Light-Duty Vehicle Greenhouse Gas 

Emission Standards and Corporate 

Average Fuel Economy Standards 

EPA Response to Comments Document 

for Joint Rulemaking

EPA-420-R-10-012a

April 2010

Assessment and Standards Division

Office of Transportation and Air Quality

U.S. Environmental Protection Agency

Light-Duty Vehicle Greenhouse Gas 

Emission Standards and Corporate 

Average Fuel Economy Standards 

EPA Response to Comments Document 

for Joint Rulemaking
Introduction 

The following is the Environmental Protection Agency’s (EPA) Response to Comments 

document for the EPA and National Highway Traffic Safety Administration (NHTSA) Joint 

Rulemaking: Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average 

Fuel Economy Standards. The following document contains verbatim excerpts of the 

commenter’s text followed by EPA’s responses. Citizen comments that raised unique 

substantive issues are included. In addition, several thousand citizens commented through mass 

e-mail campaigns; these comments are not included individually, but rather examples are 

provided. The comments and responses are organized by topic (see Table of Contents prior to 

each section) to help the reader find comments and responses of interest. An index of 

commenters and the associated docket numbers is also provided. 

This is an EPA document and does not contain NHTSA’s responses to comments. NHTSA’s 

responses to comments are contained in the joint preamble and the NHTSA Final Regulatory 

Impact Analysis (RIA) for the rule. 

ii 
 

 

 

TABLE OF CONTENTS 

Index of Proposal Commenters 

1. General Comments 1-1 

2. Reserved 2-1 
 

3. EPA CO2 Standards 3-1 

4. EPA Response to Comments on Joint Issues and Technical Work 4-1 

5. EPA Vehicle Program and Estimated Impacts 5-1 

6. Reserved 6-1 
 

7. Other Comments 7-1 

iii 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Index of Proposal Commenters 

Proposed Rulemaking To Establish Light-Duty Vehicle Greenhouse 

Gas Emission Standards and Corporate Average Fuel Economy 

Standards 

Commenter Abbreviation Docket ID Number(s) 

Adcock, James OAR-2009-0472-5385 

Air Permitting Forum OAR-2009-0472-0128, 7253 

NHTSA-2009-0059-0128 

Alliance of Automobile Manufacturers Alliance OAR-2009-0472-6952 

Aluminum Association NHTSA-2009-0059-0067.1, 0067.2, 0067.3, 0067 

American Chemical Society OAR-2009-0472-3985 

American Chemistry Council ACC OAR-2009-0472-8259 

American Chemistry Council, American 

Iron and Steel Institute, American Meat 

Institute, Corn Refiners Association, 

National Oilseed Processors Association 

NHTSA-2009-0059-0094.1, 0094 

American Council for an Energy Efficient 

Economy 

OAR-2009-0472-7260 

American Farm Bureau Federation AFBF OAR-2009-0472-7172, 7171 

American Forest and Paper Association AF&PA OAR-2009-0472-7126 

American Iron and Steel Institute OAR-2009-0472-7088 

American Lung Association of California OAR-2009-0472-7216 

American Petroleum Institute OAR-2009-0472-0089.1, 0089, 7143 

NHTSA-2009-0059-0089.1, 0089 

Arizona Public Service APS OAR-2009-0472-7107 

Artega Automobil GmbH & Co. KG OAR-2009-0472-7481 

Arthur G. Randol OAR-2009-0472-7254 

Association of International Automobile 

Manufacturers 

AIAM OAR-2009-0472-0084.1, 0084, 7123 

NHTSA-2009-0059-0084.1, 0084 

Aston Martin Lagonda OAR-2009-0472-7217 

Automotive Aftermarket Industry 

Association 

AAIA; et.al OAR-2009-0472-7057 

BCCA Appeal Group the Group OAR-2009-0472-7505 

Bieling, Andrea OAR-2009-0472-8704 

BiotectConnect, Inc. OAR-2009-0472-7203 

BMW of North America, LLC BMW OAR-2009-0472-0092.1, 0092, 7145 

NHTSA-2009-0059-0092.1, 0092 

BorgWarner OAR-2009-0472-0076, 7289 

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NHTSA-2009-0059-0076 

Brick Industry Association OAR-2009-0472-11279 

Brooks, Dawn OAR-2009-0472-3851 

California Air Resources Board OAR-2009-0472-7189 

California Cotton Ginners Association CCGA OAR-2009-0472-7139 

California State Senate OAR-2009-0472-7532 

Center for Auto Safety OAR-2009-0472-0117.1, 0117, 7259 

NHTSA-2009-0059-0117.1, 0117 

Center for Biological Diversity OAR-2009-0472-0053.1, 0053, 0090.1, 0090, 0104.1, 

0104.2, 0104.3, 0104.4, 0104.5, 0104.6, 0104.7, 

0104.8, 0104, 0105.1, 0105.2, 0105, 0110.1, 0110.2, 

0110.3, 0110.4, 0110.5, 0110.6, 0110.7, 0110, 0115.1, 

0115.2, 0115.3, 0115.4, 0115.5, 0115.6, 0115.7, 

0115.8, 0115, 0118.1, 0118.2, 0118.3, 0118.4, 0118.5, 

0118, 7269 

NHTSA-2009-0059-0053.1, 0053, 0090.1, 0090, 

0104.1, 0104.2, 0104.3, 0104.4, 0104.5, 0104.6, 

0104.7, 0104.8, 0104, 0105.1, 0105.2, 0105, 0110.1, 

0110.2, 0110.3, 0110.4, 0110.5, 0110.6, 0110.7, 0110, 

0115.1, 0115.2, 0115.3, 0115.4, 0115.5, 0115.6, 

0115.7, 0115.8, 0115, 0118.1, 0118.2, 0118.3, 0118.4, 

0118.5, 0118 

Chamber of Commerce of the United 

States of America 

OAR-2009-0472-7233 

Charleston Metro Chamber of Commerce OAR-2009-0472-7061 

Chew, Yuli OAR-2009-0472-7042 

Chrysler Group LLC Chrysler NHTSA-2009-0059-0124 

Clark, Roy OAR-2009-0472-7257 

Clean Energy Fuels OAR-2009-0472-7220 

Coalition for Responsible Regulation OAR-2009-0472-7164 

Competitive Enterprise Institute OAR-2009-0472-7281 

Congress of Racial Equality OAR-2009-0472-7506 

Consumer Federation of America OAR-2009-0472-7272 

Consumers Energy OAR-2009-0472-7264 

Council of Industrial Boiler Owners CIBO OAR-2009-0472-7271 

County of Greenville NHTSA-2009-0059-0101 

County of Greenville, SC OAR-2009-0472-8346 

Cummins Inc. OAR-2009-0472-0077.1, 0077, 0080, 7205 

NHTSA-2009-0059-0077.1, 0077, 0080 

Custom Lights and Iron OAR-2009-0472-7110 

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Denso International America, Inc. OAR-2009-0472-8765 

Devon Energy Corporation OAR-2009-0472-10450 

Dillard, Joyce OAR-2009-0472-7226 

Dinter, Bridget OAR-2009-0472-7250 

Dow Chemical Company Dow OAR-2009-0472-7221 

Duke Energy OAR-2009-0472-7136 

Dynamic Research, Inc OAR-2009-0472-0112.1, 0112, 7238 

NHTSA-2009-0059-0112.1, 0112 

Ecology Center OAR-2009-0472-4068 

Edison Electric Institute OAR-2009-0472-7212 

Energy, Environmental & Public Utility 

Practice Group 

OAR-2009-0472-8884 

Energy-Intensive Manufacturers Working 

Group 

OAR-2009-0472-11276 

Environmental Defense Fund OAR-2009-0472-7285 

eTec OAR-2009-0472-7670 

European Automobile Manufacturer's 

Association 

OAR-2009-0472-7444 

European Small Volume Car 

Manufacturers' Alliance 

ESCA OAR-2009-0472-7287 

Ferrari S.p.a OAR-2009-0472-7230, 7214 

Fertilizer Institute OAR-2009-0472-7279 

Fisker Automotive, Inc. OAR-2009-0472-8732 

Ford Motor Company OAR-2009-0472-0063.1, 0063, 0068.1, 0068, 7082 

NHTSA-2009-0059-0063.1, 0063, 0068.1, 0068 

Ford, Jonathan L. OAR-2009-0472-7674 

Fraas, Arthur, G. OAR-2009-0472-7523 

Fran Jackson OAR-2009-0472-4064 

Fuji Heavy Industries USA, Inc. Subaru NHTSA-2009-0059-0070.1, 0070 

General Motors OAR-2009-0472-6953 

Georgia Department of Natural Resources OAR-2009-0472-7150 

Georgia-Pacific GP OAR-2009-0472-7122 

Gluckstern, Henry OAR-2009-0472-5258 

Guardian Industries Corp. OAR-2009-0472-7124 

Hagen, David L. OAR-2009-0472-7218 

Hartung, Lynn OAR-2009-0472-4070 

Heritage Foundation OAR-2009-0472-7052 

Herzlich Consulting, Inc. OAR-2009-0472-4567 

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Honda Motor Company NHTSA-2009-0059-0095.1, 0095 

Honeywell International, Inc. OAR-2009-0472-7206 

Honeywell Transportation Systems OAR-2009-0472-7248 

Hyde, James OAR-2009-0472-7258 

Hyundai Motor Company OAR-2009-0472-0103.1, 0103, 7231 

NHTSA-2009-0059-0103.1, 0103 

IMPCO Technologies, Inc. OAR-2009-0472-7282 

Industry Coalition OAR-2009-0472-7673 

INRIX NHTSA-2009-0059-0079.1, 0079 

Institute for Energy Research OAR-2009-0472-7225 

Institute for Liberty OAR-2009-0472-7284 

Institute for Policy Integrity at New York 

University School of Law and 

Environmental Defense Fund 

OAR-2009-0472-0114.1, 0114.2, 0114, 7246 

NHTSA-2009-0059-0114.1, 0114.2, 0114 

Insurance Institute for Highway Safety IIHS NHTSA-2009-0059-0125.1, 0125 

International Council on Clean 

Transportation 

OAR-2009-0472-0093.1, 0093, 7156 

NHTSA-2009-0059-0093.1, 0093 

Investor Network on Climate Risk OAR-2009-0472-7243 

Jaguar Land Rover OAR-2009-0472-0081, 7504 

NHTSA-2009-0059-0081 

Johnson, Kenneth C. OAR-2009-0472-0134.1, 0134, 7135 

NHTSA-2009-0059-0134.1, 0134 

Karplus, Valerie J. OAR-2009-0472-7280 

Kleinbaum, Rob OAR-2009-0472-4074 

Koenigsegg Automotive AB OAR-2009-0472-7194 

KTM-Sportsmotorcycle AG OAR-2009-0472-7183 

Lance Tunick OAR-2009-0472-7293, 7208 

Lawrence Berkeley National Laboratory OAR-2009-0472-0060.1, 0060, 6696 

NHTSA-2009-0059-0060.1, 0060 

League of Women Voters of South 

Carolina 

LWVSC OAR-2009-0472-0137, 11309 

NHTSA-2009-0059-0137 

Lotus Cars Ltd. OAR-2009-0472-0066, 7249 

NHTSA-2009-0059-0066 

Manufacturers of Emission Controls 

Association 

OAR-2009-0472-7108 

Mass Comment Campaign 

(13,829, Union of Concerned Scientists) 

OAR-2009-0472-3906 

Mass Comment Campaign 

(18,583, unknown organization) 

OAR-2009-0472-3907 

vii 
 

 

 

 

 

 

 

 

 

 

 

Mass Comment Campaign 

(19, unknown organization) 

OAR-2009-0472-5748 

Mass Comment Campaign 

(2,332, unknown organization) 

OAR-2009-0472-5747 

Mass Comment Campaign 

(27,307, Alliance for Climate Protection) 

OAR-2009-0472-7295 

Mass Comment Campaign 

(32,918, Sierra Club) 

OAR-2009-0472-5749 

Mass Comment Campaign 

(326, Student PIRGs) 

OAR-2009-0472-11293 

Mass Comment Campaign 

(48 unknown organization) 

OAR-2009-0472-10556 

Mass Comment Campaign 

(7,239, unknown organization) 

OAR-2009-0472-3905 

Massachusetts Department of 

Environmental Protection 

OAR-2009-0472-7195 

MD McLaren Automotive Ltd. OAR-2009-0472-0078, 7288 

NHTSA-2009-0059-0078 

Mercedes-Benz Daimler AG OAR-2009-0472-7204 

Mindful Consumption, Inc. OAR-2009-0472-5327 

Mississippi Department of Environmental 

Quality 

OAR-2009-0472-7102 

Missouri Department of Natural Resources, 

Air Pollution Control Program 

OAR-2009-0472-0051.1, 0051, 7480 

NHTSA-2009-0059-0051.1, 0051 

Mitsubishi Motors R & D of America MRDA OAR-2009-0472-0085.1, 0085, 0127.1, 0127.2, 0127, 

7125 

NHTSA-2009-0059-0085.1, 0085, 0127.1, 0127.2, 

0127 

Morgan Motor Company Ltd. OAR-2009-0472-7190 

Morton, Jim OAR-2009-0472-3639 

Motor and Equipment Manufacturers 

Association 

OAR-2009-0472-0083.1, 0083, 7121 

NHTSA-2009-0059-0083.1, 0083 

National Asphalt Pavement Association OAR-2009-0472-7224 

National Association of Clean Air 

Agencies 

NACAA OAR-2009-0472-7071 

National Association of Home Builders NAHB OAR-2009-0472-11278 

National Association of Manufacturers OAR-2009-0472-0082, 7215 

NHTSA-2009-0059-0082 

National Automobile Dealers Association NADA OAR-2009-0472-7182 

National Climate Coalition NHTSA-2009-0059-0086.1, 0086 

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National Cotton Ginners Association OAR-2009-0472-7209 

National Mining Association NMA OAR-2009-0472-7237 

National Petrochemical & Refiners 

Association 

OAR-2009-0472-7234 

National Renewable Energy Laboratory OAR-2009-0472-4798 

National Rural Electric Cooperative 

Association 

OAR-2009-0472-7252 

Natural Resources Defense Council OAR-2009-0472-0129, 7530, 7274 

NHTSA-2009-0059-0129 

New York City Law Department OAR-2009-0472-0091.1, 0091, 7240 

NHTSA-2009-0059-0091.1, 0091 

New York State Department of 

Environmental Conservation 

OAR-2009-0472-7454 

New York State Department of 

Transportation 

NYSDOT OAR-2009-0472-0098, 7531 

NHTSA-2009-0059-0098 

New York University School of Law, 

Institute for Policy Integrity 

IPI OAR-2009-0472-0111.1, 0111.2, 0111, 7232 

NHTSA-2009-0059-0111.1, 0111.2, 0111 

NGVAmerica OAR-2009-0472-7236 

NISEI Farmers League OAR-2009-0472-7142 

Nissan North America OAR-2009-0472-6798 

Northeast States for Coordinated Air Use 

Management 

OAR-2009-0472-7235 

Pacific Unitarian Church, Green Sanctuary 

Project 

OAR-2009-0472-7241 

Peabody Energy Company OAR-2009-0472-7223 

Pendleton, Tom OAR-2009-0472-2094 

People's Republic of China OAR-2009-0472-0135.1, 0135, 11269 

NHTSA-2009-0059-0135.1, 0135 

Pew Center OAR-2009-0472-7239 

Pittsburgh Glass Works OAR-2009-0472-0109.1, 0109, 7244 

NHTSA-2009-0059-0109.1, 0109 

Porsche Cars North America, Inc. OAR-2009-0472-7431 

Portland Cement Association OAR-2009-0472-7207 

Process Engineers OAR-2009-0472-7166 

Public Citizen and Safe Climate Campaign OAR-2009-0472-0071.1, 0071, 7050 

NHTSA-2009-0059-0071.1, 0071 

Public Hearing Transcript, Detroit OAR-2009-0472-6185 

Public Hearing Transcript, Los Angeles OAR-2009-0472-7283 

Public Hearing Transcript, New York OAR-2009-0472-4621 

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PurigeN98 OAR-2009-0472-7201 

Recreational Vehicle Industry Association RVIA NHTSA-2009-0059-0107 

Rose, Stephen OAR-2009-0472-0106.1, 0106, 7276 

NHTSA-2009-0059-0106.1, 0106 

Saab Automobile AB Saab OAR-2009-0472-7103 

SABIC Innovative Plastic OAR-2009-0472-7090 

SCANA Corporation OAR-2009-0472-7316 

Schade, Michael T. OAR-2009-0472-7261.1 

Seeds of Hope OAR-2009-0472-7111 

Shaw, Donald F. OAR-2009-0472-7270 

Sierra Club OAR-2009-0472-7635 

Sierra Research Inc. OAR-2009-0472-7977 

Society of Motor Manufacturers and 

Traders Limited 

OAR-2009-0472-7229 

South Carolina Chamber of Commerce OAR-2009-0472-7298 

South Carolina Department of Health and 

Environmental Control 

OAR-2009-0472-0075, 7202 

NHTSA-2009-0059-0075 

South Carolina Manufacturers Alliance SCMA OAR-2009-0472-7296 

South Carolina Pulp & Paper Association SCPPA OAR-2009-0472-7479 

South Carolina Wildlife Federation OAR-2009-0472-0136, 11303 

NHTSA-2009-0059-0136 

Southeastern States Air Resource 

Managers, Inc. 

SESARM OAR-2009-0472-7137 

Spurgeon, C. M. OAR-2009-0472-7092 

Spyker Cars OAR-2009-0472-7277 

Stanton, Neil OAR-2009-0472-10169 

State of California NHTSA-2009-0059-0087.1, 0087 

State of Connecticut OAR-2009-0472-0120, 7499 

NHTSA-2009-0059-0120 

State of Connecticut Department of 

Environmental Protection 

OAR-2009-0472-0097, 7301 

NHTSA-2009-0059-0097 

State of New Jersey OAR-2009-0472-0073, 0074, 7109 

NHTSA-2009-0059-0073, 0074 

State of Washington Department of 

Ecology 

OAR-2009-0472-7299 

Steiner, John OAR-2009-0472-8705 

Stockholm Environment Institute-US 

Center 

OAR-2009-0472-7432 

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Texas Chemical Council TCC OAR-2009-0472-7294, 7290 

Texas Commission on Environmental 

Quality 

OAR-2009-0472-7180 

Texas Cotton Ginners Association OAR-2009-0472-7081 

Texas Department of Agriculture OAR-2009-0472-0102, 7300 

NHTSA-2009-0059-0102 

Texas Industry Project TIP OAR-2009-0472-7430 

Texas Oil and Gas Association OAR-2009-0472-11275 

Toyota Motor North America OAR-2009-0472-7291 

U.S. Coalition for Advanced Diesel Cars OAR-2009-0472-0113.1, 0113, 7496 

NHTSA-2009-0059-0113.1, 0113 

U.S. EPA, Office of Enforcement and 

Compliance Assurance, Office of Federal 

Activities 

NHTSA-2009-0059-0052.1, 0052 

Union of Concerned Scientists OAR-2009-0472-0096, 7181 

NHTSA-2009-0059-0096 

United Auto Workers OAR-2009-0472-7056 

University of California, Los Angeles 

School of Law 

OAR-2009-0472-7263 

University of California, Santa Barbara, 

Bren Working Group on Vehicle Fuel 

Economy 

OAR-2009-0472-7188 

University of Miami, School of Law OAR-2009-0472-6770 

University of Michigan Transportation 

Research Institute 

UMTRI OAR-2009-0472-6802 

University of Pennsylvania, Environmental 

Law Project 

OAR-2009-0472-7286 

US Steel Corporation OAR-2009-0472-7197 

Utility Air Regulatory Group OAR-2009-0472-0116.1, 0116, 7262 

NHTSA-2009-0059-0116.1, 0116 

Vehicles Services Consulting, Inc OAR-2009-0472-0064, 7292, 7083 

NHTSA-2009-0059-0064 

Volkswagen Group of America Volkswagen OAR-2009-0472-7210 

Volvo Car Corporation OAR-2009-0472-0119, 7168 

NHTSA-2009-0059-0119 

Weber, Dave OAR-2009-0472-1410 

Western Agricultural Processors 

Association 

OAR-2009-0472-7140 

Wiesmann GmbH OAR-2009-0472-7198 

Wood, John S. OAR-2009-0472-7157.1x 

xi 
Zaski, Frank OAR-2009-0472-3769 

xii
 
General Comments 

1. General Comments.................................................................................................................. 2 

1.1 General Support ................................................................................................................... 2 

1.2. General Opposition ............................................................................................................ 57 

1-1 
 

EPA Response to Comments 

1. General Comments 

1.1 General Support 

Organization:Alliance of Automobile Manufacturers (Alliance)

 Aluminum Association 

American Chemical Society 

American Council for an Energy Efficient Economy 

American Lung Association of California 

Association of International Automobile Manufacturers (AIAM) 

Bieling, Andrea 

Biotect Connect, Inc. 

BMW of North America, LLC (BMW) 

BorgWarner 

Bright Automotive 

California Air Resources Board 

California State Senate 

Cambell, Bruce 

Chamber of Commerce of the United States of America 

Chew, Yuli 

Chrysler Group LLC (Chrysler) 

Clarke, Darrell 

Clean Energy Fuels 

Coalition for Clean Air 

Consumer Federation of America 

County of Greenville, SC 

Cummins Inc. 

Dewey, Scott 

Eadie, R. Frank 

Ecology Center 

Environment Michigan 

Environment New Jersey 

Environmental Defense Fund 

Epps, Jennifer 

Ford Motor Company 

General Motors 

Georgia Department of Natural Resources 

Glasser, Mark 

Honda Motor Company 

Honeywell International, Inc. 

Honeywell Transportation Systems 

Hyundai Motor Company 

Insurance Institute for Highway Safety (IIHS) 

International Council on Clean Transportation 

Kia Motors 

Lance Tunic 

1-2 
General Comments 

League of Women Voters of South Carolina (LWVSC) 

Lee Auto Components 

Magavern, Bill 

Manufacturers of Emission Controls Association 

Mass Comment Campaign (13,829) (Union of Concerned Scientists) 

Mass Comment Campaign (18,583) (unknown organization) 

Mass Comment Campaign (19) (unknown organization) 

Mass Comment Campaign (2,332) (unknown organization) 

Mass Comment Campaign (27,307) (Alliance for Climate Protection) 

Mass Comment Campaign (32,918) (Sierra Club) 

Mass Comment Campaign (326) (Student PIRGs) 

Mass Comment Campaign (7,239) (unknown organization) 

Mercedes-Benz (Daimler AG) 

Mitsubishi Motors R & D of America (MRDA) 

Motor and Equipment Manufacturers Association 

Mr. Richter - Environmental Capital Partners 

National Asphalt Pavement Association 

National Association of Clean Air Agencies (NACAA) 

National Association of Manufacturers 

National Automobile Dealers Association (NADA) 

Natural Resources Defense Council 

New York City Law Department 

Northeast States for Coordinated Air Use Management 

New York State Department of Environmental Conservation 

New York State Department of Transportation (NYSDOT) 

New York University School of Law, Institute for Policy Integrity (IPI) 

NGVAmerica 

Nissan North America 

Pacific Unitarian Church, Green Sanctuary Project 

Peters, Doug 

Pavely, Fran, California State Senate 

Physicians for Social Responsibility, Los Angeles 

Public Citizen and Safe Climate Campaign 

Sack, Emily 

Seal, Kathy 

Sierra Club 

South Carolina Department of Health and Environmental Control 

South Carolina Pulp & Paper Association (SCPPA) 

South Carolina Wildlife Federation 

South Coast Air Quality Management District 

Southeastern States Air Resource Managers, Inc. (SESARM) 

State of California 

State of Connecticut 

State of Connecticut Department of Environmental Protection 

State of New Jersey 

State of Washington Department of Ecology 

1-3
 
EPA Response to Comments 

Steiner, John 

Toyota Motor North America 

Transportation and Buildings Policy for the State of Massachusetts Executive 

Office of Energy and Environmental Affairs 

U.S. Coalition for Advanced Diesel Cars 

Union of Concerned Scientists 

United Auto Workers 

University of Miami, School of Law 

University of Michigan Transportation Research Institute (UMTRI) 

University of Pennsylvania, Environmental Law Project 

US Steel Corporation 

Volkswagen Group of America (Volkswagen) 

Washington State Department of Commerce 

Webb, Alysha 

Weiner, Jill 

Winograd, Marcy 

Comment: 

Alliance of Automobile Manufacturers (Alliance) 

First, we want to commend EPA and NHTSA for the effort invested in putting this complex joint 

rulemaking together and for taking the lead in harmonizing the CAFE and Greenhouse Gas 

programs into a workable set of requirements. The Alliance supports the overall rule and in 

particular supports the agencies’ coordinated attribute-based approach. [OAR-2009-0472-6952.1, 

p.1] 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

OAR-2009-0472-6185, pp. 83-86.]] 

While this proposal covers model years 2012-2016, we agree with EPA and NHTSA that it is 

important to create a strong coordinated National Program that continues to provide a national 

standard for light-duty vehicles in model years beyond 2016. This is a key to reducing the 

impact of vehicle greenhouse gases on our global climate. 

The proposal provides manufacturers with a roadmap for meeting significant increases for model 

years 2012-2016. It calls for an increase in the average fuel economy in new vehicles by 40 

percent to a combined 35.5 miles per gallon. As EPA and NHTSA have stated, final rulemaking 

prior to April 2010 is essential to providing manufacturers with the certainty and lead time 

necessary to plan for the future and to cost effectively add new technology. 

The Alliance members are committed to continuously improving fuel economy and thereby 

reducing our greenhouse gas emissions. In fact, the motor vehicle industry has committed to 

reduce greenhouse emissions more than any other sector of the U.S. economy. By the Agencies' 

own estimates, these new standards would lead to reductions of 62 billion gallons of fuel, or CO2 

emissions totaling 656 million metric tons, during the useful lives of vehicles 2012 - 2016 

1-4 
General Comments 

vehicles. The elements of the proposal before us -- a harmonized and coordinated National 

Program, attribute-based approach, the available compliance mechanisms and general 

implementation elements provide this industry with certainty and flexibility necessary for 

achieving ambitious reductions in greenhouse gases and significant savings in oil consumption 

proposed by the rule. 

In going forward to 2017 and beyond, this joint coordinated effort by EPA and NHTSA on a 

national plan is a process we endorse for the future well-being of the industry. It is important to 

include all key stakeholders including California and states adopting the California standards into 

this process. A goal for going beyond 2017 would be to achieve even greater harmonization 

between the EPA and NHTSA program. Already the auto industry is transforming itself and 

reinventing the automobile. Automakers have made major investments into developing new fuel 

efficient technologies, and the results are continuing to show in the marketplace. More than 50 

technologies offered in vehicles for sale today reduce emissions, increase mileage, and allow 

these vehicles to run on cleaner fuels. Today consumers can buy more than 130 models that 

achieve 30 mpg or more on the highway, and they can choose from more than 27 models of 

hybrids and 8 models of clean diesels. 

As we stated in our May 18th letter of commitment, the Alliance fully supports the adoption of a 

National Program to address both greenhouse gases and fuel economy, and further we commend 

the Federal Government for taking a leadership role. By eliminating unnecessary complexity 

and providing flexibility for the development of individual manufacturers compliance plans, the 

proposed rule will allow manufacturers to develop products that consumers will want to buy and 

only enhance vehicle performance with respect to greenhouse gas reductions and oil savings. 

In closing, the time has come to move all stakeholders forward. The Alliance believes that any 

effective, efficient program to address climate change must be built on a single strong national 

framework administered by the Federal Government. This framework should acknowledge the 

specific product and sales structure of individual manufacturers' fleets, and be designed in a way 

that challenges all manufacturers fairly by including appropriate implementation and compliance 

flexibilities without negatively affecting overall greenhouse gas reductions. 

To this end, we encourage EPA and NHTSA to work closely with all stakeholders, to refine the 

technical framework of the program. 

Aluminum Association 

The aluminum industry congratulates NHTSA on its continued reliance on a size-based approach 

to setting CAFE standards since there is ample evidence to confirm that that size is the vehicle 

attribute that can best assure design and structure consistency across model years and preserve 

safety. Increased use of high strength, low weight materials like aluminum will increase vehicle 

fuel economy, reduce tailpipe emissions and improve safety as manufacturers strive to meet ever 

more challenging fuel economy requirements. [NHTSA-2009-0059-0067, p.1] 

American Chemical Society 

1-5
 
EPA Response to Comments 

The American Chemical Society is pleased by the Obama Administration’s recently announced 

plan to increase and standardize automobile fuel standards. ACS is a long-time proponent of 

increased automotive efficiency standards and previously supported legislation to increase 

Corporate Average Fuel Economy. As such, we are gratified to see this move by the 

Administration. [OAR-2009-0472-3985.1, p. 1] 

Increasing automobile efficiency is an important, and long-overdue, step towards improving the 

sustainability and security of our energy enterprise. Improving the efficiency of the national fuel 

economy standard is a short-term, relatively inexpensive, and effective way of reducing 

greenhouse gas emissions. Cars emit approximately a quarter of overall emissions, and 

automotive efficiency has actually fallen over the last two decades. Your initiative is an 

important step not only in making our nation more sustainable, but it will help reduce our 

dependence on foreign oil, which represents the vast bulk of our imported energy. We also 

applaud the decision to standardize the policy nationwide and send the appropriate market 

signals necessary for industry capital investments. [OAR-2009-0472-3985.1, p. 1] 

Again, thank you for your forward-thinking policy. As America’s oldest and largest scientific 

society, we look forward to working with you to ensure America’s sustainability. [OAR-2009­

0472-3985.1, p. 1] 

American Council for an Energy Efficient Economy 

ACEEE applauds USEPA and NHTSA for taking the enormous step towards energy security and 

environmental protection that this joint rulemaking represents. The proposed rule offers very 

substantial increases in fuel economy and reductions in vehicles’ greenhouse gas emissions. 

The rule also reflects important analytical improvements over the approach taken in previous 

rulemakings, especially the more thorough and transparent analysis of the technical potential to 

reduce emissions and fuel consumption, and the associated costs. In addition, the agencies’ use 

of a publicly available data set fully describing the reference fleet, rather than confidential 

manufacturer product plans, to develop the rule allows the public to understand in detail the basis 

for the standards. [OAR-2009-0472-7260.1, p.1] 

[ACEEE also submitted these comments as testimony at the New York public hearing, See 

docket number OAR-2009-0472-4621, pp. 138.] 

American Lung Association of California 

The American Lung Association in California applauds the Obama administration for this 

truly historic agreement to adopt rules that mirror California's clean air standards and move the 

nation forward toward a cleaner transportation future. 

The joint proposal by EPA and NHTSA to establish greenhouse gas vehicle standards and 

improve fuel economy in motor vehicles across the nation is an important step in the fight 

against global warming, air pollution, and the serious public health impacts of petroleum 

consumption. 

1-6 
General Comments 

The American Lung Association of California urges the federal EPA to move forward to adopt 

the proposed clean air standard and to adopt the strengthening changes recommended by the 

California Air Resources Board today. 

These recommendations include, one, adding an automaker-specific backstop to ensure that 

the expected level of greenhouse gas emission reductions are achieved; and, two, to ensure that 

credit calculations for electric- or hydrogen-powered vehicles include upstream emissions. 

In the future, the American Lung Association would also urge EPA to adopt additional measures 

to tighten vehicle tailpipe standards for smog-forming pollutants. 

[ALAC submitted these comments as testimony at the Los Angeles public hearing. See docket 

number OAR-2009-7283, pp. 39-44] 

Association of International Automobile Manufacturers (AIAM) 

AIAM and our member companies fully support a single national program to address these two 

overlapping programs, and we commend the agencies for their efforts to develop a harmonized 

program as much as possible. We look forward to working with the agencies as you finalize this 

rulemaking early in 2010. [OAR-2009-0472-7123.1, p.1] 

The core element of these proposals is for EPA and NHTSA to each separately adopt standards 

under each agency’s enabling statute that will be of roughly equivalent stringency. The goal is, to 

the extent possible, to craft standards that would “allow auto manufacturers to build a single 

national light-duty fleet that would comply with both the GHG and the CAFE standards.” Notice 

of Upcoming Joint Rulemaking to Establish Vehicle GHG Emissions and CAFE Standards, 74 

FR 24007, 24009 (May 22, 2009). AIAM supports this proposal and agrees that doing so is 

consistent with both the Clean Air Act and EPCA. [OAR-2009-0472-7123.1, p.4] 

These NHTSA/EPA proposed regulations are an important step in implementing the new, 

harmonized national program for regulating motor vehicle fuel economy and greenhouse gas 

emissions that was announced by the Obama Administration on May 19, 2009. [OAR-2009­

0472-7123.1, p.19] 

[AIAM also submitted these comments as testimony at the Los Angeles public hearing. See 

docket number OAR-2009-7283, pp. 28-32] 

Bieling, Andrea 

I applaud the Environmental Protection Agency and the National Highway Traffic Safety 

Administration for proposing standards that will make our cars and trucks cleaner and more 

efficient. The proposed rules will help realize President Obama's historic commitment, saving 

1.8 billion barrels of oil and $193 billion in consumer gasoline costs, and significantly reducing 

our global warming emissions. 

1-7
 
EPA Response to Comments 

I applaud the Environmental Protection Agency and the National Highway Traffic Safety 

Administration for proposing standards that will make our cars and trucks cleaner and more 

efficient. The proposed rules will help realize President Obama's historic commitment, saving 

1.8 billion barrels of oil and $193 billion in consumer gasoline costs, and significantly reducing 

our global warming emissions. 

I strongly support cleaner cars and thank the Administration for proposing standards that are a 

win for consumers, automakers, and the environment alike. Strong final rules will launch vehicle 

standards into the 21st century, help make Detroit a leader in green vehicles, laying a strong 

foundation for the cleaner vehicles we need to significantly reduce our reliance on oil and curb 

global warming. [OAR-2009-0472-8704 p.1] 

BiotectConnect, Inc. 

I fully support efforts to improve fuel efficiency. [OAR-2009-0472-7203, p.1] 

BMW of North America, LLC (BMW) 

The proposal will permit auto manufacturers to build a single light-duty national fleet, satisfying 

the requirements of each agency program. In keeping with our corporate commitment to 

reducing greenhouse gases, BMW commends both EPA and NHTSA for listening to and 

collaborating with auto makers in their efforts toward developing this complex proposal covering 

model years 2012 through 2016. Additionally, we commend the State of California Air 

Resources Board for their collaboration with EPA and NHTSA toward a single national standard 

that includes their aggressive targets. [OAR-2009-0472-7145.1, p.1] 

In order to provide product planning certainty for the auto industry, while continuing to reduce 

greenhouse gas emissions and improve fleet fuel economy, BMW strongly recommends a 

comparable collaboration toward a national program in the model years beyond 2016. This 

would also help ensure wise financial and resource investments, as well as increased energy 

security for the nation. [OAR-2009-0472-7145.1, p.1] 

Now, in keeping with our corporate commitment to reducing greenhouse gases, we commend 

both the U.S. Environmental Protection Agency and the National Highway Traffic Safety 

Administration for their enormous efforts in developing this complex proposal that will permit 

auto manufacturers to build a single light-duty national fleet which will satisfy the requirements 

of each agency's program. [These comments were submitted as testimony at the New York 

public hearing. See docket number EPA-HQ-OAR-2009-0472-4621, pp. 131.] 

BorgWarner 

BorgWarner would first like to commend the EPA, NHTSA and the State of California for their 

combined efforts to harmonize the standards in this very thorough joint proposal. [NHTSA2009-0059-0076, p.1] 

1-8 
General Comments 

BorgWarner is very supportive of EPA, NHTSA and the State of California's efforts and sees the 

joint proposal as a major step forward in our desire for energy independence and reduced CO2 

emissions. [OAR-2009-0472-7289, p.3] 

Bright Automotive 

 [These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number OAR-2009-0472-7283 p.175] 

So we're here to support this and say that there are innovators in this country ready to meet this 

challenge, and so we fully support the joint and harmonized regulations. I'm not here to 

comment on whether it's sufficient, but it's definitely necessary. 

Another thing we'd like to say is we also believe in the business model that is proposed in the 

regulation, that this will actually save significantly more money than it will cost. 

California Air Resources Board 

CARB strongly supports the joint proposed action, most importantly the stringency of the 

greenhouse gas emission standards as proposed for each year in the 2012 through 2016 model 

years. Those standards align very well with California’s adopted and now enforceable Pavley 

greenhouse gas emissions standards for those model years, ultimately arriving at the same 

stringency as California’s standards in 2016. The proposed standards are the result of the 

agencies’ thorough review and study of technical, engineering, and cost studies and a reasonable 

weighing of their respective statutory directives. The proposal also contains several provisions 

that will help to ensure no credit windfall occurs that could undermine the standards and reduce 

their cumulative greenhouse gas reductions. However, CARB has two critical concerns, 

stringency and the upstream emission factor for zero-emission vehicles (ZEVs), which must be 

addressed in the Final Rule to ensure California’s continued support for the National Program. 

Other CARB concerns and responses to questions posed by EPA and NHTSA then 

follow. [OAR-2009-0472-7189.1, p.1] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. See 

docket number OAR-2009-7283, pp. 21-27] 

California State Senate 

I applaud the Obama Administration for forging a truly historic agreement to increase fuel 

economy and set the nation’s first greenhouse gas standard for new passenger cars and light 

trucks. The National Clean Vehicles Program, using separate, but complementary fuel economy 

and tailpipe greenhouse gas emission standards, is set to achieve a fleetwide average of an 

equivalent 35.5 miles per gallon by model year 2016. [OAR-2009-0472-7275.1, p.4] 

[Fran Pavley also submitted these comments as testimony at the Los Angeles public hearing. See 

docket number EPA-HQ-OAR-2009-0472-7283, pp. 13-20] 

1-9
 
EPA Response to Comments 

Cambell, Bruce 

 [These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number EPA-HQ-OAR-2009-0472-7283, p.199] 

And I support the Obama, EPA, NHTSA call for considerably better gas mileage. And I urge 

 that you get as clean a rule as possible without complicated carbon credit loopholes and 

 moving-the-problem-around type thing. 

So please proceed with as clean as possible around 35 miles per gallon and then improve from

 there. 

Chamber of Commerce of the United States of America 

The U.S. Chamber of Commerce strongly supports reducing emissions from automobile 

tailpipes. The Chamber supports improving vehicle fuel economy to 35.5 miles per gallon, a 

standard that will also reduce vehicle greenhouse gas emissions to 250 grams of CO2 per mile. 

The Chamber has serious concerns, however, with the regulatory framework through which EPA 

intends to achieve these goals. [OAR-2009-0472-7233.1, p.1] 

Chew, Yuli 

Though the results from the use of the MAGICC model only shows small, but quantifiable, 

reductions in the atmospheric CO2 concentration, , I support EPA’s efforts of regulating the 

greenhouse gas from vehicles no matter how insignificant the benefits will be. In the Supreme 

Court’s decision ion MASSACHUSETTS ET AL. v. ENVIRONMENTAL PROTECTION 

AGENCY ET AL. on April 2, 2007, it noted: “Agencies, like legislatures, do not generally 

resolve massive problems in one fell swoop, ...., but instead whittle away over time, refining 

their approach as circumstances change and they develop a more nuanced understanding of how 

best to proceed, ...... That a first step might be tentative does not by itself negate federal-court 

jurisdiction. And reducing domestic automobile emissions is hardly tentative. Leaving aside the 

other greenhouse gases, the record indicates that the U. S. transportation sector emits an 

enormous quantity of carbon dioxide into the atmosphere. “ [OAR-2009-0472-7042.1, p.5] 

I believe that the 2003 Kahane Study (in which NHTSA adopted) for 1995 – 1998 Model Year 

cars and 1995 – 1997 trucks, in which all 2-door cars, or 20% of registered vehicles were 

excluded was statically biased. The information was based on outdated technologies, bad 

rollover rates for trucks at that time. It should be reviewed along with 2005 DRI Study (DRI-TR05-01). In “Increasing the Fuel Economy and safety of New Light-Duty Vehicles” by Lawrence 

Berkeley National Laboratory on September 18, 2006, the final conclusion was “However, 

recent research indicates that mass is merely a proxy for other characteristics that are more 

important for crashes between cars and trucks, such as frontal heights and stiffness.” [OAR2009-0472-7042.1, p.5] 

Chrysler Group LLC (Chrysler) 

1-10 
General Comments 

Chrysler supports the efforts of the United States Environmental Protection Agency ('EPA') and 

the National Highway Traffic Safety Administration ('NHTSA') to establish a National Program 

for the regulation of vehicle greenhouse gas emissions and fuel economy. As EPA and NHTSA 

have noted, the National Program 'hold[s] out the promise of delivering environmental and 

energy benefits, cost savings, and administrative efficiencies that might not be available under a 

less coordinated approach. The efforts to craft standards have largely succeeded in 1) 

harmonizing Corporate Average Fuel Economy ('CAFE') and vehicle greenhouse gas emissions 

('GHG') attribute-based standards; 2) replacing state standards with a single federal standard; and 

3) focusing on performance requirements rather than technology mandates. The rules proposed 

by this NPRM for the 2012-2016 model years ('MY') will reduce greenhouse gas emissions, 

enhance energy security, and offer greater regulatory certainty for vehicle manufacturers. 

[NHTSA-2009-0059-0124, p.1] 

Chrysler strongly believes that a single national fuel economy and greenhouse gas program will 

place more clean and efficient vehicles on the road quickly and at lower costs. Our resources are 

best utilized when applied to one, single, national standard versus differing state-level fuel 

economy and greenhouse gas requirements. [NHTSA-2009-0059-0124, p.1] 

The proposed rules are an important step towards the achievement of the goals of the National 

Program. They reflect the substantial efforts that EPA and NHTSA have made to provide 

'consistent, harmonized, and streamlined requirements. EPA and NHTSA have recognized that 

those efforts are complicated by the fact that EPA and NHTSA have different authorizing statues 

with requirements that are not identical. The primary effect of those differences is that EPA can 

grant some compliance flexibilities - for example, in trading credits - that NHTSA cannot. As a 

result, the joint standards themselves cannot be identical, but 'the goal is providing regulatory 

compatibility that allows auto manufacturers to build a single light-duty fleet that would comply 

with both the GHG and the CAFE standards.' [NHTSA-2009-0059-0124, pp.1-2] 

Chrysler agrees that regulatory compatibility is an important and achievable goal. If the 

regulations are wholly compatible. a fleet that complies with the GHG rules will also comply 

with the CAFE standards. In these comments. Chrysler suggests some changes to ensure that the 

final rule will meet the goal of regulatory compatibility. We believe that these changes can be 

accommodated in the final rule without compromising the environmental goals of the National 

Program. We will continue working with EPA and NHTSA to ensure these and our other 

concerns are resolved. [NHTSA-2009-0059-0124, p.2] 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

OAR-2009-0472-6185, pp. 46-48]] 

We believe it's important to observe that the 2016 model year standard of 250 g/mi carbon 

dioxide or 35.5 mpg represent an historic and unprecedented challenge for our industry. 

Translating this into more easily understood terms, this is a 10 mpg or 40 percent increase in the 

entire fleet's fuel economy from today's level within six years. 

Chrysler confirmed support for this historic program in the May 19th, 2009 White House 

ceremony with President Obama. Our current CEO, Sergio Marchionne is also the CEO of Fiat, 

1-11
 
 

 

EPA Response to Comments 

the fuel economy leader in Europe. He understands and endorses these commitments and is 

determined to implement the product actions necessary for Chrysler to meet those 2016 

standards. In fact, Chrysler and Fiat continue to progress towards those product actions, and 

work is already underway on developing new environmentally friendly, fuel-efficient, high 

quality vehicles that we intend to become the hallmark of Chrysler's product line. 

We have significantly revised our five-year plan to meet these new standards. Chrysler's 

compliance requires successful application of a broad range of technologies from advanced 

technology ICE all the way through electrification in an unprecedented time. This means that 

Chrysler's vehicles will adopt Fiat's world-class technology, platforms and powertrains for small 

and medium sized vehicles, allowing us to offer an expanded product lineup including 

environmentally friendly vehicles with these rules and, also, by increasing demand to consumers. 

One type of technology is multi-air technology, an electrohydraulic variable valve lift system for 

internal combustion engines. It controls air flow and combustion cylinder by cylinder, stroke by 

stroke, improving both fuel efficiency and performance in our engines. 

Chrysler is also working with the Department of Energy to improve the commercial viability of 

our plug-in hybrid programs through the electrification grant that we received earlier this year. 

In addition to these steps that are primarily powertrain efficiency actions, Chrysler will also 

continue to lessen the vehicle energy demands through actions such as improved aerodynamics, 

reduced loading resistance, and also material substitution, lightweighting while maintaining 

overall strength and safety of our products. 

Chrysler believes that reducing vehicle mass without reducing the size of the vehicle or the 

structural integrity is technically feasible in the rulemaking time frame on these products. 

Clarke, Darrell 

 [These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number OAR-2009-0472-7283 p.187] 

I'm just going to say for starters this is only the most important step for us to take as a nation 

about global warming and oil dependence. To put it rather succinctly, I'll point to some charts. 

[The commenter provides extensive testimony unrelated to the ruling] 

Clean Energy Fuels 

Clean Energy supports GHG regulation of motor vehicles and would like to thank both EPA and 

NHTSA staff for their hard work and foresight used in the development of this important 

rulemaking. [OAR-2009-0472-7220.1, p.5] 

1-12 
General Comments 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

OAR-2009-0472-6185, p. 141.]] 

And I'd like to say there's a lot of hard work put into this rulemaking, and we appreciate it. 

We're very supportive of, you probably are new to our company, Clean Energy, we are mostly a 

California -- although we are nationally based, but we are extremely supportive of EPA's efforts 

to curb greenhouse gas emissions in the transportation sector, and we are just looking for ways 

that we can get to the same conclusion with more flexibility, using low carbon fuels and, also, 

seeing if there are ways to combine efficiency strategies with our technology as well. We 

believe that ultimately by employing progressive strategies like bio-methane, hybrid drivetrains, 

plug- in hybrid drivetrains, we can achieve 2015 emission targets for greenhouse gases. 

 [[Clean Energy also submitted these comments as testimony at the Detroit public hearing, See 

docket number OAR-2009-0472-6185, p. 131.]] 

Coalition for Clean Air 

 [Following comments are from LA Testimony, OAR-2009-0472-7283, pp.134-137] 

That is why today we applaud the Obama administration for forging a historic agreement with 

industry to adopt rules that mirror California's groundbreaking Clean Cars Law. 

When we adopted our standards in 2004, we knew that automakers could make clean cars that 

 consumers want and need. We are confident that they will devise ways to make even cleaner 

cars in the future. 

So given California's dire need to continue improving our air quality, we cannot take our chances 

and assume that after President Obama's administration or administrations, we will have other 

administrations who agree with us in the need to reduce global warming gases specifically here 

in California. 

And having said that, we cannot rely on others out of the state to protect our residence, our 

children, our families, and our workers. 

Consumer Federation of America 

THE IMPORTANCE OF THIS GROUNDBREAKING RULEMAKING In many ways, this is 

the most important change in the Corporate Average Fuel Economy (CAFE) program since its 

inception three and a half decades ago. 

• This rulemaking unifies the regulation of the energy and environmental standards for motor 

vehicles in the U.S. 

• It embodies one of the largest increases in fuel economy over a four-year period in the history 

of the program. 

1-13
 
EPA Response to Comments 

• It resolves a major dispute over federal and state shared authority by ordering improvements in 

the environmental impact of automobiles, and thereby preserving the most important dynamic 

characteristics of federalism. 

• It is based on a consensus agreement that includes the automakers. 

• It incorporates new methodology for analyzing potential CAFE and greenhouse gas emissions 

standards that is more transparent, replicable, and accurate than the prior methodology. 

At the same time, this rulemaking reflects the fact that it is a transition regulation that demands a 

more effective process for setting fuel economy standards in the future. 

• The transition requires the Environmental Protection Agency (EPA) and the National Highway 

Traffic Safety Administration (NHTSA) to harmonize and reconcile their statutes. 

• The rulemaking recognizes the dire circumstances of the auto industry and allows it some 

breathing space to redefine itself and retool before a more rigorous and demanding regime of 

fuel economy improvement is required. Thus, the ultimate success of this landmark rulemaking 

will be in the framework of standard setting that it creates for the future. There are many critical 

issues that will have to be resolved in order to ensure that the standard setting process provides 

the maximum benefits for consumers, the nation and the environment. 

[[Consumer Federation of America also submitted these comments as testimony at the Detroit 

public hearing, See docket number EPA-HQ-OAR-2009-0472-6185, pp. 104-105.]] 

County of Greenville, SC 

We commend the EPA and the NHTSA for working together to develop a rule that will result in 

significant improvements in fuel economy. Our nation needs reduced emissions and energy 

security and we support these goals. In addition to reducing greenhouse gas emissions, 

improving fuel economy will have the very important benefit of reducing emissions of air 

pollution . These reductions will help areas meet the 2008 or a new national ambient air quality 

standards resulting from the revisions currently underway at EPA for pollutants including ozone 

and particulate matter 2.5 and will also reduce urban air toxics . This will have a very positive 

impact on public health and the environment. [OAR-2009-0472-8346 p.1] 

As such, we support NHTSA moving forward at this time with the CAFE standards as proposed. 

It is important to note that virtually all of the greenhouse gas emission reductions and air quality 

benefits will occur from the new CAFE standards proposed by NHTSA. [OAR-2009-0472-8346, 

p.1] 

Cummins Inc. 

Cummins Inc. (“Cummins”) supports the proposed joint rulemaking by the National Highway 

Transportation Safety Administration (NHTSA) and the Environmental Protection Agency 

(EPA) to reduce greenhouse gas (GHG) emissions and improve fuel economy of new cars and 

1-14 
General Comments 

light-duty trucks sold in the United States. Cummins is committed to help meet these goals in 

vehicles powered by our engines. Cummins is also working closely with the National Academy 

of Sciences (NAS) on developing a framework for a fuel efficiency improvement and GHG 

program for heavy-duty commercial vehicles in the United States. We view the development of 

technology and responsible regulations as one of our core corporate responsibilities. [OAR-2009­

0472-7205.1, p.2] 

Cummins supports the overall framework of the proposed regulation by EPA and NHTSA to 

harmonize the agencies’ programs. However, Cummins urges EPA to take a more holistic 

approach that reflects upstream CO2 impacts in the development of GHG emission standards. 

[OAR-2009-0472-7205.1, p.2] 

Dewey, Scott 

 [These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number EPA-HQ-OAR-2009-0472-7283 p.149-159] 

It would be hard to overemphasize the importance of this issue for our nation and the world. 

Our survival as a species may actually depend on it, getting global warming under control. 

 Unfortunately, for various political reasons, we are about 20 years late in developing policies 

to confront global warming. The problem has grown larger in the meantime, meaning it's 

 particularly critical that we now act swiftly and effectively to confront this problem. It really is 

urgent. 

By reducing oil consumption and importation, by reducing greenhouse gas emissions, and by 

reducing motorists' fuel costs, the President's national program will enhance national security, 

energy independence, and economic stability, making us less vulnerable to energy price shocks 

and supply disruption while also helping to control the number one global environmental threat. 

 It's the proverbial win-win. It's not the total answer to the whole complicated problem, but it's a 

good start. 

Eadie, R. Frank 

The -- so we're more than grateful to see the EPA at very long last and, you know, it's -- I can't 

count the number of years that I've been involved in promoting better CAFE standards for the 

country, and it's -- you know, I'm really, really grateful that finally the President has decided that 

we're going to have that happen, at least -- and we want to make sure that it does happen, so let 

me applaud that standard over miles per gallon and that's a giant, a real important change, it 

probably is not nearly [OAR-2009-0472-4621, p.169] enough, but it's a major improvement, and 

it's something that we're all very grateful for the President's action and your following up on it. 

[OAR-2009-0472-4621, p.170] 

Ecology Center 

1-15
 
EPA Response to Comments 

The Ecology Center is pleased to be here today and to provide support for the proposed rule 

making to establish Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate 

Average Fuel Economy Standards. [OAR-2009-0472-4068,p.1] 

The Ecology Center has for many years been an advocate for strong fuel economy standards for 

cars and light trucks. But we have also advocated that such standards be developed in a way that 

helps advance new investments in U.S.-manufacturing, protects jobs, and fairly distributes the 

costs across the industry. We believe this approach is the best way to achieve a sustainable 

policy that builds public support while also protecting the environment and improving energy 

security. [OAR-2009-0472-4068,p.1] 

The Ecology Center committed itself to these ideals when it created a special project called the 

Green Machines Tour, which was aimed at building public awareness about the many positive 

benefits of new investments in advanced fuel economy technologies. We focused on the auto 

producing region here in the Midwest, and spent many hours on the road speaking with 

community members, union leaders, and elected officials about the fuel-efficient technologies 

that were either already being used in today's vehicles, or that were on the drawing boards, and 

how they were helping their communities. We identified billions of dollars in new or planned 

investments, and the creation or retention of thousands of auto sector jobs. We also discussed 

how new policies to require improved vehicle fuel economy could help ensure even greater 

opportunities for new jobs and economic development in this vital industry. [OAR-2009-0472­

4068, p.1] 

Almost without exception, the people we talked with were in support of advancing new fuel 

economy policies. However, they did want assurances that the rules would be developed in a 

way that was fair for their community and their industry, and that protection of existing jobs 

would be strongly considered. [OAR-2009-0472-4068, p.1] 

In summary, the Ecology Center supports the proposed rules and believes that they achieve the 

desired balancing of interests for fairness and cost-effectiveness, while also requiring significant 

and meaningful reductions of CO2 emissions and petroleum use. It is our hope that these new 

rules can help to set the U.S. automobile industry on a new course for success-at least in terms of 

improved fuel economy. [OAR-2009-0472-4068, p.2] 

Environment Michigan

 [[These comments were submitted as testimony at the Detroit public hearing. See docket 

number OAR-2009-0472-6185, pp. 64-67.]] 

The administration deserves great credit for taking this historic step to cut global warming 

pollution, make America more energy independent, and help make Detroit a leader in clean 

vehicle technology. We applaud the administration's overall effort and your individual 

contributions. 

I'll make three main points in my testimony. First, oil dependence and global warming are 

urgent and interrelated problems that demand bold policy solutions. Second, this proposal is a 

1-16 
General Comments 

good first step but must be strengthened to meet President Obama's goals for reducing pollution 

and saving oil. And, third, the proposal is evidence that the Clean Air Act works in addressing 

global warming pollution. 

America is at an energy crossroad. As a nation, we are heavily reliant on oil and other fossil fuels 

at a time of growing demand and dwindling supply. Our dependence on fossil fuels continues to 

impose massive environmental, economic, and security costs. Now our country must choose 

between paying to continue the status quo and investing in a clean energy future. 

America spends nearly $1 billion each day importing oil. Those funds are a direct transfer of 

wealth from America's pocketbooks to oil companies and foreign governments. These figures do 

not include the untold damages to our environment, health, and security resulting from the 

production and use of oil. A report released this week by the National Academies of Sciences 

quantifies just a portion of these damages; it estimated that energy use in motor vehicles 

produced $56 billion in health and other nonclimate-related damages in 2005 alone. 

Light-duty vehicles alone account for about 40 percent of all U.S. oil consumption. 

At the same time, pollution from the production and use of oil is a leading source of air pollution, 

water pollution from spills, and global warming pollution. 

With respect to global warming, the impacts on human and natural systems are now being 

observed nearly everywhere. In 2007, the Nobel Prize- winning U.N. Intergovernmental Panel 

on Climate Change predicted serious risks and damages to livelihoods, human infrastructure, 

societies, species, and ecosystems unless future warming is substantially reduced. So far this 

decade emissions, warming, and impacts, such as ice melt and sea level rise, have all been at the 

upper end of IPCC projections. 

To meet the challenge of global warming, we must transform the ways America and the rest of 

the world produce and use energy, achieving dramatic improvements in the efficiency with 

which we use energy in our vehicles, homes, and businesses and moving to clean, renewable 

energy, such as wind solar power. 

This challenge also brings enormous opportunity. Vastly improving the efficiency of our 

economy and moving to renewable energy will reduce our dependence on oil, help revive our 

economy, and create millions of green-collar jobs in many fields, including in the auto industry. 

Mobile sources emitted more than 30 percent of all U.S. global warming emissions in 2006 and 

have been the fastest-growing source of U.S. global warming emissions since 1990. Light-duty 

vehicles are responsible for nearly 60 percent of all global warming emissions from mobile 

sources. 

As a first step to address America's oil dependence and global warming, these proposed vehicles 

standards are a good beginning. The proposal will raise the fuel economy of the passenger 

vehicle fleet to an average of 34.1 by 2016, accelerating the goals in the 2007 energy bill by four 

years. In addition, the proposal sets the first-ever Federal standards to reduce global warming 

1-17
 
EPA Response to Comments 

emissions from new passenger vehicles -- requiring a fleet average of 250 grams carbon dioxide 

equivalent per mile in 2016. Importantly, these standards establish a foundation for more 

stringent standards in the future that will do even more to curb global warming and to wean the 

country from its dependence on oil. 

The proposal makes clear that auto manufacturers can meet these proposed standards by utilizing 

technologies that are already available today. Requiring the more widespread adoption of clean 

technologies will help spark the technology innovation necessary for automakers to successfully 

compete in the global economy and thereby contribute to a strong local and domestic economy. 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

OAR-2009-0472-6185, pp. 69-70.]] 

Finally, I want to point out that this proposal is strong evidence that the Clean Air Act is 

effective in addressing global warming pollution from vehicles. 

The Clean Air Act allows California to set auto emission standards that are stronger than Federal 

standards and other states to adopt California's auto emission standards. Over the last 40 years, 

California has consistently demonstrated leadership in developing and implementing standards to 

curb pollution from motor vehicles, as is the case with the state's first-of-their-kind standards to 

reduce global warming emissions from new vehicles. 

Thirteen other states and the District of Columbia adopted these California standards 

representing about 40 percent of the light-duty market. And the states' program gave rise to the 

proposal that is before us today. 

We applaud the states that spearheaded the drive for cleaner cars. We wouldn't be here today if 

it weren't for their trailblazing efforts to reduce our oil dependence and curb global warming. 

This process worked for conventional pollutants, and it works for the pollutants that are fueling 

global warming. 

In closing, we commend the administration for proposing these historic standards to reduce 

global warming pollution, make America more energy independent, and help our country regain 

its edge as a technology leader. We urge you to strengthen and finalize the rule. 

Environment New Jersey 

I definitely appreciate the opportunity to testify today. The Obama Administration deserves great 

[OAR-2009-0472-4621, p.66] credit for taking this historic step to cut global warming pollution, 

to make this country more energy independent and finally to make America a leader in clean 

vehicle technology. We applaud the Administration's overall effort and your individual 

contributions. [OAR-2009-0472-4621, p.67] 

Environmental Defense Fund 

1-18 
General Comments 

I. THE PROPOSED STANDARDS ARE A VITAL STEP IN FORGING COMMON GROUND 

AMONG DIVERSE INTERESTS AND MOVING THE NATION FORWARD TO ADDRESS 

GREENHOUSE GASES AND IMPROVE FUEL ECONOMY. 

There are dual national security benefits from EPA’s proposed action: reducing America's 

reliance on foreign oil and beginning to address climate-disrupting emissions that will exacerbate 

geopolitical instability. Military experts have pointedly recognized these dual policy imperatives. 

A report commissioned by the Pentagon states that “It is quite plausible that within a decade the 

evidence of an imminent abrupt climate shift may become clear and reliable. . . . Disruption and 

conflict will be endemic features of life.” Commander Jeffrey W. Eggers, former director for 

combating terrorism at the National Security Council, stated that “the seemingly intractable 

problem of U.S. dependence on foreign oil is a pre-eminent national security threat . . . .” A CNA 

Military Advisory Board report came to a similar conclusion, finding that “[o]ur dependence on 

foreign oil reduces our international leverage, places our troops in dangerous global regions, 

funds nations and individuals who wish us harm, and weakens our economy; our dependency 

and inefficient use of oil also puts our troops at risk.” The Government Accountability Office has 

also sounded the alarm, warning that “without dramatic change, the nation will become ever 

more reliant on imported oil and natural gas with attendant threats to national security.” [OAR2009-0472-7285.1, pp. 3-4] 

The national security risks created by heavy dependence on foreign oil require broadscale 

changes throughout the economy. Speaking before the Senate Foreign Relations Committee, 

Retired Vice Admiral Dennis McGinn declared: Energy security and a sound response to climate 

change cannot be achieved by pursuing more fossil fuels. Our nation requires diversification of 

energy sources and a serious commitment to renewable energy. Not simply for environmental 

reasons—for national security reasons. [OAR-2009-0472-7285.1, p. 4] 

As our military leaders have noted, “[o]ur only choice is whether we’re going to make the 

decisions [on reducing our dependence on oil] forcefully and in a timely manner. We could lag 

and then we’ll find ourselves in a much more serious situation, when all of these other costs 

come on us.” [OAR-2009-0472-7285.1, p. 4] 

The cost of delaying action is high: “We will pay to reduce greenhouse gas emissions today . . . 

[o]r we will pay the price later in military terms. And that will involve human lives.” The 

proposed regulations are an important part of necessary, immediate action to reduce emissions. 

“Each of us can help end America’s addiction to oil. Using less fuel in our cars and trucks 

reduces overall demand . . . . These steps, taken individually, may seem small. Collectively, they 

can make us more secure.” [OAR-2009-0472-7285.1, p. 4] 

[Following comments are from LA Testimony, OAR-2009-0472-7283 p.72-79] 

There is good reason for hope. The proposal for cleaner cars at issue today represents an 

important step forward in addressing the grim impacts of a changing climate, but to secure 

these critical benefits, the final standards must be rigorous and well designed. We examine 

some elements of the proposal that warrant close attention. 

1-19
 
EPA Response to Comments 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

EPA-HQ-OAR-2009-0472-6185, pp. 114-117]] 

America is a vast and diverse nation. But despite our differences, we are united by unyielding 

and common bonds. We are united in a commitment to our nation's security. We stand together 

in our quest to realize a shared prosperity for all Americans. And we are steadfast -- as a nation 

of mothers, fathers, grandparents, uncles and aunts -- in our vigilance for a safe and healthy 

future for America's children. 

On May 19th the President of the United States charted a path forward for our nation that ended 

years of discord and division. The President forged an accord on cleaner cars to begin breaking 

our addiction to foreign oil, to pioneer the clean energy technologies that will lead the way in the 

21st Century global marketplace, and to start reducing the global warming pollution that imperils 

our planet. 

We sincerely thank the President and the leaders in labor, business, and state government who 

worked together to break this logjam -- the United Auto Workers, the Alliance of Automobile 

Manufacturers, and the numerous states involved from California to Maine. 

By virtually any metric, the benefits of the EPA and Department of Transportation proposal to 

implement the Presidential accord measure up. 

The proposed standards strengthen our national security. The vehicles subject to these proposed 

standards are responsible for about 40 percent of all U.S. oil consumption. The standards would 

reduce our consumption of oil by 1.8 billion barrels while achieving a 5 percent annual 

improvement in fuel efficiency for the nation's passenger vehicle fleet. 

The proposed standards reduce global warming pollution from a significant and rapidly rising 

sector. The vehicles covered by the proposed standards account for 60 percent of heat-trapping 

emissions from the transportation sector and about 20 percent of all U.S. heat-trapping gases. 

These emissions have steadily increased by more than 1 percent annually. The EPA estimates the 

proposed standards would cut carbon dioxide pollution from passenger vehicles approximately 

21 percent by 2030, reducing emissions by 950 million tons. 

The proposed standards will provide dividends in fuel savings at the pump for America's 

families. The estimated overall cost savings over the life of the vehicle are more than $3,000. 

And families who finance a new vehicle purchase are expected to save estimated $12 to $14 a 

month over the duration of the loan. 

While these numbers mark progress for our nation, the benefits of the proposed standards are farreaching in their measure. 

The proposal embodies the first national standards to limit global warming pollution. We 

applaud the President and the leadership at the Environmental Protection Agency for taking 

landmark steps to reduce heat-trapping gases and for following the law enunciated by the United 

States Supreme Court. 

1-20 
General Comments 

The proposal weaves the innovative state clean car programs, the nation's clean air laws, and the 

nation's fuel economy laws into a single national policy that reduces global warming pollution 

and improves fuel efficiency through the clarity and certainty of an integrated program. 

The proposal provides compliance flexibility that will ensure consumers will have a full range of 

vehicle choices. 

And while the proposed standards can be achieved with today's available technologies, the 

proposal also lays the foundation for new innovative technologies that will pave the way for 

additional progress in the next phase of clean car standards. And it is these advanced clean car 

technologies that will position our nation as a leader in the global economy. 

We recognize the challenges ahead in completing this proposal to ensure a rigorous and balanced 

outcome. Environment Defense Fund, respectfully, will submit written comments offering our 

recommendations to ensure the final standards are protective and well-designed. The 

fundamental promise of the Presidential accord and the charge for the Environmental Protection 

Agency and Department of Transportation in finalizing the proposed standards -- is to strengthen 

our nation's common bond by uniting America to achieve profound and lasting progress in 

national security, climate stability and economic opportunity. We hope this policy initiative is 

the first of many steps in realizing that promise. 

[Environmental Defense Fund also submitted these comments as testimony at the New York 

public hearing, See docket number EPA-HQ-OAR-2009-0472-4621, pp. 118-119.] 

Epps, Jennifer 

 [These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number OAR-2009-0472-7283, pp.205-206] 

I think we desperately need clean, fuel-efficient vehicles, and I think we deserve them. 

Taxpayers fund the construction of roads and highways. We fund the maintenance of those roads 

 and highways. We fund the administration of them through the DMV. We fund the policing of 

them. 

So I think it's high time; we've waited long enough. Automakers have been dragging their feet 

for about 25 years, and these new proposals would be the first serious improvements to fuel 

economy in two decades. 

Ford Motor Company 

Ford supports the overall manner in which the agencies have proposed to harmonize the 

greenhouse gas emissions and CAFE regulatory framework. The proposal brings together a 

range of compliance mechanisms such as improvements to vehicle fuel economy, improvements 

in air-conditioning systems designed to minimize refrigerant leakage (another potential source of 

greenhouse gases) and advanced technology vehicles that can run on biofuels and electricity. 

Taken together, the broader elements of this harmonized national program provide a more 

1-21
 
EPA Response to Comments 

efficient compliance framework compared to individual state programs or potentially 

overlapping federal and state programs. [OAR-2009-0472-7082.1, Cover letter, p. 1] 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.90-96] [Following 

comments are also from Detroit Testimony, OAR-2009-0472-6185 p.13-17] [Ford also 

submitted these comments as testimony at the New York public hearing, See docket number 

OAR-2009-0472-4621, pp. 26-31.] 

We commend the efforts of both agencies in this difficult task to develop harmonized 

greenhouse gas emissions and CAFE standards for passenger cars and light-duty trucks, and we 

are committed to working with you to finalize these regulations. 

Turning now to the proposed rulemaking, Ford supports the manner in which the agencies 

have proposed to harmonize the greenhouse gas emissions and CAFE regulatory framework 

which is a broader program compared to what was outlined in the 2007 Energy Independence 

and Security Act. 

It brings together a range of compliance mechanisms such as improvements to vehicle fuel 

economy, improvements in air-conditioning systems designed to minimize refrigerant leakage, 

another potential source of greenhouse gas emissions, and advanced technology vehicles that can 

run on biofuels and electricity. 

It also maintains separate car and truck footprint-based targets which Ford and the industry have 

supported given that cars and trucks have different functional characteristics whether they have 

the same footprint or not. 

Taken together, the broader elements of this one national program provide a more 

efficient compliance framework compared to individual state programs or potentially 

overlapping federal and state programs. 

General Motors 

GM supports the joint proposal from EPA and NHTSA to address 2012 to 2016 model year 

vehicles. We commend the technical staffs of both agencies with working together on this 

highly complex issue to produce what appears to us to be a very harmonized approach with the 

two Federal programs that will regulate fuel economy and greenhouse gas emissions. We also 

want to thank the agencies for leadership that the Federal Government is showing in trying to 

minimize the disruptive impacts of having multiple programs at State and Federal levels. (OAR2009-0472-6185, p.10) 

It is our view that this rule represents a dramatic opportunity to advance our mutual goals of CO2 

reduction and increased energy diversity while respecting customer choice. But even after this 

rule is finalized, more work will remain on the policy front. This rule only gets us to 2016. 

(OAR-2009-0472-6185, p.12) 

1-22 
General Comments 

We do urge both EPA and NHTSA to keep all stakeholders at the table and immediately begin 

work on the next phase of what we would call an ongoing national strong program. And I will 

tell you right now from a GM perspective, we are prepared to engage in that process today. 

(OAR-2009-0472-6185, p.12) 

General Motors (GM) supports the joint proposal from EPA and NHTSA to address the fuel 

economy and greenhouse gas emissions of 2012-2016 model year vehicles. The proposal is 

consistent with the intent of the May agreements with the administration. We commend the 

technical staffs of both agencies for working together on this highly complex issue, and 

appreciate their efforts to produce a harmonized approach for federal regulation of vehicle fuel 

economy and greenhouse gas emissions. We further commend the agencies for the leadership 

that the federal government has shown in trying to minimize the disruptive impacts of having 

multiple programs at the federal and state levels. While this rule represents a dramatic 

opportunity to advance our mutual goals of CO2 reduction, increased energy diversity and 

respecting customer choice, even after this rule is completed, more work will remain on the 

policy front. We urge both EPA and NHTSA to move quickly to keep all stakeholders at the 

table and work on the next phase of an ongoing, strong National program. All voices -- the states, 

the automakers, the environmental organizations, and the energy providers -- are essential for 

this to happen. Ultimately, we will need strong leadership at the federal level with an integrated 

and coordinated approach that addresses infrastructure, vehicles, fuels and consumer behavior, as 

well as all other sectors of the economy. This proposal is a positive first step and a good 

foundation on which we can all build, but we cannot rest on our laurels. [OAR-2009-0472­

6953.1, pp.2-3] 

[The following is from LA Testimony, OAR-2009-0472-7283, pp.55-59] 

First, let me underscore that GM supports the joint proposal from EPA and NHTSA to address 

the 2012 to 2016 model year vehicles. We commend the technical staffs of both the agencies for 

working together on this highly complex issue to produce what appears to be a very harmonized 

approach for the two federal programs that will regulate vehicle fuel economy and greenhouse 

gas emissions. 

We also want to thank the agencies for the leadership that the federal government is showing 

in trying to minimize the disruptive impacts of having multiple programs at both the federal and 

state levels. We are especially pleased that we are able to testify today in support of the approach 

that is being proposed rather than saying no to a patchwork of state programs. 

Among the highlights of the proposal are, one, the coordinated attribute-based approach of 

the two programs; and, two, the recognition of the need for mechanisms that provide for 

compliance flexibility in the face of uncertainty over future technology developments and costs, 

customer acceptance of these technologies, and the price of fuels that consumers may see in the 

marketplace. 

This proposal is a positive first step and a good foundation on which we can all build, and 

GM intends to provide some detailed technical written comments to enhance the clarity and 

harmonization of this joint effort and program. And as we have from the start, we just would like 

1-23
 
EPA Response to Comments 

to reiterate our commitment to working with the agencies, the states, and other interested parties 

to make this a success. 

Georgia Department of Natural Resources 

We commend the U.S. Environmental Protection Agency (EPA) for working closely with the 

National Highway Traffic Safety Administration (NHTSA) to develop a rule that will result in 

significant improvements in fuel economy. Our nation needs energy security and reduced 

emissions and we support these goals. [OAR-2009-0472-7150.1, p.1] 

Glasser, Mark 

[These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number OAR-2009-0472-7283, pp.201-205] 

And so I bring these personal things up just to note the importance of what you're doing and the 

wonderful job that has been started here, and I do thank you guys for coming here and for 

listening to all of us. 

Honda Motor Company 

American Honda Motor Co., Inc. (“Honda”) appreciates the efforts made by EPA and NHTSA to 

develop a single national program to address motor vehicle greenhouse gas emissions and fuel 

economy and welcomes the opportunity to provide its comments on the Notice of Proposed Joint 

Rulemaking (the “NPRM”), dated September 28, 2009. [NHTSA-2009-0059-0095.1, p.2] 

Honda supports the overarching goal of the NPRM, which is to establish a “coordinated and 

harmonized approach” to implementing the Clean Air Act’s mandate that EPA regulate motor 

vehicle emissions, and the mandate in the Energy Policy and Conservation Act (EPCA) that 

NHTSA regulate motor vehicle fuel economy. [NHTSA-2009-0059-0095.1, p.2] 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.96-103] 

This NPRM represents a significant, positive step forward, and we appreciate the efforts of 

everyone involved to create more harmonized national standards. Honda has long advocated 

for higher fuel economy standards and, by inference, lower greenhouse gas emissions as well as 

a single national standard. 

Until the White House agreement, the automobile industry was facing fragmented, conflicting, 

and burdensome regulation of fuel economy and greenhouse gases. The regulations in California 

and adopted by 12 states and the District of Columbia compared to NHTSA's CAFE 

regulations differed in terms of testing requirements, vehicle category definitions, and 

stringency. 

The White House agreement, in Honda's view, represents a great step forward in the much 

needed regulation of greenhouse gases. The agreements signal wide consensus that the interests 

1-24 
General Comments 

of the country are best served by starting a greenhouse gas regulation and by a national 

implementation of that regulation. 

Honeywell International, Inc. 

Honeywell supports EPA and NHTSA in its historic effort and has offered the agencies solutions 

to better reflect the direct and indirect emissions associated with mobile A/C Systems. [OAR2009-0472-7206.1, p.10] 

Honeywell Transportation Systems 

HTS commends the Environmental Protection Agency ('EPA') and the National Highway Traffic 

and Safety Administration ('NHTSA') in their historic effort to reduce greenhouse gas ('GHG') 

emissions from mobile sources and reduce oil consumption through improvements in fuel 

economy. We recognize the vast challenge before the two organizations and applaud the 

development of a workable solution that protects the environment while providing flexibilities 

important to maintaining a viable automotive industry. The Proposed Rulemaking presents a 

framework that should be economically practicable and successful in achieving these challenging 

goals. Please continue this important work and ensure a harmonized national standard is 

maintained to secure the future health of an industry that is so integral to domestic and global 

economies. [OAR-2009-0472-7165.1, p.2] 

We respectfully submit comments with the view that the Proposed Rules should encourage 

compliance with rules and policy objectives while remaining technologically neutral. We believe 

that the enacted rules should ensure fair treatment of innovators, foster the development of new 

and more effective technologies, and not simply favor currently popular technologies. Setting 

clear standards and selection criteria without prescribing specific solutions will inspire 

innovation that will stand the test of time. [OAR-2009-0472-7165.1, p.2] 

We urge EPA and NHTSA to ensure that decisions taken pursuant to the final Rule incorporate 

the best available data on technology performance, vehicle usage, and geographic considerations. 

Through these comments and suggestions, we strongly encourage measurable, efficient solutions 

that improve fuel economy and reduce GHG emissions. [OAR-2009-0472-7165.1, p.2] 

Hyundai Motor Company 

The improvement of fuel economy and control of GHG are very important issues to Hyundai. In 

our 2008 comments on the proposed NHTSA MY 2011 through 2015 CAFE standards Hyundai 

recognized California for beginning a critical national debate on fuel economy and GHG policy. 

Moreover, we supported early implementation and a faster ramp up to NHTSA's then 2020 fleet 

fuel economy target of 35.0 miles per gallon (mpg) under the 2007 Energy Independence and 

Security Act. That same year, Hyundai became the first automaker to pledge to achieve 35 mpg 

by 2015 . On November 20, 2009, EPA's 2009 Fuel Economy Trends Report 2 shows that 

Hyundai is now the industry leader in brand fuel economy performance for MY 2008 and 2009. 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.67-72] 

1-25
 
 

EPA Response to Comments 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

OAR-2009-0472-6185, pp. 79-80.] 

First I want to clearly state that the improvement of fuel economy and the control of greenhouse 

gases are very important issues for Hyundai, and we appreciate the opportunity to testify here 

today. 

That same year, we became the first automaker in America to pledge that we would meet the 

then 35-mile-per-gallon rule by 2015, not 2020. The fuel economy regulations have now 

changed, but our goal remains the same. We've become the industry's fuel economy leader 

propelled by our Hyundai Blue Drive initiative. 

Hyundai applauds this joint NHTSA-EPA rulemaking exercise here. It represents unprecedented 

regulatory cooperation. It seeks a national solution for reducing greenhouse gas emissions and 

improving fuel economy of motor vehicles, and it works toward a global solution for addressing 

climate change. 

A unified program allows manufacturers to develop a concerted and cost-effective way to 

work in the development of advanced technologies. We believe that a single national program is 

the most efficient and practical approach now and in the future. This is a global and a national 

problem and should be addressed on a national basis. 

Insurance Institute for Highway Safety (IIHS) 

IIHS supports NHTSA’s efforts to increase fuel economy while maintaining vehicle safety 

through the use of an attribute-based system. [NHTSA-2009-0059-0125.1, p.1] 

International Council on Clean Transportation 

This proposed rule takes a giant step towards catching up with vehicle efficiency in Europe, 

Japan, and other nations (see graphic below) and will enhance U.S. credibility worldwide. We 

applaud EPA and NHTSA, along with California, the Administration, and the vehicle 

manufacturers, for taking the first steps along the road to a sustainable transportation 

system. There are tremendous opportunities to dramatically reduce climate change emissions 

from passenger vehicles in the coming years and it is essential to continue this progress in the 

future. Long-term goals need to be set, so that manufacturers have consistent, long-term signals 

to help them develop future technologies and product plans. This is especially important in the 

context of the recession, with companies reorganizing and investment dollars in short supply. 

ICCT supports a strong Federal rule and recognizes and applauds the constructive role that 

California has played in building the technical and public support for this critical rulemaking. 

We urge all parties to continue the process and set aggressive standards for 2017 and beyond. 

ICCT strongly supports the proposed program stringency. 

[OAR-2009-0472-7156.1, pp.1-2] 

1-26 
General Comments 

Kia Motors

 [These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number OAR-2009-0472-7283, pp.169-170] 

The joint EPA/NHTSA proposal is also important to Kia because it works towards the 

only meaningful resolution of these issues, which is a global solution of addressing climate 

change and energy security. 

Kia strongly believes that a single national program to regulate greenhouse gas emissions and 

improve the fuel economy of motor vehicles is the most efficient way and practical approach 

now and in the future. 

We strongly encourage dialogue between California, EPA, and NHTSA on the creation of post2016 model year national standards and look forward to participating in such discussions. 

In addition to supporting an overall goal of a national program, we also support the 

various compliance flexibilities outlined in the joint proposal, including credit transfers and 

trading, credit for advanced technologies, and early credits. 

These mechanisms are important to provide a cost-effective means of achieving the 

standards. This is of particular importance to Kia due to our specific customer need for 

affordable quality vehicles with long-term warranties. 

Lance Tunick 

[[These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number OAR-2009-0472-7283, pp. 140]] 

I would also like to start off by saying that I fully support a GHG standard that makes SVMs do 

their fair share and that does not give them a free ride. 

Such an approach is already taken by both NHTSA in its CAFE program as well as by the 

European Union where, in both cases, an SVM can obtain an alternative standard determined on 

a case-by-case basis and based on feasibility. 

League of Women Voters of South Carolina (LWVSC) 

Thank you for the opportunity to share our viewpoints on this very important matter. We fully 

support and appreciate your efforts by requesting that the new rules and standards be 

implemented as soon as possible. [NHTSA-2009-0059-0137, p. 2] 

Please allow this letter to serve as a comment on the above matter from the League of Women 

Voters of South Carolina (LWVSC). Though we understand fully that the comment period on the 

above issues ended in late November we are nonetheless compelled to share our voice on this 

issue. [NHTSA-2009-0059-0137, p. 1] 

1-27
 
EPA Response to Comments 

LWVSC is very disappointed that South Carolina Department of Health and Environmental 

Control (SCDHEC), our state's own environmental protection agency, failed to take sufficient 

care in expressing their concerns and disagreement with the federal rules to control greenhouse 

gas pollution that contribute to climate change. [NHTSA-2009-0059-0137, p. 1] 

Some of SCDHEC's concerns related to program implementation costs may be legitimate. 

However, LWVSC believes that program costs should be weighed against what South Carolina 

could face in terms of environmental and public health consequences should the new rule not 

become law. As a coastal state we are continuously challenged by extreme weather conditions 

such as hurricanes, tornadoes, drought, and rising sea levels. LWVSC would also argue that 

SCDHEC's comments regarding the program's potential impact on the South Carolina economy 

is neither evidence-based nor within SCDHEC's scope of responsibility for comment. [NHTSA2009-0059-0137, p. 1] 

LWVSC is unsure whether SCDHEC's comments do or do not support consideration of the 

regulatory action, or even whether they support any action to control greenhouse gas emissions. 

If the intent of SCDHEC's comments is to be non-supportive of the final rule for the 

Endangerment and Cause or Contribute Findings for the Greenhouse Gases Under Section 202 

(a) of the clean Air Act (Federal Register, December 15,2009), then LWVSC believes that 

SCDHEC has made a serious mistake and its comments are unacceptable for protecting the 

public health and environment of South Carolina. [NHTSA-2009-0059-0137, p. 1] 

While LVWSC supports new federal legislation on greenhouse gases, there is no assurance at 

this writing that such legislation will pass in the near future. In short, the only protection we can 

expect for the residents of South Carolina will be the minimum federal environmental and health 

standards passed down to the respective states because of our own state agency as shown in their 

comments to you, will not adopt any stronger regulations even when negative outcomes are so 

evident. [NHTSA-2009-0059-0137, p. 2] 

Lee Auto Components

 [[These comments were submitted as testimony at the Detroit public hearing. See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 123-124.]] 

After all these years, I couldn't be more believed and proud that Detroit finally stands with the 

Obama administration in an effort to raise fuel economy standards and restrict greenhouse gas 

emissions. 

Magavern, Bill 

 [These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number OAR-2009-0472-7283, p.180] 

So I see this as being a huge step forward for our country as we grapple with global warming and 

decreasing our energy dependence. And I say this as someone who has been involved in this 

issue for over 20 years now. 

1-28 
General Comments 

So we really thank President Obama for taking the bold action he did earlier this year in basically 

aligning national standards with California standards, recognizing California's leadership, 

bringing the automakers into the tent, and moving forward on this very important regulation. 

I'm very impressed in your analysis that you're showing a benefit-to-cost ratio of over four to one 

from this rule, which is very impressive, and we actually think it could be higher because we 

think that your analysis understates the social cost of carbon. We do urge you to do another 

assessment because we think you're underestimating the social cost of carbon. 

Manufacturers of Emission Controls Association 

In conclusion, MECA commends EPA for taking important steps to reduce greenhouse gas 

emissions and improve fuel economy from light-duty vehicles. MECA believes that a variety of 

advanced powertrain options are available for reducing carbon dioxide emissions from passenger 

vehicles and light-duty trucks. [OAR-2009-0472-7108.2, p.11] 

MECA believes that EPA should include black carbon emissions as part of its overall greenhouse 

gas emission control strategy. [OAR-2009-0472-7108.2, p.7] 

Mass Comment Campaign (13,829) (Union of Concerned Scientists) 

I applaud your combined efforts to implement the national clean car standards announced by 

President Obama. These standards are a win for U.S. drivers, whose gasoline savings will 

outweigh any increased costs for vehicle technology developments. Indeed, your own analysis 

shows that automakers could reach significantly higher efficiency standards than those proposed 

and still save consumers money. [OAR-2009-0472-3906, p.1] 

But 30 years without any significant change in fuel economy standards has shown that only a 

strong rule will ensure that clean car choices become a reality. Past loopholes to fuel economy 

rules, such as allowing automakers to reclassify cars as 'light trucks' to decrease fuel economy 

requirements and incorporating weight thresholds that allowed gas guzzlers like the Hummer to 

evade all fuel economy regulations, helped to create the current environmental and economic 

predicament the automobile industry finds itself in. [OAR-2009-0472-3906, p.1] 

The final clean car rule must guard against any potential loopholes or other efforts to weaken the 

effectiveness of the standards. Creating a strong national program will fulfill the president's 

commitment, provide U.S. consumers with clean vehicle choices, and allow the struggling auto 

industry to emerge as the model for a clean energy economy. [OAR-2009-0472-3906, p.1] 

Mass Comment Campaign (18,583) (unknown organization) 

I support the proposed EPA - NHTSA rule to set strong global warming pollution standards for 

personal vehicles. This landmark rule would: 

-- Limit greenhouse gas pollution from automobiles; 

-- Improve fuel efficiency by about 5% annually; 

1-29
 
EPA Response to Comments 

-- Reduce fleet-wide greenhouse gases 19% by 2030; and 

-- Cut carbon dioxide emissions by an estimated 950 million metric tons and 1.8 billion barrels 

of oil over the lifetime of the vehicles sold under the program (model years 2012-2016). [OAR2009-0472-3907, p.1] 

Global warming is the most serious environmental threat facing the planet today. Americans face 

a wide variety of public health threats, from the spread of infectious diseases to worsening air 

quality to more intense weather events heat waves, floods, droughts. [OAR-2009-0472-3907, 

p.1] 

I applaud EPA and NHTSA for setting the first greenhouse gas emissions limits in American 

history and encourage the Obama administration to continue to find ways to curb the pollution 

that causes global warming. [OAR-2009-0472-3907, p.1] 

Mass Comment Campaign (19) (unknown organization) 

Thank you for your efforts to implement the national unified fuel economy standards announced 

by President Obama. I applaud your efforts to issue strong standards while also protecting jobs in 

the domestic auto industry. We must design these regulations in a way that fairly distributes the 

burdens across the industry so we can create new jobs while we move forward with reducing 

carbon pollution and enhancing energy security. [OAR-2009-0472-5748, p.1] 

Also, the final rule must guard against any potential loopholes or other efforts to weaken the 

effectiveness of the standards. Creating a strong national program will provide U.S. consumers 

with clean vehicle choices and allow the struggling auto industry to emerge as the model for a 

clean energy economy. [OAR-2009-0472-5748, p.1] 

Mass Comment Campaign (2,332) (unknown organization) 

I urge that you protect the greenhouse gas and fuel economy standards for passenger cars and 

light trucks from being undermined by the various credits being offered. [OAR-2009-0472-5747, 

p.1] 

Automakers have been dragging their feet in making improvements in fuel economy for 25 

years. There is ample technology ?on the shelf? to meet the proposed standards without unduly 

burdening the industry. If automakers had acted to build more efficient cars and trucks, 

consumers would not have been hit as hard by $4-a-gallon gas a little over a year ago. It is time 

to put fuel efficient vehicles people want to buy on the market. [OAR-2009-0472-5747, p.1] 

President Obama set a goal in May to put us on a path towards reduced greenhouse gas 

emissions and oil consumption. I urge that every effort be made to ensure the president's goal 

comes to fruition. [OAR-2009-0472-5747, p.1] 

Mass Comment Campaign (27,307) (Alliance for Climate Protection) 

1-30 
General Comments 

The Alliance for Climate Protection commends the Environmental Protection Agency (EPA) and 

National Highway Traffic Safety Administration (NHTSA) in their efforts to propose regulations 

to limit greenhouse gas emissions and improve fuel economy from automobiles and light trucks . 

