced into U.S. commerce before we voided the
certificate. If we void an exemption, all the engines/equipment
introduced into U.S. commerce under that exemption are considered
uncertified (or nonconforming), and you are liable for engines/
equipment introduced into U.S. commerce under the exemption and may
face civil or criminal penalties or both. You may not sell, offer for
sale, or introduce or deliver into commerce in the United States or
import into the United States any additional engines/equipment using
the voided exemption.
* * * * *
[FR Doc. 2024-06214 Filed 4-17-24; 8:45 am]
BILLING CODE 6560-50-P