G/SCM/Q2/USA/60  
 
17 April 2013  
(13-2044)  Page: 1/4  
Committee on Subsidies and  
Countervailing Measures  Original: English  
 
 SUBSIDIES 
REPLIES TO QUESTIONS POSED BY JAPAN1 REGARDING THE NEW AND  
FULL NOTIFICATION OF THE UNITED STATES2 
The following communication, dated 17 April 2013, is being circulated at the request of the 
Delegation of the United States. 
 
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Energy Conservation Program –Transportation Sector 
 
Question 1 
 According to footnote 3 of the U.S. notifi cation (G/SCM/N/220/USA), two sub programs, 
'Batteries and Electric Drive Technology ' and 'Vehicle and Systems Simulation & 
Testing', were formerly 'Hybrid Electric Syst ems'. If we recall the previous answers from 
the U.S. (G/SCM/Q2/USA/51), 'Hybrid Electr ic Systems' is the sub program which 
brought together the activities in 'Vehicle Sy stems' and 'Hybrid and Electric Propulsion'. 
With regard to the transfer from 'Vehicle Sy stems' and 'Hybrid and Electric Propulsion' 
to 'Hybrid Electric Systems', the U.S. expl ained that the change was to rename the 
programs. What kind of change took place in the transfer from 'Hybrid Electric Systems' 
to 'Batteries and Electric Drive Technolo gy' and 'Vehicle and Systems Simulation & 
Testing'? Please explain the reasons for such frequent renaming of the programs. Is it 
because the activities move on to a different  stage, different configuration, different 
contractual agreement between federal agen cies, private sector partners, etc?  
 Reply 
 
In the Vehicle Technologies budget structure,  Hybrid Electric Systems was changed to 
two separate subprograms, “Batteries and Electr ic Drive Technology” and “Vehicle and Systems 
Simulation & Testing” in an effort to use subprogram names that better reflect the work 
performed. It was intended to improve transparen cy and help ensure subprogram names would be 
more intuitive to stakeholders and the public. The name change is not the result of a difference in the work performed or related contractual agreements or mechanisms. 
 
Question 2  According to footnote 4, 'Technology In tegration' was divided into 'Outreach, 
Deployment & Analysis', 'Advanced Ba ttery Manufacturing', 'Transportation 
Electrification' and 'Alternati ve Fueled Vehicles'. In FY2 010, the annual appropriations 
for these programs were zero, except for 'Out reach, Deployment & Analysis'. Were these 
programs also renamed or terminated in FY 2010? Please explain what kind of change 
took place in these programs.  
                                               
1 G/SCM/Q2/USA/55. 
2 G/SCM/N/220/USA.   G/SCM/Q2/USA/60 
 
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  Reply 
 
This question identifies an error in the footnote/formatting on this page. Footnote 4 is intended to refer to Outreach, Deployment & Analysis, an ongoing subprogram in the Vehicle Technologies 
Program. Advanced Battery Manufacturing, Transpor tation Electrification, and Alternative Fuel 
Vehicles are Recovery Act programs and should ha ve been referenced using footnote 5. Although 
these projects are multi-year projects, the Recove ry Act provided one-time funding; they do not 
receive annual appropriations through the Vehicle Technologies Program and as such, received no 
appropriation in 2010.  
Energy Conservation – Industry Sector 
 Question 3  
Comparing the previous U.S. notification (G/SCM/N/186/USA) and the new U.S. 
notification (G/SCM/N/220/USA), a new sub program appears under 'Industries of the 
Future: Glass Industry'. Is this a new sub program? Or, is it an existing program 
renamed? In that case, which program was re named as 'Industries of the Future: Glass 
Industry'?   Reply 
 The Industries of the Future: Glass Industry activity was an active part of the program before 2007 and received annual appropriations. In 2007 the DOE Program was closing out all activities in 
this area and did not request nor receive fundin g for this area. In 2009 the DOE did not request 
funding for the Glass Industry activity but did receiv e appropriations to continue activities in this 
area. After 2009, the DOE continued to close out this activity and has not requested or received 
additional funding. 
 Question 4  
With regard to 'Industries for the Future: Me tal Casting Industry and Glass Industry', 
the annual appropriations in FY2010 for these programs were zero. Were these programs terminated? What are the reasons for frequent changes in sub programs?  
 