These measures are important to limit global warming pollution, reduce America's dependence 

on foreign oil, revitalize the US auto industry, and save consumers money at the gas pump. 

[OAR-2009-0472-7295, p.1] 

The Alliance informed its members about this proposed rule, and provided them with an 

opportunity to support the draft regulation. Interested members expressed support for the 

proposal by submitting signing on to a shared statement to serve as public comments to EPA and 

NHTSA. [OAR-2009-0472-7295, p.1] 

The statement is: 'I support efforts to strengthen fuel efficiency standards that will reduce 

pollution and revitalize our auto industry.' [OAR-2009-0472-7295, p.1] 

In total, 27,307 Alliance members endorsed the petition. [OAR-2009-0472-7295, p.1] 

The Alliance for Climate Protection supports the intent of the proposed rule and encourages EPA 

and NHTSA to finalize a rule that includes the most stringently constructed fuel economy 

standards and mandatory greenhouse gas tailpipe limits that will maximize fuel savings and 

minimize greenhouse gas pollution. [OAR-2009-0472-7295, p.1] 

Mass Comment Campaign (32,918) (Sierra Club) 

I applaud Environmental Protection Agency and National Highway Traffic Safety 

Administration for proposing standards that will make our cars and trucks cleaner and more 

efficient. The vehicles sold under these standards will carry out President Obama's historic 

announcement and save 1.8 billion barrels of oil, $193 billion in consumer gasoline costs, and 

significantly reduce our greenhouse gas emissions. [OAR-2009-0472-5749, p.1] 

I urge the EPA and the Department of Transportation not to let excessive credits and unneeded 

flexibility keep us from reaching oil savings and emission reduction goals. Both agencies should 

include a backstop that will ensure the auto industry meets the 2016 targets. As it stands now, if 

automakers simply produce more gas guzzling trucks than the proposal predicts, we could end up 

with more pollution and less oil savings. [OAR-2009-0472-5749, p.1] 

These standards will help Detroit become a leader in green vehicles by putting the best of today's 

technology to work and investing in future technologies, such as electric vehicles. But we need 

to ensure that electric vehicle credits don't allow automakers to fail to clean up other vehicles in 

their fleet. While electric vehicles don't have a tailpipe, producing the electricity used to power 

an electric vehicle does emit greenhouse gases. The standards should treat electric vehicles 

accurately. [OAR-2009-0472-5749, p.1] 

I am excited about cleaner cars and applaud the Administration for proposing standards that are a 

win for consumers, automakers, and the environment. Strong final rules will take vehicle 

standards out of the 1970s and into the 21st century, laying a strong foundation for the cleaner 

1-31
 
EPA Response to Comments 

vehicles we need to end our reliance on oil and curb global warming. [OAR-2009-0472-5749, 

p.1] 

Mass Comment Campaign (326) (Student PIRGs) 

Thank you for the leading the way on global warming by proposing the first-ever federal 

standards to reduce global warming pollution from cars and light trucks. This historic action will 

reduce our nation's oil dependence, save consumers money at the pump, and cut global warming 

pollution. [EPA-HQ-OAR-2009-0472-11293, p. 1] 

Mass Comment Campaign (7,239) (unknown organization) 

The president's 35 mpg by 2016 target will help me and all Americans play a stronger role in 

curbing oil dependence and global warming pollution, and help in the transformation and 

revitalization of our struggling auto industry. [OAR-2009-0472-3905, p.1] 

As we know from 30 years of stagnation on national fuel economy, your plan will be the key to 

ensuring that the president's stated goal -- 35 mpg by 2016 -- becomes reality. [OAR-2009­

0472-3905, p.1] 

Significant past loopholes, such as allowing automakers to reclassify cars as 'light trucks' to 

decrease fuel economy requirements and incorporating weight thresholds that allowed gas 

guzzlers like the Hummer to evade all fuel economy regulations, helped to create the current 

environmental and economic predicament the industry finds itself in. [OAR-2009-0472-3905, 

p.1] 

Only a strong final plan that ensures the president's targets are met will deliver the clean car 

choices, oil savings, and jobs that a transformed auto industry can bring. [OAR-2009-0472-3905, 

p.1] 

I look forward to seeing the Environmental Protection Agency and the Department of 

Transportation working together to deliver and implement strong national clean car standards. 

[OAR-2009-0472-3905, p.1] 

Mercedes-Benz (Daimler AG) 

We agree with the conclusion that the nation can't wait for the automobile industry to recover 

before pushing forward on greenhouse gas reductions. In fact, our chairman often describes the 

current crisis as an opportunity for strong companies like ours to refocus their investment and be 

even stronger in a post crisis world, and so for that reason our [These comments were submitted 

as testimony at the New York public hearing. See docket number OAR-2009-0472-4621, p. 48.] 

company, Daimler, is moving full steam ahead, we have not reduced our investments in any way 

and we expect to have significant improvements in our entire fleet across all of our vehicles in 

the coming years. In this spirit, we are pleased to participate in this forum and lend our support to 

this proposed rule. [These comments were submitted as testimony at the New York public 

hearing. See docket number OAR-2009-0472-4621, p. 49.] 

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General Comments 

Mitsubishi Motors R & D of America (MRDA) 

Mitsubishi Motors strongly supports the development of a National Program to regulate lightduty vehicle greenhouse gas emissions which reduces the regulatory burden upon Automakers 

while significantly decreasing light-duty vehicle greenhouse gas emissions. In order to continue 

Automakers’ efforts to comply with the National Program, Mitsubishi Motors urges EPA and 

NHTSA to continue to work together to extend the National Program beyond MY 2016. [OAR2009-0472-7125.1, p.1] 

Mitsubishi Motors applauds the joint rulemaking efforts of EPA and NHTSA, and specifically 

supports the respective organization’s harmonization efforts under the National Program. [OAR2009-0472-7125.1, p.5] 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.85-87] 

Mitsubishi Motors supports the efficient and practical approach to achieving true greenhouse gas 

reductions and fuel economy improvements, a single national standard. 

This joint rulemaking by EPA and NHTSA is an important step of establishing a 

cohesive national program to reduce greenhouse gases and improve fuel economy. This unified 

program should allow manufacturers to develop cost-effective processes in meeting these 

standards and deploying advanced technology vehicles. 

Motor and Equipment Manufacturers Association 

MEMA is encouraged by the collaborative effort between the National Highway Traffic Safety 

Administration (NHTSA) and the Environmental Protection Agency (EPA) to improve fuel 

economy and reduce emissions under one National Program. Compatible and consistent 

standards allow vehicle manufacturers to focus their resources on investing in the best 

technologies, which in turn, feeds the ability of the supplier base to advance development and 

transfer research technologies into commercially viable products. MEMA and the supplier 

industry are committed to policies that enable the introduction of new technologies needed to 

support sustainable mobility. [OAR-2009-0472-7121.1, cover page] 

The state of the nation's economy has severely challenged the motor vehicle industry and many 

suppliers are facing huge financial shortfalls. MEMA is encouraged by the collaborative efforts 

between the National Highway Traffic Safety Administration (NHTSA), 

Environmental Protection Agency (EPA), and the State of California to approach GHG 

emissions and fuel economy standards under one National Program with compatible, consistent 

standards. MEMA strongly supports a uniform National Program based on GHG reduction and 

increased fuel economy because it allows vehicle manufacturers to focus their resources on 

investing in the best technologies available. This, in turn, feeds the ability of the supplier base to 

advance development and turn research technologies into commercially viable products. [OAR2009-0472-7121.1, p.2] 

1-33
 
EPA Response to Comments 

MEMA supports the approach taken by the Administration to bring together the light-duty 

vehicle fuel economy standards and emissions standards into a joint National Program. A 

uniform program not only allows vehicle manufacturers to invest in the appropriate technologies 

their vehicles need to reach and exceed fuel economy and emissions targets, but also helps the 

supplier base convert research technologies into commercially viable products. [OAR-2009­

0472-7121.1, p.13] 

[See docket OAR-2009-0472-7121.1, p. cover page-2 for detailed introduction and p.12 for 

detailed conclusion] 

Mr. Richter - Environmental Capital Partners 

The most obvious is environmental, which encompasses human health and quality of life. It's 

fairly obvious if we drive the same number of miles and produce less tailpipe emissions, of 

course, we're going to help out the ecological systems and our societies in general. I think you've 

all seen the National Academy of Sciences recently released report describing it's estimated that 

$120 billion worth of health cost of burning fossil fuels. These are real dollars, they're 

real health concerns, and we can do an awful lot if we just eliminate a percentage of the 

transportation pollution. [Comment submitted as testimony at the New York public hearing 

EPA-HQ-OAR-2009-0472-4621, pp.159-160]] 

So I will close in saying that raising CAFE standards is not the only answer to the many deep 

and varied challenges that this nation and the world face, of course, but it is a simple proven, 

relatively low cost method of combatting global warming, improving our competitiveness in the 

auto industry, strengthen our energy security, stimulating our economy, and reclaiming our 

moral standing in the international community. My suggestion and hope is that the EPA takes the 

most aggressive approach possible and demands the highest standards in the world for the 

American car industry as quickly as possible. Decades of ignoring this responsibility has left us 

with no other choice but to learn from the past and much, much upside if we do. [OAR-2009­

0472-4621, p.164-165] 

National Asphalt Pavement Association 

As the national association representing the majority of asphalt pavement producers and 

contractors, we commend the EPA and the NHTSA for working together to develop a rule that 

will result in significant improvements in fuel economy. [OAR-2009-0472-7224.1, p.1] 

National Association of Clean Air Agencies (NACAA) 

Our association strongly supports timely and effective action to curb GHG emissions from lightduty vehicles and, therefore, supports this proposal. [OAR-2009-0472-7071.1, p.1] 

Global warming is the most pressing global environmental issue facing our generation. The 

Intergovernmental Panel on Climate Change (IPCC) stated in 2007 that the evidence that global 

warming is already affecting our planet is “unequivocal, as is now evident from observations of 

increases in global average air and ocean temperatures, widespread melting of snow and ice, and 

1-34 
General Comments 

rising global average sea level.” And since the IPCC report was released, even more compelling 

research and evidence have accumulated demonstrating that we need to act now to reduce GHG 

emissions. [OAR-2009-0472-7071.1, p.1] 

As EPA data confirm, the mobile source sector is responsible for approximately 36 percent of 

total U.S. GHG emissions, taking into consideration upstream transportation fuel emissions (such 

as those associated with extraction, shipping, refining and distribution), as well as nonroad 

mobile sources (including construction, farm and lawn and garden equipment). This level 

exceeds electricity generation, which accounts for approximately 34 percent of total U.S. GHG 

emissions. Given this significant contribution, a comprehensive regulatory strategy to reduce 

GHG emissions from the mobile sector must be developed and implemented without delay. 

[OAR-2009-0472-7071.1, p.1] 

For this reason, NACAA applauds EPA and NHTSA for this landmark federal proposal which, 

in addition to improving the fuel economy of cars and light-duty trucks, puts in place the first 

ever national program for reducing motor vehicle GHG emissions. The proposed standards to 

reduce GHG emissions from light-duty vehicles in model years 2012 through 2016 are a very 

commendable first step forward in what must be an ongoing effort to make light-duty vehicles 

and our nation’s entire mobile source fleet and fuels as clean and “green” as possible. [OAR2009-0472-7071.1, p.1] 

We are confident that these standards can be implemented with success, given EPA’s proven 30­

year-plus track record of establishing and implementing motor vehicle emissions standards under 

Title II of the Clean Air Act. The technical research and analysis that EPA has conducted 

illustrate the agency’s thoughtful deliberation of various approaches for this program, leading to 

a proposed set of national light-duty vehicle GHG emissions standards that can be achieved with 

known and available technologies. [OAR-2009-0472-7071.1, p.2] 

Moreover, the automobile manufacturers have endorsed the establishment of a national program 

for vehicle GHG emissions standards and Corporate Average Fuel Economy standards. In 

commitment letters signed on May 18, 2009, automakers and the trade associations that represent 

them stated that they “recognize the benefit for the country of a National Program to address 

GHGs and fuel economy and the historic announcement of EPA and NHTSA’s intent to jointly 

propose a rule to set standards for both. They further stated that they “fully support proposal and 

adoption of such a National Program,” that they “welcome this opportunity to be a partner in 

helping to advance a harmonized National Program” and that they “commit to working with EPA 

and NHTSA, the states, and other stakeholders to help our country address global climate change 

and the need to reduce oil consumption by developing this kind of strong, coordinated, national 

program for the model years after 2016.” [OAR-2009-0472-7071.1, p.2] 

[NACAA also submitted these comments as testimony at the New York public hearing. See 

docket number OAR-2009-0472-4621, pp. 54-60.] 

National Association of Manufacturers 

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EPA Response to Comments 

The NAM supports the Administration’s broader policy objectives of harmonizing vehicle 

emission standards under a National Program and promotion of energy efficiency through 

enhanced CAFE standards through the Department of Transportation (DOT). Not only does 

establishment of national, uniform standards have the potential - if implemented correctly- to 

create a climate of investment certainty necessary to make long-term business decisions, but 

stronger energy efficiency objectives will also enhance domestic energy security, which is a key 

policy priority for manufacturers. The NAM applauds the Administration’s objective to “mitigate 

the additional costs that manufacturers would otherwise face in having to comply with multiple 

sets of federal and state standards.” [OAR-2009-0472-7215.1, p. 2] 

National Association of Manufacturers 

NAM supports the Administration’s broader policy objectives of harmonizing vehicle emission 

standards under a National Program and promotion of energy efficiency through enhanced CAFE 

standards through the Department of Transportation (DOT). Not only does establishment of 

national, uniform standards have the potential - if implemented correctly- to create a climate of 

investment certainty necessary to make long-term business decisions, but stronger energy 

efficiency objectives will also enhance domestic energy security, which is a key policy priority 

for manufacturers. The NAM applauds the Administration’s objective to mitigate the additional 

costs that manufacturers would otherwise face in having to comply with multiple sets of federal 

and state standards. [OAR-2009-0472-7215.1, p.1] 

National Automobile Dealers Association (NADA) 

Ever since enactment of EPCA in 1975, NADA has supported the goal of continuous fuel 

economy improvements, while recognizing the constraints inherent in any “push” approach to 

improving motor vehicle fuel economy performance. Simply put, the ultimate success of any 

policy directed at improving new vehicle fuel economy and GHG performance rests with 

consumer new vehicle preferences. Unless and until consumers actually buy and use new 

vehicles, the fuel economy and GHG emissions benefits associated with those vehicles cannot 

and will not be realized. Prospective purchasers in search of personal transportation have 

alternative choices to buying or leasing new vehicles. Specifically, they always may elect to hold 

onto their existing vehicles longer or to turn to the used vehicle marketplace. Production 

mandates resulting in vehicles with performance constraints or high prices will lead to lower new 

vehicle sales. Thus, any National Program must incorporate feasibility and affordability as 

essential elements designed to achieve the energy and environmental benefits associated with 

fleet turnover. Of greatest importance for dealers, for energy security, and for the environment is 

not what can be built, but what the motoring public is willing and able to buy. [OAR-2009-0472­

7182.1, p.2] 

[National Automobile Dealers Association also submitted these comments as testimony at the 

New York public hearing, See docket number OAR-2009-0472-4621, pp. 84-85.] 

I'd like to commend you for working hard to try to design a single national fuel economy 

standard that aims to avoid an unworkable patchwork of state-based laws. Coordinating the 

regulatory efforts of two important federal agencies is a challenging task, especially given the 

1-36 
General Comments 

important differences in each agency's statutory structures, mandates, goals and objectives. It is 

in this light that today I will present three major points. [These comments were submitted as 

testimony at the New York public hearing. See docket number OAR-2009-0472-4621, p. 80.] 

Natural Resources Defense Council 

 [[These comments were submitted as testimony at the Detroit public hearing. See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 18-19.] 

NRDC applauds the creation of the National Program. The program is a historic step forward for 

protecting the environment and helping consumers save money at the pump. It secures the 

benefit of the California Vehicle Emissions Program while also giving consumers more clean 

vehicle choices. The program represents a path forward on new vehicle standards that is clearly a 

win for automakers, their workers, and the States. It's good for automakers because it gives them 

certainty and lays the foundation for them to be more sustainable businesses in a future world of 

volatile fuel prices and intensifying global warming. It is good for auto workers because a 

stronger industry means more better paying jobs. The program is also good for the states 

because it preserves their right to act to protect their local interests and citizens and it upholds 

their tremendous value as laboratories for clean vehicle policy. 

The joint proposal establishes an important policy partnership by aligning the fuel conservation 

directive of the Energy Policy and Conservation Act with the pollution and health protections of 

the Clean Air Act. The Supreme Court ruled in Massachusetts v EPA that the Clean Air Act is 

the appropriate law for controlling carbon pollution and the Clean Air Act authority brings new 

important perspectives to standards that reduce vehicle carbon emissions. 

In addition to having health and welfare as primary drivers of the standards, the Clean Air Act 

provides technology enforcing standards, and it includes the flexibility to set standards over 

longer time frames. Unlike EPCA, which limits NHTSA to setting standards just five years into 

the future, the Clean Air Act allows EPA to set longer term standards based on advanced, not 

just incremental technologies. This approach increases regulatory certainty for automakers and 

enables them to more effectively plan new technology in this strategic manner. 

New York City Law Department 

In light of the City’s unique vulnerability to the impacts of climate change and its on-going 

efforts to reduce greenhouse gas emissions and improve air quality within the City, we write to 

provide these comments in support of the proposed rules, and to highlight the rules’ potential 

beneficial interaction with legislation now pending before Congress that would allow states and 

municipalities to set fuel economy and emissions standards for their taxicabs and other for-hire 

fleets. [OAR-2009-0472-7240.1, p.1] 

Northeast States for Coordinated Air Use Management 

Thus, NESCAUM applauds EPA for taking an extremely important step towards reducing 

transportation-related GHG emissions. The proposed rule, once implemented, will reduce 

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EPA Response to Comments 

lightduty vehicle GHG emissions 21 percent by 2030. The rule will also increase energy security 

— the U.S. currently consumes more than 18 million barrels of oil a day, and imports about 60 

percent of total consumption. Of this, more than 8 million barrels a day are consumed in 

lightduty vehicles. The rule will reduce oil consumption by approximately 1.8 billion barrels 

over the lifetime of the vehicles that will be sold in model years 2012 to 2016. [OAR-2009-0472­

7235.1 p.1] 

[Northeast States for Coordinated Air Use Management also submitted these comments as 

testimony at the New York public hearing, See docket number EPA-HQ-OAR-2009-0472-4621, 

pp. 41-42.] 

New York State Department of Environmental Conservation 

The greenhouse gas (GHG) emission standards proposed here are an important step towards 

minimizing the risk to human health and environmental quality posed by global warming. These 

risks include increases in heat related illness and increases in the range of disease vectors. Sea 

level rise and changes in rainfall patterns are also expected, with attendant risks to coastal 

infrastructure and agricultural production. There may be too much water in some places and not 

enough in others. These risks are too great to ignore. [OAR-2009-0472-7454, cover page 1] 

This joint proposal is long overdue. Along with its neighbors, New York State has been at the 

forefront of efforts to combat global warming. Pursuant to Section 177 of the Clean Air Act 

(Act), New York has adopted California's greenhouse gas emission standards for light duty 

vehicles. New York has also acted, through the Regional Greenhouse Gas Initiative, to reduce 

emissions from electric power generation. We applaud EPA's decision to use its authority, under 

the Act to reduce GHG emissions. [OAR-2009-0472-7454, cover page 1] 

[New York State Department of Environmental Conservation also submitted these comments as 

testimony at the New York public hearing, See docket number EPA-HQ-OAR-2009-0472-4621, 

pp. 15-18] 

New York State Department of Transportation (NYSDOT) 

NYSDOT commends the Obama Administration, NHTSA, and the EPA for their joint efforts to 

improve the fuel economy of the light duty vehicle fleet. We also commend the Administration 

and the agencies for pursuing harmonized national emissions and fuel economy standards that 

are consistent with the automotive emissions control program established by the State of 

California under the authority of Section 209 of the Clean Air Act and by several other states, 

including New York, under the authority of Section 177 of the Clean Air Act. [OAR-2009-0472­

7531.1, p.1] 

New York University School of Law, Institute for Policy Integrity (IPI) 

The Institute for Policy Integrity strongly supports the efforts of the Environmental Protection 

Agency (EPA) and the National Highway Transportation and Safety Administration (NHTSA) to 

address the problem of greenhouse gas (GHG) emissions from light-duty vehicles in this joint 

1-38 
General Comments 

rulemaking. This joint proposal of new Corporate Average Fuel Efficiency Standards (CAFE) 

from NHTSA and greenhouse gas emission standards (GHG Standards) from EPA for light-duty 

motor vehicles is an important move toward meeting EPA’s obligations under the Clean Air Act 

(CAA), as defined by the Supreme Court in Massachusetts v. EPA. [OAR-2009-0472-7232.3, 

p.1] 

However, this is only the first step. Several petitions are pending before EPA to regulate a 

variety of other mobile sources that produce significant greenhouse gas emissions, including a 

petition from this Institute. In order to fully comply with its mandates under the Clean Air Act, 

EPA must address all significant sources of greenhouse gas emissions and must respond to these 

petitions. [OAR-2009-0472-7232.3, p.1] 

We applaud the agencies efforts to respond to the legal obligations under Massachusetts v. EPA 

and to the growing risks associated with GHG emissions. The recommendations contained in 

these comments will allow EPA to more efficiently and effectively meet these goals. [OAR2009-0472-7232.3, p.18] 

NGVAmerica 

NGVAmerica supports the U.S. EPA effort to regulate greenhouse gas emission from motor 

vehicles. Regulating greenhouse gas emissions from transportation sources is an important part 

of the overall effort to reduce greenhouse gas emissions and help mitigate America’s impact on 

climate. Therefore, we agree with EPA’s assessment that such emissions must be controlled. 

[OAR-2009-0472-7236.1, p.5] 

Nissan North America 

The Notice of Proposed Rulemaking is consistent with the National Program in terms of both the 

stringency of the standards and the structure of the two programs. More significantly, the 

proposed Joint Rulemaking is consistent with the overarching goal of encouraging and 

acknowledging investment in a zero emissions transportation system. [OAR-2009-0472-6798.1, 

p.1] 

Pacific Unitarian Church, Green Sanctuary Project 

Please support. [OAR-2009-0472-7241, p.1] 

Pavley, Fran, California State Senate 

In May of this year I had the honor of being present in the Rose Garden with President Obama, 

Congressional leaders, and CEO’s from major automobile companies, EPA and California 

officials, and advocates for the passage of a comprehensive Federal program to reduce 

greenhouse gas emissions from passenger automobiles and light duty trucks. It was 7 years ago 

that California’s Clean Cars bill, AB 1493, was signed into law, and in 2004 the California Air 

Resources Board unanimously adopted the regulations. The standards to reduce greenhouse gas 

emissions by 30% by 2016 were based on off-the-shelf, cost effective, and available 

1-39
 
EPA Response to Comments 

technologies. Expert engineers were able to quantify greenhouse gas emission reductions based 

on a package of technologies that could be used in different classes of vehicles, allowing for 

consumer choice. Independent public opinion polls each July from 2002-2009 by the PPIC 

shows that across geographic, demographic and political parties, Californians continue to 

strongly support these regulations. In 2004, when these regulations were adopted, gas was nearly 

$1 dollar less per gallon, and global conflicts were less threatening to our economic security. In 

addition, in 2004 we did not include our target greenhouse gas reductions under AB 32, or even 

the alternative fueled vehicles, such as hybrids, that are on the market today. We certainly didn’t 

consider the public’s growing interest as well as the competitive race among automobile 

companies, to build electric vehicles and plug in hybrids. [OAR-2009-0472-7275.1, pp.1-2] 

I am confident that automakers’ topnotch engineers will be able to design cleaner cars to meet 

these standards not just in California but also across the nation. Rising gas prices, a growing 

public concern about the dependence of importing oil and how that affects our security, the 

health impacts of air pollution, as well as the visible and growing impacts of global warming, 

have increased the publics demand for cleaner, more fuel-efficient cars. [OAR-2009-0472­

7275.1, p.2] 

In California, and many other Western states, we are in our record 3rd year of drought. We have 

documented evidence of an earlier melt of our snow pack, with more rain than snow at higher 

elevations, causing an unreliable water supply during our shorter springs and long hot summers. 

Sea level rise along our coast as well as states like Florida are a growing concern. From salt 

water intrusion into our water supply, inability to get insurance along low lying coastal 

properties as well as in our dry parched hillsides, and the potential to seriously impact our state’s 

coastal dependent tourism economy, we are very concerned about the cost of doing too little or 

nothing to address the impacts of global warming. [OAR-2009-0472-7275.1, pp.2-3] 

There is a compelling link between global warming and air pollution. Warmer temperatures 

increase our ozone and smog forming pollutants. We have alarming and growing respiratory 

illness, asthma and cancer rates occurring among our youth and the elderly. Several intense heat 

waves over weeks at a time have caused illness and deaths. Lower income neighborhoods that 

often lack air conditioning are particularly at risk during heat episodes. Agricultural losses, 

increases in vector borne diseases, and a dramatic increase in loss of property and air pollution 

from costly wildfires have become the new normal. California is not the only state that is 

impacted by air pollution. [OAR-2009-0472-7275.1, p.3] 

From Denver, to Chicago, to Albuquerque New Mexico, air pollution is a serious health 

problem. Two years ago, I testified in Santa Fe, New Mexico as they were having a hearing on 

adopting California’s Clean Car standards. Several doctors and pediatricians, on their own 

initiative, came to support the policy because of their concerns of their patient’s health. For 

many, they said it was the first time they had ever testified at a government hearing. [OAR-2009­

0472-7275.1, pp.3-4] 

[Fran Pavley also submitted these comments as testimony at the Los Angeles public hearing. See 

docket LA EPA Hearing EPA-HQ-OAR-2009-0472-7283, pp. 13-20] 

1-40 
 

 

General Comments 

Peters, Doug 

 [The following comments were submitted as testimony at the Detroit public hearing. See docket 

number EPA-HQ-OAR-2009-0472-6185, p. 118-122.] 

I felt personally compelled to come here today to support this regulation because of the national 

security aspects of climate change and our nation's dangerous dependence on both foreign and 

domestic oil. 

Oil dependence also threatens our economic stability. Everyone knows that. In the last year 

alone we have seen the price of oil in a very volatile manner go from approximately $140 a 

barrel down to $40 a barrel. We'll pay a much higher price in terms of American lives and our 

economy if we delay or fail to act to reduce our oil dependence right now. This is the consensus 

among national security experts and retired generals and admirals. This is why this rule is so 

important. This regulation will be a tremendous first step. It is estimated this regulation will 

save 1.8 billion barrels of oil over the lives of the vehicles sold between 2012 and 2016. This is 

a very important step in a long road to the energy and climate security that our nation needs and, 

most importantly, cannot be the last. 

I spent five years in the Marine Corps. In that time I participated in both Afghanistan and Iraq 

invasions. On January 9, 2002 seven Marines from my squadron became the first Marines to die 

following the 9/11 attacks. Seven of my friends of which I left American soil with were the first 

Marine casualties suffered by this nation. I guess my time overseas, particularly the time I spent 

in Pakistan, Afghanistan, and the Middle East in general served as a true wake-up call for me. I 

realized that the way America would have to interact with the world going forward had changed. 

I realized that new threats had emerged, unconventional threats. I witnessed U.S. military go 

from old war style of fighting to that of asymmetric warfare practically overnight. 

One of those new threats, as intangible as it may seem at times, is climate change or climate 

disruption. Climate disruption is obviously not one of your traditional military threats. It's what 

the military refers to as a threat multiplier. Climate change has the potential to destabilize fragile 

governments, turning those governments into failed states, has potential to spark mass migration 

of populations, turning those populations into refugee populations, has the potential to spark 

conflicts over scarce water resources and scarce agricultural resources. 

In these types of environments and scenarios the possibility exists for extremists to hide, the 

possibility exists for extremists to recruit and train desperate members of these populations and 

turn them against us. We've already seen this happen in Bangladesh, Darfur, Somalia, and other 

places in the Horn of Africa. Climate disruption is such a viable threat, the Pentagon has already 

started creating contingency scenarios for them. In fact, the Pentagon will focus on its issue in 

its 2010 quadrennial defense review as I believe the State Department will in its quadrennial 

diplomacy and development review. In other words, U.S. military is going to be called upon to 

respond to such scenarios and threats. This is in addition to the pre-existing wars and challenges 

1-41
 
EPA Response to Comments 

the U.S. military already faces. I believe one of the most misunderstood or underfelt aspects 

facing today's military is the continuous deployment cycles of U.S. troops overseas. 

Now, the U.S. military will always step up, that's what we do, it's an honor and a privilege, but 

when troops are on their third, fourth, and even fifth deployments overseas to either Afghanistan 

or Iraq, that places a tremendous burden on the troops themselves and on their family members. 

This burden will only be intensified if the military is forced to respond to such threats posed by 

climate change or climate disruption. Good examples of this scenario can be found in the 2004 

Indonesia tsunami when the U.S. military was called in to provide aid. The U.S. military is the 

only organization in the world that has the strength, the know-how, and the resources to respond 

to such conflicts or disasters. You can even take Hurricane Katrina as another example. For 

these reasons, implementation of this rule is vital to our national security. It is estimated that this 

rule will reduce greenhouse gas emissions by 950 million metric tons by 2016. Climate security, 

in other words, is our nation security. 

Equally threatening to our national security is America's dependence on oil. Now, obviously this 

is not a new threat, it's been around a while. It's been realized, but I don't believe it's been as 

recognized as it should be. As I mentioned, our military is already stretched very thin, and 

ensuring the constant flow of oil around the globe has become a constant if not secondary 

occupation and task of the U.S. military, yet this is another burden on top of the war fighting 

responsibilities and the preparation we have to put in for future contingencies. 

Because we simply do not have enough oil in the United States to meet our demand, we have to ­

- we are forced to rely on hostile regimes such as Iran or potentially Venezuela for our oil. 

Especially considering Iran and countries like Venezuela have nationalized their oil companies, 

so basically we're dealing directly with the nation-states themselves. 

In 2008 we sent over $386 billion overseas for oil. That's over a billion dollars a day. When this 

amount of wealth is being transferred to countries like Iran, we are basically -- we are actually 

funding both sides of the war against terror. Everybody knows that, it's well known that Iran has 

funded and trained and supported insurgents in Iraq and in broader Middle East in general. So as 

I said, we are actually paying people to fight against us. 

I applaud the automakers for taking this step and their support of this regulation, and I want to 

thank the EPA. It's been an honor to testify before another organization whose duty it is to 

protect the United States and its citizens. 

Physicians for Social Responsibility, Los Angeles 

 [Following comments are from LA Testimony, OAR-2009-0472-7283 p.79-85] 

Our organization believes this is a first good step, but it's just the beginning, and stronger action 

is needed to truly protect public health and create a fleet of vehicles that we need for a greener, 

healthier future. 

Public Citizen and Safe Climate Campaign 

1-42 
General Comments 

The commitment of EPA, NHTSA, CARB, and the auto industry to move forward with these 

standards to reach 250 grams of carbon dioxide per mile (gCO2/mi) by 2016 would be a historic 

achievement for climate protection. [OAR-2009-0472-7050.1, p.1] 

The agencies? treatment of various details in knitting the programs together will set an important 

precedent for future rulemakings. We urge the agencies to give careful thought to the structure of 

this program, with an eye toward additional gains needed beyond the 2016 model year. [OAR2009-0472-7050.1, p.1] 

Sack, Emily 

I applaud your work, I don't do technical work, I'm not a politician, but I thank you so much for 

what you're doing and keep it up. Thank you so much. [OAR-2009-0472-4621, p. 157] 

[See Docket Number OAR-2009-0472-4621, pp.154-157 for detailed comments] 

Seal, Kathy 

 [These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number OAR-2009-0472-7283 p.147] 

So I wanted to thank you for giving us some hope, for contemplating and proposing 

these standards, in the future for implementing them. I'm very happy that they will reduce 

greenhouse gas emissions equivalent to the shutting down of 200 more coal plants per year. I'm 

really thrilled about these standards that are being proposed. At the same time, I urge you to 

make them be implemented very, very strongly without loopholes, without watering them down. 

Sierra Club 

The Sierra Club, Safe Climate Campaign, Coalition for Clean Air, Alliance for Climate 

Protection and Environment America applaud EPA and NHTSA for proposing greenhouse gas 

and fuel economy standards the first outlined in President Obama’s historic announcement on 

May 19, 2009. Achieving the President’s goals will reduce America’s oil dependence, curb 

global warming, cut air pollution, save consumers money at the gas pump, and create new auto 

industry jobs. [OAR-2009-0472-7278.1, p.1] 

We applaud the use of publicly available data as the basis for these proposed standards and the 

fresh look at technologies and costs, which stands in stark contrast to NHTSA’s past reliance on 

confidential product plans and proprietary data. Additionally, we note EPA’s ability to set 

standards that address a range of greenhouse gases, including air conditioning systems and their 

potent refrigerants. EPA’s Clean Air Act authority is an important complement to NHTSA’s 

energy conservation goals and more limited assessment of impacts on CO2 emissions. [OAR2009-0472-7278.1, p.2] 

By accelerating compliance with the 2020 fuel economy target provided in EISA, EPA and 

NHTSA create the opportunity for going well beyond 35 mpg in 2020 and putting the US auto 

1-43
 
EPA Response to Comments 

industry on a path for longer term transformation. This is the biggest single step we can take to 

curb global warming, reduce air pollution, cut America’s oil dependence, save consumers money 

at the gas pump, and create new auto industry jobs. [OAR-2009-0472-7278.1, p.2] 

EPA and NHTSA have proposed standards for both cars and light trucks in response to the 

historic May 19th agreement. EPA’s proposal to achieve a 250 g/mi CO2e standard is matched 

with NHTSA’s proposal to set CAFE standards. These are welcome standards that come after 

nearly 3 decades of complete inaction on car standards and incremental change for light trucks. 

This lack of standards has resulted in a technology backlog which the industry can be apply to 

cost-effectively meet (and exceed) these proposed standards. Technologies, including highstrength and light weight materials, transmissions, better engines and even tires are available 

now to move standards higher, faster. [OAR-2009-0472-7278.1, p.2] 

The technology exists today to significantly reduce greenhouse gas pollution from new cars and 

light trucks and to slash our addiction to oil. Existing and emerging technologies will enable 

automakers to make continuous improvement through 2016 and beyond, while improving safety 

and consumer choice. The Sierra Club, Safe Climate Campaign, Coalition for Clean Air, 

Alliance for Climate Protection and Environment America welcome the new National Program 

and the direction EPA has provided in establishing the first national greenhouse gas standards for 

cars and light trucks to complement NHTSA’s fuel economy program. The MY 2012-2016 

standard is a robust start to moving vehicle standards out of the 1970’s and into the 21st century. 

This NPRM establishes a foundation for stronger standards after 2016 that will be put the auto 

industry on the path to continuous innovation in vehicle technology that will reduce greenhouse 

gas pollution, curb our addiction to oil and keep billions of dollars here in the US. Including a 

backstop, fairly considering electric vehicles to avoid the taint of FFV credits, ensuring 

flexibilities and credits are tied to real reductions, and ensuring standards for the future are 

technology forcing will help establish a final rule that achieves President Obama’s goals – and 

will both meet the need of the nation to save oil and act swiftly to protect public health and 

welfare from greenhouse gases. [OAR-2009-0472-7278.1, p.19] 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

EPA-HQ-OAR-2009-0472-6185, pp. 26-27.]] 

And perhaps most importantly for today, as we're in Detroit, these standards will provide 

automakers with the direction they need to become leaders in efficient vehicles and make Detroit 

the epicenter of a green industry. These standards acknowledge that our automakers have 

technologies on the shelf to safely improve fuel economy. Technology such as Ford's EcoBoost 

engine, continuously variable transmissions, and high strength, lightweight materials will 

provide consumers with the safe, clean vehicles they deserve. The proposed standards will 

ensure that these technologies are put to work now and lead to the development and deployment 

of even more advanced technologies. 

[[These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number EPA-HQ-OAR-2009-0472-7283, pp. 137-138.]] 

1-44 
General Comments 

I would like to applaud the EPA and DOT on the new vehicle standards that will 

benefit consumers by allowing us to fill up less at the pump, that will benefit our nation by 

reducing our dependence on foreign oil, and will benefit the world by reducing pollutants that 

contribute to global warming. 

The EPA and DOT's new vehicle standards are a big step in the right direction. They promote 

 exactly what the world needs right now, real progress towards living without dirty, unlimited 

energy. Our reliance on polluting fuels now can only lead to disaster in the future. 

South Carolina Department of Health and Environmental Control 

We commend the EPA and the NHTSA for working together to develop a rule that will result in 

significant improvements in fuel economy. Our nation needs reduced emissions and energy 

security and we support these goals. In addition to reducing greenhouse gas emissions, 

improving fuel economy will have the very important benefit of reducing emissions and helping 

areas meet national ambient air quality standards for pollutants including ozone and particulate 

matter 2.5 and will also reduce urban air toxics. These air quality improvements will have a very 

positive impact on public health and the environment. [OAR-2009-0472-7202.1, p.1] 

South Carolina Pulp & Paper Association (SCPPA) 

SCPPA supports the National Highway Transportation Safety Administration (NHTSA) moving 

forward at this time with the Corporate Average Fuel Economy (CAFE) standards as proposed 

and commends the effort to develop a rule that will result in significant improvement in fuel 

economy. However, SCPPA has significant concerns with the Greenhouse Gas Emission 

Standards provisions in the rule, primarily related to greenhouse gases triggering of Title V and 

New Source Review (NSR) permitting provisions of the Clean Air Act. [OAR-2009-0472-7479, 

p. 1] 

South Carolina Wildlife Federation 

Thank you of the opportunity to comment on this extremely important action. We fully support 

your efforts and request that these new rules and standards be implemented as quickly as the law 

allows. [NHTSA-2009-0059-0136, p. 2] 

Although the formal comment period on the Proposed Rulemaking To Establish Light- Duty 

Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards 

closed on November 27,2009, a letter from Robert J Meyers, Principal Deputy Assistant 

Administrator, EPA to Governor John Engler, President and CEO, National Association of 

Manufactures, dated November 14,2008 indicates that closure of a formal comment period is not 

the end of the dialogue or opportunity to provide input on such important issues. We understand 

that EPA continues to post such comments to the docket and when moving forward with rule 

making or other actions under the Clean Air Act, will use the entire docket, including late 

comments, as a resource. [NHTSA-2009-0059-0136, p. 1] 

1-45
 
EPA Response to Comments 

We wish to express our strong disagreement with specific comments critical of EPA 

transparency and the time allowed for public comments expressed in a November 2 4 2009 letter 

from the South Carolina Department of Health and Environmental Control (SCDHEC). South 

Carolina Wildlife Federation fully supports the proposed standards for reducing vehicle 

greenhouse gas emissions. [NHTSA-2009-0059-0136, p. 1] 

We feel that it would be extremely short sighted to delay such regulations based on fear of the 

potential collateral impacts on state and local air permitting authorities, small business and other 

stationary sources as requested by SCDHEC. Additional time will not decrease but only serve to 

increase potential impacts on the economic well-being of our state. It is difficult to understand 

the position that such regulations would have a detrimental effect on South Carolina's economy, 

a coastal state, considering the potential impact that increasing green house gases has on extreme 

weather events such as hurricanes and rising sea levels. [NHTSA-2009-0059-0136, p. 2] 

Increasing fees, revising state regulations, getting State legislation enacted, or increasing State 

employee workload and training expressed by SCDHEC pales in comparison to the troubles our 

State will face should the new rule not be promulgated. Such impacts are outlined in the final 

rule for the Endangerment and Cause or Contribute Findings for Greenhouse Gases Under 

Section 202(a) of the Clean Air Act (Federal Register, December 15,2009). [NHTSA-2009­

0059-0136, p. 2] 

We find it ironic and unacceptable that SCDHEC, the agency charged with regulating and 

controlling health and environmental matters in this state, would take such a cavalier attitude 

towards protecting the health and environment of our citizens. Although new federal legislation 

on greenhouse gasses may be a preferred solution, there is no assurance that such legislation will 

pass in the near future. In general terms, the minimum federal environmental and health 

standards passed down to the respective states is the only protection we can expect as citizens of 

South Carolina because of SCDHEC's historical reluctance to look at stronger requirements, 

even when threats are obvious. [NHTSA-2009-0059-0136, p. 2] 

South Coast Air Quality Management District 

We would also like to urge that EPA and DOT continue to support and strongly coordinate with 

ARB in the development of new emission standards known in California as Pavley II. 

[Comments are from LA Testimony, OAR-2009-0472-7283, pp.59-67.] 

Southeastern States Air Resource Managers, Inc. (SESARM) 

We commend the U. S. Environmental Protection Agency (EPA) for working closely with the 

National Highway Traffic Safety Administration (NHTSA) to develop a rule that will result in 

significant improvements in fuel economy. Our nation needs reduced emissions and energy 

security and we support these goals. Through gubernatorial and/or legislative mandates, some of 

our agencies are required to consider effective methods of mitigating greenhouse gas (GHG) 

emissions, provided the measures do not result in adverse impacts to the economy, environment, 

1-46 
General Comments 

or jobs. We support emission reduction programs that are well designed, complementary, and 

coordinated. [OAR-2009-0472-7137.1, p.1] 

State of California 

The attorney general of California is generally supportive of the proposed rulemaking and agrees 

with comments submitted by CARB. NHTSA and EPA are proposing to adopt California's GHG 

emission standards on a nationwide basis, and that can only be good for the Earth's Climate, our 

nation's energy security, and putting money back in consumer's pockets. 

State of Connecticut 

I write to congratulate you on your groundbreaking joint effort to coordinate two very significant 

regulatory efforts on vehicle fuel efficiency requirements. (CAFE) and motor vehicle greenhouse 

gas (GHG) emission standards. Both of these efforts are praiseworthy by themselves; in tandem, 

you have made a bold statement that energy, the economy and the environment are closely and 

inexorably linked and our government's policies must reflect this undeniable fact. [OAR-2009­

0472-7499, p.1] 

State of Connecticut as a front runner in climate change, strongly supports the proposed rule and 

commends the interagency coordination efforts. 

State of Connecticut Department of Environmental Protection 

DEP congratulates the Environmental Protection Agency (EPA) and the National Highway 

Traffic Safety Administration (NHTSA) on your groundbreaking joint effort to coordinate two 

very significant regulatory efforts on motor vehicle greenhouse gas (GHG) emission standards 

and vehicle- fuel efficiency requirements (CAPE). The mobile source sector represents a 

significant source of greenhouse gas (GHG) emissions and in 2007 mobile sources contributed 

4396 of GHG emissions in Connecticut. The emission reductions attributable to these rules are 

necessary for Connecticut to meet its GHG reduction targets and will be similarly critical in 

meeting national targets once adopted. 

DEP believes the Clean Air Act is an appropriate mechanism for regulating GHG emissions. As 

such, it is critical to maintain the Clean Air Act provisions protecting states' rights to adopt motor 

vehicle standards - for California under Section 209 and for Connecticut under Section 177. This 

effort created the technical basis and real world experience critical to the proposed national 

motor vehicle GHG emissions reduction proposal. Furthermore, as directed by Governor Reli 

and in accordance with a proposal now being developed by California, DEP will begin a rule 

making process next year intended to deem vehicles that comply with the new federal standards 

to be in compliance with our adopted state standards from 2012 through 2016. [OAR-2009-0472­

7301, p.1] 

DEP also supports comments submitted by NESCAUM. [OAR-2009-0472-7301, p.3] 

State of New Jersey 

1-47
 
EPA Response to Comments 

I would like to thank you for this opportunity to testify on the joint proposal of the United States 

Environmental Protection Agency and the National Highway Transportation Safety 

Administration to establish light-duty vehicle greenhouse gas emission standards and corporate 

average fuel economy standards. The Department of Environmental Protection supports the 

proposed action as a first step in our efforts to combat climate change. New Jersey is a leader in 

addressing the [These comments were submitted as testimony at the New York public hearing. 

See docket number OAR-2009-0472-4621, p. 109.] control of air pollution, including 

greenhouse gases, and welcomes this opportunity to comment constructively to help advance a 

harmonization of the federal vehicle control program. [These comments were submitted as 

testimony at the New York public hearing. See docket number OAR-2009-0472-4621, p. 110.] 

Although the Department is supportive of the proposed federal vehicle control program as a 

powerful first step in addressing greenhouse gas emissions from motor vehicles, additional 

reductions will be needed for vehicles beyond the model year 2016. New Jersey is committed to 

working with the U.S. EPA, NHTSA, California Air Resources Board, and other stakeholders to 

address global climate change and the need to reduce oil consumption by developing strong 

motor vehicle greenhouse gas standards for model years after 2016. [These comments were 

submitted as testimony at the New York public hearing. See docket number OAR-2009-0472­

4621, p. 113.] 

State of Washington Department of Ecology 

Ecology especially acknowledges the Obama Administration's historic leadership of bringing 

together for the first time EPA, NHTSA, California, and the auto industry to reduce this 

country's greenhouse gas emissions and their contribution to global warming. The proposed 

standards to reduce GHG emissions from light-duty vehicles in model years 2012 through 2016 

are a very critical and commendable first step toward making light-duty vehicles in Washington 

and our nation as clean as possible. [OAR-2009-0472-7299, p.1] 

Steiner, John 

Your continued leadership in finalizing protective standards will help wean us off of foreign oil, 

reduce harmful greenhouse gases, and save families money at the gas pump. [OAR-2009-0472­

8705 p.1] 

Toyota Motor North America 

Last May, Toyota executives joined President Obama, Cabinet members, governors, the 

California Air Resources Board, other CEOs and environmental leaders to support a commitment 

to establish a coordinated national program for fuel economy standards and greenhouse gas 

reductions from passenger cars and light trucks. We encouraged this agreement, which we had 

sought for a very long time. Without it, our industry would be subject to overlapping and 

potentially conflicting regulations from two separate federal agencies and over a dozen states. 

[OAR-2009-0472-7291, p.1] 

1-48 
General Comments 

The Environmental Protection Agency (EPA) and the National Highway Traffic Safety 

Administration (NHTSA) have jointly proposed a comprehensive set of regulations to implement 

this agreement. We support EPA and NHTSA's efforts to harmonize two programs under two 

quite different statutes and at the same time establish a completely new greenhouse gas (GHG) 

program for motor vehicles. [OAR-2009-0472-7291, p.2] 

Toyota is committed to addressing climate change and oil dependence by increasing the fuel 

efficiency of our products, developing new markets for advanced vehicle technologies, and 

reducing the greenhouse gas footprint of our manufacturing and distribution operations. In fact, 

our top societal priority is sustainable mobility, a stance that transcends our regulatory 

obligations. To us, sustainable mobility means building vehicles that meet customer needs and 

expectations, while also being safe, durable, and better for the environment. [OAR-2009-0472­

7291, p.2] 

To minimize our environmental footprint, we are accelerating the roll-out of conventional 

hybrids across our entire line-up. In addition, we are pursuing hydrogen fuel cells, plug-in 

hybrids, pure electrics and advanced batteries beyond lithium ion - all with the goal of 

overcoming the barriers that currently prevent their mass deployment. On the operational side, 

we've already cut carbon dioxide (C02) emissions and energy use from our manufacturing plants 

on a per vehicle produced basis by 19% since 2000. [OAR-2009-0472-7291, p.2] 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

OAR-2009-0472-6185, pp. 51-54.] 

We welcome the development of a single coordinated fuel economy and greenhouse gas 

standard. This agreement is something we have encouraged and sought for a very long time, and 

it is a landmark achievement for all of us. Without it, we would be subject to overlapping and in 

places conflicting regulations from two separate Federal agencies and over a dozen states. In 

exchange for eliminating the patchwork, we agreed to pull forward the ambitious fuel economy 

targets set by Congress for 2020 to 2016. 

We applaud the efforts NHTSA and EPA have made to unify two programs under two quite 

different statutes, and to establish a completely new EPA program for motors vehicles. The 

proposed regulations appear to capture the key elements of our historic agreement, including the 

various compliance flexibilities that were integral to reaching a consensus. We therefore believe 

the proposal sets the stage for a successful final joint rulemaking that will provide certainty for 

our product planners and significant environmental and energy benefits for our nation and the 

world. We are now examining the details of this complex proposal, and to the extent that issues 

need to be clarified we will be submitting written comments. 

Make no mistake, meeting the overall fleet average of 35.5 mpg by 2016 will be a challenge for 

our engineers and product planners. It will require every ounce of their ingenuity and creativity. 

In the end, consumers will be the true beneficiaries of this program. A unified national program 

ensures American consumers will have the choice of vehicles they need and want, as well as the 

fuel efficiency and low emissions they expect, without the confusion of multiple standards. 

1-49
 
EPA Response to Comments 

That's why the process of collaboration must continue beyond 2016 and we must continue to 

seek additional areas of harmonization between the two programs. 

Now I would like to step back and comment from a broader perspective just a moment. The fact 

that diverse groups could find common ground on these challenges is a notable example of how 

government and industry can -- and should -- work. It illustrates one of the cornerstones of how 

Toyota approaches public policy, by fostering partnerships, with government, universities, nonprofits, and other companies. The other cornerstone is a long-range planning for and investing in 

the future. At Toyota, we don't stop at regulatory compliance nor do we wait for government 

regulation to address the challenges of tomorrow's transportation. 

Our top public policy priority is sustainable mobility. That means building vehicles that meet 

customer needs and expectations, while also being safe, durable, and better for the environment. 

To minimize our environmental footprint, we are accelerating the roll-out of conventional 

hybrids across our entire vehicle lineup. In addition, we are pursuing hydrogen fuel cells, plugin hybrids, pure electrics, and advanced batteries beyond lithium ion -- all with the goal of 

overcoming the barriers that currently prevent their mass deployment. 

Sustainability mobility defines where we are today and where we plan to be in the future: We 

are the leader in fuel-efficient vehicles in the U.S. We are the leader in hybrid technology, 

having launched our first hybrid a dozen years ago and put more than 2 million in the worldwide 

market to date. We are bringing a plug-in, a pure EV, and other advanced technologies to market 

in the near future to complement our hybrid dominance. And we've already cut CO2 emissions 

and energy use from our manufacturing plants on a per vehicle produced basis by 19 percent 

since the year 2000. Just yesterday Toyota became the first car manufacturer to join the 

SmartGridCity in Boulder, Colorado. 10 plug-in Prius hybrid electric vehicles will help teach us 

how to reduce carbon emissions and our dependence on foreign oil, while at the same time, not 

just meet, but exceed customer expectations. 

We believe it is important to keep in mind that the road to sustainable mobility is a long one, and 

it is not one, but actually two separate and distinct roads traveling in the same direction. One 

road is the path to compliance. The other is the path to market preparedness. One is constructed 

to meet the priorities of government regulation. The other is constructed to search out and 

respond to the specific needs and desires of the consumer. 

I believe we need both of these roads to arrive together in the same place to realize the goal of 

sustainable mobility. 

Transportation and Buildings Policy for the State of Massachusetts Executive Office of 

Energy and Environmental Affairs 

The benefits of this proposal will be far-reaching: Significant reductions of greenhouse gases, 

improved fuel economy and lowered cost for the nation's drivers, reduced demand for imported 

oil and economic growth for the development of advanced vehicle technologies. [OAR-2009­

0472-4621, p.19] 

1-50 
General Comments 

Thus, Massachusetts strongly supports the work of the federal agencies in moving forward with 

this proposed joint rulemaking. In addition to harmonizing federal regulations, this rulemaking 

would for the first time align the federal motor vehicle standards with the greenhouse gas [OAR2009-0472-4621, p.20] standards adopted by the California Air Resources Board and the Section 

177 states, a group that includes Massachusetts and 13 other states which have adopted these 

more stringent standards. [OAR-2009-0472-4621, p.21] 

In conclusion, Massachusetts fully supports the Obama Administration and the proposed 

rulemaking of EPA and NHTSA. [OAR-2009-0472-4621, p.26] 

I want to emphasize the importance of moving forward with national regulations at this time. 

Climate change is the most critical environmental issue of our time and the time is now to act to 

address it. [OAR-2009-0472-4621, p.26] 

U.S. Coalition for Advanced Diesel Cars 

The Coalition supports the twin national objectives of reducing green house gas (GHG) 

emissions and petroleum fuel consumption by the U.S. light duty vehicle fleet. To that end, the 

Coalition urges EPA to adopt fuel-neutral policies, standards and reality-based vehicle ratings 

that will promote vigorous technology competition in the market place. Failure to adopt fuelneutral policies and reality-based vehicle ratings will undermine consumer choice and drive a 

systematic shortfall in achieving the benefits promised by the new rulemaking. [OAR-2009­

0472-7496, p.1] 

The success of the new rules will ultimately be judged by reductions in real-world petroleum 

barrels and real -world GHG tons. Moreover, the recovering auto industry cannot afford to make 

investment decisions based on EPA data without an assurance that those decisions will make 

long-term business sense. This is in stark conflict with President Obama's call for rules that will 

'give our auto companies some long-overdue clarity, stability and predictability.' [OAR-2009­

0472-7496, p.2] 

Union of Concerned Scientists 

UCS applauds the work of both agencies for moving quickly to issue the proposed rulemaking to 

make President Obama’s commitment a reality. Overall, the proposed rule takes a dramatic step 

forward. However, certain aspects of the rule could erode the potential benefits unless they are 

effectively implemented and enforced. In order to maximize the environmental, economic, and 

security benefits of this program, it is critical that the 250 grams per mile goal is achieved. 

[OAR-2009-0472-7181.1, p.1] 

We would like to commend the agencies in general on their noticeable efforts to provide high 

levels of transparency in the proposed rulemaking, and particularly to laud EPA for its detailed 

and thoroughly credible assessments of technology availability and technology cost. We would 

like to compliment EPA on its approach of basing its finding not upon confidential business 

information, as has been the practice of NHTSA in recent rulemakings, but rather upon well 

documented, proven, and transparent findings. [OAR-2009-0472-7181.1, p.12] 

1-51
 
EPA Response to Comments 

[Union of Concerned Scientists also submitted these comments as testimony at the New York 

public hearing, See docket number EPA-HQ-OAR-2009-0472-4621, pp. 91-92.] 

United Auto Workers 

The UAW commends both agencies and the Obama administration for putting forth a proposal 

that provides for a national system of fuel-economy and greenhouse gas emission regulations. 

This will avoid a confusing and costly patchwork of federal and state regulation of light-duty 

vehicle fuel economy and greenhouse gas emissions. This proposal contains the features of the 

historic stakeholder agreement that that was announced by President Obama in May, 2009. It 

will benefit the nation by reducing oil consumption and greenhouse gas emissions. In particular, 

it will save more fuel and avoid more greenhouse gas emissions than would have been the case 

under a state and federal regulatory patchwork. This is because it extends tougher standards 

across the entire nation rather than having them limited to a minority of states that would have 

chosen to follow the standards promulgated by the State of California. At the same time, by 

establishing a unified national system the regulations will make it easier for automakers to meet 

the tougher standards. This will facilitate investment and production in the auto sector, and help 

to preserve and create jobs for American workers. [OAR-2009-0472-7056.1 p.1] 

University of Miami, School of Law 

We support the proposed EPA and NHTSA rule and encourage the Obama administration to 

continue to find ways to curb the pollution that causes global warming. These proposed 

standards allow automobile manufactures to utilize technologies that will reduce vehicle GHG 

emissions and improve fuel economy. The EPA proposal would require vehicles to meet an 

estimated combined average emissions level of 250 grams/mile of CO2 in model year 2016. The 

NHTSA proposal would require car manufacturers to meet an estimated combined average fuel 

economy level of 34.1 mpg in model year 2016. [OAR-2009-0472-6770, p. 1] 

University of Michigan Transportation Research Institute (UMTRI) 

The National Program is supposed to establish strong and coordinated federal greenhouse gas 

and fuel economy standards for passenger cars, light-duty trucks, and medium-duty passenger 

vehicles. For the National Program to be successful, stakeholders with diverse interests and 

views need to cooperate. EPA, NHTSA, CARB, and the automakers are to be commended for 

the cooperative beginning of the joint rulemaking process for managing automotive CAFE and 

GHG emissions standards. [OAR-2009-0472-3651.1, p.1] 

[[UMTRI also submitted these comments as testimony at the Detroit public hearing, See docket 

number OAR-2009-0472-6185, pp. 33.] 

University of Pennsylvania, Environmental Law Project 

Some of the changes brought about this legislation could supplant a regulatory scheme 

established by this rule by enforcing cap-and-trade strategies for carbon emissions across broad 

sectors of the economy. However, given that the Senate has yet to act, there remains a great deal 

1-52 
General Comments 

of uncertainty in both timing of final passage and the content of specific provisions. This rule is a 

useful step forward in reducing GHGs, and marks important redefinitions of the scope and 

relevance of existing statutory provisions. [OAR-2009-0472-7286.1, p. 4] 

Undoubtedly, the United States must adopt policies that address global climate change and 

reduce its oil consumption. These proposed rules, developed in response to President Obama’s 

call for a National Fuel Efficiency Policy, constitute a strong and coordinated federal fuel 

economy and GHG program for passenger cars and light trucks. Since the proposed rules will 

provide regulatory certainty and consistency for the automobile industry while reducing 

greenhouse gas emissions based on technologies that can be incorporated at reasonable cost, the 

proposal represents an important effort to improve fuel economy and reduce greenhouse gas 

emissions. [OAR-2009-0472-7286.1, p. 14] 

It is critically important that the United States adopt policies that address global climate change 

and reduce its oil consumption. These proposed rules constitute a strong and coordinated federal 

fuel economy and GHG program for passenger cars and light trucks. Since the proposed rules 

will provide regulatory certainty and consistency for the automobile industry while reducing 

greenhouse gas emissions based on technologies that can be incorporated at reasonable cost, the 

proposal represents an important effort to improve fuel economy and reduce greenhouse gas 

emissions. [OAR-2009-0472-7286.1, pp. 21-22] 

However, the proposal is not without its flaws. Namely, the proposal fails to gradually reduce the 

disparity between efficiency requirements for 2012 and 2016 MYs. Additionally, the policy does 

not create mechanisms whereby minimum reductions are ensured, nor does it address the fiction 

of “zero emissions” electric vehicles. Finally, the proposal fails to make a complete lifecycle 

impact analysis, and therefore may overlook deleterious consequences of its implementation. 

Thus, the proposal, while timely, would benefit from an enhanced discussion of these among 

other potentially problematic omissions. [OAR-2009-0472-7286.1, p. 22] 

US Steel Corporation 

U. S. Steel supports the intent of the Clean Air Act and the Energy Independence and Security 

Act (EISA) of 2007, which together have formed the basis of this proposed rulemaking on 

greenhouse gas emissions and fuel economy standards. We support EPA and NHTSA for 

proposing a common national standard for light-duty vehicles (passenger cars, light-duty trucks, 

and medium duty vehicles) and avoiding a patchwork of state and federal regulations that would 

have added complexity and cost to compliance efforts. The proposed rule is aimed at leading our 

nation to greater energy independence and our world to a condition of lower emissions and a 

cleaner environment. It is important, however, to carefully analyze the methodology selected for 

enforcement of the intended rules in order to ensure that the methods are technically sound, 

economically feasible, and of sufficient scope to avoid unintended consequences that oppose the 

objectives of the regulations. The purpose of these comments is to place on the record our 

analysis concerning the likely impact of the proposed CAFE regulations on the steel industry, on 

the economy, and on the emissions of CO2 and reduction of energy use. [OAR-2009-0472­

7197.1 p.2] 

1-53
 
EPA Response to Comments 

Volkswagen Group of America (Volkswagen) 

First, as a general comment Volkswagen supports the framework of this proposed regulation and 

strongly supports GHG and CAFE regulations under a National structure. Volkswagen 

participated in the negotiations to make a National program a reality and believes a National 

solution to controlling both GHG emissions and fuel economy regulations is the best 

arrangement for all parties. Volkswagen appreciates the efforts of the White House, the Federal 

agencies, the state of California, the auto industry and other involved stakeholders in making a 

National Program possible. [OAR-2009-0472-7210.1, p.2] 

The proposed regulation is significant and historic. With this joint notice, EPA and NHTSA have 

proposed stringent standards that will be challenging for the auto industry. The regulation is 

technology forcing and will increase the initial purchase cost of vehicles in the future. It also 

represents a major change in the treatment of fuel economy regulations and GHG emissions from 

the light-duty transportation sector. Despite the development tasks and challenges the proposed 

regulation represents, Volkswagen supports the overall framework and balance of the regulation. 

[OAR-2009-0472-7210.1, p.2] 

In addition, Volkswagen supports the continuation of a National Program beyond the 2016 MY 

limit of this NPRM and urges all stakeholders to work towards that goal. Volkswagen pledges to 

support and contribute to efforts to put a National Program in place for 2017 model year and 

beyond. [OAR-2009-0472-7210.1, p.2] 

Volkswagen supports the efforts of both agencies to harmonize the GHG and the CAFE program 

as much as possible under the regulatory constraints in place for both regulations. Volkswagen 

especially supports the work by both agencies to form their respective regulations to allow 

averaging, banking and trading as similar as possible in both programs, and to provide as many 

credit flexibilities as possible that accommodate the wide range of manufacturers. [OAR-2009­

0472-7210.1, p.2] 

Volkswagen commends both NHTSA and EPA in their efforts to harmonize the GHG and CAFE 

programs in this joint notice. While stringent, we support the overall level of the standards 

proposed. We also support the efforts to allow as much flexibility as possible and we urge the 

agencies to maintain the credit flexibilities proposed in the joint NPRM. Due to the major change 

to the treatment of GHG and CAFE regulations this regulation represents, we believe the 

flexibility in the proposed regulations are essential to allowing all manufacturers the time and 

tools needed to adjust to the new era of regulation for GHG emissions and fuel economy. [OAR2009-0472-7210.1, p.10] 

Volkswagen remains committed to working with EPA and NHTSA staff to establish the best 

regulation possible to achieve the goals of the country in a fair and balanced manner. 

Volkswagen also supports efforts to continue a National program in 2017 MY and beyond. 

[OAR-2009-0472-7210.1, p.10] 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

OAR-2009-0472-6185, pp. 112-113.] 

1-54 
General Comments 

Make no mistake, this regulation is very challenging, but we support a national solution to 

greenhouse gas and fuel economy regulation and we support the lead time and stability of the 

proposed regulation through the 2016 model year. 

The Volkswagen Group urges all stakeholders to continue developing this program and working 

towards a National Program for 2017 and beyond. In particular, Volkswagen supports the 

government's efforts and the NPRM to provide the flexibility to the regulation that helps 

manufacturers transition to the proposed national greenhouse gas/CAFE program. 

The government correctly recognized that auto manufacturers are a diverse group representing 

many different market segments and different sales volumes in the U.S. market. In recognizing 

these differences, the agencies were able to develop credit banking and trading schemes that 

offer real greenhouse gas reductions and provide all manufacturers flexibility in complying with 

the regulation and with various credit pathways. 

Washington State Department of Commerce 

 [Following comments are from LA Testimony, OAR-2009-0472-7283, pp.121-122] 

The Washington State Department of Commerce is really happy with EPA and NHTSA 

working together toward a national plan. 

Almost half of the greenhouse gas emissions in the State of Washington come from 

transportation. Therefore, we view efficiency as a key tool for the mitigation of these emissions. 

We are therefore very supportive of the development of the national plan, and we look forward 

to working with you on improving the proposed rule. 

The State of Washington also recognizes the work that the car industry will make to meet the 

new standards. We believe that states also have a role in helping the success of this program by 

incentivizing the adoption of cleaner vehicles and partnering with industry to help on the 

deployment of advanced technology vehicles. 

Setting vehicle performance standards is one important step toward achieving our fuel economy 

and greenhouse gas emission goals. However, our information says that this will not be enough 

to address the problems of greenhouse gas emissions from road transportation. 

Webb, Alysha 

 [Following comments are from LA Testimony, OAR-2009-0472-7283, pp.129-130] 

And as I mentioned before, automakers have the technology to achieve these standards. We've 

heard from a number of automakers here. They don't oppose them, but they need some certainty. 

So I think these standards are very important because they're going to give the automotive 

industry some certainty. 

1-55
 
EPA Response to Comments 

So, again, I thank you for supporting the greenhouse gas standards, but I urge you not 

to emasculate them by granting too many tax credits or too many credits or making 

implementation too flexible. 

There are a lot of areas in which I wish China would emulate U.S. policy more closely, 

but where greenhouse gas emission standards are concerned, thankfully the U.S. is in some ways 

following China. 

But, most importantly, I urge you to continue to follow California's example in this as you 

consider policies for the future. 

Weiner, Jill 

 [Following comments are from LA Testimony, OAR-2009-0472-7283, pp.87-89] 

I am happy that the Pavley standards are the basis for a new national standard, and I want 

to applaud the administration and the auto industry for working together to reach an agreement. 

I'm excited to see how the automakers will apply existing and new technologies to meet 

these standards, and I'm looking forward to replacing my 1998 model with a cleaner, more 

efficient car in the near future. 

That being said, I urge you to make sure that the details of the program are such that we do, in 

fact, meet the goals, both in terms of emission reductions and oil savings. Please do not allow 

loopholes or excessive credits to dilute the program's results. For electric vehicles, the EPA 

needs to consider the source of electricity and accurately account for how that power is generated 

just as the Pavley standards do. 

Winograd, Marcy 

 [These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number OAR-2009-0472-7283, pp.159-163] 

I am here today to applaud the EPA and the Department of Transportation and encourage you 

to work vigorously and meaningfully to achieve significant reductions in global warming 

pollution. 

While I am greatly encouraged by the proposed standards, we must be on guard to weed out the 

devil in the details that inevitably surface in situations like these. 

EPA Response: 

Many commenters expressed support for the program in general, as well as for various specific 

provisions the rule. Most of these commenters also had concerns about some relatively detailed 

provisions of the rule -- which we address elsewhere in this document and in the preamble to the 

rule -- but were supportive of the overall program. 

1-56 
General Comments 

These commenters were supportive of several key aspects of the rule including the following: 

	 The stringent level of the emission standards, which received support from states, 

environmental organizations, and many others for the large greenhouse gas emission 

reductions that will result, 

	 EPA's assessments of costs and GHG-reducing technologies, including support from 

auto industry stakeholders, 

 EPA's adopting of attribute-based standards, and using footprint at the sole attribute, 

 EPA's overall analytical approach to establishing the target emission levels, which the 

industry either supported or was silent about, and 

	 The successful effort to develop a coordinated single National Program that avoids the 

need for manufacturers to comply with separate NHTSA, EPA, and state emission 

requirements. 

1.2. General Opposition 

Organization: 

American Chemistry Council (ACC) 

Arizona Public Service (APS) 

Devon Energy Corporation 

Duke Energy 

Fertilizer Institute 

Hagen, David L. 

Heritage Foundation 

Industry Coalition 

Mass Comment Campaign (48) (unknown organization) 

Mississippi Department of Environmental Quality 

National Automobile Dealers Association (NADA) 

National Climate Coalition 

Process Engineers 

Shaw, Donald F. 

Spurgeon, C. M. 

Texas Industry Project (TIP) 

Comment: 

American Chemistry Council (ACC) 

The Associations acknowledge EPA‘s desire to address GHG emissions from mobile sources 

quickly, as well as NHTSA‘s need to set new fuel economy standards, which must be [OAR2009-0472-7148.1, p.1] promulgated at least 18 months before the affected model year (in this 

case the 2012 model year). 49 U.S.C. § 32902(g)(2). However, as proposed, the Motor Vehicle 

Rule ignores the enormous burdens the Rule would impose on stationary sources. This omission 

violates legal requirements for agency rulemaking, constitutes arbitrary and capricious action, 

1-57
 
EPA Response to Comments 

and is simply bad policy. This is especially so because nearly all the environmental benefits EPA 

says will result from its promulgation of the Motor Vehicle Rule under CAA authority would 

also result from the NHTSA rule alone. Yet, unlike NHTSA action to raise corporate average 

fuel economy (CAFE) standards, the redundant EPA standards promulgated under the CAA 

would have regulatory impacts reaching far beyond the automotive industry and would impose 

billions of dollars in additional permitting and compliance costs. [OAR-2009-0472-7148.1, p.2] 

Thus, although the Associations take no position on NHTSA‘s proposal to increase CAFE 

standards, we vigorously object to EPA‘s proposal to finalize the superfluous Motor Vehicle 

Rule under CAA Section 202. EPA‘s failure to account here for the PSD and Title V burdens it 

elsewhere acknowledges will flow from this rulemaking renders this rulemaking legally invalid. 

EPA must fully consider those burdens in this rulemaking. [OAR-2009-0472-7148.1, p.2] 

[See Docket number OAR-2009-0472-7148.1, cover page 1-2 for detailed comments] 

Arizona Public Service (APS) 

APS has significant concerns regarding the proposed Light-Duty Vehicle Greenhouse Gas 

Emission Standards and Corporate Average Fuel Economy Standards. Specifically, a comparison 

of the proposed benefits resulting from the EPA program to the NHTSA program reveals the 

programs to be virtually identical and that EPA's proposal provides no apparent additional 

benefit. For this reason, APS believes that EPA's action is simply a means to regulate greenhouse 

gas emissions from stationary sources through the Clean Air Act Prevention of Significant 

Deterioration (PSD) and Title V permit programs. As such, APS also believes the economic and 

environmental cost and benefits analysis of this joint proposal fails to assess impacts on 

stationary sources. [OAR-2009-0472-7107.1, p.1] 

If this rule is finalized, a significant number of stationary sources will become subject to PSD 

and Tide V permitting requirements. However, EPA did not include the economic and 

environmental consequences of triggering these rules. It is APS' position that EPA either 

withdraw its portion of the rule or perform a thorough economic and environmental cost and 

benefit analysis, and provide an adequate public notice and comment period to address the 

impacts to stationary sources. [OAR-2009-0472-7107.1, p.1] 

Devon Energy Corporation 

Many scientists (myself included) doubt the “consensus” that CO2 contributes significantly to 

atmospheric warming. The Earth has been warming ever since the last ice age ended, roughly 

12,000 years ago in fits and starts, and it is definitely not proven that man-made CO2 is a 

significant contributor to the current warming trend (last 100 years or so). But, for the sake of 

argument, let’s assume that CO2 does matter. Further, let’s assume that global warming is a 

problem (this is not proven either). Let us also assume that additional CO2 is not a benefit to 

plant life, this is crazy, since it is one of their main foods, but let’s assume this. Even with these 

assumptions, the Environmental Protection Agency (EPA) is not justified in regulating carbon 

dioxide emissions from vehicles. These regulations will only increase the cost of our cars, harm 

1-58 
General Comments 

our economy, and limit our transportation options. We need efficient, affordable transportation to 

rebuild our economy and create American jobs. 

According to the proposed regulations, EPA wants to regulate carbon dioxide emissions from 

cars and trucks, “because of the critical need to address global climate change.” (74 Fed. Reg. 

49454).This regulation does not achieve EPA’s stated goal because, according to EPA data, it 

does not reduce global warming or sea level rise in a meaningful way. The regulation states that 

the carbon dioxide reductions “are projected to reduce global mean temperature by 

approximately 0.007–0.016°C by 2100, and global mean sea level rise is projected to be reduced 

by approximately 0.06–0.15 cm by 2100.” [OAR-2009-0472-10450 p.1] 

Duke Energy 

Duke Energy Business Services LLC (“Duke Energy”), on behalf of Duke Energy Carolinas, 

LLC, Duke Energy Indiana, Inc., Duke Energy Ohio, Inc., Duke Energy Kentucky, Inc., and 

Duke Energy Generation Services (“DEGS”), therefore submits the following comments on the 

Joint Motor Vehicle Proposal. Specifically, the significant flaws and shortcomings of the Joint 

Motor Vehicle Proposal necessitate the withdrawal of EPA’s portion of the proposed rule. Duke 

Energy continues to support the enactment of environmentally and economically sustainable 

federal climate change legislation. Regulating GHGs under the CAA is the wrong approach. 

[OAR-2009-0472-7136.1, p.2] 

The U.S. Environmental Protection Agency’s (“EPA”) has stated its view that promulgation of 

the GHG motor vehicle standards will subject GHGs to the CAA Prevention of Significant 

Deterioration (“PSD”) program and the permitting requirements of Title V of the CAA, 

potentially as soon as the date on which the rule becomes final and effective. Duke Energy 

believes, however, that EPA’s legal positions in this regard and the analysis presented in the 

proposed rule are seriously flawed and must be corrected. [OAR-2009-0472-7136.1, p.2] 

The Joint Motor Vehicle Proposal and its supporting documentation makes clear that EPA’s 

proposed GHG motor vehicle emission standards are largely duplicative of NHTSA’s proposed 

program and that EPA’s proposal will not add in any significant manner to the GHG reductions 

and associated impacts of NHTSA’s proposed CAFE standards. Therefore, EPA cannot properly 

reach an affirmative endangerment finding to satisfy the requirements of the CAA’s test for 

finding “endangerment,” rendering EPA’s proposed GHG motor vehicle emission [OAR-2009­

0472-7136.1, p.2] standards legally (and scientifically) unjustified. Because an affirmative 

endangerment finding cannot be legally made, EPA lacks the authority to finalize its proposed 

GHG motor vehicle standards under section 202(a) of the CAA. [OAR-2009-0472-7136.1, p.3] 

Fertilizer Institute 

TFI supports the comments submitted by the National Mining Association on this NPRM. TFI 

believes that GHGs should be evaluated and, if necessary, regulated under comprehensive 

climate change legislation and not under the piecemeal, command and control approach of the 

CAA and other existing statutory programs. Finally, it appears the economic impacts of the 

rulemaking have not been fully evaluated. [OAR-2009-0472-7279.1, p.2] 

1-59
 
EPA Response to Comments 

Hagen, David L. 

I petition the Environmental Protection Agency (EPA) to reject regulating carbon dioxide 

emissions from vehicles as unjustified. Such regulations unnecessarily harm the economy, limit 

transportation, increase the cost of vehicles and reduce jobs. EPA proposes to regulate carbon 

dioxide emissions from cars and trucks, “because of the critical need to address global climate 

change.” (74 Fed. Reg. 49454). This is a false very weakly founded basis. [OAR-2009-0472­

7218.1, p. 1] 

Futile regulation The proposed regulation will fail to achieve EPA’s stated goal. EPA’s 

regulation states that the carbon dioxide reductions “are projected to reduce global mean 

temperature by approximately 0.007–0.016°C by 2100, and global mean sea level rise is 

projected to be reduced by approximately 0.06–0.15 cm by 2100.” This is a negligible result will 

not affect global climate at all nor will they affect “public health and welfare” (See Clean Air 

Act Sec. 202). [OAR-2009-0472-7218.1, p. 3] 

This will cause a massive constraint and financial impact. The National Highway Safety 

Administration (NHTSA) estimated that increasing fuel economy standards to 35 miles per 

gallon by 2020 would cost the car companies $114 billion. (See Detroit News, “Fuel Plan Would 

Cost Big Three” (March 1, 2007). EPA and NHTSA’s plan will increase costs for car companies 

and further reduce auto company jobs. Higher priced cars and trucks will make life more difficult 

for American families who need affordable transportation options. [OAR-2009-0472-7218.1, p. 

3] 

EPA would be forced to regulate greenhouse gases under Clean Air Act, sections 108, 111, and 

112. This would seriously harm our economy, reduce American jobs, and worsen our 

employment situation. [OAR-2009-0472-7218.1, p. 3] 

I pray the EPA not to regulate carbon dioxide or greenhouse gas emissions under the Clean Air 

Act. These regulations would severely worsen our economy, and massively increase our high 

unemployment. It would result in negligible reduction in global temperature while diverting 

effort from the critical issue of providing alternative fuels to manage global peaking of light 

oil. [OAR-2009-0472-7218.1, p. 3] 

Heritage Foundation 

We are writing out of serious concern for the unintended consequences along with negligible 

environmental benefits likely to result if the Environmental Protection Agency moves forward 

with its Proposed Rulemaking to Establish Light-Duty Vehicle Greenhouse Gas Emission 

Standards and Corporate Average Fuel Economy Standards. It is unnecessary to move up the 

timeframe to create a 35.5 miles per gallon vehicle fleet from 2020 to 2016 - a standard initially 

put into place by Energy Independence and Security Act of 2007. The new regulations will 

create headaches for struggling automakers, and those automakers will simply pass on higher 

costs to the consumers. 

1-60 
General Comments 

The EPA estimates that the averaged increase cost of a vehicle will be $1,300 in 2016 compared 

to today's prices but because consumers will save $2,800 on gas that will offset the increased 

purchase price. One senior manager from General Motors’ energy center said meeting the 2020 

goal would cost $5,000 to $7,000 to make more fuel efficient cars and light trucks. Moving the 

deadline up four years would only exacerbate these costs 

The environmental benefits are dubious as well. Touted as a measure to curb global warming, 

fuel efficiency standards have very little environmental impact. Newer vehicles with better 

efficiency standards may emit less carbon dioxide per mile, but increased fuel efficiency often 

leads to more driving and new cars constitute a miniscule source of overall carbon dioxide 

emissions. The EPA’s own regulation states that “the rule will lead to global mean temperature 

being 16 thousandths of a degree Celsius lower (0.016°C) in 2100.” [OAR-2009-0472-7052.1, 

pp.1-2] 

Industry Coalition 

The Associations acknowledge EPA’s desire to address GHG emissions from mobile sources 

quickly, as well as NHTSA’s need to set new fuel economy standards, which must be [OAR2009-0472-7673.1, p.1] promulgated at least 18 months before the affected model year (in this 

case the 2012 model year). 49 U.S.C. § 32902(g)(2). However, as proposed, the Motor Vehicle 

Rule ignores the enormous burdens the Rule would impose on stationary sources. This omission 

violates legal requirements for agency rulemaking, constitutes arbitrary and capricious action, 

and is simply bad policy. This is especially so because nearly all the environmental benefits EPA 

says will result from its promulgation of the Motor Vehicle Rule under CAA authority would 

also result from the NHTSA rule alone. Yet, unlike NHTSA action to raise corporate average 

fuel economy (CAFE) standards, the redundant EPA standards promulgated under the CAA 

would have regulatory impacts reaching far beyond the automotive industry and would impose 

billions of dollars in additional permitting and compliance costs. [OAR-2009-0472-7673.1, p.2] 

Thus, although the Associations take no position on NHTSA’s proposal to increase CAFE 

standards, we vigorously object to EPA’s proposal to finalize the superfluous Motor Vehicle 

Rule under CAA Section 202. EPA’s failure to account here for the PSD and Title V burdens it 

elsewhere acknowledges will flow from this rulemaking renders this rulemaking legally invalid. 

EPA must fully consider those burdens in this rulemaking. [OAR-2009-0472-7673.1, p.2] 

Mass Comment Campaign (48) (unknown organization) 

The Environmental Protection Agency (EPA) is not justified in regulating carbon dioxide 

emissions from vehicles. These regulations will only increase the cost of our cars, harm our 

economy, and limit our transportation options. We need efficient, affordable transportation to 

rebuild our economy and create American jobs. 

According to the proposed regulations, EPA wants to regulate carbon dioxide emissions from 

cars and trucks, 'because of the critical need to address global climate change.'(74 Fed. Reg. 

49454).This regulation does not achieve EPA's stated goal because, according to EPA data, it 

does not reduce global warming or sea level rise in a meaningful way. The regulation states that 

1-61
 
EPA Response to Comments 

the carbon dioxide reductions 'are projected to reduce global mean temperature by approximately 

0.007-0.016°C by 2100, and global mean sea level rise is projected to be reduced by 

approximately 0.06-0.15 cm by 2100.' 

To be clear, EPA is proposing to increase the price of automobiles by $1,100 per car (74 Fed. 

Reg. 49460) in exchange for (according to EPA) a global temperature decrease of 16 thousandths 

of a degree Celsius in 90 years. Also, according to EPA, sea level won't rise by an extra 1.5 

millimeters. These tiny amounts are so inconsequential that they will not affect global climate at 

all nor will they affect 'public health and welfare' (See Clean Air Act Sec. 202). 

The proposed regulations will harm our economy. A few years ago, the National Highway Safety 

Administration (NHTSA) estimated that increasing fuel economy standards to 35 miles per 

gallon by 2020 would cost the car companies $114 billion. (See Detroit News, 'Fuel Plan Would 

Cost Big Three' (March 1, 2007). Inexplicably, today NHTSA claims that achieving the 35 miles 

per gallon fleetwide standard by 2016, four years earlier, would cost only $60 billion. (75 Fed. 

Reg. 49479). This change from NHTSA is not credible. The cost of technology-forcing 

regulations do not decrease by half as a result of companies only having half the time to comply 

with the regulations. 

EPA and NHTSA's plan will increase costs for car companies and further reduce auto company 

jobs. Higher priced cars and trucks will make life more difficult for American families who need 

affordable transportation options. 

To make matters worse, these regulations would start a regulatory cascade. EPA would start 

regulating emissions from millions of sources, including large buildings, churches, sports arenas, 

office buildings, farms, schools, hospitals' you name it. EPA will be forced to regulate 

greenhouse gases with many sections of the Clean Air Act, including sections 108, 111, and 112. 

This will further harm our economy, reduce American jobs, and worsen our employment 

situation. NHTSA already has the ability to regulate fuel economy without EPA further harming 

the economy. 

Lastly, we care about our families' safety as much as the Secret Service cares about the 

President's safety. There is a clear correlation between size and weight of a vehicle and its safety. 

That is why the President's limo only gets a reported 8 mpg, not 35 mpg. The Secret Service 

should not have to cut corners in keeping the President safe, just as we should not have to cut 

corners to keep our families safe. 

EPA should not regulate carbon dioxide or greenhouse gas emissions under the Clean Air Act. 

These regulations will make our high unemployment even worse. It does not make sense for 

EPA to reduce American jobs, increase the price of cars and trucks, and make America less 

economically competitive in exchange for an immeasurable and meaningless reduction in global 

temperature. [OAR-2009-0472-10556, pp.1-2] 

Mississippi Department of Environmental Quality 

1-62 
General Comments 

In summary, it does not appear that EPA has properly evaluated the impacts of this rulemaking 

on state and local agencies and therefore failed to meet the obligations of the Unfunded 

Mandates Reform Act. The potential effects of this rulemaking on state and local agencies as 

well as small business that would be subject to the CAA could be disastrous, especially in today's 

economic climate. It also does not appear to be necessary to set GHG emissions standards to 

obtain the goals of reduced air emissions and increase fuel economy. It is not necessary for EPA 

to act now to meet any statutory requirements. Therefore, EPA should not set the proposed GHG 

emission standards for Light Duty Vehicles at this time. [OAR-2009-0472-7102.1, pp.1&5] 

National Automobile Dealers Association (NADA) 

Since dealers are impacted directly by vehicle production mandates, a National Program must 

carefully account for potential dealership impacts and concerns. In-use passenger car and light 

truck fuel economy and GHG performance will continue to improve as older, less fuel-efficient 

vehicles are replaced by newer ones offering comparable performance with improved fuel 

economy. To avoid impeding fleet turnover, a National Program must not unduly restrict product 

availability, reduce product performance, or increase product price. [OAR-2009-0472-7182.1, 

p.11] 

National Climate Coalition 

The Clean Air Act Is Flawed and National Legislation Is The Best Mechanism For Regulating 

Greenhouse Gases 

Stabilizing atmospheric greenhouse gas concentrations will require the transformation of our 

energy, manufacturing and transportation systems. We believe that this is the work of Congress. 

Federal legislation should not only take a broad, flexible multi-sector approach, but also must be 

designed to meet multiple objectives, including energy and transportation security, reliability and 

affordability; ensuring the economic competitiveness of United States businesses; energy 

conservation; strategic technology development; and environmental performance. Such 

legislation should also allow for and define the appropriate involvement of other departments 

and agencies with expertise in energy, environment, security and transportation in addition to 

EPA – something that is necessary yet not permitted under the Clean Air Act. Our highest 

priority must be for Congress to establish a uniform national program that will be consistent with 

the emerging and overarching international framework. [NHTSA-2009-0059-0086.1, p.4] 

For a variety of reasons, the existing Clean Air Act is a poor mechanism for addressing climate 

change. Congressional intent in drafting the Clean Air Act was to identify and regulate sources 

based on their relatively large emissions. Such sources typically have also been financially able 

to bear the costs of regulation. By establishing major source thresholds, the Act excluded from 

regulation the large numbers of smaller sources that exist in the United States. The number of 

stationary sources subject to regulation has thus historically been relatively small. By all 

estimates, however, this number could grow by at least an order of magnitude, perhaps two, and 

affect for the first time many previously unaffected sources (e.g., large retail establishments, 

schools, hospitals and government facilities) if greenhouse gases are regulated in the same 

1-63
 
EPA Response to Comments 

manner as criteria pollutants under NSR, and Title V — let alone §112, which has even lower 

thresholds for regulation. [NHTSA-2009-0059-0086.1, pp.4-5] 

The permitting thresholds under the Act, however, are keyed to emissions levels that are 

meaningful only in the context of regulating the local and regional health and welfare impacts of 

lower-emitting criteria or hazardous air pollutants. Even small sources have emissions of CO2 as 

a result of typical fuel use that would exceed current permitting thresholds on this basis. As EPA 

itself underscored in the ANPR and the Tailoring Rule Proposal, the PSD and Title V programs 

would sweep hundreds of thousands of sources not previously subject to regulation into the 

scope of the Clean Air Act, at great cost and consequence for the functioning of the economy and 

at great administrative burden on regulated sources, EPA, the states and local governments. EPA 

estimates that its approach in the Tailoring Rule would avoid over $55.6 billion in the first six 

years of regulation – or, stated differently, in the absence of the Tailoring Rule, the cost of 

compliance for affected sources and permitting agencies will increase by more than $55.6 

billion. [NHTSA-2009-0059-0086.1, p.5] 

Paradoxically, forcing the square peg of greenhouse gas emissions into the round hole of the 

existing Clean Air Act also has the potential to create adverse incentives that may stifle 

innovation and even increase greenhouse gas emissions. This could occur, for instance, if a 

company decides to delay improvements that would otherwise reduce emissions intensity to 

avoid triggering regulatory requirements, as we have seen occur time and time again under the 

New Source Review programs. A practical example of this situation is a turbine upgrade at an 

electric generating station. While the project results in more efficient production of electricity, if 

that energy efficiency were projected to result in more criteria pollutant emissions on an annual 

basis due to increased operations, it is likely the project would not be pursued due to the time 

consuming and expensive requirements of the New Source Review programs, including the 

likely need to implement additional controls for all pollutants that exceed the NSR pollutant 

thresholds. That is contrary to the desired outcome. [NHTSA-2009-0059-0086.1, p.5] 

Regulation under the Clean Air Act has historically focused on control of criteria and hazardous 

air pollutants to address the local or regional human health, welfare and environmental impacts. 

The architecture of the Clean Air Act is thus premised on the concept that state, regional and 

federal control of emissions will improve air quality in the corresponding area. This is not 

accurate as to greenhouse gases. The greenhouse effect is global -- and localized (or even United 

States-wide) emissions reductions will not result in environmental benefits to the United States 

in the absence of corresponding international action. Moreover, greenhouse gases at current and 

projected atmospheric concentrations have no known direct adverse human health impacts to 

which to link standards, and any environmental and welfare impacts only occur over substantial 

time, due to the indirect effects of aggregate global levels of greenhouse gases. Thus, greenhouse 

gases present a particular regulatory challenge. The same requirements that apply to emissions of 

criteria pollutants from stationary sources are not likely optimally to control and provide the 

most effective incentives to reduce greenhouse gases emissions. [NHTSA-2009-0059-0086.1, 

p.5] 

Because the Clean Air Act is such a poor vehicle for addressing climate change, we believe that 

further federal legislation is the best approach to reduce emissions that may contribute to global 

1-64 
General Comments 

warming. We recognize that the Supreme Court’s decision in Massachusetts v. EPA may require 

the Agency to commence regulatory action in absence of, or in the face of delayed, 

Congressional action. Congress, however, is poised to act. Comprehensive climate change and 

energy legislation has been passed by the U.S. House of Representatives, H.R. 2454 - the 

American Clean Energy and Security Act of 2009 (Waxman-Markey), and the Senate is 

considering stand alone climate change legislation, the “Clean Energy Jobs and American Power 

Act” (Kerry-Boxer), and energy legislation, S. 1462 - the American Clean Energy Leadership 

Act of 2009 (ACELA). The NCC urges EPA and the Administration to work in support of 

prompt Congressional efforts, and exercise its authority only where it can adopt flexible, 

appropriate measures to control greenhouse gases in a manner best designed to facilitate ultimate 

Congressional action. [NHTSA-2009-0059-0086.1, pp.5-6] 

The National Climate Coalition appreciates the opportunity to submit these comments and looks 

forward to providing further input. We encourage EPA to work with Congress towards prompt 

national greenhouse gas legislation. If EPA must continue to move ahead with rulemakings 

under the Clean Air Act, then we urge the Agency to exercise its discretion to limit application of 

those sections of the statute that would impose unintended economic harm and divert scarce 

public and private resources without commensurate benefit in stabilizing global greenhouse gas 

concentrations. As appropriate, in the course of regulating greenhouse gases under the statute, 

EPA also should seek prompt Congressional confirmation that such harmful provisions may be 

so limited or need not be implemented to address climate change. [NHTSA-2009-0059-0086.1, 

p.8] 

Process Engineers 

With the confirmation of scientific fraud of AGW manifested world-wide, any and all proposed 

regulations need to be suspended until after Congressional Inquiry is completed by Senator 

Inholf's committee. [OAR-2009-0472-7166, p.1] 

Shaw, Donald F. 

I oppose the implementation of the proposed requirements. I request that you consider these 

comments and drop the proposed requirements. [OAR-2009-0472-7270, p. 1] 

I oppose the Environmental Protection Agency (EPA) proposal to regulate carbon dioxide 

emissions from vehicles. These regulations will significantly increase the cost of our cars, harm 

our economy, and limit our transportation options. Significant hardships will be imposed on 

every family. We need efficient, affordable transportation to rebuild our economy and create 

American jobs. [OAR-2009-0472-7270.1, p. 1] 

The $1100/car is prohibitive and will probably exceed that estimate. [OAR-2009-0472-7270.1, p. 

2] 

According to the proposed regulations, EPA wants to regulate carbon dioxide emissions from 

cars and trucks, “because of the critical need to address global climate change.” (74 Fed. Reg. 

49454).This regulation does not achieve EPA’s stated goal because, according to EPA data, it 

1-65
 
EPA Response to Comments 

does not reduce global warming or sea level rise in a meaningful way. The regulation states that 

the carbon dioxide reductions “are projected to reduce global mean temperature by 

approximately 0.007–0.016°C by 2100, and global mean sea level rise is projected to be reduced 

by approximately 0.06–0.15 cm by 2100.” [OAR-2009-0472-7270.1, p. 2] 

The EPA is proposing to increase the price of automobiles by $1,100 per car (74 Fed. Reg. 

49460) in exchange for (according to EPA) a global temperature decrease of 16 thousandths of a 

degree Celsius in 90 years. Also, according to EPA, sea level won’t rise by an extra 1.5 

millimeters. These tiny amounts (assuming they will be realized) are so inconsequential that they 

will not affect global climate at all nor will they affect “public health and welfare” (See Clean 

Air Act Sec. 202). [OAR-2009-0472-7270.1, p. 2] 

EPA should not regulate carbon dioxide or greenhouse gas emissions under the Clean Air Act. 

These regulations will make our high unemployment even worse. It does not make sense for 

EPA to reduce American jobs, increase the price of cars and trucks, and make America less 

economically competitive in exchange for an immeasurable and meaningless reduction in global 

temperature. 

I appreciate the opportunity to comment on the proposed rule making and recognize that many 

past efforts by the EPA have been beneficial to improve our environment. This proposal will 

have no beneficial impact while having destructive impact on our economy. [OAR-2009-0472­

7270.1, p. 3] 

Spurgeon, C. M. 

The Environmental Protection Agency (EPA) is not justified in regulating carbon dioxide 

emissions from vehicles. These regulations will only increase the cost of our cars, harm our 

economy, and limit our transportation options. We need efficient, affordable transportation to 

rebuild our economy and create American jobs. [OAR-2009-0472-7092.1, p. 1] 

According to the proposed regulations, EPA wants to regulate carbon dioxide emissions from 

cars and trucks, “because of the critical need to address global climate change.” (74 Fed. Reg. 

49454).This regulation does not achieve EPA’s stated goal because, according to EPA data, it 

does not reduce global warming or sea level rise in a meaningful way. The regulation states that 

the carbon dioxide reductions “are projected to reduce global mean temperature by 

approximately 0.007–0.016°C by 2100, and global mean sea level rise is projected to be reduced 

by approximately 0.06–0.15 cm by 2100.” [OAR-2009-0472-7092.1, p. 1] 

EPA should not regulate carbon dioxide or greenhouse gas emissions under the Clean Air Act. 

These regulations will make our high unemployment even worse. It does not make sense for 

EPA to reduce American jobs, increase the price of cars and trucks, and make America less 

economically competitive in exchange for an immeasurable and meaningless reduction in global 

temperature. [OAR-2009-0472-7092.1, p. 2] 

Texas Industry Project (TIP) 

1-66 
General Comments 

Global climate change is a serious issue that is best addressed through concerted international 

action and/or comprehensive federal legislation, rather than through unilateral agency regulation 

under the current Clean Air Act (“CAA” or the “Act”). Not only did the Supreme Court make 

clear in Massachusetts v. EPA that the U.S. Environmental Protection Agency (“EPA” or the 

“Agency”) has substantial discretion regarding the timing of any rules, but the Court of Appeals 

for the District of Columbia (“D.C. Circuit”) subsequently denied a petition to compel EPA 

action in response to Massachusetts v. EPA. [OAR-2009-0472-7430.1, p. 1] 

More importantly, Congress is moving forward quickly on comprehensive legislation that would 

address the problem of climate change outside of the structure of the current Act. Despite a clear 

need to proceed with the utmost caution in this important area, EPA has proposed to regulate 

GHG emissions from motor vehicles in the Proposed Rulemaking to Establish Light-Duty 

Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards 

(the “Motor Vehicle GHG Rule”). Under EPA’s current interpretation of the CAA, the Motor 

Vehicle GHG Rule may (as EPA has stated in the Proposed PSD and Title V GHG Tailoring 

Rule (the “PSD Tailoring Rule”) trigger regulation of GHG emissions from millions of 

stationary sources, including hundreds of thousands of Texas sources, many of which have never 

before been regulated under the Clean Air Act (“CAA”). [OAR-2009-0472-7430.1, p. 1] 

The Motor Vehicle GHG Rule, as well as its companion, the PSD Tailoring Rule, are 

fundamentally flawed, both procedurally and substantively, and Texas, as the nation’s leading 

energy producer and a leader in chemical manufacturing and agriculture, could be significantly 

impacted by these federal rulemakings. Most notably, EPA completely failed to evaluate the 

burdens of triggering PSD and Title V for GHG emissions under the required federal regulatory 

review statutes and Executive Orders. Furthermore, even had the Agency conducted the required 

burden analysis, the rule is unlawful, would devastate the Texas and national economies, and the 

burdens of regulating GHGs under CAA Section 202 far outweigh the insignificant 

environmental benefits of the GHG emission standards. [OAR-2009-0472-7430.1, pp. 1-2] 

Accordingly, for all of the reasons discussed in these comments, EPA should withdraw the 

Motor Vehicle GHG Rule, and proceed with caution going forward by allowing both the 

international community and Congress time to develop a comprehensive and sensible approach 

to the global problem of climate change. [OAR-2009-0472-7430.1, p. 2] [See OAR-2009-0472­

7430.1, pp. 2-11 for specific comments related to PSD and NSR for stationary sources in Texas.] 

EPA Response: 

EPA received several comments opposing the proposed rule, some opposing the overall program 

and other opposing various specific aspects of the rule. These comments are addressed generally 

here, and in detail in the respective sections of this Response to Comments document and 

elsewhere in the rulemaking documents. 

Commenters opposing the overall program raised issues of EPA's statutory authority, comments 

related to the EPA's separate action on "endangerment," and the relationship commenters see 

between this action and the permitting of stationary sources of GHGs. (See Section 7.1 of this 

document and the preamble for our discussion of permitting issues.) Many of these comments 

1-67
 
EPA Response to Comments 

request that EPA forego action until such a time when Congress enacts comprehensive climate 

and energy legislation. Some commenters support a national program that would involve new 

NHTSA CAFE standards but not EPA GHG standards. Some commenters also express concerns 

about whether the projected climate benefits of the program are as important and as large as EPA 

projects, and are concerned about recent attention to international climate science. Some 

commenters (although none from the auto industry) believe that the economic impacts of the 

program on the industry and consumers are too high; some of these commenters believe there 

will be impacts on vehicle performance and vehicle choice. 

EPA has extensively evaluated each of these concerns about the program, and, as stated above, 

address them elsewhere in this document and the rule. We have made some relatively minor but 

important improvements to the proposed program in response to comments; our overall 

conclusions in the NPRM remain the same: 

 That the rule represents very important public policy that the Clean Air requires EPA to 

take action on, 

 That our action is fully authorized by and meets all requirements of the Clean Air Act, 

 That our overall assessments of the costs and benefits of program are well documented 

and sound, and 

 That increased vehicle costs will be offset by fuel savings, and vehicle choice and 

performance will not be negatively affected. 

1-68 
General Comments 

1-69
 

Section 2 Reserved 

2. Reserved 

2-1 
EPA Response to Comments 

2-2 
EPA CO2 Standards 

3-1 

3.0 EPA CO2 Standards...................................................................................................... 2 

3.1 National versus state standards and harmonization of EPA and NHTSA standards 6 

3.2 Form of the standards.............................................................................................. 21 

3.3 Stringency of the standards..................................................................................... 53 
EPA Response to Comments 

3-2

3.0 EPA CO2 Standards 

Several commenters provided comments which touch upon two or more aspects of the 

proposed EPA GHG standards, as they are broken out in this Section of the RTC 

document. Splitting these comments apart according to the organization of this section 

might have caused a loss of the context of the specific comment. Citing the entire 

comment in each relevant subsection would have produced significant duplication. In 

lieu of either of these approaches, we present these integrated comments at a relatively 

high point in the organization of this section (e.g., Section 3.0) where all of the relevant 

specific aspects of the comment are addressed either at that level or at a more 

disaggregated level (e.g., Section 3.1). 

Organization: Ford Motor Company 

National Automobile Dealers Association (NADA) 

New York State Department of Environmental Conservation 

University of Miami, School of Law 

Dr. Walter McManus, Ph.D., of the University of Michigan 

Transportation Research Institute (UMTRI) 

Transportation and Buildings Policy for the State of Massachusetts 

Executive Office of Energy and Environmental Affairs 

Comment:

Ford Motor Company 

Ford supported the President's initiative to bring together key stakeholders and work out a 

solution to enable a single national program for motor vehicle greenhouse gas and fuel 

economy standards. A state-by-state approach to such standards is unworkable for a 

variety of reasons, and would impose hardships on consumers, dealers, and 

manufacturers. [OAR-2009-0472-7082.1, p.1] 

[Ford also submitted these comments as testimony at the Detroit public hearing, See 

docket number EPA-HQ-OAR-2009-0472-6815, pp. 16.] 

[Ford also submitted these comments as testimony at the New York public hearing, See 

docket number EPA-HQ-OAR-2009-0472-4621, pp. 32.] 

National Automobile Dealers Association (NADA) 

Above all else, the final rule must encompass a single national light-duty vehicle fuel 

economy/GHG program that avoids any unworkable patchwork of state laws. The EISA 

mandate for a fleet-wide combined fuel economy average of at least 35 miles per gallon 

(a 40% increase) by 2020, with a commensurate reduction in GHGs of at least 30 percent, 

was Congress’ clear guidance on what a National Program should achieve. Notably, 

EISA’s ambitious Congressional mandate resulted from vigorous public debate and, in 

the end, received virtually universal support from all interested parties. Unfortunately, the 
EPA CO2 Standards 

3-3 

proposed National Program downplays EISA’s landmark mandates, opting instead for a 

bureaucratic cobbling of new NHTSA CAFE standards together with separate and largely 

redundant EPA GHG standards. [OAR-2009-0472-7182.1, p.3] 

As the National Program proposal states, “CAFE standards address most, but not all, of 

the real world C02 emissions because EPCA requires the use of 1975 passenger car test 

procedures under which vehicle air conditioners are not turned on during fuel economy 

testing.” 74 Fed. Reg. 49458. EPA’s test procedures used to calculate CAFE standards 

are based on equations involving a carbon balance technique where fuel economy is 

calculated from the measurement of exhaust emissions and an assumption that the 

quantity of carbon in a vehicle’s exhaust gas is equal to the quantity of carbon consumed 

by the engine as fuel. The physics and chemistry involved spell a direct relationship; 

controlling fuel economy controls GHGs and controlling GHGs controls fuel economy. 

Clearly, the most straightforward and elegant National Program would be one with 

NHTSA regulating tailpipe GHGs through its long-established, Congressionallymandated CAFE standards, supplemented by a few appropriately tailored EPA rules 

governing vehicle air conditioning (under Title VI of the CAA), fuel design, and vehicle 

use. Several of the comments below point to areas where EPA’s tortured attempt to 

overlay GHG rules on top of NHTSA’s CAFE standards raise significant issues of 

concern. [OAR-2009-0472-7182.1, p.3] 

In any event, NADA strongly objects to the proposal’s admitted attempt to incorporate 

the fuel economy/GHG rules promulgated by California’s unelected Air Resources Board 

(CARB). CARB’s long history of appropriately addressing mobile source criteria and 

hazardous pollutants, in no way justifies incorporation of its GHG rules as they are 

neither practically necessary to nor legally appropriate for a well-designed National 

Program. It is in this light that NADA recently challenged EPA’s reversal of its prior 

denial of CARB’s request for authority to regulate motor vehicle fuel economy and 

GHGs. NADA ‘s legal challenge has nothing to do with the propriety of raising 

fuel economy standards, but rather arises from the unworkable impact on dealership new 

vehicle commerce that would result from a “patchwork of state—based regulations. 

Notably, nothing in EISA changed EPCA’s explicit preemption of the adoption or 

enforcement of laws “related to” fuel economy by states, an express preemption 

necessary to ensure national uniformity and to avoid a patchwork of state-by-state 

mandates. CARBs “flat standard” approach to regulating motor vehicle fuel economy and 

GHGs clearly fails to account for all relevant criteria necessary to a National Program, 

directly relates to and conflicts with the federal CAFE standards, and unquestionably 

undermines the safety. job loss, equity. and consumer choice considerations mandated by 

EPCA. [OAR-2009-0472-7182.1, p.3] 

The National Program very ambitiously proposes to pull forward EISA’s 2020 target by 

four years. Recently, a top EPA official stated that EPA and NHTSA have “put together a 

single national standard with one implementation.” Cobbled together and christened the 

“National Program,” the proposal in reality is not a “single national standard,” but three 

fuel economy standards separately administered by NHTSA, EPA and CARB. The 

proposal claims that the National Program will be “harmonized” and “consistent, “ yet it 
EPA Response to Comments 

3-4

is virtually impossible for the CAFE program, the CAA, and CARB’s regulations 

(designed to regulate GHGs only from light duty vehicles produced for sale in California) 

to be so as each agency must follow separate statutory frameworks. The National 

Program is in fact three different fuel economy standards, set by three different agencies, 

governed by three different laws. [OAR-2009-0472-7182.1, p.5] 

Automakers producing light-duty vehicles for sale in MYs 2012-2016 will have to 

comply with all three standards, even when their mandates and policies conflict. This 

makes for an unnecessarily complex and costly regulatory program with scant (if any) 

commensurate additional benefits. While the proposal gives lip service to harmonizing 

these three mandates, in reality it falls far short in that regard. For example, it fails to 

adequately rationalize and equalize GHG tailpipe emissions between the NHTSA and 

EPA standards. Perhaps one solution to this specific issue would be for NHTSA to adjust 

its curves downward to better reflect the contribution A/C improvements will make to 

overall GHG reductions. [OAR-2009-0472-7182.1, pp.5-6] 

Curiously, the proposal fails to establish a “ratable” ramp-up of fuel economy targets. 

The worst example of this is the unjustifiably large jump between MYs 2011 and 2012. 

Put simply, the proposal’s standards require too much, too soon. Given the unprecedented 

targets proposed for MY 2016, the National Program should adopt a more equitable and 

linear rate of annual increase for MYs 2011-2016, and even should consider back loading 

higher increases into the later model years. NADA does not suggest what targets are 

feasible or practicable for any given model year, as such determinations depend on an 

appropriate evaluation of vast amounts of often confidential business data viewed in the 

light of statutory criteria and numerous assumptions. Of course, an ongoing evaluation of 

manufacturer product plan information is essential, as exemplified by NHTSA’s recent 

request for future data. The feasibility and practicability of compliance changes with time 

for many reasons, not the least of which is the ability of economically constrained vehicle 

manufacturers to develop and implement new technologies, and the willingness of the 

motoring public to pay for those new technologies if and when they choose to buy or 

lease a new vehicle. [OAR-2009-0472-7182.1, p.6] 

Ultimately, any National Program cannot impose standards beyond those deemed to be 

“maximum feasible.” “Economic practicality” is one key criterion for making that 

statutory determination, and any analysis of such must recognize, preserve, and capitalize 

on consumer choice and affordability. Again, unless and until vehicles covered by CAFE 

standards are actually purchased, projected fuel economy and GHG reduction benefits 

will be illusory. Moreover, all three standards must take into account impacts on new 

passenger car and light truck dealerships. Dealerships directly purchase the vehicles 

produced by manufacturers. If the National Program mandates vehicles that are 

unacceptable to the motoring public for cost or performance reasons, potential new 

vehicle customers predictably will hold on to their existing vehicles longer or will turn to 

the used vehicle marketplace. The result: unwanted new vehicles languishing on 

dealership lots, with a decline in dealership sales, income, profits, and employment, and a 

predictable rise in business failures. [OAR-2009-0472-7182.1, p.6] 
EPA CO2 Standards 

3-5 

[National Automobile Dealers Association also submitted these comments as testimony 

at the New York public hearing, See docket number EPA-HQ-OAR-2009-0472-4621, pp. 

80-84, 88-89.] 

New York State Department of Environmental Conservation 

New York will deem vehicles that comply with the new federal standards to be in 

compliance with its adopted state standards from 2012 through 2016. We wish to 

emphasize that the Clean Air Act provision of states' rights to adopt motor vehicle 

standards - for California under Section 209 and for other states under Section 177 - was 

crucial in allowing New York and other states to lay the groundwork and create the 

momentum for this national vehicle GHG emissions reduction program, as it was for 

many other previous ground-breaking mobile source regulatory programs. Therefore, our 

statutory right to adopt more rigorous motor vehicle standards than the federal 

government's proved to be a valuable catalyst for innovation and progress. [OAR-2009-

0472-7454, cover page 2] [New York State Department of Environmental Conservation 

also submitted these comments as testimony at the New York public hearing, See docket 

number EPA-HQ-OAR-2009-0472-4621, pp. 13-16] 

The New York State Department of Environmental Conservation (Department) agrees 

with EPA's stated goal of increasing the stringency of greenhouse gas emissions 

standards at a rate such that manufacturers can comply by making emissions reductions 

as part of regularly scheduled vehicle redesigns. We believe that the proposed standards 

are reasonably achievable, and are phased in at an appropriate pace. [OAR-2009-0472-

7454, p.1] 

University of Miami, School of Law 

The time frame of the proposed rule nevertheless poses some concern. The standards 

should not cease to apply in 2016, but should remain in effect until a comparable or more 

stringent standard is permanently in place. Before drafting the rule, the EPA should make 

sure to explore other related transportation-emitters that could be regulated as part of this 

effort. In this way, the standards can be applied to more than 60% of emissions from 

transportation. [OAR-2009-0472-6770, p. 1] 

Dr. Walter McManus, Ph.D., Research Scientist, University of Michigan 

Transportation Research Institute (UMTRI) 

EPA and NHTSA have proposed a new methodology for analyzing potential CAFE and 

GHG emissions standards that is more transparent, replicable, and accurate that the prior 

methodology. [OAR-2009-0472-3651.1, p.3] 

Among other objectives, Congress wants fuel economy standards that balance the 

benefits from reducing negative external effects of fuel consumption with the costs of 

improving vehicle fuel economy. The benefits can generally be estimated with public 

data, but to estimate the costs it would be helpful to use private information on costs 
EPA Response to Comments 

3-6

known only to the automakers. This information asymmetry has the potential to introduce 

“gaming” into the process. [OAR-2009-0472-3651.1, p.3] 

 [[Dr. McManus, also submitted these comments as testimony at the Detroit public 

hearing, See docket number EPA-HQ-OAR-2009-0472-6185, pp. 36-37.] 

Transportation and Buildings Policy for the State of Massachusetts Executive Office 

of Energy and Environmental Affairs 

As a result of the differences in the EPA and NHTSA statutes, there are two key areas 

that I would like to highlight. First, in the proposed rulemakings, the GHG benefits 

estimated from the EPA-proposed, footprint-based standard, expressed as grams per mile 

or CO2 are slightly higher than what NHTSA's proposing for CAFE. This is primarily 

because the CAFE standards do [EPA-HQ-OAR-2009-0472-4621, p.24] not account for 

greenhouse gas emissions from vehicle air conditioning systems. In contrast, EPA gives 

the automobile manufacturers the ability to obtain credit for reducing CO2 and 

hydrofluorocarbon emissions from air conditioning systems. We believe EPA's approach 

is correct; requiring additional reductions from air conditioning systems represents, 

quote, a whole vehicle approach which is appropriate. [EPA-HQ-OAR-2009-0472-4621, 

p.25] 

EPA Response:

As indicated by the organization of Section 3, there are many important aspects of the 

EPA GHG standards for motor vehicles. We have attempted to separate the comments 

received according to their primary focus and address each group of similar or 

comparable comments together in a cohesive manner. The comments cited above in 

Section 3.0 interweave many of these aspects in a way that was not easily separable. 

Rather than repeating these comments in two or more of the following sub-sections of 

Section 3.0, we present these comments here together. The issues which they raise, 

including the interaction between state and federal programs, the overlap of the NHTSA 

and EPA standards, the overall stringency of the NHTSA and EPA standards, the 

stringency of the 2012-2016 standards (including the issue of EISA’s direction to 

NHTSA for a ratable increase in the standards through 2020) and the desirability of 

carrying the current approach to standard setting forward beyond the 2016 model year 

will be addressed as each of these issues is focused on more specifically in the various 

sub-sections of Section 3.0 of this RTC document. 

3.1 National versus state standards and harmonization of EPA and NHTSA 

standards 

Organization:Center for Biological Diversity 

Environmental Defense Fund 

Alliance of Automobile Manufacturers (Alliance) 

New York University School of Law, Institute for Policy Integrity (IPI) 

General Motors 
EPA CO2 Standards 

3-7 

Volkswagen Group of America (Volkswagen) 

BMW of North America, LLC (BMW) 

National Association of Manufacturers (NAM) 

Senator Fran Pavley, California State Senate 

Consumer Federation of America 

University of California, Los Angeles School of Law 

State of New Jersey 

State of Washington Department of Ecology 

Environment New Jersey 

Comment:

Center for Biological Diversity 

C. The Effect of Other Motor Vehicle Standards on Fuel Economy Supports More 

Stringent Standards 

California has consistently led the way in seeking to set higher mileage standards, and is 

a leader in the regulation of GHG emissions. Undoubtedly, this trend will continue. Thus, 

the ability of California to seek additional waivers in the future to continue in this 

leadership role argues for the setting of more stringent national standards as well. [OAR2009-0472-7265.1, p. 19] 

Alliance of Automobile Manufacturers (Alliance) 

In addition, the Alliance supports creation of an effective single, national program that 

automakers can plan to meet and that will minimize the disruptions of multiple programs 

on vehicle choice and availability. The Administration fundamentally has accomplished 

this objective for the 2012-2016 timeframe. Beyond 2016, this goal must still be pursued. 

It is important that all key stakeholders, including California and states adopting 

California standards, be included in this process. It is also critical that the Federal 

government continue working to develop an integrated approach that addresses 

infrastructure, vehicles, fuels and fuel quality, and consumer behavior, as well as all other 

sectors of the economy. [OAR-2009-0472-6952.1, pp.1-2] 

Harmonization of EPA and NHTSA S-Curves 

Harmonization between the EPA and NHTSA programs is critical to meeting the 

National Program’s target of 250g CO2/mile by MY 2016. Both agencies stress the 

importance of harmonization in the May 22, 2009 Notice of Intent, where the word 

harmonization is mentioned nine times. The Notice of Intent describes key elements of 

the National Program as follows: 

EPA and NHTSA intend to propose two separate sets of standards, each under their 

respective statutory authorities. EPA expects to propose a national CO2 vehicle emissions 
EPA Response to Comments 

3-8

standard ....NHTSA expects to propose appropriate related CAFE standards. [OAR2009-0472-6952.1, p.31] 

EPA standards recognize the CO2 benefit from investing in air conditioning technology 

improvements, whereas NHTSA’s standards are constrained from doing so. Since the 

agencies are taking different approaches to reaching the same 2016 goals, the National 

Agreement states that a manufacturer should be able to build a single national fleet of 

light-duty vehicles that simultaneously satisfy the requirements of both programs. For a 

single product plan to meet both the EPA and NHTSA approaches, the stringency of the 

tailpipe CO2 standards must be equivalent between the two programs. However, the 

stringencies of the tailpipe standards are not equivalent in the proposed rule. A primary 

reason for this lack of equivalency is the air conditioning assumptions being made in the 

translation between the NHTSA and EPA standard curves. [OAR-2009-0472-6952.1, 

pp.31-32] 

Manufacturers that employ a higher level of A/C system advancements will not realize 

the benefit under the NHTSA CAFE program. If the NHTSA curves fail to recognize the 

A/C system improvements a manufacturer may make under the EPA framework, the 

curves could have the unintended consequence of discouraging A/C system 

improvements. This disconnect, effectively leads to a more stringent overall National 

Program than is contemplated by the Notice of Intent. [OAR-2009-0472-6952.1, pp.33-

34] 

As an example, one manufacturer may want to implement alternative refrigerants as 

quickly as possible. EPA recognizes the benefits of low GWP refrigerants and rewards 

this with 14.9 g/mi credit. If the manufacturer’s strategy was to do this on half of its 

vehicle fleet in MY 2012, the manufacturer would earn 14.9 g/mi CO2e divided by two, 

or 7.5 g/mi CO2e credits for the refrigerant portion alone (plus other indirect credits). 

This is more than twice the average credit level assumed. A strategy like this may be the 

most technologically feasible way to overcome the steep near term increase in the MY 

2011-2012 standards, while the manufacturer is implementing the longer lead time fuel 

efficiency strategies. [OAR-2009-0472-6952.1, p.34] 

This same manufacturer may determine that the best and most economically practicable 

way (given the capital constraints currently faced by the industry) for complying with this 

rule is to maximize A/C improvements in combination with fuel economy improvements. 

The current NHTSA S-curve translation would penalize this approach even though 

equivalent GHG reductions would be achieved. [OAR-2009-0472-6952.1, p.34] 

The issue here has to do with harmonizing the two rules – a key objective of a successful 

National Program. Manufacturers still have to meet the overall stringency of the joint 

program. [OAR-2009-0472-6952.1, p.34] 

Recommendation 
EPA CO2 Standards 

3-9 

NHTSA needs to adjust the S-curves downward for 2012-16 model years to allow for the 

potential strategy of pursuing maximum A/C improvements to lower GHG emissions. 

The Alliance’s proposed adjustments can be accomplished without backsliding from the 

MY 2011-15 fuel economy standards published in the April 2008 NHTSA NPRM (and 

later withdrawn). 73 Fed. Reg. 24,352 (May 2, 2008). [OAR-2009-0472-6952.1, p.34] 

The table below quantifies the difference in CO2e between the April 2008 NPRM and the 

September 2009 NPRM. The difference in CO2e quantity (shown in column E) could be 

used without backsliding from the April 2008 NPRM. NHTSA should re-translate the 

EPA S-Curves by the amount in Column G. There would be no environmental loss with 

such an approach because a manufacturer that does not pursue maximum air conditioning 

credits would be required to achieve the necessary CO2 reductions through tailpipe 

emissions. [OAR-2009-0472-6952.1, p.34] 

Consideration of EPA's 2012-2016 Model Year GHG Standards 

With respect to EPA's 2012-2016 GHG standards, it is important to note that the current 

joint NPRM is the result of an agreement in principle between the federal government, 

California, and the automakers in support of one national program for GHG and fuel 

economy standards for model years 2012-2016. Under the agreement in principle, EPA 

and NHTSA are working together to ensure that their respective standards are 

harmonized as closely as possible, in keeping with the joint rulemaking notice. 

Obviously, the harmonization effort requires both agencies to be aware of and 'consider' 

what the other is doing, so they can make adjustments that align the requirements of both 

the GHG and fuel economy programs. As evidenced by the NPRM, NHTSA and EPA 

have been engaged in the harmonization effort for some time now, and they should 

continue in that effort to the conclusion of the joint rulemaking process. This will fulfill 

NHTSA's obligation to 'consider' EPA's GHG rules under Section 32902(f). Of course, 

the process of 'considering' and harmonizing with EPA's GHG rules does not eliminate 

NHTSA's obligation to set standards that conform to the other criteria set forth in EPCA. 

For example, NHTSA must see to it that nothing resulting from the harmonization effort, 

or any other aspect of the standard-setting process, will result in fuel economy standards 

that are not technologically feasible or economically practicable. NHTSA has an 

independent obligation under EPCA to make sure that those criteria are satisfied under 

any final rule. Likewise, any regulations adopted by EPA under the Clean Air Act for 

model years beyond the scope of the current proposal must be consistent with the goals 

and purposes of EPCA and must respect NHTSA’s primary role in setting fuel economy 

standards in consultation with EPA and other agencies. [OAR-2009-0472-6952.1, p.66] 

Consideration of California's 2012-2016 Model Year GHG Standards 

Under the agreement in principle mentioned above, the California Air Resources Board is 

expected to promulgate amendments to its regulations providing that compliance with the 

federal GHG/fuel economy program is deemed to satisfy compliance with the California 

program. Under this framework, as the Alliance understands it, the California GHG 

standards will have no independent practical impact on fleet-wide fuel economy in the 
EPA Response to Comments 

3-10

2012-2016 time frame. Assuming that the agreement in principle is carried out as 

anticipated, the existence of California GHG regulations for the 2012-2016 model years 

should therefore not have any impact on NHTSA's standard-setting process. [OAR-2009-

0472-6952.1, p.66] 

Consideration of EPA or CARB GHG Standards for the 2017 Model Year and Beyond 

The Alliance and all stakeholders have agreed that the best approach to control mobile 

source GHG emissions is through a national program. The Alliance supports the concept 

of a national program beyond the 2016 model year and urges all other stakeholders to do 

likewise. The Alliance is confident a national approach can and will be achieved for the 

post-MY 2016 time frame, and we will work diligently towards that goal. Assuming the 

'one national program' approach continues beyond 2016, and the standard-setting process 

for 2017 and beyond is conducted under a joint rulemaking much like the current one, 

NHTSA's obligation to consider EPA's GHG rules under Section 32902(f) would be 

similar to what is outlined above for the 2012-2016 time period. [OAR-2009-0472-

6952.1, pp.66-67] 

New York University School of Law, Institute for Policy Integrity (IPI) 

(3) Program Choice 

The program proposed by EPA builds largely on the structure of its previous regulatory 

programs, taking the form of traditional command-and-control regulation. [OAR-2009-

0472-7232.3, p. 14] 

EPA has submitted its positive endangerment finding on greenhouse gas pollutants under 

Section 202 of the Clean Air Act (CAA) to the White House Office of Management and 

Budget for final approval. Once that finding is finalized, the CAA requires EPA to 

promulgate regulations. As explained in IPI’s report, The Road Ahead, the statutory 

language in Title II of the CAA limits EPA in its choices to regulate under this section; 

regulations must be in the form of emissions standards mandating some type of limit on 

GHG emissions. These types of command-and-control regulations will be detrimental to 

any subsequent cap-and-trade system that covers GHG emissions from vehicle fuel, 

whether created by Congress or by EPA. [OAR-2009-0472-7232.3, pp. 14-15] 

Assuming California’s existing standards for motor vehicle emissions are close to 

efficient, EPA’s attempt to harmonize its proposed GHG standards with Californian 

policy is the optimal regulatory choice. This harmonization will minimize any inefficient 

interaction of the standards with a subsequently enacted cap-and-trade system, by 

creating a single uniform regulatory regime. Through this method, EPA avoids increasing 

regulatory obligations on (or creating regulatory uncertainty for) car manufacturers, as 

manufacturers already need to comply with similar regulations for cars sold in California 

and the seventeen other states that have adopted California’s standards. [OAR-2009-

0472-7232.3, p. 15] 
EPA CO2 Standards 

3-11 

Although the proposed GHG regulations fulfill EPA’s legal duty under Section 202, the 

program does not reach an efficient level of GHG reductions in the transportation sector. 

The proposal does not create a uniform regulatory framework applicable to all mobile 

sources and does not effectively maximize social welfare or minimize costs. In April 

2009, IPI submitted a rulemaking petition to EPA requesting the creation of a 

comprehensive cap-and-trade system under Section 211 of the CAA for vehicle fuel used 

in all mobile sources. A cap-and-trade rulemaking would be more effective at addressing 

GHG emissions of all mobile sources, including sources such as off-road vehicles and 

marine vessels, which are not subject to a similar statutory scheme as light-duty vehicles. 

It would also allow EPA to regulate emissions at the source of fuel sale, manufacture, and 

import rather than requiring piecemeal command-and-control regulation of various 

vehicle sectors. The outlines of such a program, and the statutory authority for the 

program under the CAA, are more clearly outlined in IPI’s petition and IPI’s report The 

Road Ahead, included as attachments to these comments. [OAR-2009-0472-7232.3, p. 

15] 

General Motors 

Our working together in a common direction on a single national approach could 

accomplish much more, consistent with the energy needs and the environmental priorities 

of the country. We knew then only about the framework for the proposed regulations. 

But we made clear that we were prepared to work with EPA and NHTSA, and in that 

regard, I appreciate this opportunity to testify today to reaffirm GM's commitment from 

last May and to comment briefly on the proposed rules of the two agencies. [OAR-2009-

0472-6185, pp.9-10] 

Volkswagen Group of America (Volkswagen) 

Volkswagen has concern that the relative stringency between the EPA GHG proposed 

regulation and the NHTSA CAFE: regulation is not equivalent. It is our understanding 

that the EPA regulation would be more stringent than the NHTSA regulation due to the 

credit flexibility offered under the EPA GHG proposal. The preamble speaks at length 

about the need for harmonization and the effort spent to harmonize the NHTSA CAFE 

program and the EPA GHG requirements under a National program. We expected the 

stringency published for the EPA GHG as the 250 gram/mile combined car and truck 

fleet target as outlined by the President's announcement on May 19, 2009 was a given 

value that the collective automotive companies and other stakeholders could agree to. In 

the joint NPRM, however, we were surprised to see the stringency of the NHTSA curves 

when they are converted to a CO2 basis. The NHTSA curves match the stringency of the 

EPA targets, especially in the earlier years of the regulation. In particular, the 2012 MY 

curves are essentially the same when the NHTSA curve is converted to a CO2 basis. This 

is troubling because we do not believe this increased stringency of the NHTSA targets 

allows manufacturers complete confidence they can build a single fleet that complies 

with both regulations. During negotiations earlier this year leading up to the 

announcement of the National agreement it was thought that if a manufacturer complied 

with the EPA GHG regulation that in turn meant that the manufacturer also complied 
EPA Response to Comments 

3-12

with the NHTSA CAFE regulation. Based on the current CAFE targets published in the 

NPRM we see the possibility that manufacturers can achieve the EPA targets but not the 

NHTSA targets, leading to the situation where a manufacturer could comply with the 

EPA regulation but still pay a CAFE penalty. We ask the agencies to examine this 

possibility and adjust the NHTSA targets to allow the regulations to be better 

harmonized. As discussed in the Alliance comments, we agree that this issue is due to the 

air conditioning credit NHTSA is assuming as they establish their curves. We 

recommend that the offset between the EPA and NHTSA curves should be constant and 

should be based on the maximum A/C credit that can be realized under the CO2 

compliance requirements. This provides incentive to reduce GHG emissions through the 

use of improved A/C system. As is mentioned several times in the regulation, the goal is 

to set the relative levels of the standard to, 'represent a harmonized approach that will 

allow industry to build a single national fleet that will satisfy both the GHG requirement 

under the CAA and CAFE requirements under EPCAIEISA' (Federal Register, Monday, 

September 28, 2009, page 49468, Section 2, Level of the Standards). [OAR-2009-0472-

7210.1, pp.4-5] 

CO2 uses a sales-weighted fleet average calculation. CAFE uses a harmonic salesweighted fleet average calculation. We only note that a consistent calculation method 

between the two regulations may be preferred. If changes are made to harmonize the 

calculation method, however, the relative stringency of the regulations must be 

maintained. [OAR-2009-0472-7210.1, p.9] 

BMW of North America, LLC (BMW) 

[These comments were submitted as testimony at the New York public hearing. See 

docket number EPA-HQ-OAR-2009-0472-4621, pp. 136.] 

We also would like to mention 25 that we very much appreciate the collaboration of the 

State of California in helping to make this National Program a reality. The greenhouse 

reduction targets of California have been met with a single national standard. [These 

comments were submitted as testimony at the New York public hearing. See docket 

number EPA-HQ-OAR-2009-0472-4621, p. 137.]] 

National Association of Manufacturers (NAM) 

NAM supports the Administration’s broader policy objectives of harmonizing vehicle 

emission standards under a National Program and promotion of energy efficiency through 

enhanced CAFE standards through the Department of Transportation (DOT). Not only 

does establishment of national, uniform standards have the potential - if implemented 

correctly- to create a climate of investment certainty necessary to make long-term 

business decisions, but stronger energy efficiency objectives will also enhance domestic 

energy security, which is a key policy priority for manufacturers. The NAM applauds the 

Administration’s objective to mitigate the additional costs that manufacturers would 

otherwise face in having to comply with multiple sets of federal and state standards. 

[OAR-2009-0472-7215.1, p.1] 
EPA CO2 Standards 

3-13 

The NAM supports the Administration’s goal to harmonize fuel efficiency standards by 

implementing a federal rule that will pre-empt disparate state and regional programs. 

However, manufacturers believe that the process established by EPA, by using the Clean 

Air Act as its primary statutory vehicle, is deeply flawed and will have the unintended 

and unmanageable consequence of triggering regulation of millions of stationary sources. 

By resorting to the CAA, the EPA has established a process that will undermine private 

and public efforts to recover from the deepest economic downturn since the 1930s. 

Alternatively, the EPA should promulgate a rule that adequately decouples the goal of 

achieving greater fuel efficiency and reduced light-duty vehicle GHG emissions from the 

consequence of regulating GHG emissions from millions of stationary facilities. Any 

failure to do so will inflict harm on the manufacturing sector for which the NAM must 

seek appropriate remedies, legislative or otherwise. [OAR-2009-0472-7215.1, p.5] 

Senator Fran Pavley, California State Senate 

One of the cornerstones of the agreement underpinning these proposed regulations is that 

it strongly reiterates California’s authority under the Clean Air Act to set its own 

greenhouse gas standards as part of the national program, and California will continue to 

be able to set new standards once the program expires in 2016. It is absolutely essential 

that any ruling to extend the federal program beyond 2016 does not either consciously or 

inadvertently create de-facto preemption for California and other states to move forward 

with their own programs, including further regulations for automobiles and trucks. State 

actions not only enable and accelerate progress toward emissions reduction goals, but 

also help spur technological innovation that will benefit the entire country. This is 

absolutely crucial because of California’s special challenges to meet air quality standards 

to protect our citizens’ health and safety. [OAR-2009-0472-7275.1, p.4] 

[Senator Fran Pavley also submitted these comments as testimony at the Los Angeles 

public hearing. See docket LA EPA Hearing EPA-HQ-OAR-2009-0472-7283, pp. 13-20] 

Consumer Federation of America 

From a policy perspective, it is critically important that the Clean Air Act’s framing of 

standard setting, which allows EPA to take a long-term view and a technology-forcing 

role, is being joined to the NHTSA approach. It must shake the standard setting process 

out of its lethargy. The decision to join NHTSA and EPA creates the opportunity for a 

major improvement in the regulation of automobiles because the Clean Air Act allows 

EPA to take a longer-term view with greater flexibility. Moreover, the lengthy discussion 

of the failure of the market to yield an efficient outcome with respect to energy efficiency 

presented in Section II has two critical purposes in these comments and the process of 

standard setting for both fuel economy and tailpipe emissions. 

First, the explanation of why the vehicle fleet is less efficient than it should be is critical 

to understanding why fuel economy standards are the right policy to address the problem 

and how those standards should be set. The explanation of the “efficiency gap” (the gap 

between the optimal level of efficiency and the level the marketplace yields) involves a 
EPA Response to Comments 

3-14

host of market imperfections, barriers and obstacles on both the supply and the demand 

side. Our analysis shows that setting fuel economy standards is an ideal approach to 

addressing the market imperfections, barriers, flaws and obstacles that underlie the 

market failure. 

Second, and more importantly, the law and practice of setting fuel economy standards at 

NHTSA under the Energy Policy Conservation Act have severely restricted the ability of 

the agency to set fuel economy standards in the public interest (see Exhibit II-13). 

Standards are the right policy instrument, and EPA is the right agency to take the lead for 

a variety of reasons 

First, NHTSA is required to achieve only a 35-mile per gallon standard by 2020, but 

beyond that there is no mandate to achieve higher levels of fuel economy. In contrast, as 

a result of a recent Supreme Court ruling, EPA is obligated under the Clean Air Act 

(CAA) to regulate tailpipe emissions of pollutants, such as carbon dioxide. 

Second, NHTSA is severely constrained in the time frame for which it can set standards. 

It must give the automakers at least 18 months advance notice of what the standard will 

be and it cannot set standards more than 5 years in advance. This narrow window for 

standard setting is too short for effective long term planning. The rulemaking period 

barely covers a full product design cycle. NHTSA has repeatedly said that the time frame 

is too short to ask the industry to do too much. The short time horizon shortchanges the 

public. EPA is not under this time constraint. Therefore, it can give the industry a longterm trajectory that promotes energy efficiency and environmental clean-up. In other 

words, NHTSA has neither the legal mandate nor the ability to take a long-term view of 

fuel economy, but EPA has the ability to do so for tailpipe emissions. [OAR-2009-0472-

7272.1, pp.35-36] 

University of California, Los Angeles School of Law 

As you work to finalize the proposed federal greenhouse gas emissions standards 

referenced above, I write to urge you to resist any efforts restricting the right of 

California, after 2016 and under the Clean Air Act, to regulate automobile emissions 

more strictly than the federal government. [OAR-2009-0472-7263.1, p. 1] 

For over 40 years, California has had the authority to set stricter standards than the 

federal government for automobile emissions under the Clean Air Act. For thirty years, 

other states have been permitted to adopt those tougher standards. The program has 

worked exceedingly well, with California’s regulations often serving (as here) as a model 

for other states and even for national programs by showing what is possible. [OAR-2009-

0472-7263.1, p. 1] 

The tradition of state innovation benefits the country as a whole. When the Clean Air Act 

was passed, California had already begun, by necessity, to regulate motor vehicle 

emissions in significant ways. Congress wisely allowed California's program to remain 

and allowed other states to adopt California's regulatory program. Over time, California 
EPA CO2 Standards 

3-15 

has shown an ability and willingness to regulate creatively in the public interest in ways 

that often lead to innovative solutions. This very federal rulemaking would not have been 

possible without the leadership of the states, and it should not be used as a means to 

restrict states’ abilities to continue to serve as leaders in the future. [OAR-2009-0472-

7263.1, pp. 1-2] 

Indeed, the national agreement paving the way for these regulations, signed onto by car 

manufacturers, states, and federal agencies, explicitly affirms “that the proposed national 

program would not alter California’s longstanding authority under the Clean Air Act to 

have its own motor vehicle emissions program.” [OAR-2009-0472-7263.1, p. 2] 

It is especially important to continue to allow California, post-2016, to address the threat 

posed by emissions of greenhouse gases from cars. In part because of a strong history of 

energy conservation in the state, motor vehicles are California’s largest source of 

greenhouse gas emissions and it will be difficult for the state to meet its GHG reduction 

requirements, enshrined in laws like California’s Global Warming Solutions Act, without 

maintaining flexibility in dealing with passenger vehicle GHG emissions. California’s 

greenhouse gas laws themselves have served as models for the nation, and many are 

looking to California’s implementation of these laws as indicators of the potential success 

of GHG emission reduction programs more generally. For this reason as well, it would be 

a serious error for EPA to tie California’s hands in regulating its most significant source 

of GHG emissions going forward. [OAR-2009-0472-7263.1, p. 2] 

State of New Jersey 

These reductions are critical [These comments were submitted as testimony at the New 

York public hearing. See docket number EPA-HQ-OAR-2009-0472-4621, pp. 113.] for 

the state to achieve its 2020 and 2050 greenhouse gas goals. Future federal programs 

should not preempt the states from establishing appropriate greenhouse gas emission 

reduction programs, including additional motor vehicle programs as they are provided for 

by federal law. [These comments were submitted as testimony at the New York public 

hearing. See docket number EPA-HQ-OAR-2009-0472-4621, p. 114.] 

Several other northeastern states who like New Jersey have already adopted and 

implemented the low emission vehicle program, as well as California, we've heard from 

NESCAUM and NACAA earlier today, we support their comments of the states and the 

regional groups and will highlight issues covered in their testimony in our written 

comments. [These comments were submitted as testimony at the New York public 

hearing. See docket number EPA-HQ-OAR-2009-0472-4621, p. 114.] 

State of Washington Department of Ecology 

The importance of preserving the Clean Air Act provision of state's rights to adopt motor 

vehicle standards - for California under Section 209 and for other states under Section 

177 - cannot be overstated. The Federal Clean Air Act generally prohibits states from 

adopting new motor vehicle emission standards. However, Congress specifically 
EPA Response to Comments 

3-16

authorized California to establish its own emission standards for cars. Courts upheld this 

approach: 

Congress intended California to continue and expand its pioneering efforts at adopting 

and enforcing motor vehicle emission standards different from and in large measure more 

advanced than the corresponding federal program. [OAR-2009-0472-7299, p.1] Motor & 

Equipment Mfrs. Ass'n v. EPA ('MEMA I'), 627 F 2d 1095, 110-11 (D.C. Cir. 1979). 

[OAR-2009-0472-7299, p.2] 

According to the National Academies' National Research Council, California has used its 

authority as Congress intended, by implementing more aggressive measures than the rest 

of the country and serving as a laboratory for technological innovation. California's 

action paved the way for other states across the country to exercise their statutory 

authority under Section 177 of the Clean Air Act; 14 other states have adopted 

California's standards. As one of the first states to follow California's lead, Washington 

adopted California's GHG regulations on May 6, 2005. [OAR-2009-0472-7299, p.2] 

The federal government has been a follower, not a leader, in vehicle emissions 

improvements. [OAR-2009-0472-7299, p.2] 

California's statutory right to adopt more rigorous motor vehicle standards than the 

federal governments, and other states' rights to opt in to California's programs, must be 

acknowledged as the catalyst for this national vehicle GHG emissions reduction program. 

[OAR-2009-0472-7299, p.2] 

EPA should join state and local clean air agencies as an active proponent for the full 

preservation of these states' rights. [OAR-2009-0472-7299, p.2] 

Environment New Jersey 

For most of this decade, you know, unfortunately, we've had to look to the states on clean 

car legislation, clean car advocacy. Now it's time as we grapple with this crisis finally to 

give the green light to clean cars on the national level and nowhere is that more 

appreciated than in states like New Jersey and the other states which Steve [Steve Flint of 

the Mobil Sources and Fuels Committee of the National Association of Clean Air 

Agencies (NACAA) EPA-HQ-OAR-2009-0472-4621, p.53-65] mentioned and that have 

become leaders on this issue. We believe firmly in the adage from Supreme Court Justice 

Louis Brandeis, the states are the laboratories of democracy, and I believe that was 

especially proven from the advocacy work over the course of this decade. [EPA-HQOAR-2009-0472-4621, p.67] 

Second, specifically on the rule proposal, that it's a first strong step but must be 

strengthened to meet President Obama's proposals. [EPA-HQ-OAR-2009-0472-4621, 

p.68] 
EPA CO2 Standards 

3-17 

And then finally I want to point out the proposal is certainly strong evidence that the 

Clean Air Act is effective in addressing global warming pollution. California has 

obviously been the leader on adopting emission standards than are stronger than the 

federal regulations, and they have led the way, but they have allowed states like New 

Jersey that have similar needs and similar air pollution problems to opt in to those 

programs. We believe firmly as I stated before that states should have that right, states are 

the laboratories of democracy. We certainly encourage that provision to remain. [EPAHQ-OAR-2009-0472-4621, p.77] 

EPA Response:

As described in Section III.D.1 of the preamble to the final rule, EPA and NHTSA have 

worked extensively with the state of California and other states which have adopted the 

California GHG emission standards, as well as many other stakeholders, to craft 

a national fuel economy and GHG emission program which allows manufacturers to 

build a single national fleet that will comply with EPA’s GHG and NHTSA’s CAFE 

standards, and avoids the situation where manufacturers' sales must comply with 

different standards in individual states, each with their own sales mix, etc. We believe 

that we have succeeded in this task. . 

EPA’s final rule does not change California’s authority to establish GHG standards for 

MY 2017 and beyond and to request a waiver of preemption under section 209 of the 

Clean Air Act for such standards, nor other states from adopting California standards 

which receive such a waiver. 

Regarding the interaction between the NHTSA fuel economy standards and the EPA 

GHG standards, there are two reasons why EPA projects greater GHG benefits and fuel 

savings for its standards. One reason, as cited by the State of Massachusetts in Section 

3.0, is the inclusion of reductions in GHG emissions from the air conditioning units 

present on motor vehicles. Credits for GHG improvements in air conditioning leakage 

and air conditioning efficiency are not considered under CAFE because they are not 

measured by the test procedures used (and for passenger automobiles, mandated) to 

measure fuel economy. Certain measures available under the CAFE program which have 

the effect of reducing fuel economy (and increasing GHG emissions), such as the use of 

automatic FFV credits through MY2020 and the option of paying fines in lieu of 

compliance, are either not being allowed or are impermissible under the Clean Air Act 

and the GHG rules. The difference in expected GHG reductions and fuel savings from 

EPA’s GHG standards and NHTSA’s CAFE standards can be seen in Tables I.C.1-2 and 

I.C.2-1 of the preamble to the final rule. 

NADA commented (cited in Section 3.0 above) that NHTSA fuel economy standards 

should be used to regulate CO2 emissions from the tailpipe as measured over the two 

cycle test procedure and EPA should only establish supplemental standards to address air 

conditioning related emissions. EPA disagrees with this approach for several reasons. 

One, the NHTSA fuel economy standards appropriately focus on the conservation of fuel 

consumption by the nation, which has many benefits beyond GHG emission control. As 
EPA Response to Comments 

3-18

such, the CAFE standards do not distinguish between the carbon intensity of various 

fuels. For example, vehicles fueled with gasoline and diesel fuel can have the same fuel 

economy, yet have different CO2 emissions. Thus, it is appropriate for the CAFE 

program to focus on the volume of petroleum-based fuel consumed in each case, while 

also appropriate for EPA to distinguish between the two fuels due to their distinct carbon 

(and thus, tailpipe CO2 emissions) per gallon. Two, other GHGs are emitted from the 

tailpipe besides CO2, such as methane and nitrous oxide, which are not currently 

controlled by the CAFE program per EPCA and EISA. Three, the combination of twocycle tailpipe emissions and air conditioning-related emissions in one program 

provides manufacturers greater flexibility to select the most cost effective combination of 

control technology for their particular vehicles. This would not be possible with two 

separate programs due to the current inability of the CAFE program to accept increased 

air conditioning related controls in lieu of compliance with the CAFE standards 

(including the statutory prohibition on such consideration for passenger automobiles). 

Four, the Clean Air Act is more flexible with respect to test procedures. In 

particular, EPA may find it desirable in the future to expand the test procedures used 

to measure GHG emissions beyond the current FTP and HFET test cycles in order to 

obtain more realistic estimates of the benefits of GHG emission control technology. Fifth, 

the CAA is more flexible than EPCA with regard to providing compliance flexibilities, 

which may allow opportunities for more cost-effective regulatory approaches for GHG 

reductions. Finally, the commitment by California to accept compliance with federal 

standards for purposes of its state GHG program is premised on issuance of EPA GHG 

standards as described in the Joint Notice of Intent, and compliance by the automobile 

manufacturers with EPA’s GHG standards. Compliance with NHTSA CAFE standards 

for just these 5 model years would not lead to this result, nor would compliance with the 

much more limited GHG standards suggested by NADA. This would lead to the loss of 

this important benefit of a national program. EPA believes that these reasons amply 

justify the inclusion of CO2 emissions as measured over the current two cycle test 

procedure in its final GHG standards. 

In the example above given by AAM, a manufacturer generating a greater level of direct 

(i.e., refrigerant emission related) air conditioning emission credit relative to EPA's 

projection would be able to use this “extra” credit to reduce the requisite degree of CO2 

emission control over the two-cycle test procedure under the EPA program, but not under 

the NHTSA program. AAM recommends that the stringency of the CAFE standards be 

relaxed so that this situation could never occur. 

As mentioned above, although as a practical matter, the means of achieving requirements 

of the CAFE and GHG programs overlap to a large degree, they in fact have two distinct 

purposes. One focuses on fuel consumption, while the other focuses on GHG emissions. 

Because of these distinct goals, it is perfectly reasonable for a manufacturer to continue 

to have to reduce the fuel consumption of its fleet despite implementing non-fuel related 

GHG emission controls at a greater rate than projected by EPA. In any case, that is an 

issue of how to set the CAFE standard under EPCA, which is under NHTSA’s authority, 

and not how to set the GHG standard under the CAA. 
EPA CO2 Standards 

3-19 

That said, the two agencies have attempted to craft their final standards in such a way as 

to ensure that the additional stringency of one program relative to the other results in 

valuable benefits to the nation, either in terms of fuel conservation or GHG emission 

reduction. Any over-compliance with NHTSA's fuel economy standard would clearly be 

applicable to compliance with EPA GHG standards. In contrast, a manufacturer which 

implemented more than our projected level of air conditioning controls in the early years 

of the program would still be required to comply with NHTSA's fuel economy standards. 

This is essentially the issue raised by NADA in Section 3.0 above and by AAM and VW 

in this section. EPA acknowledges that some manufacturers could choose to generate 

more A/C credits than what we estimated in the rule for MY 2012-2015. However, the 

agency believes that the differences will be small for the fleet as a whole. The agency 

does not feel that this will cause any disharmony or inconsistency between the EPA and 

NHTSA programs, or devalue such credits, as manufacturers can bank any 

overcompliance credits for the next model year (or beyond). The compliance situation 

for the next model year may be quite different depending on that company’s compliance 

burden and the ramp up rate of its standards (both CAFE and GHG). Therefore, EPA 

disagrees with the Alliance comment that the standards are structured in a way that can 

discourage A/C improvements. The EPA has every reason to believe that all 

manufacturers will take advantage of these cost effective technologies to reduce GHG 

emissions from light-duty vehicles. 

We disagree with NADA that this rule will have a negative impact on automotive 

dealerships. The two agencies appreciate the economic difficulties currently faced by 

many automobile dealerships and the fact that many have or could soon be forced to 

close. However, we believe that this is due to the current national and global economic 

downturn and the resulting decrease in vehicle sales and financial difficulties of several 

automotive manufacturers. The analysis supporting this rule clearly indicates that the 

fuel savings resulting from meeting the final standards far exceed the cost of the 

technology needed to achieve the standards. These costs include the costs of maintaining 

vehicle performance, utility, safety, and other characteristics, so that vehicles should be 

as acceptable to consumers as current models. (EPA did this by building technology 

packages for each vehicle type (see Chapter 1 of EPA’s RIA) that maintained the key 

performance characteristic. Each subsequent package generally costs more, provides 

greater fuel efficiency, and maintains performance relative to the package before it and, 

hence, the baseline or current vehicle.) Moreover, our analyses also reasonably project 

increased vehicle sales, and do not project that the rule will be the cause of any loss of 

sales. This calculation was done assuming that consumers consider only five years of 

fuel savings when buying vehicles, an assumption endorsed by NADA. That, coupled 

with the avoidance of the cited "patchwork" of state standards is expected to avoid any 

negative impact on automotive sales. 

The analysis in section 3.1 of the RIA describes how the EPA 250 g/mi CO2 equivalent 

fleetwide standard for 2016 achieves the level of control which would have been 

achieved by the California GHG standards in the State of California. However, that 

equivalency is not the basis for our selection of this level of control for the final EPA 

GHG standards, and we thus cannot accept the comment by NADA cited in Section 3.0. 
EPA Response to Comments 

3-20

See section III.D (and in particular III.D. 6) of the preamble to the final rule which 

discusses the basis for the GHG standards and their feasibility. The basis for the final 

standards is a balance of the technical feasibility of the standards, the cost of this 

technology and the lead time needed to implement it, considerations of costs to 

consumers, the cost-effectiveness of needed technology, and the benefits which will 

accrue from the standards (among other factors), as described particularly in section III.D 

of the preamble to the final rule. Although the level of the California standards, and the 

technical analysis underlying those standards, was a reasonable starting point for 

evaluating a national GHG standard, the California standards are not the justification for 

the federal standards. See section III.D.1 of the preamble to the final rule. Achieving 

some degree of equivalence with the benefits of the California standards was an 

important aspect of obtaining cooperation from the state of California and the other states 

which had adopted California's standards to accept compliance with the EPA standards as 

compliance with their own standards. However, the standards reflect consideration of the 

relevant factors under section 202 (a) (1) and are justified on that basis. 

With respect to the comment that the EPA GHG standards for motor vehicles will be 

detrimental under a broader cap and trade regulation, this issue is currently not ripe as no 

such cap and trade program exists; nor has one been proposed by the agency. EPA will 

carefully consider the interaction between the final motor vehicle GHG standards and any 

future cap and trade program if and when a national cap and trade program exists. 

With respect to IPI's recommendation that EPA establish a broad regulation covering all 

mobile source GHG emissions, EPA is taking this initial action with respect to 

automobiles alone due to the impending timing of both California GHG standards and 

NHTSA CAFE standards. It is highly desirable that national GHG standards be 

coordinated with these other actions now versus the necessarily later date when more 

comprehensive regulations covering additional mobile sources could be established. 

EPA is currently working on GHG emission controls from other mobile sources, again in 

coordination with NHTSA fuel economy regulation as appropriate. We will take IPI's 

recommendations under consideration as the extent of GHG emission control from 

mobile sources expands. See State of Massachusetts v. EPA, 549 U.S. at 533 (EPA 

retains significant discretion as to timing of regulation). 

We do not understand the purported distinction being made by VW regarding the 

methodologies used to determine the fleet average fuel economy and GHG emissions 

under the two programs. The harmonic averaging of fuel economy essentially means the 

simple sales-weighted averaging of fuel consumption per mile. As fuel consumption per 

mile is proportional to CO2 emissions per mile for a given fuel, the two programs 

perform their sales-weighting consistently. There exist several statutory restrictions on 

the trading of car and truck credits under the CAFE program which cannot be avoided. 

EPA chose not to impose those restrictions, as it is not required by law to do so. This 

simply makes compliance with the EPA GHG standards somewhat more flexible. 

However, the analyses conducted by NHTSA demonstrate that the CAFE standards are 

feasible for the vast majority of sales under the final provisions of that program. In fact, 

VW is one of the manufacturers which has historically paid CAFE fines in lieu of 
EPA CO2 Standards 

3-21 

compliance. EPA analyses indicate that VW may need to utilize more advanced 

technology on a greater percentage of its sales than most manufacturers in order to 

comply with the two programs. EPA analyses indicate that this is at least partly due to 

the fact that VW vehicles are heavier than other vehicles in their size classes. See Fig. 

III-D.6-1 and surrounding text in the preamble to the final rule. VW has not provided 

any information to demonstrate why this needs to be the case currently or in the future. 

VW has also not provided any information indicating that they are unable to implement 

for their U.S. sales volumes the types of advanced technologies which are already 

commercially available. 

EPA recognizes that several analyses have indicated that new vehicle purchasers do not 

always choose technology which pays for itself in terms of fuel savings. See chapter 

8.1.2 of the RIA and section III.H.1 to the preamble to the final rule. There are several 

possible reasons for this, but no consensus exists concerning the actual cause. We will 

continue to study this issue, along with others in the scientific and economic community. 

We believe that the implementation of the types of fuel savings and emission control 

technology projected in the analyses supporting these rules will provide direct consumer 

benefits far exceeding their cost, as well as important emission reduction related benefits 

for the national and global communities. 

3.2 Form of the standards 

Organization: Mercedes-Benz (Daimler AG) 

 International Council on Clean Transportation 

 European Small Volume Car Manufacturers' Alliance (ESCA) 

Comment:

Mercedes-Benz (Daimler AG) 

By choosing footprint as the attribute to apply in the joint rulemaking, the agencies have, 

indeed, created a mechanism for encouraging weight reduction in light trucks while 

maintaining vehicle size and functionality. The safety of the light truck fleet is enhanced 

by encouraging light trucks with lower centers of gravity, thereby reducing rollover risks. 

Functionality is maintained even as weight is reduced because the footprint system 

encourages lightweight materials. While traditionally changes in mass and size have been 

directionally consistent from a compatibility standpoint, with the advent of crash 

avoidance systems, expansion of crash energy distribution techniques and continued 

improvement in behavioral safety, smaller vehicles with advanced emissions controls can 

be safely incorporated into the current vehicle mix. 

That the relative stringency of the passenger car and light truck fleet has been quite 

stable, moreover, does not appear to reflect a policy determination as much as the fact 

that the standards for many years remained either frozen or moved in increments which 

would not have had a significant impact on the relative apportionment of the standards. 

The passenger car standard has remained at 27.5 mpg since 1990, and the light truck 
EPA Response to Comments 

3-22

standard remained at 20.7 from 1996 through 2004, when NHTSA began to increase it 

incrementally. When NHTSA set new standards for MY 2011, the agency readjusted the 

curves to account for its decision to reclassify 2wd SUVs and crossovers as passenger 

cars and thus retained the traditional relative apportionment. See 74 Fed. Reg. 14196 

(March 30, 2009). NHTSA did not, however, consider the relative apportionment of 

stringency as between light trucks and passenger cars as a matter of policy. 

This rulemaking represents the first opportunity for the agencies to consider the 

comprehensive policy objectives of the joint proposal while establishing standards for 

passenger cars and light trucks. The agencies can achieve this objective, and promulgate 

a final rule that is in fact “as substantially described in the May, 2009 Notice of Intent to 

conduct rulemaking,” by setting the stringency of the passenger car standards for the 

model years leading up to MY 2016 according to a “generally linear phase-in.” Doing so 

would also be consistent with the goal of the rulemaking to adjust the fleet mix to 

improve emissions and fuel economy performance without affecting safety. [OAR-2009-

0472-7193.2, p.2-4] 

International Council on Clean Transportation (ICCT) 

We commend EPA and NHTSA for proposing a footprint-based adjustment to the CAFE 

standards instead of weight-based adjustments. Footprint-based adjustments fully 

encourage manufacturers to introduce lightweight materials, which can improve vehicle 

efficiency by 20% or more in the long run. Lightweight materials also extend the electric 

drive range of electric and plug-in vehicles by a similar amount. This is one area of 

policymaking where the U.S. is ahead of the rest of the world. Japan, Europe, and China 

have all adopted standards with weight-based adjustments that effectively discourage the 

use of lightweight materials. NHTSA pioneered the footprint concept with the 2011 light 

truck rule and we urge EPA and NHTSA to continue its use in the future. 

We also support the proposed change to the shape of the footprint adjustments. The linear 

slope for all but the largest and smallest vehicles provides a consistent signal to improve 

efficiency for all vehicles within this range, while the flat line for largest vehicles creates 

an incentive to make the largest vehicles smaller. 

The proposed rule maintains separate footprint curves for cars and light trucks. This 

subjects light trucks with the same footprint to much less stringent standards and gives 

manufacturers a tremendous incentive to reclassify cars as light trucks. In the past this 

has brought us such notable trucks as the Subaru Outback, Chrysler PT Cruiser, Dodge 

Magnum, Mazda 5, Chevrolet HHR, Porsche Cayenne, and BMW X6, which BMW 

describes as a Sports Activity Coupe. In the future it is likely to cause manufacturers to 

drop many 2wd versions of their small SUVs and make less efficient 4wd versions 

standard, so that they can be classified as light trucks instead of cars. This will actually 

increase overall real world fuel consumption and CO2 emissions in two ways. First, it 

will increase 4wd installation and directly increase the fuel consumption of the fleet. 

Second, it makes it easier for manufacturers to meet the standards, so that they do not 

have to implement as much technology on other vehicles. 
EPA CO2 Standards 

3-23 

The large majority of light trucks today are based on car platforms with unibody 

construction. All minivans use unibody construction and cab-and-chassis construction for 

SUVs is rapidly disappearing. Except for pickup trucks and a few relatively low volume 

SUVs, such as the Jeep Wrangler and the Suburban, in the 2016 timeframe of the rule all 

light trucks will be based on car platforms. In addition, due to the empty pickup bed, 

pickup trucks are considerable lighter than truck-based SUVs with the same footprint and 

fit much better on a single footprint line. Thus, there is no technical reason to maintain 

separate footprint lines for cars and light trucks. 

EPA recognized the importance of this issue when it established a single Tier 2 emission 

standard for all cars and light trucks. The issue here is just as important. It is time to also 

end this artificial distinction between cars and light trucks for fuel efficiency and 

greenhouse gas emissions. A single footprint function will still give larger trucks a less 

stringent target to meet, while avoiding vehicle classification games and helping to 

ensure fuel consumption and GHG emission goals are actually met. 

[OAR-2009-0472-7156.1, pp.2-3] 

Organization: Toyota Motor North America 

EPA also requests comments on combining the entire fleet into a single compliance 

category, with a single target curve for the fleet each model year. If faced with just one 

federal program with which to comply, Toyota may not object to a combined fleet 

standard, since it would arguably provide manufacturer's with the greatest level of 

flexibility to comply and it would remove any concerns about vehicle classifications . 

However, due to the lack of harmonization with NHTSA's program that would result, and 

the inflexibility afforded NHTSA in the existing CAFE statute, Toyota would not support 

EPA setting a single target curve for the entire fleet of cars and trucks even though it 

would result in the greatest level of flexibility. [OAR-2009-0472-7291, p.7]EPA 

EPA Response:

EPA appreciates the comments concerning the relative stringencies of the NHTSA CAFE 

standards for cars and light trucks prior to MY 2012. There is no need to evaluate or to 

respond to these comments, however, as they are not germane to the EPA standards being 

proposed for 2012 and beyond. 

EPA also understands ICCT’s concern that manufacturers may have an incentive to 

convert two-wheel drive (2WD) vehicles SUVs to all-wheel drive (AWD) or four-wheel 

drive (4WD) in order to have these vehicles classified as trucks instead of cars, and thus 

reduce their applicable corporate fuel economy standard and increase their applicable 

corporate GHG standard. NHTSA modified its definition of trucks in its rule 

implementing the MY 2011 CAFE standards in order to counter manufacturers' actions 

which shifted vehicles with many car-like designs to the truck fleet. On the one hand , 

since the vast majority of the SUVs newly classified as cars are also available in AWD or 

4WD versions, manufacturers face few if any redesign hurdles in shifting these vehicles 
EPA Response to Comments 

3-24

back to the truck fleet by emphasizing AWD or 4WD sales through sales incentives or by 

simply offering these vehicles in only AWD or 4WD versions. On the other hand, AWD 

or 4WD vehicles cost more to produce than 2WD versions and usually have lower fuel 

economy and higher CO2 emissions (though to a much lesser degree than the difference 

between the car and truck standard curves). Thus many consumers still may not desire to 

purchase 4WD vehicles because of concerns about cost premium and additional 

maintenance requirements; conversely, many manufacturers often require the 2WD 

option to satisfy demand for base vehicle models. The agencies note that many luxury 

SUVs are only offered with AWD or 4WD functionality, so vehicle purchasers appear to 

value these options. EPA will monitor this situation and assess the degree to which 

manufacturers attempt to relax the stringency of their applicable fuel economy and GHG 

standards by shifting sales of 2WD SUVs from their car fleets to their truck fleets. 

Should this occur, the agencies will evaluate further changes to the definition of cars and 

light trucks, as well as the relative stringency of their respective standards to address this 

situation in the future. 

Regarding the comment that the agencies should move towards single footprint-based 

standards for both cars and trucks, NHTSA addresses this issue with respect to the CAFE 

standards in section IV of the preamble to the final rule. Regarding the GHG standards, 

EPA believes that it is appropriate for the 2012-2016 MY period to utilize 

NHTSA's definition of cars and trucks to maximize consistency between the two sets of 

standards. For the purpose of this rule, the levels of the car and truck GHG curves are 

closely connected to the 2011 NHTSA definitions of cars and trucks. Were EPA to either 

utilize a different set of vehicle definitions or establish a single standard curve, 

the overall level of GHG control would be roughly the same given the same level of 

technology application. However, the impacts on specific manufacturers of doing so 

would be very large in some instances. EPA believes that more leadtime should be 

available before such dramatic changes to the relative stringency of the GHG standards 

across manufacturers should be effected. 

EPA notes that the incremental cost for a larger light truck to achieve the Tier 2 emission 

standards relative to that for a car is much smaller than the incremental cost for a large 

truck to achieve the fuel economy or GHG emission level of a car. In part that is because 

tailpipe emissions of the criteria pollutants are largely driven by the after treatment 

catalyst and related technology, while the factors that affect GHG emissions are much 

more varied and involve a much wider variety of systems in the vehicle. This leads to 

larger differences between vehicles as far as baseline technology that impacts GHG levels 

and GHG controls. Thus, while the equivalent treatment of cars and trucks in EPA's Tier 

2 emission control program is an appropriate analogy with respect to this GHG program, 

the technology and economic implications are much greater and we believe that further 

study would be necessary to justify such large relative economic impacts across 

manufacturers. 

3.2.1 Choice of footprint as the attribute and international harmonization 
EPA CO2 Standards 

3-25 

Organization:General Motors 

Ferrari S.p.a 

Toyota Motor North America 

Northeast States for Coordinated Air Use Management 

BMW of North America, LLC (BMW) 

Lawrence Berkeley National Laboratory 

SABIC Innovative Plastic 

International Council on Clean Transportation 

National Automobile Dealers Association (NADA) 

Lotus Cars Ltd. 

Cummins Inc. 

Porsche Cars North America, Inc. 

Fisker Automotive, Inc. 

European Automobile Manufacturer's Association 

New York State Department of Environmental Conservation 

Ecology Center 

Bright Automotive 

Johnson, Kenneth C. 

Comment:

General Motors 

Among the highlights of the proposal is the coordinated attribute-based approach of the 

two programs. [OAR-2009-0472-6185, p.11] 

GM especially supports: 1) the coordinated attribute based approach of the two 

harmonized programs; and 2) the recognition of the need for mechanisms to provide for 

compliance flexibility in the face of great uncertainty over future technology 

developments and costs, customer acceptance of these technologies, and the price of fuels 

that consumers may see in the marketplace. All of these factors make it critical that 

automakers have some ability to cope with changes or unexpected outcomes, and we 

believe the proposed rules provide essential flexibility. [OAR-2009-0472-6953.1, p.2] 

Ferrari S.p.a 

Ferrari concurs with EPA and NHTSA that the method to classify vehicles should be as 

simple as possible, and based on reliable and stable attributes. Moreover, we support the 

harmonization of the EPA and NHTSA rules in the National Program. Nonetheless, we 

are concerned that the footprint alone does not take into account many of a vehicles’ 

other characteristics that greatly affect the fuel economy. For example characteristics like 

the engine, transmission, curb weight, aerodynamics, etc. We treat this topic with more 

details in the comments to the proposed NHTSA CAFE rule. We support the adoption of 

a constrained linear rather than a constrained logistic function. We think it is not 

necessary to put a “backstop” for both CO2 and CAFE standards. [OAR-2009-0472-

7214.1, p.3] 
EPA Response to Comments 

3-26

Toyota Motor North America

EPA requests comments on its proposal to use a footprint-based attribute approach for 

regulating GHG emissions. Toyota supports EPA's selection of footprint, subject to the 

additional comments below regarding Emissions Covered. Toyota supports 

harmonization of the EPA and NHTSA programs to the greatest extent practicable. Since 

NHTSA has already established footprint as the attribute upon which the CAFE program 

is based, and they have continued use of footprint in the subject proposal, Toyota agrees 

with EPA's selection of footprint as the attribute for its program. This approach will result 

in harmonization of the two regulatory programs in terms of the attribute upon which the 

standards are based. [OAR-2009-0472-7291, p.6] 

Northeast States for Coordinated Air Use Management

NESCAUM concurs with and supports the EPA and DOT decision to use an attributebased standard rather than an industry-wide average standard. 

Footprint-based standard: NESCAUM agrees with EPA’s approach to regulate vehicle 

footprint. Consistent with the model year 2011 CAFE standards, EPA and DOT are 

proposing to use footprint as the attribute for the model year 2012-2016 CAFE standards 

and CO2 emissions standards. Footprint-based standards provide an incentive to use new 

and advanced lightweight materials and structures that could otherwise be discouraged by 

weight-based standards. Manufacturers can use them to improve a vehicle’s fuel 

economy without necessarily resulting in a change in the vehicle’s target level of fuel 

economy or CO2 emissions and without a substantial impact on the safety (in terms of 

crashworthiness) of that vehicle. 

EPA has crafted the proposal in a way that ensures consumers will continue to have the 

variety and choice in vehicle models they have come to expect. The size-based standard 

provides manufacturers with significant flexibility in meeting the proposed GHG 

reductions. Furthermore, as mentioned above, technologies to reduce vehicle GHG 

emissions exist in the market today. The phase-in of the standards between 2012 and 

2016 allows manufacturers six years to incorporate these technologies into greater 

numbers of vehicles. [OAR-2009-0472-7235.1, p.4] 

[Northeast States for Coordinated Air Use Management also submitted these comments 

as testimony at the New York public hearing, See docket number OAR-2009-0472-4621, 

p. 43.] 

BMW of North America, LLC (BMW) 

With respect to one national program. BMW fully supports an attribute-based program 

for passenger cars and light trucks as proposed by EPA and NHTSA. Compared to a 

uniform standard for passenger cars and light trucks, an attribute-based standard drives 

fuel efficiency and GHG reduction in all segments while taking into account the 

manufacturer's product portfolio. However, because BMW offers a worldwide product 
EPA CO2 Standards 

3-27 

portfolio and most of the C02 and fuel economy regulations worldwide are based on 

vehicle weight instead of footprint, BMW recommends that these regulations be 

harmonized as much as possible. [OAR-2009-0472-7145.1, pp.4-5] 

[BMW of North America also submitted these comments as testimony at the New York 

public hearing, See docket number EPA-HQ-OAR-2009-0472-4621, p. 133.] 

Lawrence Berkeley National Laboratory 

Comments are directed at the choice of vehicle footprint as the attribute by which to vary 

fuel economy and greenhouse gas emission standards, in the interest of protecting vehicle 

occupants from death or serious injury. Comments are summarized below: 

Analysis of casualty risk finds that, after accounting for drivers and crash location, there 

is a wide range in casualty risk for vehicles with the same weight or footprint. This 

suggests that reducing vehicle weight or footprint will not necessarily result in increased 

fatalities or serious injuries. 

Indeed, the recent safety record of crossover SUVs indicates that weight reduction in this 

class of vehicles resulted in a reduction in fatality risks. 

Computer crash simulations can pinpoint the effect of specific design changes on vehicle 

safety; these analyses are preferable to regression analyses, which rely on historical 

vehicle designs, and cannot fully isolate the effect of specific design changes, such as 

weight reduction, on crash outcomes. 

There is evidence that automakers planned to build more large light trucks in response to 

the footprint-based light truck CAFE standards. Such an increase in the number of large 

light trucks on the road may decrease, rather than increase, overall safety. [NHTSA2009-0059-0060.1, p.1] 

See all the casualty analysis related to vehicle footprint in pp.2-11 of the docket. 

SABIC Innovative Plastic

SABIC-IP supports the footprint-based regulatory program proposed because it 

encourages both appropriate materials substitution on existing products and the 

development of a safe, lighter-weight vehicle fleet. [OAR-2009-0472-7080.1, p.2] 

International Council on Clean Transportation 

[[These comments were submitted as testimony at the Detroit public hearing. See docket 

number EPA-HQ-OAR-2009-0472-6185, p. 58.]] 

We commend EPA and NHTSA for proposing a footprint based adjustment to the CAFE 

standards instead of weight based adjustments. Footprint based adjustments fully 
EPA Response to Comments 

3-28

encourage manufacturers to introduce lightweight materials, which can improve vehicle 

efficiency by 20 percent or more in the long run. Lightweight materials also extend the 

electric drive range of electric and plug-in vehicles by a similar amount. 

This is one area where the U.S. is ahead of the rest of the world. Japan, Europe, and 

China have all adopted standards with weight-based adjustments that discourage the use 

of lightweight materials. NHTSA pioneered the footprint concept with the 2011 Light 

Truck Rule, and we urge EPA and NHTSA to continue its use in the future. 

National Automobile Dealers Association (NADA) 

The proposal’s vehicle attribute-based framework is essential to driving fuel economy 

performance improvements while allowing dealers to access a mix of cars and trucks that 

meet their customer needs. As recognized by EISA, attribute-based standards offer at 

least four critical benefits over “flat” standards. First, greater fuel economy and GHG 

emission benefits can be expected as continuous improvements are encouraged across all 

vehicle types, regardless of product mix. Second, if set correctly, an incentive to the 

inexpensive downsizing or downweighting of vehicles is eliminated, helping to preserve 

passenger safety. Third, an attribute based approach inherently is more equitable in that it 

is largely product plan neutral, acting to spread compliance costs broadly across all 

regulated vehicle manufacturers. Finally, and perhaps most importantly, by avoiding 

mandated fleet mixes, an attribute-based approach recognizes and capitalizes on the 

critical consumer choice factors that drive a successful fuel economy/GHG improvement 

program. As stated above, hoped-for fuel economy and GHG benefits simply will not be 

realized until consumers purchase and use the regulated vehicles in question. [OAR2009-0472-7182.1, p.4] 

The National Program proposal’s standards are based on a footprint (average track width 

times average wheelbase) attribute and a continuous function (vs. step function) curve 

similar to that first used in the 2006 light truck CAFE rule. Appropriate dispensation 

must be allowed to help ensure the final National Program does not frustrate customer 

demand for new light trucks as their maximum towing, cargo-hauling, and four-wheel 

drive (4WD)/all-wheel drive (AWD) capabilities are essential to certain vocational and 

recreational demands. Business and consumer purchasers focused on vehicle utility and 

durability buy light trucks for their capability and performance characteristics and 4WD 

and AWD options are popular for off-road commercial and recreational use and for onroad handling benefits. Tow-capable configurations or “packages” are essential to many 

uses. Having a wide variety of vehicles available for use in trade or business particularly 

is essential to the small business community which drives the U.S. economy. Large and 

powerful light trucks are essential to many business purchasers (e.g., farmers, contractors, 

etc.), and larger vans and SUVs are often the first choice of growing families and 

carpoolers. The stringency of the light truck curve must not constrain the ability of 

vehicle manufacturers to meet these market needs, as it would leave the motoring public 

no choice but to keep older, less efficient vehicles longer or to turn to the used vehicle 

marketplace. [OAR-2009-0472-7182.1, pp.4-5] 
EPA CO2 Standards 

3-29 

The attribute-based, continuous curve framework is designed to foster real world fuel 

economy improvements and GHG reductions by maintaining consumer choice, by 

protecting safety, by distributing costs more equitably, and by reducing the overall cost of 

regulation. These same benefits also argue for downward sloping curves without any 

flattening at the lower asymptote. Any constant value or “clip” applied to the end of a 

curve could serve to severely limit the availability or performance of vehicles demanded 

by the motoring public, especially light trucks, effectively imposing an unwarranted 

“backstop” compliance overlay. [OAR-2009-0472-7182.1, p.5] 

Lotus Cars Ltd. 

The proposed legislation attempts to account for differing vehicle segments with sizebased standardization; however such an approach can only work together with fleet 

averaging if the fleet itself can be considered 'average'. The footprint of a vehicle does 

not differentiate to a sufficient degree between vehicle segments for this approach to 

work with small volume manufacturers. In practice, it is quite possible for a sports car to 

have the same footprint size as a compact saloon vehicle, which would result in the 

applicability of a similar greenhouse gas target. [OAR-2009-0472-7249, p.6] 

Cummins Inc. 