Reply 
 
The DOE ITP program was closing out both the glass and metals casting industries subprogram's in 
2010. The program has moved away from supporting specific industrial sectors and is now focused on crosscutting foundational technologies which can benefit multiple industrial sectors, including those sectors that DOE previously focused on. 
 
Innovative Technology Loan Guarantee Program 
 
Question 5 
 Please explain the eligibility requirements to  participate in this program. Are foreign 
entities eligible for receiving subsidies under this program? 
 Reply 
 
Under Section 1703, eligible projects must be located in the United States, employ innovative 
technology (see response to Q.6 for technology categories), as opposed to technologies in use in the United States, avoid reduce or sequester air pollutants or anthropogenic emissions of 
greenhouse gases, and satisfy other financial, technical and legal requirements set forth in 
applicable regulations and solicitations. Otherwise eligible projects owned by foreign entities are not excluded from eligibility for loan guarantees under this program. 
 
Question 6  According to item 5, this program was provid ed for "many other types of projects that 
use advanced technologies in commercial proj ects that avoid, reduce, or sequester air G/SCM/Q2/USA/60 
 
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  pollutants or anthropogenic emissions of gr eenhouse gases". Are the 'projects that use 
advanced technologies' limited to the energy sector?  Reply 
 Technologies eligible for loan guarantees under Section 1703 are specified in section 1703 (b), as follows: (1) renewable energy systems; (2) advanced fossil energy technology (including coal 
gasification meeting certain criteria); (3) hydrogen fuel cell technology for residential, industrial or 
transportation applications; (4) advanced nuclear energy facilities; (5) carbon capture and sequestration practices and technologies, including agricultural and forestry practices that store and sequester carbon; (6) efficient electrical generation, transmission and distribution 
technologies; (7) efficient end-use energy technologies; (8) production facilities for fuel efficient 
vehicles, including hybrid and advanced diesel vehicles; (9) pollution control equipment; and (10) refineries, meaning facilities at which crude oil is refined into gasoline. 
 
Question 7  
Please explain the differences in elig ibility criteria between Section 1703 and 
Section 1705, if there are any.  Reply 
 Section 1705 was a temporary program for eligible projects that commenced construction on or prior to 30 September 2011. Eligible technologies under Section 1705 were limited to 
(1) renewable energy systems, including incremen tal hydropower, that generate electricity or 
thermal energy, and facilities that manufacture related component; (2) electric power transmission systems, including upgrading and reconductoring projects; and (3) certain biofuels projects that 
produce transportation fuels that substantially reduce life-cycle greenhouse gas emissions 
compared to other transportation fuels. Section 1705 projects were not required to use innovative technologies.  
Advanced Technology Vehicle Manufacturing Program (ATVM) 
 
Question 8 
 
Please explain the eligibility requirements to  participate in this program. Are foreign 
entities eligible for receiving subsidies under this program? 
 
Reply 
 ATVM loans may be made to eligible applicants to finance the cost of (i) reequipping, expanding or 
establishing manufacturing facilities in the United States to produce advanced technology vehicles 
(ATVs) or qualifying components or (ii) engineering integration performed in the United States of ATVs or qualifying components. The underlying ATVM statute and rules set forth technical, 
financial, legal and other eligibility requirements for an ATVM loan. Otherwise eligible applicants 
that are foreign entities are not excluded from eligibility for an ATVM loan. 
 