Cummins supports the attribute-based standards for setting CAFE and GHG standards; 

however, we urge EPA and NHTSA to consider a secondary attribute for light-duty 

trucks (with significant hauling and towing capacity as well as off road capabilities) for 

determining the target fuel economy/CO2 emissions. Trucks primarily used for work 

purposes (e.g. trucks equipped with diesel engines), are engineered for heavier use (more 

capable components) resulting in lower fuel economy than similar truck meant for lightload use. Cummins supports a proposal for creating a separate classification for heavytow, highly capable trucks which would provide a more equitable framework for vehicles 

meant for towing and cargo-hauling. The SAE J2807 recommended practice provides a 

robust framework to define a tow rating for vehicles and eliminates potential gaming, as 

noted by NHTSA in an earlier NPRM. [OAR-2009-0472-7205.1, p.4] 

Porsche Cars North America, Inc. 

Porsche's sport car average footprint (the basis for our target standards) is: 

• The smallest in the industry 

• 14% less than the industry average 

• considerably smaller than companies known for producing small cars (e.g., Honda, 

Toyota, Suzuki, etc.) 

Because the standards proposed are entirely based on footprint and because our footprint 

is the smallest, the proposed standards for Porsche are the most stringent. While we do 
EPA Response to Comments 

3-30

not believe that it is the intent of EPA/DOT to make Porsche the world's most fuel 

efficient passenger car manufacturer or to punish Porsche, this is the consequence of the 

footprint-based concept. While there is a reasonable correlation between footprint and 

fuel economy and C02 for the average fleet of cars there are cars for which this does not 

apply. Sports cars, especially Porsche cars have a very short wheelbase for handling 

reasons in combination with high performance, which is an attribute associated with 

sports cars and a selling point. Unfortunately the standard in this footprint category is set 

by small, low priced sedans, a category where fuel economy is an important selling 

attribute rather than performance. 

In proposing to establish standards based entirely on vehicle footprint, EPA and DOT 

have proposed a set of standards that would perversely require Porsche (a company 

predominantly manufacturing high-powered sports cars) to become the fuel efficiency 

leader in the United States. 

In Figure 1 [OAR-2009-0472-7431.1, p.5] below, using the proposed standards shown in 

the tables above, we have plotted the percent improvement required for compliance for 

each manufacturer. We show the percent improvement required relative to 2008MY 

performance since this is the most recent model year for which complete fuel economy 

model year data was available at the time at which these comments were initially drafted. 

It should be understood that, according to the proposal, Porsche is expected to achieve a 

passenger car fuel economy level of 41.4 mpg (or 204 g/mi C02) by 2016MY. This is by 

far the highest mpg value demanded of any auto maker affected by the proposal. [OAR2009-0472-7431.1, pp.1-6] 

Fisker Automotive, Inc. 

Fisker Automotive recommends a flat standard to avoid irrational trends to certain 

vehicle sizes or types. That is, the standard’s emissions allowance should not correlate to 

footprint or separate passenger cars from lightduty trucks. The regulation, as proposed, 

appropriates more credits to larger vehicles and trucks, causing an economic incentive 

not only to increase fuel economy, but to increase vehicle footprint and to classify as a 

truck as well. The market should decide vehicle sizes and types. [OAR-2009-0472-

8732.1, p.5] 

Automakers have many options available to decrease emissions, including electrification, 

powertrain efficiency increase, weight reduction, and aerodynamic drag reduction, etc. 

Regulation should remain neutral to allow all methods of improvement. Averaging, 

banking, and trading methods are sufficient to maintain diverse consumer choice of 

vehicles. [OAR-2009-0472-8732.1, p.5] 

The Fisker Karma, for example, will do unusually well under the proposed footprint 

method because it has a very large footprint and superb fuel economy, well beyond 2016 

targets. If we chose to make a version of the Karma with a smaller footprint, it would 

actually do worse under the proposed regulation, even if the utility (e.g. seating, storage 
EPA CO2 Standards 

3-31 

space, and performance) and fuel economy remained exactly the same. This does not 

make sense. In a competitive market, automakers will be driven to sell larger vehicles and 

trucks for the increased credits. We would like the freedom to design our vehicles 

without concern for these footprint and classification metrics. [OAR-2009-0472-8732.1, 

pp.5-6] 

While larger vehicles can be made safer, this is not always the case. For example, many 

large SUVs are considerably more dangerous than smaller vehicles due to rollover 

concerns. NHTSA can (and does) implement safety regulations to directly address safety 

issues. We consider it best to handle safety in this manner, separately from emissions. A 

flat standard would remain neutral to size, as consumer demand will remain for large 

vehicles. Furthermore, hybrid and electric vehicles do not suffer in fuel economy from 

weight increase nearly as much as traditional vehicles due to their regenerative braking 

capability. This will also serve to maintain diverse consumer choice of vehicles. [OAR2009-0472-8732.1, p.6] 

Finally, causing a trend towards larger vehicle footprints can have adverse environmental 

affects. Material requirements would increase, and unless automakers take considerable 

effort to avoid it, environmental impact (e.g. CO2 emissions) of vehicle production 

would increase in step. The regulation should serve to put a market value only on metrics 

of concern to the regulation—GHGs and fuel. [OAR-2009-0472-8732.1, p.6] 

European Automobile Manufacturer's Association 

ACEA emphasizes that any legislation should in principle not be technology prescriptive. 

Also, efforts with a view to increasing international harmonization of motor vehicle 

regulations should be maintained where appropriate. [OAR-2009-0472-7444.1, p.1] 

New York State Department of Environmental Conservation

Use of Footprint as a Basis for Standards (Preamble Section III.B.2) 

EPA proposes an attribute based greenhouse gas standard, using vehicle footprint as the 

basis. NHTSA is required by statute to establish attribute based CAFE standards. The 

benefit of harmony between the CAFE and greenhouse gas standards outweighs any 

potential benefits an alternate form of greenhouse gas standard might have, and we 

believe that footprint is at least as valid as any other attribute. [OAR-2009-0472-7454, 

p.1] 

Ecology Center 

One key aspect of the proposed rules is the attribute-based system for determining fuel 

economy standards. This approach ensures that fuel-economy progress will be made 

across the broad spectrum of vehicle types and sizes, rather than just through downsizing 

or by certain manufacturers. In the past, the fleet average approach has tended to put fullline manufacturers with market share in the larger vehicle segments at a significant 

disadvantage. Now all manufacturers will share the burden of improving the fuel 
EPA Response to Comments 

3-32

economy of their vehicles. The Ecology Center also believes that using the vehicle 

footprint attribute is the most preferable from an environmental and safety perspective to 

a weight-based approach. [OAR-2009-0472-4068, pp.1-2] 

Bright Automotive 

[These comments were submitted as testimony at the Los Angeles public hearing. See 

docket number EPA-HQ-OAR-2009-0472-7283, pp.173-179] 

I'd like to also applaud the footprint standard because, again, we do not want to force a 

single solution into downsized vehicles. We want to be able to allow our customers and 

Americans to drive vehicles in the size they want. 

That being said, lightweighting is an extremely important driver for electrification 

in meeting these standards and importantly for the safety concerns as well. There is a 

strong correlation between weight and size for safety, but there's even -- I'm sorry. 

Weight and safety. There's a stronger correlation between size and safety. 

So if you can decouple weight and size, what you can get are vehicles that are large 

like our 63-square-foot light truck that are safe and not just safe to the occupants but safe 

to other drivers and pedestrians. 

Johnson, Kenneth C. 

These comments are respectfully submitted in response to the following request, on page 

49685 of the Notice of Proposed Rulemaking (NPRM): 

... while NHTSA tentatively concludes that footprint is the most appropriate attribute 

upon which to base the proposed standards ... we seek comment on whether the agency 

should consider setting standards for the final rule based on another attribute or another 

combination of attributes. [OAR-2009-0472-7135.1, p.1] 

One of the key recommendations of the 2002 NAS Report was the following: 

Recommendation 3. Consideration should be given to designing and evaluating an 

approach with fuel economy targets that are dependent on vehicle attributes, such as 

vehicle weight, that inherently influence fuel use. Any such system should be designed to 

have minimal adverse safety consequences. (emphasis added) [OAR-2009-0472-

7135.1, p.1] 

The NPRM deviates from this recommendation by adopting a footprint attribute, which 

does not inherently influence fuel use. In contrast to weight, there is no clear causal 

connection between footprint and fuel economy, as evidenced by their poor correlation. 

[OAR-2009-0472-7135.1, p.1] 
EPA CO2 Standards 

3-33 

The poor correlation is clearly evident from the current fuel economy and footprint data 

provided in the NPRM, Tables IV.C.1–2 and IV.C.1–4a. This data is plotted in the 

attached Figure 1. (Each data point represents a particular manufacturer; and the X’s and 

O’s represent passenger cars and light trucks, respectively.) By contrast, weight is 

strongly correlated to fuel economy across all manufacturers and vehicle classes (Table 

IV.C.1–5a, attached Figure 2). Furthermore, the weight correlation is stronger than that of 

power-to-weight ratio, even though the latter is also causally related to fuel economy 

(Table IV.C.1–6a, attached Figure 3). [OAR-2009-0472-7135.1, pp.1-2] 

The policy rationale for favoring a footprint attribute over weight is based on the two 

competing objectives of discouraging weight-changing compliance strategies that would 

adversely impact safety or consumer choice, and also encouraging weight-changing 

strategies that would improve fuel economy without adversely affecting consumer 

welfare. The NPRM recognizes that the rulemaking does not effectively balance these 

objectives. As noted on pages 49462-49463, “... even under attribute-based standards, 

there is still risk that manufacturers will rely on downweighting to improve their fuel 

economy (for a given vehicle at a given footprint target) in ways that may reduce safety”. 

Furthermore (page 49725), “NHTSA cautions that vehicle footprint is not synonymous 

with vehicle size. Since the footprint is only that portion of the vehicle bounded by the 

front and rear axles and by the wheels, footprint based standards do not discourage 

downsizing the portions of a vehicle in front of the front axle and to the rear of the rear 

axle ... The crush space provided by those portions of a vehicle can make important 

contributions to managing crash energy.” [OAR-2009-0472-7135.1, p.2] 

The NPRM suggests that a weight-based standard would create perverse incentives to 

increase weight. As noted on page 49685, “it is relatively easy for a manufacturer to add 

enough weight to a vehicle to decrease its applicable fuel economy target.” However, it is 

not easy to add weight without also compromising fuel economy, and thereby nullifying 

the advantage of a less stringent target. A weight-based standard would, by design, 

neutralize – not increase – weight-changing incentives. It would nullify the large weightreduction incentive of an attribute-neutral standard, but would not reverse that incentive. 

[OAR-2009-0472-7135.1, p.2] 

The primary drawback of a weight-based standard is that it would create no incentive for 

beneficial weight-changing compliance strategies. But since the regulatory incentive 

would be substantially weight-indifferent, the standard would also not incentivize 

detrimental weight changes; and it would not conflict with complementary policies that 

are targeted specifically at creating favorable (e.g., safety-enhancing) weight-changing 

incentives. [OAR-2009-0472-7135.1, p.3] 

The proposed footprint attribute cannot optimally balance the tradeoff between favorable 

and unfavorable weight changes because it does not discriminate between the two. For 

example, the NPRM states on page 49685 that “footprint-based standards provide an 

incentive to use advanced lightweight materials and structures that would be discouraged 

by weight-based standards”. But the standards would not incentivize downweighting 

exclusively by such means. As stated on page 49727, “... weight can be removed by 
EPA Response to Comments 

3-34

downsizing, rather than material substitution, even while maintaining footprint”. [OAR2009-0472-7135.1, p.3] 

How can the weight-change conundrum be resolved? The solution can be illustrated by 

analogy with a similar problem in the electricity industry. [OAR-2009-0472-7135.1, p.3] 

A power utility can reduce emissions by using cleaner energy-generation technology (i.e. 

reducing GHG emissions per generated kWh). It can also reduce emissions by investing 

in energy efficiency (i.e. reducing kWh consumption per unit of consumer utility). For 

example, it could finance or subsidize home weatherization programs, efficient lights and 

appliances, etc. But an emission performance standard based on GHG emissions per kWh 

would, in effect, award emission allowances in proportion to energy generation, and 

would therefore provide no incentive for reducing energy consumption. How can this 

problem be resolved? [OAR-2009-0472-7135.1, p.3] 

One approach would be to award emission allowances in relation to some kind of 

attribute, such as a generating facility’s “footprint,” which would somehow balance the 

competing incentives. But a more practical approach would be to simply recognize that 

promoting clean energy generation and energy efficiency are independent, separable 

problems that can be addressed with separate, complementary policies. A GHG-per-kWh 

performance standard could effectively induce clean energy generation, while a separate 

regulatory measure would be employed to promote energy efficiency. [OAR-2009-0472-

7135.1, p.3] 

Similarly, the vehicle regulation problem can be efficiently partitioned into two separate 

problems: one of minimizing emissions per unit weight, and one of minimizing weight 

per unit of consumer utility. Furthermore, safety could also be addressed as a separate 

regulatory problem – the regulations should not, in effect, use weight (or footprint) as a 

proxy for safety. Trying to solve all of these problems with one standard, as the NPRM 

proposal does, leads to regulations that are over-constrained and therefore 

suboptimal. [OAR-2009-0472-7135.1, p.4] 

The NPRM notes, on page 49724, that “The question of the effect of changes in vehicle 

weight on safety in the context of fuel economy is a complex question that poses serious 

analytic challenges ...,” but these complexities can be circumvented by using a weightbased standard that would, by design, create no significant weight-changing incentives. 

Instead, the “serious analytic challenges” would be localized in a separate, 

complementary regulatory measure, which would be specifically and exclusively targeted 

on motivating optimal weight-changing strategies. This measure, unlike the proposed 

footprint-based standard, would discriminate between strategies based on their consumerwelfare impacts; and it would preferentially and selectively focus incentives on beneficial 

strategies. [OAR-2009-0472-7135.1, p.4] 

In one approach, optimal weight reduction could be incentivized by a crediting system 

somewhat analogous to air conditioning credits. “Weight credits” would be awarded for 

the use of qualified engineering materials based on their equivalent utility characteristics. 
EPA CO2 Standards 

3-35 

For example, if a vehicle manufacturer replaces 1000 lbs of steel with 600 lbs of 

functionally equivalent, high-strength composite material, then the 400-lb difference 

would be added to the vehicle weight for the purpose of determining its compliance 

requirement under a weight-based standard. [OAR-2009-0472-7135.1, p.4] 

Safety concerns could similarly be addressed through regulatory measures that apply 

specifically to safety-related vehicle attributes. For example, vehicle safety regulations 

might specify a minimum vehicle footprint-to-weight ratio, or a maximum center-ofgravity height as a proportion of track width. [OAR-2009-0472-7135.1, p.4] 

A weight-based standard, complemented with optimal weight-reduction incentives and 

safety-related regulations, would achieve all of the objectives that the footprint-based 

standard is intended to achieve, but without the tradeoffs inherent in a one-size-fits-all 

regulatory approach. The benefits of this approach would include some or all of the 

following: (1) less disparity in manufacturers’ and consumers’ compliance costs, (2) 

improved economic feasibility (and consequently, potentially more stringent emission 

targets), (3) better preservation of consumer choice, and (4) enhanced safety. [OAR2009-0472-7135.1, p.4] 

The separate, but complementary, regulation of fuel economy and emissions by NHTSA 

and EPA argues in favor of a similar separation of weight-changing and safety 

regulations; and a weight-based standard would represent a step toward 

harmonized international standards. (China, Japan, and the European Union use weightbased standards.) Inasmuch as this approach has not been identified as a regulatory option 

in the NPRM and appears not to have been considered by the agencies, I encourage the 

agencies to do at least a cursory comparative analysis of this approach and to objectively 

consider its merits, and then to reevaluate the policy rational underlying NHTSA’s 

selection of footprint as “the most appropriate attribute upon which to base the proposed 

standards”. [OAR-2009-0472-7135.1, pp.4-5] 

EPA Response:

Most of the comments received on this issue support the use of footprint as the sole or at 

least one of the attributes upon which to base the fuel economy and GHG standards. 

Most of those disagreeing with the use of footprint support the substitution of vehicle 

weight for footprint for two primary reasons. One reason is harmonization with the fuel 

economy, fuel consumption, CO2, or GHG emission standards of other nations. The 

other is the fact that vehicle weight is a much better predictor of fuel economy and CO2 

emissions than footprint. Starting with international harmonization, EPA agrees that the 

use of vehicle weight as the primary attribute upon which to base the final standards 

would result in standards that, in that respect, appear to be more closely harmonized with 

the standards of several nations, namely Europe, Japan, and China. However, we believe 

that the benefits of this harmonization could be minimal, and in any event, do not 

outweigh the detriments at this time. 
EPA Response to Comments 

3-36

First, establishing a weight based standard in the U.S. would not guarantee that the same 

vehicles could or would be sold in all of the nations with weight based standards 

presently; indeed, there is little, if any, evidence that weight-based fuel consumption and 

GHG emissions standards in place in Europe, Japan, and China are leading to 

significantly more similar new vehicle fleets in those regions. Even if the standard curve 

were the same in two or more nations, the mix of vehicles sold would likely vary across 

national boundaries. Manufacturers comply with their applicable sales-weighted standard 

by balancing the number of vehicles sold which are above and below the standard (and 

the degree to which they are above and below the standard, of course). Setting the 

appropriate level of a fuel economy or GHG standard depends on many factors, including 

fleet mix and other regulations (e.g., safety requirements, NOX and PM emissions 

standards). Fleet mix varies widely across national boundaries, and some other 

regulations are not as stringent in other countries as in the United States. Thus, it may 

not be appropriate for all nations to set the same level of fuel economy or GHG emission 

standard. In fact, harmonization of fuel economy or CO2 standards internationally is 

most practically achieved when roughly the same level of fuel conserving and CO2 

reducing technologies can be marketed internationally. The fact that many of 

technologies projected to be used to meet the final standards are already utilized 

commercially in Europe and Japan is an indication that the final standards are 

harmonized to some extent internationally. In addition, because the focus of EPA’s 

standards are GHG emissions and not fuel consumption, manufacturers have the option 

(and are expected to take advantage) of generating credits through the use of low leak 

A/C systems, which are not presently incorporated into other nations’ fuel conservation 

programs. 

Second, as mentioned by several commenters, setting a weight-based GHG standard 

eliminates the incentive for manufacturers to use weight saving materials or techniques to 

reduce fuel consumption and CO2 emissions. As one commenter points out, fuel 

consumption and CO2 emissions are highly correlated with weight. As described in the 

Joint TSD, there are numerous ways that vehicle weight could be reduced in the future 

while maintaining vehicle safety and utility. A weight based standard (where the slope 

was set to neither promote mass increases or decreases) would simply remove these 

techniques from consideration. 

The fact that vehicle weight correlates much better than footprint with fuel consumption 

and CO2 emissions is, however, not the most relevant factor when selecting the 

attribute to use when developing the standard curve. In its 2002 report on the CAFE 

program, NAS recommended that NHTSA adopt weight-based standards in order to 

discourage manufacturers from responding to CAFE standards by reducing vehicle mass 

in ways that would compromise highway safety. However, NHTSA has concluded and 

EPA agrees that a size-based system not only more equitably distributes compliance 

burdens than a flat standard, but also that, compared to a weight-based system, a sizebased system encourages further penetration of high-strength lightweight materials and, 

importantly, incurs less risk that energy and environmental benefits will be lost to 

“gaming” (it being much easier to increase a vehicle’s mass than to increase its footprint). 
EPA CO2 Standards 

3-37 

In another comment, Cummins recommends that towing capacity be added as a 

secondary attribute to the proposed truck category, as greater towing capacity increases 

vehicle utility in a manner similar to greater footprint. Cummins suggests that such 

vehicles be granted a numerically higher CO2 standard than other trucks. We believe 

that towing capacity is already implicitly factored into the proposed (and final) car and 

truck curves. Towing capacity tends to be higher for trucks than for cars and trucks are in 

fact allowed to emit more CO2 than cars (at a given footprint) under the final standard 

which was developed based on analysis of the agencies’ forecast of vehicle models 

expected to be present in the future light truck market. We also believe that larger trucks 

tend to have higher towing capacities than smaller trucks and again, larger trucks are 

allowed to emit more CO2 than smaller trucks, up to a footprint of 66 square feet. In 

other words, differences in towing capacity are part of the reason why the GHG standard 

curve increases with vehicle size and is higher for trucks than for cars. It is possible that 

EPA would consider adding additional attributes like towing capacity to its standard 

setting function in the future. 

Several manufacturers make a similar suggestion for engine size or power (or multiple 

attributes). Vehicles with higher engine power tend to have higher CO2 emissions due to 

the fact that the engines operate at lower average loads over the two-cycle test procedure. 

Unlike passenger and cargo capacity, however, the societal benefit of higher engine 

power is less clear. The analysis supporting this rule assumes no change in the 

acceleration performance of vehicles due to the rule (and the agencies’ cost analysis 

includes the costs for preserving acceleration performance). In other words, we have 

included performance vehicles in our analysis and we have evaluated the various GHG 

reducing technologies in such a way to maintain acceleration performance as much as 

possible. EPA did this by building technology packages for each vehicle type (see 

Chapter 1 of EPA’s RIA) that were designed to maintain key performance characteristics 

(e.g., effective engine displacement considering turbocharging, estimated acceleration 

performance, etc.) to the fullest extent possible. Each subsequent package generally costs 

more, provides greater fuel efficiency, and maintains performance relative to the package 

before it and, hence, the baseline or current vehicle. We have explicitly excluded 

projecting increased sales of lower powered engines as a method of reducing CO2 

emissions even in those cases where a manufacturer currently markets the same vehicle 

with two or more sized engines. To base the GHG standard on engine size or power 

would encourage manufacturers to increase engine size or power and thus, decrease fuel 

economy and CO2 emissions, while discouraging smaller engine size or power with their 

attendant benefits. Although safety concerns support the adoption of a system that 

discourages vehicle downsizing as a compliance strategy, they do not support the 

adoption of a system that discourages reductions in the size and/or power of engines in 

performance vehicles. 

Porsche, for example, states that the purpose of their small sports cars is to provide 

performance, while that of other small vehicles is to provide fuel economy (and 

commensurately, low CO2 emissions). As stated above, we have included high 

performance vehicles when developing the standard curve shapes, as well as their 

absolute levels and have maintained the performance levels of these vehicles when 
EPA Response to Comments 

3-38

applying fuel-saving and CO2-reducing technology. However, we believe that it would 

be inappropriate to base the GHG standard using engine size or power as an explicit 

attribute. Such engines inherently operate at a low level of fuel efficiency at normal 

highway speeds. Thus, to include engine power or vehicle performance as an attribute 

upon which to set the GHG standard would be to encourage vehicles with inherently high 

CO2 emissions, which is directly counter to the expressed goals of the final rule. Also, 

since it takes more power to move a larger vehicle, the use of footprint as the attribute 

upon which to base the GHG standard indirectly includes the impact of a larger engine on 

the GHG standard. However, this is done to enable the utility of the larger vehicle with 

larger passenger and cargo capacity. 

Porsche further states that they would be required to be the most fuel efficient 

manufacturer in the U.S. due to their small average footprint. However, other 

manufacturers of small vehicles must achieve the same fuel efficiency. Porsche did not 

assert, nor establish that the proposed standards were more stringent for smaller footprint 

vehicles than for larger footprint vehicles. Thus, the fact that their overall average fuel 

efficiency would be required to be higher than other manufacturers does not mean that 

the proposed, nor final standards are more stringent for Porsche than for other 

manufacturers. (Note further that the final GHG rules contain an alternative standard for 

manufacturers with domestic sales of 2009 MY light duty vehicles of less than 50,000 

allowing such manufacturers to select any combination of 2012 through 2015 MY light 

duty vehicles to meet the Temporary Lead Time Allowance alternative standard, up to a 

cumulative total of 200,000 vehicles. An additional 50,000 2016 MY vehicles may be 

included under this alternative as well. Section 86.1818-12 (e) (3). Porsche may choose 

this alternative (assuming it meets the various eligibility criteria in the rule) to obtain 

needed leadtime to ultimately meet the main CO2 standards for its fleet.) 

BMW commented that there is evidence that the footprint-based standards are leading to 

increased sales of large trucks. We are not aware of such evidence. EPA's projection of 

future sales of large trucks and SUVs in the NPRM did show relatively large sales 

volumes. However, as discussed in the Joint TSD, this was due primarily to the mistaken 

inclusion of vehicles over 8,500 pounds GVWR which are not subject to the final 

standards. We believe that any remaining increase in future large truck sales is due 

primarily to the anticipated rebound in the economy and not to the footprint standards. 

The design of the final footprint standards is intended to avoid incentives for 

manufacturers to increase or decrease the size of their vehicles. 

Comments concerning the flattening of the standard curves at low and high footprint 

values will be addressed in section 3.2.2 below. 

3.2.2 Mathematical shape of the footprint-based standards 

Organization:General Motors 

Ford Motor Company 

Honda Motor Company 

Alliance of Automobile Manufacturers (Alliance) 
EPA CO2 Standards 

3-39 

Toyota Motor North America 

University of California, Santa Barbara, Bren Working Group on Vehicle 

Fuel Economy 

University of Pennsylvania, Environmental Law Project 

Recreational Vehicle Industry Association (RVIA) 

Comment:

General Motors 

The agencies “seek comment on the ... methodology for apportioning the fleet 

stringencies to relative car and truck standards for 2012-2016.” GM recommends: 1) 

modifying the slope of the truck curves such that large pickups have a lesser obligation, 

and 2) changing the large footprint “cut points” or “clips” from 66 ft2

 to 72 ft2 to parallel 

the methodology applied to passenger cars (i.e. to affect only models with “extremely 

low sales volumes”) The statistical application of an un-weighted mean absolute 

deviation places inappropriate and additional burden on large pickups and full line 

manufacturers. Using a sales-weighed least square regression (as shown below) more 

appropriately applies the overall industry goal across the entire fleet. [OAR-2009-0472-

6953.1, p.27] 

Further, the agencies propose “to “cut off” the linear portion of the passenger car function 

at 56 square feet” primarily because of “extremely low sales volumes” for passenger cars 

are larger than this footprint. This treatment of the data is equitable and appropriate; 

however the agencies discard this equitable approach in the treatment of larger trucks. In 

fact as shown in the table below (shown for 2016 MY but likewise applicable to all 

model years of the program), the agencies’ arbitrary “cut point” for large trucks affects a 

much larger volume of the fleet. [OAR-2009-0472-6953.1, p.27] 

To propose a specific solution to the curve fitting methodology, it is helpful to re-iterate 

the parameters that EPA uses to define the curve: 

EPA mathematically defines the piecewise linear curves as follows: 

Target = a, if x ≤ l 

Target = cx + d, if l < x ≤ h 

Target = b, if x > h I 

in the constrained linear form applied by NHTSA, this equation takes the simplified 

form: 

Target = MIN [ MAX ( c * x + d , a) , b] 

Where: 
EPA Response to Comments 

3-40

Target = the CO2 target value for a given footprint (in g/mi) 

a = the minimum target value (in g/mi CO2) 

b = the maximum target value (in g/mi CO2) 

c = the slope of the linear function (in g/mi per sq ft CO2) 

d = is the intercept or zero-offset for the line (in g/mi CO2) 

x = footprint of the vehicle model (in square feet, rounded to the nearest tenth) 

l & h are the lower and higher footprint limits or constraints or (“kinks”) or the boundary 

between the flat regions and the intermediate sloped line (in sq ft) 

Specifically, GM recommends: 1) Modifying the slope of the truck curves such that 

large pickups have a lesser obligation; specifically increase (in EPA metric of g/mi CO2) 

“c” parameter 2) Changing the large footprint “cut points” or “clips” from 66 ft2

 to 72 ft2

to parallel the methodology applied to passenger cars; specifically increase (in EPA 

metric of g/mi CO2) the “b” parameter. [OAR-2009-0472-6953.1, p.28] 

Ford Motor Company 

Fitting the Curves 

Ford recommends that the agencies use the same approach when setting the truck 

piecewise linear curve lower limit that was used for setting the car and truck upper limit 

and the car lower limit. For example, Ford agrees with the methodology used to establish 

the car upper limit that took into account the volume of vehicles (less than 10%) 

represented below a certain footprint and also the unique characteristics of those vehicles. 

The agencies state that the cars below a certain footprint have 'characteristics that could 

make it infeasible to achieve the very challenging targets that could apply in the absence 

of a constraint'. Further the agency noted the maximum value for passenger cars was 

determined based on extremely low volume sales of four luxury vehicles. 

The agency noted that there is limited public information regarding the sales volumes of 

many different configurations (cab designs and bed sizes) of pickup trucks, most of the 

largest pickups (e.g., the Ford F-150, GM Sierra/Silverado, Nissan Titan, and Toyota 

Tundra) appear to fall just above 66 square feet in footprint. NHTSA is therefore 

proposing to 'cut off' the linear portion of the light truck function at 66 square feet. Ford 

disagrees with this assessment. Ford agrees with the Alliance assessment that a large 

volume of the trucks are between 68-72 square feet. This significant volume of trucks 

above the 66 square foot limit, makes this limit function more as a 'backstop.' 

Ford strongly supports the Alliance recommendation for the agencies to move the lower 

limit for the truck piecewise linear curve to 72 square feet to recognize where the fleet is 
EPA CO2 Standards 

3-41 

at today and avoid both market distortions and the GHG/CAFE backstop effect it could 

impose. Ford further recommends that the agencies use the same methodology applied to 

both the car upper and lower limit and the truck upper limit, which takes into account not 

only the volume of vehicles affected by the limit, but more importantly the unique 

characteristics (towing capacity and/or cargo hauling capability) of those vehicles that 

could make it infeasible to achieve the very challenging targets that would apply in the 

absence of the constraint adjustment. [OAR-2009-0472-7082.1, p. 4] 

Honda Motor Company 

Honda notes that the passenger car GHG and MPG attribute curve stringencies are 

capped for vehicles with footprints smaller than 41 square feet. The 41 square foot cap 

roughly aligns with the smallest 10% of the passenger car market. This cap will create the 

possibility that OEMs can offer consumers lower cost solutions to greenhouse gas 

reduction and higher fuel economy. In other words, as the stringency increases each year, 

the only solution for OEMs to meet these tougher standards is to increase the technology 

– and therefore the costs – that are applied to vehicles of the same footprint. Vehicles 

small enough to fit under the footprint cap will be able to meet the increased stringency 

simply by being small, and potentially less technology – and costs – need to be applied. 

Consumers who choose to downsize to these smaller vehicles can benefit from the lower 

greenhouse gas emissions and increased fuel economy of these vehicles while 

minimizing the cost impact. [NHTSA-2009-0059-0095.1, pp.5-6] 

Honda strongly supports the creation of a similar cap for the truck GHG and MPG 

attribute curves. Currently the 41 square foot cap is applied to both passenger cars and 

trucks, however, the 41 square foot cap for trucks does not correspond to any current 

trucks on the market, so it is effectively meaningless. A similar cap for trucks would set 

the cap approximately where the smallest 10% of the truck fleet can be found. According 

to data from the 2011 MY CAFE NPRM, the smallest 10% of the truck fleet is found at 

approximately 46 square feet (see Attachment 1). Trucks provide consumers with 

increased functionality, and as such, not all consumers can downsize from trucks to cars. 

By enabling truck customers to downsize within the truck category, customer choice will 

be protected. [NHTSA-2009-0059-0095.1, p.6] [See [NHTSA-2009-0059-0095.1, p.14 

for Attachment 1]] 

Alliance of Automobile Manufacturers (Alliance) 

Truck Clip 

With vehicle size-based standards (i.e., footprint) based on a continuous curve, all models 

have a specific target fuel economy and CO2 emissions level. Larger vehicles receive a 

standard that reflects a fundamental of physics: that a larger vehicle requires more energy 

than a smaller one (with equivalent technology levels). 74 Fed. Reg. 49470. [OAR-2009-

0472-6952.1, p. 30] 
EPA Response to Comments 

3-42

This scientific relationship holds true for a continuous footprint function until clips are 

imposed. A “clip” is defined as a region where the footprint-fuel economy (or CO2) 

relationship is replaced with a constant (“clipped”) value for fuel economy (or CO2) 

regardless of footprint. [OAR-2009-0472-6952.1, p. 30] 

The Alliance notes the high-side clip regions could force manufacturers to limit 

production of vehicles that are above the high-side clip or cause manufacturers who 

currently produce more vehicles above the high-side clip region to drastically change 

their products whereas other manufacturers would not be required to make such changes. 

Also, this option may deny customers the full range of vehicles that meet their needs 

within the clip region – this is especially true on the truck fleet. [OAR-2009-0472-6952.1, 

pp.30-31] 

The high-side clip on the car fleet affects significantly less than 1% of the fleet but the 

high-side clip on the truck fleet is centered on the volume of the full size pickup trucks. 

[OAR-2009-0472-6952.1, p.31] 

It appears EPA and NHTSA assumed that these full size pickup trucks were at or about 

66 square feet, when in fact a large volume of them are at 68-72 square foot footprint. 74 

Fed. Reg. 49,472. This significant volume of trucks above the clip, make this clip 

function more as a “backstop.” [OAR-2009-0472-6952.1, p.31] 

NHTSA cannot subject a vehicle to both a class standard and an overall standard. This is 

contrary to the legislative scheme of placing a vehicle is placed in a single compliance 

fleet, and contrary to NHTSA’s past interpretations. During the time when NHTSA set 

2WD and 4WD/AWD CAFE standards for light trucks, the “combined standard” was an 

option (i.e. an alternative to compliance with the class standard), and NOT an additional 

requirement. Subjecting manufacturers to a CAFE backstop would perpetuate the 

anticompetitive and antisafety consequences of the fleet average system that Congress 

abandoned with the passage of the Energy Independence and Security Act of 2007, Pub. 

L. 110-140 (EISA). [OAR-2009-0472-6952.1, p.31] 

If the objective of the footprint system is to develop a regulatory framework that is 

superior to the non-attribute-based fleet average system, the high-side truck clip acts as a 

'GHG/CAFE backstop' and simply places a new layer of regulations on top of the 

footprint curve, creating more complexity for both manufacturers and the two agencies. 

[OAR-2009-0472-6952.1, p.31] 

The Alliance recommends that the agencies move the high-side clip on the truck curve to 

72 square feet to recognize where the fleet is at today and avoid both market distortions 

and the GHG/CAFE backstop effect it could impose. This would reflect a consistent 

approach with the methodology that the agencies employed in setting the passenger car 

high-slide clip. [OAR-2009-0472-6952.1, p.31] 

Toyota Motor North America 
EPA CO2 Standards 

3-43 

Shape of Target Curves 

The agencies requested comment on several aspects of the proposed target curves and the 

manner in which the curves were developed. [OAR-2009-0472-7291, p.11] 

In general, Toyota supports the overall shape of the proposed target curves. In particular, 

the proposed car target curves represent an improvement over NHTSA's 2011 model year 

final rule car curve. In that rulemaking, the car curve adopted by NHTSA was quite 

'steep' in the middle footprint ranges. The steepness of that curve had two possible 

negative effects. First, from a competitive standpoint, competing vehicles in the 

marketplace with slightly different footprints could have meaningfully different targets, 

which could provide an advantage for certain manufacturers in certain market segments. 

Second, a steep curve could provide an incentive to upsize a model in order to secure a 

relaxed target. [OAR-2009-0472-7291, pp.11-12] 

The proposed car curves are 'flatter' than the 2011 model year curve as shown in Figure 5 

below, particularly in the early model years. Note the figure shows the NHTSA car 

curves in MPG space, and compares the 2012 and 2016 model year slopes to the 2011 

model year curve. Toyota supports this trend in flattening the car target curves. [OAR2009-0472-7291, p.12] 

With respect to the truck curves, the slope of the proposed curves is very similar to the 

2011 model year truck curve adopted by NHTSA as shown in Figure 6. Again, the figure 

shows the NHTSA truck curves in MPG space, and compares the 2012 and 2016 model 

year slopes to the 2011 model year curve. Toyota supports the general continuation of 

this slope for the truck curves. [OAR-2009-0472-7291, p.12] 

Another key aspect of the proposed target curves is the 'cut-off' (or clip) at footprints 

below 41 square feet and above 56 square feet for cars and above 66 square feet for 

trucks. A comparison of the final 2011 model year car and truck curves and the proposed 

2012 and 2016MY curves is shown in Figures 7 and 8. While the constrained logistic 

function used for 2011 model year does not have a true clip from a 

mathematical viewpoint, the 2411 model year target curves for both cars and trucks 

largely flatten out to form effective clips at both ends of the curve. [OAR-2009-0472-

7291, pp.12-13] 

For smaller footprint vehicles, the current proposal extends the effective clip down to 41 

square feet, requiring additional improvements in smaller cars and trucks . At the same 

time, maintaining some level of clip also ensures that the smallest and most fuel efficient 

vehicles are not unduly penalized by setting targets so high as to price these vehicles out 

of the most price-sensitive market segment. Toyota supports the clip at the smaller 

footprint range, and would not support eliminating the clip (requiring ever increasing 

target for smaller vehicles). For larger footprint vehicles, Toyota has no comment other 

than to recognize the current proposal clips both the car and truck curves at nearly the 

same footprint as the 2011 model year car and truck curves. [OAR-2009-0472-7291, 

p.13] 
EPA Response to Comments 

3-44

University of California, Santa Barbara, Bren Working Group on Vehicle Fuel 

Economy 

A second issue concerns the shape of the fuel economy curves. The reason for using a 

curve instead of a single fuel economy target as in the original CAFÉ standards is to 

prevent excessive downsizing as a strategy for meeting fuel economy targets. However 

some downsizing is appropriate if it is done gradually. It makes little sense to structure 

the regulation to actively discourage downsizing. We recommend that the slope of the 

curve be made shallower over time. Making the slope flatter would raise the fuel 

economy standard at the 'backstop' of 56 square feet (or 66 square feet for light trucks). 

The flattening of the slope coincides with the consideration that new innovations will be 

developed between now and when the enforcements are enacted. [OAR-2009-0472-

7188.1, p. 4] 

It should be recognized that the stated purpose of the slope of the curve is to ensure that 

there would be 'no significant effect on the relative distribution of different vehicle sizes 

in the fleet, which means that consumers will still be able to purchase the size of vehicle 

that meets their needs'. The sloping curve allows for regulators to apply targets to 

vehicles of all sizes with relatively equal stringency. It is predicted that this equal 

distribution of stringency will result in relatively similar increases in vehicle efficiency in 

vehicles of all footprints, in order to prevent the proposed regulation from influencing 

consumer choice and market-driven forces. [OAR-2009-0472-7188.1, p. 4] 

If the manufacturer succeeds in increasing a vehicle model's footprint while minimizing 

its decline in fuel economy, they may obtain emission credits that they would not have 

otherwise earned, undermining the regulation’s core purpose. Since the slope of the curve 

currently does not change as it increases annually, this incentive will be present 

throughout the 2012-2016 period. [OAR-2009-0472-7188.1, p. 5] 

Therefore, we recommend an incremental increase in stringency of the footprint curve 

which takes technology-forcing into account by gradually flattening the slope of the 

curve, possibly attaining a flat, fleet wide fuel economy target in the future. The 

flattening of the curve will pose a greater obstacle for larger, less fuel efficient cars to 

meet the proposed standards, and at the same time assure the anticipated market shift 

toward vehicles with smaller footprints, resulting in higher fuel economy. In addition to 

efficiency innovations, this shift toward smaller, more fuel-efficient cars is a critical 

factor in making significant, tangible nation-wide reductions in vehicle greenhouse gas 

emissions. By meeting and exceeding more stringent curves, American manufacturers 

will place themselves at the forefront of the global technology frontier, thus helping to 

regain our role as an economic leader. [OAR-2009-0472-7188.1, p. 5] 

Moreover, we recommend that the method with which the curves were drawn be made 

transparent in the support documentation. Any equations and formulae utilized to derive 

the curve should be made publicly available. We attempted to use the VOLPE model 

output data from NHTSA's website to reproduce the footprint curve, in order to assess the 

method with which the curve was drawn. According to the technical support document, 
EPA CO2 Standards 

3-45 

the mean absolute deviation (MAD) regression was used to draw the slope between the 

maximum and the minimum footprints (41sq ft to 56 sq ft for passenger vehicles). 

However, we were unable to reproduce the maximum technology curve and, therefore, 

could not compare the MAD methodology to alternative regressions. [OAR-2009-0472-

7188.1, p. 5] 

Despite direct communication with NHTSA, we were unable to clarify these questions 

and replicate the exact slope and intercept given in the VOLPE model output. According 

to testimony at the Los Angeles hearings, the Environmental Defense Fund similarly had 

difficulty replicating the NHTSA analysis. This is a crucial piece of information, as the 

curve is the central tool with which the fuel economy targets are assigned. If the method 

is made transparent, then commentators could also make better informed 

recommendations to the proposal. [OAR-2009-0472-7188.1, p. 5] 

University of Pennsylvania, Environmental Law Project 

While it is important that the regulation avoid providing perverse incentives to vehicle 

manufacturers, predictability and gradualness are also important features of the 

regulation. These features ensure that the cost of compliance will be relatively low, as 

auto manufacturers are given time to incorporate improvements into the standard design 

timeline. Thus, we recommend that the regulation gradually reduce the disparity between 

the efficiency requirements for larger and smaller vehicles such that it is 

significantly reduced between model years 2012 and 2016. This reduction would take the 

form of a decreasing slope in the standard curves between 2012 and 2016, as well as a 

decrease in the difference between the height of the car and truck curves. [OAR-2009-

0472-7286.1, pp. 17-18] 

 Recreational Vehicle Industry Association (RVIA) 

The NPRM proposes fuel economy/CO2 target curves for light trucks which flatten out at 

the 66 square feet footprint value. It is our understanding, however, that there are lightduty vehicle tow vehicles currently in the marketplace which have a volume [sic: 

footprint] in the range of 68 to 72 square feet. In flattening out the curve at 66 square feet, 

vehicles up to 72 square feet footprint range will be expected to achieve the same fuel 

efficiency as vehicles having a footprint of 66 square feet. We urge EPA and NHTSA to 

correct this oversight and adjust the target curves so that these larger vehicles, especially 

since they are used for towing, are not penalized by the standards. Failing to do so risks 

manufacturers downsizing these tow vehicles or eliminating them altogether from the 

product mix. Either of these actions will be detrimental to highway safety and to the RV 

industry and individual who tow RVs. [NHTSA-2009-0059-0107, p.5] 

EPA Response:

There are several key aspects to the mathematical form of the footprint-based standards 

which were commented upon. These were: 1) the statistical methods used to develop the 

slope of the car and truck curves, including the resultant slopes of these curves, and 2) the 
EPA Response to Comments 

3-46

lower and upper footprint values where the curves flatten out. We address each of these 

aspects below. 

The slopes of the footprint-based standard curves in the NPRM were based on a 

minimization of the sum of the absolute differences between the individual vehicle data 

points and the curve, often referred to as minimum mean absolute deviation or MMAD. 

Each vehicle's data point was assigned the same "weight" in this summation. The 

primary alternatives to this technique would be to 1) use least-square regression and 2) 

sales-weight each vehicle's data point. GM, for example, recommended that both 

alternatives be used in lieu of the non-sales weighted MMAD regression. 

The MMAD regression technique differs from least square regression primarily in that it 

reduces the influence of data points which deviate the most from the curve. Least square 

regression by definition squares this deviation before summing, while MMAD simply 

adds the deviation to the sum of differences. Examination of the vehicle data used to 

develop the curves indicates that the fuel consumption and CO2 emission levels of 

individual vehicles having similar footprints vary widely, often by as much as 50%. This 

extreme variation can indicate the absence of a normally distributed dataset, often 

indicating the need to use a statistical technique that reduces the influence of outlying 

data points.1

 

With respect to recommendations that NHTSA and EPA use weighted least-squares 

analysis, the agencies find that the market forecast used for analysis supporting both the 

NPRM and the final rule exhibits the two key characteristics that previously led NHTSA 

to use minimization of the unweighted rather than sales-weighted analysis. The agencies’ 

intention is to fit a curve that describes a technical relationship between fuel economy 

and footprint, given comparable levels of technology, and this supports weighting 

discrete vehicle models equally. However, there are some aspects of vehicle design which 

are known to influence fuel consumption and CO2 emissions, such as acceleration 

performance and amenities which can increase vehicle weight. To the extent that the 

distribution of these preferences is not equally distributed across the range of footprint 

values, vehicles with relatively extreme attributes and low sales levels could affect the 

slope of the curves. 

 

1

 In the case of a dataset not drawn from a sample with a Gaussian, or normal, distribution, there is often a 

need to employ robust estimation methods rather than rely on least-squares approach to curve fitting. The 

least-squares approach has as an underlying assumption that the data are drawn from a normal distribution, 

and hence fits a curve using a sum-of-squares method to minimize errors. This approach will, in a sample 

drawn from a non-normal distribution, give excessive weight to outliers by making their presence felt in 

proportion to the square of their distance from the fitted curve, and, hence, distort the resulting fit. With 

outliers in the sample, the typical solution is to use a robust method such as a minimum absolute deviation, 

rather than a squared term, to estimate the fit (see, e.g., ‘‘AI Access: Your Access to Data Modeling,’’ at 

http://www.aiaccess.net/English/Glossaries/GlosMod/e_gm_O_Pa.htm#Outlier). The effect on the 

estimation is to let the presence of each observation be felt more uniformly, resulting in a 

curve more representative of the data (see, e.g., Peter Kennedy, A Guide to Econometrics, 3rd edition, 1992, 

MIT Press, Cambridge, MA). 
EPA CO2 Standards 

3-47 

In conducting analysis to support its rulemaking for MY2011 CAFE standards, NHTSA 

evaluated several combinations of these two aspects of the curve setting techniques. 

Most combinations yielded slopes for the car curve that were believed to give 

manufacturers too great an incentive to upsize their vehicles. In other words, the change 

in allowed fuel consumption or CO2 emissions with an increase in size was deemed to be 

greater than that which would inherently result from a larger vehicle platform, as 

supported by Toyota. This belief was despite the fact that the slopes of these curves 

reflected the change in fuel consumption or CO2 emissions with a change in vehicle 

footprint. Considering this, and considering the technical issues discussed above, 

NHTSA selected techniques that yielded a car curve with what it believed to be an 

acceptable slope. NHTSA and EPA have continued to apply those techniques in 

connection with the final rule, though with a constrained linear curve as opposed to a 

constrained logistic curve, which in part resulted in a car curve slope lower than that in 

the middle of the 2011 MY constrained logistic curve. 

This choice of statistical techniques also yielded a slightly lower slope for the truck curve 

than several other combinations of the available statistical techniques. A lower truck 

slope increases the stringency of the standard for larger trucks relative to smaller trucks. 

This appears to be GM's concern, as GM's truck sales are oriented towards the larger 

truck segment of the market. GM's suggestion to use sales weighted least square 

regression is not supported by any additional information beyond that provided by the 

two agencies in the proposed rule. GM and Ford did challenge the two agencies' 

projections that their larger trucks could meet the proposed standards. These comments 

are addressed in section 3.3 of this RTC document. GM did not address the issue of the 

increased slope for cars, which would accompany their recommended 

statistical technique. Overall, the two agencies continue to believe that the use of 

unweighted MMAD regression produces the best results for this dataset and that no 

arguments exist which clearly indicate that this approach should be rejected. Thus, the 

two agencies fitted the car and truck curves using the same statistical techniques as those 

used in the NPRM. It is possible that EPA and NHTSA would reconsider the statistical 

techniques used to develop the standard curves in future rulemaking. 

Regarding the lower and upper footprint values where the standard curves flatten out, 

GM recommends that the upper footprint value for trucks be increased to 72 square feet 

from 66 square feet. Their argument is based on the fact that the upper footprint value for 

cars of 56 square feet affects very few sales. Thus, the upper footprint value for trucks 

should do the same. 

This argument does not address the interaction between the car and truck curves and how 

they together regulate the light vehicle fleet. For example, the lower limit of the car 

curve was set at 41 square feet. Roughly 10% of car sales fall below this level. Were the 

lower limit of the truck curve to be set at footprint value where 10% of truck sales fell 

below its value, the lower limit of the truck curve would have been well above 41 square 

feet. The truck curve is already well above the car curve in terms of fuel consumption or 

CO2 emissions at lower footprint values. If the truck curve were to flatten out at a 

footprint value of, for example, 46 square feet as suggested by Honda, the difference 
EPA Response to Comments 

3-48

between the two curves would become even greater for vehicles below 46 square feet. 

The incentive to convert cars with footprints below 46 square feet to trucks would have 

been extremely large. Thus, even though few current trucks are sold with footprints 

below 41 square feet, protecting the overall goal of the two programs makes it clear that 

the lower footprint limit of the truck curve should be the same as or very similar to that 

for the car curve. Thus, Honda's comment that the 41 square foot cutpoint for the truck 

curve is meaningless is not correct. 

Since trucks tend to have larger footprints than cars, it makes similar sense to set the 

upper limit of the truck curve in the same way as the lower limit of the car curve (i.e., at 

the point where roughly 10% of sales exceed the limit). This is roughly 66 square feet. 

Analogous to the setting of the lower limit of the truck curve at the same level as the 

lower limit of the car curve, we could have set the upper limit of the car curve at 66 

square feet. However, there are very few car sales above 56 square feet, so the point is 

essentially moot as to setting the upper limit of the car curve at 56 or 66 square 

feet. GM's arguments starts by setting of the upper limit of the car curve and then setting 

that of truck curve to the same level. This is incorrect from a policy perspective. The 

lower limit of the two curves is set based on that vehicle class with the smaller vehicles 

(i.e., cars) and the upper limit of the curves is set based on that vehicle class with the 

larger vehicles (i.e., trucks). 

While GM, Ford and AAM assert that a large volume of truck sales exist with footprints 

between 68 and 72 square feet, detailed data supporting this claim, which could have 

been incorporated into the two agencies' analyses, were not provided. As discussed in 

section 3.4 of this RTC document, there is value from a policy perspective for a backstop 

which increases the likelihood that the projected benefits of these rules actually occurs. 

Thus, the fact that the upper limit on the truck curve serves to a small degree as an 

indirect backstop on fuel consumption and CO2 emissions is not in itself a problem. We 

also note that most vehicles which are marketed as "low-priced" or "economical" are very 

small in size. This implies that sales of these vehicles would be the most sensitive to 

increases in cost due to the addition of fuel saving technology. Trucks above 66 square 

feet in footprint do not fall into this category. In contrast, these vehicles are typically on 

the high end of the market in many respects and should be in a good position to absorb 

the cost of the technologies which the agencies project will enable their compliance. 

Toyota suggests reducing the slopes of the car and truck curves over time to encourage a 

gradual downsizing of both the car and truck fleets. The two agencies did not decide to 

do this at the present time, primarily because the agencies are attempting use attributebased standards to discourage downsizing that might compromise highway safety and to 

more equitably distribute compliance burdens, not to encourage vehicle downsizing 

beyond levels consistent with normal market demands. Of course, the agencies will 

reconsider appropriate ways to fit the car and truck curves for purposes of subsequent 

rulemakings. 

Since the fitted slopes of the two curves were based on vehicle data which reflected the 

use of all available technologies other than diesel and strong hybridization, we do not 
EPA CO2 Standards 

3-49 

believe that there is an inappropriate incentive for manufacturers to upsize their vehicles 

in order to reduce the need to add fuel saving and CO2 reducing technology. 

As described in section II.C of the preamble to the final rule, NHTSA did correct several 

errors in its analysis used to fit the slopes of the curves, allowing the commenters to 

reproduce the results. The refitted passenger car curve is similar to that presented in the 

NPRM, and the refitted light truck curve is nearly identical to the corresponding curve in 

the NPRM. However, the slope of the refitted passenger car curve is about 27 percent 

steeper (on a gram per mile per square foot basis) than the curve presented in the NPRM, 

and would increase stringency for the smallest cars, decrease stringency for the largest 

cars, and provide a greater incentive to increase vehicle size throughout the range of 

footprints within which NHTSA and EPA project most passenger car models will be sold 

through MY 2016. The agencies are concerned that these changes would make it unduly 

difficult for manufacturers to introduce new small passenger cars in the United States, 

and unduly risk losses in feasible and cost-effective energy and environmental benefits by 

increasing incentives for the passenger car market to shift toward larger vehicles. 

Considering NHTSA’s and EPA’s concerns regarding the change in incentives that 

would result from a refitted curve for passenger cars, the agencies are finalizing CAFE 

and GHG standards based on the curves presented in the NPRM. 

3.2.3 Relative stringency of the car and truck standards 

Organization: General Motors 

Northeast States for Coordinated Air Use Management 

International Council on Clean Transportation 

University of California, Santa Barbara, Bren Working Group on Vehicle 

Fuel Economy 

University of Pennsylvania, Environmental Law Project 

South Coast Air Quality Management District 

Comment:

General Motors 

The overall industry goal of 250 CO2 g/mile (35.5 mpg equivalent) by 2016 model year is 

tough, but reasonable. This target can, however, be distributed between the separate car 

and truck fleets in an infinite number of combinations. In our comments, we provide an 

analysis for adjusting the proposed distribution to achieve a more equitable burden on the 

truck fleet. Our analysis shows that today’s most efficient, segment leading cars and 

small trucks already meet the 2016 model year targets, but the segment leading and most 

efficient large pickups are required to improve by 20% to meet their 2016 MY 

requirements. Our analysis shows that over estimated benefits of added fuel economy 

technology and future pickup truck volumes result in a disproportionate burden being 

placed upon large pickups. GM recommends that in each year of the rule, the agencies 

better balance the respective obligations of passenger cars and trucks – while still 
EPA Response to Comments 

3-50

reaching the same end point for the car and truck fleets combined in 2016. [OAR-2009-

0472-6953.1, p.2] 

GM recommends that in each year of the rule, the agencies better balance the obligation 

for large pickups as compared to passenger vehicles. Today’s most efficient, segment 

leading cars and small trucks already meet the 2016 model year targets but the segment 

leading, most efficient large pickups are required to improve by 20% to meet their 2016 

MY requirements. [OAR-2009-0472-6953.1, p.4] [[See pp.4-8 of OAR-2009-0472-

6953.1 for a discussion on GM's analysis of the truck efficiencies]] 

Northeast States for Coordinated Air Use Management 

Separate footprint curves for cars and light trucks: NESCAUM encourages EPA and 

DOT to maintain a single footprint curve for cars and light trucks in the final regulation. 

By establishing two curves as EPA and DOT have proposed, there is a significant risk 

that automobile manufacturers will “game” the standard. This can be done, for example, 

by making four wheel drive small SUVs rather than two wheel drive small SUVs so that 

cars become classified as trucks. If manufacturers reclassify cars as light trucks as has 

happened before, GHG emissions and fuel consumption could increase 

significantly. [OAR-2009-0472-7235.1, p.4] 

[Northeast States for Coordinated Air Use Management also submitted these comments 

as testimony at the New York public hearing, See docket number OAR-2009-0472-4621, 

p. 43.] 

International Council on Clean Transportation 

[[These comments were submitted as testimony at the Detroit public hearing. See docket 

number EPA-HQ-OAR-2009-0472-6185, p. 59.]] 

We also support the proposed change to the shape of the footprint adjustments. Target 

standards versus the vehicle footprint provide consistent signals to improve efficiency for 

most vehicles while preserving incentives to make the largest vehicles smaller. 

[[These comments were submitted as testimony at the Detroit public hearing. See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 61-62.]] 

First, the proposed rule maintains separate footprint curves for cars and light trucks. This 

subjects light trucks with the same footprint to much less stringent standards and gives 

manufacturers a tremendous incentive to reclassify cars as light trucks. In the past this 

has brought us such notable trucks as the Subaru Outback, Chrysler P.T. Cruiser, Dodge 

Magnum, Mazda 5, Porsche and BMW X6, BMW describes as a sports activity coupe. 

In the future it is likely to cause manufacturers to drop many 2-wheel drive versions of 

their small sport utilities and make less efficient 4-wheel drive versions standard so that 

they can be classified as light trucks instead of cars. Each car to light truck sales shift 
EPA CO2 Standards 

3-51 

results in easier compliance for manufacturers but higher in use fuel consumption and 

greenhouse gas emissions in use. 

EPA recognized the importance of this issue when it established a single tier 2 emissions 

standard that applied to all cars and light trucks. It is time to do the same for fuel 

efficiency and greenhouse gas emissions and end this artificial distinction. A single 

footprint function will still give larger trucks a less stringent target while avoiding vehicle 

classification games. 

University of California, Santa Barbara, Bren Working Group on Vehicle Fuel Economy 

While the proposed rule itself will not alter fleet composition, the EPA and NHTSA have 

projected a market-driven shift from the current mix of vehicles (51% passenger cars, 

49% light trucks) towards a vehicle mix of 67% passenger cars and 33% light trucks by 

2016. However, the market simply may not respond in the manner projected in the 

proposal, or the shift may not occur with market power alone. The Union of Concerned 

Scientists contend that vehicles slated to be reclassified as passenger vehicles (e.g. 2-

wheel drive SUVs) could be equipped with other light truck attributes to qualify for light 

truck classification. As long as there is a separate, less stringent footprint-curve for light 

trucks, there will be a strong incentive on the part of auto-makers to classify their 

vehicles as light trucks. While the curve evenly distributes the penalties, it also rewards 

vehicles with larger footprints, which inherently tend to have a lower fuel economy. Not 

only does the footprint-based curve discourage downsizing of vehicles, it introduces 

incentives for manufacturers to maximize the footprint for a given model, so that a model 

will have a less stringent target fuel economy. This may include shifting the wheelbase to 

a wider, boxy shape, or elongating the vehicle. [OAR-2009-0472-7188.1, p. 4] 

University of Pennsylvania, Environmental Law Project 

While it is important that the regulation avoid providing perverse incentives to vehicle 

manufacturers, predictability and gradualness are also important features of the 

regulation. These features ensure that the cost of compliance will be relatively low, as 

auto manufacturers are given time to incorporate improvements into the standard design 

timeline. Thus, we recommend that the regulation gradually reduce the disparity between 

the efficiency requirements for larger and smaller vehicles such that it is 

significantly reduced between model years 2012 and 2016. This reduction would take the 

form of a decreasing slope in the standard curves between 2012 and 2016, as well as a 

decrease in the difference between the height of the car and truck curves. [OAR-2009-

0472-7286.1, pp. 17-18] 

South Coast Air Quality Management District 

Third, the South Coast AQMD staff shares the concern that the attribute basis of the EPA 

 program may provide certain incentives to up-weight vehicles. 
EPA Response to Comments 

3-52

For example, the EPA's program may result in auto manufacturer compliance strategies 

which involve up-weighting of vehicles from two-wheel drive to four-wheel drive SUV 

configurations. For this reason, the South Coast AQMD staff recommend that EPA 

consider establishing some form of backstop mechanism to ensure that the vehicle fleet 

is not dramatically distorted by perverse incentives occurring by selecting different 

vehicle weight categories. 

In conclusion, the AQMD staff certainly appreciate this opportunity to provide comment. 

We compliment the EPA and NHTSA and DOT staffs for their diligent analysis. The 

standards proposed by both of your organizations will significantly reduce greenhouse 

gas emissions as well as criteria pollutants. We are very pleased to stand here and 

strongly endorse the standards as they will provide meaningful national benefits for 

decades to come. 

[Comments are from LA Testimony, OAR-2009-0472-7283, pp.59-67] 

EPA Response:

GM's basic comment that the burden of the standards can be more equitably distributed 

between cars and trucks is a function of three aspects of the car and truck standard 

curves: 1) their relative slopes, 2) their relative intercepts at zero footprint (ignoring their 

flattening at a footprint value of 41 square feet), and 3) the lower and upper footprint 

values where the curves flatten out (and for GM, their primary focus is the 66 square foot 

cutpoint for the truck curve). The issues of the relative slopes of the car and truck curves 

and the lower and upper footprint cutpoints were addressed is section 3.2.2 above. The 

remaining issue to be addressed here is how the two agencies set the intercepts of the two 

curves, or in other words, the degree to which the truck curve was above the car curve in 

terms of fuel consumption and CO2 emissions. 

This distance between the car and truck curves was based on setting each curve at the 

level where estimated net societal benefits were maximized (as described in section II of 

the preamble). These two curves were then adjusted upwards (in terms of fuel 

consumption or CO2 emissions) to the point where the desired fleet-average fuel 

consumption or CO2 targets were achieved. Thus, this analysis reflects the cost of 

adding technology to both cars and trucks, smaller and larger vehicles, as well as the 

benefits accruing from this technology. GM has not shown why this approach produces a 

greater burden on large trucks versus smaller cars. Simply comparing current vehicles, 

even "market leading" vehicles, to the proposed standards does not establish the 

capability of adding additional, cost beneficial technology. Current market forces, 

including forces in overseas markets for some manufacturers, can lead to the uneven 

addition of technology to current vehicles. Without assessing the degree to which 

available technology has already been added to current vehicles, any such comparison 

can be misleading. We believe that the approach of adding all cost beneficial technology 

to all vehicles provides a reasonable balance of regulatory burden across the wide variety 

of vehicles currently being sold in the U.S. market. 
EPA CO2 Standards 

3-53 

Regarding NESCAUM's suggestion for a single curve for both cars and light trucks and 

other comments indicating a risk that manufacturers will shift car sales to trucks, we 

believe that there are several reasons to reject this approach for the present rule. As 

discussed above in section 3.0, EPCA requires NHTSA to set separate standards for 

passenger cars and light trucks. Also, some trucks, at least, provide utility not available 

from cars. These include cargo and towing capacity. The vehicle features required to 

provide this utility inherently increase fuel consumption and CO2 emissions relative to 

vehicles without such utility. Therefore, some distinction between car and truck 

standards appears justifiable. As also discussed in section 3.0 above, we acknowledge 

that there is some risk that manufacturers will increase the sale of AWD and 4WD 

versions of their smaller SUVs relative to 2WD versions of these vehicles, thereby 

leading to increased levels of fleetwide fuel consumption and CO2 emissions. As 

indicated above, we will monitor this situation and take necessary action as we develop 

standards for 2017 and beyond. At the present time, a shift from the historical approach 

of setting separate standards for cars and trucks to one that would tgreat them the same or 

much more similarly would lead to a large differential regulatory impact on several 

manufacturers. The current state of the auto industry and the fact that the time frame of 

these rules only extends 6 years from today argue against such a dramatic change at this 

time. 

3.3 Stringency of the standards 

Organization: General Motors 

Northeast States for Coordinated Air Use Management 

Public Citizen and Safe Climate Campaign 

American Council for an Energy Efficient Economy 

Sierra Club 

California Air Resources Board 

International Council on Clean Transportation 

US Steel Corporation 

University of Pennsylvania, Environmental Law Project 

Eadie, R. Frank 

Sack, Emily 

Comment:

General Motors 

The overall industry goal of 250 CO2 g/mile (35.5 mpg equivalent) by 2016 model year is tough, 

but reasonable. [OAR-2009-0472-6953, p.2] 

The proposed standards are not easy, nor will they be inexpensive, but we are up to the 

challenge. The success of our current offerings in the marketplace like the Chevy Malibu 

and the Equinox and the enthusiasm over soon-to-be released products like the Chevy 

Cruze convince us that we will be able to do our part, and even before this rule becomes 

effective, we will have introduced the Chevy Volt, which is scheduled to start production 
EPA Response to Comments 

3-54

in late 2010 as a 2011 model year vehicle, and it will be GM's first extended range 

electric vehicle. [OAR-2009-0472-6185, p.11] 

Public Citizens and Safe Climate Campaign 

The agencies have not outlined an approach to setting standards that sets a precedent for 

how the agencies would approach this task the next time around. The agencies 

have engaged in economic hand waving, estimating that more stringent standards would 

be cost-effective, but then appealing to the financial state of the auto industry in choosing 

the level of standards. For example, EPA discusses other rates at which to ramp down the 

CO2 standards, looking at two options: lowering allowable CO2 emissions by four 

percent per year and six percent per year. These options are not indicated by any 

technological or economic criteria, but merely establish a range within which the 

agency’s proposal fails. EPA proposes that CO2 emissions decline at approximately 4.2 

percent per year for passenger cars and 4.5 percent per year for light trucks. [OAR-2009-

0472-7050.1, p.9] 

EPA then discusses the relative cost of compliance with standards in each scenario, and 

explains that the cost savings for setting standards at four percent instead of the proposed 

level would be $73 per vehicle, whereas the six percent alternative would incur additional 

costs of $493 per vehicle on average. EPA appeals to the financial state of the industry in 

influencing its decision: “EPA is not concluding that the 6% per year alternative 

standards are technologically infeasible, but EPA believes such standards for this time 

frame would be overly stringent given the significant strain it would place on the 

resources of the industry under current conditions. EPA believes this degree of stringency 

is not warranted at this time. Therefore EPA does not believe the 6% per year alternative 

would be an appropriate balance of various relevant factors for model years 2012–2016.” 

EPA does not substantiate this claim with an analysis that evaluates the tradeoff in terms 

of public health and welfare. [OAR-2009-0472-7050.1, p.9] 

Science dictates that to avoid the worst consequences of global warming that we must 

reduce emissions of greenhouse gases to 83 percent below 1990 levels by 2050. In order 

for the U.S. light duty transportation sector to get there, EPA must set standards that cross 

multiple product cycles and allow for much more significant transformative changes in 

the light duty vehicle fleet. The CAA requires EPA to issue standards that protect public 

health and welfare. The Supreme Court in Massachusetts v. EPA affirmed CAA authority 

to regulate greenhouse gases, and EPA has asserted that greenhouse gases pose a threat to 

public health and welfare through its proposed endangerment finding. The agency’s 

approach to setting standards must reflect its responsibility to set protective standards 

consistent with its statutory mandate. [OAR-2009-0472-7050.1, p.9] 

EPA’s consideration of health and the environment are paramount to economic 

considerations in setting standards under CAA. NHTSA has significant discretion to 

balance the four factors under EPCA for setting standards, and could choose 

technological feasibility and the need of the nation to conserve energy as the paramount 

factors in standard setting. The agency’s assessment of the industry’s capacity and 
EPA CO2 Standards 

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willingness to raise fuel economy and cut greenhouse gas emissions does not reflect 

current trends. Consumer demand for fuel efficient cars has increased significantly in 

light of gas price spikes in 2005 and 2008, and increased public awareness of global 

warming. Major automakers have been making announcements for over a year about 

ambitious plans to raise vehicle fuel economy, roll out new efficiency technology, and 

move more rapidly than expected into hybrid, plug-in hybrid, and fully electric vehicles. 

Both agencies’ assumptions about technology adoption and willingness to increase fleet 

fuel economy seem unjustifiably constrained by outdated assumptions. [OAR-2009-

0472-7050.1, p.10] 

In establishing this new program, the agencies should develop a standard-setting 

methodology that satisfies each agency’s statutory requirements, as well as the intent of 

both laws. EPCA aims to stabilize energy prices through conservation efforts. It was 

passed to establish a national energy policy that protects consumers against future price 

shocks and puts the nation in a more competitive position globally by making the nation 

less sensitive to price volatility. This vision was undermined by inconsistency in standard 

setting, and when oil prices rose sharply in 2005 and 2008, consumers were subject to 

prices shocks similar to those experienced in the 1970s. EPA has a responsibility to 

protect public health and welfare by setting standards under the CAA. The threat of 

global warming is clearer today than previously, and the agency’s authority to regulate 

greenhouse gas emissions to fulfill its mission of protecting public health and welfare has 

been affirmed. [OAR-2009-0472-7050.1, p.10] 

Both agencies should start the standard setting process by establishing oil savings and 

greenhouse gas reduction goals based on assessments of national needs. From these 

estimates, the agencies must then apply considerations appropriate to their respective 

statutes, including technological feasibility, economic considerations, and the needs of 

the nation to conserve oil and reduce greenhouse gas emissions. This would result in 

setting levels of stringency consistent with the needs of the nation that are the 

maximum feasible, as required by EPCA, and that are as technology-forcing as 

practicable, consistent with EPA’s charge to place public health and welfare above 

economic concerns. [OAR-2009-0472-7050.1, p.11] 

American Council for an Energy Efficient Economy 

Recommendations: 

Establish in the final rule that light-duty vehicle standards in subsequent rules shall be set 

to achieve medium- and long-term emissions goals for the transportation sector 

commensurate with the need for emissions reductions overall. 

Ensure that required emissions levels are sufficiently stringent to ensure that, at a 

minimum, any incremental reductions with positive net benefits are implemented. 

The stringency of the proposed rule is well below the maximum cost-effective level, as 

the agencies clearly demonstrate. Table IV.F.2 (p.49700) shows that the proposed 
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standards would save 62 billion gallons per year, while a more stringent standard that 

maximizes net benefit would save 90 billion gallons, or almost 50 percent more fuel (and 

CO2 emissions). Choosing one level of standards over another that is superior on both 

environmental and economic grounds is a decision that calls for a clear explanation. The 

agencies’ rationale for doing so is not compelling, however. 

In Section III.D., EPA compares the manufacturers’ likely response to the proposed 

standards to what would be required to achieve a 4 percent per year reduction in CO2 

(slightly less stringent than the standards) and to achieve a 6 percent per year reduction 

(substantially more than the standards). EPA notes that, according to its model, the 

requisite application of advanced technologies to achieve 6 percent reductions would 

increase fleetwide, necessitating for example an 8 percent increase in the application of 

start-stop technology. Furthermore, for BMW and Daimler, for example, increases of up 

to 42 percent in hybrid production could be necessary to meet the standard. (p.49557) 

These observations do not support the view that a 6 percent per year rate is too ambitious. 

Moreover, the concern over BMW and Daimler is reminiscent of NHTSA earlier, illadvised “least-capable manufacturer” approach (to nonattribute- based standards), except 

that EPA has cited manufacturers less likely to elicit sympathy than those to which 

NHTSA applied its approach. 

EPA goes on to state that as the annual percent reduction increases from 4 to 6 percent, 

“[c]ompliance costs are entering the region of non-linearity. The $73 cost savings of the 4 

percent per year standards relative to the proposal represents $18 per g/mi CO2 increase. 

The $493 cost increase of the 6 percent per year standards relative to the proposal 

represents $25 per g/mi CO2 increase.” (p.49557) It is not clear why EPA regards this 

increase in cost-per-ton as dramatic and excessive. EPA also fails to discuss whether a 

CO2 reduction rate of 5 percent per year, for example, would be feasible. EPA proposes 

no objective measure of what is sufficiently stringent. Indeed, NHTSA’s subsequent 

discussion of the various rates of improvement the agencies considered indicates that 

even a 6 percent rate of improvement is well below the optimal rate, even from a purely 

economic perspective, without prioritization of environmental goals. 

NHTSA presents stringency options in the form of annual percent increases in fuel 

economy, with the proposed standards corresponding to a 4.3 percent per year increase. 

In IV.F., NHTSA argues that 5 percent would be too aggressive, because it would 

increases the per vehicle incremental cost by 30 percent while reducing fuel consumption 

by only 3 percent (p. 49704). This comparison in fact provides no basis for comparison 

between the proposed standard and a 5 percent annual reduction, and certainly does not 

demonstrate that the higher rate of reduction is excessively costly. If several very lowcost technologies exist to reduce fuel consumption, the next technologies on the cost 

curve might cost many times more per gallon saved while still being highly costeffective. 

The ad hoc and narrow arguments advanced by the agencies to show that standards more 

stringent than those proposed would not be reasonable are for the most part 

unconvincing, especially given that the proposed standards are far below the level that 
EPA CO2 Standards 

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maximizes net benefits. The perilous condition of the domestic auto industry may in fact 

imply that the proposed standards are the best choice for the current rulemaking. 

However, the reasons for this must be clearly articulated and formulated in a way that 

makes clear how “maximum feasible” levels are to be determined in the future. The 

inadequate explanation for the stringency of the proposed rule could have negative 

implications for subsequent rulemakings. 

The governing statutes grant the agencies substantial discretion in setting stringency, and 

ACEEE does not support the application of a rigid economic test to determine the 

appropriate levels of the standards. However, recommending a standards even below the 

maximum net benefit in economic terms calls for a special explanation. A standard that 

falls below the point on the technology cost curve where marginal costs equal marginal 

benefits would be widely acknowledged to fall short of the “maximum feasible” and 

“economically practicable” standard required under the CAFE statute. Under the Clean 

Air Act, for which economic considerations are secondary to environmental protection 

needs, the appropriate standard can only be more stringent. Maximum net benefits should 

therefore be considered a lower bound for stringency of the standards. 

The final rule should set out the principles by which stringencies will be determined in 

future rulemakings in order to ensure that standards will continue to support expeditious 

reduction of fuel use and greenhouse emissions. The ability of the standards to promote 

the development and deployment of new efficiency technologies is central to their role in 

national climate and energy security policy, so EPA and NHTSA should make clear how 

this aspect of the program will be preserved and strengthened over time. 

Given that the purpose of the EPA rule is to help achieve the reductions in GHG 

emissions necessary to reach sustainable atmospheric concentrations of carbon, those 

emissions reduction goals should inform the setting of standards in a quantitative way. 

This general approach was introduced in EPA’s GHG NPRM in 2008 and begins with 

certain assumptions about the percent reduction in GHG emissions, relative to 2005 

levels, required in milestone years out to 2050. A default assumption that sectors and 

subsectors must reduce emissions in proportion to their contribution to total emissions is 

appropriate, at least until the potential for some sectors to do more is verified. 

In such an approach, aggressive measures will be needed for the transportation sector, 

going well beyond the standards proposed in the rule, to achieve the sector’s share of the 

necessary reductions. Therefore, ACEEE believes that GHG reduction targets should be 

the principal determinant of the stringency of vehicle emissions rules in the future. 

[ACEEE also submitted these comments as testimony at the New York public hearing, 

See docket number EPA-HQ-OAR-2009-0472-4621, pp. 139, 144-146.] 

Sierra Club 

The proposed National Program combines the first national greenhouse gas standards for 

vehicles under the Clean Air Act with energy saving Corporate Average Fuel Economy 
EPA Response to Comments 

3-58

(CAFE) standards, all while ensuring the nation benefits from the precedent set by 

California’s Pavley standards. The proposed National Program is expected reduce 

greenhouse gas emissions by 950 million metric tons, equivalent of 205 coal plants 

shutting for one year, and reduce oil consumption by 1.8 billion barrels, resulting in 

consumer savings at the pump of $193 billion. These standards must ensure the nation 

benefits from the precedent set by California’s Pavley standards to achieve a 30% 

reduction in greenhouse gas pollution from new vehicles in 2016. A strong final rule is 

needed to deliver on President Obama’s promise and to pull vehicle standards out of the 

1970s and into the 21st century. [OAR-2009-0472-7278.1, p.2] 

This NPRM includes many elements that are identified as transitional – as both agencies 

work to create a new National Program for greenhouse gas and fuel economy standards. 

While the 250 g/mi CO2e standard in the NPRM is significant, we urge that both 

agencies definitively end “transitional” elements in 2016 and indicate an intent to launch 

a standard setting process for 2017 and beyond that will meet the urgent need of the 

United States to dramatically reduce greenhouse gas pollution and conserve oil and 

[OAR-2009-0472-7278.1, p.2] meet the growing demand of American consumers for 

vehicles that go farther on a gallon of gas. [OAR-2009-0472-7278.1, p.3] 

[[These comments were submitted as testimony at the Detroit public hearing. See docket 

number OAR-2009-0472-6185, pp. 30-31.]] 

EPA and NHTSA should clarify the approach to setting standards. As we know, the 

proposed standards of 250 g/mi and 34.1 mpg are the result of an agreement; however, 

future rounds of standards will likely not be bound by a similar agreement and, in fact, 

both agencies should ensure that future standards maximize the application of costeffective technologies to vehicles and consumer savings at the pump. The Clean Air Act 

is a technology forcing statute, and we urge EPA to clearly note the transitional aspect of 

these standards in the final rule. 

These standards will move us from one standard aimed at reducing oil consumption, to a 

broader National Program that also guarantees greenhouse gas emissions reductions. The 

proposed National Program sets the table for future standards that can finally break our 

dependence on oil and create substantially cleaner vehicles. 

California Air Resources Board 

First, the Final Rule needs to maintain the proposed standards’ stringency in each model 

year 2012 through 2016. It appears that a principal industry trade group has proposed 

reducing the stringency of the proposed fuel economy standards for model year 2012-

1015, arguing that, as currently proposed the standards do not meet EISA’s requirement 

for the standards to increase “ratably.” See Alliance of Automobile Manufacturers 

(Alliance) Document ID EPA-HQ-OAR-2009-0472-6952.1. CARB strongly opposes the 

Alliance proposal. 
EPA CO2 Standards 

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California committed to adopt the national program for model years 2012-2016 with the 

understanding that it would provide equivalent or better overall greenhouse gas 

reductions nationwide than California’s own program coupled with its adopting sister 

states; the Alliance proposal threatens that equation. First, the proposed fuel economy and 

greenhouse gas requirements were designed to establish a national program with a 

consistent and harmonized approach that would reduce greenhouse gas emissions and 

improve fuel economy from light-duty vehicles. Because the Alliance is also 

recommending that EPA’s GHG standards be simultaneously stepped, the greenhouse gas 

reductions projected for the national program would be significantly reduced. Second, the 

proposed fuel economy and greenhouse gas requirements were established after a joint 

effort by both agencies to determine standards that were technically feasible and costeffective in the timeframe proposed. We do not believe that a case has been made to 

refute the agencies’ analyses. These and other Alliance recommendations need careful 

review to ensure that they do not reduce the stringency and consequent cumulative 

greenhouse gas reductions California expected in committing to the National 

Program. [OAR-2009-0472-7189.1, p.2] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. 

See docket number OAR-2009-0472-7283, pp. 21-27] 

International Council on Clean Transportation 

The technical analyses conducted by EPA and NHTSA are sound and demonstrate that 

the proposed standards are feasible and the benefits of the rule far outweigh the costs. 

The analytical framework also provides a good base for further reductions in fuel 

consumption and greenhouse gas emissions beyond 2016. 

US Steel Corporation 

Consider the regulation targets for the year 2016 for both agencies. The target for EPA is 

250 g/mile CO2 fleet average, equivalent to 35.5 mpg with allowable air conditioning 

and flex fuel credits. The NHTSA combined fleet target is roughly equivalent to EPA’s 

standard and requires 34.1 mpg combined fleet average, but without air conditioning 

credits. Should carmakers comply with these rules, the previous goal of Congress (2007 

CAFE Law previously specifying 35 mpg by 2020) will have been met four years ahead 

of schedule. This acceleration places the car companies in a difficult position to satisfy 

the regulations by making major technical and manufacturing decisions in order to be 

compliant, some of which could have negative consequences. The National Program 

similarly compresses the time frame for steel suppliers and other materials suppliers to 

develop and produce those new materials, such as the required grades of advanced highstrength steels and ultra high-strength steels, which will help build the required 

improvements into cars and trucks during this period. 

The overly aggressive schedule proposed by this joint NPRM may cause car companies 

to select low density materials at a faster rate than would be the case if a more extended 

time period were applied. The harm suffered by the steel industry, the risk to national 
EPA Response to Comments 

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energy security through acceleration in the use of high-energy materials for vehicle mass 

reduction, in addition to the harm to the environment and the harm to the economy could 

be accelerated by this decision. The risk of selecting high energy use and high CO2 

emissions materials to adhere to the standard during the 2012-2016 time period would be 

significant. Our recommendation is to consider reducing the rate of improvement to the 

time frame originally defined by Congress (35 mpg by 2020) or to ensure that appropriate 

credits, such as those which may be associated with low energy, low emissions materials 

(such as steel) in the manufacturing of the vehicle be included in the CAFE/emissions 

formulae. In this way car companies will have additional time to work with suppliers and 

their own development teams to acquire the best technologies for the required 

improvements in fuel economy. [OAR-2009-0472-7197.1, p.7] 

University of Pennsylvania Environmental Law Project 

We agree with the EPA’s response under the Proposed Rule in setting strict minimum 

compliance levels for carbon dioxide (CO2) emissions. [OAR-2009-0472-7286.1, p. 11] 

Sack, Emily 

I urge you to find the strongest possible regulations to protect, to begin to reduce the 

devastating impact that the pollution -- the pollutants have had on our air and our water 

and our quality of life. [EPA-HQ-OAR-2009-0472-4621, p.157] 

[See Docket Number EPA-HQ-OAR-2009-0472-4621, pp.154-157 for detailed 

comments] 

EPA Response: 

As discussed in the proposal, section 202(a)(1) provides EPA broad discretion in setting 

emissions standards for new motor vehicles. 74 FR 49454, 49464-5 (September 28, 

2009). 

Section 202 (a) (1) of the Clean Air Act (CAA) states that “the Administrator shall by 

regulation prescribe (and from time to time revise)...standards applicable to the emission 

of any air pollutant from any class or classes of new motor vehicles ..., which in his 

judgment cause, or contribute to, air pollution which may reasonably be anticipated to 

endanger public health or welfare.” If EPA makes the appropriate endangerment and 

cause or contribute findings, then section 202(a) authorizes EPA to issue standards 

applicable to emissions of those pollutants. 

 

Any standards under CAA section 202(a)(1) “shall be applicable to such vehicles ... for 

their useful life.” Emission standards set by the EPA under CAA section 202(a)(1) are 

technology-based, as the levels chosen must be premised on a finding of technological 

feasibility. Thus, standards promulgated under CAA section 202(a) are to take effect 

only “after providing such period as the Administrator finds necessary to permit the 

development and application of the requisite technology, giving appropriate consideration 
EPA CO2 Standards 

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to the cost of compliance within such period” (section 202 (a)(2); see also NRDC v. EPA, 

655 F. 2d 318, 322 (D.C. Cir. 1981)). EPA is afforded considerable discretion under 

section 202(a) when assessing issues of technical feasibility and availability of lead time 

to implement new technology. Such determinations are “subject to the restraints of 

reasonableness”, which “does not open the door to ‘crystal ball’ inquiry.” NRDC, 655 F. 

2d at 328, quoting International Harvester Co. v. Ruckelshaus, 478 F. 2d 615, 629 (D.C. 

Cir. 1973). Also see NRDC, 655 F. 2d at 333-34. In developing such technology-based 

standards, EPA has the discretion to consider different standards for appropriate 

groupings of vehicles (“class or classes of new motor vehicles”), or a single standard for 

a larger grouping of motor vehicles (NRDC, 655 F. 2d at 338). 

Although standards under CAA section 202(a)(1) are technology-based, they are not 

based exclusively on technological capability. EPA has the discretion to consider and 

weigh various factors along with technological feasibility, such as the cost of compliance 

(see section 202(a) (2)), lead time necessary for compliance (section 202(a)(2)), safety 

(see NRDC, 655 F. 2d at 336 n. 31) and other impacts on consumers, and energy impacts 

associated with use of the technology. See George E. Warren Corp. v. EPA, 159 F.3d 

616, 623-624 (D.C. Cir. 1998) (ordinarily permissible for EPA to consider factors not 

specifically enumerated in the Act). See also Entergy Corp. v. Riverkeeper, Inc., 129 

S.Ct. 1498, 1508-09 (2009) (congressional silence did not bar EPA from employing costbenefit analysis under Clean Water Act absent some other clear indication that such 

analysis was prohibited; rather, silence indicated discretion to use or not use such an 

approach as the agency deems appropriate). 

In addition, EPA has clear authority to set standards under CAA section 202(a) that are 

technology forcing when EPA considers that to be appropriate, but is not required to do 

so (as compared to standards set under provisions such as section 202(a)(3) and section 

213(a)(3)). EPA has interpreted a similar statutory provision, CAA section 231, as 

follows: 

While the statutory language of section 231 is not identical to other provisions in 

title II of the CAA that direct EPA to establish technology-based standards for 

various types of engines, EPA interprets its authority under section 231 to be 

somewhat similar to those provisions that require us to identify a reasonable 

balance of specified emissions reduction, cost, safety, noise, and other factors. 

See, e.g., Husqvarna AB v. EPA, 254 F.3d 195 (DC Cir. 2001) (upholding EPA’s 

promulgation of technology-based standards for small non-road engines under 

section 213(a)(3) of the CAA). However, EPA is not compelled under section 231 

to obtain the ‘‘greatest degree of emission reduction achievable’’ as per sections 

213 and 202 of the CAA, and so EPA does not interpret the Act as requiring the 

agency to give subordinate status to factors such as cost, safety, and noise in 

determining what standards are reasonable for aircraft engines. Rather, EPA has 

greater flexibility under section 231 in determining what standard is most 

reasonable for aircraft engines, and is not required to achieve a ‘‘technology 

forcing’’ result.2

 

 

2

 70 FR 69664, 69676, November 17, 2005. 
EPA Response to Comments 

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This interpretation was upheld as reasonable in NACAA v. EPA, (489 F.3d 1221, 1230 

(D.C. Cir. 2007)). CAA section 202(a) does not specify the degree of weight to apply to 

each factor, and EPA accordingly has discretion in choosing an appropriate balance 

among factors. See Sierra Club v. EPA, 325 F.3d 374, 378 (D.C. Cir. 2003) (even where 

a provision is technology-forcing, the provision “does not resolve how the Administrator 

should weigh all [the statutory] factors in the process of finding the 'greatest emission 

reduction achievable’”). Also see Husqvarna AB v. EPA, 254 F. 3d 195, 200 (D.C. Cir. 

2001) (great discretion to balance statutory factors in considering level of technologybased standard, and statutory requirement “to [give appropriate] consideration to the cost 

of applying ... technology” does not mandate a specific method of cost analysis); see also 

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”); Permian Basin Area Rate Cases, 390 U.S. 

747, 797 (1968) (same); Federal Power Commission v. Conway Corp., 426 U.S. 271, 278 

(1976) (same); Exxon Mobil Gas Marketing Co. v. FERC, 297 F. 3d 1071, 1084 (D.C. 

Cir. 2002) (same). 

As described above, EPA has broad discretion in determining the appropriate standards to 

adopt under section 202(a)(1), based on a reasonable consideration and balancing of 

various factors relevant under that provision. As discussed in the preamble, including 

section III.D., EPA did consider and balance all of the factors discussed by commenters – 

the GHG reductions achieved by the various proposed and alternative standards, the 

technology to achieve such standards, lead time, cost of achieving the standards, as well 

as other factors such as safety impacts. EPA explained that the final standards will 

achieve very large and significant reductions in GHGs, as well as very significant fuel 

savings. EPA identified a technology pathway by which manufacturers could achieve 

these reductions, modeling in detail each manufacturer's fleet of cars and trucks. The 

technology pathway calls for the widespread introduction across the fleet of several 

different kinds of technology that are currently available but with much more limited 

usage, as well as an expectation of a limited use of some more costly technology, such as 

HEVs. For the near term model years at issue in this rulemaking, EPA expects that there 

will only be a very limited use of advanced technologies such as EVs and PHEVs. EPA 

evaluated the cost of this spread in technology and found it reasonable both from the 

perspective of costs per vehicle as well as the total benefits of the rule far outweighing 

the total costs. Lead time is a critical consideration and EPA determined that there is 

adequate lead time to employ the financial, engineering, and other resources needed to 

achieve the standards, recognizing that a significant portion of these human and capital 

resources would need to be expended during the next few years. Lead time is somewhat 

constrained for these model years, as it is now 2010 and MY 2012 is only a number of 

months away. The farthest model year, 2016, also is not many years from now, given the 

time needed for redesigning cars and trucks for new production. EPA also took into 

account that the automobile manufacturing industry has been and continues to face 

serious economic and other constraints, stemming from the recent economic problems in 

the U.S. and around the world. This is an important context to EPA’s evaluations of cost 

and lead time considerations. 
EPA CO2 Standards 

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The final standards will achieve very significant reductions in GHG emissions and fuel 

savings, the technology to achieve these reductions is identified and commercially 

available, and the costs are reasonable. EPA also recognizes that the standards will be 

difficult for the manufacturers to achieve and present major hurdles for them to 

overcome. While the technology is generally well understood and can be implemented 

over these model years, the lead time to do so is relatively short and the capital and 

human resources that must be employed are large, especially in the next few years, and 

must occur in the context of current serious economic strain on this industry. 

Considering all of these factors, EPA determined that the final standards are a reasonable 

and appropriate balance of the relevant factors under section 202(a)(1). 

US Steel commented that the rate of improvement associated with the final standards 

could force the use of low density, high energy (required for production) materials before 

the steel industry had time to ramp up the production capacity of high strength, low 

energy (required in production) steel. We do not agree that the rate at which the final 

standards require improvement will result in the permanent reduction in the use of high 

strength steel. First, the overall weight reduction projected for the final standards is only 

4%. As discussed in the Joint TSD, several manufacturers have already announced plans 

to achieve weight reductions approaching this level. Second, several manufacturers 

already utilize high strength steel components, indicating some production capacity and 

general engineering awareness of its benefits. Third, given this awareness, we do not 

believe that it is likely that manufacturers would lock themselves into vehicle designs 

which precluded future use of the benefits of high strength steel, even if they should 

decide to use another material in the very near term due to capacity constraints. 

US Steel specifically suggested that we slow the rate of improvement in the fuel economy 

and CO2 standards to that described in EISA. Again, we do not agree that this would be 

acceptable. First, the 35 mpg fleet-wide fuel economy mentioned in EISA is a minimum 

requirement, not a mandated target. Second, with the exception of several smaller 

manufacturers, the final standards are not projected to require the substantial use of 

hybrid or diesel technology. To promulgate more relaxed standards would reduce the use 

of much more conventional technology. If manufacturers are concerned about supply of 

high strength steel, which is US Steel’s main concern, we believe that manufacturers 

have several options available to compensate, one being increased use of hybrid and 

diesel technology in market segments where they have experience with these 

technologies and where consumer acceptance has been demonstrated. 

EPA also considered standards that were less stringent and more stringent than those 

adopted. EPA took a similar approach in evaluating these alternative standards. EPA 

considered and balanced all of the statutorily relevant factors, comparing and contrasting 

these to the final standards. For example, EPA rejected an alternative of more stringent 

standards that would achieve an average 6% per year increase. EPA’s rejection of the 6% 

alternative was based largely on concerns over the adequacy of the lead time in a context 

of a significant increase in technology and costs, and a significant increase in the risk of 

non-compliance by manufacturers. These real world concerns indicate that the 6% per 

year alternative is not an appropriate standard for the MY 2012-2016 time frame, even 
EPA Response to Comments 

3-64

though it would by definition achieve greater GHG reductions and fuel savings than the 

final standards. 

With respect to the 6 percent per year standards, the levels of requisite control technology 

increased substantially relative to those under the final standards, as would be expected. 

Industry-wide, the largest increase was a 25 percent increase in the application of startstop technology and 13-17 percent increases in the use of gasoline direct injection 

engines, turbo charging and dual clutch transmissions. Our projections for BMW, 

Porsche, Tata and Volkswagen continue to show they are unable to comply with the CO2

standards in 2016, so our projections for these manufacturers do not differ relative to the 

final standards, though the amount of short-fall for each firm increases significantly, by 

an additional 20 g/mi CO2 per firm. However, Ford and Mitsubishi join this list. Five 

manufacturers are projected to need to increase their use of start-stop technology by at 

least 30 percent. 

The 6% per year alternative represents a significant fleetwide increase in both the 

technology required and the overall costs compared to the final standards. In absolute 

percent increases in the technology penetration, compared to the final standards the 6% 

per year alternative requires for the industry as a whole: an 18% increase in GDI fuel 

systems, an 11% increase in turbo-downsize systems, a 6% increase in dual-clutch 

automated manual transmissions (DCT), and a 9% increase in start-stop systems. For a 

number of manufacturers the expected increase in technology is greater, as noted in the 

paragraph above. For the industry as a whole, the per-vehicle cost increase for the 6% 

per year alternative is nearly $500 greater than the per vehicle cost of the final standard. 

On average this is a 50% increase in costs compared to the final standards. At the same 

time, CO2 emissions would be reduced by about 8%, compared to the 250 g/mi target 

level. These incremental costs are out of proportion to those of the final standards. 

As noted in the preamble and earlier in this response, EPA’s OMEGA model predicts that 

for model year 2016, Ford, Mitsubishi, Mercedes, BMW, Volkswagen, Jaguar-Landover, 

and Porsche do not meet their target under the 6 percent per year scenario. In addition, 

Chrysler, General Motors, Suzuki and Nissan all are within 2 grams/mi CO2 of 

maximizing the applicable technology allowed under EPA’s OMEGA model – that is, 

these companies have almost no head-room for compliance. In total, these 11 companies 

represent more than 58 percent of total 2016 projected U.S. light-duty vehicle sales. This 

provides a strong indication that the 6 percent per year standard is much more stringent 

than the final standards, and presents a significant risk of non-compliance for many firms, 

including four of the seven largest firms by U.S. sales. 

These technology and cost increases are significant, given the amount of lead-time 

between now and model years 2012-2016. In order to achieve the levels of technology 

penetration for the final standards, the industry needs to invest significant capital and 

product development resources right away, in particular for the 2012 and 2013 model 

year, which is only 2-3 years from now. For the 2014-2016 MY time frames, significant 

product development and capital investments will need to occur over the next 2-3 years in 

order to be ready for launching these new products for those model years. Thus, a major 
EPA CO2 Standards 

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part of the required capital and resource investment will need to occur now and over the 

next few years, under the final standards. EPA believes that the final rule (a target of 250 

gram/mile in MY 2016) already requires significant investment and product development 

costs for the industry, focused on the next few years. 

It is important to note, as discussed in the preamble, as well as in the Joint Technical 

Support Document and the EPA Regulatory Impact Analysis document, the average 

model year 2016 per-vehicle cost increase of roughly $950 includes an estimate of both 

the increase in capital investments by the auto companies and the suppliers as well as the 

increase in product development costs. These costs can be significant, especially as they 

must occur over the next 2-3 years. Both the domestic and transplant auto firms, as well 

as the domestic and world-wide automotive supplier base, is experiencing one of the most 

difficult markets in the U.S. and internationally that has been seen in the past 30 years. 

One major impact of the global downturn in the automotive industry and certainly in the 

U.S. is the significant reduction in product development engineers and staffs, as well as a 

tightening of the credit markets which allow auto firms and suppliers to make the nearterm capital investments necessary to bring new technology into production. The 6% per 

year alternative standard would impose significantly increased pressure on capital and 

other resources, indicating that it is too stringent for this time frame, given both the 

relatively limited amount of lead-time between now and model years 2012-2016, the 

need for much of these resources over the next few years, as well as the current financial 

and related circumstances of the automotive industry. EPA is not concluding that the 6% 

per year alternative standards are technologically infeasible, but EPA believes such 

standards for this time frame would be overly stringent given the significant strain it 

would place on the resources of the industry under current conditions. EPA believes this 

degree of stringency is not warranted at this time. Therefore, EPA does not believe the 

6% per year alternative would be an appropriate balance of various relevant factors for 

model years 2012-1016. 

There is particular sensitivity to predicating these standards on more aggressive 

penetration of strong hybrid technologies. The more stringent alternatives are all 

projected to necessitate more extensive use of hybrid technologies. Several hybrid 

technologies have already been commercially demonstrated and their use could clearly be 

expanded. (Several manufacturers may even require extensive use of hybrid technology 

to meet the final standards due to certain characteristics of their vehicles which lead to 

unusually high fuel consumption and CO2 emissions.) However, while a couple of 

manufacturers have extensive experience with high volume hybrid production and use in 

smaller cars, some large volume manufacturers have minimal experience. No 

manufacturer has extensive experience across all of the market segments believed to be 

suitable for hybridization. Current world-wide production capacity for hybrid 

components is relatively small. Thus, the application of hybrid technology to a 

significant fraction of U.S. sales in the 2012-2016 time frame would require extensive 

new resources at every level: design, component production, vehicle integration, and 

vehicle production. In addition, since the electric components and batteries in a fully 

optimized hybrid design (capable of achieving the CO2 emission reductions projected in 

the Joint TSD) usually require significant changes to the vehicle design, hybrids will 
EPA Response to Comments 

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likely require separate safety assessments, increasing the need for engineering and testing 

resources during a time of economic challenge. 

Moreover, one of the key components of the hybrid technology is the battery or other 

type of device to store energy and battery technology is developing rapidly. Establishing 

MY 2012-2016 standards which necessitate extensive use of hybrid technology each 

model year would 1) require dramatic capital investment in plants needed to produce the 

hybrid components, and 2) would commit manufacturers to large investments in specific 

battery technologies which may not be the technology of choice in just a few years. We 

believe that it is much more prudent to give this particular technology a few more years 

of development before basing standards on its widespread use. We believe that the final 

standards are sufficiently stringent that hybrid technology will still be used on significant 

numbers of vehicles and encourage the continued development of this technology. 

All of these factors apply even more strongly to the more advanced plug-in hybrid and 

fully electric vehicle technologies. These vehicles require much larger battery capacity 

and are much more likely to require use of the new lithium-based materials. Significant 

application of these two technologies would not only require substantial increases in 

lithium battery production, but would require entirely new mining production capacity as 

well. 

In short, EPA believes that it has made an informed and reasoned choice in rejecting the 

6% alternative, and does not accept the commenter’s characterization that the basis for 

the choice is unsubstantiated or otherwise arbitrary. 

Certain commenters rejected EPA’s approach to considering and balancing the relevant 

factors under section 202(a)(1). They argued that this approach was ad hoc and narrow, 

and that EPA should announce and apply a different approach to standard setting for this 

rulemaking. In their view, EPA should first determine a specific goal of GHG 

reductions and oil savings, based on an assessment of national needs, and then apply 

considerations of technological feasibility and cost, in order to be as technology forcing 

as possible or practicable. One suggestion was to have a quantitative goal – identify the 

country's goal for reducing GHGs and then assign a proportionate share to the 

transportation sector as a default position. Commenters also suggested that EPA should 

assign more priority to achieving an environmental goal and thereby prioritizing public 

health and welfare, placing that above economic or other considerations. Commenters 

suggested this was required under both “the agency’s ... responsibility to set protective 

standards consistent with its statutory mandate” (Public Citizen) and with the CAA’s 

mandate to “be as technology-forcing as possible” (Public Citizen; see also Sierra Club). 

Other commenters suggested that the decision making criteria should call for a standard 

no less stringent than one that maximizes net benefits, or that this should be a presumed 

minimum. 

The comments appear to mischaracterize CAA section 202 (a) (1), and the discretion 

Congress provided to EPA under that provision. Commenters appear to read this 

provision as a mandate from Congress that EPA place the greatest emphasis on achieving 
EPA CO2 Standards 

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a desired environmental goal, with secondary emphasis on other factors such as economic 

considerations or considerations of lead time and technological feasibility. However, 

Congress clearly provided very broad discretion to EPA and did not direct its discretion 

in the ways suggested. For example, section 202(a) is not a provision where reducing 

risk is the only or the highest priority assigned by Congress. Compare, e.g., CAA 

sections 109(b) and 112(f)(2). It is also not a provision where Congress mandated a 

certain minimum degree of technology or emissions reduction. See CAA section 

112(d)(3). It is not a provision where Congress directed EPA to be technology forcing 

and achieve the greatest achievable reductions from technology that will be available in 

the future. See CAA sections 202(a)(3) and 213(a)(3). Instead, Congress referred to 

consideration of available technology, its effectiveness and cost, the lead time necessary 

for compliance. See generally 74 FR at 49464-65. Although section 202 (a) (1) 

standards may be technology-forcing, they are not required to be. 74 FR at 49464-65. 

As discussed above with respect to section 231(a), CAA section 202(a)(1) does not 

specify the degree of weight to apply to each factor, and EPA accordingly has discretion 

in choosing an appropriate balance among the relevant factors. Thus EPA rejects that the 

approach taken in this rule of considering and balancing the various relevant factors is 

inconsistent with the discretion provided by Congress under CAA section 202(a)(1). 

EPA also disagrees that a more determinative or approach to standard setting or more 

specific or objective decision making criteria are either required or called for in this 

rulemaking. For example, EPA does not believe it is appropriate for this rulemaking to 

try and determine a free standing national goal for reducing GHGs and saving oil, and 

either assigning a specific share to these light-duty sources or using the goal as a measure 

of some sorts for standard setting. In the relatively short timeframe for this rulemaking, it 

would be unrealistic to try and develop such a goal, given the great complexity and 

national input that this would involve. In addition, it is not at all clear that for this 

specific rulemaking that such a goal would be of any more use than a more general and 

qualitative goal of achieving significant reductions, given the recognized need for 

significant reductions and taking into account the limited scope of the near-term model 

years covered by this rulemaking. In the context of this short term rulemaking, covering 

just the next handful of model years, with limited lead time to implement changes in 

technology, EPA does not believe that a more specific and quantitative goal of longer 

term GHG reductions for the nation and this sector would provide any better guidance to 

the agency than the more qualitative but no less important goal EPA has employed - 

achieving significant reductions by moving the industry to the point where available nearterm technology is broadly employed across the fleet, over the next few model years, 

taking into consideration the lead time needs of the industry and other factors. 

EPA also disagrees that this amounts to a failure to place the proper priority on achieving 

the health and welfare protection called for by the CAA. CAA Section 202(a)(1) 

provides the guide to Congress’ intent on this issue, and EPA has employed the broad 

discretion provided by that provision to aim for and achieve very significant reductions in 

GHGs, after taking careful consideration of the factors relevant under that provision, as 

described above. This approach is fully consistent with CAA section 202(a)(1), and 

EPA’s consideration and balancing of the factors in this rulemaking gives full 
EPA Response to Comments 

3-68

consideration of the need to achieve significant GHG reductions to help reduce the risk to 

public health and welfare from global climate change. 

EPA also disagrees that it should use specific criteria for considering cost, using the 

maximization of net benefits as a minimum. As explained above and in the preamble, 

EPA has very good reasons for rejecting the 6% alternative, and that alternative is still 

significantly below the level that NHTSA has estimated would maximize net benefits. 

The alternative standards evaluated by NHTSA as providing the maximum net benefits 

(given all of the market, technological, economic, and other inputs to the agencies’ 

analyses) are even more stringent and less supportable than the 6% alternative rejected by 

EPA. While the relationship of marginal costs to marginal benefits is certainly a factor 

for EPA to consider, and EPA has considered it, the currently-estimated relationship of 

marginal costs to benefits does not, by itself, adequately determine the appropriate 

balance of the several factors EPA must consider, such as consideration of lead time, 

overall cost, and technological feasibility. It also assumes that all costs and befits have 

been fully and accurately identified, and that is certainly not the case. Even so, per 

NHTSA’s analysis of this scenario, the incremental cost of the maximum net benefit 

scenario exceeds that of the final standards by $700 per car for only a 2.5 mpg 

improvement and $1100 per truck for a two mpg improvement. These incremental costs 

are far out of proportion to those of the final standards. Numerous manufacturers were 

projected to be required to exceed the 15% cap on hybridization, particularly for their 

truck lines. EPA believes it is better in this rulemaking to consider this factor as one of 

several factors, but not to consider it as a single or predominant criterion for setting the 

standards in this rulemaking under CAA section 202(a)(1). 

As discussed above, EPA is not required under CAA section 202(a)(1) to set standards 

that are technology forcing, as under CAA section 202(a)(3) or section 213(a)(3). 

However, the final standards are readily justifiable under CAA provisions which are 

technology-forcing (allowing considerations of future advances in emission control 

capability as well as those already in existence and application). Neither CAA section 

202 (a) (1) nor provisions which are explicitly technology-forcing (e.g. section CAA 202 

(a)(3) requiring “the greatest degree of emission reduction achievable”) specify the 

weight to accord each relevant decision factor, leaving EPA with great discretion in 

determining an appropriate balance. See Sierra Club v. EPA, 325 F. 3d 374, 378 (D.C. 

Cir. 2003). And although the commenters are correct that the statute’s environmental 

goals are a dominant consideration in weighing the relevant factors, Husqvarna AB v. 

EPA, 254 F. 3d 195, 200 (D.C. Cir. 2001), EPA retains great discretion to weigh the 

relevant factors so long as its resolution is within a zone of reasonable values. See, e.g. 

Hercules Inc. v. EPA, 598 F. 2d 91, 106 (D.C. Cir. 1978). As discussed in detail in 

section III.D. of the preamble to the final rule (and in particular, in sections III.D.6 and 

7), the final standards are projected to require very significant penetration of technologies 

throughout the fleet and already raise challenging issues of sufficient lead time at the 

selected level of stringency. As further discussed in the preamble and in later responses 

in this comment response section, EPA reasonably considers more stringent standards to 

be inappropriate 
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Several commenters were also concerned that the approach taken in this rulemaking 

would limit EPA’s discretion in future rulemakings for this or other sectors, and 

recommended that EPA announce its approach for future rulemakings. As described 

above, EPA does not believe it is appropriate to identify a more precise or quantitative 

approach to standard setting for this rulemaking. These same reasons lead EPA to not 

announce such an approach for a future rulemaking concerning later light-duty model 

years. The discussion above and in the preamble makes it clear that the specific facts 

before the agency are critical in determining the appropriate balance of the relevant 

factors. It is useful to preserve the discretion to address the issues that must be 

considered in standard setting under section 202(a)(1) without a predetermined approach. 

That preserves EPA’s discretion to take into account the detailed circumstances before it. 

For example, if longer lead time is involved in a future rulemaking this could lead to 

consideration of greater changes in technology, leading to greater reductions. Section 201 

(a) (1) provides EPA great flexibility to tailor standards to circumstances, and EPA sees 

no advantage in a priori limiting that desirable degree of regulatory discretion. 

Several commenters suggest that the proposed standards were insufficiently stringent due 

to the public's demonstrated shift towards smaller vehicles and away from trucks. 

However, as fuel prices have stabilized at levels below $3 per gallon, truck sales have 

rebounded to some extent and sales of hybrids have fallen as a percentage of overall sales 

from their highs in 2008. Thus, it is not prudent to base long term purchasing trends on 

potentially short term market perturbations. See 74 FR at 14317-318 (March 30, 2009) 

(inappropriate to estimate future price of petroleum based on then-current high market 

fluctuations). We believe that the technology needed to meet the final standards will 

provide fuel savings which more than pay for itself over the life of the vehicle under 

essentially any realistic future fuel price scenario. Again, we also believe that the 

technological improvements which will occur over the 2012-2016 time period will 

provide a solid foundation for further improvements in the future. 

One commenter suggested that standards which reflected 5% per year reductions in CO2 

emissions should have been analyzed and potentially selected. Of course, numerous 

additional alternative standards can be identified in addition to those analyzed. We 

believe that standards beyond those being promulgated would have pushed most 

manufacturers to greater hybrid use. For example, per NHTSA’s analysis of this 

scenario, the incremental cost of the 5% per year reduction scenario exceeds that of the 

final standards by $200 per car for only a 1.1 mpg improvement and $400 per truck for a 

0.8 mpg improvement. These incremental costs are much greater than those of the final 

standards. From this NHTSA analysis, it appears that the standards being promulgated in 

this rule require the use of nearly all of the non-hybrid and non-diesel technology 

projected to be available in this timeframe for many of the large volume manufacturers. 

While hybrid and diesel technologies are technically feasible and have been 

commercialized in several applications, the investment costs for these technologies far 

exceeds those of the other technologies. The technology projected to be required to 

enable compliance with the final standards already requires significant new investment 

for dual clutch transmissions and start stop systems. Given the current economic climate, 

we are concerned that manufacturers and major suppliers may not have sufficient capital 
EPA Response to Comments 

3-70

to build the capacity for large volumes of electric motors, batteries, transmission control 

systems, diesel engines, nor the engineering resources to begin designing these systems 

essentially immediately. We believe that the substantive addition of these major 

technologies is best left to the post-2016 time period. 

We appreciate the comments mentioning concern about the need to make near term 

decisions about the use of weight saving materials. However, the projected reductions in 

vehicle mass projected for the final standards are relatively small (e.g., 4% on average, 

although some vehicles are projected to apply more mass reduction and some less). 

While manufacturers are free to choose from a variety of technology with which to meet 

the final standards, we believe that such weight reductions can be achieved by choosing 

methods which will prove to be beneficial beyond 2016. 

3.3.1 2016 Standard and selection of proposed standards versus 4% per year and 

6% per year alternative standards 

Organization: Center for Biological Diversity 

Toyota Motor North America 

New York State Department of Transportation (NYSDOT) 

Consumer Federation of America 

Comment:

Center for Biological Diversity 

III. The Proposed Rule Sets Impermissibly Low Mileage and GHG Emission Standards 

By Arbitrarily and Capriciously Undervaluing the Benefits and Overvaluing the Costs of 

More Stringent Standards and Failing to Adhere to the Overriding Goal of Conserving 

Energy 

When Congress enacted EPCA, it specified its goals: to decrease the nation’s dependence 

on foreign oil imports, to enhance national security and to achieve the efficient utilization 

of scarce resources. Center for Biological Diversity, 508 F.3d at 514. To achieve these 

goals, EPCA expressly demands that NHTSA set the maximum feasible fuel economy 

standards. 49 U.S.C. § 32902(a). In doing so, NHTSA must weigh four factors: 

technological feasibility, economic practicability, the effect of other motor vehicle 

standards on fuel economy, and the need of the United States to conserve energy. 49 

U.S.C. § 32902(f). In balancing these factors, NHTSA “cannot set fuel economy 

standards that are contrary to Congress’s purpose in enacting the EPCA – energy 

conservation,” it cannot act arbitrarily and capriciously; it cannot advance conclusions 

unsupported by the evidence; if it conducts cost-benefit analyses, it may not assign values 

of zero to benefits that can be ascertained within a range; and it cannot bias its costbenefit analysis. Center for Biological Diversity, 508 F.3d at 531, 534. As set forth 

above, Section 202(a) of the Clean Air Act requires a similar analysis, setting control 

standards no later than the availability of control technology allows, while giving 

appropriate consideration to compliance costs. The Proposed Rule fails to meet the 
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requirements of the law because none of the relevant factors support its conclusions. 

[OAR-2009-0472-7265.1, p. 5] 

A. Technological Feasibility Supports More Stringent Standards 

The Proposed Rule admits that “all” of the technology to improve fuel efficiency is 

commercially available today: 

NHTSA’s and EPA’s technology assessment indicates there is a wide range of 

technologies available for manufacturers to consider in upgrading vehicles to reduce 

GHG emissions and improve fuel economy . . . All of these technologies are already 

available today, and EPA’s and NHTSA’s assessment is that manufacturers would be 

able to meet the proposed standards through more widespread use of these technologies 

across the fleet. 74 Fed. Reg. 49470 (emphasis added). 

This is a stunning conclusion, as it means that if deployed, technology already in use 

today could allow the U.S. light-duty vehicle fleet to meet the Agencies’ 2016 mileage 

standard of 34.1 miles per gallon and greenhouse gas emission standards of 250 grams 

per mile in 2009, seven years earlier than here projected. Plainly, one of the four factors 

NHTSA must consider – technological feasibility – points in only one direction: much 

more stringent standards. Indeed, the Agencies could not defend any claim that 

technological constraints prevent the achievement of much higher standards. This is so 

because the average fuel economy of the vehicle fleets presently on the roads in the 

European Union (at 41.8 mpg in 2008) and Japan (at 40.6 in 2007) already far exceed the 

standards the Agencies are proposing for 2016.6 China’s fleet, at 32.9 mpg in 2008, and 

South Korea’s, at 31.0 mpg in 2008, are currently not far behind the U.S. proposal for 

2016. The following graph quickly illustrates the point: [See OAR-2009-0472-7265.1, p. 

7 for the graph] [OAR-2009-0472-7265.1, pp. 5-7] [See OAR-2009-0472-7265.1, pp. 5-

8 for a detailed discussion of technological feasibility.] 

D. The Need of the United States to Conserve Energy Supports More Stringent Standards 

It should go without saying that the last of the factors to be considered under EPCA, the 

United States’ need to conserve energy, supports setting more stringent mileage and 

tailpipe GHG emission standards. “Motor vehicles are the second largest greenhouse gasemitting sector in the U.S., after electricity generation, and accounted for 24 percent of 

total U.S. GHG emissions in 2006.” Proposed Rule, 74 Fed. Reg. 49632. The light duty 

vehicles that are the subject of this rulemaking account for fully 40% of all U.S. oil 

consumption. Id., 74 Fed. Reg. 49459. Increasing mileage standards for this vehicle fleet 

is the single most effective and quickest available step the U.S. can take to conserve 

energy and to reduce the U.S. dependence on foreign oil, and also has an immediate and 

highly significant effect on total U.S. GHG emissions. Indeed, it would be difficult to 

overemphasize the critical impact on vital national interests that could be achieved if the 

Proposed Rule would simply set its 2016 standards at the fuel efficiency and GHG 

emission reduction levels the European Union or Japan implement today.[OAR-2009-
EPA Response to Comments 

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0472-7265.1, pp. 19-20] [See OAR-2009-0472-7265.1, pp. 20-25 for an extensive 

discussion of this issue.] 

Toyota Motor North America 

In general, the overall level of the standards in 2016 model year is consistent with 

Toyota's expectation, the agreements signed last May, and the joint Notice of Intent 

(NOI) published last spring. Additional comments and responses to specific questions 

posed by the agencies are covered below. Where appropriate, we have identified to which 

agency's portion of the joint proposal our comments are directed. [OAR-2009-0472-7291, 

p.6] 

In general, the proposed standards in 2016 model year (a new vehicle fleet-wide level of 

250 grams of C02 per mile - equivalent to 35.5 mile per gallon) are consistent with 

Toyota's expectation, the agreements signed last May, and the joint Notice of Intent 

(NOI) published last spring. While meeting these levels will be a serious challenge for 

our engineers and product planners, we remain committed to the agreement and will 

make every effort to meet the challenge. [OAR-2009-0472-7291, p.7] 

New York State Department of Transportation 

The baseline condition used in the analysis of alternatives for the previous CAFE 

proposals was based on manufacturers' confidential plans for each model year, whereas 

the baseline in this proposal is based on each manufacturer's actual MY 2008 fleet. We 

agree that this approach will result in more complete market data and is more transparent 

than relying on manufacturers' confidential plans. It is also illustrative. While the results 

vary somewhat among manufacturers, the current MY 2011 baseline fuel economy is 

slightly better than the baseline fuel economy that was assumed in the MY 2011 final 

rule. This fact indicates that the auto industry as a whole is capable of achieving progress 

in improving fuel economy more rapidly than the rate that would be required by the 

proposed rule. [OAR-2009-0472-7531.1, p.2] 

Since the actual MY 2011 baseline is more fuel efficient than the previously assumed 

baseline, it is difficult to understand why the fuel economy projections for many of the 

alternatives that were considered in developing this proposed rule are less stringent than 

similar alternatives that were evaluated in the development of the MY 2011-2015 

standards. For example, the 'Total Costs = Total Benefits (TCTB)' alternative that was 

evaluated in the previous CAFE proposal was projected to result in a required fuel 

economy of 43.3 mpg for MY 2015 passenger vehicles and 33.1 mpg for MY 2015 light 

trucks. Conversely, the TCTB alternative in today's proposal is projected to only achieve 

40.8 mpg for MY 2015 passenger vehicles and 30.9 mpg for MY 2015 light trucks. We 

request that NHTSA and EPA provide an explanation as to why this 'backsliding' of the 

effectiveness of similar alternatives has occurred between the 2008 and 2009 proposals. 

[OAR-2009-0472-7531.1, p.2] 

Consumer Federation of America 
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[These comments were submitted as testimony at the Detroit public hearing. See docket 

number OAR-2009-0472-6185, pp. 106-107.] 

In particular, EPA and NHTSA should balance the three goals in the underlying statutes 

of technical feasibility, economic practicability, and the need to conserve energy, and the 

statutes really are in agreement here, by setting the standard at the mid point of the range 

between maximum economic benefit and maximum practicable environmental benefit. 

EPA Response: 

The Center for Biological Diversity states that the agencies arbitrarily “do not analyze the 

costs and benefits of requiring manufacturers to abandon the [5-year] redesign cycle in 

favor of much quicker and more nimble technology implementation” (comment p. 14). 

They argue further that “strict adherence to this [5-year] cycle is baked into each analysis 

the Agencies present”, and that this analysis is therefore arbitrary. 

The Center’s reference to “much quicker and more nimble technology implementation” 

glosses over many critical considerations. Manufacturers adding substantial amounts of 

new technology to an existing vehicle would need to go through a redesign of that 

vehicle, in the sense that all of the steps undertaken during the standard redesign cycle 

would be needed to be undertaken earlier. For example, manufacturers would have to 

assure that the new technology features are properly calibrated with other vehicle 

systems, that all safety standards are satisfied, that emission standards can be met, etc. 

Vehicle platforms may need to be modified, as well. The upshot is that manufacturers 

cannot bypass a redesign process as the Center assumes. They essentially have to 

redesign in a more rapid timeframe – i.e. to accelerate the redesign cycle process. 

This is not a mere semantic distinction. As just explained, all of the collateral design 

steps that go with redesign would need to be undertaken. The next paragraph notes the 

resource implications involved in doing so. Manufacturers could avoid the most drastic 

of these implications by adding less technology, but this would defeat the purpose of the 

rule to force more widespread penetration of the more significant GHG control 

technologies and not to forego ultimate feasible and cost-effective emission reductions in 

favor of quicker implementation of less technology. (EPA already assumes that the most 

easily applied technology can be applied in the 2012 MY to all vehicles.) 

If full scale redesigns are attempted earlier, then manufacturers would have to ramp up 

resources drastically in order to do so. As a simple example, if a redesign cycle is 

shortened from five years to four, 25% more engineers would be required. Furthermore, 

redesigns require a significant outlay of capital from the manufacturer. This includes 

research and development, material and equipment purchasing, overhead, benefits, etc. 

These costs are significant and are included in the cost estimates for the technologies in 

this rule. Because of the manpower and financial capital constraints, it would only be 

possible to redesign all the vehicles across a manufacturer’s line simultaneously if the 

manufacturer has access to tremendous amounts of ready capital and an unrealistically 

large engineering staff. However no major automotive firm in the world has the 
EPA Response to Comments 

3-74

capability to undertake such an effort, and it is unlikely that the supplier basis could 

support such an effort if it was required by all major automotive firms. The commenter 

provides no information to challenge this conclusion.3 Even if this unlikely condition 

were possible, the large engineering staff would then have to be downsized once the 

entire fleet had been redesigned at this faster pace. The overall effect would be to 

significantly increase the cost of the vehicles. 

Moreover, there is much evidence to indicate that the average redesign cycle in the 

industry is about 5 years.4

 There are some manufacturers who have longer cycles, and 

there are others who have shorter cycles for some of their products. EPA believes that 

there are no full line manufacturers who can maintain significant redesigns of vehicles 

(with relative large sales) in 1 or 2 years, and CBD has provided no evidence indicating 

this is technically feasible. 

Accordingly, the agencies have not provided quantified estimates of the costs of massive, 

industry-wide acceleration of the redesign process but note that such an undertaking 

raises the most basic issues of feasibility coupled with enormous increase in costs. 

The Center also comments that because the standards are based on performance of 

technology already in existence, this indicates that much more stringent standards should 

be adopted, and even that the MY 2016 standards are immediately feasible. The Center 

also points to fuel economy standards of other industrialized nations as support for its 

proposition that much more stringent standards should be adopted. 

As explained in section III.D. 7 of the preamble to the final rule, existence of technology 

cannot be equated with its fleet-wide application. Significant issues of lead time exist to 

allow the large-scale penetration of technology throughout the fleet to meet the final 

standards, much less more stringent alternatives. Among the critical issues (largely 

ignored by the commenter) are the availability of sufficient capital and technical 

personnel. In addition, it takes several years to redesign a vehicle, and several more to 

design an entirely new vehicle not based on an existing platform. Thus, redesign cycles 

are an inextricable component of adequate lead time under the Act. Other lead time and 

cost issues are raised as well, such as the issue of stranded capital both for the original 

equipment manufacturer (OEM), but up and down the OEM supply chain. 

Nor is the comparison with other nations’ fuel economy standards proper, given (among 

other things) the different fleet mixes involved and the different test procedures utilized. 

In fact, as explained in the preamble discussion, these nations’ standards are predicated 

 

3

 The commenter states that the redesign cycle has vanished altogether in some instances, citing to 74 FR at 

49488. This passage, however, describes vehicle models for which production has ceased altogether or has 

been drastically curtailed. The commenter also states, correctly, that some vehicle models are redesigned 

and refreshed more frequently in some years than in others (citing to 74 FR at 49654), but this only 

indicates that the typical 5-year redesign cycle occurs at different times for different vehicles. The fact that 

redesign cycles are staggered throws no light on the issue raised by the commenter of the feasibility and 

costs of drastically accelerating the redesign process industry-wide. 4

 See for example “Car Wars 2010-2013, The U.S. automotive product pipeline”, John Murphy, Research 

Analyst, Bank of America/Merrill Lynch research paper, July 15, 2009. 
EPA CO2 Standards 

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on use of the same technologies projected for the final GHG standards. Moreover, if one 

is to compare these standards with those of another entity, the most directly relevant 

comparison is with the GHG standards for light duty vehicles of the State of California. 

The federal standards are of comparable stringency. 

A comparison of the 2011 MY fuel economy and CO2 emission levels projected in 

NHTSA's 2011 MY CAFE rule (including the proposed rule which contained projections 

through 2016) and those projected is only minimally relevant to the projection of feasible 

and cost effective standards in MY 2016. First, the sales of specific vehicle models and 

vehicle segments differ significantly between the two rulemaking analyses. The 

projections for the NHTSA 2011 CAFE rule were based in large part on manufacturer 

product plans which are now several years old. Those for the current rule are based on 

projections made by an industry analyst, CSM International. Differences in projected 

fleetwide fuel economy and CO2 emission levels would be primarily a function of 

relative car and trucks sales and relative size of these vehicles. Both of these factors 

change between MYs 2011 and 2016 in both sets of projections. Thus, few legitimate 

inferences can be drawn from the difference between the MY 2011 rule projections about 

MY 2016 and the analysis for this final rule. 

The specific cost and effectiveness of a number of technologies has also changed 

between the two rule making analyses. Future fuel prices also differ, as do a number of 

other important factors, such as annual VMT per vehicle, the rebound rate, etc. Thus, 

again, the comparison being made by NYDOT between the CAFE 2011 MY fuel 

economy levels in previous rules to that made in the NPRM is not reliable, and the 

comparison is particularly misplaced regarding those projections based on economic 

criteria, such as standards projected to maximize net quantifiable benefits. 

NYDOT also recommends that EPA implement CO2 standards equivalent to the fuel 

economy standards resulting from NHTSA’s 'Total Costs Equal Total Benefits (TCTB)' 

alternative for passenger vehicles and the 'Technology Exhaustion' alternative for light 

duty trucks. These two scenarios require the application of even more technology and 

involve even higher costs than that of the 6% reduction per year scenario. Thus, the same 

concerns presented above for the 6% reduction per year standards apply to an even 

greater extent here. This is sufficient reason to reject NYDOT’s recommendation. 

3.3.2 2012-2015 Standards 75 

Organization:Mercedes-Benz (Daimler AG) 

Chrysler Group LLC (Chrysler) 

Mitsubishi Motors R & D of America (MRDA) 

Volkswagen Group of America (Volkswagen) 

Toyota Motor North America 

Recreational Vehicle Industry Association (RVIA) 

Mercedes-Benz (Daimler AG) 
EPA Response to Comments 

3-76

The passenger car standards should be set to reach the MY 2016 goals through a 

generally linear stringency level phase-in through MYs 2012-2015. Using a generally 

linear phase-in is both consistent with the agencies’ Notice of Intent and with the 

overarching policy of transitioning to a U.S. vehicle fleet. [OAR-2009-0472-7193.2, p.1] 

[The following comments are nearly the entirety of the statement for the above 

subheading, from [OAR-2009-0472-7193.2, p.2-4] 

In the Notice of Intent published on May 22, 2009 and announcing EPA and NHTSA’s 

intention to publish joint rulemaking, the agencies made clear their intentions to propose 

GHG standards capable of achieving on average 250 g/mile of CO2 in model year 2016, 

and further that “[t]he standards for earlier years would begin with the 2012 model year, 

with a generally linear phase-in from MY 2012 through to model year 2016. NHTSA 

expects to propose appropriate related CAFE standards.” 74 Fed. Reg. 24007, 24008 

(May 22, 2009) (emphasis added). 

Rather than following the foregoing guideline, the proposed standards place a substantial 

amount of emphasis on passenger car improvement in the earlier model years. This 

creates additional challenges, not anticipated at the time of the Notice of Intent, for 

manufacturers whose fleets are primarily composed of passenger cars, and in particular 

for limited-line, lower-volume manufacturers who were to be provided lead time through 

the TLAAS. 

These additional challenges not only make the flexibilities and credits proposed in the 

GHG program more significant, they also mandate careful consideration by the agencies 

of additional flexibilities, such as including air conditioning credits in the CAFE 

program. Further, placing an earlier and larger burden on the light-duty vehicle 

population, as opposed to equalizing the annual increases, raises serious questions as to 

whether the regulatory policy of this proposal is encouraging the appropriate type of fleet 

mix to redress the serious public health and welfare and energy security concerns leading 

to this rulemaking. 

As noted above, the Notice of Intent expressed an intention to design a program that 

would equal the levels in the California program at the end of the rulemaking period, or 

by MY 2016. The Notice of Intent clearly indicates not that California levels were to be 

achieved each year, but rather that they would be reached by MY 2016 and that the 

interim years would be generally linear. DAG submitted a letter to Secretary LaHood and 

Administrator Jackson making clear its commitments based on EPA proposing national 

GHG standards and NHTSA proposing CAFE standards for MYs 2012-2016 “as 

substantially described in the May, 2009 Notice of Intent to conduct rulemaking” and 

certain additional actions. See DAG Commitment Letter, available at 

http://www.epa.gov/otaq/climate/regulations.htm#1a. While DAG nonetheless remains 

committed to meeting the standards, DAG considers the movement away from generally 

linear stringency changes to those focusing on MYs 2012 and 2013 to be a substantial 

deviation from the description provided in the May 2009 Notice of Intent. 
EPA CO2 Standards 

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Chrysler Group LLC (Chrysler) 

The endpoint 2016 model year EPA greenhouse gas industry fleet average standard of 

250 g/mile was as expected, based on the Notice of Intent. The Notice of Intent states that 

'the standards for earlier years (pre-2016) would begin with the 2012 model year, with a 

generally linear phase-in from MY 2012 through to model year 2016' (emphasis added). 

However, the Proposed Rules shows that the intermediate 2012-15 MY standards 

increase in a significantly non-linear fashion at the start of the program - front loading a 

disproportionate amount of the task to the early years of the program. In particular, the 

passenger car standard increase between the 2011 and 2012 model years is more 

aggressive than necessary. [NHTSA-2009-0059-0124, p.8] [[Chrysler also submitted 

these comments as testimony at the Detroit public hearing, See docket number EPA-HQOAR-2009-0472-6185, p. 49.] 

Moreover, President Obama's Rose Garden Remarks also noted that 'the goal is to set one 

national standard that will rapidly increase fuel efficiency ... by an average of five percent 

each year between 2012 and 2016, building on the 2011 standard ..., (emphasis added). 

Although 2012 is the first year of the EPA program, given the 'direct and close, 

relationship between tailpipe greenhouse gas emissions and fuel economy, the 2011 

NHTSA CAFE standards (and their equivalent in greenhouse gas emissions terms) 

should have been used when determining the phase-in to the 2016 model year goal. 

[NHTSA-2009-0059-0124, p.8] 

In the NPRM, excluding model years 2009-2011, EPA and NHTSA propose a generally 

linear phase-in between the 2012 and 2016 model years, but the passenger car greenhouse 

gas emission reduction of 11.2% between the 2011-2012 model years is extremely steep 

and unprecedented. The industry average truck fleet also has the largest GHG emission 

reduction of 4.6% between the 2011-2012 model years. [NHTSA-2009-0059-0124, p.8] 

In addition to the numerically large increase in passenger car standards between the 2011 

and 2012 model years, manufacturers need to simultaneously accommodate changes to 

the passenger car fleet definition. Beginning in the 2011 model year, certain 2WD lightduty trucks are reclassified as passenger cars. In the 2012 model year, additional lightduty trucks are re-classified as passenger cars based on a lack of 3-row standard seating. 

These reclassifications move truck-like utility vehicles from the light-duty truck category 

to the passenger car category, subjecting them to more stringent standards and, as a 

result, they become relatively poorer fuel economy and greenhouse gas performers, 

reducing manufacturers' ability to comply with the more stringent passenger car 

standards. [NHTSA-2009-0059-0124, p.9] 

While the ability to earn credits and the carry-forward and carry-back credit flexibility 

helps manufacturers' ability to comply, the large jump in standards is at a time when 

manufacturers can do little to impact the actual fleet performance. Given typical model 

year lead times, this setting of extremely aggressive 2012 model year standards does not 

allow for sufficient leadtime to re-engineer vehicles to meet this stringency increase. The 

type of major product changes necessary to increase vehicle efficiency by over 10% 
EPA Response to Comments 

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requires sufficient time to re-engineer vehicles. This type of change normally occurs 

during a product re-design or a new product release, not mid-model year modifications. 

[NHTSA-2009-0059-0124, p.9] 

Recommendation: 

Chrysler recommends that the agencies set passenger car and light-duty truck standards 

with a linear phase-in to the 2016 model year goals as envisioned during the signing of 

the May 2009 manufacturer and California Letters of Intent in response to the National 

Program. Chrysler supports the general methodology of linearizing the standards 

suggested by the Alliance of Automobile Manufacturers. [NHTSA-2009-0059-0124, p.9] 

Mitsubishi Motors R & D of America (MRDA) 

There are significant challenges in the increased stringency between the 2011 and 2012 

model years. The rate of this increase will likely result in excessive costs and burdens as 

many vehicles are quickly reconfigured to comply with these new standards. [OAR-2009-

0472-7125.1, p.1] 

Smaller Automakers need more time to develop new technologies and to implement 

design changes. The proportional effort is much greater to meet stringent standards and 

far less resources are available for long term R&D to develop and introduce new 

technologies. Further, smaller Automakers are unable to negotiate timely, cost effective 

supplier contracts – suppliers favor high volume Automakers and limit the technology 

available to smaller Automakers. Overall, it takes longer/costs more for limited line 

vehicle manufacturers to introduce new technologies. [OAR-2009-0472-7125.1, p.2] 

The proposed stringent standards are particularly challenging for limited line, 

“intermediate volume” manufacturers, especially considering that Mitsubishi Motors was 

not subject to the California AB1493 GHG regulations until the MY 2016. [OAR-2009-

0472-7125.1, p.5] 

Volkswagen Group of America (Volkswagen) 

In addition, Volkswagen questions the need for the large step in stringency proposed 

from the 2011 MY CAFE regulation to the 2012 MY targets proposed in the NPRM. We 

believe the 2016 MY target combined fleet target of 250 gram/mile is achievable and that 

the targets for each model year can be adjusted to meet the same air quality targets 

without such a large jump in the requirements in the first year of the regulation. [OAR2009-0472-7210.1, p.5] 

Toyota Motor North America 

Ramp Rate of the Target Curves 
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The rate of increase in the proposed car targets by both agencies is front-loaded and 

should be adjusted. As can be seen in Figures 1 and 2, the rate of increase in the car target 

curves between 2011 MY and 2012MY is inconsistent with the rates of increase in 

subsequent model years. The largest increase in target values occurs in the first year of 

the proposed regulation, when manufacturers have the least available lead time to 

integrate technology into the fleet. While the curves are shown only for NHTSA's portion 

of the joint proposal (in MPG space), EPA's proposed target curves show the same trend. 

[OAR-2009-0472-7291,p.9] 

Consistent with comments provided by Toyota in previous CAFE rulemakings, we 

suggest the rate of increase be 'smoothed' between the existing 2011 model year car 

curves and the final 2016 model year proposed curves. Such an adjustment would align 

more closely with product planning cycles and lead time requirements. [OAR-2009-

0472-7291,p.9] [See OAR-2009-0472-7291, pp.9-11 for a detailed discussion on this 

issue] 

Recreational Vehicle Industry Association (RVIA) 

RVIA believes that with the non-linear standards increase proposed, to achieve 

compliance, some manufacturers may opt to eliminate certain non-compliant vehicles 

from their product mix since compliance otherwise may not be technologically feasible. 

We are concerned that tow vehicles could be likely candidates for such eliminations since 

the cost of technology to achieve such abrupt improvements may diminish their 

commercial viability. To ensure that highway safety and air quality are not negatively 

impacted by RV owners who tow their RV trailers with undersized vehicles or keep 

older, less environmentally friendly tow vehicles on the road, we ask that you implement 

a more gradual rollout of the standards. [NHTSA-2009-0059-0107, p.5] 

One of the key points found in the General Motors comments dated November 20, 2009, 

is that the '... the car standard detailed in the NPRM does not even 'encourage' limited 

product line manufacturers to increase vehicle fuel economy.' GM goes on to state, 

'Because the NPRM curves require little improvement from cars and small trucks, there is 

a lost opportunity for fuels savings for the nation. As an example. increasing the 

stringency of the NPRM curves by 10% for the smallest vehicles and reducing the 

stringency by 5% for the largest trucks, would result in more energy savings, and enable 

more economically practical application of technology across the country.' [NHTSA2009-0059-0107, pp.5-6] 

Given that small cars are essentially already meeting the 2016 model year standards, such 

a trade off makes sense. RVIA would support such a measure and encourages a careful 

re-examination of the assigned mpg/C02 targets for both small vehicles and larger trucks. 

[NHTSA-2009-0059-0107, p.6] 

EPA Response:
EPA Response to Comments 

3-80

EPA believes that the standards for MY 2012-2016 are consistent with the Notice of 

Intent which stated that “The standards for earlier years would begin with the 2012 

model year, with a generally linear phase-in from MY 2012 through to model year 2016.” 

Those standards likewise represent a reasonable exercise of EPA's authority under section 

202 (a)(1) of the Act. See, e.g. section III.D of the preamble to the final rule; see also 

comment response 3.3.3.3.1. EPA acknowledges that the standards for passenger cars 

have a higher rate of increase from MY 2011 CAFE standards to MY 2012 GHG 

standards; however there are several reasons that this is a misleading comparison. First, 

the form of the 2011 standard (the footprint based curve) differs considerably from the 

form of the MY2012-2016 standards. The baseline and reference fleets and many of the 

underlying technical assumptions used to approximate the fleet targets and stringencies 

for the 2011 rulemaking also differ from the ones used for this rule. The automotive 

industry commenters above do not point to a specific technical issue with the standards, 

but rather to their desire for a linear phase-in from the existing 2011 CAFE standards. 

These arguments are addressed in NHTSA’s response to comments in section IV of the 

preamble to the final rule and in the NHTSA RIA. As to meeting the 2012 MY GHG 

standards, EPA notes further that the various flexibility mechanisms in the rule (e.g. 

TLAAS, early generation of credits for out-performing California standards, averaging, 

banking and trading with carry backward of credits if needed) ) provide ready means for 

manufacturers to comply with the MY 2012 GHG standard. For example, since issuance 

of the NPRM, it has come to light that some manufacturers may be implementing more 

air conditioner leakage reduction technologies than EPA had anticipated (see section 

III.C.1.a of the final preamble; see also comment response 3.1). This would result in 

additional early credits that could be carried forward to help meet MY 2012 standards. 

Because of these arguments, and due to the support for the phase-in of the standards from 

other stakeholders (including the California Air Resources Board) the agency is not 

making significant changes to the MY 2012-2016 GHG standards. For further discussion 

on the feasibility of the EPA standards, see section III.D of the final preamble. 

3.3.3 Post 2016 standards 

Organization: Sierra Club 

 Ford Motor Company 

 Northeast States for Coordinated Air Use Management 

 BMW of North America, LLC (BMW) 

 New York State Department of Environmental Conservation 

 State of Connecticut Department of Environmental Protection 

 Union of Concerned Scientists 

 

Comment: 

The industry, however, needs a longer term and stronger direction to be able to produce 

dramatically cleaner vehicles. We urge EPA to move swiftly to set standards that will 

apply to vehicles beyond 2017 and to consider a longer time horizon to ensure that lead 
EPA CO2 Standards 

3-81 

time is not a constraint on the “technology forcing” authority EPA can exercise under the 

Clean Air Act. As soon as the endangerment finding is final, EPA will have the 

obligation to set standards for greenhouse gas pollutants that protect public health and 

welfare. To do this effectively, EPA should model where vehicle standards need to be in 

2050 to achieve an 80% reduction (or the appropriate science-based emissions reductions 

needed) in vehicle emissions. Starting in 2017, EPA should give a clear “technology 

forcing” path to the auto industry. [OAR-2009-0472-7278.1, p.13] 

A longer term approach is consistent with EPA’s authority and statutory obligation under 

the Clean Air Act and with the analysis of the industry’s ability to achieve higher 

standards in this NPRM. In this NPRM EPA considers three options. EPA identifies the 

annual 4.3% decrease in g/mi CO2e as the preferred option – the option that yields the 

250 g/mi CO2 standard President Obama announced in May 2009. The agency considers 

a lower 4% and higher 6% option. EPA notes that that the 4% option 'forgoes CO2 

reductions which can be achieved at reasonable cost.” EPA also notes that this lower 

option would be too weak to achieve equivalence with California’s Pavley [OAR-2009-

0472-7278.1, p.13] standards and would, therefore violate the agreement. The 6% 

increase would increase the cost of a new vehicle by an average $500 with additional 

greenhouse gas reductions. EPA determines that this level is not “technically infeasible” 

but that it would be “overly stringent” given the condition of the industry and lack of lead 

time. EPA concludes that the preferred option demands enough of the industry in terms 

of technology change and cost. [OAR-2009-0472-7278.1, p.14] 

EPA seeks comment on its judgment regarding the three options. In sum, EPA concludes 

that it “does not believe the 6% per year alternative would be an appropriate balance of 

various relevant factors for model years 2012–1016.” We applaud EPA for ensuring that 

equivalence with California’s standards are met in this first National Program, but urge 

the agency to ensure that its next standards do not leave greenhouse gas reductions and 

consumer savings unrealized. To do this EPA must look at the longer term and push the 

industry’s best technologies into new cars and light trucks that both force technology 

forward and maximize their greenhouse gas potential. [OAR-2009-0472-7278.1, p.14] 

NHTSA provides a slightly different approach to a range of from a 3% per year increase 

in fuel economy to 7% - but notes that the 4.3% preferred option achieves the 250 g/mi 

CO2 needed for equivalence with CA’s program and yields a fleetwide average fuel 

economy of 34.1 mpg (equivalent to 250 g/CO2e). NHTSA, based on its statutory 

obligation to consider the need of the nation to conserve oil, concludes that weaker 

increases – 3 or 4% would “not produce the reductions in fuel savings and CO2 

emissions that the Nation needs at this time.” NHTSA’s conclusion that weaker standards 

leave substantial benefits on the table is not matched by the rationale for picking the 

preferred option over the somewhat stronger choices. “NHTSA determined that it would 

be inappropriate to propose any of the other more stringent alternatives due” to lead time 

issues and “economically critical state of the industry.” NHTSA diverges from past 

proposals which considered setting the standards at a level that maximizes societal net 

benefits. [OAR-2009-0472-7278.1, p.14] 
EPA Response to Comments 

3-82

Ford Motor Company 

Above all, Ford strongly believes that measures need to be put in place to ensure that the 

national program approach outlined in this rulemaking continues beyond 2016. We were 

pleased when the President brought the stakeholders together to agree on a roadmap for 

harmonizing greenhouse gas emissions and CAFE standards at the federal level. The 

EPA and NHTSA proposal gives us greater clarity, certainty and flexibility to achieve the 

aggressive greenhouse gas emissions reduction goals that we all share. Most importantly, 

it avoids the patchwork and overlapping requirements that we would have faced under 

the status quo. Nonetheless, it is only a first step, and it is critical that we avoid returning 

to the patchwork approach after 2016. We look forward to working with the same 

stakeholders toward a permanent national program for 2017 and beyond. [OAR-2009-

0472-7082.1, Cover letter, p.2] 

. Although the national program created by this rule covers the 2012-2016 model years, it 

is critical that measures be put in place to establish a permanent national program for the 

2017 model year and beyond. [OAR-2009-0472-7082.1, p.1] 

Northeast States for Coordinated Air Use Management 

NESCAUM is very supportive of the proposed federal vehicle control program as a 

powerful first step in addressing GHG emissions from motor vehicles. However, 

additional reductions will be needed for vehicles beyond model year 2016. NESCAUM is 

committed to working with the EPA, NHTSA, the California Air Resources Board, and 

other stakeholders to address global climate change and the need to reduce oil 

consumption by developing strong motor vehicle GHG standards for model years after 

2016. These additional reductions will be critical for the states in the Northeast to achieve 

their 2020 and 2050 GHG goals. [OAR-2009-0472-7235.1, p.7] 

BMW of North America, LLC (BMW) 

To ensure future regulatory stability for the auto industry while continuing to reduce 

greenhouse gas emissions and improve fuel fleet economy, BMW strongly recommends a 

comparable National Program in the model years beyond 2016. We are very, very happy 

with the way the negotiations, discussions, collaboration and cooperation have gone to 

come up with this single national standard and we very, very strongly support the same 

process for the years 2016 and beyond. [These comments were submitted as testimony at 

the New York public hearing. See docket number EPA-HQ-OAR-2009-0472-4621, p. 

132.] 

New York State Department of Environmental Conservation 

We do not believe that the 2016 model year standards proposed here represent the 

ultimate, lowest limit for light duty vehicle greenhouse gas emissions. We believe that 

lower emissions will be possible in the future without sacrificing the utility these vehicles 

provide their owners. We urge EPA and NHTSA to continue to evaluate the feasibility of 
EPA CO2 Standards 

3-83 

more stringent regulations. We do hope the nation will not have to wait another 30 years 

for the next step. [OAR-2009-0472-7454, cover page 2] 

State of Connecticut Department of Environmental Protection 

Any standards developed for 2016 and later should comprehensively evaluate the need 

for and benefits of a multi-pollutant perspective, including criteria and air toxics along 

with GHGs, that views vehicles and fuels as a system. Assuming additional standards are 

warranted, the next phase of light duty vehicle standards should view the transportation 

system in a holistic manner that takes into account vehicles, fuels and the transportation 

infrastructure that can be designed to enable greater levels of pollution or to minimize it. 

[OAR-2009-0472-7301, p.2] 

Union of Concerned Scientists 

Finally, I wanted to discuss the importance of establishing a strong regulatory framework 

for future rulemakings as part of this process. While the immediate focus of this 

rulemaking is achieving the President's goals through model year 2016, it will also set the 

precedent for future standards beyond that date. [These comments were submitted as 

testimony at the New York public hearing. See docket number EPA-HQ-OAR-2009-

0472-4621, p. 101.] 

It is critical that future standards achieve the maximum feasible [These comments were 

submitted as testimony at the New York public hearing. See docket number EPA-HQOAR-2009-0472-4621, p. 101.] level of energy savings as required by EPAct and EISA 

as well as fulfill EPA's obligations under the Clean Air Act. Under this rulemaking, EPA 

and DOT have set standards that fall below the economically practicable levels indicated 

by the agencies' own analysis. This means that Americans will not realize the full benefits 

of the Nation Program through 2016. UCS recognizes that the current standards were set 

at a more modest level to help automakers achieve the standards given the financial 

problems facing the industry and the challenges of navigating a new regulatory structure. 

However, it's critical that future standards are set at levels that achieve the maximum 

benefits of the National Program. These standards should be based on sound modeling 

that uses accurate technology assessments, verified costs and transparent input. [These 

comments were submitted as testimony at the New York public hearing. See docket 

number EPA-HQ-OAR-2009-0472-4621, p. 102.] 

EPA Response:

EPA appreciates all of the comments expressing concern that 2017 and later GHG 

standards be set sufficiently soon so that the lack of available lead time does not limit the 

stringency of the standards. EPA is also sensitive to how complex and undertaking this 

will be and that a new National Program will provide a level of certainty for the 

manufacturers so that they may modify their long term product planning. We will 
EPA Response to Comments 

3-84

consider these issues seriously as we proceed to evaluate post 2016 GHG standards for 

light-duty vehicles. 

3.3.4 GHG Emissions Backstops 

In the proposal, EPA and NHTSA recognized “that there is some possibility that low fuel 

prices during the years in which MY 2012-2016 vehicles are in service might lead to less 

than currently anticipated fuel savings and emissions reductions. One way to assure that 

emission reductions are achieved in fact is through the use of explicit backstops, fleet 

average standards established at an absolute level.” EPA stated that a backstop “could be 

adopted under section 202(a) of the CAA assuming it could be justified under the 

relevant statutory criteria.” EPA did not propose backstop standards, but sought 

comment on possible backstop approaches. 

EPA and NHTSA received many comments on backstops. In this section, EPA responds 

to both specific comments on GHG emissions backstops, as well as to general comments 

on backstops that were submitted to both EPA and NHTSA. In the latter case, where 

comments were made jointly on both EPA GHG emissions backstops and NHTSA CAFE 

backstops, EPA’s response only addresses the issue of GHG emissions backstops. 

EPA received 26 public comments on the issue of GHG emissions backstops. There is 

significant overlap among the comments on this issue, and the structure of this section is 

to provide a comprehensive sampling of excerpts of these 26 comments, followed by an 

EPA response to the comments organized into 3 sections: 

 Whether EPA has the statutory authority to establish GHG emissions backstops 

 Whether EPA should establish GHG emissions backstops 

 Alternative backstop approaches to universal GHG emissions backstops 

Organization: Alliance of Automobile Manufacturers (Alliance) 

American Council for an Energy Efficient Economy 

American Lung Association of California 

Association of International Automobile Manufacturers (AIAM) 

California Air Resources Board 

California State Senate 

Center for Biological Diversity 

Connecticut Department of Environmental Protection 

Environment Michigan 

Environment New Jersey 

Ford Motor Company 

Mass Comment Campaign (2,322 comments) (unknown organization) 

Mass Comment Campaign (326 comments) (Student PIRGs) 

Massachusetts Department of Environmental Protection 

National Automobile Dealers Association (NADA) 

Natural Resources Defense Council 

Northeast States for Coordinated Air Use Management (NESCAUM) 

Public Citizen Safe Climate Campaign 
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3-85 

Seal, Kathy 

Sierra Club 

State of New Jersey 

Toyota Motor North America 

Union of Concerned Scientists 

United Auto Workers 

University of Pennsylvania Environmental Law Project 

Washington Department of Ecology 

Comment: 

Ford Motor Company

Backstops 

Backstops should not be combined with attribute-based standards unless specifically 

required by statute. Backstops are inefficient and force manufacturers to produce vehicles 

that consumers may not want. Moreover, they are unnecessary. The sloped portion of the 

piecewise linear curves takes into account size based product mix differences across the 

industry and adjusts automatically for changes in vehicle size mix in response to 

economic conditions and consumer preferences. The flattened portion of the car and truck 

curves serves a function akin to a backstop by discouraging manufacturers from building 

larger vehicles. Moreover, NHTSA has commented in past rulemakings that the curve of 

an attribute-based standard has several features that limit backsliding. 74 FR at 14410. 

[OAR-2009-0472-7082.1, pp. 2-3] 

GHG Backstops 

EPA also seeks comment on the concept of 'backstop' standards for GHG emissions. In 

the NPRM, EPA proposes to establish motor vehicle GHG standards in the form of the 

'C02 curves.' The authority and justification for the establishment of any additional 

'backstop' standards underlying the CO2 curves is highly questionable. First, the Clean 

Air Act (CAA) § 202(a) does not mention the concept of 'backstop' standards, let alone 

authorize EPA to promulgate them. The concept of 'backstop' standards would involve 

promulgating two sets of standards (the main standards and the backstop standards) 

applicable to a given fleet of vehicles, and there is nothing in the CAA to suggest that 

Congress intended multiple 'layers' of standards to apply to vehicle emissions. 

Second, EPA is presumably already taking the statutory criteria in § 202(a) into account 

in its development of proposed CO2 curves. Backstop standards would need to meet the 

same criteria, and the agency would need to conduct a separate evaluation of both the 

backstop standards on their own, and the combination of the backstop and main 

standards, under those criteria. However, it is far from clear that the § 202 criteria would 

support a second set of standards for the same vehicles. Backstop standards would likely 

impact individual manufacturers very differently. The most likely effect of backstop 

standards would be to prevent full-line manufacturers from building and selling vehicles 
EPA Response to Comments 

3-86

that the market wants and that could otherwise be sold under the primary standards. This 

could have a significant financial impact on a few individual manufacturers most affected 

by the backstop standards, while having a negligible impact on overall projected 

concentrations of GHGs. A key purpose of the attribute based approach is to reduce the 

impact of vehicle mix and put manufacturers on a more level playing field; the addition 

of backstop standards would run counter to this goal. At present, the Administrator has no 

basis for concluding that backstop GHG standards are necessary to protect health and 

welfare. Given the potential costs and disparate competitive impacts that backstop 

standards may impose on individual manufacturers, EPA should not pursue such 

standards. 

Finally, as noted above, the intent of the joint EPA/NHTSA proposal is to ensure the 

greatest possible level of consistency between fuel economy standards issued by NHTSA 

and CO2 emission standards established by EPA. Even if EPA had the authority under 

the CAA to independently establish backstop standards, any EPA-issued CO2 emission 

standards would only serve to create new inconsistencies between the two programs, 

rather than further the goal of harmonization. Ford supports the harmonization of the 

EPA and NHTSA standards to the maximum extent possible, consistent with the 

Massachusetts v. EPA decision directing the federal agencies 'avoid inconsistency' in 

regulating greenhouse gas and fuel economy. The best way to 'avoid inconsistency' in this 

case is to allow NHTSA to establish the one backstop required by law for CAFE, and 

avoid any other backstops in the CAFE or GHG regulations. [OAR-2009-0472-7082.1, 

pp. 3-4] 

Association of International Automobile Manufacturers (AIAM) 

AIAM opposes the adoption of an additional “backstop” (i.e., minimum conventional) 

standard as a means of preventing market shifts toward larger vehicles. A backstop 

standard would defeat the purpose of the attribute format by limiting the flexibility of 

manufacturers to respond to shifts in market demand. Moreover, when Congress 

considered the need for a backstop standard in the similar context of CAFE standards 

under EISA, it adopted a limited “minimum standard” for domestic passenger 

automobiles. The EISA backstop provisions require that a manufacturer’s domestic 

passenger auto fleet must comply with the greater of 27.5 mpg and 92 percent of the 

combined domestic/import average fuel economy of all manufacturers. See EISA, section 

102(b)(4). An additional backstop standard in an EPA greenhouse gas regulatory program 

would be inconsistent with Congress’ intent and would be unnecessary and inappropriate. 

[OAR-2009-0472-7123.1, p.18] 

In Center for Biological Diversity v. NHTSA, the Ninth Circuit held that “neither the 

EPCA’s language nor structure explicitly requires NHTSA to adopt a backstop.” Rather, 

the court held that NHTSA had abused its discretion in failing to adequately consider the 

“need of the nation to conserve energy,” as it was required to do under 49 USC § 

32902(f), and did not show that a backstop would be technologically infeasible or 

economically impracticable. EISA did not expressly change this. The only backstops 

required are the requirements in EISA that the combined car-truck fuel economy values 
EPA CO2 Standards 

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reach 35 mpg by MY2020 and that the regulations established between MY2011 and 

MY2020 increase ratably to that goal. So long as NHTSA makes the showing that the 

standards meet these requirements, then nothing more should be required in terms of a 

backstop. [OAR-2009-0472-7123.1, p.18] 

[AIAM also submitted these comments as testimony at the Los Angeles public hearing. 

See docket LA EPA Hearing EPA-HQ-OAR-2009-0472-7283, pp. 28-32] 

Alliance of Automobile Manufacturers (Alliance) 

EPA's Backstop Authority 

As noted above, the intent of the joint EPA/NHTSA proposal is to ensure the greatest 

possible level of consistency between fuel economy standards issued by NHTSA and 

CO2 emission standards established by EPA. Even assuming EPA has the authority under 

the CAA to independently establish backstop standards, which is unclear, any EPAissued backstopped CO2 emission standards would only serve to create inconsistencies 

between the two programs, which would be contrary to the directive of the Supreme 

Court in Massachusetts v. EPA that federal agencies “avoid inconsistency” in regulating 

GHGs and fuel economy. See Massachusetts v. EPA, 549 U.S. 497, 532 (2007). 

Because of differences between EPCA and the CAA, NHTSA's proposed CAFE rules 

include domestic and import passenger car fleets, while EPA's proposed GHG rules do 

not include the domestic/import distinction for passenger cars. Under EISA, as explained 

above, only the domestic passenger car fleet is subject to a backstop under the NHTSA 

CAFE rules. EPA cannot duplicate this under its rules; any "backstop" standards EPA 

might seek to promulgate would presumably apply to all passenger cars. Were EPA to 

proceed with such backstop standards, it would impose a new set of regulatory 

requirements on a group of vehicles (imported passenger cars) that are not affected by the 

backstop under NHTSA's rules. Such an outcome would only add to the complexity of 

the manufacturers' task of producing a fleet of vehicles that complies with both sets of 

rules. Furthermore, backstops are unnecessary. The concern about widespread vehicle 

upsizing and a loss of anticipated benefits from the proposed standards is greatly 

overstated given practical design considerations and the shape of the proposed attribute 

curves. 

First, upsizing doesn’t necessarily present an easier compliance path. The basic concern 

about upsizing is that manufacturers will be motivated to increase the footprint of their 

fleet since larger vehicles have a less stringent standard under a size-based attribute 

system. This premise ignores that an increase in vehicle footprint typically results in an 

increase in vehicle weight. While upsizing may relax the fuel economy target, 

compliance may be just as difficult due to the loss of fuel economy from the added 

weight. 

Second, increasing vehicle footprint may require vehicle platform changes. The 

opportunity to upsize a vehicle platform is limited by product planning cycles which have 
EPA Response to Comments 

3-88

already been finalized in many cases for basic attributes such as vehicle size. Further, 

changes in vehicle footprint and platform present practical design considerations such as 

vehicle styling and vehicle dynamics/handling. Lastly, these platform changes are not 

without cost. 

Third, any erosion of the anticipated benefits is likely to be minimized by the substantial 

yearly increase in the target curves as well as the shape of the curves for any given year. 

For example, under the proposed standards, the efficiency of a car fleet with an average 

footprint of 45 sq ft is required to improve by 13 percent between 2012 and 2016. To 

completely negate this improvement, the footprint for every vehicle in this example fleet 

would have to be increased by an average of 7 sq ft over that 4-year period. For all of the 

technical reasons mentioned above, such a scenario is highly unlikely, if not impossible. 

Upsizing the footprint by even half this amount, while still not a reasonable scenario, 

would net significant fuel economy improvements. In fact, a backstop is already built 

into the standard curves to the extent the targets become constant or “clipped” as vehicle 

footprint continues to increase. Therefore, the target curves already help guard against 

any loss of benefit from theoretically upsizing into the “clipped” regime. 

From a policy perspective, a backstop introduces an unnecessary secondary standard that 

increases the complexity of the requirements and runs contrary to the intent of an 

attribute-based standard. For these policy reasons and in keeping with the Supreme 

Court's admonishment to "avoid inconsistency," EPA should not seek to adopt backstop 

standards. [OAR-2009-0472-6952, pp 35-36] 

Backstop Standards 

The agencies note that NHTSA is required to set minimum “backstop” standards for 

domestically-manufactured passenger cars and request comment on whether “backstop 

standards, or any other method within the agencies’ statutory authority, should and can be 

implemented in order to guarantee a level of CO2 emissions reductions and fuel savings 

under the attribute-based standards” for other categories of vehicles. Proposed 

Rulemaking To Establish Light-Duty Vehicle Greenhouse Gas Emission Standards and 

Corporate Average Fuel Economy Standards; Proposed Rule, 74 at 49,493. [OAR-2009-

0472-6952.1, p.37] 

The agencies have not established that they have authority to set back-stop standards that 

are not specifically authorized by Congress, and the Alliance is aware of no evidence 

indicating that such back-stops are necessary to achieve the goals and purposes of the 

national fuel economy and emissions programs. Such back-stops would unduly limit 

consumer choice and the industry’s ability to achieve the goals of the new national 

programs as cost-effectively as possible. [OAR-2009-0472-6952.1, p.37] 

Toyota Motor North America 

Anti-Backsliding Standards 
EPA CO2 Standards 

3-89 

Anti-backsliding or backstop standards currently apply only to the domestic passenger 

fleet under NHTSA's CAFE program. The Agencies request comment on whether antibacksliding provisions should be expanded to all vehicle fleets covered by the proposed 

NHTSA and EPA standards. NHTSA additionally proposes to revise the domestic car 

anti-backsliding standards that were set in the March 2009 final CAFE rule for 2011 MY. 

Finally, NHTSA proposes to use projected target fuel economy when establishing the 

minimum CAFE standard for the domestic passenger fleet. [OAR-2009-0472-7291, 

pp.14-15] 

Expanding Anti-Backsliding Standards to All Cars and Trucks 

Toyota opposes any expansion of anti-backsliding provisions beyond the domestic 

passenger car fleet in the CAFE program. The clear intent of Congress has been that 

NHTSA should only establish anti-backsliding standards for the domestic car fleet. As 

such, EPCA requires NHTSA to establish anti-backsliding standards for domestic 

passenger cars and does not authorize NHTSA to establish additional anti-backsliding 

standards for import cars and trucks. [OAR-2009-0472-7291, p.15] 

In the case of EPA and CAA, there is no explicit statutory authority that either compels 

or authorizes EPA to establish anti-backsliding standards for any class of light-duty 

vehicle. While EPA's authority may be ambiguous, it is clear that any EPA-issued antibacksliding standards would create new inconsistencies between the NHTSA and EPA 

programs, rather than support the goal of harmonization. NHTSA anti-backsliding 

standards are limited to domestic passenger cars, and the CAA cannot be used to 

duplicate a similar outcome since EPA's fleet definitions do not distinguish between 

domestic cars and import cars. The most 'harmonized' outcome is for NHTSA to proceed 

with the required domestic car anti-backsliding standard for the CAFE program, and for 

EPA to forego any attempt to set anti-backsliding standards under the CAA. [OAR-2009-

0472-7291, p.15] 

Notwithstanding the legal constraints described above, anti-backsliding standards are 

unnecessary. The concern about widespread vehicle upsizing and a loss of anticipated 

benefits from the proposed standards seems overstated given practical design 

considerations and the shape of the proposed attribute curves. [OAR-2009-0472-7291, 

p.15] [See OAR-2009-0472-7291, pp.15-16 for more discussion on this issue] 

Northeast States for Coordinated Air Use Management (NESCAUM) 

NESCAUM urges EPA and DOT to include a backstop mechanism for the standards. The 

shift in the market away from cars towards light trucks in the 1990s resulted in a decrease 

in the U.S. fleet average fuel economy. More recently, there has been a dramatic shift in 

the market towards 4 and 6 cylinder engines and away from 8 cylinder engines. This has 

been accompanied by a shift away from larger trucks and towards smaller trucks and 

cars. The technical analysis conducted for this proposal by EPA and DOT assumes that 

this trend will continue. Should there be a shift back toward higher CO2 emitting vehicles 

(as was the case in the 1990s) the emissions reductions projected by the agency could be 
EPA Response to Comments 

3-90

greatly overestimated. A backstop which sets a floor for reductions would address this 

potential problem. NESCAUM also urges the agencies to revisit the GHG standards and 

incorporate changes in the light-duty vehicle fleet into baseline assumptions. NESCAUM 

believes this is an important element to include in the final rule. We encourage the 

agencies to revisit and revise the light-duty GHG standards to correct for mistaken future 

projections. [OAR-2009-0472-7235.1, p.6] 

Public Citizen/Safe Climate Campaign 

Reaching the agency’s proposed standard of 250 g CO2/mi is predicated on the fleet mix 

of 67 percent cars and 33 percent light trucks in 2016, versus a fleet mix of 51 percent 

cars and 49 percent light trucks in 2008. Some of this shift in the market will result from 

the reclassification of a large number of vehicles that were previously categorized as light 

trucks to passenger cars, which will take effect in the 2011 model year, consistent with 

the final rule for 2011 fuel economy standards. Many of these affected vehicles are twowheel drive versions of vehicles that are also sold in a four-wheel drive configuration. 

[OAR-2009-0472-7050.1, p.2] 

This creates a problem for automakers in manufacturing and marketing these vehicles. 

Automakers would have to build a two-wheel drive version of a vehicle to fit on the “car 

curve” or meet the footprint-based target for fuel economy set for the passenger car fleet 

versus the light truck fleet. There is significant overlap of footprints which are on both 

curves. If automakers successfully build two-wheel drive versions that get the better fuel 

economy required on the car curve, it calls the two-fleet rule into question. Automakers 

may respond to reclassification by simply ceasing to offer two-wheel drive configurations 

of certain SUVs, which would distort the fleet mix and ultimately result in lowering fuel 

economy and raising greenhouse gas emissions. [OAR-2009-0472-7050.1, p.2] 

For this reason, the new standards should include backstops, or some other adjustment 

mechanisms to ensure that there is a firm level below which individual automakers and 

the economy-wide [OAR-2009-0472-7050.1, p.2] fleet of vehicles could not fall. The 

agencies already build in an expectation value based on analysis of the extent to which it 

is estimated that automakers will apply credits. EPA discusses several backstop options 

in its Advanced Notice of Proposed Rulemaking (ANPRM) on greenhouse gas regulation 

under the CAA. An approach that EPA outlines that could be most effective would have 

the standards automatically reset to account for increases in emissions that are 

inconsistent with agency projections at the time of promulgation: [OAR-2009-0472-

7050.1, p.3] 

For example, at the time of promulgation, EPA could assume a certain average industrywide carbon dioxide g/mi emissions level for 2011–2012. If, in 2013, EPA found that the 

average industry-wide emissions level in 2011–2012 was higher than projected in the 

final rule (and therefore the carbon dioxide emissions reductions were lower than 

projected because of higher than projected average footprint levels), then the backstop 

provisions would be triggered and the footprint curves for future years (say, 2016 and 

later) would be automatically changed to be more stringent and/or flatter in shape. This 
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approach would reframe the backstop issue in terms of industry-wide emissions 

performance, rather than in terms of individual automaker emissions performance. [OAR2009-0472-7050.1, p.3] 

A mechanism similar to this would prevent greenhouse gas emissions from rising because 

of unanticipated shifts in the fleet mix. We urge EPA and NHTSA to adopt backstops for 

greenhouse gas emissions and oil consumption to ensure that the goals of the program are 

met, and to discourage manufacturers from continuing to use the light truck loophole to 

undermine advances in fuel economy and reductions in greenhouse gas emissions. [OAR2009-0472-7050.1, p.3] 

Union of Concerned Scientists 

Given the possibility that a fleet average of 250 g/mi may not be reached – either by 

renewed interest in light trucks or by industry gaming of light truck classifications – it is 

critical that the agencies add a backstop in order to guarantee that the President’s 

emissions reductions and energy savings goals are met. While a backstop could take 

numerous forms, UCS suggests one that includes an automatic re-computation or 

“ratchet” of stringencies for subsequent years, such that the National Program’s 

cumulative emissions reductions and oil savings goals are fully achieved in 2016, even if 

falling short in early years of the program. [OAR-2009-0472-7181.1, p.5] 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.103-113 (p.6)] 

First, a backstop is necessary to meet California's standards. By 2016, new cars under the 

California program are expected to emit an average of 250 grams per mile of global 

warming pollution. 

To meet this level of emissions, the NPRM projects that in model year 2016 the fleet will 

consist of approximately two-thirds passenger cars and one-third light trucks. But in 

today's new vehicle fleet, nearly half of the vehicles sold in the U.S. are light trucks. 

While there has been a recent market trend away from light trucks towards cars, it 

is questionable whether market pressure alone will achieve such an overall notable shift 

by 2016. Additionally, automakers might strategically redesign vehicles in some classes 

so they might meet higher emissions limits. 

EPA and NHTSA should include a backstop in the final regulations to ensure that the 

fleet-wide standards are achieved in each model year and that by 2016 the fleet average is 

indeed 250 grams per mile. 

[Union of Concerned Scientists also submitted these comments as testimony at the New 

York public hearing, See docket number OAR-2009-0472-4621, pp. 95-98.] 

Natural Resources Defense Council 
EPA Response to Comments 

3-92

GHG Standards Need “Backstop” Standards to Ensure Environmental Objectives Are 

Not Undermined by Shifts in Sales Mix 

The proposed GHG standards lack a regulatory “backstop” mechanism to ensure the 

National Program goals for model year 2016 fleetwide average emission levels and the 

cumulative greenhouse gas and oil consumption reductions are met (see section I for the 

list of program goals). Such mechanisms are necessary because under an attribute-based 

system that has separate car and light truck standards, the fleet sales mix could shift to 

larger, higher-emitting vehicles and to a greater proportion of light trucks, resulting in 

greater fleetwide emissions and oil consumption thus undermining the achievement of the 

program goals. [OAR-2009-0472-7141.1, p. 8] 

In the proposal, the agencies recognize that attribute-based standards of the proposed 

standards do not guarantee that specific fleetwide GHG emission and fuel economy levels 

will be achieved. Achieving the pollution and oil reduction goals of the program are 

dependent on the overall market achieving the agencies’ forecasted sales and size mixes. 

To reach a fleetwide average of 250 g/mi in model year (MY) 2016, the agencies have set 

the individual car and light truck standards on the assumption of a specific car/light truck 

sales split. However, if the automakers shift their product mix to more light trucks or if 

they change the vehicle designs to classify fewer models as cars and more models as light 

trucks, this car/light truck split would be changed and the GHG and oil savings goals of 

the program would be undermined. This is of particular concern since the agencies’ 

forecast assumes a substantial increase in car sales share, from today’s 50.3 percent to 

66.5 percent by MY 2016.5 Starting in MY 2011, 2WD SUVs will be reclassified as 

cars, which could potentially increase the car portion by 10 percent. However to avoid the 

reclassification, automakers could simply cut back their 2WD SUV offerings. As a 

consequence, the car sales share could be lower than forecast and the National Program’s 

GHG and oil reduction goals would be missed. [OAR-2009-0472-7141.1, pp. 8-9] 

To prevent intentional and unintentional market shifts from undermining the 

environmental and oil savings benefits of the Program, we recommend EPA and NHTSA 

adopt manufacturer-specific backstop combined car and light truck standards that bar an 

individual automaker from exceeding its forecast GHG emission levels by more than 2 

gCO2-equivalent/mi (henceforth referred to as gCO2e/mi). Manufacturer-specific 

backstop standards would ensure that specific manufacturers can be held accountable if 

the overall fleet emission targets are missed. A manufacturer should be allowed no more 

than three years to make up any exceedance in its manufacturer-specific backstop 

standard. [OAR-2009-0472-7141.1, p. 9] 

[NRDC also submitted these comments as testimony at the Detroit public hearing, See 

docket number EPA-HQ-OAR-2009-0472-6185, pp. 20-21.] 

American Council for an Energy Efficient Economy 

The rule should include a provision to ensure that savings are not substantially 

undermined by discrepancies between the future vehicle market and the vehicle market 

projected by the agencies. The extent to which the standards could promote upsizing or 
EPA CO2 Standards 

3-93 

downsizing of vehicles depends in part upon the shape of the attribute curve. In reducing 

the steepness of the car curve, the agencies have reduced the incentive to upsize vehicles, 

because upsizing a vehicle will not increase the emissions target enough to offset the 

natural tendency of the larger vehicle to consume more fuel (although some distortion of 

the market through wheelbase manipulation could still occur). At the same time, the new 

standard is not flat enough to promote downsizing, except at the upper and lower ends of 

the size spectrum, which covers a negligible percent of vehicle models. 

The better choice of slope does not however address the issue of car/truck split, which 

presents perhaps the principal way in which the rule could fail to deliver the promised 

emissions reductions. If, for example, instead of reaching 67 percent of the market in 

2016 as the agencies predict, cars remain at the 58 percent share projected for 2011, 

savings attributable to the 2016 standards would be more than 10 percent less than the 

agencies have claimed. 

ACEEE recommends the addition of a “ratchet” mechanism that automatically increases 

the stringency of standards across the board, should emissions reductions fall below a 

predetermined percentage of projected reductions. Such a mechanism would be 

completely compatible with the flexibility offered by an attribute-based system. The need 

for a backstop will be even more evident if the agencies’ approach to setting the level of 

standards is changed to reflect the need to achieve certain levels of GHG emissions, as 

ACEEE recommends. 

Recommendation: Set an upper bound for the level of emissions and fuel consumption 

that can be associated with new light-duty vehicles in a given year. Any exceedence of 

that amount should result in an automatic tightening of the standard to ensure that 

vehicles in the next year will achieve the intended reductions. 

[ACEEE also submitted these comments as testimony at the New York public hearing, 

See docket number EPA-HQ-OAR-2009-0472-4621, p. 139.] 