Generally, in order for a vehicle to be eligible as an “ATV” for an ATVM loan, the vehicle must be 
one of the following: (a) a passenger automobile or light truck (as defined in 49 CFR 523) that satisfies both of the following standards: (x) the em ission standards set forth in clauses (i) and (ii) 
of the definition of “advanced technology vehicle”  in 10 CFR 611.2, as evidenced by an emissions 
certification delivered in accordance with 10 CFR 611.3(a) and (y) the fuel economy standards set 
forth in clause (iii) of the definition of “advanced technology vehicle” in 10 CFR 611.2, as evidenced by a demonstration of the vehicle’s fuel economy performance in accordance with 10 
CFR 611.3(b); or (b) an ultra efficient vehicle (as more particularly described in the answer to 
Question 9 below).  
In order for a component to be eligible as a “qualifying component” for an ATVM loan, the 
component must be both of the following: (a) designed for ATVs; and (b) installed in ATVs for the purpose of meeting the emission and fuel economy standards set forth in clauses (i), (ii) and (iii) of the definition of “advanced technology vehicles” in 10 CFR 611.2. 
 G/SCM/Q2/USA/60 
 
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  Generally, in order for an applicant to be technically eligible for an ATVM loan, the applicant must 
be either one of the following: (a) an automotive  manufacturer satisfying one of the following fuel 
economy requirements (as specified in 10 CFR 611. 100(b)): (x) if the applicant is an automotive 
manufacturer that built vehicles in model year 2005 that were subject to Corporate Average Fuel 
Economy (CAFE) standards, then the applicant mu st demonstrate that the adjusted average fuel 
economy for the vehicle fleet it produced in the most recent year for which final CAFE compliance 
date is available is at least equal to the adjusted  average fuel economy of the applicant’s fleet for 
model year 2005; or (y) if the applicant is an automotive manufacturer that did not build vehicles 
in model year 2005 that were subject to CAFÉ standards, then the applicant must demonstrate 
that the projected combined fuel economy for the ATV’s being financed with the ATVM loan is at least equal to the industry adjusted average fuel  economy for equivalent vehicles built in model 
year 2005; or (b) a manufacturer of a qualifying component. 
 Question 9 
 
According to the item 5, "[i]n 2010, Sectio n 136 was amended to include ultra-efficient 
vehicles within the definition of advanced te chnology vehicles". Please describe what is 
included within the definition of 'ultra-efficient vehicles'. 
 Reply 
 
As provided for at 42 USC 17013(a)(5), an “ultra efficient vehicle” is defined as a fully closed 
compartment vehicle designed to carry at least two (2) adult passengers that achieves either (x) at least 75 miles per gallon while operating on gasoline or diesel fuel or (y) at least 75 miles 
per gallon equivalent while operating as a hybrid electric-gasoline or electric-diesel vehicle or 
(z) at least 75 miles per gallon equivalent wh ile operating as a fully electric vehicle. 
 
Question 10 
 
Please explain what kind of assistance is pr ovided, i.e. what kinds of costs are covered, 
under this program. Is the loan provided to cover only those costs for reequipping, 
expanding or establishing manufacturing facilities in the U.S.? 
 Reply 
 Proceeds of an ATVM loan can only be used to  pay (or reimburse the applicant for payments of) 
eligible costs. Eligible costs are: (i) costs that are reasonably related to reequipping, expanding or 
establishing a manufacturing facility in the United  States to produce advanced technology vehicles 
(ATVs) or qualifying components; and (ii) cost s of engineering integration performed in the 
United States for ATVs or qualifying components; in each case that have been incurred after substantial completion of the application. Examples of eligible costs include, but are not limited to, 
(i) costs of purchasing and installing equipment into a qualified facility and (ii) costs of direct 
materials and labor for reequipping, expanding or es tablishing a qualified facility or performing 
qualified engineering integration. Examples of ineligible costs include, but are not limited to 
(i) costs for vehicle variants that are not ATVs, (ii) costs for components that are not qualifying 
components, (iii) costs for research and development, (iv) costs for operation and maintenance and general administration and overhead and (v) funding for reserve accounts. 
 
 
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