California State Senate 

I would like the EPA and DOT to develop polices to ensure this program meets its stated 

goals. For example, what happens if a carmaker fails to meet your requirement and can’t 

meet the 2016 target? We are counting on you to achieve the emissions reductions and oil 

savings that we expect from this rule. [OAR-2009-0472-7275.1, p.5] 

[Fran Pavley also submitted these comments as testimony at the Los Angeles public 

hearing. See docket LA EPA Hearing EPA-HQ-OAR-2009-0472-7283, pp. 13-20] 

Sierra Club 

Both agencies should include a backstop in the final rule and we welcome the opportunity 

to comment on this essential element of a strong program. We are concerned that the joint 

proposal’s reliance upon attribute-based curves, whose efficacy will vary with the 
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3-94

composition of the fleet, imperils the President’s goal of “establishing consistent, 

harmonized, and streamlined requirements” to reduce greenhouse gas emissions and 

improve fuel efficiency. We suggest adopting a backstop rule to prevent shifts of fleet 

composition from undermining the standards and now renew that recommendation. A 

backstop will address weaknesses in the attribute based system and problems that may 

arise with credits – making sure the program stays on course. [OAR-2009-0472-7278.1, 

p.3] 

But the attribute approach, on its own, is imperfect for at least two substantial reasons: 

First, the ultimate effect of the curves is dependent upon the fleet mix. Both agencies 

have assumed a MY 2016 sales fleet mix of 67% cars and 33% trucks, which is a 

dramatic shift from the current 50/50 fleet mix. If assumptions regarding fleet mix 

underestimate the number of larger vehicles sold, then net benefits across the curves will 

be smaller than estimated. According to the Union of Concerned Scientists, a more truck 

heavy fleet mix (42%) would miss the 250 g/mi target by 7 g/mi or nearly 1 mpg and if 

the fleet mix in 2016 is similar to today’s mix, the standard will be missed by 13 g/mi or 

as much as 1.7 mpg. [OAR-2009-0472-7278.1, p.3] 

Second, because the attribute curves for light trucks are set at consistently less ambitious 

levels than those for cars, manufacturers have a strong incentive to attempt to classify 

their cars as ‘light trucks’, thereby escaping the more stringent car curves. As we 

documented in our July 1, 2008, comments on NHTSA’s then-proposed 2011-15 vehicle 

standards, several common vehicles, including the PT Cruiser and Subaru Outback, have 

been so misclassified. While many two-wheel drive compact SUVs will be reclassified 

beginning in MY 2011, manufacturers may opt to shift compact two- [OAR-2009-0472-

7278.1, p.3] wheel drive SUVs to a 4-wheel drive platform keep them on the truck curve, 

affecting the outcome of the program. [OAR-2009-0472-7278.1, p.4] 

To ensure that we achieve 250 g/mi and 34.1 mpg in MY 2016, both agencies 

should include manufacturer-specific, automatic ratchet ‘backstops’ – essentially hard 

fleetwide limits that would undergird the attribute curves, thereby accounting for fleet 

mixes and classifications that had not been predicted. The proposed rule recognizes 

the potential of backstops, acknowledging that “[o]ne way to assure that 

emissions reductions are achieved is through the use of explicit backstops, fleet 

average standards established at an absolute level.” Another option would be to 

require automakers who miss the 2016 targets make up that difference with banked 

credits. Banked credits would be turned into EPA and NHTSA and therefore retired from 

the system and make up for shortfalls. Yet, both EPA and NHTSA fail to adopt this 

simple fail-safe approach save for in the limited case of mileage standards for domestic 

cars. We urge the agencies to reconsider this choice. Below are detailed comments on 

both agencies authority to adopt backstop standards. [OAR-2009-0472-7278.1, p.4] 

The Clean Air Act affords EPA broad discretion to shape its rulemakings to be as 

effective as possible. Section 202(a) of the Act provides that EPA shall propose 

“standards applicable to the emission of any air pollutant from any class of classes of new 

motor vehicles or new motor vehicle engines, which in [EPA’s] judgment cause, or 
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3-95 

contribute, to air pollution which may reasonably be anticipated to endanger public health 

or welfare.28 It gives EPA significant authority to prescribe the precise form of these 

standards, as the proposed rule rightly states.29 So, as the proposed rule states, “[a] 

backstop . . . could be adopted under section 202(a) of the [Clean Air Act].”30 EPA has 

already described the acute dangers of allowing continued increases in greenhouse gases 

in its proposed endangerment and cause or contribute findings.31 Given that the statute’s 

“primary goal” is “pollution prevention,” (42 U.S.C. §7401(c)), EPA should be taking 

every measure to ensure that its proposed rule successfully drives reductions in the 

vehicular greenhouse gas emissions it has identified as an acute threat to public health 

and welfare. 

EPA’s prior work on setting greenhouse gas standards for vehicle referenced a possible 

“automatic ratchet.” EPA should determine what appropriate annual targets for cars and 

light trucks would be based upon a steady increase to meet the 2016 standards – and, 

indeed, it has already done this in the process of developing its attribute-based curves. 

Second, EPA would include a ‘ratchet’ mechanism in the rule that worked as follows: At 

the end of every year, EPA would determine whether the actual fleet produced in that 

year was consistent with its original predictions. If not, EPA would automatically revise 

the attribute-based curves for the next year to make up the difference. Manufacturers 

would respond by either meeting the new standards directly or by disgorging any credits 

they had earned through over-compliance in past years. In this way, the ‘backstop’ acts 

solely through adjustments in the attribute-based curves. 

For the reasons we have already discussed in these comments, backstop standards help 

ensure that EPA’s goals will be met, acting to buffer the attribute-based curve system 

from unanticipated problems. EPA should adopt this valuable tool. It is, moreover, 

particularly important the EPA do so if NHTSA ultimately does not. Because EPA’s rules 

intertwine with NHTSA’s, EPA could be badly undermined if neither it nor NHTSA put 

a backstop in place. In sum, backstop standards are not hard to write and, if the system 

functions properly, may never need to be implemented. They are a valuable form of lowcost insurance, available to both agencies as they work to help America solve the “urgent 

and closely intertwined challenges of energy independence and global warming.” 

28 42 U.S.C. § 7521(a)(1). 

29 See 74 Federal Register at 49,464 (collecting cases, including NRDC v. EPA, 655 

F.2d 318 (D.C. Cir. 1981)). 

30 74 Federal Register at 49,493; see also id. at 49,513 (describing, correctly, EPA’s 

broad authority to design effective rules). 

31 See generally 74 Federal Register 18,886 (Apr. 24, 2009) at 49,458. We urge EPA and 

NHTSA to take the prudent course and put manufacturer specific, automatic ratchet 

backstops in place. 

[See docket number [OAR-2009-0472-7278.1, pp.10-11] 
EPA Response to Comments 

3-96

[Sierra Club also submitted these comments as testimony at the Detroit public hearing, 

See docket number EPA-HQ-OAR-2009-0472-6185, p. 27.] 

United Auto Workers 

The EPA requested comments on the desirability of establishing alternative backstop 

standards for greenhouse gas emissions. The UAW believes that this is undesirable and 

unnecessary. Doing so would jeopardize the carefully crafted harmonization the agencies 

have achieved under these proposed regulations, eliminating or severely limiting the 

benefits of a unified national program and raising the cost of any particular level of 

regulation. [OAR-2009-0472-7056.1, p.2] 

California Air Resources Board 

The agencies sought comment on whether a backstop should and can be implemented to 

guarantee emission reductions from these attribute-based standards. CARB strongly urges 

the EPA to include a backstop measure in the final rule. The fleet composition in model 

year 2008 – the baseline model year used by the agencies to project fleet composition in 

future years – demonstrated a significant shift in consumer preference to smaller, more 

efficient passenger cars due to an unforeseen increase in fuel prices and a declining 

economy. This shift in consumer preference was also noticeable in the recent “cash for 

clunkers” program. Additional uncertainties in the analysis of future fleet composition 

include: the methodology used by the agencies to project future fleet composition; the 

impact of early credits; future oil prices; and the impact of changing economic 

conditions. A backstop measure would provide assurance that, regardless of any 

unforeseen changes in fleet mix, the GHG emission reductions expected from the 

program would be achieved. 

Contrary to the Alliance’s argument (Document ID EPA-HQ-OAR-2009-0472-6952.1), 

Massachusetts et al. v. EPA said very little about EPA’s and NHTSA’s respective duties, 

did not direct the agencies to avoid inconsistency, and does not preclude EPA from 

promulgating a backstop. 549 U.S. 497, 532 (2007). Rather, the Court merely stated that 

the agencies could fulfill their respective obligations while avoiding the inconsistency. 

This nuanced distinction is important, as the Central Valley and Green Mountain further 

delineated those obligations and found that EPA can fulfill its public health and welfare 

mandate – which a backstop could serve to ensure – while NHTSA fulfills its fuel 

economy mandate. 

In addition, the Alliance’s practical considerations, suggesting a backstop is unnecessary, 

are less than reassuring. First, manufacturers can increase vehicle footprints and offset 

their supposed increased weight penalty by down weighting. Second, manufacturers need 

not change vehicle platforms mid-stream if their sales were originally targeted to larger 

vehicle models than those estimated in the joint proposal. Third, their extreme case of 

offsetting any increase in car efficiency by increasing vehicle footprint is a red herring; 

backstops typically under discussion instead are proposed (as noted above) to preserve 

the greenhouse gas reductions envisioned for this program should any unforeseen 
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3-97 

changes in fleet mix occur. So rather than rely on an industry that has deftly exploited 

regulatory loopholes and marketing tricks to sell larger and heavier vehicles, EPA has an 

opportunity to ensure that the greenhouse gas emissions it is mandated to achieve actually 

come to fruition. [OAR-2009-0472-7189.1, pp.3-4] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. 

See docket number OAR-2009-0472-7283, pp. 21-27] 

Center for Biological Diversity 

The Proposed Rule Should Include Backstops to Assure That Minimum Mileage and 

GHG Emission Standards Are Met 

As the court in Center for Biological Diversity determined, although EPCA does not 

explicitly require a backstop to assure that minimum feasible average fuel economy 

standards are met for each model year, the Agencies cannot act arbitrarily or capriciously 

in not adopting a backstop. Id., 508 F.3d at 537-538. See also 49 U.S.C. § 32902(a)(6). 

Moreover, voluntary non-compliance with air pollution standards set under the Clean Air 

Act is not permitted. 

Proposed Rule, 74 Fed. Reg. 49522. In other words, the failure to meet a minimum 

“backstop” pollution standard violates the CAA. Here, the Proposed Rule contemplates 

so many credit swaps, special programs and other loopholes that it cannot predict what 

fuel efficiency standard or GHG emission standard will actually be met in any given 

year....This outcome is impermissible under Center for Biological Diversity, 508 F.3d at 

537-539. The Agencies should set backstops or eliminate all loopholes, credits and other 

mechanisms that allow minimum standards to be flouted. [OAR-2009-0472-7265.1, p. 

18] 

National Automobile Dealers Association (NADA) 

EPA should defer to the CAFE program by not incorporating backstops into its GHG 

rules and by clarifying that it will adjust its mandates as necessary should initial 

feasibility and practicability calculations prove too ambitious. Any failure to do so would 

undermine the concept of a single National Program and, helping to prove the abovestated contention that the issuance of a duplicative EPA standard makes little sense. 

[OAR-2009-0472-7182.1, p.7] 

Non-CO2 light-duty GHGs effectively are regulated by CAFE and, to some extent, even 

by existing tailpipe standards. In light of their de minimis global warming potential 

compared to CO2 separate standards/backstops for non-CO2 GHGs are unnecessary and 

would be redundant. [OAR-2009-0472-7182.1, p.7] 

Connecticut Department of Environmental Protection 

First, DEP supports the proposed emissions standards as cost effective and technically 

feasible. DEP also supports the use of flexible individual manufacturer compliance plans 
EPA Response to Comments 

3-98

as a cost mitigation policy, but believes such plans must- ultimately provide the 

anticipated fuel savings and GHG emission reductions benefits associated with the 

proposed rules. In the event that manufacturers default to widespread vehicle upsizing as 

a compliance strategy, the proposed rules should consider a trigger under which a back 

stop framework (either under the Clean Air Act, or the Energy Independence and 

Security Act) would be implemented. Lacking such a critical assurance, DEP believes 

future coordination among the states, the federal government and vehicle manufacturers 

in the post 2016 timeframe will be difficult to maintain. [OAR-2009-0472-7301, p.2] 

State of New Jersey 

In several places throughout the proposal, the Agencies request commenter input on their 

determination to use attribute-based standards. While we understand why the Agencies 

determined to rely on attribute-based standards when establishing the federal motor 

vehicle control program, the Department is concerned with the attribute-based approach. 

By allowing manufacturers to meet less stringent fuel economy standards through 

expanding the vehicle's footprint, the attribute-based approach could encourage 

manufacturers to produce larger vehicles. 

If this were to occur, the greenhouse gas reductions from the proposed standards may not 

be achieved. In addition, the impact of the civil penalty of $5.50 for each tenth of a mile 

per gallon is negligible for the manufacturers of trucks with larger footprints. These 

concerns could result in manufacturers * shifting to produce larger vehicles, which would 

significantly lessen the estimated greenhouse gas reductions estimated from the 

implementation of this proposal. 

Because of these and other potential concerns, the Department recommends that the 

Agencies establish a backstop measure in its final rulemaking to preserve the estimated 

reductions in greenhouse gas emissions. The backstop could state that a certain fraction 

of the estimated greenhouse gas emission reductions based on the current fleet mix must 

he achieved under these rules or the backstop measure would become effective. [OAR2009-0472-7109.1, p.5] 

Massachusetts Department of Environmental Protection 

Shift of Light-Duty Trucks into the Car Category :A key element of the proposed 

rulemaking is that the increase in MPG and reduction in carbon emissions will be partly 

achieved by shifting most two-wheel drive SUV's into the car category, thereby falling 

under a requirement for higher MPG and lower carbon emissions. Thus, it is projected 

that cars, which are now around 50% of new car sales, will rise to 67% of such sales 

through this adjustment. However, it would be a relatively simple matter for 

manufacturers to avoid this shift by selling more four-wheel drive SUV's relative to two 

wheel-drive vehicles, and to provide consumers with incentives to make such purchases. 

Should this happen, the proportion of light-duty trucks in the fleet might not fall nearly as 

much as EPA and NHTSA are projecting, and overall MPG could be substantially worse 

than the projections in the proposal. 
EPA CO2 Standards 

3-99 

Massachusetts believes that EPA and NHTSA should take whatever steps are necessary 

to prevent such a result. One way to do this would be to have a 'backstop' or recalculation of the MPG and emission requirements every couple of years, so that if the 

fleet mix contains a higher proportion of light trucks than is currently forecasted, then 

separate requirements on both categories would be tightened. If this backstop were 

adopted in the final regulations, it could remove any incentive for the manufacturers to 

encourage shifts from two-wheel to four-wheel drive sales, thereby forestalling the need 

to implement the tightened standard. 

[OAR-2009-0472-7195.1, p.2] 

Washington Department of Ecology 

Second, history shows that efficiency and emissions reduction gains from motor vehicle 

emission control can be offset by changes in the fleet mix between passenger cars and 

light duty trucks. For example, the shift from cars to SUVs increased smog-forming 

emissions and led California and EPA to adopt uniform emission standards for most 

passenger vehicles. Ecology urges EPA and NHTSA to consider a potential backstop 

mechanism to preserve the projected GHG reductions over time should the future fleet 

mix change significantly. [OAR-2009-0472-7299, p.2] 

Mass Comment Campaign (2322, unknown organization) 

The best defense would be the establishment of a 'backstop' to preserve oil savings and 

greenhouse gas reductions projected under this program. [OAR-2009-0472-5747, p.1] 

University of Pennsylvania Environmental Law Project 

Another significant problem with the proposed rule is that it is based on uncertain 

projections of future vehicle footprints, vehicle fleet composition, miles driven, and other 

relevant variables. While it is obviously unavoidable to base the policy on uncertain 

future outcomes to some degree, the policy does not guarantee any reduction in 

greenhouse gas emissions. While it is desirable to maintain a degree of flexibility, it is 

also essential that greenhouse gas emissions are significantly curtailed. Thus, the policy 

should create mechanisms whereby minimum reductions are ensured, even if the 

projections turn out to be in significant error. [OAR-2009-0472-7286.1, p. 18] 

American Lung Association of California 

The American Lung Association of California urges the federal EPA to move forward to 

adopt the proposed Clean Cars standard, and to adopt the strengthening changes 

recommended by the Natural Resources Defense Council and the Union of Concerned 

Scientists. These recommendations include: 1) add an automaker specific backstop to 

ensure that the expected level of greenhouse gas emissions reductions are achieved. 

[OAR-2009-0472-7216, p. 2] 
EPA Response to Comments 

3-100

Environment Michigan 

[These comments were submitted as testimony at the Detroit public hearing. See docket 

number EPA-HQ-OAR-2009-0472-6185, p. 69.] 

In addition to addressing these specific issues, we urge you to include a backstop in the 

program that will ensure that the program meets the President's goals for reducing 

pollution and saving oil. 

Environment New Jersey 

And then, finally, we definitely want to make sure there is a backstop in the program to 

make sure the program meets the President's goals for reducing pollution and saving oil. 

[EPA-HQ-OAR-2009-0472-4621, p.76] 

Citizen Kathy Seal 

[These comments were submitted as testimony at the Los Angeles public hearing. See 

docket number OAR-2009-0472-7283, p.148] 

Please consider also the backstop measures to ensure that industry stays on track, the 

backstop measures that I believe other people have already described today on the panels. 

Mass Comment Campaign (326, Student PIRGs) 

President Obama has promised that the standards will cut carbon dioxide pollution by 

950 million metric tons and oil use by 1 .8 billion barrels of oil over the lifetime of the 

vehicles sold under the program. However, the proposed standards include loopholes that 

put these goals at risk. To ensure that the President's goals for reducing pollution and 

cutting oil use are met, please include a backstop in the final rule. [EPA-HQ-OAR-2009-

0472-11293, p. 1] 

EPA Response: 

Whether EPA Has the Statutory Authority to Establish GHG Emissions Backstops 

EPA received only a few comments that directly address the question of whether EPA 

has the statutory authority to establish one or more GHG emissions backstops. Ford 

claimed that EPA’s statutory authority is “highly questionable,” with its main legal 

arguments being that the Clean Air Act does not mention the concept of backstop 

standards, and that backstop standards would yield “two sets of standards” and that “there 

is nothing in the CAA to suggest that Congress intended multiple ‘layers’ of standards to 

apply to vehicle emissions.” The Alliance of Automobile Manufacturers stated that EPA 

authority was “unclear.” Toyota stated that “EPA’s authority may be ambiguous.” 
EPA CO2 Standards 

3-101 

On the other hand, Sierra Club emphasized EPA’s “broad discretion” under the CAA and 

argued that EPA does have the authority to establish GHG emissions backstops. Many 

other commenters (see next section) that endorsed GHG emissions backstops presumably 

believe that EPA does have statutory authority in this area, though they did not address 

the legal arguments. 

EPA agrees with the Sierra Club and strongly reaffirms its position from the proposal that 

EPA has the discretion to adopt GHG emissions backstops, where appropriate in light of 

the factors relevant under section 202(a)(1). 

Whether EPA Should Establish GHG Emissions Backstops 

Most of the comments that EPA received on backstops pertained to whether EPA should 

or should not adopt GHG emissions backstops. 

Many commenters supported the establishment of GHG emissions backstops: Northeast 

States for Coordinated Air Use Management, Public Citizen/Safe Climate Campaign, 

Union of Concerned Scientists, Natural Resources Defense Council, American Council 

for an Energy Efficient Economy, California State Senator Fran Pavley, Sierra Club, 

California Air Resources Board, Center for Biological Diversity, Connecticut Department 

of Environmental Protection, State of New Jersey, Massachusetts Department of 

Environmental Protection, Washington Department of Ecology, University of 

Pennsylvania/Environmental Law Project, American Lung Association of California, 

Environment Michigan, Environment New Jersey, and citizen Kathy Seal. EPA also 

received short, “mass comments” from over 2000 private citizens supporting GHG 

emissions backstops. The primary argument of supporters was that backstops were 

necessary, as stated by the Natural Resources Defense Council, “to prevent intentional 

and unintentional market shifts from undermining the environmental and oil savings 

benefits of the Program.” The most common concern cited by many of the commenters 

was that the proposed truck footprint curves yield higher GHG emissions targets than the 

car footprint curves, for the same footprint values, and that this could lead some 

manufacturers to consider changes to increase truck market share and decrease car market 

share. Doing so would decrease the overall GHG savings associated with the standards. 

In addition, some commenters stated that manufacturers might build larger vehicles 

(“upsize”) than EPA projects, for example, because any amount of slope in target curves 

could encourage manufacturers to upsize. 

Some commenters were opposed to GHG emissions backstops: Ford Motor Company, 

Association of International Automobile Manufacturers, Alliance of Automobile 

Manufacturers, Toyota Motor North America, United Auto Workers, and the National 

Automobile Dealers Association. Opponents of backstops argued that upsizing was 

unlikely and emphasized the anti-backsliding characteristics of the target curves (i.e., the 

Alliance of Automobile Manufacturers and Toyota said that upsizing would not 

necessarily make compliance with applicable standards easier, since larger vehicles tend 

to be heavier and heavier vehicles tend to achieve worse fuel economy/emissions levels). 

 Backstop opponents also claimed that universal backstop standards could restrict 
EPA Response to Comments 

3-102

consumer choice of vehicles. Finally, opponents argued that if EPA were to adopt 

backstop standards while NHTSA did not, this would create “new inconsistencies 

between the two programs, rather than further the goal of harmonization” (Ford Motor 

Company). 

EPA is not finalizing GHG emissions backstop standards for the following reasons. 

One, EPA is confident that our projections of the future fleet mix are reliable, and that 

future changes in the fleet mix of footprints and sales as a result of this rule are not likely 

to lead to more than modest changes in projected GHG emissions reductions. The 

agencies acknowledge that based on economic and consumer demand factors that are 

external to this rule, the distribution of footprints in the future may be different (either 

smaller or larger) than what is projected in this rule. However, the agencies continue to 

believe that there will not be significant shifts in this distribution as a direct consequence 

of this rule. 

As explained elsewhere in the rulemaking documents, EPA’s projections of the future 

fleet are based on the most reliable, transparent information currently available. 

Moreover, recent market trends are consistent with EPA’s future fleet projections, 

showing shifts from light trucks to passenger cars and increased emphasis on higher fuel 

economy and lower greenhouse gas emissions. For example, NHTSA’s March 2009 final 

rule establishing MY 2011 CAFE standards was based on a forecast that passenger cars 

would represent 57.6 percent of the MY 2011 fleet, and that MY 2011 passenger cars and 

light trucks would average 45.6 square feet (sf) and 55.1 sf, respectively, such that 

average required CAFE levels would be 30.2 mpg, 24.1 mpg, and 27.3 mpg, respectively, 

for passenger cars, light trucks, and the overall light-duty fleet. Based on EPA and 

NHTSA’s current market forecast, even as soon as MY 2011, passenger cars will 

comprise a larger share (59.2 percent) of the light vehicle market; passenger cars and 

light trucks will, on average, be smaller by 0.5 sf and 1.3 sf, respectively; and average 

required CAFE levels will be higher by 0.2 mpg, 0.3 mpg, and 0.3 mpg, respectively, for 

passenger cars, light trucks, and the overall light-duty fleet. 

Two, EPA does not believe that the risk of changing vehicle offerings to “game” the 

passenger car and light truck definitions is as great as some commenters imply for the 

model years in question. NHTSA’s recent clarification of the light truck definitions, 

which EPA is adopting in its vehicle classifications for the GHG program, has reduced 

the potential for gaming, and resulted in the reclassification of over a million vehicles 

from the light truck to the passenger car fleet. The changes that commenters suggest 

manufacturers might make may not be so simple nor so likely to be accepted by 

consumers. For example, 4WD versions of vehicles tend to be more expensive and, other 

things being equal, have inherently lower fuel economy than their 2WD equivalent 

models. Therefore, although there is a market for 4WD vehicles, and some consumers 

might shift from 2WD vehicles to 4WD vehicles if 4WD becomes available at little or no 

extra cost, many consumers still may not desire to purchase 4WD vehicles because of 

concerns about cost premium and additional maintenance requirements; conversely, 

many manufacturers often require the 2WD option to satisfy demand for base vehicle 
EPA CO2 Standards 

3-103 

models. Additionally, increasing the footprint of vehicles involves platform changes, 

which usually requires a product redesign phase. Alternatively, turning many 2WD 

SUVs into 2WD light trucks would require manufacturers to squeeze a third row of seats 

in or significantly increase their GVWR, which also requires a significant change in the 

vehicle’s overall design. 

Three, EPA believes that the shapes of the car and truck footprint curves, including the 

“flattening” at the largest footprint values, tend to avoid or minimize regulatory 

incentives for manufacturers to upsize their fleet to change their compliance burden. 

Given the way the curves are fit to the data points (which represent vehicle models’ GHG 

emissions and fuel economy mapped against their footprint), the agencies believe that 

there is little real benefit to be gained by a manufacturer upsizing its vehicles. The 

agencies’ analysis indicates that, for passenger car models with footprints falling between 

the two flattened portions of the car footprint curve, the actual slope of fuel economy 

with respect to footprint, if fit to that data by itself, is about 27 percent steeper than the 

curve being promulgated today. This difference suggests that manufacturers would, if 

anything, ease their compliance burden by reducing vehicle footprint than by increasing 

vehicle footprint. For light trucks, the agencies’ analysis indicates that, for models with 

footprints falling between the two flattened portions of the corresponding curve, the slope 

of fuel economy with respect to footprint is nearly identical to the curve being 

promulgated today. This suggests that, within this range, manufacturers would typically 

have little incentive to either incrementally increase or reduce vehicle footprint. A 

number of commenters, including Honda, affirmed that this is the case. 

At the same time, adding another backstop standard would have virtually no effect if the 

standard was weak, but a more stringent backstop could compromise the objectives 

served by attribute-based standards – that they distribute compliance burdens more 

equally among manufacturers, and at the same time encourage manufacturers to apply 

fuel-saving technologies rather than simply downsizing their vehicles, as they did in past 

decades under flat standards. This is why Congress mandated attribute-based CAFE 

standards in EISA. This compromise in objectives could occur for any manufacturer 

whose fleet average was above the backstop, irrespective of why they were above the 

backstop and irrespective of whether the industry as a whole was achieving the emissions 

and fuel economy benefits projected for the final standards, the problem the backstop is 

supposed to address. For example, the projected industry wide level of 250 gm/mile for 

MY 2016 is based on a mix of manufacturer levels, ranging from approximately 205 to 

315 gram/mile5

 but resulting in an industry wide basis in a fleet average of 250 gm/mile. 

Unless the backstop was at a very weak level, above the high end of this range, then some 

percentage of manufacturers would be above the backstop even if the performance of the 

entire industry remains fully consistent with the emissions and fuel economy levels 

projected for the final standards. For these manufacturers and any other manufacturers 

who were above the backstop, the objectives of an attribute based standard would be 

compromised and unnecessary costs would be imposed. This could directionally impose 

increased costs for some manufacturers. It would be difficult if not impossible to 

establish the level of a backstop standard such that costs are likely to be imposed on 

 

5

 Based on estimated standards presented in Preamble tables III.B.1-1 and III.B.1-2. 
EPA Response to Comments 

3-104

manufacturers only when there is a failure to achieve the projected reductions across the 

industry as a whole. See comments from Ford Motor Company above supporting this 

reasoning. An example of this kind of industry wide situation could be when there is a 

significant shift to larger vehicles across the industry as a whole, or if there is a general 

market shift from cars to trucks. The problem the agencies are concerned about in those 

circumstances is not with respect to any single manufacturer, but rather is based on 

concerns over shifts across the fleet as a whole, as compared to shifts in one 

manufacturer's fleet that may be more than offset by shifts the other way in another 

manufacturer's fleet. However, in this respect, a traditional backstop acts as a 

manufacturer specific standard. 

While the simplest form of GHG emissions backstop is a universal standard, i.e., a single 

gram/mile level that no manufacturer could exceed, a few commenters suggested 

alternative GHG emissions backstop approaches. The most common alternative 

approach suggested by commenters was an industry-wide “trigger” or “ratchet” approach, 

whereby EPA would build into the standards an automatic lowering or flattening of the 

GHG-footprint curves if the industry-wide model mix and footprint characteristics 

changed sufficiently to reduce the actual GHG emissions savings relative to the projected 

GHG emissions savings. The concept of a ratchet mechanism recognizes the problem 

discussed above,, and would impose the new more stringent standard only when the 

problem arises across the industry as a whole. While the new more stringent standards 

would enter into force automatically, any such standards would still need to provide 

adequate lead time for the manufacturers. Given the short lead-time already before the 

2012 model year, a ratchet mechanism in this rulemaking that would automatically 

tighten the standards at some point after model year 2012 is finished and apply the new 

more stringent standards for model years 2016 or earlier, would fail to provide adequate 

lead time for any new, more stringent standards. Since the GHG emissions standards 

remain in effect unless and until they are changed, there would be greater lead time for 

future years beyond model year 2016. However, as discussed below, EPA believes the 

better course is to monitor model mix and footprint characteristics, and associated GHG 

emissions reductions, and reconsider this issue in the future if a problem arises. 

EPA believes that it has ample reasons to choose not to exercise its discretion under 

section 202 (a) (1) to adopt a backstop. EPA consequently disagrees with the Center for 

Biological Diversity that any choice not to adopt a backstop would be impermissibly 

arbitrary. 

Although EPA is not adopting GHG emissions backstops, EPA plans to conduct and 

document retrospective analyses to evaluate the model mix and footprint characteristics 

of the future fleet during the rulemaking timeframe and to compare these characteristics 

to what EPA has projected in this rulemaking analysis. If EPA determines that there is a 

significant shift in the industry’s product mix resulting in a relaxation of their estimated 

targets and overall GHG emissions savings, EPA will reconsider the relative merits of 

GHG emissions backstops in future rulemakings under the CAA. 

 
EPA Responses on Joint Issues and Technical Work 

4. EPA Response to Comments on Joint Issues and Technical Work............................... 2 

4.1. Baseline Market Forecast......................................................................................... 2 

4.2 Reserved................................................................................................................... 7
 

4.3 Reserved................................................................................................................... 7
 

4.4. Joint Vehicle Technology Assumptions ................................................................. 7 

4.5 Economic Assumptions ......................................................................................... 28 

4.6. Safety and Mass Reduction.................................................................................... 81 

4.7. Endangered Species Act ........................................................................................ 94 

4-1
 
EPA Response to Comments 

4. EPA Response to Comments on Joint Issues and Technical Work 

4.1. Baseline Market Forecast 

Organization: International Council on Clean Transportation 

Comment: 

[[These comments were submitted as testimony at the Detroit public hearing. See docket 

number EPA-HQ-OAR-2009-0472-6185, p. 58] 

The technical analyses conducted by EPA and NHTSA are sound and demonstrate that 

proposed standards are feasible and the benefits of the rule far outweigh the costs. The 

analytical perimeter also provides a good base for further reductions in fuel consumption 

and greenhouse gas emissions beyond 2016. 

EPA Response: 

The EPA appreciates the positive feedback on the methodology used in the proposal. We 

continue to believe to that our methodology is a transparent way to accurately assess the 

costs and benefits of the rule. 

Organization: Dr. Walter McManus, Ph.D., Research Scientist, University of Michigan 

Transportation Research Institute (UMTRI) 

Comment: 

NHTSA has historically based its analysis of potential new CAFE standards heavily on 

private information—extensive and detailed product plans for vehicles, engines, and 

transmissions. This private information is obtained voluntarily, and NHTSA is obligated 

to prevent its public disclosure. [OAR-2009-0472-3651.1, p.3] 

The new approach is more transparent. The information sources (with few exceptions), 

are all either in the public domain, available to the public upon request, or available 

commercially. This is arguably the most profound change in the methodology. In the 

past, the process was essentially immune from rigorous review. In the new process, 

anyone can repeat and review the analyses done by the agencies. [OAR-2009-0472-

3651.1, p.3] 

Transparency produces some tangible benefits to consumers and automakers. The new 

approach reduces the potential for errors (whether of omission and/or commission) that 

have been observed in past responses to NHTSA’s requests. The new approach more 

accurately measures the incremental costs and benefits of the proposed standards. The 

product plans submitted recently show a significant increase over prior plans in 

applications of technology to improve fuel economy. To the extent that improvements 

have been planned in anticipation of future increases in CAFE standards, they should not 

be in the baseline. They would be in the old process. [OAR-2009-0472-3651.1, p.3] 

4-2
 
EPA Responses on Joint Issues and Technical Work 

[[Dr. McManus, also submitted these comments as testimony at the Detroit public 

hearing, See docket number EPA-HQ-OAR-2009-0472-6185, pp. 36-37.] 

EPA Response: 

The EPA appreciates the positive feedback on the methodology used in the proposal. We 

continue to believe to that our methodology is a transparent way to accurately assess the 

costs and benefits of the rule. 

Organization: Public Citizens and Safe Climate Campaign 

Comment: 

We appreciate and support the agencies’ use of publicly available information about 

technology adoption. NHTSA’s previous approach, using confidential product plans 

made it impossible for the public to verify NHTSA’s technology forecast. It also 

introduced the potential for automakers to game the standard-setting process by providing 

incomplete or misleading product plans. Using publicly available data makes the 

standards more transparent and provides the opportunity for broader participation in 

estimating the technological feasibility of improving vehicle efficiency. [OAR-2009-

0472-7050.1, p.10] 

EPA Response: 

The EPA appreciates the positive feedback on the methodology used in the proposal. We 

continue to believe to that our methodology is a transparent way to accurately assess the 

costs and benefits of the rule. 

Organization: New York State Department of Transportation 

Comment: 

The baseline condition used in the analysis of alternatives for the previous CAFE 

proposals was based on manufacturers' confidential plans for each model year, whereas 

the baseline in this proposal is based on each manufacturer's actual MY 2008 fleet. We 

agree that this approach will result in more complete market data and is more transparent 

than relying on manufacturers' confidential plans. [OAR-2009-0472-7531.1, p.2] 

EPA Response: 

The EPA appreciates the positive feedback on the methodology used in the proposal. We 

continue to believe to that our methodology is a transparent way to accurately assess the 

costs and benefits of the rule. 

Organization: Kleinbaum, Rob 

Comment: 

4-3
 
 

EPA Response to Comments 

As Ronald Reagan used to say, we need to trust but verify. And that, it seems, is exactly 

what the new rule does. Central to the success of both the rule and the automakers, is 

transparency. [OAR-2009-0472-4074, p.2] 

Much of the debate on the impact of fuel economy has been clouded by the fact that data 

and assumptions are not disclosed. NHTSA has historically based its analysis of potential 

new CAFE standards heavily on private information-extensive and detailed product plans 

for vehicles, engines, and transmissions. This private information is obtained voluntarily, 

and NHTSA is obligated to prevent its public disclosure. [OAR-2009-0472-4074, p.2] 

The new rule's proposed approach is more transparent, with most sources in the public 

domain or readily available. This is a critically important change in the methodology 

since, in the new process, anyone can repeat and review the analyses done by the 

agencies. [OAR-2009-0472-4074, p.2] 

EPA Response: 

The EPA appreciates the positive feedback on the methodology used in the proposal. We 

continue to believe to that our methodology is a transparent way to accurately assess the 

costs and benefits of the rule. 

Organization: American Council for an Energy Efficient Economy 

Comment: 

ACEEE applauds USEPA and NHTSA for taking the enormous step towards energy 

security and environmental protection that this joint rulemaking represents. The proposed 

rule offers very substantial increases in fuel economy and reductions in vehicles’ 

greenhouse gas emissions. 

The rule also reflects important analytical improvements over the approach taken in 

previous rulemakings, especially the more thorough and transparent analysis of the 

technical potential to reduce emissions and fuel consumption, and the associated costs. In 

addition, the agencies’ use of a publicly available data set fully describing the reference 

fleet, rather than confidential manufacturer product plans, to develop the rule allows the 

public to understand in detail the basis for the standards. [OAR-2009-0472-7260.1, p.1] 

[ACEEE also submitted these comments as testimony at the New York public hearing, 

See docket number OAR-2009-0472-4621, pp. 138.] 

EPA Response: 

The EPA appreciates the positive feedback on the methodology used in the proposal. We 

continue to believe to that our methodology is a transparent way to accurately assess the 

costs and benefits of the rule. 

4.1.1. 2008 Baseline Fleet 

4-4
 
EPA Responses on Joint Issues and Technical Work 

Organization: Ford Motor Company 

Comment: 

Pursuant to the National Highway Traffic Safety Administration's (NHTSA's) September 

22nd, 2009 Request for Product Plan Information (74 FR 48192) to acquire new and 

updated information regarding vehicle manufacturers' future product plans to aid in 

establishing model year 2012-2016 passenger car and light truck average fuel economy 

standards, Ford Motor Company (Ford) conducted an assessment of its future product 

plans and concluded that they are materially unchanged from our May 1, 2009 

submission. Ford requests that NHTSA and EPA continue to reference the Ford 

submission to the NHTSA Office of the Chief Counsel Docket Number NHTSA-2009-

0042, Docket ID: NHTSA-2009-0042-0006.1. Ford requested and was granted 

confidential treatment for designated information in that submittal. Confidential treatment 

of such information continues to be appropriate until the end of the specified or 

applicable model year identified in the submittal, for the reasons outlined in the May I 

cover letter. Should the agency have any questions regarding Ford's product plan 

information, please contact Cynthia Williams. In the event of any questions about the 

confidential nature of the May 1 submittal, please contact Mark Edie, Office of the 

General Counsel, Ford Motor Company, Suite 450, 1350 I St. NW, Washington D.C. 

20005. [NHTSA-2009-0059-0063.1, p. 1] 

EPA Response: 

The EPA appreciates the update on the status of Ford's product plan. The agency has 

treated all manufacturers' product plans as confidential business information and has not 

released or otherwise divulged any confidential information in the baseline fleet utilized 

for analytical purposes in each agency’s rules. Also, it is important to note that the 

baseline fleet was not updated to reflect information that would have been available at the 

end of the 2009 model year. The baseline fleet continued to be constructed from publicly 

available data, and based on 2008 model year vehicles for the final rulemaking. The 

agencies’ reasons for doing so are set out in section II.B.4 of the preamble to the final 

rule. 

Organization: General Motors 

Comment: 

On May 1, 2009, GM responded to a NHTSA request for a detailed product plan (EPA 

was subsequently copied). As part of that submission, GM provided very detailed product 

information, aligned with the restructuring plan submitted to the Treasury Department in 

February 2009. Since that time, GM has gone through bankruptcy reorganization and has 

updated its restructuring plan accordingly. Rather than recompiling the entire detailed 

product plan spreadsheets for September 2009, below we have outlined the major 

changes that have occurred since our prior submission and provide data as appropriate. 

The changes can be summarized as follows: 

4-5
 
 

EPA Response to Comments 

Discontinuation of GM Brands 

The most notable change to the GM product plan is the discontinuation of 4 of our brands 

and the associated models. The previous submission had included a longer wind-down of 

Saturn, Saab and HUMMER, and did not anticipate the closing of Pontiac. Pontiac, 

Saturn, Saab and HUMMER will no longer be part of GM in the future. Pontiac 

production has already been discontinued, and we are still awaiting resolution on the 

sale/disposition of Saab and HUMMER. GM is not planning on any significant 2010 MY 

volume for Saturn, Saab and HUMMER and most of Pontiac (Pontiac Vibe and G6 have 

2010 MY volume). [OAR-2009-0472-6953.1, p.32] 

EPA Response: 

The EPA appreciates the update on the status of GM's product plan. It is important to 

note that the baseline fleet was not updated to reflect the new information from GM. One 

reason for doing so, as noted in the preamble to the final rule, is that “although the 

agencies recognize that these specific vehicles will be discontinued, we continue to 

include them in the market forecast because they are useful as a surrogate for successor 

vehicles that may appear in the rulemaking time frame to replace the discontinued 

vehicles in that market segment. ” 

Market share in our reference fleet are based on CSM's 4th quarter forecast that takes into 

account changes to GM's brand lineup. The projections distribute GM's market share 

across all of GM's 2008 model year brands. For a complete explanation of methodology 

used to create the projections and fleet file for modeling, see the first chapter of the joint 

technical support document. 

4.1.2. 2012 - 2016 Reference Fleet 

Organization: California Air Resources Board 

Comment: 

The agencies have requested comment on their use of publicly available data to 

determine the baseline fleet for model years 2012-2016. CARB agrees with the agencies 

that this approach provides greater transparency to the process and avoids some of the 

inherent problems noted in the NPRM from relying on incomplete and limited data from 

manufacturers’ future production plans. The NPRM acknowledges that because future 

fleet projections are based on the model year 2008 fleet some vehicles models 

manufacturers have already announced for production in the near future are not included 

in the analysis. We agree with the agencies that the likely impact of this omission is 

minor. [OAR-2009-0472-7189.1, p.10] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. 

See docket number OAR-2009-0472-7283, pp. 21-27] 

4-6
 
EPA Responses on Joint Issues and Technical Work 

EPA Response: 

The EPA appreciates the positive feedback on the methodology used in the proposal. We 

continue to believe to that our methodology is a transparent way to accurately assess the 

costs and benefits of the rule. 

Organization: General Motors 

Comment: 

GM recommends that the agencies reduce the projections for large pickup volume in the 

future fleet in every model year, thus lowering the requirements for large pickups yet still 

maintaining the overall industry goal of 250 CO2 g/mile (35.5 mpg equivalent) by 2016 

model year. From a baseline vehicle fleet, the agencies developed a methodology to 

project the size, composition, volume and footprint of the segments of the future fleet. 

The methodology projects an uncharacteristically large volume of large pickup trucks in 

the future and therefore compels the results to require more reductions from this segment 

of the fleet. The agencies used a forecast from CSM and added some of their own 

modifications. In searching for explanations for these discrepancies, we note that the 

agencies’ forecast could possibly have erroneously included some volume of unregulated 

pickups. Regardless, the agencies’ projections of large pickups lead to higher overall 

requirements for those vehicles. [OAR-2009-0472-6953.1, p.25] 

EPA Response: 

GM correctly posits that the 2011 and 2016 reference fleets used by the agencies in the 

proposed rule over-project the number of large pickup trucks. EPA in fact came to this 

same conclusion after issuing the NPRM, but before the comment period started. The 

over-estimate at proposal occurred because the standard CSM forecast included heavy 

duty class 2b and class 3 vehicles (which are not light duty vehicles, and so are not 

subject to the rule). This had the effect of increasing the volumes of large pickup trucks 

and full size vans disproportionately to the other truck classes. To correct the 

overestimate, EPA used a custom forecast from CSM in projecting the reference fleets 

used for analytical purposes for the final rule. This custom forecast had all class 2b and 3 

vehicles that did not qualify as medium duty passenger vehicles removed from the 

forecast. 

4.2 Reserved 

4.3 Reserved 

4.4. Joint Vehicle Technology Assumptions 

Organization: California Air Resources Board 

4-7
 
EPA Response to Comments 

Comment: 

The agencies requested comment on the joint technology analysis and assumptions, 

including new types of analyses introduced in this joint proposal. CARB believes the 

joint technological and cost analyses are fundamentally sound. CARB supports the 

agencies methodology for determining component technology costs. Clearly, component 

teardown costs as determined by FEV are the most reliable method for assessing 

technology costs. Absent such detailed cost data, the next best option is a bill of materials 

approach – used by CARB in determining costs for California’s GHG standards – 

supplemented by cost data from manufacturers, component suppliers, and public sources. 

As additional teardown cost data becomes available, the agencies should include those 

costs in the final rule. Given the uncertainties in the model inputs raised in our previous 

comment on EPA’s estimate of future fleet mix, EPA’s use of the OMEGA model 

appears to be a reasonable methodology to determine manufacturers’ technology 

implementation and costs for compliance with the proposed GHG requirements. 

Although CARB used a different methodology to determine the cost-effectiveness of its 

GHG requirements, it is not surprising that EPA has arrived at the same conclusion 

regarding what levels of GHG emission reductions are reasonable and achievable in the 

same timeframe. 

EPA requested comment on their estimates for diesel cost, mass reduction and material 

substitution generally (techniques, costs, and effectiveness), and revised hybrid system 

costs. EPA’s technology costs and effectiveness estimates generally match those 

determined by CARB for the same technologies. This is not surprising because most of 

the technologies are well known and are either already being implemented in vehicles or 

are at the prototype stage. Concerning hybrid systems, CARB does not believe they are 

required to meet the proposed standards. Nonetheless, the costs cited in the DRIA may be 

reasonable when considered in the timeframe of the proposed GHG program. However, 

we would note that the costs cited for power split systems seem high in light of Ford and 

Toyota’s statements that they have made significant cost improvements in their hybrid 

systems and are currently making some profit from their hybrid vehicles. In addition, as 

hybrid drive systems and batteries undergo further refinement, their costs are expected to 

decrease near and beyond 2016. 

EPA also requested specific comment on their mark-up factor of between 1.11 and 1.64, 

depending on the technology. As noted in our response above, CARB supports the 

methodology used by the agencies to determine component costs. CARB is also 

supportive of the comprehensive analysis EPA undertook to determine indirect 

component costs to the manufacturer resulting from production and retail related costs. 

EPA noted in its DRIA that cost multipliers will vary between components depending 

on the complexity of the technology and the timeframe. CARB agrees with EPA’s 

analysis that less complex and/or more mature technologies would incur lower 

production and retail costs. [OAR-2009-0472-7189.1, p.10] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. 

See docket number OAR-2009-0472-7283, pp. 21-27] 

4-8
 
EPA Responses on Joint Issues and Technical Work 

EPA Response: 

EPA appreciates CARB's comments and agrees with them. As regards the comment on 

power-split hybrid cost estimates being too high, both agencies continue to believe that 

the cost estimates used in the proposal and final rules are the best estimates available at 

this time. Although the agencies agree that some manufacturers have made statements 

recently about improvements to their systems having resulted in cost reductions, we 

prefer instead to base estimates on engineering analysis. Note also that recent 

manufacturer statements pertain to existing hybrid systems based on nickel-metal hydride 

battery technology while the cost estimates in our rules are based on Li-Ion battery 

technology. This adds another level of uncertainty to the press release type statements 

made recently by auto makers. 

Organization: BorgWarner 

Comment: 

(1) The need for technology-neutral legislation. As a supplier of multiple advanced 

technologies named in the joint proposal for improving fuel economy and emissions, 

BorgWarner supports technology neutrality. We believe there is no single 'silver bullet' 

technology that meets the American consumers varied driving behaviors. It will take a 

combination of several advanced technologies to meet the needs of automakers and 

consumers seeking more fuel efficient vehicles. However, the joint proposal falls short of 

achieving technology neutrality in several areas: the delay in the adoption of real-world 

driving data in vehicle ratings, offering large credits for a select few technologies, and 

using models that discourage the use of other effective technologies. [OAR-2009-0472-

7289], p.1 

Our primary concern is the delay in adopting fuel economy and CO2 rating calculations 

that are closer to the real world driving behaviors. According to a 2006 EPA study, 

American consumers accumulate 57% of their miles on the highway and 43% in the city. 

However, the proposed rule continues to base fuel economy and CO2 ratings on outdated 

1975 data that showed the American consumer accumulated 45% of their miles on the 

highway and 55% in the city. As a result, existing and proposed vehicle fuel economy 

and CO2 ratings are inaccurate measures of today's real-world fuel economy and CO2 

production. Continuing to rate vehicles with this inaccurate data essentially discourages 

any technologies that excel in highway driving conditions (speeds over 45 mph) and may 

encourage an unintended bias toward vehicles that perform better in city driving 

conditions. If not addressed now, the auto industry will continue to invest and make 

decisions based on outdated information for another seven years. Decisions based on 

outdated calculations may not lead Americans or the auto industry to the right choices to 

reduce oil dependence and real-world CO2 emissions. [OAR-2009-0472-7289, pp.1-2] 

Significant long-term technology and capital decisions are being made now, and 

regulations need to properly tie these decisions to real-world benefits as best as possible. 

This is one of the key principles outlined in the 'Bellagio Memorandum on Motor Vehicle 

4-9
 
EPA Response to Comments 

Policy,' which suggests policies should be based on real-world performance compared to 

societal objectives, and not given special consideration for specific fuels, technologies, or 

vehicle type. Since the EPA already uses the revised driving cycles of 57% highway and 

43% city in other areas such as the 'Fuel Economy Trends Report,' if should be relatively 

simple to change the formulas for the upfront calculations to provide a consistent 

measure. No testing protocol is changed, only the weighting calculations. Implementing 

this calculation change now brings us a step closer to utilizing real world measures to 

provide real world results. This also supports President Obama's desire for the joint 

proposal to provide clarity, stability and predictability and the EPA's own desire to tie 

technologies to real-world results. [OAR-2009-0472-7289, p.2] 

EPA Response: 

EPA interprets the reference to “1975 data” to mean the Federal Test procedure used to 

implement the standard (which reflects the relative proportions of highway/city driving 

referenced in the comment). EPA believes it is premature to use different test procedures 

to evaluate performance at this time as virtually all current data on technology 

performance is based on 2-cycle testing. Moreover, as a matter of law, CAFE standards 

for passenger cars (although not light trucks) must be established using the FTP. 42 USC 

section 32904 (c). At the same time, the agencies have accounted for the difference in 

real world performance in assessing the results of their respective rules, adjusting fuel 

economy results by 20% to account for the difference. 

4.4.1. Technologies Considered 

Organization: International Council on Clean Transportation 

Comment: 

EPA and NHTSA conclude that ‘the application of diesel engines on small vehicles is not 

a viable or cost effective option’. Thus, the cost and effectiveness estimates did not 

include the technology of a diesel engine with lean NOx trap (LNT) catalyst aftertreatment on a small car. 

While the market share of diesel passenger cars in general is currently at a very low level 

in the US (<1%), the technology should not be completely ignored for the following 

reasons: (1) Volkswagen and Mercedes have a history of selling diesel cars in the US, 

with regular customers eager to buy diesel cars in the future. (2) Average market share of 

diesel passenger cars in Europe is about 50%. European manufacturers are interested in 

exporting some of their diesel models to the US to establish an additional business 

segment. (3) Diesel engines are able to meet Tier 2 standards in small cars without 

needing a deNOx catalyst or urea injection (Selective Catalytic Reduction – SCR), 

making compliance easier and cheaper than for larger diesel vehicles. 

4-10
 
EPA Responses on Joint Issues and Technical Work 

Volkswagen’s success in selling smaller diesel cars in the US supports this assumption. 

Volkswagen of America recently announced that 5,072 diesel vehicles were sold in June 

2009, representing 26% of total sales for the month. Diesel engines accounted for 81% of 

Jetta SportWagen sales, and 40% of Jetta sedan sales. For 2010 VW is introducing a 

diesel version of the Golf and expects that 30% of all Golf hatchbacks sold in 2010 will 

be equipped with a turbocharged diesel engine. 

Given this background, ICCT suggests considering diesel technology for small passenger 

cars and assessing their cost and effectiveness. 

[OAR-2009-0472-7156.1, pp.22-23] 

EPA Response: 

The final standards, of course, do not mandate any particular technology path. 

Manufacturers remain free to use any package of technologies (and other compliance 

strategies, such as use of credits) to achieve their fleetwide average. The OMEGA 

modeling is used by EPA to forecast potential compliance paths, not to determine the 

level of the standard. That being said, EPA at proposal evaluated diesel technology in its 

consideration of potential technology packages for all vehicles other than small cars, and 

in the final rule, included diesel technology in the technology packages for small cars as 

well. EPA is not predicting that manufacturers will utilize diesel technology to comply 

with the model year 2012-2016 standards because it is considerably more expensive and 

less cost effective than other potential technologies. Specifically, the diesel package was 

not as cost effective as other packages in the compact car vehicle type (vehicle type 2) 

and was not, therefore, chosen by the OMEGA model. This does not mean that diesel 

technology is not a viable technology for small cars, but rather that using the metrics used 

by the OMEGA model and the model inputs used by EPA, it was not considered to be as 

cost effective as other technologies. If the consumer demands diesel technology in this 

market segment, a manufacturer will probably offer it, and nothing in the rule prevents 

manufacturers from doing so. 

Organization: University of California, Santa Barbara, Bren Working Group on 

Vehicle Fuel Economy, University of Miami, School of Law 

Comment: 

Stringency of Targets 

The stringency of the footprint-fuel economy curve at the year 2016 represents fuel 

efficiencies attainable utilizing maximum technology available at present. NHTSA and 

EPA’s interpretation of 'maximum technology' is crucial to the annual increase in 

stringency of this curve; this underscores the importance of assumptions pertaining to 

technological advancement. According to the NHTSA/EPA joint technical support 

document, many of the technologies included in the proposed ruling are currently 'well 

known' and 'readily available'. Technologies presently in the research and development 

4-11
 
EPA Response to Comments 

phase were not considered because of uncertainty surrounding implementation. [OAR2009-0472-7188.1, p. 3] 

We feel that it is inappropriate to base regulations for the year 2016 solely on 

technologies that are available today. Technologies currently in the research and 

development phase should be considered in setting the standards for the latter years of 

this proposed ruling. [OAR-2009-0472-7188.1, p. 4] 

We maintain that the fuel economy curves need to be more stringent as an incentive for 

manufacturers to innovate and devote more capital to the research and development of 

fuel saving technologies. Similar technology-forcing occurred in the 1970s during the 

phase-in of catalytic converters in all automobiles. At that time, automakers unanimously 

maintained that the high cost of phase-in exceeded the overall benefit and high 

uncertainty in performance effects. In 1975, emissions standards necessitated automakers 

to adopt these technologies though they previously deemed them undesirable. We 

recommend that the fuel economy curves be stringent enough to encourage 

manufacturers to reach for forthcoming technologies. [OAR-2009-0472-7188.1, p. 4] 

Although many of these technologies are available today, the emissions reductions and 

fuel economy improvements proposed would involve more widespread use of these 

technologies across the light-duty vehicle fleet, which account for about 40% of all U.S. 

oil consumption, and about 60% of transportation sector oil use. Ultimately, the 

greenhouse gas emission reductions this program would bring about are equivalent to the 

emissions of 42 million cars. [OAR-2009-0472-6770, p. 1] 

When considering technological feasibility, the agencies should give consideration to 

more than just currently applied technology, including experimental and developing 

technology. Of course, the economic costs to manufacturers and consumers of this 

potentially expensive technology must be given due weight. Technology that would 

create prohibitive costs for manufacturers and/or consumers should not be required. 

However, this should not imply that such technology be permanently overlooked [OAR2009-0472-6770, p. 1] 

EPA Response: 

Availability of adequate lead time is an essential component of both agencies’ statutory 

mandates. EPA indeed has sound reasons for rejecting a standard based on increasing 

stringencies of 6%, and the type of approach advocated by the commenter forcing 

aggressive use of still-to-be-developed technologies would be more stringent still and 

hence inappropriate. See preamble section III.D.7 and comment response 3.3.3.3.1. 

Even for technologies that are well known and readily available, there are two underlying 

issues that affect the time frame during which these technologies can be adopted by 

manufacturers. EPA determined that there is adequate lead time to employ the financial, 

engineering, and other resources needed to achieve the standards, recognizing that a 

significant portion of these human and capital resources would need to be expended 

during the next few years. Lead time is already somewhat constrained for these model 

4-12
 
EPA Responses on Joint Issues and Technical Work 

years, as it is now 2010 and MY 2012 is only a number of months away. The farthest 

model year, 2016, also is not many years from now, given the time needed for 

redesigning cars and trucks for new production. More specifically, the first set of factors 

related to adequacy of lead time is manufacturers’ production capacity and the ability of 

automobile manufacturers and suppliers to produce these technologies in sufficient 

volumes to support all applications. For example, even though the capacity of dual clutch 

transmissions continues to increase, there will not be sufficient volume to supply every 

vehicle sold in the United States in the 2016 MY. The second issue concerns 

coordination of technology additions with manufacturers’ design cycles. It takes several 

years to redesign a vehicle, and several more to design an entirely new vehicle not based 

on an existing platform. Thus, redesign cycles, i.e. consideration of the time needed to 

design, are an inextricable component of adequate lead time under the Act. As noted in 

section III.D.6 of the preamble to the final rule, Vehicle manufacturers typically redesign 

their vehicles every five years and it takes several years to redesign a vehicle. 

Furthermore, redesigns require a significant outlay of capital from the manufacturer. 

This includes research and development, material and equipment purchasing, overhead, 

benefits, etc. These costs are significant and are included in the cost estimates for the 

technologies in this rule. Because of the manpower and financial capital constraints, it 

would only be possible to redesign all the vehicles across a manufacturer’s line 

simultaneously if the manufacturer has access to tremendous amounts of ready capital 

and an unrealistically large engineering staff. However no major automotive firm in the 

world has the capability to undertake such an effort, and it is unlikely that the supplier 

basis could support such an effort if it was required by all major automotive firms. 

Consequently, EPA believes that the level of stringency chosen for the final rule is sound 

and reasonable, and based on proper consideration not only of available technologies but 

the costs and necessary lead time for its introduction throughout the vehicle fleet. 

Organization: BorgWarner 

Comment: 

Finally, through the issues mentioned above and in some of the Volpe modeling, we find 

the proposal offers limited credits and incentives for advanced clean diesel technologies. 

The Volpe model only considers diesel technologies for vehicles with engines of 6 

cylinders or more. The model does not apply diesel technologies to 4-cylinder engines, 

even though these vehicles are very efficient for highway driving. In fact, clean diesels 

vehicles that are emissions certified in 50 states are selling well in the US, where they are 

available, as a result of their fuel efficiency. Over the next five years 4-cylinder diesel 

engines will have the highest compounded annual growth rate within diesel engines in the 

United States. Looking at global trends, in five years 4-cylinder diesels will account for 

87% of the diesel market, and solid diesel growth is expected in even smaller engines 

such as 2 and 3-cylinder engine. In 2009, the percentage of consumers selecting dean 

diesel vehicles actually surpassed the percentage of consumers selecting hybrid electric 

powertrain vehicles. As we transition to more fuel efficient vehicles, there is a role for 

advanced light-duty diesels. Therefore, all technologies need to be on equal ground and 

4-13
 
EPA Response to Comments 

evaluated/incentivized based on their real-world performance. [OAR-2009-0472-7289, 

pp.2-3] 

EPA Response: 

Regarding Borg Warner's comment on clean diesels and, in particular, 4-cylinder clean 

diesels, the agencies appreciate the views laid out by Borg Warner but emphasize that the 

modeling done to support the proposed and final rules does not limit what can and cannot 

be done by manufacturers to comply with the standards. Instead, the modeling done is 

meant to evaluate the feasibility of, and the most cost effective means of complying with, 

the new standards. In other words, the modeling done does not in any way prohibit the 

technologies manufacturers may choose to use or that consumers may choose to buy. 

Should manufacturers and/or consumers prefer diesel technology to other technologies 

(downsized/turbocharged gasoline engines, hybrids, etc.), these technologies can be 

utilized so long as a manufacturer meets its fleetwide standard. 

Organization: American Iron and Steel Institute 

Comment: 

[[These comments were submitted as testimony at the Detroit public hearing. See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 70-77.] 

Steel is the basis for modern vehicles in the U.S. and around the world. Recent studies 

over the last three years have found that the average light vehicle in North America 

contains about 60 percent steel. Our goal, of course, in the steel industry is to keep steel 

in the vehicle, to preserve and grow this vital market. Let me explain why this steel 

industry objective supports the goals of EPA and NHTSA; that is, why steel technology 

helps to reduce emissions associated with vehicles. 

I would like to make three points today. One on reinventing steel, one on the importance 

of collaboration, and the third on steel's greenness as measured by lifecycle analysis. 

Now, first, the steel industry has reinvented its automotive steel products in the past and 

must continue to do so in the future if it is to continue to provide safe, practical and 

affordable means of reducing vehicle mass, which leads to emissions reductions. For 

example, in my experience working in programs with GM, Ford, and Chrysler as well as 

the new North American domestics including Toyota, Honda, Nissan, Hyundai, BMW, 

Mercedes and others, I can tell you that all of these companies, which do manufacture 

vehicles in North America, make use of state-of-the-art high-strength steel grades 

manufactured by domestic steel mills. Now, this proposed rule on light-duty vehicle 

emissions clearly reports the consensus by EPA and NHTSA that reducing vehicle weight 

is an effective part of the overall strategy for meeting the proposed emissions and fuel 

economy standards. EPA further has asked for comment on its conclusion that it is 

'technically feasible to reduce vehicle weight without reducing vehicle size or footprint or 

structural strength.' I would like to say that AISI does agree with this statement since that 

4-14
 
EPA Responses on Joint Issues and Technical Work 

is exactly what is accomplished by the effective use of advanced high-strength steels or 

'AHSS.' And I will explain this a little further. 

These new steels have helped car makers to achieve 5-star crash ratings in their latest 

models without increasing vehicle mass. This is consistent with EPA comments written 

in the Weight Reduction and Vehicle Safety Draft on the Regulatory Impact Analysis, 

talking mainly by reducing vehicle mass and including comments like the substitution of 

lower density and/or higher strength materials -- going on to explain that including highstrength steels, aluminum, magnesium, or composite materials for components currently 

fabricated from mild steels. In fact, it is these AHSS grades in today's cars and trucks, 

and their growth over the last 10 years, that have made steel bodies and chassis 

components considerably stronger and lighter, and more crashworthy than ever before. 

Such grades include 'dual phase' and 'TRIP' steels, grades that are new to these -- these 

new grades now add up to about 15 percent of the average vehicle, new vehicle now 

made in the U.S., and are the fastest growing materials, by the way, in today's vehicles. 

These materials have already proven to reduce the mass of body structures by up to 25 

percent or even more in some cases, and can do this more affordably than any other 

materials considered for mass reduction. AISI believes there is more weight savings to 

be gained by further using these materials in future vehicles. 

My second point has to do with collaboration. AISI believes collaboration is essential for 

both the steel and automotive industries to move forward and implement the technologies 

that drive down emissions. Our partnering together is well known for achieving 

productive results. In 1987, the Auto/Steel Partnership was formed with Chrysler, Ford, 

and General Motors, and the major domestic steel mills and still operates today. In the 

1990s the domestic steel companies organized with a global consortium to form the 

ULSAB-ARV and Ultra-Light Steel Auto Body, consortium of those groups, that 

released a study that showed the power of advanced computer-aided design or CAE 

analysis coupled with advanced high strength steels could lead to weight reduction, mass 

reduction, and safe and fuel efficient vehicles. One case study done by the Auto/ Steel 

Partnership examined mass reduction and safety together and did this with folks on the 

vehicle front rails, an important load path in determining vehicle crash performance. 

Before ULSAB -- these rails were mainly made of mild steel. After that study on ultra 

light vehicles was released with the help of the Auto/Steel Partnership project reengineering the front rails, almost all front rails today in vehicles have been converted to 

advanced high strength steel, AHSS. The project, in fact, demonstrated that front rails can 

be built 25 percent lighter with AHSS and absorb the same crash energy. This was 

engineered on the computer, of course, and validated, though, with actual frontal crash 

tests. 

My third point is that steel is a green material, in fact, greener than most people think, 

particularly with respect to the emissions associated with every phase of a vehicle's life. 

For example, did you know that steel has a much lower energy content per ton and 

energy intensity and less CO2 emissions, therefore, than most other automotive structural 

materials? This is particularly important in containing emissions in the manufacture of 

vehicles. 

4-15
 
EPA Response to Comments 

For example: If you compared steel to aluminum, you'd find that aluminum has over 8 

times the energy intensive, magnesium 7 to 14 times, and carbon fiber over 10 times the 

energy intensity of steel. Additionally, our domestic steel mills have the lowest energy 

intensity per ton produced of any steel sector in the world and the domestic industry has 

reduced its energy intensity by 33 percent by improvements in steel making from 1990 to 

2007. 

Finally, steel is really the most recycled material in the world and averages 97 percent 

recycling rate, and that's the tons of automotive steel recycled divided by the tons used to 

make new cars and trucks each year, and has done that for the last 20 years. This is really 

why steel has such extremely low emissions when the full life cycle of the automotive 

products are considered. 

Therefore, let's consider really how steel contributes to emissions in three ways. In fact, 

through the manufacturing phase because of its low energy emissions, in use phase 

because of its ability to reduce mass, and at the end-of-life because of its high recycling 

rate. 

So in conclusion, the steel industry has a rich and productive history of working with its 

automotive customers over the years towards objectives like mass reduction and safety -- 

objectives which I believe are fully consistent with those of EPA and NHTSA. Even in 

these very difficult times, I can report to you that our collaborative work is going strong, 

mainly because we are working on important issues for future vehicles which will lead to 

vehicle emissions reductions. AISI recommends that there be serious consideration given 

to the LCA or life cycle performance of materials in the manufacturing of light vehicles 

in the future, mainly I mean beyond 2016. We should evaluate possible credits or 

allowances for those materials which provide bona fide reduction s in emissions over a 

vehicle's full life. In this way all factors will be considered towards the goal of 

continuous reduction of vehicle emissions. 

EPA Response: 

EPA agrees with AISI that there are ways of reducing vehicle mass without negatively 

affecting the vehicle’s functional objectives, including safety. As AISI also noted, there 

are many vehicles currently being manufactured and operated within the United States 

that make use of high strength steel, and that high strength steel now makes up about 15 

percent of the average vehicle. This further supports the EPA position that it is critical 

that assessments of the relationship between vehicle mass and safety be performed, to the 

extent possible, on data which reflects the safety performance of current production 

vehicles. EPA also agrees that the issue of lifecycle emissions accounting may be 

appropriate to consider for subsequent rulemakings. See also preamble discussion in 

sections III.C.2.b.ii and III.C. explaining those limited instances where EPA is 

considering issues of vehicles’ lifecycle emissions in this rulemaking. 

Organization: Motor and Equipment Manufacturers Association 

4-16
 
EPA Responses on Joint Issues and Technical Work 

Comment: 

Standards Must Be Technology-Neutral 

MEMA supported attribute-based standards, as prescribed in the Energy Independence 

and Security Act of 2007 (EISA), allowing changes to a vehicle's fuel economy that do 

not come at the expense of safety. Incentive language in EISA noted the important role 

suppliers play in research and development of the advanced technologies necessary to 

meet the fuel economic goals. No specific vehicle technology will meet all of America's 

driving needs. All options must be available in order to achieve our legislative and 

societal objectives of improving fuel economy, reducing emissions, and advancing 

energy independence. [OAR-2009-0472-7121.1, p.3] 

The supplier industry innovates, creates, and integrates many types of components and 

technologies for vehicles and helps vehicle manufacturers accelerate the sort of 

modifications required to get more fuel efficient, lower emitting vehicles into the hands 

of consumers. The variety of means to achieve marked improvements in fuel economy 

and reduced emissions is why MEMA believes it is so important for any requirements not 

only to be attribute-based, but also technology-neutral. Otherwise, the risk of establishing 

requirements that may tend to favor one or two types of vehicle technologies over a 

myriad of other competing technologies (with equal or better performance) is too great 

and is counter to the intent of EISA. In addition, favoring certain technologies may 

foreclose even greater opportunities for fuel savings and emissions reductions that are 

available from developments in other 'non-favored' technologies or in combining 

technologies. Since a true attribute-based system is not a 'one-size-fits-all' approach, it 

encourages more innovation in various vehicle types to improve fuel economy and 

emissions in all vehicle classes. Unfairly favoring one or two types of technology over 

others also inhibits industry innovation and limits consumer choice. [OAR-2009-0472-

7121.1, p.3] 

Over time, complex combinations of vehicle technologies will increase and improve fuel 

efficiency and emissions. The NHTSA Volpe model adequately addresses the synergistic 

effects relating to the engine, transmission, electrification, hybrids, and other vehicle 

technologies. Positive synergies, for example, can be found with light weight materials 

(see Section III.A. [OAR-2009-0472-7121.1, pp.4-5]). However, the EPA proposal does 

not fully consider possible synergies that could be derived in air conditioning component 

technologies relative to the credits system (See Section IV [OAR-2009-0472-7121.1, 

pp.7-10]). All synergies must be fully examined and developed. [OAR-2009-0472-

7121.1, p.3] 

EPA Response: 

MEMA’s comments support several facets of the rule. First, the agencies believe that 

considering technologies across the entire vehicle is required in the regulation of fuel 

economy and CO2 emissions. Many factors outside of the powertrain affect fuel 

consumption and CO2 emissions, including aerodynamic drag, tire rolling resistance, and 

electrical accessory loads and only be addressing all of them from a system perspective 

4-17
 
EPA Response to Comments 

can the stringency required by this rule be obtained. Hence the use of a whole vehicle 

approach in the standard-setting process. See, e.g. the introduction to section III.D in the 

preamble to the final rule. With regard to the footprint based attribute curve not 

providing a technology preference, the agencies worked to provide an attribute curve that 

accomplished just that, and acknowledge MEMA's endorsement of such. 

Organization: Recreational Vehicle Industry Association (RVIA) 

Comment: 

a. Application of Technologies to Tow Vehicles 

In RVIA's July 1, 2008, comments to NHTSA regarding the 2011-2016 CAFE proposal 

(NHTSA - 2008-0089), we urged NHTSA to incorporate a 'heavy-tow capable' vehicle 

classification so as not to negatively impact safely towing or stopping recreation vehicle 

trailer combinations. While we regret that NHTSA did not incorporate this 

recommendation, we appreciate the fact that the Draft Joint Technical Support Document 

(TSD) prepared by EPA and DOT for this rulemaking addresses the issue of towing with 

regard to the following technologies: [NHTSA-2009-0059-0107, p.2] 

In discussing hybrid technologies, the draft joint TSD included the following discussion 

(from pp.3-50): 

Some manufacturers choose not to downsize the engine when applying hybrid 

technologies. In these cases, performance is vastly improved, while fuel efficiency 

improves significantly less than if the engine was downsized to maintain the same 

performance as the conventional version. While this approach has been used in cars such 

as the Honda Accord Hybrid (now discontinued), it is more likely to be used for vehicles 

like trucks where towing and/or hauling is an integral part of their performance 

requirements. In these cases, if the engine is downsized, the battery can be quickly 

drained during a long hill climb with a heavy load, leaving only a downsized engine to 

carry the entire load. Because towing capability is currently a heavily-marketed truck 

attribute, manufacturers are hesitant to offer a truck with downsized engine which can 

lead to a significantly diminished towing performance with a low battery, and therefore 

engines are traditionally not downsized for these vehicles. [NHTSA-2009-0059-0107, 

p.2] 

In discussing electrically-driven accessories, the draft joint TSD included the following 

discussion (from pp.3-60): 

Indirect benefit may be obtained by reducing the flow from the water pump electrically 

during the engine warm-up period, allowing the engine to heat more rapidly and thereby 

reducing the fuel enrichment needed during cold starting of the engine. Further benefit 

may be obtained when electrification is combined with an improved, higher 

efficiency engine alternator. Intelligent cooling can more easily be applied to vehicles 

that do not typically carry heavy payloads, so larger vehicles with towing capacity 

4-18
 
EPA Responses on Joint Issues and Technical Work 

present a challenge, as these vehicles have high cooling fan loads. [NHTSA-2009-0059-

0107, pp.2-3] 

In discussing integrated motor assist/crank integrated starter generator technology, the 

draft joint TSD included the following discussion (from pp.3-63): 

EPA relied on a combination of certification data (comparing vehicles available with and 

without a hybrid system and backing out other components where appropriate) and 

manufacturer-supplied information to determine that the effectiveness of these systems in 

terms of CO2 reduction is 30% for small cars, 25% for large cars, and 20% for minivans 

and small trucks similar to the range estimated by NHTSA for the respective vehicle 

classes.. The effectiveness for small cars assumes engine downsizing to maintain 

approximately equivalent performance. The large car, minivan, and small truck 

effectiveness values assume less engine downsizing in order to improve vehicle 

performance and/or maintain towing and hauling performance. [NHTSA-2009-0059-

0107, p.3] 

In discussing 2 mode hybrid technology, the draft joint TSD included the following 

discussion (from pp.3-66): 

For this proposal the CAFE model considered a range of 23 to 33 percent with a midpoint 

of 28 percent, assuming no engine downsizing to preserve the utility nature of medium 

and large trucks (e.g., maintaining full towing capability even in situations with low 

battery charge) and EPA estimates CO2 emissions reduction effectiveness to be 25 

percent for large trucks (LDT3 and LDT4 categories) based on vehicle certification data. 

EPA estimates an effectiveness of 40 percent for smaller vehicles. [NHTSA-2009-0059-

0107, p.3] 

In discussing weight reduction, the draft joint TSD included the following discussion 

(from pp.3-74): 

NHTSA and EPA estimate that a 10 percent reduction in mass results in a 6.5 percent 

reduction in fuel consumption while maintaining equivalent vehicle performance (i.e. 0- 

60 mph time, towing capacity, etc.) which is consistent with estimates in the 2002 NAS 

report. [NHTSA-2009-0059-0107, p.3] 

In discussing the full series hydraulic hybrid technology, the draft joint TSD included the 

following discussion (from pp.3-81): 

A Full Series Hydraulic Hybrid Vehicle (HHV) is somewhat similar in concept to a full 

series electric hybrid vehicle, except that the energy is stored in the form of compressed 

nitrogen gas and the power is transmitted in the form of hydraulic fluid. Series 

HHV technology currently under development by EPA is capable of a 40% decrease in 

tailpipe CO2 emissions in the small car, large car, minivan, and small truck classes. In the 

large truck class, a 30% CO2 reduction is possible. The large truck benefit is somewhat 

lower than the other classes because it is assumed that a large truck requires a larger 

4-19
 
EPA Response to Comments 

engine to maintain towing and hauling performance after the energy in the high pressure 

hydraulic accumulator is exhausted. This technology is still under development and not 

yet commercialized however there are technology demonstration vehicles in service with 

UPS in daily package delivery service. [NHTSA-2009-0059-0107, pp.3-4] 

RVIA commends the agencies for taking towing into consideration in conducting its 

technology review. We encourage you to continue doing so and to incorporate provisions 

that allow for the continued availability of safe, effective tow vehicles as you proceed in 

finalizing the standards. [NHTSA-2009-0059-0107, p.4] 

EPA Response: 

First, many of the vehicles addressed by the commenter are not subject to this rule at all. 

This rule only applies to light duty vehicles of less than 8500 lbs. GVWR and mediumduty passenger vehicles less than 10,000 lbs. For those light trucks subject to the rule, 

EPA recognizes that light duty vehicles specifically designed for towing must not be 

compromised due to advanced GHG reducing technologies. EPA thus took care in its 

analyses to recognize the utility to consumers of towing capacity and in its engine 

packages used for modeling did not downsize engines (i.e. so that EPA did not seek to 

evaluate the standard’s feasibility by downsizing engines). See RIA chapter 1 Tables 1-

11 and 1-12. 

4.4.2. Costs and Effectiveness of Technologies 

Organization: Honeywell Transportation Systems 

Comment: 

Honeywell seeks clarification from EPA and NHTSA on the assumptions made in 

determining the cost and efficiency benefits of turbocharged engines. We offer the 

agencies additional information herein for consideration in refining its assumptions. It is 

now well accepted that turbocharging enables engine downsizing by allowing a smaller 

engine to satisfy the power requirements typically derived only from larger engines. The 

downsized engine can now meet consumer expectations while improving fuel economy 

of gasoline powered passenger vehicles. [OAR-2009-0472-7165.1, p.3] 

EPA and NHTSA estimate the fuel efficiency advantage [or CO2] of a turbocharged and 

downsized engine to be in the range of 3 to 6 percent compared to a naturally aspirated 

engine of comparable performance and estimate the cost of implementing the technology 

to be in the range of $1,100. HTS would like to submit the following to show that the 

benefit to fuel economy is more in the range of 15 to 20 percent and implementing the 

technology is not as costly as described within the Proposed Rule. [OAR-2009-0472-

7165.1, p.3] 

Conventionally, large displacement, naturally aspirated gasoline engines are used to get 

high power and torque ratings. This results in the engine being operated in a throttled 

4-20
 
EPA Responses on Joint Issues and Technical Work 

condition most of the time, negatively impacting fuel economy. Downsizing the engine 

results in less throttling and higher operating efficiency, improving the overall fuel 

economy of the vehicle by 15 to 20 percent. For example, in its marketing materials, Ford 

claims that the 'primary benefits delivered by the Ford EcoBoost design approach 

include: optimized engine efficiency - fuel consumption and CO2 emissions reduced by 

up to 20 per cent; greater driving enjoyment - strong low-end torque and responsive 

performance across the full rev range; and the opportunity to downsize - large-engine 

performance, but with the size, weight and fuel economy of a much smaller unit. The 

technology featured in Ford EcoBoost engines builds on existing petrol engine 

knowledge, and offers customers a more affordable alternative to reduce carbon 

emissions than equivalent hybrid or diesel engine designs.' [OAR-2009-0472-7165.1, p.3] 

Turbocharging enables this downsizing by restoring horsepower and torque rating. It is 

estimated that turbocharging enables about 30 to 40 percent engine downsizing, yet 

delivers enhanced performance from a smaller engine with fewer cylinders than is 

possible with a non-turbocharged engine. If cylinder count is reduced, the cost savings in 

parts and assembly offset the costs of turbocharging. Replacing a 6-cylinder dual 

overhead cam engine with a 4-cylinder turbocharged engine may be cost neutral. 

Consideration of the potential to decrease cylinder count and offset costs should be 

included in calculations for fleet fuel economy and implementation costs. [OAR-2009-

0472-7165.1, p.3] 

HTS used four different methods to estimate the fuel economy benefits and degree of 

engine downsizing made possible by gasoline engine turbocharging. 

(1) Production Vehicle Data - US Market: HTS selected vehicles for sale in the U.S. for 

comparison when turbocharged, downsized engines were offered as an option instead of 

larger, non-turbocharged engines. HTS used data published on manufacturers' websites 

for comparison. For example, we compared the fuel economy of the following vehicles 

when offered for sale with and without turbo option: Passat, Passat Wagon, Mercedes E 

and C class as well as CLK, and Audi A4. The scatter in the data is wide because 

turbocharging is sometimes used for 'drivability' and sometimes for fuel economy. Also, 

this is not a strictly 'back to back' comparison because other changes such as direct 

injection instead of port injection are also sometimes made. Nevertheless, the data is 

illustrative because engine downsizing and turbocharging are the primary fuel economy 

mechanisms. The data from these six vehicles show about 40 percent downsizing and 

about 20 percent fuel economy improvement. [OAR-2009-0472-7165.1, p.4] 

(2) Production Vehicle Data - E.U. Market: We similarly analyzed the cost and fuel 

economy results from vehicles for sale in Europe, including Renault Clio, Volvo S80, 

VW Golf, Opel Astra, and Audi A6. When comparing turbo and non-turbo options, it was 

seen that fuel economy improvement was 12 to 18 percent with 20 to 25 percent 

downsizing when the turbo option was selected. [OAR-2009-0472-7165.1, p.4] 

(3) Back-to-Back Comparison - FEV Study: A study published by the power train 

consulting firm FEV supports HTS' s assertion that fuel economy improvement is in the 

4-21
 
EPA Response to Comments 

range of 15 percent when turbocharging and downsizing are employed by vehicles. The 

variation in production vehicle data due to changes in several design parameters and due 

to different design objectives has already been noted. HTS offers to EPA and NHTSA for 

their consideration a study performed by FEV which tested specifically the fuel economy 

improvements utilizing downsized engines with turbocharging. In the study FEV 

replaced the original, nonturbocharged engine with a 20 percent and then a 40 percent 

downsized, turbocharged engine. FEV observed a 13 percent and 18 percent 

improvement in fuel economy from these downsizing steps. FEV observed this 

improvement even though the compression ratio was reduced to enable high engine 

boosting. This study is the closest 'back to back' comparison that appears to be available. 

[OAR-2009-0472-7165.1, p.4] 

(4) Vehicle Simulation: HTS conducted a methodical simulation of the effects of 

downsizing to illustrate the benefits of turbocharged engines. First, HTS collected data on 

fuel consumption maps of conventional, non-turbocharged and turbocharged engines. 

HTS then averaged, normalized, and interpolated these data to construct fuel 

consumption maps of a large displacement, non-turbocharged engine and two downsized, 

turbocharged engines of the same power rating. Significantly, HTS analysis of this data 

established that the fuel consumption of gasoline engines rises sharply as load is reduced. 

In downsized, turbocharged engines this rise is below the majority of operating points for 

typical drive cycles, resulting in significant fuel consumption reduction. [OAR-2009-

0472-7165.1, pp.4-5] 

HTS selected a state of the art vehicle for this simulation. HTS did not change vehicle 

specifications when it replaced the original, non-turbocharged engine with progressively 

downsized turbocharged engines. We used simple equations for aerodynamic drag, 

rolling resistance, and acceleration losses, along with a fixed passenger compartment 

load, to calculate the engine speed and torque at each point of the FTP-75 cycle. HTS 

then used this data to obtain the fuel consumption values from engine data maps secondby-second through the FTP cycle. The consumption was summed to determine the total 

fuel used over the cycle, resulting in 13 percent fuel economy improvement for 20 

percent engine downsizing and 23 percent improvement for 40 percent downsizing. 

[OAR-2009-0472-7165.1, p.5] 

Each of these four methods shows consistently that 15 to 20 percent improvement in fuel 

economy and 30 to 40 percent reduction in engine displacement are possible with the use 

of turbocharging. HTS plotted all four data sets on the same graph and fitted a curve 

through the combined set. This graph is shown in Figure 1 and confirms the benefits of 

turbocharging, i.e. downsizing, and fuel economy improvement. [OAR-2009-0472-

7165.1, p.5] 

These four methods all produce similar results: that turbo downsizing enables significant 

fuel economy improvement when engine performance is maintained. HTS encourages 

EPA and NHTSA to accurately reflect the true benefit of turbocharging in published data. 

We believe these benefits to be in the range of 13 to 20 percent for 20 to 40 percent 

engine downsizing. [OAR-2009-0472-7165.1, p.6] 

4-22
 
EPA Responses on Joint Issues and Technical Work 

HTS supports EPA's current designation of the turbocharger as an emission related part 

under section 207 of the Clean Air Act as described by EPA in Federal Guidance. EPA 

identifies turbochargers as an example of other parts of your vehicle which have a 

primary purpose other than emissions control but which nevertheless have significant 

effects on your vehicle's emissions.' CO2 emission reduction is achieved as a direct result 

of the possibility to downsize a turbo boosted engine, and not due to the turbocharger 

itself. [OAR-2009-0472-7165.1, p.7] 

EPA Response: 

Turbocharged and downsized engines are considered an important technology for the 

reduction of greenhouse gas emissions. The effectiveness of this technology will 

continue to be evaluated as certification data is collected. 

Organization: National Automobile Dealers Association (NADA) 

Comment: 

When calculating technology costs, all dealer costs-of—sales should be accounted for in 

“dealer profit.” The finance costs paid by over 90% of consumers also must be properly 

accounted for, as should unique costs characteristics associated with leases and fleet 

purchases. [OAR-2009-0472-7182.1, p.10] 

Costs associated with design changes necessary to maintain vehicle performance, 

capability, and utility in conjunction with fuel economy/GHG technology improvements 

must be accurately accounted for. Monetizing these costs captures the degree to which 

consumers will forgo new vehicle purchases that fail to meet their needs and instead elect 

to hold onto older vehicles longer, or to access the used vehicle marketplace. Importantly, 

these marginal costs will result in marginal decreases in energy security and 

environmental benefits. [OAR-2009-0472-7182.1, p.10] 

Future fuel price projections are the most critical lynchpin to determining the value of 

fuel savings and the benefits of National Program. NHTSA and EPA should continue to 

rely on the U.S. Energy Information Administration’s (EIA) most recent reference case 

fuel price projections. Of course, as demonstrated by the many years where EIA’s 

projections fell above or below reality, forecasting future fuel prices is far from an exact 

science. Despite the inherent volatility and uncertainty of fuel prices, the National 

Program would be remiss to not use the very best models and data available or to rely on 

“high” or “low” price case projections that are inherently not probabilistic. [OAR-2009-

0472-7182.1, p.10] 

Criteria pollutant reduction benefits associated with the proposed National Program may 

be overstated as the negative impact of inhibited fleet turnover does not appear to be 

accounted for. 74 Fed. Reg. 49674-5. With respect to GHGs, only any domestic impacts 

of reducing the social costs of motor vehicle CO2, should considered given that EPCA 

focuses on U.S. energy security, and all other costs and benefits evaluated with respect to 

4-23
 
 

 

EPA Response to Comments 

CAFE standards are domestic only. NHTSA is not justified in moving away from its 

prior practice in this regard. [OAR-2009-0472-7182.1, p.10] 

A discount rate of at least seven percent (or higher) should be used to estimate future 

prospective benefits of the National Program. Financing rates on motor vehicle loans are 

indicative of appropriate discount rates since they reflect the real-world opportunity costs 

faced by consumers when buying vehicles with greater fuel economy costs associated 

with them. An accurate analysis of historic loan rates and a justifiable projection of retail 

loan rates for MY 2012-26 should be conducted and used. Importantly, using too low of a 

discount rate, like using too high fuel price projection, will result in an overly ambitious 

National Program, depressed new motor vehicle sales, and lower than projected fuel 

savings and GHG reduction benefits. [OAR-2009-0472-7182.1, p.11] 

EPA Response: 

Regarding the NADA comment that dealer costs-of-sales should be accounted for in 

"dealer profit", the agencies have included dealer costs-of-sales (selling costs) in the 

indirect cost multiplier (ICM)—which makes up part of the final technology costs—as a 

unique element. There is no compelling reason to include those costs in the “dealer 

profit” element of the ICM. As for the finance costs paid by consumers, it is important 

to note that from a social perspective, the costs of the rule are the technology costs 

themselves and do not include the finance costs. While those costs are incurred by 

consumers, they are merely transfer costs from the perspective of regulatory cost 

analysis. We have included financing costs in our vehicle sales impacts analysis since 

costs there are not social costs but rather personal costs. 

Regarding NADA's comment on vehicle utility, it is important to note that the agencies 

have made every effort to craft a national program that will have no impact on vehicle 

utility. Vehicle performance characteristics should not change as a result of this rule. As 

noted elsewhere (see, e.g. comment response 5.13), EPA accounted for costs needed to 

preserve existing vehicle utility in its analyses, for example by retaining features relating 

to performance in the baseline vehicle packages used as the basis for analyzing 

technology cost and effectiveness. That said, vehicle performance characteristics may 

well change due to consumer demand, but that would not be the result of the rule.1 In 

fact, EPA's analysis of the rule's impact on vehicle sales suggests that sales will increase 

as a result of the rule because consumers will find the new, more efficient vehicles more 

attractive than older vehicles. In short, we disagree with this comment and the premise 

that compliant vehicles will have less utility and/or be less attractive to consumers. 

Organization: General Motors 

Comment: 

1 We note that CARB in its public comments “agrees with the agencies’ assumption that vehicle attributes 

of performance, carrying capacity, safety, or comfort would not change under this regulation.” 

4-24
 
 

EPA Responses on Joint Issues and Technical Work 

The agencies developed a baseline fleet for cars and trucks and then applied fuel 

economy technologies to the fleet to create the most cost effective set of standard curves. 

In this assessment, assumptions are made about the effectiveness of each applied 

technology. Included herein is a detailed analysis of the technologies applied to large 

pickups. The analysis shows that the effectiveness of many of these technologies is 

significantly overstated. Therefore GM recommends that the obligation for large pickups, 

in each year of the rule, be reduced. [OAR-2009-0472-6953.1, p.9] [[See pp.9-16 of 

OAR-2009-0472-6953.1 for a detail analysis of the following technologies: Engine 

Downsizing and Boosting (Turbocharging) applied to a Full-Size Truck; Variable Valve 

Timing or Valve Lift; 12V Flywheel Stop/Start System; and, Dual-Clutch Automatic 

Shift Manual Transmission (DCT)]] 

EPA Response: 

Based on a careful review of GM’s entire submission, EPA believes that the GM analysis 

is largely consistent with EPA’s analysis and publically data cited within Chapter 3 of the 

Technical Support Document for this rule, when GM’s analytical results are compared on 

the basis of similar curb-weight and similar vehicle performance to what was used within 

EPA’s analysis. In the specific case of turbocharged gasoline direct injection engines, 

EPA estimates of CO2 reduction are less than publically available data for some 

turbocharged direct-injected engines for future light- truck applications (see TSD Chapter 

3). We agree with GM’s comments that it is unlikely that dry-DCTs will be used in lighttruck applications. 

EPA’s estimated effectiveness for start-stop systems is relatively conservative when 

compared to publically available data and appears to be generally consistent with GM’s 

analysis. 

EPA’s estimated effectiveness of variable valve timing and lift is similar to or in some 

cases overlaps GM’s analysis. Insufficient detail was provided within GM’s analysis to 

determine the reason for any differences. 

We continue to believe that wet-DCTs provide CO2 benefit, based on the results in our 

analysis within Chapter 3 of the TSD and the 2008 EPA Staff Report. 

Organization: International Council on Clean Transportation 

Comment: 

EPA and NHTSA used different models to assess costs and benefits. NHTSA used the 

Volpe model, which they have evolved over their last several CAFE rulemakings. EPA 

has developed an independent model with some significant simplifications and that does 

not depend on confidential manufacturer product plans. While both models are capable of 

4-25
 
EPA Response to Comments 

properly assessing costs and benefits, ICCT prefers the overall EPA approach because of 

its relative simplicity and better transparency. 

ICCT is generally in favor of simplifying models, as long as accuracy is maintained. For 

example, the EPA model assesses technology over 5 year redesign periods, instead of for 

each model year. This is a good simplification, as manufacturers’ redesign plans change 

frequently and annual assessments are likely to be no more accurate than assessing 

technology over redesign periods. 

A simplification that does not work as well is that EPA appears to assign the same 

technology package improvements to each manufacturer. EPA’s model begins by 

determining the specific CO2 emission standard applicable for each manufacturer, based 

on the footprint and projected sales of each model, and accounts for differences in 

technology for the baseline model year. However, the model implicitly assumes that 

every manufacturer will implement the same technologies in the same order in the future 

based on industry $/kg estimates, without looking at the specific knowledge and 

experience base for each manufacturer. This simplification may be missing important 

differences between manufacturers. For example, Volkswagen is unique in having 

heavily invested in diesel engines in the U.S. for decades and having a substantial share 

of diesel engine in their fleet, but is far behind some manufacturers in developing and 

introducing hybrid vehicles. Given their existing investments, Volkswagen’s future 

technology mix is likely to be very different from most manufacturers. Similarly, Honda 

has been an industry leader in variable valve timing and cylinder deactivation, Toyota a 

leader in hybrids, Nissan a leader in continuously variable transmissions (CVTs), and 

Ford and a few other manufacturers have been especially aggressive in developing direct 

injection, turbocharged gasoline engines. NHTSA's model is capable of assessing 

leadtime, benefits, and costs independently for each manufacturer. While this is not 

critical for assessing overall costs and benefits, it does help to evaluate competitive 

impacts. 

In the long run, the agencies should cooperate in developing a single model for setting 

vehicle standards, incorporating the best features of each model while maintaining as 

much simplicity and transparency as possible. 

EPA is implicitly applying a separate learning curve to indirect costs, though the 

reduction in the long term multiplier. However, as indirect costs are a multiple of direct 

costs, learning curves applied to direct costs also reduce indirect costs. How does the 

reduction in indirect costs due to learning for direct costs interact with the reduction in 

the long-term multiplier? 

[OAR-2009-0472-7156.1, pp.17-18] 

EPA Response: 

The intent of this rulemaking is to provide the most value to the consumer while still 

meeting the standard. A manufacturer has many choices to meet the standard based on 

4-26
 
EPA Responses on Joint Issues and Technical Work 

many factors such as corporate expertise, innovative technologies, consumer choice, etc. 

The goal of the EPA model is to define the lowest cost technology route for each baseline 

vehicle in order for the manufacturer to meet the standard. The manufactures may 

implement any common or proprietary technologies in any order they choose as long as 

the standard is met. 

Regarding learning curves, mathematically, the comment is not incorrect. The indirect 

cost multipliers are proxies for having more detailed information about the indirect costs 

associated with a new technology. The method, derived from the longstanding use of 

retail price equivalent multipliers, estimates indirect costs as a proportion of direct costs. 

The learning curve effects are applied only to direct costs in our analysis. However, if 

direct costs go down, all else equal, the assumption of this approach is that indirect costs 

will go down as well. 

Organization: Gluckstern, Henry 

Comment: 

There is ample technology on the shelf to meet the proposed standards without unduly 

burdening the industry. If automakers had acted to build more efficient cars and trucks, 

consumers would not have been hit as hard by $4-a-gallon gas a little over a year ago. It 

is time to put fuel efficient vehicles people want to buy on the market. No passenger car 

should be getting fewer than 50 miles to the gallon in the year 2010, but precious little of 

the world's fleet achieves such a number. [OAR-2009-0472-5258, p. 2] 

EPA Response: 

EPA appreciates these comments as we move toward reducing greenhouse gasses and 

dependence on limited natural resources. 

Organization: Eadie, R. Frank 

Comment: 

I do think that -- well, it's going to need to -- let me say that one thing that could be done 

and I would really like to ask that the EPA consider restrictions on idling. Idling is a very, 

very large source of pollutants in Manhattan, and because you spend so much time in 

traffic, there's vehicles spending so much time idling, especially buses and trucks which, 

of course, put out very toxic things along with the CO2 that they're admitting, and so it's -

- you know, I would suggest that, for example, that there be automatic idle -- idling 

restrictors on vehicles and that that be mandated, say after 20 seconds of idling, the 

engine would automatically shut off on gasoline, diesel and fossil fuel burning engines. 

That would save [EPA-HQ-OAR-2009-0472-4621, p.170] a lot of lives in a fairly short 

period of time, and certainly we have the technology nowadays that, for example, the 

engine could be restarted by simply pushing the accelerator. That happens in the hybrid 

vehicles now. So it should be mandatory on all new vehicles, maybe retrofitted after, you 

4-27
 
EPA Response to Comments 

know, 2015 or something, that all vehicles be retrofitted with that kind of a thing. This is, 

of course, a major problem. It's not just New York that has congestion problems. [EPAHQ-OAR-2009-0472-4621, p.170] 

So I have one other. I want to ask that you communicate with your leaders at all levels 

about this new rule, that you seriously look at the new reports that are coming out and 

begin to think in a very friendly way, you basically have to -- I'm actually old enough to 

remember the Second World War, and, you know, what happened then is what has to 

happen now. We have to go on a war footing, a real war footing, not an Iraq war kind of 

footing, but a real footing where the President calls together the industry leaders and the 

best scientists and thinkers and organizers and works out a reorganization of the 

economy. That really is what needs to happen, and nothing short of that is going to get us 

close to being able to survive, and that's what I wanted to say. [EPA-HQ-OAR-2009-

0472-4621, p.175] 

EPA Response: 

EPA has considered a technology that reduces CO2 emissions at idle and we anticipate 

that the technology will be applied in the timeframe of the final rule. The technology is 

referred to as Start-Stop and is described in detail in the Joint Technical Support 

Document (TSD). The following is an excerpt from the TSD and is a brief summary of 

how it works: 

	 12-volt micro-hybrid (MHEV) – also known as idle-stop or start stop and 

commonly implemented as a 12-volt belt-driven integrated starter-generator, 

this is the most basic hybrid system that facilitates idle-stop capability. Along 

with other enablers, this system replaces a common alternator with an 

enhanced power starter-alternator, both belt driven, and a revised accessory 

drive system. 

While this rule does not mandate the implementation of any specific technology, we 

recognize that CO2 emissions at idle are a significant contributor to a vehicle’s overall 

emissions performance. EPA modeling results show an overall penetration rate of this 

technology in the 2016 MY to be 2% for cars and 4% for trucks to meet the stringency set 

forth by this rule. 

4.5 Economic Assumptions 

4.5.1 Consumer Welfare and Valuation of Fuel Savings 

Valuation of Fuel Savings 

Organization:Consumer Federation of America 

Institute for Energy Research 

Mr. Richter – Environmental Capital Partners 

Union of Concerned Scientists 

4-28
 
EPA Responses on Joint Issues and Technical Work 

United Auto Workers 

University of Michigan Transportation Research Institute (UMTRI) 

Investor Network on Climate Risk 

University of Pennsylvania, Environmental Law Project 

State of New Jersey 

James Adcock 

Comment: 

Consumer Federation of America 

Our analysis of opinion polls and purchase decisions over the past half-decade shows that 

consumers want a great deal more fuel economy than automakers have been willing to 

supply (see Sections II and IV). The recent economic analysis of fuel economy by 

NHTSA/EPA suggests why consumers want more fuel economy. The cost of increasing 

fuel economy to 38.1 miles per gallon by putting more fuel saving technology in cars and 

trucks is well below the amount consumers are willing to pay and the cost of 

gasoline. [OAR-2009-0472-7272.1, p.5] 

Our analysis of the failure of the market to yield an efficient outcome with respect to 

energy efficiency presented in Section III has four critical purposes in these comments 

and implications for the process of standard setting for both fuel economy and tailpipe 

emissions. First, it demonstrates that the consumer welfare gains, which account for 

almost 80 percent of the total societal welfare gains, should be included in the costbenefit analysis. Without these gains, a benefit cost framework would justify little if any 

increase in fuel economy standards. The nature and extent of the market failure dictates 

the degree of confidence in the consumer welfare gains. [OAR-2009-0472-7272.1, p.6-

7] 

Exhibit I-1 also shows the large benefits that have been left on the table as a result of the 

dire circumstances of the industry. The proposed rule delivers far smaller benefits than 

could be achieved if the condition of the industry were not holding the agencies back. 

• The societal benefit would be $50 billion larger. • The consumer pocketbook savings 

would be $37 billion larger. • Gasoline consumption would be 32 billion gallon lower.• 

Greenhouse gas emissions would be 13 billion tons lower. 

Our analysis of opinion polls and purchase decisions over the past half-decade show that 

consumers want a great deal more fuel economy than automakers have been willing to 

supply. The NHTSA/EPA analysis shows that the cost of higher fuel economy is well 

below the amount consumers are willing to pay given the cost of gasoline. The cost of 

saved energy, a concept frequently used in the analysis of energy efficiency, is also far 

below the current cost of gasoline. [OAR-2009-0472-7272.1, p.10] 

I want to briefly highlight today one issue that I think is of paramount importance as we 

move forward. The agencies must adopt a firm analytic framework that recognizes that 

4-29
 
EPA Response to Comments 

fuel economy standards enhance consumer welfare. The billions of dollars of consumer 

welfare gains estimated by the agencies in their analysis are real and substantial. The 

final rule should clearly acknowledge not only the empirical estimates of these gains, it 

should also conclude that the theoretical justification for incorporating consumer welfare 

gains into the rulemaking is clear and solid. 

Now, in the proposed rule the agency rejected claims that consumer welfare gains 

shouldn’t be included on the basis of the empirical finding that the models are too 

imprecise. You’re perfectly right to say that, but that is too weak of a rationale. 

These models have a fundamental theoretical flaw. In order to conclude that consumers 

do not enjoy increased welfare as a result of fuel economy standards, one must assume 

that consumers have full information and perfect foresight in their vehicle purchase 

decisions, and that the supply side of the market gives them a full, balanced, and unbiased 

range of choices to meet their needs. None of these assumptions is correct, and that’s 

why we have a $100 billion market failure. 

In fact, as we’ll show in our comments, there’s a broad range of theoretical and empirical 

evidence to support the conclusion that there is a substantial market failure with respect 

to efficiency and that fuel economy standards enhance consumer welfare. 

Institute for Energy Research 

These estimates are flawed. For example, EPA is claiming consumers would save $90 

[billion] in fuel costs because of these regulations. These savings should not be 

considered a benefit under this analysis because consumers’ voluntary, market choices 

illustrate they prefer other vehicle attributes more than fuel economy. [OAR-2009-0472-

7225.1, p.9] 

Consumers demand a certain fuel economy, but consumers also want to maximize other 

attributes such as performance and size (then again, maybe the fuel economy of these 

cars is actually higher than consumers’ actual preferences because of CAFE standards). If 

consumers really demanded very fuel efficient cars, Honda would still make a car today 

that gets better gas mileage than the 1985 Honda Civic Coupe HF. The Civic Coupe HF 

got nearly 50 mpg on the highway a quarter century ago. Today, the Honda’s most fuel 

efficient car is a hybrid sedan Civic that gets 40 mpg in the city and 45 mpg on the 

highway. [OAR-2009-0472-7225.1, p.10] 

Also, if there were greater consumer demand for fuel efficient cars, it is likely European 

versions of automakers’ cars would be sold in the United States. For example, in Europe, 

Ford sells the Fiesta ECOnetic which gets 65 mpg. [OAR-2009-0472-7225.1, p.10] 

Because U.S. consumers value other attributes in their cars more highly than fuel 

economy, EPA’s cost-benefit analysis should not include the $90 billion in savings from 

fuel economy as a benefit, or at the very least, it should include the $90 billion in savings, 

4-30
 
EPA Responses on Joint Issues and Technical Work 

but offset it with an even larger negative figure to account for consumers’ unhappiness 

with the reduction in their options. [OAR-2009-0472-7225.1, p.10] 

The issue of consumer welfare due to vehicle attributes is crucially important: It may 

mean the difference between a program that confers net benefits or net costs. If the loss in 

consumer welfare (due to forced change in vehicle attributes) exceeds $3 billion by 2030, 

then the net social benefits of the proposed rule may be negative, because the low end of 

the estimated benefits (excluding fuel savings) are $21 billion, while the other estimated 

costs of the program are $18 billion by 2030. [OAR-2009-0472-7225.1, p.10] 

Mr. Richter - Environmental Capital Partners 

Secondly, as was mentioned in the earlier panel, cars that get better gas mileage save the 

consumer money in the long run. When oil prices soar, even a free car becomes 

unaffordable if you can’t pay to fill the car up. If you look at the Cash For Clunkers, for 

instance, the top ten models purchased get almost 30 miles to the gallon. The average 

mile traded in got 15.8. That’s a 58 percent improvement because those purchases got an 

average of 24.1 miles per gallon. Energy efficient cars represent more than an 

environmental statement. For financially challenging times, they’re an economic 

necessity. [EPA-HQ-OAR-2009-0472-4621, p.163] 

Union of Concerned Scientists 

According to UCS analysis, the standards proposed in the NPRM will reduce oil 

consumption from U.S. light-duty vehicles by 1.3 million barrels per day in 2020. This 

translates into a savings of nearly 20 billion gallons of gasoline in just one year. 

By reducing oil consumption, consumers will save money at the gas pump. Even if prices 

stay at current values, approximately $2.50 a gallon, consumers will save $32 billion in 

2020. UCS calculates these savings on a net basis and includes the additional cost of fuel 

saving technology. This demonstrates consumers still recognize additional benefits even 

with a significantly higher purchase price of a new vehicle. If prices return to higher 

levels, such as $4 a gallon, savings would nearly double to over $61 billion. [These 

comments were submitted as testimony at the New York public hearing. See docket 

number EPA-HQ-OAR-2009-0472-4621, pp. 92-3.] 

In addition to the consumer savings, these standards will achieve a critical reduction in 

the heat-trapping gases that cause global warming. Currently, cars and light trucks 

account for nearly 20 percent of total U.S. global warming emissions. These standards 

will reduce greenhouse gas emissions from cars and light trucks by 215 million metric 

tons of carbon dioxide equivalent in 2020. That’s about the equivalent of taking 32 

million vehicles off the road in that year. And as the fleet turns over, the benefits will 

only grow with time. [These comments were submitted as testimony at the New York 

public hearing. See docket number EPA-HQ-OAR-2009-0472-4621, pp. 93-94.] 

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EPA Response to Comments 

All of our analysis is based on assuming the fleet achieves the 250 grams per mile fleetwide average in model year 2016, a level equivalent to approximately 35.5 miles per 

gallon and the NHTSA standard of 34.1 in that year. [These comments were submitted 

as testimony at the New York public hearing. See docket number EPA-HQ-OAR-2009-

0472-4621, p. 94.] 

United Auto Workers 

Fourth, the UAW commends the agencies for the extended discussion of consumer 

benefits and losses in the Notice of Proposed Regulation, the Draft Regulatory Impact 

Analysis, and the Draft Joint Technical Support Document. The UAW agrees with the 

agencies that much more work must be done in this area, and believes that there is a 

major omission in the cost-benefit analysis because there is no value given to consumer 

and producer welfare losses. While the benefits of fuel savings to consumers are apparent 

and easily calculated, consumer and producer welfare losses, though apparent, are more 

difficult to assess. [OAR-2009-0472-7056.1, p.3] 

Given that the benefits to consumers from reduced fuel expenditures, reduced fueling 

time, and increased driving together comprise fully 89 percent of the benefits from these 

proposed rules and dwarf the energy security and environmental benefits, the UAW 

believes remedying this critical omission should be a top priority for future rulemakings. 

To have balanced rulemaking, it is important that the obvious but unvalued losses for 

consumers and producers be included in any cost-benefit analyses. We appreciate the 

agencies’ willingness and stated commitment to attempt to develop methods to value both 

consumer and producer losses in future rulemakings. [OAR-2009-0472-7056.1, p.4] 

The UAW would suggest that the most fruitful approach is a close examination of 

consumer and producer behavior in the passenger car market. The existing CAFE 

standard of 27.5 miles per gallon has not been binding on the vast majority of producers 

for many years. This means that in all likelihood consumers have been demanding the 

full level of fuel economy that they value in relation to other vehicle characteristics, and 

that producers have been free to add features to vehicles that will maximize their 

profits. [OAR-2009-0472-7056.1, p.4] 

Hence, any regulation that that forces producers to market and consumers to buy 

passenger cars with fuel economy that exceeds this “revealed preference” generates both 

consumer and producer losses. Consumers have losses because they are forced to have 

additional utility in the form of fuel efficiency when in most cases they have clearly 

chosen otherwise. Producers suffer losses because they are forced to offer additional 

utility in the form of fuel efficiency that customers do not want and are therefore 

unwilling to pay the full cost of, and due to lost profits from the opportunity cost of not 

being able to add features that provide utility for which consumers are willing to pay the 

full cost. [OAR-2009-0472-7056.1,p.4] 

This logic gains considerable strength from the competitive nature of the passenger car 

market in the United States, and the fact that the market has become much more 

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EPA Responses on Joint Issues and Technical Work 

competitive over the last decade. Consumers have a wide and growing range of choices, 

and any producer that saw a potential advantage to offering more fuel-efficient vehicles 

would do so. Indeed, many have, resulting in average fleet-wide passenger car fuel 

efficiency that exceeds the existing regulations, but is less than the levels in this proposed 

rule. Although the agencies performed the technology analysis in a manner that attempted 

to maintain current vehicle-class utility, this only begs the question of what vehicle 

features consumers might prefer, besides additional fuel efficiency, for the extra cost 

associated with achieving that fuel efficiency. [OAR-2009-0472-7056.1,p.4] 

University of Michigan Transportation Research Institute (UMTRI) 

Over the past few years, I have authored or co-authored a number of research reports on 

the impacts of fuel economy regulations and fuel prices on automaker costs, profits, and 

employment. Today I want to bring your attention to two recent reports: [OAR-2009-

0472-3651.1, p.1] 

The first study, “CAFE and the U.S. Auto Industry Revisited” (written in partnership 

with Citi Investment Research & Analysis, Ceres, the Investor Network on Climate Risk, 

the Planning Edge, and Meszler Engineering Services) was recently released by Citi 

Investment Research & Analysis. [OAR-2009-0472-3651.1, p.1] 

The study analyzed two regulatory scenarios for light vehicles: CAFE 2020—an 

industry-wide target of 35 mpg in 2020; and “national Pavley” (equivalent to the National 

Program)—an industry-wide target of 35 mpg in 2016. In each scenario, we estimated the 

impacts on sales, costs, and profits relative to a baseline forecast. [OAR-2009-0472-

3651.1, p.1] 

The analysis found that the proposed National Program is likely to benefit both the 

Detroit 3 and the Japan 3 by boosting profits, based on the relative value consumers put 

on fuel costs compared to vehicle price, the future price of fuel, and the combined direct 

and indirect costs incurred to improve fuel economy. The study found that by producing 

more competitive, fuel-efficient fleets in the coming years the Detroit 3 would be able to 

slow or reverse their market share erosion that has accelerated in recent years. [OAR2009-0472-3651.1, p.2] 

According to the study, the National Program is likely to increase the Detroit 3’s profits 

by $3 billion per year, and to increase the Japan 3’s profits by $0.8 billion per year. Unit 

sales by the Detroit 3 are predicted to increase by the equivalent of two large assembly 

plants, thereby saving U.S. autoworker jobs. [OAR-2009-0472-3651.1, p.2] 

Consumers will also benefit, since the fuel savings from more efficient cars – even at the 

present gas price of $2.50 a gallon – will more than offset the higher prices for vehicles 

incorporating new fuel-saving technologies. Under the National Program, the present 

value of the fuel saved will be greater on average than the increase in purchase price on 

average associated with the new fuel saving technology. [OAR-2009-0472-3651.1, p.2] 

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EPA Response to Comments 

The second study, “Fixing Detroit: How Far, How Fast, How Fuel Efficient” (which my 

colleague Rob Kleinbaum co-authored) was completed in June 2009. [OAR-2009-0472-

3651.1, p.2] 

The report modeled the impact of three different fuel economy standard increases—30 

percent (35 mpg), 40 percent (37.7 mpg) and 50 percent (40.4 mpg)—on the profitability 

and sales of the auto industry. The model estimated the impact of improving fuel 

economy on the costs of producing vehicles, on the retail prices of vehicles, and on 

consumer demand. We used the most recent and accepted estimates of all the key 

parameters, but since there is debate on many of these values, the report conducts an 

extensive sensitivity analysis on the results. [OAR-2009-0472-3651.1, p.2] 

Results indicated that the Detroit 3 would have increased profit (over the baseline) in all 

three scenarios, and their profit gains would be larger the more aggressively they pursue 

improvements in fuel economy. The Japan 3 (Toyota, Nissan, and Honda) would also 

gain profit from pursuing higher fuel economy, but their gains would be smaller than 

those of the Detroit 3. The profit gains are possible because higher fuel economy is worth 

more to consumers than it costs the automakers to provide. [OAR-2009-0472-3651.1,p.2] 

The market for clean, fuel-efficient vehicles is not a perfectly competitive market in 

which consumers and automakers have perfect foresight and perfect computation ability. 

In a perfectly competitive market, producers would have complete knowledge of 

consumers’ willingness to pay for all vehicle attributes as well as complete knowledge of 

all technologies to produce vehicles with any feasible combination of attributes.[OAR2009-0472-3651.1, p.2] 

However, recent events have demonstrated that automakers have neither complete 

knowledge not perfect foresight. The shifts in consumer demand toward wanting more 

fuel economy caught automakers by surprise, and significantly contributed to the 

financial failure of GM and Chrysler. Consumer demand began to shift at least as early as 

2002, yet automakers, the Detroit 3 in particular, did not respond with new technologies 

and products until 2007. The failure to anticipate and respond to the shift in consumer 

demand is clear evidence that automakers seriously underestimated the consumer value 

of fuel economy. [OAR-2009-0472-3651.1, p.2] 

The scenario with 30 percent improvement in fuel economy (to 35 mpg) is roughly 

equivalent to the proposed standards under the National Program. We estimated the 

average cost per vehicle of improving to 35 mpg to be $1,715 and the average consumer 

value added per vehicle to be $2,578. [OAR-2009-0472-3651.1, p.3] 

[UMTRI also submitted these comments as testimony at the Detroit public hearing, See 

docket number EPA-HQ-OAR-2009-0472-6185, pp. 33-36.] 

Investor Network on Climate Risk 

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EPA Responses on Joint Issues and Technical Work 

As long-term investors, and as members of the Investor Network on Climate Risk 

(INCR), which represents over $8 trillion in assets, we are writing to express our strong 

support for the National Program (the proposed fuel economy/GHG emissions standards). 

The proposed regulation essentially adopts the GHG emissions standards that CA had 

proposed, and will require a fleetwide average of approximately 35.5 mpg in 2016, 

representing an approximately 40% increase in fuel economy over present standards. 

In particular, we would like to bring your attention to the findings of the Citi report, 

published on October 13, 2009. This report was produced in partnership with INCR, 

Ceres, and the University of Michigan Transportation Research Institute (UMTRI), and 

addresses the impacts of the National Program on automakers. The Citi report finds that 

the recently proposed vehicle CAFE/GHG standards will likely boost profits and slow the 

loss of market share of Detroit’s Big Three automakers. 

Key findings of the report include the following: Automakers’ variable profits will be 

greater (as compared to the case under no new regulation) under the National Program.: 

The standards are likely to increase Detroit’s competitiveness: 1. The Detroit Three will 

be able to mitigate market share erosion by producing more competitive fuel-efficient 

fleets in the coming years. 2. The Detroit Three do better than Japanese Three under the 

National Program under most scenarios. 3. Sales by the Detroit Three are expected to 

increase by the equivalent of two large assembly plants, thereby saving U.S. autoworker 

jobs. 

Consumers will benefit as well since fuel savings from more efficient cars – even at the 

present gas price of $2.50 a gallon – will more than offset slightly higher prices for 

vehicles incorporating new fuel-saving technologies. [OAR-2009-0472-7243.1, p.1] 

[Investors Network on Climate Risk also submitted these comments as testimony at the 

New York public hearing, See docket number EPA-HQ-OAR-2009-0472-4621, pp. 34-

36.] 

University of Pennsylvania, Environmental Law Project 

3. Expected Costs of Implementation of the Proposed Rule 

As previously mentioned, some groups worry about the economic costs of rule 

implementation. They argue that the proposed rule could add too much to the price of 

new cars. This will lead, they say, to people sticking with their older, gas-guzzling cars 

instead of buying new ones, thereby undermining the primary goal of the rule of lowering 

vehicle emissions [OAR-2009-0472-7286.1, pp. 20-21]. 

However, most stakeholders, including the auto industry and Auto Dealers Association 

support the rule and agree that this standard can be met without undue costs. They also 

point to the benefits of a predictable national standard that will help to lessen uncertainty 

for the auto industry when they develop new models, and lower compliance costs by 

avoiding a patchwork of rules between the states. Furthermore, it will allow them time to 

4-35
 
EPA Response to Comments 

build improvements into new models during the normal production and design process, 

which will minimize the additional costs imposed. [OAR-2009-0472-7286.1, p. 21] 

Consumers also will not only be spared from extra costs, but will save money in the long 

run because of the fuel efficiencies of their new cars. [OAR-2009-0472-7286.1, p. 21] 

State of New Jersey 

Finally, we agree with the federal government’s assessment that under realistic 

assumptions, the private gains to the consumer from the joint proposal (e.g., savings in 

fuel economy), together with the social gains (e.g., reduced health costs associated with 

pollution, reduced reliance of foreign oil sources, etc.), will significantly outweigh the 

incremental initial costs of providing these newer advanced technology vehicles. [OAR2009-0472-7109.1, pp.5-6] 

Union of Concerned Scientists 

It was disconcerting to read in the NPRM that there was some debate about the role of 

private benefits in assessing the total benefits and costs of the program. The argument 

against including these benefits boils down to an attempt to force the assumption of a 

perfect free market on to a situation that is far from it. As noted in the NPRM, if the car 

market had all the features of a perfect free market (e.g. full information, perfect 

foresight, perfect substitutes, etc.) then there would be an argument for excluding the 

private benefits. But we know that consumers can not have full information and perfect 

foresight. For example, EPA window stickers and the EPA Fuel Economy Guide note 

that “Your Fuel Economy Will Vary.” Further, not even the government’s Energy 

Information Agency can accurately predict gasoline prices. Consumers also cannot 

predict future traffic patterns, changes in job location and many other factors that will 

influence how much they could save on gasoline from various vehicle choices. [OAR2009-0472-7181.1, p.15] 

Union of Concerned Scientists 

Further, consumers save money under these standards from the minute a new vehicle is 

purchased. Currently approximately 70 percent of consumers purchase a new vehicle 

using loans. Assuming a typical five year loan at 6 percent interest, savings at the gas 

pump due to higher fuel economy are greater than the additional cost of technology each 

and every month the consumer owns the vehicle, even if gas prices were to fall to a 

modest $2 a vehicle. In other words, our analysis shows that consumers will save money 

from the moment they roll off the lot under these standards. [These comments were 

submitted as testimony at the New York public hearing. See docket number EPA-HQOAR-2009-0472-4621, p. 93.] 

James Adcock 

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EPA Responses on Joint Issues and Technical Work 

Does CAFE in fact represent a negative to consumer utility or rather a protection of the 

consumer's interests in the face of irrational discounting by the consumer? Also, the 

utility of higher fuel economy DOES pass on to secondary owners - NHTSA also needs 

to represent the interests of secondary owners who are even more unable to bear the 

burden of high fuel costs. 

EPA Response: 

While most of these commenters argue that this rule will save consumers money, because 

the present value of fuel savings greatly outweighs the technology costs, the Institute for 

Energy Research and the UAW argue that, if consumers wanted more fuel savings, the 

market would have provided them. These two commenters suggest that there must be a 

loss associated with improving fuel economy, because many consumers do not purchase 

highly fuel-efficient vehicles already on the market. 

EPA distinguishes between the fuel savings that consumers consider when buying 

vehicles and the fuel savings that consumers will get after the purchase. These two 

values need not be the same. As discussed in Section 5.13.1 of this Response to 

Comments document, as well as Section III.H.1 of the Preamble and Section 8.1.2 of the 

RIA, a number of reasonable explanations have been offered for the possible divergence 

between these two approaches to valuing fuel savings. 

OMB Circular A-4 notes that “Economists ordinarily consider market prices as the most 

accurate measure of the marginal value of goods and services to society.” The fuel 

savings that consumers will receive are directly measurable using market prices for fuel, 

while the values that consumers reveal through their purchase decisions are indirect 

measures and may therefore be less reliable. 

EPA, along with most commenters on the rule, find that there are cost-effective fuel 

savings that the market has not at this time provided to consumers and includes those 

benefits in our analysis. 

As discussed more in Section 5.13.1 of this Response to Comments document, as well as 

Preamble III.H.1 and RIA Section 8.1.2, EPA believes that any adverse effects on vehicle 

characteristics due to the rule are best considered in the context of the technology costs to 

achieve the standards, not the fuel savings. 

The University of Michigan Transportation Research Institute and the Investor Network 

on Climate Risk argues that the Detroit auto makers, as well as consumers, will benefit 

from improved fuel economy in vehicles. While EPA’s analysis of vehicle sales impacts 

(Preamble Section III.H.5 and RIA Section 8.1.1) is not able to distinguish effects for 

individual auto makers, EPA estimates that vehicle sales will increase in response to the 

rule. 

Quantification of Consumer Welfare Impacts 

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EPA Response to Comments 

Organization: New York University School of Law, Institute for Policy Integrity (IPI) 

Comment: 

Once an agency undertakes a cost-benefit analysis and relies on that analysis in its 

rulemaking, it cannot perform the cost-benefit analysis in an arbitrary and capricious 

manner. If a cost-benefit analysis used in rulemaking “fail[s] to consider an important 

aspect of the problem” or “runs counter to the evidence before the agency,” a reviewing 

court will invalidate the rule under the Administrative Procedure Act. Perhaps crucially, 

NHTSA has clearly identified the potential lost consumer welfare as “an important 

component of the total private costs and benefits.” [OAR-2009-0472-7232.3, p. 4] 

Failing to quantify an important element in a cost-benefit analysis can constitute arbitrary 

and capricious action. A cost-benefit analysis must be as accurate as reasonably possible, 

and agencies must estimate costs and benefits in a responsible manner. Courts have 

criticized Department of Transportation rulemakings in the past for trying to justify a 

failure to quantify by citing uncertainty. In Public Citizen v. FMCSA, the court warned 

that: 

The agency’s job is to exercise its expertise to make tough choices about which of the 

competing estimates is most plausible, and to hazard a guess as to which is correct... 

Regulators by nature work under conditions of serious uncertainty, and regulation would 

be at an end if uncertainty alone were an excuse to ignore a congressional command. 

[OAR-2009-0472-7232.3, p. 4] 

Similarly, in Center for Biological Diversity v. NHTSA, NHTSA believed the economic 

models on the benefits of reducing greenhouse gas emissions were too uncertain and 

inconsistent to support an explicit valuation. The Ninth Circuit Court of Appeals held that 

NHTSA’s reasoning was arbitrary and capricious because “while the record shows that 

there is a range of values, the value...is certainly not zero.” In the present rulemaking, the 

agencies also fail to quantify an important element of the cost-benefit analysis and thus 

unnecessarily expose themselves to legal challenges. [OAR-2009-0472-7232.3, p. 4] 

EPA Response: 

EPA does not accept the premise that a court must invalidate a rule as arbitrary if any 

cost-benefit analysis accompanying the rule fails to consider some important aspect of the 

problem. The uses to which cost-benefit analysis is put during the rulemaking determines 

the degree of judicial scrutiny to which such analysis is subject – a distinction overlooked 

by the commenter. Nor does EPA accept the premise that it has ignored some significant 

element – evaluation of consumer welfare costs and benefits – in establishing the 

standards. 

In Center for Biological Diversity v. NHTSA, 538 F. 3d 1172 (9th Cir. 2008), the court 

was reviewing a rule where the standard was established using a type of marginal costbenefit analysis such that individual inputs became output determinative. 538 F. 3d at 

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EPA Responses on Joint Issues and Technical Work 

1199. Under such circumstances, the agency’s failure to assign any value to a critical 

factor (valuation of reduced carbon emissions) was deemed arbitrary. Id. at 1202. (noting 

that the omission was both arbitrary and that the omission affected the stringency of the 

standard). In Public Citizen v. FMCSA, 374 F. 3d 1209 (D.C. Cir. 2004) the court found 

that the agency had outright failed to consider a critical statutory decision factor – driver 

safety – and so had acted arbitrarily. Id. at 1216-17. In dicta, the court also noted that a 

decision not to require use of a device to monitor compliance on cost-benefit grounds 

appeared arbitrary when the agency had made no attempt to quantify or otherwise 

estimate either the costs or benefits of using the devices. Id. at 1221-22. 

These cases are readily distinguishable from the situation here. Although EPA has 

conducted a cost-benefit analysis for purposes of Executive Order 12866, and notes that 

the results of that analysis support the overall reasonableness of the standards, the costbenefit analysis is not the main, much less sole, decision criterion. Pursuant to section 

202 (a) (1) of the Act, EPA has considered such factors as available technology and its 

level of performance, lead time necessary to install the technology, the costs of doing so 

to both manufacturers and consumers, the cost-effectiveness of the controls, implications 

for vehicle safety, and other considerations. See e.g. section III.D of the preamble to the 

final rule. Thus, EPA is accorded the customary broad latitude in assessing and 

considering costs in adopting technology-based standards. See e.g. Kennecott v. EPA, 

780 F. 2d 445, 456 (4th Cir. 1985). 

Nor has EPA ignored the issue of consumer welfare. The issue is discussed at length at 

proposal at 74 FR 49602 and in the final rule and record in Preamble III.H.1 and RIA 

Section 8.1.2. If the commenter’s point is that EPA has not monetized consumer welfare 

penalties, EPA’s analysis argues that such penalties are estimated by the cost of 

additional technology. Any possible unquantified effects would affect estimation of the 

technology costs, which already take into account (by holding constant) effects on 

performance, safety, utility, and other attributes. Moreover, the value of the monetized 

fuel savings is a consumer welfare benefit. These benefits and costs are included in 

EPA’s benefit-cost analysis set out in Preamble Section III.H. Consequently, EPA has 

considered and evaluated the effects of this rule on consumer welfare in a reasonable and 

non-arbitrary manner. 

Consumer Vehicle Choice Modeling 

Organization: American Council for an Energy Efficient Economy 

California Air Resources Board 

Institute for Energy Research 

International Council on Clean Transportation 

Natural Resources Defense Council 

Union of Concerned Scientists 

James Adcock 

New York University School of Law, Institute for Policy Integrity (IPI) 

American Council for an Energy Efficient Economy 

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EPA Response to Comments 

The use of consumer choice models calibrated to historical sales data, as discussed in the 

proposal, is a sure recipe for the creation of a backward-looking policy and one that 

threatens the viability of auto companies. This approach ignores important factors such as 

past correlation between low fuel economy and desirable design features, the role of 

manufacturer advertising and consumer vehicle selection and evidence of recent shifts in 

consumer preferences as shown, for example, in the Cash For Clunkers Program. The 

discussion of consumer welfare in the agencies' proposal appears to raise a possibility 

that future progress in fuel economy could be jeopardized by improperly formulated 

economic concerns. Indeed, rapid progress toward a sustainable transportation sector is 

an economic imperative. This is a time for creative thinking as to how federal standards 

can best contribute to achieving the crucial and very challenging goals of major 

reductions in greenhouse gas emissions and in reliance on unsustainable sources of 

energy. [These comments were submitted as testimony at the New York public hearing. 

See docket number EPA-HQ-OAR-2009-0472-4621, pp. 147-148.] 

Recommendations: 1. Acknowledge that the standard model of individuals’ behaviors is 

deeply flawed, and apply it only when it is clear that it offers real insights to actual 

behavior; 2. Expand the investigation of consumer welfare to include up-to-date findings, 

including: work showing that consumers do not necessarily maximize utility, even absent 

evident barriers to doing so; impacts of advertising and incentives on vehicle choice; 

changing consumer valuation of vehicle characteristics; 3. Unless and until this research 

can be adequately incorporated in a quantitative model and peer-reviewed, exclude 

intangibles from the quantification of consumer welfare impacts; 4. Consistently 

represent in the rule and accompanying documents NHTSA’s estimates that both sales 

and automotive jobs will increase as a result of the proposed standards. 

California Air Resources Board 

CARB agrees with the agencies’ assumption that vehicle attributes on performance, 

carrying capacity, safety, or comfort would not change under this regulation. In response 

to the request for comment on how to explicitly estimate changes in consumer welfare, 

we believe it is possible to use consumer choice modeling to obtain a reasonable 

estimate. While EPA’s DRIA thoroughly describes the variation in model types and 

results as well as the issue of consumer valuation of fuel savings, we support EPA’s 

efforts to continue investigation of this type of methodology. Assumptions, data sources 

and collection methods, and model specification clearly drive many of the differences in 

model results. EPA’s conclusion that the literature is inconsistent does not seem to have 

controlled for these varying factors. We believe a closer look will reveal that when 

models have similar objectives and specifications, they will produce repeatable results. 

EPA also questions the reliability of consumer choice models for their predictive power 

of future vehicle choices. While this is certainly a limitation of any forecast model, this 

can be mitigated by including stated preference data for technologies that are currently 

not in the marketplace, e.g. plug-in hybrids, fuel cell vehicles. [OAR-2009-0472-7189.1 

p.6] 

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EPA Responses on Joint Issues and Technical Work 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. 

See docket number OAR-2009-0472-7283, pp. 21-27] 

Institute for Energy Research 

Another problem with empirically second-guessing consumers’ valuations of fuel 

economy is the crudeness of most modeling techniques. The estimated valuations vary by 

an order of magnitude, suggesting that the econometricians do not understand this issue 

very well. In practice, there are no 'controlled experiments' where consumers are offered 

the choice between two otherwise identical vehicles, where one is more expensive yet has 

better fuel economy. On the contrary, in the real world there are tradeoffs between 

vehicles that simultaneously differ on vehicle size, acceleration, price, safety, and finally 

fuel economy. More recent modeling has done a better job capturing these nuances, but 

economists have still not reached a consensus on exactly what motivates consumers when 

making vehicle purchases. [OAR-2009-0472-7225.1, p.13] 

Another problem with the entire approach is to assume that consumers have identical 

tastes regarding fuel economy. In reality, some consumers may be very concerned, while 

others may not be. Thus even if the proposed rule made the “representative consumer” 

better off, in practice it would still harm those consumers who (for whatever reason) do 

not place a high subjective value on fuel economy. [OAR-2009-0472-7225.1, p.14] 

International Council on Clean Transportation 

EPA asked for comments “on the usefulness of consumer choice modeling results and the 

consistency and reliability of results from these models.” The usefulness of consumer 

choice models depends on establishing an appropriate consumer discount rate for the fuel 

savings. As discussed, above, there are numerous unresolved questions related to 

consumer welfare that reflect the lack of clarity and understanding of this issue in 

general. There is no point in trying to use a consumer choice model until the issue of 

consumer welfare is resolved and an appropriate discount rate established. [OAR-2009-

0472-7156.1, pp.4-5] 

Natural Resources Defense Council 

Consumer Vehicle Choice Models Are Not Appropriate for Welfare Analysis 

EPA and NHTSA have solicited feedback on the future use of consumer vehicle choice 

models to estimate welfare impacts associated with new standards. We believe such 

models have a role in estimating the outcome of particular market-based policies (e.g., 

feebates, consumer incentives) or the market driven penetration rates of new 

technologies. However, such models are not useful when evaluating the consumer 

welfare impacts of new GHG or CAFE standards. [OAR-2009-0472-7141.1, p. 25] 

The basic framework of the model, consumer utility maximization, suffers from the 

identical weaknesses of using a “revealed” or “implicit” discount rate to quantify the 

benefits of fuels savings. That is, the coefficients for the consumer vehicle choice models 

4-41
 
EPA Response to Comments 

must be estimated using existing market data (i.e., “revealed preferences”) or data from 

surveys (i.e., “stated preferences”). The models simply assume, without any empirical 

foundation, that the consumers are already maximizing their utility with their current 

decisions. Thus, the use of such models to estimate consumer welfare impacts leads to a 

circular conclusion that any changes in vehicle attributes (including fuel efficiency) 

decrease consumer welfare. Clearly, given the robust discussions in the NPRM and in the 

energy efficiency literature and the accepted use of low discount rate for appliance 

efficiency standards, there is strong basis for the conclusion that market intervention in 

the form of efficiency standards can lead to significant increases in consumer welfare by 

overcoming market barriers to efficiency. [OAR-2009-0472-7141.1, p. 25] 

Furthermore, we concur with the EPA discussion of the limitations of such models since 

they must be estimated using existing vehicles choices which clearly do not represent a 

full set of choices the consumer could face for fuel efficiency, especially in the future 

market place with new technologies. The new standards have the potential to bring 

significant changes to the vehicle market with improvements in fuel economies that have 

not been seen for 20 years. Additionally, safety features continue to improve. Advanced 

electric-drive vehicles that bear little resemblance to their conventional gasoline 

counterparts are also poised to enter the market in significant numbers. The changes in 

vehicle choices available by the new configuration of the vehicle market cannot be 

reliably predicted by consumer choice models. [OAR-2009-0472-7141.1, p. 26] 

Finally, the consumer vehicle choice models assume fixed consumer preferences and do 

not consider the reality of today’s marketplace which clearly has demonstrated large 

shifts in consumer preferences away from large, fuel inefficient vehicles. The oil shock of 

1973 serves as a historical reference for past large vehicle market changes. As EPA notes, 

consumer choice modeling efforts to predict shifts in the vehicle market were ineffective. 

Similarly the oil price shocks of 2007 and 2008 have also fundamentally reshaped 

consumer preferences for vehicles. Future changes in consumer attitudes towards global 

warming, energy security as well as oil prices will likely have an ongoing impact on 

reshaping consumer preferences, rendering any model which explicitly or implicitly 

depends on an assumption of fixed preferences obsolete. [OAR-2009-0472-7141.1, p. 27] 

[Note that since the above comments apply to both EPA and NHTSA, they also 

appear under comment summary outline heading 4.5.5.2] 

Union of Concerned Scientists 

The agencies should continue including the private benefits when calculating the total 

benefits of the program and should not shift to a system that would include consumer 

choice models in the benefits assessments. It was those same consumer choice models 

that led many companies to dismiss hybrid-electric vehicles like the Prius, airbags, and 

many other innovations that have seen significant market success. [OAR-2009-0472-

7181.1, p.16] 

James Adcock 

4-42
 
EPA Responses on Joint Issues and Technical Work 

In general consumers with differing projections of the "true" future cost of SCC and fuel 

prices will make differing estimates of the utility of the purchase of a particular vehicle. 

Analysis that assumes one particular "US-wide" value of SCC or fuel costs will thus 

reach erroneous conclusions about vehicles Mfgs should be offering consumers – 

consumers hold a wide variety of beliefs on these subjects and thus Mfgs should, if "free 

market" forces are at work [which they aren't, due to huge barriers to entry into the Auto 

Industry -- due in part to NHTSA regulations] provide a wide variety of fuel efficiency 

vehicles to consumers. But the market doesn't actually work that way. For example 

Toyotas' great success with the Prius makes it LESS likely not more that other Mfgs will 

attempt to compete in that segment of the market. 

We support the EPA contract with RFF to develop a better model and understanding of 

the vehicle market. 

New York University School of Law, Institute for Policy Integrity (IPI) 

Consumers can expect either increased vehicle purchase prices or different vehicle design 

features (or some combination thereof). In the former case, consumers could experience 

lost welfare if the fuel savings and other private benefits from greater fuel efficiency do 

not fully compensate them for the increased purchase price. In the latter case, consumers 

could experience lost welfare if they do not value the new fuel efficiency as highly as 

they value the design features that have been sacrificed. Three economic concepts will 

affect the measurement of consumer valuations: the Energy Efficiency Paradox, the 

Positional Goods Effect, and the Bandwagon Effect. [OAR-2009-0472-7232.3, p. 5] 

EPA Response: 

Consumer vehicle choice models estimate what vehicles consumers buy based on vehicle 

and consumer characteristics. In principle, they could provide a means of understanding 

both the role of fuel economy in consumers’ purchase decisions and the effects of this 

rule on the benefits that consumers will get from vehicles. The NPRM included a 

discussion of the wide variation in the structure and results of these models. Models or 

model results have not frequently been systematically compared to each other. When 

they have, the results show large variation over, for instance, the value that consumers 

place on additional fuel economy. As a result, EPA found that further assessment needed 

to be done before adopting a consumer vehicle choice model. In the NPRM, EPA asked 

for comment on the state of the art of consumer vehicle choice modeling and whether it is 

sufficiently developed for use in regulatory analysis. 

EPA has not used a consumer vehicle choice model for the final rule analysis, due to 

concerns discussed in Chapter 8.1.2 of the RIA, and because no new information became 

available, during the public comment period or afterward, to resolve those concerns. In 

fact, a recent review commissioned by EPA supports the finding of great variability, by 

looking at one key parameter: the role of fuel economy in consumers’ vehicle purchase 

4-43
 
 

 

 

EPA Response to Comments 

decisions.2 It finds no consensus on the role of fuel economy in consumer purchase 

decisions. Of 27 studies, approximately equal numbers find that consumers undervalue, 

overvalue, or value approximately correctly the fuel savings that they will receive from 

improved fuel economy. The variation in the value of fuel economy in these studies is so 

high that it appears to be inappropriate to identify one central estimate from the literature. 

Thus, estimating consumer response to higher vehicle fuel economy is still unsettled 

science. It is likely that this variation exists as well in measuring consumer response to 

changes in other vehicle characteristics, such as performance. Thus, there does not 

appear to be evidence at this time to develop robust estimates of consumer welfare effects 

of changes in vehicle attributes.3 

Nonetheless, because there are potential advantages to using consumer vehicle choice 

models if these difficulties can be addressed, EPA is continuing to explore options for 

including consumer and producer choice in modeling the impacts of fuel economyrelated regulations. This effort includes further review of existing consumer vehicle 

choice models and the estimates of consumers’ willingness to pay for increased fuel 

economy. We are exploring (and will continue to explore) the implications of behavioral 

economics for this modeling. In addition, EPA is developing capacity to examine the 

factors that may affect the results of consumer vehicle choice models, and to explore their 

impact on analysis of regulatory scenarios. Under contract with EPA, Resources for the 

Future (RFF) is developing a model of the vehicle market that can be used to evaluate 

different policy designs and compare regulatory scenarios on the basis of changes in cost, 

changes in the prices paid by consumers, changes in consumer welfare, and changes in 

industry profits. It should help to shed light on whether it is more costly to rely solely on 

the application of technologies to vehicles to meet a given fuel standard than when 

consumer and producer behavior is taken into account. EPA plans to evaluate this work 

within the context of the overall literature on consumer vehicle choices, to determine its 

usefulness in informing the analysis for future rules. EPA agrees with the California Air 

Resources Board that stated preference information may be useful for evaluating new 

technologies not currently in the marketplace. 

Economic theory provides insight into how to consider consumer welfare implications in 

the absence of the use of consumer vehicle choice models. As discussed in Section III.D 

of this preamble, the technology cost estimates developed here take into account the costs 

to hold other vehicle attributes, such as size and performance, constant. Thus, if auto 

makers decide to change these characteristics, they are likely to do so only if consumers 

are likely to prefer these changes to the increased vehicle costs. In addition, the analysis 

assumes that the full technology costs are passed along to consumers. With these 

assumptions, because welfare losses are monetary estimates of how much consumers 

would have to be compensated to be made as well off as in the absence of the change,4 

2

 Greene, David L. “How Consumers Value Fuel Economy: A Literature Review.” EPA Report EPA-420-

R-10-008, March 2010. 

3

 As noted in the previous response, the decision not to use these uncertain valuation methodologies is both 

reasonable and was not determinative in the ultimate decision as to what standard to adopt. 

4

 This approach describes the economic concept of compensating variation, a payment of money after a 

change that would make a consumer as well off after the change as before it. A related concept, equivalent 

4-44
 
 

 

 

 

EPA Responses on Joint Issues and Technical Work 

the price increase measures the loss to the consumer.5

 Assuming that the full technology 

cost gets passed along to the consumer as an increase in price, the technology cost thus 

measures the welfare loss to the consumer. Increasing fuel economy would have to lead 

to other changes in the vehicles that consumers find undesirable for there to be additional 

losses not included in the technology costs. At this time EPA has no available methods 

to identify or estimate potential additional effects on consumers not included in the 

technology cost estimates, e.g., due to changes in vehicles that consumers find 

undesirable, shifts in consumer demand for other attributes, and uncertainties about the 

long term reliability of new technologies. Comments on the rule generally supported 

EPA’s analysis of the technology costs and the assumption that other vehicle 

characteristics were not adversely affected, and EPA adheres to that analysis in adopting 

the final rule. 

EPA’s assessment is that vehicle sales may increase as a result of this rule (see Preamble 

III.H.5 and RIA 8.1.1), because the fuel savings exceed technology costs even when only 

a five-year payback period for those savings is considered. 

EPA considers the energy efficiency paradox, the positional goods effect, and the 

bandwagon effect as some of the potential explanations for why consumers do not buy 

the cost-effective amount of fuel economy and discusses those in Preamble III.H.1 and 

RIA 8.1.2, along with Section 5.13.1 of this Response to Comments document. EPA 

continues to explore the implications of these and other hypotheses (such as those cited 

by the Consumer Federation of America’s comments) for consumer vehicle choice 

modeling and welfare analysis. 

4.5.2 The on-road fuel economy “gap” 

No comments were received on either the derivation or use of the on-road fuel economy 

gap. 

4.5.3 Fuel prices and the value of saving fuel 

No comments were received on the data sources used for fuel prices. 

4.5.4. Benefits of Reducing GHG Emissions (Social Cost of Carbon) 

variation, estimates the income change that would be an alternative to the change taking place. The 

difference between them is whether the consumer’s point of reference is her welfare before the change 

(compensating variation) or after the change (equivalent variation). In practice, these two measures are 

typically very close together. 

5

 Indeed, it is likely to be an overestimate of the loss to the consumer, because the consumer has choices 

other than buying the same vehicle with a higher price; she could choose a different vehicle, or decide not 

to buy a new vehicle. The consumer would choose one of those options only if the alternative involves less 

loss than paying the higher price. Thus, the increase in price that the consumer faces would be the upper 

bound of loss of consumer welfare, unless there are other changes to the vehicle due to the fuel economy 

improvements that make the vehicle less desirable to consumers. 

4-45
 
EPA Response to Comments 

EPA RESPONSE A 

Organizations: See table below. 

Commenter Affiliation Document ID Number 

California Air Resources Board EPA-HQ-OAR-2009-0472-7189.1 

Center for Biological Diversity EPA-HQ-OAR-2009-0472-7265.1 

Connecticut DEP EPA-HQ-OAR-2009-0472-7301.1 

Environmental Defense Fund EPA-HQ-OAR-2009-0472-7246.1 

Ford Motor Company EPA-HQ-OAR-2009-0472-7082.1 

Institute for Energy Research EPA-HQ-OAR-2009-0472-7225.1 

Institute for Policy Integrity at EPA-HQ-OAR-2009-0472-7246.1 

New York University School of 

Law 

National Association of Clean EPA-HQ-OAR-2009-0472-7071.1 

Air Agencies 

Natural Resources Defense EPA-HQ-OAR-2009-0472-7274.1 

Council 

National Rural Electric EPA-HQ-OAR-2009-0472-7252.1 

Cooperative Association 

New Jersey DEP EPA-HQ-OAR-2009-0472-7093.1 

Northeast States for EPA-HQ-OAR-2009-0472-7235.1 

Coordinated Air Use 

Management 

Pew Center EPA-HQ-OAR-2009-0472-7239.1 

Physicians for Social EPA-HQ-OAR-2009-0472-7283, pg 81 

Responsibility, Los Angeles 

Private Citizen (Adcock, James) EPA-HQ-OAR-2009-0472-5385 

Private Citizen (Chew, Yuli) EPA-HQ-OAR-2009-0472-7042.1 

Private Citizen (Magavern, Bill) EPA-HQ-OAR-2009-0472-7283, pg 179-186 

Private Citizen (Rose, Stephen) EPA-HQ-OAR-2009-0472-7276.1 

Private Citizen (Steiner, John) EPA-HQ-OAR-2009-0472-8705 

Sierra Club EPA-HQ-OAR-2009-0472-6185, p. 31 

Stockholm Environment EPA-HQ-OAR-2009-0472-7432.1 

Institute-US Center 

Union of Concerned Scientists EPA-HQ-OAR-2009-0472-7181.1 

University of California Santa EPA-HQ-OAR-2009-0472-7188.1 

Barbara Bren Working Group 

Comments: 

Commenters presented extensive methodological input and discussed various issues, 

including discount rate, uncertainty and risk, and magnitude and uses of the social cost of 

carbon. 

4-46
 
EPA Responses on Joint Issues and Technical Work 

Comments on Discount Rate 

These comments identified concerns about the discount rates applied to SCC estimates 

and provided different recommendations about issues such as the approach used to select 

discount rates, the magnitude of the discount rate, and ways to account for uncertainty in 

discount rates. Many commenters emphasized the ethical issues embedded in the 

selection (e.g., 7246.1, 7239.1, and 7274.1). 

In general, commenters recommended different approaches and lower rates to give more 

weight to climate damages experienced by future generations. Some commenters 

recommended that EPA develop a social discount rate on the basis of detailed 

consideration of the scientific, ethical, and economic implications of discounting (e.g., 

7246.1 and 7274.1); several commented on using the Ramsey framework in particular to 

derive the discount rate (e.g., 7432.1, 7246.1, 7274.1). Some commenters did not think it 

was appropriate to infer rates from observed market behavior when considering the long 

time horizons for climate damages (e.g., 7265.1, 7246.1, 7274.1). For example, the 

Environmental Defense Fund and the NYU Institute for Policy Integrity stated in a joint 

letter that a “simple application of a market rate of return is not justified” because of the 

“special relationship of GHGs to the market rate of return and to a large range of goods 

and services (both market and non-market)” (7246.1, pg 15). They noted, however, that 

if EPA opted to use market rates of return, it should also analyze and consider the 

underlying complexities in greater detail, such as the relationship between GHG 

reductions and economic growth, and present a robust discussion about GHG reductions 

“fit into an optimal portfolio of investments” (7246.1, pg 15). 

In addition, two commenters suggested that EPA should not discount the SCC (7265.1, 

7274.1). That is, they stated that EPA should use a discount rate of zero, thereby making 

the present value of damages in the future equivalent to their value in the future, 

effectively making the net present value of damages infinite. 

Many of the commenters stated that the discount rates applied to the interim SCC 

estimates were too high and therefore resulted in underestimates of SCC that fail to 

adequately capture the value of damages experienced by future generations (e.g., 7265.1, 

7246.1, 7274.1, 7239.1). In particular, some commenters disagreed with the rationale 

given for use of a 5 percent discount rate. Dr. Rose stated that “a 5 percent discount rate 

is inconsistent with risk-free consumption trade-offs within the current generation,” 

further noting that the intergenerational timeline for GHG emissions “implies even 

greater uncertainty than that reflected in intragenerational interest rates” (7276.1, pg 4). 

That is, GHG mitigation represents a different kind of investment than intragenerational 

investments analyzed with higher discount rates like 5 percent. The Environmental 

Defense Fund and the NYU Institute for Policy Integrity concluded that there are “strong 

reasons for concluding that a substantial fraction of the benefits from abatement are 

uncorrelated or even negatively correlated with the returns to the economy as a whole” 

(7246.1, pg 15). Other commenters agreed with this view and concluded that it would be 

appropriate to view investment in GHG mitigation from a risk-averse perspective—i.e., 

4-47
 
 

 

 

EPA Response to Comments 

investment in mitigation as a form of insurance against uncertain future climate 

damages—rather than a risky investment in mitigation technology (7274.1, 7432.1). 

Furthermore, some commenters disagreed with the proposed rule’s statement that 5 

percent is consistent with the Ramsey framework, based on standard estimates of the 

Ramsey parameters (e.g., 7239.1, 7276.1, 7246.1, 7432.1). First, the Stockholm 

Environment Institute noted that controversy about appropriate estimates of Ramsey 

parameters has thus far prevented standardization of the framework values. Similarly, 

Environmental Defense Fund and NYU Institute for Policy Integrity stated that “[t]he 

claim that 5% is ‘near the middle of the range of values that are able to be derived from 

the Ramsey equation’ is in fact meaningless—there is no theoretical lower or upper 

bound to values that could possibly be derived from the Ramsey equation” (7276.1, pg 

8). Second, several commenters pointed out that the Ramsey framework normally 

assumes perfect certainty about the future and needs to be adjusted to account for the 

significant uncertainty inherent in GHG emissions; this would result in a lower estimate 

of the discount rate (e.g., 7432.1, 7239.1). Third, the Stockholm Environment Institute 

concluded that the derivation of the 5 percent discount rate from Ramsey “does not 

appear to be based on a careful reading of the sources cited in supporting footnotes” 

(7432.1, pg 11).6 

In addition, many commenters noted that the range of discount rates used in the proposed 

rule did not include low enough rates and recommended using lower rates in the final rule 

(e.g., 7239.1, 7432.1, 7188.1). Several specifically suggested using 2 percent and lower 

and one recommended setting an upper bound that did not exceed 4 percent (7246.1, 

7274.1). 

The commenters presented multiple sources to support their recommendation for lower 

rates. For example, several commenters stated that consideration of rates below 3 percent 

would fulfill OMB Circular A-4 guidance to conduct sensitivity analysis at such rates for 

intergenerational problems (e.g., 7432.1, 7274.1, and 7239.1). The Environmental 

Defense Fund and NYU Institute for Policy Integrity presented evidence of lower rates 

that the interagency group should consider, including a 2009 National Academy of 

Science study that reporting discount rates of 1.5, 3, and 4.5 percent for SCC estimates 

(7246.1). 

Finally, some commenters recommended that EPA account for discount rate uncertainty 

and adjust the rates in the final rule (e.g., 7246.1, 7274.1, 7432.1). The Stockholm 

Environment Institute disagreed with the proposed rule’s statement that the literature on 

techniques to account for discount rate uncertainty, in particular time-varying discount 

rates, is relatively recent. This commenter cited several papers, including a literature 

review published in 2002 in AEA’s Journal of Economic Literature; the review discussed 

6

 The Stockholm Environment Institute determined that four of the five sources cited in the proposal as the 

basis for the Ramsey parameter estimates are inconsistent with the numerical estimates presented in 

proposed rulemaking. See OAR-2009-0472-7432.1, pg 11. 

4-48
 
 

 

 

EPA Responses on Joint Issues and Technical Work 

numerous arguments for time-varying discount rates dating back to a 1937 paper.7 

Likewise, the Environmental Defense Fund and the NYU Institute for Policy Integrity 

pointed out the qualitative conclusions of the work by Newell and Pizer are “reinforced in 

a general theoretical setting by Gollier and Weitzman” (7246.1, pg 21).8 

Likewise, the Environmental Defense Fund and NYU Institute for Policy Integrity 

supported the adjustment of discount rates for uncertainty and recommended that EPA do 

so to determine the principal SCC estimates, rather than limit it to sensitivity analysis. 

These commenters described the choice between the Weitzman and Newell-Pizer 

approaches, which define discount rate uncertainty in different ways, as a false one 

because each approach supports the same conclusion: “in the presence of uncertainty over 

the appropriate discount rate, future costs and benefits should be discounted at a rate that 

declines over time” (7246.1, pg 21). However, they noted that if forced to choose one or 

the other, they would advise Newell and Pizer because of “its careful use of historical 

data, its demonstration that time-varying discount rates are rigorously justified on strictly 

descriptive grounds, and its development of a rigorous analytical methodology that can 

be readily applied to the computation of SCC values in the current context” (7246.1, pg 

20-21). 

Another commenter identified the potential time inconsistency as an issue to consider 

when applying Newell and Pizer (2003) to SCC estimates. Specifically, Dr. Rose stated 

that the Newell and Pizer discounting framework may present values that are inconsistent 

with various alternative futures; he further noted that such inconsistencies would likely be 

greater if climate impacts affect future economic growth (7276.1). 

The Environmental Defense Fund and NYU Institute for Policy Integrity addressed the 

critique that rank ordering of present value and future value of benefits may produce 

different results when using time-differential discount rates. They maintained that the 

timing of the investment decision is not arbitrary—it is made by individuals in the present 

under known certainties. Rather, concerns about time inconsistency center on “a certain 

pattern of discount rates (“high today, low tomorrow”) that the planner nonetheless 

systematically fails to anticipate,” but that time-declining rates (e.g., Newell-Pizer) 

involve a “discrete investment decision [that] must be made today, in the absence of full 

information about the future discount rate, that will continue to yield returns far into the 

future” (7246.1, pg 21-22). In sum, they concluded that no time inconsistency arises in 

the latter case because “by the time we reach the future the decision will have already 

been made. Declining discount rates merely provide an aid to current decision-making in 

the face of risk” (7246.1, pg 21-22). 

Comments on Uncertainty and Risk 

7

 Shane Frederick, George Loewenstein, and Ted O’Donoghue, “Time discounting and time preference: A 

critical review,” Journal of Economic Literature (2002) 40:351-401. 

8

 See, for example, Martin L. Weitzman, Why the Far Distant Future Should Be Discounted at Its Lowest 

Possible Rate, 36 Journal of Environmental Economics and Management, 201 (1998); Christian Gollier & 

Martin L. Weitzman, How Should the Distant Future Be Discounted When Discount Rates Are Uncertain?
 

(Working Paper, Nov. 2009),
 

http://www.economics.harvard.edu/faculty/weitzman/files/discountinglongterm(2).pdf. 

4-49
 
EPA Response to Comments 

Many commenters discussed the limitations of the SCC estimates, in particular the 

treatment of uncertainty, catastrophic impacts, and omitted impacts, and the implications 

for the benefits assessment. For example, several commenters noted that the reliance on 

model-weighted averages in the proposed rule failed to capture the uncertainty in climate 

impacts. The Environmental Defense Fund and NYU Institute for Policy Integrity 

recommended the final rule better account for the upward skew of uncertainty by, for 

example, applying an upward adjustment to the SCC estimates. 

Commenters from various environmental organizations and state and regional 

government agencies observed that the models do not capture numerous and significant 

climate impacts, in particular potentially catastrophic events, which contributes to the 

underestimation of GHG mitigation benefits. The Union of Concerned Scientists’ 

conclusion that the interim SCC estimates fell “far short of capturing the potentially 

immense impacts of climate change” was echoed by many other commenters (e.g., 

7265.1, 7235.1, and 7274.1). 

The Natural Resources Defense Council (NRDC) elaborated on the treatment of 

catastrophic impacts, stating that the “SCC estimates [used in the proposed rule] are 

systematically biased downward, in large part because they do not adequately reflect the 

most critical issue in climate change: non-zero probabilities of extremely high and 

potentially catastrophic damages” (7274.1, p. 3). NRDC observed that the set of interim 

SCC estimates misrepresented the probability distribution of climate damage estimates, 

which includes “a ‘fat’ right tail (low to medium probabilities of relatively high 

damages), extending toward infinity (very low probabilities of profound catastrophes)” 

(7274.1, pg 12). Specifically, NRDC noted that while the lower bound of the interim 

SCC estimates was representative of the left tail of the distribution of damage estimates, 

the upper bound was not. NRDC recommended that SCC estimates instead go to the 

right of the central estimates to better represent the right-skew of the distribution. NRDC 

further supports this recommendation by referring to Weitzman’s (2009) observation that 

“climate change presents a long chain of tenuous inferences with huge uncertainties in 

every link that undermine the capability of [integrated assessment models] to estimate 

damages” (7274.1, pg 14). 

Comments on Magnitude and Uses of Social Cost of Carbon 

Many commenters stated that the interim SCC estimates were too low (e.g., 7301.1, 

7181.1, 7093.1, 7239.1), although one commenter said SCC overstates the benefits of 

GHG mitigation (7225.1). Some commenters expressed concern that EPA is using an 

underestimate of the SCC to determine the stringency of the vehicle rule’s GHG 

standards (e.g., 7239.1, 7265.1, 7093.1). Commenters recommended that EPA consider 

higher values in the analysis to better represent the possibility of catastrophic climate 

damages; some recommended specific numbers to use as the upper bound (e.g., 7189.1) 

or other analyses to set a minimum lower bound (7181.1). 

4-50
 
 

EPA Responses on Joint Issues and Technical Work 

Commenters discussed additional uses of SCC in rulemaking analyses as well as 

presentation. For example, the Environmental Defense Fund and NYU Institute for 

Policy Integrity recommended that the interagency group specify how agencies should 

use SCC in traditional regulatory impact analysis and agency rulemaking. The 

Stockholm Environment Institute also commented on the use and purpose of SCC, and 

noted that policies designed from an insurance perspective “would not be framed in terms 

of cost-benefit calculations,” but that economic analysis would inform selection of a 

least-cost strategy for meeting a risk-based standard (7432.1, pg 13). 

Other recommendations regarding the use and presentation of SCC included: 

 Present an even number of SCC estimates (7276.1) 

 Expand the presentation of information about the basis for the estimates, 

including discussion about omitted impacts, a broader set of descriptive statistics, 

and probability density functions (e.g., 7274.1, 7246.1) 

 Considering using CO2 mitigation cost in lieu of SCC estimates (7082.1) 

 Incorporate a broader range of SCC estimates into the benefits analysis rather than 

rely on central estimates (e.g., 7246.1). 

EPA Response A: 

As discussed in preamble III.H.6, EPA and NHTSA used new SCC estimates in this final 

rule that were recently developed by an interagency process, in which both agencies 

participated. EPA and NHTSA critically evaluated the decisions of the interagency 

group and the new SCC estimates and endorsed them as reasonable for this final rule for 

the reasons presented in preamble III.H.6. The remainder of this response discusses 

EPA’s consideration of and response to the comments on discount rate, uncertainty and 

risk, and magnitude and uses of the social cost of carbon, and, as relevant, how the 

interagency modeling exercise addressed the methodological comments. 

EPA has responded to the commenters’ other SCC comments elsewhere. Specifically, 

refer to Response [B] for EPA’s response to comments regarding the interim SCC 

estimates and methodology, the use of integrated assessment models, and equityweighting, and to Response [C] for EPA’s response to comments regarding global and 

domestic valuations of SCC. 

Discount rate 

Many of the comments on SCC identified concerns about the discount rates applied to the 

interim SCC estimates and provided different recommendations about: (i) approach used 

to select discount rates; (ii) the magnitude of the discount rate, and; (iii) ways to account 

for uncertainty in discount rates. 

EPA’s continued assessment of the SCC literature and review of the extensive public 

comments about discount rate selection reaffirms the complexity and sensitivity of this 

task. Recognizing the lack of consensus about an appropriate discount rate to use in this 

4-51
 
 

EPA Response to Comments 

context and uncertainty regarding how interest rates might change over time, EPA 

selected three rates to span a plausible range of certainty-equivalent constant discount 

rates: 2.5, 3, and 5 percent per year. Although EPA selected discount rates for this 

exercise that differed from some of those recommended by commenters, the agency 

regards its approach as defensible and transparent given its consistency with current 

benefit-cost analysis principles as well as OMB’s guidelines for such analysis as 

embodied in OMB Circular A-4. The Technical Support Document, Social Cost of 

Carbon for Regulatory Impact Analysis Under Executive Order 12866 (hereafter, "SCC 

TSD"), discusses in detail the basis for the discount rate selection.9 

(i) Response to Comments on the Approach Used to Select Discount Rates 

EPA considered the comments and recommendations regarding both prescriptive 

approaches for discount rate selection and descriptive approaches that infer discount rates 

from observed market behavior. As stated in the SCC TSD, the selection of discount 

rates drew on both approaches but relied primarily on the descriptive approach. 

In sum, average returns on longer-term investments were used to inform selection of 

certainty-equivalent discount rates. This approach was consistent with the comments on 

consumption-based rates as well as the literature. EPA recognizes its limitations but 

finds this approach to be the most defensible and transparent given its consistency with 

the standard contemporary theoretical foundations of benefit-cost analysis and with the 

approach outlined in OMB’s existing guidance. See the SCC TSD for a detailed 

explanation. 

Prescriptive Approaches. EPA considered all recommendations for prescriptive 

approaches, including selection of rates at 2 percent and lower within the Ramsey 

framework and use of a zero discount rate (i.e., not discounting). As noted in the SCC 

TSD, Ramsey (1928) argued that it is “ethically indefensible” to apply a positive pure 

rate of time preference to discount values across generations. After considering the 

comments and relevant literature, however, EPA ultimately decided that within the time 

constraints of this rulemaking, use of observed market behavior was a more transparent 

and defensible approach consistent with the federal government’s current guidelines on 

intergenerational discounting. See the SCC TSD for the detailed rationale and 

discussion. 

NRDC presented an interesting observation regarding the relationship between damage 

functions and growth rates, and maintained that declining economic growth requires a 

negative discount rate. However, negative growth does not automatically imply negative 

discount rates because the discount rate is a function of both rho and the product of eta 

9 Interagency Working Group on Social Cost of Carbon, U.S. Government, with participation by Council of 

Economic Advisers, Council on Environmental Quality, Department of Agriculture, Department of 

Commerce, Department of Energy, Department of Transportation, Environmental Protection Agency, 

National Economic Council, Office of Energy and Climate Change, Office of Management and Budget, 

Office of Science and Technology Policy, and Department of Treasury, “Social Cost of Carbon for 

Regulatory Impact Analysis Under Executive Order 12866,” February 2010. EPA-HQ-OAR-2009-0472 

4-52
 
 

EPA Responses on Joint Issues and Technical Work 

and growth. Therefore, one could have low, but positive discounting depending on the 

value of rho. 

Regardless of the relationship between economic growth and discount rate, the modeling 

exercise supporting the final rule could not allow for negative discount rates because it 

used constant discount rates. Moreover, negative discount rates cannot be justified using 

EPA’s current discounting approach—reliance on observed market behavior to infer 

discount rate. Application of a negative discount rate would involve explicit 

consideration of ethical aspects of intergenerational discounting and ultimately the 

selection of an appropriate social discount rate. 

EPA agrees with the NYU Institute for Policy Integrity and the Environmental Defense 

Fund (IPI, EDF) that use of prescriptive approaches would necessitate explicit 

consideration of philosophical and legal issues (7246.1, pg 4). While EPA has 

considered these comments and remains keenly aware of the normative dimensions of 

discount rate selection, the selection of discount rates in the recent modeling exercise 

focused primarily on economic considerations and the guidelines for intergenerational 

discounting specified in OMB Circular A-4 and EPA’s guidance. 

Using Market Rates to Inform Discount Rates. Several commenters expressed a 

preference for explicitly prescriptive approaches but also provided comments for the 

agency to consider if it used market rates to inform discount rate selection (e.g., see IPI, 

EDF, NRDC). EPA agrees with IPI and EDF’s clarification that regardless of the 

approach, the choice of a discount rate is not a “value-free ‘objective’ decision” and 

involves “deep ethical and moral judgments” (7246.1, pg. 4). While using observed 

market behavior was the best approach feasible for this analysis, EPA recognizes its 

limitations and will continue to seek opportunities, such as convening workshops to 

explore economic and non-economic aspects of discounting, to aid our understanding of 

the relevant issues. The SCC TSD explains in greater detail the rationale for using 

market rates to inform discount rate selection. 

EPA concurs with the comments regarding the need to carefully select an appropriate 

market rate, given the numerous rates available, as well as the comments on 

consumption-based discount rates. EPA carefully reviewed the literature and considered 

various complexities involved in discounting over long time horizons. For example, IPI 

and EDF noted that it would be difficult to justify the selection of high rates on the basis 

that the returns from alternate investments would be available as compensation for those 

impacted by climate change because this is unlikely to be feasible over long time 

horizons. As discussed in the SCC TSD, EPA opted to use average returns on longerterm investments rather than short term rates. 

In addition, IPI and EDF stated that if EPA uses market rate of returns, it should also 

analyze and consider the underlying complexities in greater detail, such as the 

relationship between GHG reductions and economic growth. In particular, IPI and EDF 

referred to Weitzman’s observations about a limitation of integrated assessment models: 

the models’ assumption of perfect correlation between GHG damage and aggregate 

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EPA Response to Comments 

economic activity is a function of the model design, not “the result of any reasoned 

argument” (Weitzman 2007) (as quoted in 7246.1, pg 15). Indeed, the modeling exercise 

has raised questions about the relationship between mitigation benefits and economic 

growth in the models. While more analysis is required before EPA can reach definitive 

conclusions, the agency recognizes this as a key issue that should be explored when 

refining SCC or applying it to benefit analyses. 

(ii) Magnitude of Discount Rate 

EPA determined lower rates are appropriate and used rates of 2.5 and 3 percent. 

Consistent with the rationale presented by several commenters, risk-free rates of return 

informed the selection of discount rates. However, average returns on longer-term 

investments rather than short-term rates were used. The lower rates are also consistent 

with the comments suggesting that mitigation should be viewed as a form of insurance 

against climate damages rather than a rate of return on risky assets (e.g., NRDC, 

Stockholm Environment Institute). 

Many commenters disagreed with the rationale for and use of a 5 percent discount rate in 

the proposed rule. In particular, several commenters stated that GHG mitigation 

represents a different kind of investment than intragenerational investments analyzed 

with higher discount rates like 5 percent. IPI and EDF concluded that there are “strong 

reasons for concluding that a substantial fraction of the benefits from abatement are 

uncorrelated or even negatively correlated with the returns to the economy as a whole.” 

Other commenters agreed with this view and concluded that it would be appropriate to 

view investment in GHG mitigation from a risk-averse perspective—i.e., investment in 

mitigation as a form of insurance against uncertain future climate damages—rather than a 

risky investment in mitigation technology. Consideration of SCC estimates based on a 5 

percent discount rate could not be ruled out, however, and was included to represent the 

view that climate damages are highly correlated with market returns, under which the 

appropriate discount rate would be expected to exceed the risk-free rate. 

In addition, IPI and EDF recommended 4 percent as an appropriate upper bound. While 

EPA agrees with IPI and EDF that “the uncertainty (more properly the risk) over the 

temperature changes resulting from a ton of GHG emissions does not justify a higher 

discount rate,” it is not clear how this concern argues for setting 4 rather than 5 percent as 

the upper bound (7246.1, pg 24). 

In sum, EPA applied three constant certainty-equivalent discount rates (2.5, 3, and 5 

percent) to the SCC estimates to account for various perspectives about risk and 

uncertainty. The upper value of 5 percent accounts for the view that there may be a high 

correlation between climate damages and market returns while the rest of the SCC 

analysis centers on a discount rate consistent with concerns about risk aversion. See SCC 

TSD for more details about the rationale for using 5 percent. 

(iii) Uncertainty in discount rates 

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The comments informed the ongoing consideration of how GHG benefits analysis could 

account for discount rate uncertainty through differential discounting. The SCC TSD 

presents the basis for EPA’s decision to account for discount rate uncertainty by using 

certainty-equivalent constant discount rates, in particular inclusion of 2.5 percent to 

incorporate the concern that interest rates are highly uncertain over time. 

The SCC TSD also summarizes the consideration of the approaches discussed by 

commenters (e.g., Newell and Pizer (2003), Weitzman (2001), and the UK’s “Green 

Book” for regulatory analysis) and concludes that the proper way to model discount rate 

uncertainty remains an active area of research. 

In particular, key questions about potential time inconsistencies arising with differential 

discounting remain unresolved. For example, in its 2008 critique of the EPA Economic 

Guidelines, the EPA Science Advisory Board (SAB) found that in cases with uncertain 

discount rates, “rank ordering of policies by present values and future value may differ.” 

The SAB advised EPA to use caution when interpreting the results of time differential 

discounting and noted that more research is warranted. Similarly, Dr. Rose noted that 

there is an inconsistency between the Newell and Pizer (2003) discounting and various 

alternative futures. 

Several commenters considered the potential for and implications of time inconsistency 

issues. For example, the Stockholm Environment Institute stated that “there is minimal 

risk” of time inconsistency problems and that regardless, “no one...has the life span or 

resources to arbitrage against multi-century public policies” (7432.1, pg 12). IPI and 

EDF noted that the timing of the investment decision is not arbitrary—it is made by 

individuals in the present under known certainties. They maintain that concerns about 

time inconsistency center on “a certain pattern of discount rates (‘high today, low 

tomorrow’) that the planner nonetheless systematically fails to anticipate,” but that timedeclining rates (e.g., Newell-Pizer) involve a “discrete investment decision [that] must be 

made today, in the absence of full information about the future discount rate, that will 

continue to yield returns far into the future” (7246.1, pg 22). IPI and EDF conclude that 

no time inconsistency arises in the latter case because “by the time we reach the future 

the decision will have already been made. Declining discount rates merely provide an aid 

to current decision-making in the face of risk” (7246.1, pg 22). Although the 

commenters presented a valid point, in light of uncertainty about how interest rates may 

change over time, EPA uses a low certainty-equivalent discount rate to incorporate the 

concern that interest rates are highly uncertain over time. 

IPI and EDF also point out that the “choice of starting point cannot be made 

independently of the underlying financial instrument used to estimate real returns over 

time. The simulated paths are extensions of a particular time series, and thus correspond 

to a particular financial instrument” (7246.1, pg 23). They state that the time-differential 

discounting literature, which has thus far relied on lower discount rates as the starting 

point, provides sufficient empirical evidence for EPA to use a similar starting point. IPI 

and EDF suggest that the agency would first need to gather empirical evidence before 

using alternative starting points, in light of the likely differences that would result from 

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EPA Response to Comments 

instruments with different risk levels. However, given the lack of agreement about the 

starting point and proper adjustment to use in differential discounting, EPA could not 

justify relying on this technique. 

EPA agrees with a comment from Dr. Rose that clarifies the difference between dynamic 

discount rates and uncertain rates. The SCC modeling exercise supporting the benefits 

analysis in this rulemaking used certainty-equivalent constant discount rates and did not 

change over time. The SCC TSD discusses in greater detail how the discount rates 

accounted for uncertainty. 

Uncertainty and Treatment of Impacts in the Models 

Many commenters discussed the limitations of the SCC estimates, in particular the 

treatment of uncertainty, catastrophic impacts, and omitted impacts, as well as the 

implications for the benefits assessment. EPA has responded to these concerns by 

providing a more robust discussion about these important issues that complements the 

SCC estimates and better informs policy makers. 

EPA considered these limitations and, as a participant in the interagency group, used best 

available information and techniques to quantify such impacts as feasible and supplement 

the SCC with qualitative assessments. Overall, presentation of the revised SCC estimates 

in the final rule responds more fully the uncertainties and risks associated with climate 

change (see the SCC TSD for discussion). 

In particular, the revised estimates more fully capture uncertainty through Monte Carlo 

analysis and are accompanied by a fuller discussion of the uncertainties and risks 

associated with climate change, as well as the limitations of SCC. In addition to the 

uncertain parameters in each model, EPA assessed three parameters—climate sensitivity, 

socioeconomic and emissions trajectories, and discount rate—and sought to model them 

probabilistically for purposes of formal uncertainty analysis in the interagency modeling 

exercise. A probability distribution was specified for climate sensitivity and used as an 

input in the three models. A probability distribution was not specified for the other two 

parameters because of uncertainty about how to model them probabilistically for 

purposes of formal uncertainty analysis. For example, while models can project potential 

emissions pathways, assigning probability weights to different states of the world in an 

analytically rigorous way proved challenging given the dearth of information on the 

likelihood of a full range of future socio-economic pathways. Therefore, the modeling 

exercise used multiple scenarios that span a range of socio-economic parameters and 

multiple values for the discount rate. 

Consistent with the commenter’s recommendations, EPA has provided much more 

information about the SCC estimates and the underlying parameters in the record to the 

final rule. For example, the SCC TSD shows how SCC values for 2010 vary across 

model, scenario, and discount rate; it also presents the distribution of SCC estimates, 

including benefit estimates at the 95th and 99th percentiles. However, EPA believes that 

it is more appropriate to place the technical information in the rulemaking’s technical 

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EPA Responses on Joint Issues and Technical Work 

supporting documents, rather than in the preamble text, which is intended to provide a 

high-level discussion of the policy issues related to the economic analysis. Therefore, 

EPA has presented a summary of the SCC results in the preamble along with references 

to the other rulemaking documents that provide data and methodological details 

necessary to replicate the analysis. 

EPA also considered the emerging literature about the treatment of risk of catastrophic 

impacts and commenters’ recommendations on this issue. For example, EPA considered 

the findings from Weitzman (2009) suggesting that catastrophic damages are so large that 

they would dominate the effect of the discount rate in a present value calculation and 

result in an infinite willingness-to-pay for GHG mitigation today. However, EPA 

determined that this research requires further exploration before its generality is known 

and the optimal way to incorporate it into regulatory reviews is understood. EPA also 

considered ways to account for risk aversion in the SCC estimates, such as inclusion of a 

risk premium, suggested by IPI, EDF, and the Pew Center on Global Climate Change. 

The review showed that further research in this area is needed to develop a reasonable 

approach to account for catastrophic risks in regulatory analyses. In addition, an adder 

was not used given the lack of a rigorous method to select the number; choosing an adder 

value would at this point amount to an arbitrary decision. Finally, available information 

did not support rigorous inclusion of an option value, as recommended by the IPI and 

EDF. See the SCC TSD for more about the consideration of catastrophic risk. 

Instead, low probability, high impact events are incorporated into the SCC values through 

explicit consideration of their effects in two of the three models as well as the use of a 

probability density function for equilibrium climate sensitivity (see the SCC TSD). 

Treating climate sensitivity probabilistically results in more high temperature outcomes 

than analyzing climate sensitivities of specific values (e.g., 1.5 or 4.5), which in turn lead 

to higher projections of damages. EPA has also presented a detailed qualitative 

assessment of potential catastrophic damages and the implications for SCC estimates in 

the SCC TSD. EPA remains interested in research about practical and robust methods to 

address this important consideration. 

The SCC TSD further emphasizes the need to explore the sensitivity of the results to 

other aspects of the models, in particular how the damage functions incorporate 

adaptation, technological change, and catastrophic damages. While it is not possible at 

this time to provide a precise list of each model’s treatment (i.e., included, excluded) of 

climate impacts, EPA has presented a robust discussion of this key analytical issue and 

placed more detailed model information in the docket. 

In particular, the SCC TSD discusses in detail how each model estimates climate impacts, 

the known parameters and assumptions underlying those models, and the implications of 

incomplete treatment of impacts (catastrophic and non-catastrophic) for the SCC 

estimates. This discussion underscores the difficulty in accurately distilling the models’ 

treatment of impacts in table-form. Most notably, the use of aggregate damage 

functions—which consolidate information about impacts from multiple studies—in two 

of the models poses a challenge in listing included impacts. For example, within the 

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EPA Response to Comments 

broad agricultural impacts category, some of the sub-grouped impacts are not explicitly 

modeled but are highly correlated to other subcategories that are explicitly modeled. 

Therefore, it may be misleading to identify these kinds of impacts as either “included” or 

“omitted” from the model. Along those lines, impacts may be included in models but not 

directly; the Dynamic Integrated Climate and Economy (DICE) model represents 

adaptation implicitly through the choice of studies used to calibrate the aggregate damage 

function, and the Climate Framework for Uncertainty, Negotiation, and Distribution 

(FUND) model includes adaptation both implicitly and explicitly (see the SCC TSD for 

details). 

Accordingly, EPA recognizes the need for a thorough review of damage functions—in 

particular, how the models incorporate adaptation, technological change, and catastrophic 

damages. EPA has considered the Pew Center on Global Climate Change’s 

recommendation to conduct an expert elicitation on the value of omitted impacts, but 

determined that conducting a rigorous and complete expert elicitation was not possible 

within the rulemaking timeline. However, the Federal government is committed to 

exploring these models—e.g., determining which impacts are included and omitted—and 

how they can be modified to produce more accurate estimates of the SCC. EPA regards 

the SCC TSD as a starting point in the inquiry into the models’ treatment of impacts and 

to motivate new research. 

Regarding recommendations to modify model parameters that were not adjusted in this 

exercise, see Response B for EPA’s response. 

Magnitude and Uses of the Social Cost of Carbon 

EPA considered various comments about the magnitude of SCC estimates (e.g., interim 

SCC was too low). Many commenters recommended that EPA consider higher values in 

the analysis to better represent the possibility of catastrophic climate damages; some 

recommended specific numbers to use as the upper bound (e.g., CARB) or other analyses 

to set a minimum lower bound (e.g., Union of Concerned Scientists). In response, EPA 

has focused on developing a rigorous methodology to improve its characterization of 

SCC rather than selecting estimates from the published literature. Accordingly, EPA 

continued to review the SCC literature, participated in the interagency review of SCC, 

and conducted the modeling exercise (see the SCC TSD for detailed discussion about the 

basis for the modeling exercise, the methodology, and results). Consistent with 

recommendations to justify any weighting schemes used, the SCC TSD explains why 

each model and two of the parameters (socioeconomic emissions trajectories and 

discount rates) are weighted equally; it also presents the rationale for the probability 

distribution for climate sensitivity. 

EPA disagrees with one commenter who said that SCC overstates the benefits of 

mitigation and attributed it to emissions leakage, i.e., shifting emissions from the region 

subject to the GHG mitigation requirements to a location without such requirements. 

Emissions leakage could reduce or negate the net reduction in global emissions. 

However, emissions leakage would affect the estimate of total emissions and it is not 

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EPA Responses on Joint Issues and Technical Work 

relevant to the value of a one ton reduction in CO2 emissions (i.e., SCC) in this case. As 

discussed in the SCC TSD, we have assumed that this rule would result in small 

(marginal) impacts on cumulative global emissions. Even in the unlikely event that 

emissions leakage occurred under this rulemaking, it would not alter the cumulative 

global emissions trajectory underlying the SCC estimates. Regarding the potential for 

leakage under this rule, EPA finds the commenter’s suggestion that people will move to 

other countries to avoid purchasing cars with higher fuel economy standards highly 

implausible. See Preamble III.H.5 for further discussion about considerations of turnover 

rate for the vehicle fleet and the implications thereof. See also the prior sections of this 

response for detailed discussion about treatment of uncertainty in SCC estimates, in 

particular the treatment of omitted impacts, and the implications for the benefits 

assessment. 

On the other hand, the SCC TSD does not, as another commenter recommended, 

explicitly direct agencies to view the SCC as a minimum value for GHG reduction 

benefits. Instead, the SCC TSD presents detailed methodological information and a 

discussion of the SCC limitations, thereby enabling interpretation of the estimates as they 

are used in this analysis. 

EPA also considered comments about the use and presentation of SCC in rulemaking 

analyses. For example, IPI and EDF recommended that the interagency group specify 

how agencies should use SCC in traditional regulatory impact analysis and agency 

rulemaking. In response, the SCC TSD identifies the purpose of SCC and details how to 

use it to estimate the benefits of policies resulting in marginal reductions in CO2 

emissions. The SCC TSD further notes that there is a separate question of whether the 

SCC is an appropriate tool for calculating the benefits of reduced emissions from policies 

that have a large (non-marginal) impact on global cumulative emissions. The analysis 

supporting this final rule does not attempt to answer that question. 

Overall, EPA recognizes the importance of traditional regulatory impact analyses and the 

EPA Regulatory Impact Analysis (RIA) presents four new SCC estimates used to 

estimate benefits of the marginal reductions in CO2 emissions under this final rule (see 

EPA RIA 7.5). 

In response to Ford’s recommendation to consider using CO2 mitigation cost in lieu of 

SCC estimates, EPA has determined that doing so would eliminate useful information 

from the economic analysis about the CO2 benefits of the standards. Indeed, Executive 

Order 12866 states that agencies are required, to the extent permitted by law, “to assess 

both the costs and the benefits of the intended regulation and, recognizing that some costs 

and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned 

determination that the benefits of the intended regulation justify its costs.” Other sections 

of the economic analysis consider the costs to achieve the standards in this final rule (e.g., 

see Preamble Section III.H.3 for discussion about the annual cost per ton of GHG 

reduction). 

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EPA Response to Comments 

In addition, SEI commented that policies designed from an insurance perspective “would 

not be framed in terms of cost-benefit calculations,” but that economic analysis would 

inform selection of a least-cost strategy for meeting a risk-based standard. EPA 

continues to recognize that the estimates do not include all significant climate changes 

damages and are therefore underestimates. As a result, EPA has supplemented the 

quantified benefit estimates with a qualitative discussion about benefits. 

It is also useful to recognize the somewhat limited role that the monetary value placed on 

the SCC plays in the determination of what emissions standards should be adopted in this 

final rule. EPA used the benefit-cost analysis as one consideration among many to 

evaluate the overall reasonableness of the emissions standards chosen. See preamble 

section III.D for a complete discussion of the various factors analyzed and balanced by 

EPA in determining the stringency of the final standard. In this case, the benefits of the 

standards are significantly greater than the costs, and this would be the case whether EPA 

considered the domestic value for the SCC, the global value for the SCC, or a range of 

values including higher SCC values. The specific range or values used in this analysis 

are therefore not outcome determinative as far as deciding what emissions standards to 

adopt, as the standards adopted by EPA would still be reasonable from a net benefits 

perspective under a wide range of SCC. 

EPA considered Dr. Rose’s comments about the number of SCC estimates presented and 

basis for deciding on an appropriate SCC estimate. In response, EPA has presented four 

SCC estimates and calculated benefits at each SCC value. The SCC TSD discusses in 

detail the methodological soundness of and treatment of uncertainty and risk in the four 

SCC estimates. In sum, the four SCC estimates are considered to capture many of the 

uncertainties involved in regulatory impact analysis. 

Regarding the commenters’ concerns about omitted impacts and recommendations to 

expand the presentation of information about the estimates, see above section, 

Uncertainty and Treatment of Impacts in Models, for EPA’s response. In addition, the 

SCC TSD presents the distribution of SCC estimates, including benefit estimates at the 

95th and 99th percentiles. Variation in climate sensitivity is reflected, along with other 

parameters that are treated as uncertain in the models, in differences between SCC 

estimates for a given socio-economic trajectory and discount rate. EPA has also made the 

full model results available in the docket for this rule; see OAR-2009-0472. 

In addition, EPA notes IPI and EDF’s recommendation for the interagency group to “give 

explicit direction to agencies on how to account for ancillary benefits associated with 

GHG reductions” (7246.1, pg 42). As noted above, the SCC TSD reiterates the need to 

document more thoroughly omitted impacts and monitor the literature for emerging 

research. As the research evolves, the Federal government, including EPA, is committed 

to exploring how modeling can be improved so that these aspects are better reflected in 

the SCC. 

EPA agrees with the Center for Biological Diversity’s observation that omission of 

impacts from the SCC estimates effectively assigns such impacts a value of zero, but 

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disagrees with the Center’s interpretation of the Ninth Circuit’s decision that agencies 

must quantify non-zero benefits. First, EPA has provided a non-zero estimate of the 

benefits of this rulemaking’s reduction in CO2 emissions. As discussed at length above 

and in the SCC TSD, some of the benefits cannot currently be quantified in a rigorous 

manner and were therefore presented in a qualitative manner. Both the qualitative and 

quantitative presentation of benefits incorporates the results of the Federal government’s 

extensive review of SCC and recent modeling exercise, which was based on best 

available information. Second, the Center for Biological Diversity’s argument applies 

most directly to rulemakings in which the economic analysis determines the stringency of 

the standard. See 538 F. 3d at 1201-02 (court found arbitrary NHTSA’s determination 

not to monetize social cost of carbon when utilizing a marginal cost benefit analysis and 

where this decision directly influenced the stringency of the standard). Moreover, that 

case involved a situation where the agency assigned no monetary value to the social cost 

of carbon, clearly not the case here. As noted above and in our other comment responses, 

the stringency of this rulemaking’s standard, in fact, is not determined by the monetized 

benefits of GHG reductions. As discussed further below, the benefit-cost analysis used 

for this rule played a part in EPA’s overall conclusion that the rule is reasonable, but did 

not determine the standard’s stringency. See, for example, preamble section III.D, which 

discusses the basis for EPA’s determination and notes that issues of technology 

availability, cost (to both manufacturers and consumers), and available leadtime are the 

critical decision factors. 

EPA RESPONSE B 

Organization: See table below. 

Commenter Affiliation Document ID Number 

California Air Resources Board EPA-HQ-OAR-2009-0472-7189.1 

Center for Biological Diversity EPA-HQ-OAR-2009-0472-7265.1 

Environmental Defense Fund EPA-HQ-OAR-2009-0472-7246.1 

Ford Motor Company EPA-HQ-OAR-2009-0472-7082.1 

Institute for Policy Integrity at EPA-HQ-OAR-2009-0472-7246.1 

New York University School of 

Law 

Natural Resources Defense EPA-HQ-OAR-2009-0472-7274.1 

Council 

New Jersey DEP EPA-HQ-OAR-2009-0472-7093.1 

Pew Center EPA-HQ-OAR-2009-0472-7239.1 

Private Citizen (Adcock, James) EPA-HQ-OAR-2009-0472-5385 

Private Citizen (Rose, Stephen) EPA-HQ-OAR-2009-0472-7276.1 

Stockholm Environment EPA-HQ-OAR-2009-0472-7432.1 

Institute-US Center 

Union of Concerned Scientists EPA-HQ-OAR-2009-0472-7181.1 

University of California Santa EPA-HQ-OAR-2009-0472-7188.1 

Barbara Bren Working Group 

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EPA Response to Comments 

Comments: 

EPA received extensive comments about the methodology used to derive the interim SCC 

estimates as well as comments on the use of integrated assessment models, and equityweighting. 

Comments on the Methodology Used for Interim SCC Estimates 

While the Ford Motor Company noted that the interim methodology was acceptable 

given available data, many commenters—representing academic and environmental 

organizations—expressed concerns that the filters were too narrow and stated that modelweighting averaging was inappropriate. In general, the latter group of commenters 

observed that averaging and model-weighting the filtered estimates further restricted the 

SCC dataset and obscured the variability among published SCC estimates. 

For example, the Stockholm Environment Institute (SEI) characterized the interim 

methodology as biased and reflective of an incomplete reading of the economic literature, 

and stated that other studies and models should have been included (7432). In particular, 

SEI identified the peer-review filter as problematic because it resulted in the exclusion of 

SCC estimates from the heavily scrutinized Stern Review, which “offered an innovative, 

rigorous analysis leading to a relatively high estimate of the SCC, $85 per ton of CO2” 

(7432.1, pg 3). Although the Stern Review authors did not release their results in a peerreviewed journal, their study received a level of scrutiny “far beyond the normal peer 

review process for articles published in academic journals” (7432.1, pg 3). 

Similarly, Dr. Rose identified reliance on the most recent versions of each model as 

problematic. He stated that because there has been little change in SCC modeling since 

2001, it was incorrect to assume that the most recent estimates are superior. The 

commenter concluded that limiting consideration to “the most recent results reduces 

sample size and makes results highly contingent on most recent applications and 

assumptions used” (7276.1, pg 1-2). 

Moreover, the Natural Resources Defense Council (NRDC) described the interagency 

group’s reliance on model-weighted averages, which further compounded this distortion 

and failed to capture estimates for extreme climate events, as “astonishing,” based on the 

current understanding of climate science (7274.1, pg 14). Other commenters likewise 

concluded that the filters and model-weighting procedures exacerbated what is widely 

understood to be a partial accounting of mitigation benefits (e.g., 7432.1, 7276.1). 

Several commenters expressed concerns about averaging SCC estimates from different 

discount rates; one commenter clarified that this is incorrect because the discount rates 

represent different judgments about “the value of temporal trade-offs” (7276.1, pg 3; see 

also 7188.1, 7208.1). That is, estimates from each discount rate encompass inconsistent 

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EPA Responses on Joint Issues and Technical Work 

assumptions about the type of investments made and how their value changes over time. 

In addition, EPA received extensive comments about the selection of discount rates, 

which is discussed separately in Response to Comments [A]. 

Finally, one commenter recommended an alternative approach to monetize the benefits of 

reductions in CO2 emissions (see 5385, pg 3). Specifically, this commenter 

recommended extrapolating the results of local-scale ecosystem service valuations, such 

as one for Puget Sound, to a global estimate of SCC. 

Comments on Use of Integrated Assessment Models 

Three commenters discussed the limitations of the integrated assessment models, 

concluding that the interagency group’s selection of models and reliance on the model 

authors’ datasets contributed to the downward bias of the interim SCC estimates (7432.1, 

7239.1, 7274.1). One commenter observed that the integrated assessment models rely 

heavily on projections of GHG emissions and temperatures from the Intergovernmental 

Panel on Climate Change (IPCC) to estimate the value of economic damages and cited 

evidence to support the view that these projections are conservative.10 

Indeed, the Stockholm Environment Institute characterized all three models’ default 

datasets as “embody[ing] controversial judgments” (7432.1, pg 4). The Stockholm 

Environment Institute presented numerous examples of such judgments, including the 

“surprisingly low” estimate of climate damages in DICE. The Stockholm Environment 

Institute clarified that DICE relies on estimates of agricultural impacts developed in the 

1990s that were “excessively optimistic about potential benefits from warming, and 

contained some basic analytical errors” (7432.1, pg 6). The Stockholm Environment 

Institute further noted that a UC-Berkeley economist has run DICE using the current data 

and found that climate damages in the U.S. could be four times greater than those derived 

using the DICE default dataset (7432.1, pg 6). 

Accordingly, these commenters recommended the agencies run the models with other 

datasets and also modify some of the models’ assumptions. For example, they suggested 

modifying certain model parameters in the exercise—e.g., global value of a statistical life 

(VSL), an adaptation function, and damage functions allowing cross-sectoral impacts 

(7274.1, 7432.1). 

Comments on Equity Weighting 

EDF and IPI discussed an inconsistency between the discounting approach used in the 

proposed rule, which applies differential equity weights on a timescale, and “the decision 

10 Commenter stated that “following every IPCC assessment report (four to date), many predictions have 

turned out worse than expected. Each IPCC assessment report is grimmer than the previous. There are 

already signs that the last assessment report of 2007 (the Fourth Assessment Report, FAR) had overly 

optimistic ‘best guesses.’” Commenter cited findings published after release of the FAR, including 

evidence that summer sea ice could disappear by 2030, much sooner than the IPCC’s projection of 

disappearance by the end of the century. See Science Magazine 326(5955): 926-928. (OAR-2009-0472-

7274.1, pg 10). 

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EPA Response to Comments 

not to apply differential equity weights to the impacts on different income groups within 

a single generation” (7276.1, pg 8). They clarified the point “is not necessarily to 

recommend that equity weights be applied for intratemporal transfers: although there 

would appear to be strong ethical grounds for such an approach, the determination of 

those equity weights would be an enormous challenge in itself” (7276.1, pg 8). 

NRDC likewise noted an inconsistency and stated that “failing to weigh damages by 

income levels is inconsistent with economic theory” (7274.1, page 5). NRDC further 

noted it is “difficult to justify [not using equity weights] on ethical grounds: most of the 

world’s poor neither emitted the CO2 emissions responsible for current atmospheric 

concentration levels, nor economically benefited from them—resulting in the poor having 

the least ability to absorb climate damages” (7274.1, page 6). NRDC recommended that 

EPA apply equity-weights to the SCC estimates by taking into account the relative 

reductions in wealth in different regions of the world and use a number for the VSL that 

is equal between all countries and populations. See EPA-HQ-OAR-2009-0472-7274.1 

for further discussion. 

EPA Response B: 

The commenters’ input informed the development of the new SCC estimates. This 

response addresses the following issues identified by the commenters: the methodology 

used to derive the interim estimates, the use of integrated assessment models, and equityweighting (see letters from California Air Resources Board, Center for Biological 

Diversity, Ford, NJ DEP, Natural Resources Defense Council, Pew Center on Climate, 

Dr. Rose, Stockholm Environment Institute, University of California Santa Barbara Bren 

Working Group, and Union of Concerned Scientists). EPA has responded elsewhere to 

the commenters’ other comments related to SCC. Specifically, refer to Response [A] for 

EPA’s response to comments regarding discount rate, uncertainty and risk, and 

magnitude and uses of the social cost of carbon, and to Response [C] for EPA’s response 

to comments regarding global and domestic valuations of SCC. 

Methodology Used to Derive Interim Estimates 

EPA received and considered extensive comments about the methodology used to derive 

the interim SCC estimates. EPA recognized the limitations of the interim approach—a 

meta-analysis that relied on published SCC estimates—but judged it as the best option 

given the limited time available to coordinate among federal agencies and develop SCC 

estimates for the proposed rule. However, EPA did not continue with its interim 

approach and instead developed new SCC estimates for this rule. Specifically, the 

interagency SCC group, in which EPA participated, reconvened on a regular basis to 

generate improved SCC estimates that respond to the concerns raised by commenters. As 

noted in Preamble III.H.6, EPA has critically evaluated the decisions of the group and the 

new SCC estimates and endorses them as reasonable for this final rule. 

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The revised SCC methodology responds to comments in several key ways. First, we 

agree with the commenters’ concerns about the use of model-weighted means (e.g., see 

NRDC, SEI, Dr. Rose). The new results are weighted equally by model because the 

exercise produced an equal number of estimates for each model. Second, we agree that it 

is inappropriate to combine SCC estimates across discount rates. None of the revised 

SCC estimates has been averaged across discount rates. (See Response to Comment A 

for consideration of comments about the rationale for discount rates, approach used to 

select rates, the magnitude of rates, and treatment of uncertainty.) The Technical Support 

Document, Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 

12866 (hereafter, "SCC TSD"), also responds to these comments by presenting the 

rationale for discount rate selection.11 Third, as discussed further in Response to 

Comment A, the modeling exercise resulted in a fuller distribution of SCC estimates and 

better accounted for uncertainty through a Monte Carlo analysis. See the SCC TSD for 

detailed explanation about probabilistic treatment of climate sensitivity in the modeling 

exercise. 

The commenters also had concerns about the filters used to narrow down the pool of 

existing SCC estimates for consideration in the proposed rule, noting that they were 

overly restrictive, or that the sample otherwise excluded key studies (e.g., Dr. Rose, SEI, 

UC-Santa Barbara Bren Working Group). In response, EPA notes that the approach used 

in this final rule—conducting new model runs—has avoided this particular challenge. As 

noted in the SCC TSD, the modeling exercise produced a vast amount of data for 

consideration. 

In addition, EPA considered comments about the selection of a growth rate applied to 

climate damages for the interim SCC estimates (CARB, Center for Biological Diversity). 

Rather than assuming a constant annual growth rate, we estimated the growth rate of the 

SCC directly using the Dynamic Integrated Climate and Economy (DICE), Policy 

Analysis of the Greenhouse Effect (PAGE), and Climate Framework for Uncertainty, 

Negotiation, and Distribution (FUND) models. This approach helped to ensure that the 

estimates are internally consistent with other modeling assumptions. See the SCC TSD 

for a table that illustrates how the growth rate for these four SCC estimates varies over 

time; the SCC TSD also presents the full set of annual SCC estimates between 2010 and 

2050. 

The California Air Resources Board presented a valid critique about the non-trivial 

variation in climate scenarios underlying the interim SCC estimates; Dr. Rose also 

described the selection of socioeconomic emissions scenarios for the interim estimates as 

limited. For the new SCC estimates, we used socio-economic and emission trajectories 

that span a range of plausible scenarios. Five trajectories were selected from the recent 

11 Interagency Working Group on Social Cost of Carbon, U.S. Government, with participation by Council 

of Economic Advisers, Council on Environmental Quality, Department of Agriculture, Department of 

Commerce, Department of Energy, Department of Transportation, Environmental Protection Agency, 

National Economic Council, Office of Energy and Climate Change, Office of Management and Budget, 

Office of Science and Technology Policy, and Department of Treasury, “Social Cost of Carbon for 

Regulatory Impact Analysis Under Executive Order 12866,” February 2010. EPA-HQ-OAR-2009-0472 

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EPA Response to Comments 

Stanford Energy Modeling Forum exercise, EMF-22; each trajectory was used 

consistently in the three models. Four trajectories represent potential business-as-usual 

(BAU) growth in population, wealth, and emissions and are associated with CO2 (only) 

concentrations ranging from 612 to 889 ppm in 2100. The fifth trajectory represents an 

emissions pathway that achieves stabilization at 550 ppm CO2e (i.e., CO2-only 

concentrations of 425 – 484 ppm or a radiative forcing of 3.7 W/m2) in 2100, a lowerthan-BAU trajectory. 

We note Dr. Rose’s comment that “it would be arbitrary to use SCC estimates off of 

aspirational pathways for policies that generate small net changes in global emissions. 

Instead, estimates off of baseline projections are more consistent with current policy 

decisions with marginal global GHG emissions implications, as well as a risk 

management approach designed to internalize risks that the USG wishes to avoid or 

hedge against” (7276.1, pg 2). However, as explained in the SCC TSD, the modeling 

exercised relied primarily on BAU trajectories but also included a lower-than-BAU 

trajectory that would be consistent with widespread action by countries to mitigate GHG 

emissions. The lower-than-BAU trajectory was chosen because it represents the most 

stringent case analyzed by the EMF-22 where all the models converge: a 550 ppm, not to 

exceed, full participation scenario. See the SCC TSD for complete discussion. 

Regarding Dr. Rose’s question about why the Hope (2006) estimates were labeled as 5 

percent: One common equation used to calculate the discount rate is the Ramsey 

equation: r = ρ + g*η, where ρ is the pure rate of time preference, g is the growth rate, 

and η is the elasticity of the marginal utility of consumption. The pure rate of time 

preference cited in the Hope (2006) article is 3% per year. While the actual discount rate 

varies over time, it is relatively common to refer to the discount rate as the pure rate of 

time preference plus 2%, where the 2% is roughly the growth rate times the elasticity of 

the marginal utility of consumption. A more accurate categorization would be 

“approximately 5%” or “a pure rate of time preference of 3%.” As noted in Response A, 

EPA used a different approach to discount SCC estimates in the final rule. 

Dr. Rose also requested more information to understand the application of Newell and 

Pizer discounting to the interim SCC estimates. The undiscounted stream of benefits was 

not available for each of the studies included in this analysis. The way that the Newell 

and Pizer (2003) findings were adapted for the interim values was to apply the adjustment 

factors implied by either their preferred random walk model or mean-reverting model. 

According to the random walk model, SCC estimates based on a 3% or 5% discount rate 

are increased by 70.733% and 89.8%, respectively. The mean-reverting model implies 

increases of 10.733% and 16.8% for estimates based on a 3% or 5% discount rate. 

Note Newell and Pizer based adjustment factors were not applied to estimates from Guo 

et al. (2006) that use a different approach to account for discount rate uncertainty. 

EPA notes Dr. Rose’s recommendation to ensure consistency in presenting the SCC 

analysis in each agency’s section of the joint rule. Tables in the proposed rule, for 

example, used different dollar years to report the same SCC estimates (e.g, 2007$ in 

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EPA Responses on Joint Issues and Technical Work 

EPA’s preamble section and 2006$ in NHTSA’s preamble section). The agencies agree 

with the commenter’s recommendation and have ensured to the extent possible that the 

sections in this rule are consistent. Moreover, the same detailed analysis of SCC 

presented in the SCC TSD supports the entire rulemaking. 

In response to Dr. Rose’s request for information about base years and Newell and Pizer 

discounting, please see the table below. 

Model Study 

Base year (Best available 

info) 

Year Dollars (Best available 

info) 

FUND Anthoff et al. 2009 2000 2000 

FUND Link and Tol 2004 1995 1995 

FUND Guo et al. 2006 1995 1995 

PAGE 

Wahba & Hope 

2006 2000 2000 

PAGE Hope 2006 2000 2000 

DICE Nordhaus 2008 2005 2005 

Additionally, the commenter requested a complete list of references. The references are 

as follows: 

	 Anthoff, D., C. Hepburn, and R. Tol. 2009. Equity weighting and the marginal 

damage costs of climate change. Ecological Economics 68: 836:849. 

	 Guo, J., C.J. Hepburn, R. Tol, and D. Antoff. 2006. Discounting and the social 

cost of carbon: a closer look at uncertainty. Environmental Science and Policy 9: 

205-216. 

	 Hope, Chris. 2008. Optimal carbon emissions and the social cost of carbon over 

time under uncertainty. The Integrated Assessment Journal 8(1): 107-122. 

	 Hope, Chris. 2006. The Marginal Impact of CO2 from PAGE2002: An Integrated 

Assessment Model Incorporating the IPCC’s Five Reasons for Concern. The 

Integrated Assessment Journal 6(1): 19-56. 

	 Link, P.M., and R. Tol. 2004. Possible economic impacts of a shutdown of the 

thermohaline circulation: an application of FUND. Portuguese Economic Journal 

3: 99-114. 

	 Newell, R., and W. Pizer. 2003. Discounting the distant future: how much do 

uncertain rates increase valuations? Journal of Environmental Economics and 

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EPA Response to Comments 

Management 46: 52-71. 

	 Nordhaus, William. 2008. A Question of Balance: Weighing the Options on 

Global Warming Policies. New Haven, CT: Yale University Press. 

	 Tol, R. 2008. The Social Cost of Carbon: Trends, Outliers and Catastrophes. 

Economics: The Open-Access, Open-Assessment E-Journal 2(25): 1-24. 

	 Wahba, Mohammed, and Chris Hope. 2006. The marginal impact of carbon 

emissions under two scenarios of future emissions. Energy Policy 34: 3305-3316. 

Other Methodology Comments. Consistent with Dr. Rose’s recommendation to “strive 

for an enduring and transparent methodology that can be readily and transparently 

updated,” the SCC TSD presents a detailed discussion of the development of the 

interagency modeling exercise and the resulting SCC estimates. As noted in the SCC 

TSD, the main objective of this process was to develop a range of SCC values using a 

defensible set of input assumptions grounded in the existing scientific and economic 

literatures. In this way, key uncertainties and model differences transparently and 

consistently inform the range of SCC estimates used in this rulemaking process. 

Furthermore, the Federal government has committed to updating the new SCC estimates 

as the science and economic understanding of climate change and its impacts on society 

improves over time. The interagency group set a preliminary goal of revisiting the SCC 

values within two years or at such time as substantially updated models become 

available, and to continue to support research in this area. 

EPA notes with interest the valuation of Puget Sound ecosystem services identified by 

commenter 5385, but regards the commenter’s suggestion to extrapolate these results to a 

national or global SCC as problematic. In particular, the commenter’s recommendation 

does not incorporate findings from the existing scientific and economic literature about 

climate change impacts on other sectors. Furthermore, while the estimated value of 

ecosystem services in Puget Sound could inform assessments of the monetized value of 

climate change impacts in that region, it does not assign a dollar value to the impacts 

associated with a marginal unit of CO2 emissions. In short, it lacks a defensible approach 

that accounts for the various complexities involved in projecting CO2 emissions and 

associated climate impacts on global scale. 

In contrast, the integrated assessment models used to estimate the new SCCs combine 

climate processes, economic growth, and feedbacks between the climate and the global 

economy into a single modeling framework. As discussed in the SCC TSD, these models 

translate emissions into changes in atmospheric greenhouse concentrations, atmospheric 

concentrations into changes in temperature, and changes in temperature into economic 

damages. The emissions projections used in the models are based on specified socioeconomic (GDP and population) pathways. These emissions are translated into 

concentrations using the carbon cycle built into each model, and concentrations are 

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EPA Responses on Joint Issues and Technical Work 

translated into warming based on each model’s simplified representation of the climate 

and a key parameter, climate sensitivity. 

Use of Integrated Assessment Models 

Several commenters discussed the use of the integrated assessment models, concluding 

that the interagency group’s selection of models and reliance on the model authors’ 

datasets contributed to the downward bias of the interim SCC estimates. 

Model choice. EPA agrees with SEI that DICE, FUND, and PAGE are not the only 

relevant climate economics models and has clarified its characterization of these models 

as well as its rationale for continuing to use them in the final rule. Overall, we find 

DICE, FUND, and PAGE useful because they combine climate processes, economic 

growth, and feedbacks between the climate and the global economy into a single 

modeling framework, but we recognize that this advantage comes at the expense of a 

more detailed representation of the underlying climatic and economic systems. However, 

as noted by SEI, these models have “been widely used by other investigators, precisely 

because of their simplicity and transparency” (7432.1, pg 4). Moreover, other integrated 

assessment models have not linked physical impacts to economic damages. The limited 

amount of research linking climate impacts to economic damages makes this exercise 

even more difficult (see the SCC TSD for more information). 

Others commented on the version of the models used to derive the interim SCC 

estimates. Pew noted that few studies have been published using the most recent version, 

but identified several expected to be released by the time of the final rule and encouraged 

EPA to account for those. As discussed in the SCC TSD, EPA used SCC estimates from 

new model runs rather than selecting from those in the literature; EPA has continued to 

review developments in the SCC literature. 

We note that Pew’s comments about the values resulting from the most recent version of 

FUND are incorrect. According to EPA’s March 2010 communication with Dr. Anthoff, 

all of the deterministic SCC estimates were positive for the discount rates investigated in 

a paper that he prepared for Pew using FUND 3.5; this does not mean that FUND 3.5 

produces positive SCCs for any discount rate. Also, FUND uses a Major.Minor 

numbering system rather than calendar year to label the versions. EPA used the latest 

version of this model, FUND 3.5, that was available at the time of the modeling exercise. 

Datasets used in models. NRDC observed that the integrated assessment models rely 

heavily on projections of GHG emissions and temperatures from the Intergovernmental 

Panel on Climate Change (IPCC) to estimate the value of economic damages and cited 

evidence to support the view that these projections are conservative. Also, SEI 

characterized all three models’ default datasets as “embody[ing] controversial 

judgments” (7432.1, pg 5). SEI presented numerous examples of such judgments, 

including the “surprisingly low” estimate of climate damages in DICE, and clarified that 

DICE relies on estimates of agricultural impacts developed in the 1990s that were 

“excessively optimistic about potential benefits from warming, and contained some basic 

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EPA Response to Comments 

analytical errors” (7432.1, pg 6). SEI further noted that a UC-Berkeley economist has 

run DICE using the current data and found that climate damages in the U.S. could be four 

times greater than those derived using the DICE default dataset (7432.1, pg 6). 

EPA regards with interest the commenters’ specific recommendations to modify model 

parameters that were not adjusted in the exercise—e.g., global value of a statistical life 

(VSL), an adaptation function, and damage functions allowing cross-sectoral impacts 

(e.g., NRDC and SEI). Research gaps and practical constraints required us to limit 

modification of the models to socioeconomic and emissions scenarios, climate sensitivity, 

and discount rate. Therefore, the modeling exercise relied on the default values in the 

latest available version of each model for the remaining parameters. Moreover, 

continuing to use the models’ default values for some parameters allowed the exercise to 

account for different approaches to quantifying damages. While EPA recognizes that the 

models’ translations of physical impacts to economic values are incomplete, approximate, 

and highly uncertain, it regards them as the best available representations. 

As noted in Response A, the SCC TSD further emphasizes the need to explore the 

sensitivity of the results to other aspects of the models, in particular how the damage 

functions incorporate adaptation, technological change, and catastrophic damages. The 

Federal government is committed to supporting new research and exploring how to value 

the benefits of reduced GHG emissions. As the research evolves, the Federal government 

is also committed to exploring how modeling can be improved so that these aspects are 

better reflected in the SCC. The interagency group plans to revisit the SCC estimates 

within two years. 

Equity weighting and value of statistical life 

NRDC recommended that EPA apply equity-weights to the SCC estimates by taking into 

account the relative reductions in wealth in different regions of the world and use a 

number for the VSL that is equal between all countries and populations. As noted in the 

SCC TSD, we recognize the inconsistency between accounting for wealth differences 

over time through the discount rate and declining to do so on a geographical scale. 

However, after considering the literature on equity-weighting, we decided not to use 

equity-weights because putting it into practice and defending it for domestic regulatory 

analysis would raise complex conceptual, empirical, and normative problems (see the 

SCC TSD). 

As discussed in Response A, the modeling exercise relied on the default values for VSL 

because it was not one of the parameters chosen to be held constant across all three 

models. 

EPA RESPONSE C 

Organization: See Table below. 

Commenter Affiliation Document ID Number 

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EPA Responses on Joint Issues and Technical Work 

Environmental Defense Fund EPA-HQ-OAR-2009-0472-7246.1 

Georgia-Pacific EPA-HQ-OAR-2009-0472-7122.1 

National Automobile Dealers EPA-HQ-OAR-2009-0472-7182.1 

Association (NADA) 

National Petrochemical & EPA-HQ-OAR-2009-0472-7234.1 

Refiners Association 

Natural Resources Defense EPA-HQ-OAR-2009-0472-7274.1 

Council 

NYU Institute for Policy EPA-HQ-OAR-2009-0472-7246.1 

Integrity 

Pew Center EPA-HQ-OAR-2009-0472-7239.1 

Private Citizen (Adcock, James) EPA-HQ-OAR-2009-0472-5385 

Private Citizen (Rose, Stephen) EPA-HQ-OAR-2009-0472-7276.1 

Texas Chemical Council EPA-HQ-OAR-2009-0472-7290 

University of California Santa EPA-HQ-OAR-2009-0472-7188.1 

Barbara Bren Working Group 

Comment Summary: 

Seven commenters, representing academia and environmental organizations, supported 

the proposed rule’s preference for global SCC estimates while several industry groups 

stated that under the Clean Air Act, EPA is prohibited from using global estimates. The 

commenters supporting a global SCC described it as the most appropriate way to account 

for the public good aspects of GHG emissions and climate protection. 

The Environmental Defense Fund and NYU Institute for Policy Integrity described 

climate stability as a special public good case because it is a global one, meaning that no 

single actor can provide climate stability. Maintaining or achieving the public good— 

climate stability—must involve coordination of many sovereign countries, all of which 

have an incentive to do nothing and enjoy global benefits when other countries incur the 

costs of GHG mitigation (7246.1, pg 37). 

Moreover, the Environmental Defense Fund and NYU Institute for Policy Integrity 

maintained that consideration of domestic SCC does not solve the global public good 

problem. These commenters stated that if all countries based GHG reductions on 

domestic SCC values, it would “result in sub-optimal protection of climate stability 

[because] the global SCC is not a population-weighted average of domestic SCCs, but 

instead the aggregate of all of the harms associated with climate change” (7246.1, pg 37). 

For more details regarding comments that support use of a global SCC, see EPA-HQOAR-2009-0472-7246.1, -7274.1, -7239.1, -7276.1, -7188.1, and -5385. 

One commenter who supported use of global SCC estimates stated that it was unclear 

how the agencies planned to use domestic estimates, thereby making it difficult to 

comment on domestic SCC estimates (7276.1). NRDC also noted a lack of clarity 

regarding the agencies’ intentions for domestic SCC estimates but concluded that it 

would be inappropriate to use domestic estimates in any situation (7274.1). 

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EPA Response to Comments 

NRDC based its support for use of a global SCC on the global, public goods aspect of 

GHG emissions as well as ethical considerations. Specifically, NRDC stated that from an 

ethical standpoint, it cannot support a U.S. SCC estimate, which would effectively assign 

a value of zero to the damages imposed on other countries by U.S. emissions. NRDC 

found this particularly troubling because “many countries, especially poor ones, did not 

contribute to the current CO2 levels in the atmosphere, yet will suffer the worst 

consequences. Perversely, developed countries obtained their income status by emitting 

greenhouse gases, and as a result have more resources to absorb climate damages, while 

the opposite is true of the poor countries” (7274.1, pg 24). 

The commenters that disagreed with use of a global SCC argued that EPA cannot 

permissibly consider a global value because it lacks authority to consider the international 

effects of domestic emissions in crafting emission standards under section 202 (a). These 

commenters further argued that Congress was explicit when it wanted such effects to be 

considered, referring to section 115 of the Act, which authorizes regulation of domestic 

pollutant emissions due to their international effect under specified circumstances. The 

commenters also referred to the general presumption that Federal statutes are presumed 

not to have extra-territorial effect. For more details, see EPA-HQ-OAR-2009-0472-

7234.1, -7290, -7182.1, and -7122.1. 

EPA Response C: 

This response presents EPA’s consideration of and response to comments from regarding 

the use of global and domestic valuations of SCC (see comments from Dr. Rose, National 

Automobile Dealers Association, NYU Institute for Policy Integrity and Environmental 

Defense Fund, University of California Santa Barbara Bren Working Group, Pew Center 

on Climate, Natural Resources Defense Council, and Texas Chemical Council). 

In sum, the final rule continues to focus on global SCC values because of the global, 

public good aspects of greenhouse gas emissions. EPA prefers a global measure of GHG 

mitigation benefits because of the unusual aspects of the climate change problem—i.e., 

GHG emissions cause the same damage regardless of the location of their emission; 

climate change occurs over very long time horizons, and it represents a problem that the 

United States cannot solve independently (see the Technical Support Document, Social 

Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 (hereafter, 

"SCC TSD")).12 

Several commenters argued that EPA cannot permissibly consider a global value because 

it lacks authority to consider the international effects of domestic emissions in crafting 

emission standards under section 202 (a) (1). These commenters further argued that 

12 Interagency Working Group on Social Cost of Carbon, U.S. Government, with participation by Council 

of Economic Advisers, Council on Environmental Quality, Department of Agriculture, Department of 

Commerce, Department of Energy, Department of Transportation, Environmental Protection Agency, 

National Economic Council, Office of Energy and Climate Change, Office of Management and Budget, 

Office of Science and Technology Policy, and Department of Treasury, “Social Cost of Carbon for 

Regulatory Impact Analysis Under Executive Order 12866,” February 2010. EPA-HQ-OAR-2009-0472 

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EPA Responses on Joint Issues and Technical Work 

Congress was explicit when it wanted such effects to be considered, referring to section 

115 of the Act, which authorizes regulation of domestic pollutant emissions due to their 

international effect under specified circumstances. The commenters also referred to the 

general presumption that Federal statutes are presumed not to have extra-territorial 

effect. 

The commenters have misapprehended the analysis of global and domestic SCC. First, 

EPA’s regulation does not exercise extraterritorial effect. The regulation sets standards 

for new motor vehicles produced or imported into the United States; hence, the activity it 

regulates is domestic activity. The issue here is not the extraterritorial exercise of 

regulatory authority over conduct occurring overseas, but how to place a monetary value 

on a reduction in domestic emissions, with the commenter arguing that EPA may not 

consider effects occurring outside the borders of the US when valuing the benefits of 

reductions achieved under section 202(a) (1). In this case, the emissions reductions will 

marginally reduce the overall global contribution of GHG emissions to the atmosphere, 

affecting the global atmospheric concentrations of GHGs. This will then have a marginal 

effect on global climate change, with resulting impacts both inside the US and around the 

world. There is no issue that the impacts from global climate change that occur in the US 

are appropriate to consider in valuing the benefits of these domestic GHG reductions. 

However, there is also a value to the US from domestic emissions reductions that reduce 

the harm occurring globally. First, impacts from climate change occurring overseas can 

create economic, trade, humanitarian and national security issues for the US. For 

example, climate change may exacerbate problems (e.g., food security or water supply) in 

relatively poor and politically volatile countries that raise humanitarian issues and 

national security issues for the United States.13 Second, the US will gain the greatest 

benefit from reducing domestic emissions of GHGs if there is a global response to the 

global problem of climate change. Given the nature of the public good at issue, a global 

response would maximize the benefits the US receives from reducing GHGs. Using a 

global SCC in valuing the domestic reductions from this final rule is most consistent with 

this outcome, while using a domestic SCC is not. For both of these reasons, considering 

the global SCC is an appropriate way to value the benefits to the US from domestic GHG 

reductions under section 202(a) (1). 

Second, this situation is not analogous to section 115 of the Act, which calls for control 

of domestic emissions if certain conditions are met concerning emissions in the U.S. 

causing or contributing to air pollution that is reasonably anticipated to endanger 

public health or welfare in a foreign country. Mandating control of domestic emissions 

in certain circumstances based on the impact of those emissions on a foreign country does 

not indicate any intention by Congress on the very different issue involved here. Use of 

the global SCC in the benefits analysis for this rule is not an issue of the authority or the 

obligation to regulate domestic emissions of GHGs from new motor vehicles. Our 

authority to adopt standards stems from the endangerment and contribution findings that 

13 See US EPA, Technical Support Document, Endangerment and Cause or Contribute Findings for 

Greenhouse Gases under Section 202(a) of the Clean Air Act, December 8, 2009, for a complete discussion 

about the implications of international climate impacts for the US, in docket EPA-HQ-OAR-2009-0171. 

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EPA Response to Comments 

have been made under section 202(a) (1). The issue here is how to value those domestic 

emissions reductions in considering the benefits of the reductions. That is not the issue 

Congress addressed in section 115, when it authorized regulatory controls if certain 

conditions were met. Congress’ decisions on that issue in section 115 do not limit or take 

away any of EPA’s discretion on how to value the benefits of GHG reductions from the 

emissions standards adopted under section 202(a).14 

Finally, it is useful to recognize the somewhat limited role that the monetary value placed 

on the SCC plays in the determination of what emissions standards should be adopted. 

As noted above, the value of the SCC is not relevant to whether EPA has the authority or 

the obligation to adopt emissions standards, as that stems from the endangerment and 

contribution findings. In addition, the levels of the standards adopted by EPA have been 

determined based on the effectiveness of the technology that will be available, their cost, 

and the appropriate leadtime for incorporation of that technology in the light-duty vehicle 

fleet. See the detailed explanation in section III. D of the preamble to the final rule for 

further discussion of this issue. The cost-benefit analysis is used to help evaluate the 

overall reasonableness of the emissions standards chosen by EPA. In this case, the 

benefits of the standards are significantly greater than the costs, and (as noted earlier in 

this response) this would be the case whether EPA considered the domestic value for the 

SCC, the global value for the SCC, or a range of values including higher SCC values. 

The specific range or values used in this analysis are therefore not outcome determinative 

as far as deciding what emissions standards to adopt, as the standards adopted by EPA 

would still be reasonable from a net benefits perspective under a wide range of SCC. 

Nonetheless, EPA considered the available estimates of domestic SCC values to 

determine how global SCC values could be adjusted to national or regional levels. As 

explained further in the SCC TSD, EPA regards this approach as highly speculative and 

recognizes that there is no a priori reason why domestic benefits should be a constant 

fraction of net global benefit estimate. While there is compelling evidence suggesting 

that the US represents a non-constant fraction of global values, a rigorous manner to 

quantify that fraction in has not emerged. Indeed, current models do not quantify many 

of the spillover effects identified by commenters IPI, EDF, and NRDC, such as the U.S. 

military position in the world. Accordingly, the final rule presents only global SCC 

values; the SCC TSD presents a range of values that should be used to adjust the global 

SCC to calculate domestic effects. 

4.5.5 Vehicle Sales Assumptions 

14 The commenters are also incorrect in maintaining that because Congress addressed in section 115 the 

issue of an obligation to adopt emissions controls based on the effect domestic emissions have outside the 

US, it necessarily precluded consideration of those effects under section 202(a). See Catawba County v. 

EPA, 571 F. 3d 20, 34 (D.C. Cir. 2009) (a congressional mandate in one section and silence in another 

often “suggests not a prohibition but simply a decision not to mandate any solution in the second context, 

i.e., to leave the question to agency discretion.’ (internal citation omitted, emphasis original)). In any case, 

as explained above, section 115 addresses the different issue of authority to regulate, and does not address 

how to value a reduction of domestic emissions for purposes of evaluating the costs and benefits of an 

otherwise authorized regulation. 

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EPA Responses on Joint Issues and Technical Work 

Organization: National Automobile Dealers Association 

Comment: 

The National Program proposal reasonably assumes buyers will value any fuel savings 

associated with the purchase of a new motor vehicle over a five-year period, rather than 

over a vehicle’s full useful life. 74 Fed. Reg. 49669-70. Even at high fuel prices, 

consumers who view fuel economy as an important purchase criteria will be hard pressed 

to make the case for buying a more fuel efficient new vehicle if the up-front capital costs 

associated with doing so cannot be recouped in short order. Of course, for purposes of 

calculating payback, real-world purchaser finance costs, opportunity costs, and additional 

maintenance costs all should be accounted for. 

EPA Response: 

EPA has continued to use the assumption that consumers will consider fuel savings over 

a five-year period for its vehicle sales impact analysis. The payback analysis in Preamble 

Section III.H.5 has included additional purchasing costs, such as sales tax, insurance, and 

financing costs, as detailed in EPA’s RIA Section 8.1.3. As discussed in Preamble 

Sections III.D. and III.H.1, the opportunity costs of these standards are addressed through 

cost estimation based on holding vehicle performance, utility, safety, and other attributes 

constant while improving fuel economy. 

Organization: James Adcock 

Comment: 

Assuming a 5-year horizon for the consumer's valuation of MPG improvements is the 

same as assuming vehicle purchasers assume that they will sell their vehicles in 5 years 

and be able to receive no premium on that sale for high MPG. But, on the contrary 

consumer are well-aware and it has been well-reported that higher MPG vehicles hold 

their resale value better than lower MPG vehicles - and that low MPG SUVs and Trucks 

are hard to unload at all! Thus the need for the "Cash for Clunkers" program to allow 

owners of low MPG vehicles to unload these vehicles on the US government since there 

was no other willing buyer. Setting these low MPG standards simply is setting up the US 

Government for "Cash for Clunkers 2 .0" in another decade's time! In general NHTSA's 

leniency towards large trucks negates the current administration's investment in "Cash for 

Clunkers" -- the one hand works against the other. 

E-134: 5-year cutoff on payback period on the assumption that consumers only value a 

vehicles' MPG technology on the first five years - is not a rational assumption because 

consumer well-know how hard it is to unload gas guzzlers - hence the need for a "Cash 

for Clunkers" program. Choosing this irrational 5-year cutoff assumption in turn 

represents a large reduction in "duration" effectively causing a much higher depreciation 

rate than the claim 3% societal discount rate. 

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EPA Response to Comments 

EPA Response: 

EPA’s five-year payback period is for average consumer behavior. Some consumers will 

put more emphasis on fuel economy when buying vehicles, and others may use shorter 

payback periods. The analysis does not adjust vehicle resale value for the fuel economy 

of the vehicle, based on uncertainty of the role of fuel economy in vehicle purchase 

decisions (discussed in RIA Chapter 8.1). The analysis does include resale value as a 

proportion of initial vehicle price; if vehicles with more fuel economy are more 

expensive, their resale values will be higher. 

4.5.6 Vehicle survival assumptions 

No comments were received on vehicle survival assumptions. Several comments on total 

lifetime VMT are found in Section 5.3.2 of this document. 

4.5.7. Total Vehicle Use 

Organization: New York State Department of Environmental Conservation 

Comment: 

Vehicle Lifetime Mileage (Preamble page 49521) 

EPA and NHTSA use 190,971 miles as the lifetime for cars and 221,199 miles, for light 

trucks. The derivation of these lifetimes is unclear to us, as is the rationale for a 

difference between cars and light, trucks . The composition of the light truck fleet, as well 

as the use these vehicles see, has changed significantly in the past 30 years, to more 

closely resemble the passenger car fleet. The source of these lifetime mileages should be 

discussed in the rulemaking documents, and available for public review. [OAR-2009-

0472-7454, p.1] 

EPA Response: 

The procedures used by EPA and NHTSA to derive their estimates of expected lifetime 

VMT for passenger cars and light trucks, as well as the agencies’ estimates of the total 

number of miles driven by model year 2012-16 cars and light trucks during each year of 

their lifetimes, were described in detail in the rulemaking documents and available for 

public review. Specifically, the methodologies and assumptions used in developing these 

estimates were described in detail in EPA and NHTSA’s Draft Joint Technical Support 

Document, Section 4.2.4, pp. 4-7 to 4-15. The updated FRM analysis is available in EPA 

and NHTSA’ Joint Technical Support Document Section 4.2.3. The lifetime VMT 

numbers used in the final rulemaking increased slightly because of a decrease in 

projected fuel prices between AEO 2009 and AEO 2010. The resulting values are 

195,264 miles for cars and 225,865 miles for trucks. 

 As noted in the documentation, the analysis is based upon the January 2006 NHTSA 

report “Vehicle Survivability and Travel Mileage Schedules,” (Docket ID: EPA-HQ4-76
 
 

EPA Responses on Joint Issues and Technical Work 

OAR-2009-0472-0126) which incorporates the best available data on fleet composition 

and use. 

4.5.8. Accounting for the rebound effect of higher fuel economy 

Organization: State of New Jersey 

Comment: 

The fuel economy rebound effect refers to the fraction of fuel savings expected to result 

from an increase in vehicle fuel economy - particularly one required by higher fuel 

efficiency standards -that is offset by additional vehicle use. The Department believes the 

rebound rate of 10 percent used by the USEPA in the proposal is justified given the 

historical decline in the magnitude of the rebound effect. The Department also supports 

the proposal's findings regarding vehicle sales whereby the proposal projects a positive 

impact on vehicle sales due to reduced fuel costs outweighing the costs of meeting the 

new emission standards. [OAR-2009-0472-7109.1, p.10] 

EPA Response: 

EPA appreciates New Jersey's comments supporting our proposed value of 10 percent for 

the rebound effect. Based in part on these comments, we have decided to maintain the 10 

percent rebound value for the final rulemaking. 

Organization: California Air Resources Board 

International Council on Clean Transportation 

Missouri Department of Natural Resources, Air Pollution Control 

Program 

Comment: 

CARB supports the decision to reduce the rebound effect to 10% from previous analyses 

using 15%. As previously commented (Document ID No. NHTSA-2008-0089-0173), 

CARB believes 10% to be the upper bound for the rebound effect. Thus, the agencies 

may wish to consider further reducing this effect to 5%, which is more consistent with the 

latest results from Small (2009) on the projected dynamic rebound effect accounting for 

fuel economy regulations. NHTSA’s sensitivity analysis shows that this adjustment in 

rebound effect would increase fuel savings and emission reductions by 5% and 

discounted benefits by 4%. (PRIA p.456) Thus, the regulation impacts are somewhat 

sensitive to the assumption on the magnitude of the rebound effect and a lower value 

could be justified [OAR-2009-0472-7189.1, p.16] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. 

See docket number OAR-2009-0472-7283, pp. 21-27] 

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EPA Response to Comments 

The agencies used a fixed estimate of 10% for the rebound effect. A wide range of 

historical studies was considered by the agencies in arriving at this estimate and NHTSA 

conducted some modeling of their own. Recent studies by Small and VanDender (2007) 

and Greene (2009) demonstrate that the rebound effect is linked to personal income and 

vehicle efficiency, as well as fuel prices, and has been declining over time. 

EPA stated that if they used a dynamic estimate of the future rebound effect based upon 

the Small and VanDender work, they would use a value of 5% or lower. EPA invited 

comments: 

-“on other alternatives for estimating the rebound effect”. 

- “on the extent to which the short run elasticity of demand for gasoline with respect to its 

price can provide useful information about the size of the rebound effect”. 

- “on whether it would be appropriate to use the price elasticity of demand for gasoline, 

or other alternative approaches, to guide the choice of a value for the rebound effect”. 

The Small and VanDender work is the proper basis for calculating the rebound effect. 

Small and VanDender made a major contribution to the field by incorporating economic 

impacts and the cost of driving into calculations of price elasticity of demand. This is 

much more appropriate than assuming a fixed 10% rebound effect that does not take into 

account future changes in vehicle efficiency, fuel prices, and future income. Dynamic 

estimates should be used to calculate the future rebound effect. 

ICCT believes that estimates of the short run elasticity of demand for gasoline with 

respect to price can provide a useful point of comparison for rebound estimates derived 

by other methodologies, but should not be used to guide the choice of a value for the 

rebound effect. 

[OAR-2009-0472-7156.1, pp.14-15] 

Although it is somewhat reasonable to assume that some people will drive more if their 

vehicles get better gas mileage, there is no evidence presented in the report showing that 

the average consumer automatically increases the amount they drive when they get more 

miles per gallon. Nor does the report fully explain why 10% is assumed to be the 

estimated increase. In addition, the report's assumption that the rebound effect will result 

in no overall emissions reductions from the actual driving of vehicles appears to be 

extremely conservative in the estimation of emissions reductions resulting from higher 

CAFE standards. In the notice, EPA acknowledges that some recent studies have shown 

that as time goes on, the rebound effect is actually lower than 10%, especially in future 

years: Therefore, using an across the board 10% value should be reconsidered. Another 

important consideration should be the price of gasoline. Regardless of the increase' in 

miles per gallon for a vehicle, gasoline prices have been shown to have a very significant 

impact on miles driven. The negative effects of gasoline prices on driving was clearly 

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EPA Responses on Joint Issues and Technical Work 

shown in the summer of 2008, when gas prices climbed to record rates, and drivers 

nationwide dramatically decreased their driving. [OAR-2009-0472-7480, p.2] 

EPA Response: 

Although CARB supported EPA's use of a 10 percent rebound effect, CARB stated that 

10 percent represented the upper bound for the rebound effect. CARB, Missouri 

DNR, and ICCT all suggested that EPA should consider a rebound effect that is lower 

than 10 percent. All three commentors referenced the recent work by Small & Van 

Dender as justification for using a lower rebound effect. The Small & Van Dender 

methodology estimates a dynamic rebound effect that varies over time, taking into 

account expected future changes in factors such as income, fuel prices, and urbanization. 

Based on these variables, the Small & Van Dender methodology projects that the rebound 

effect will decline significantly over time. The hypothesis that the rebound effect is 

declining over time is also supported by recent work by Dr. David Greene. See TSD 

Chapter 4 for additional details on these studies. 

EPA agrees with the commenters that the most recently published literature supports a 

lower rebound effect, which is one of the reasons we have a adopted a value of 10 

percent, which is lower than the 15 percent used by NHTSA in its previous 

rulemaking. While EPA appreciates the input provided by commenters, we did not 

receive any new data or analysis to justify revising our initial estimates of the rebound 

effect at this time. Based on the positive comments we received, we will continue using 

the dynamic rebound effect to help inform our estimate of the rebound effect in future 

rulemakings. However, given the relatively new nature of this analytical approach, EPA 

believes the larger body of historical studies should also be considered when determining 

the value of the rebound effect. As we described in the Chapter 4 of the joint Technical 

Support Document, the more recent literature suggests that the rebound effect is 10% or 

lower, whereas the larger body of historical studies suggests a higher rebound effect. 

Therefore, we will continue to use the 10% rebound effect for this rulemaking. However, 

we plan to update our estimate of the rebound effect in future rulemakings to further 

consider the newer work of Small and Van Dender and David Greene. 

EPA also appreciates ICCT's comments discouraging the use of the short run elasticity of 

demand for gasoline with respect to price as a proxy for the rebound effect. Based in part 

on these comments, we have not used this metric as a replacement for the estimates of the 

rebound effect. 

Organization: Hyde, James 

Comment: 

Rebound Effect: The proposal assumes a 10% rebound effect. The increased VMT 

attributed to this rebound is sufficient to offset the pollutant decreases derived from the 

reduced production and distribution of fuels. The discussions of the upstream and 

downstream emissions highlights some shortcoming of the available data and models to 

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compute impacts. The assumption that the 'rebound effect' 'continues throughout the life 

of the vehicle' [DRIA, pS17] is unfounded. If these is a 'rebound effect' it is a 

psychological phenomenon which can last only as long as the original owner can remain 

aware of the fuel economy change AND as long as the fuel economy change is not 

overwhelmed by increases in the cost per gallon or other expenses. Fuel cost is only one 

component, and not a large component, of the cost of operating a motor vehicle. [OAR2009-0472-7258.1, p. 1] 

EPA Response: 

While the response of consumers to an increase in fuel economy may vary depending on 

the individual, this analysis of the rebound effect generally relies on aggregate changes in 

VMT based on historical national or state-level data. Many historical studies have shown 

a correlation between changes in total VMT and changes in fuel economy, even when 

other factors such as gasoline prices are taken into account. EPA agrees with the 

commenter that fuel costs are only one component of the full cost of driving. Therefore, 

EPA's analysis takes into account future projections of other factors such as income, fuel 

prices, and congestion when estimating the potential future rebound effect. 

4.5.9 Benefits from Increased Vehicle Use 

No comments were received on the benefits from increased vehicle use. 

4.5.10. The Value of Increased Driving Range 

Organization: Washington State Department of Commerce 

Comment: 

[Following comments are from LA Testimony, OAR-2009-0472-7283, p.125] 

We urge, however, EPA and NHTSA to include two additional costs related to the 

reduction in driving costs brought about by increased standards: A, the increase in permile fuel consumption resulting from driving in heavier traffic conditions, which is partly 

a consequence of the rebound effect; and, B, the increase in urban sprawl by incentivizing 

low-density urbanization, partly a root of the rebound effect. 

The latter is particularly important as it counters efforts to reduce VMT and may 

contribute to the carbon impacts of land-use change from new urban developments 

EPA Response: 

In both proposal and final rule, EPA included the cost of increased congestion-related 

delays in its analysis of the program. As discussed in Section II.F of the preamble, and 

Chapter 4.2.10 of the Joint TSD, this cost is approximately $0.05 per rebound mile. The 

agency did not account for a potential partial offset of the real world GHG benefits due to 

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EPA Responses on Joint Issues and Technical Work 

altered drive cycles (increased delay due to increased congestion). We believe these 

potential losses to be minimal. 

Any reduction in the cost of intra-urban travel (whether by auto, transit, or any other 

mode) provides some incentive for households and businesses to locate farther from their 

workplaces and other frequently-visited destinations (in the case of households), or 

farther from sources of raw materials, labor, and final markets (in the case of businesses). 

In comparison to the effects of infrastructure investment and financing decisions, together 

with pricing policies (indirect pricing of highway use through fuel taxes, and heavilysubsidized transit fares), the effect of making vehicles more fuel-efficient and thus less 

costly to operate on the cost of urban travel is likely to be trivial. This effect is unlikely 

to offset more than a small fraction of benefits from reducing fuel consumption. 

The relationship between vehicle CO2 standards, fuel economy, travel patterns, and land 

use change is a complex and emerging science. The agency may evaluate this 

relationship further in future rulemakings. 

4.6. Safety and Mass Reduction 

Organization: US Steel Corporation 

Comment: 

The economic impact of the proposed new CAFE rules will be affected by at least two 

competing factors. Initial response to the new regulation by automakers will change the 

mix of vehicles, typically growing the smaller and lighter C-segment and, perhaps, Bsegment vehicles in place of more standard or larger-footprint cars and trucks. Smaller 

vehicles use less steel, and the reduction in demand for automotive steel could have a 

negative effect on the health of the North American steel industry. Also, the tendency to 

assign more expensive lower density materials to satisfy the regulation could exacerbate 

the harm. Smaller vehicles reduce steel demand, steel jobs, and the profitability necessary 

for steel companies to continue to invest in new products and new process technology. 

Additionally, a CAFE law focused only on use phase fuel economy invites consideration 

of low density materials that will lessen the demand for automotive steels and reduce the 

profitability of automotive steelmakers. [OAR-2009-0472-7197.1, pp.6-7] 

Much has been written about the impact of vehicle size and weight on passenger injury 

severity. Recent summary data suggest that the daily toll on worldwide roadways is 3,000 

deaths and 30,000 serious injuries. Because of technological advancement in vehicle 

engineering, including optimized crumple zones, rigid passenger compartments, 

strengthened side structures, air bags, electronic stability control, antilock brakes and so 

forth, the historical relationship between vehicle size, weight, and collision severity may 

be certainly influenced by design and structural improvements over time. Efforts to 

standardize bumper heights to prevent large vehicles from overriding smaller passenger 

cars in collisions are also important. 

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EPA Response to Comments 

In spite of all these advances designed to protect occupants, it is clear that large, heavy 

vehicles are preferred to smaller ones in head-to-head collisions. Work by Desapriya and 

others have demonstrated that occupants in passenger sedans are more than two times 

likely to be injured than drivers or passengers in larger pickup trucks and SUVs. Resent 

testing conducted by the Insurance Institute of Highway Safety (IIHS) concluded that in 

head on collisions between small and large cars, the small car sustains significantly more 

damage, even though it has been rated as “Good” in the standard IIHS testing. The new 

NPRM, because of its schedule, assures that car makers will be manufacturing smaller, 

lighter vehicles in order to comply. This is likely to occur while significant large volumes 

of heavy trucks and SUVs are still on the road. There is a high probability that the rate of 

serious injury will increase because of the increase in the proportion of smaller vehicles 

and the higher probability that smaller cars will collide with the larger vehicles. 

U. S. Steel research with the Auto/Steel Partnership and in programs supported by the U. 

S Department of Energy, that the use of new AHSS steel grades can enable the mass of 

critical crash structures, such as front rails and bumper systems, to be reduced in weight 

by 25 percent. Such vehicle structures with reduced mass can perform as well as their 

heavier counterparts in standard NHTSA frontal or IIHS offset instrumented crash tests. 

However these tests do not address relative vehicle size, hence in spite of these 

accomplishments with high-strength steels, it is unlikely that the “vehicle footprint” 

formula will totally negate the disadvantage that drivers of smaller vehicles have in 

collisions with heavier vehicles like pickup trucks and SUVs. 

U. S. Steel believes that more time is needed to allow powertrain development to occur in 

order to achieve the targeted higher fuel economy. The development of electrification in 

powertrains (like in battery-electric vehicles or plug-in hybrids), more efficient internal 

combustion engines, and alternative energy sources (such as biofuels or hydrogen) 

requires time. The extension of the CAFE timetable to pace the required fuel economy 

targets according to technological capability of carmakers will prevent a rush to smaller 

vehicles that are less safe on roadways also populated by vehicles twice their mass or 

more. [OAR-2009-0472-7197.1, pp.7-8] 

[[These comments were submitted as testimony at the Detroit public hearing. See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 97-102.]] 

The core of my message today is that steel can play an important role in reducing the 

energy consumption and CO2 emissions in all phases of a vehicle's life, the 

manufacturing phase, driving phase, and end-of-life recovery. Over the past few decades 

working with our automotive customers I have seen a remarkable evolution of both the 

materials we supply and their application that have positively impacted the vehicle and 

meeting the NHTSA and EPA regulations. Historically the focus of CAFE regulations 

has been the use of the driving phase of the automobile. Fuel has been and will remain 

important to automakers' efforts to improve fuel economy. Steel's role is to enable mass 

production while maintaining safety and affordability. Today steel is the dominant 

material in the vehicle in the United States and around the world representing 60 percent 

of the vehicle material content. We have maintained that dominance for the last 100 

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years of the vehicle. However, it's not been the same steel. In the 60s and 70s we 

replaced cold walled steels that rust with zinc coated steels, in the 80s and 90s, replaced 

mild steels with high-strength steels. This decade we are replacing the high-strength 

steels with lightweighting advanced high- strength steels, and a decade from now we will 

be replacing those steels with new advanced lightweighting products. Today the 

advanced high-strength steels are the fastest growing material in vehicle designs -- 

whereas in 1999 there were nearly no applications of advanced high-strength steels, today 

they represent 15 percent of the vehicle steel content. Each and every new vehicle launch 

increases the content of these grades with the vehicle makers expected to reach 50 

percent within the next decade. Our customers' demand for these products is a result of 

their lightweighting capability that enable affordable designs within their existing 

manufacturing facilities. 

The need for these materials has come to result in the increase in crash requirements 

which have changed the vehicle structure from a stiffness-dominated design to a strengthdominated design. Strength is where steel performs better than any other automotive 

material. Advanced high-strength steels are four, five, and six times stronger than the 

steels that they are replacing. What has this meant to lightweighting of the vehicle? 

Material lightweighting is a function of design flexibility, strength, and density. What 

steel lacks in low density relative to competing materials, it more than compensates for 

with strength and design flexibility. To demonstrate that capability, the steel industry has 

invested in many projects demonstrating 25 to 30 percent mass reduction. We have 

worked with our customers to incorporate that technology in each and every new vehicle 

being launched today. These new vehicle structures are twice as strong as previous 

designs with mass reductions in excess of 20 percent while meeting the increased crash 

requirements and maintaining affordability. 

And, remember, this technology is not yet fully integrated. Advanced high-strength steel 

content will increase from 15 percent today to 50 percent in the next decade, enabling 

additional mass savings on future vehicles. 

Clearly steel is and will continue to play a role in reducing the energy used in CO2 

emissions of the vehicle in its driving phase. 

However, as I mentioned at the outset, steel can also play an important role in reducing 

the energy use in CO2 emissions in the other phases of a vehicle's life, in particular, the 

manufacturing phase, and end-of-life recovery. 

EPA and NHTSA have an important opportunity to use this rulemaking to formulate 

policy guidance that best encompasses the entire environmental impact associated with 

the vehicle, and, consequently, encourages vehicle manufacturers to choose the materials 

that result in the lowest environmental impact over the entire vehicle life. The advanced 

high-strength steels energy, and CO2 intensity is the same as conventional steels. So in 

the manufacturing phase, a 25 to 30 percent mass reduction enabled by these materials 

means we produce 25, 30 percent less steel for each vehicle, with the accompanying 

reduction in raw material use, energy use, and CO2 emissions. This mass reduction then 

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EPA Response to Comments 

improves fuel economy reducing energy use and CO2 emissions in the driving phase. 

Then at the end of a vehicle's life, 100 percent of the vehicle is recycled back in the very 

same steel products or future steel products for the next generation of vehicles. 

In contrast, the low-density competing metals such as aluminum or magnesium have a 

much different story. On a per-pound basis, the energy and CO2 intensities of these 

materials are 7 to 18 times more than steel, resulting in a corresponding increase in the 

vehicle's manufacturing energy and CO2 intensity. These materials may provide a mass 

advantage. Unfortunately, what is gained in fuel economy in the driving phase through 

the weight reduction can be easily overcome by the selection of high-energy, CO2-

intensive, low-density materials. And this concept goes beyond material selection. It 

applies to many technology options that may perform well within the envelope of 

regulated tailpipe emissions, but perform poorly when that boundary is expanded to 

address the total life cycle. To address these unintended consequences, a life cycle 

assessment approach is needed that considers all the phases of a vehicle's life. 

EPA Response: 

As stated in several places in the rule, the footprint curves established by NHTSA and 

EPA are designed to minimize the incentive for reducing vehicle size to meet stringency. 

EPA recognizes that based on economic and consumer demand factors that are external 

to this rule, the distribution of footprints in the future may be different (either smaller or 

larger) than what is projected in this rule. However, the agencies continue to believe that 

there will not be significant shifts in this distribution as a direct consequence of this rule. 

With regard to mass reduction and the propensity of manufacturers to apply more 

expensive, lower density materials: EPA has partially based its position on information 

provided by AISI that the mass of a vehicle may be reduced through the application of 

High Strength (HSS) and Advanced High Strength Steels (AHSS). In AISI's comments, 

they noted that the mass of certain structures could be reduced by 25% through the 

application of AHSS. Given the magnitude of the mass reduction anticipated in support 

of this rule, the majority of the mass reduction could and most likely will 

be accomplished through additional applications of HSS and AHSS. These premium 

steel products are also more expensive than mild steel at a given weight. As a result, 

even though the application requires less steel by weight, the end product could be profit 

neutral to the steel companies. 

During the Public Hearing, U.S. Steel commented that new vehicle structures 

incorporating high-strength steel would twice as strong as previous designs and were 

capable reducing mass by 20 percent while still meeting increased crash safety 

requirements and maintaining affordability. This appears to contradict their written 

comments that heavy vehicles would always be preferable to lighter vehicles in frontal 

collisions. The written comments also appear to ignore the fatalities in lighter vehicles 

struck by heavy vehicles. The 2010 Kahane Report,i

 2005 DRI studiesii,iii and 2006 work 

by Robertsoniv indicate that reducing the mass of the heaviest light-duty trucks can result 

in an overall reduction of fatalities due to reduced fatalities in lighter vehicles struck by 

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EPA Responses on Joint Issues and Technical Work 

light-duty trucks. The results from EPA's modeling also show a higher mass reduction is 

expected for larger vehicles and as such should help to alleviate the in vehicle weight 

disparity and crash incompatibility in small vs. large vehicles. See RIA chapter 7.6.1 and 

RIA chapter 4.7 table 4-14. 

Organization:Spurgeon, C. M. 

Shaw, Donald F. 

 Wood, J.S. 

Comment: 

Lastly, we care about our families’ safety as much as the Secret Service cares about the 

President's safety. There is a clear correlation between size and weight of a vehicle and its 

safety. That is why the President's limo only gets a reported 8 mpg, not 35 mpg. The 

Secret Service should not have to cut corners in keeping the President safe, just as we 

should not have to cut corners to keep our families safe. [OAR-2009-0472-7092.1, p. 2] 

The safety of vehicles meeting this requirement will be significantly reduced with 

increased deaths and injury. [OAR-2009-0472-7270.1, p. 1] 

Lastly, we care about our families. There is a clear correlation between size and weight of 

a vehicle and its safety. That is why the President’s limo only gets a reported 8 mpg, not 

35 mpg. The Secret Service should not have to cut corners in keeping the President safe, 

just as we should not have to cut corners to keep our families safe. [OAR-2009-0472-

7270.1, p. 3] 

EPA Response: 

In the proposed rule EPA made reference to two major studies on the effects of vehicle 

mass and fatalities. The first was an analysis completed in 2003 by NHTSA which 

determined that vehicle fatalities increased with a reduction in curb weight. The second 

analysis was performed by Dynamics Research Incorporated (DRI) and determined that 

there were other factors involved other than just the curb weight of the vehicle. 

Specifically, they determined that a reduction in curb weight without a reduction in a 

vehicle's footprint will improve a vehicle's ability to avoid a crash, improve the 

survivability in the impacted vehicle, and reduce fatalities in rollovers. The EPA has 

studied these reports as well as input from automotive manufacturers, material suppliers, 

and government laboratories and believes that mass can be removed from a vehicle 

without adversely affecting safety. In fact, mass reduction techniques have already been 

employed in most, if not all, light duty vehicles to meet current FMVSS regulations and 

increase feature content. 

The 2010 Kahane Report, 2005 DRI studies and 2006 work by Robertson indicate that 

reducing the mass of the heaviest light-duty trucks can result in an overall reduction of 

fatalities due to reduced fatalities in lighter vehicles by struck by light-duty trucks. The 

results from EPA's modeling of how vehicle manufacturers may respond to GHG 

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EPA Response to Comments 

regulations also show a higher mass reduction is expected for larger vehicles and as such 

should help to alleviate the in-vehicle weight disparity and crash incompatibility in small 

vs. large vehicles. 

With regard to specific comments about the Presidential limousine, this vehicle was 

reportedly built using a GMC Topkick/Chevrolet Kodiak heavy-duty truck platformv

, 

which is rated at 19,500 lbs. GVWR and thus is classified as a heavy-duty vehicle. This 

final rule only applies to passenger cars and light-duty trucks (<8,500 lbs. GVWR) and 

thus does not include heavy-duty vehicles. The regulation also does not specifically 

mandate any changes in vehicle mass, although it is likely that small reductions in vehicle 

mass that maintain safety will occur as detailed in EPA’s regulatory impact analysis due 

to the cost effectiveness of curb weight reductions of less than 10% in reducing CO2. 

Organization: State of Connecticut Department of Environmental Protection 

Comment: 

DEP is not expert in the economic analysis of safety considerations that influenced the 

development of the proposed CAFE and GHG emission standards. We note, however, 

differing conclusions reached by EPA and NHTSA on safety issues. DEP requests that 

EPA and NHTSA work to resolve these differences using the latest science, most recent 

available data and a forward looking approach that balances the safety interests of drivers 

and passengers with the protection of public health and the environment for all. [OAR2009-0472-7301, p.2] 

EPA Response: 

The Connecticut Department of Environmental Protection is correct in their assessment 

of the respective positions of NHTSA and EPA regarding mass reduction and safety in 

the NPRM. The two agencies are working closely to resolve these differences with the 

understanding that we both hold public safety in the highest regard. The agencies 

discussion is focused on not only the historical analyses, but also the engineeing and 

science behind vehicular safety as it relates to mass reduction. For the final rule, EPA 

and NHTSA have added a joint section on safety within section II of the final preamble. 

Organization: Competitive Enterprise Institute 

Comment: 

Fuel economy mandates lead to reductions in vehicle size and weight. 

Downsizing, however, has a direct negative impact on vehicle crashworthiness. In 

general, there is a positive correlation between vehicle size and safety, and between 

vehicle weight and safety. Fuel economy, on the other hand, is negatively correlated with 

size and weight. For this reason, there is a clear tension between crashworthiness and 

efforts to improve fuel economy. Given the direct connection between fuel economy and 

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EPA Responses on Joint Issues and Technical Work 

CO2 emissions, EPA’s proposed rule raises this very same safety problem. [OAR-2009-

0472-7281.1, p.4] 

New technologies and “attribute-based” regulation will not eliminate the safety trade-off. 

Although EPA acknowledges that CAFE regulation in the past has diminished auto safety 

by decreasing vehicle mass, EPA assures us that this time things will be different, 

because the GHG standards will not lead to downsizing. Under the Energy Independence 

and Security Act (EISA), enacted in 2007, fuel economy targets vary according to a 

vehicle’s “footprint” (the area formed by multiplying the wheelbase by the vehicle’s track 

width). NHTSA and EPA have “carefully chosen” the “footprint curve (or function)” so 

that it “neither encourages manufacturers to increase nor decrease the footprint of their 

fleet.” Consequently, says EPA, automakers will have no incentive to reduce a vehicle’s 

“crush and crumple zones.” Yet on the very same page, EPA acknowledges that, “EPA’s 

modeling projects that vehicle manufacturers will reduce the weight of their vehicles by 

4% on average between 2011 and 2016 although individual vehicles may have a greater 

or smaller weight reduction...” 

In short, the average vehicle will have less mass to absorb collision forces than would be 

the case absent the rule. On average, each vehicle will be less safe than it would 

otherwise be. Despite being “attribute-based,” the rule will limit production of heavier, 

safer vehicles. Consumers will not be able to buy all the safety they are willing to pay 

for. [OAR-2009-0472-7281.1, p.5] 

EPA Response: 

The Competitive Enterprise Institute (CEI), in their comments to the proposed rule, stated 

that vehicle downsizing and weight reduction, while being effective at reducing fuel 

consumption, will reduce the safety of vehicles. The two terms, downsizing and weight 

reduction, are used somewhat interchangeably in their comments when in fact these are 

two distinct attributes which must be addressed separately. 

In an effort to discourage and otherwise eliminate incentives to downsize vehicles to 

meet the standards, NHTSA and EPA have created a footprint based attribute curve as the 

form of the standards. CEI was incorrect in their statement that the Energy Independence 

and Security Act (EISA) enacted a footprint based strategy. EISA mandates that the 

stringency be controlled by a vehicle attribute. NHTSA and EPA chose footprint as that 

attribute. EPA believes that the slope of the footprint attribute standard has been 

designed to minimize the incentive for manufacturers to make smaller vehicles 

(minimizing any regulatory benefit from downsizing by flattening the curve only for the 

smallest vehicles of 41 sq. ft. and lower footprint). In this effort the agencies feel they 

have been successful in addressing vehicle downsizing concerns. EPA recognizes that 

based on economic and consumer demand factors that are external to this rule, the 

distribution of footprints in the future may be different (either smaller or larger) than 

what is projected in this rule. However, the agencies continue to believe that there will 

not be significant shifts in this distribution as a direct consequence of this rule. 

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EPA Response to Comments 

Weight reduction as a cost effective means of improving fuel economy and reducing CO2 

emissions has been adopted by both NHTSA and EPA in their projections of technologies 

which could be utilized in a cost-effective manner to meet the standards. While the 

agencies differ slightly in their application of mass reduction, both agencies believe that it 

may be accomplished without sacrificing vehicle safety. Mass reduction can be 

accomplished through several mechanisms without changing a vehicle's impact 

performance and/or size. They include: Material Substitution, where a lower density 

material replaces a higher density material; Smart Design, which consists of optimizing 

designs to minimize mass and/or combining functions of co-located components; and 

finally, Mass Compounding which allows for resizing ancillary systems that are directly 

dependent on vehicle mass, such as brakes and suspension components. 

Organization: University of Pennsylvania, Environmental Law Project 

Comment: 

While a number of studies have found that smaller vehicles are less safe for their 

occupants, many researchers have called this conclusion into question. The 

evidence indicates, instead, that disparities in vehicles size are likely to lead to injuries. 

Further, there is strong evidence that larger vehicles such as SUVs and light trucks 

impose significant safety risks on the drivers of other cars. Thus, despite claims that 

safety is served by maintaining vehicle size, the evidence is, at best, ambiguous on this 

point. Given evidence that larger vehicles impose high safety risks on non-occupants, and 

that large size disparities create the greatest risks, there is significant reason to question 

the disparate efficiency and emissions standards imposed on large and small vehicles. 

While there are clear reasons to maintain the market’s role in providing consumers with 

choices, there are also clear reasons why the regulations propagated by EPA and NHTSA 

should not greatly encourage the manufacture of larger vehicles, which both impose 

greater safety risks and emit more greenhouse gases. [OAR-2009-0472-7286.1, pp. 16-

17] 

EPA Response: 

EPA agrees with the University of Pennsylvania Environmental Law Project's comments 

regarding the rule’s effect on vehicle safety. The rule is specifically designed to create no 

incentive to produce either larger or smaller vehicles. The results from EPA's modeling 

show a higher mass reduction is expected for larger vehicles and as such should help to 

alleviate the disparity in vehicle weight in small vs. large vehicles. 

Organization: American Iron and Steel Institute 

Comment: 

Further, in Section III-f-4 (Weight Reduction and Potential Safety Impacts), p. 49589-

49590, Federal Register) and in the recently released Draft Regulation Impact Analysis 

(DRIA), Section 3.2.1.2, there is discussion about weight reduction (mass reduction) as a 

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technology that supports fuel economy. Regarding the methodology, the document states 

'A footprint attribute also would not discourage the use of lightweight materials, as a 

lighter vehicle with no change in footprint would more easily comply with its CO2 

target'. The proposed rule documents identify two paths to the achievement of materialsbased mass reduction, one based on the use of low density materials and the second based 

on the use of high-strength materials like high-strength steels in place of mild steel 

grades. AISI supports this classification and considers both approaches equally viable to 

increasing fuel economy for a carmaker within the proposed standard. However, if mass 

reduction is achieved through materials substitution of certain 'lower density materials' 

the total life cycle energy use and OHO emissions may not be equivalent to reducing 

mass (vehicle weight) with high-strength steels. This is of significant concern if the 

EPA/NHTSA objective is to reduce the total energy use and OHO footprint of the 

automotive fleet. [OAR-2009-0472-7088.1, p.4] 

By using conventional high-strength steels (HSS), advanced high strength steels (AHSS), 

and ultra-high-strength steels (UHSS) together with modem structural computer-aided 

design and engineering (CAD, CAE), mass reductions of over 25 % have been realized 

both in research studies and in actual applications. The use of HSS and AHSS simply 

reduces the amount of steel required to do the same job in the vehicle. This mass 

reduction achieved by using steel more efficiently benefits fuel economy (driving cycle 

emissions reduction) equivalent to the mass reduction accomplished by application of a 

lower density material (such as aluminum, composites, or magnesium). However, the 

substitution of low-density materials can lead to increases in the energy and greenhouse 

gas emissions associated with manufacturing such materials. Comparative charts of the 

greenhouse gas emissions and the energy associated with making specific automotive 

materials are shown in Figures 3a and 3b, respectively. Here it is easily seen that 

alternative structural materials considered as possible substitutes for steel can produce 6 

to 17 times the GHG emissions and consume 8 to 15 more energy as steel while 

achieving mass reduction in a vehicle. Unfortunately, what is gained in fuel economy in 

the driving phase of the vehicle life through weight reduction can be easily lost by 

selection of such high-energy, GHG-intensive, low-density materials. [OAR-2009-0472-

7088.1, pp.4-5] 

Much has been written about the impact of vehicle size and weight on passenger injury 

severity. Recent summary data suggest that the daily toll on worldwide roadways is 3,000 

deaths and 30,000 serious injuries. Because of technological advancements in vehicle 

engineering, including optimized crumple zones, rigid passenger compartments, 

strengthened side structures, air bags, electronic stability control, antilock brakes and so 

forth, the historical relationship between vehicle size, weight, and collision severity may 

be influenced by design and structural improvements over time. Efforts to standardize 

bumper heights to prevent large vehicles from overriding smaller passenger cars in 

collisions are also important. [OAR-2009-0472-7088.1, pp.7-8] 

In spite of all these advances designed to protect occupants, it is clear that large, heavy 

vehicles are preferred to smaller ones in head-to-head collisions. Work by Desapriya and 

others have demonstrated that occupants in passenger sedans are more than two times 

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likely to be injured than drivers or passengers in larger pickup trucks and SUVs. Resent 

testing conducted by the Insurance Institute for Highway Safety (IIHS) concluded in 

head-on collisions between small and large cars, small cars sustained significantly more 

damage, despite a 'Good' in the standard IIHS testing [which really only tests a vehicle 

against standard barriers and not against larger vehicles]. [OAR-2009-0472-7088.1, p.8] 

The aggressive schedule for implementing the proposed rule assures that carmakers will 

be manufacturing smaller, lighter vehicles in order to comply. This is likely to occur 

while a high percentage of heavier SUVs and light trucks are still on the road. We believe 

there is a high probability the rate of serious injury will increase because of the increase 

in the percentage of smaller vehicles and the higher probability that smaller cars will 

collide with the larger vehicles. [OAR-2009-0472-7088.1, p.8] 

AISI has shown in its research with the Auto/Steel Partnership and in programs supported 

by the U. S Department of Energy, the use of new AHSS steel grades can enable the mass 

of critical crash structures, such as front rails and bumper systems, to be reduced by 25 

percent. Such vehicle structures with reduced mass can perform as well as their heavier 

counterparts in standard NHTSA frontal or IIHS offset instrumented crash tests. However 

these tests do not address relative vehicle size, hence in spite of these accomplishments 

with high-strength steels, it is unlikely that the 'vehicle footprint' formula will totally 

negate the disadvantage drivers of smaller vehicles have in collisions with trucks and 

SUVs. [OAR-2009-0472-7088.1, p.8] 

AISI believes more time is needed to allow powertrain development to occur to help 

achieve higher fuel economy. The development of electrification in powertrains (such as 

in battery-electric vehicles or plug-in hybrids), more efficient internal combustion 

engines, and alternative energy sources [biofuels and hydrogen] will take time. Matching 

the compliance timetable for this rule to technological capability of carmakers will 

prevent a rush to smaller vehicles that are less safe on roadways also populated by 

vehicles twice their mass or more. [OAR-2009-0472-7088.1, p.8] 

EPA Response: 

See also the earlier response to similar comments by U.S. Steel Corporation in this same 

RTC section. AISI also noted that: “AISI has shown in its research with the Auto/Steel 

Partnership and in programs supported by the U.S. Department of Energy, the use of new 

(Advanced High Strength Steel) AHSS steel grades can enable mass of critical crash 

structures, such as front rails and bumper systems, to be reduced by 25 percent. Such 

vehicle structures with reduced mass can perform as well as their heavier counterparts in 

standard NHTSA frontal or IIHS offset instrumented crash tests.” This is exactly the type 

of material substitution that EPA noted in the NPRM. In this case a vehicle can be made 

lighter without a concomitant decrease in crush and crumple zones. 

On the other hand, AISI also commented that “the aggressive schedule for implementing 

the proposed rule assures that carmakers will be manufacturing smaller, lighter vehicles 

in order to comply”. Porsche and IIHS had similar comments implying that footprint 

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EPA Responses on Joint Issues and Technical Work 

standards will increase the risk that manufacturers will make vehicles smaller. In section 

II.C and III.D of the preamble to the final rule, the EPA describes in detail why we 

disagree with these statements. EPA believes that the slope of the footprint attribute 

standard has been designed to minimize the incentive for manufacturers to make smaller 

vehicles (minimizing any regulatory benefit from downsizing by flattening the curve only 

for vehicles with the small 41 sq. ft. and lower footprint). In this effort the agencies feel 

they have been successful in addressing vehicle downsizing concerns. EPA recognizes 

that based on economic and consumer demand factors that are external to this rule, the 

distribution of footprints in the future may be different (either smaller or larger) than 

what is projected in this rule. However, the agencies continue to believe that there will 

not be significant shifts in this distribution as a direct consequence of this rule. EPA 

believes that manufacturers will make vehicles lighter for increased fuel efficiency, but 

are not likely to reduce vehicle footprint to make them significantly smaller in response 

to the GHG standards contained in this final rule. 

Organization: Dynamic Research, Inc 

Comment: 

The Proposed Rule contains a number of statements in its Section IIIF.4 with respect to 

DRI’s research. A few of these statements contain misstatements or misinterpretations. 

The following text first quotes each such misstatement or misinterpretation and then 

presents DRI’s comments on it. [OAR-2009-0472-7238.1, p.5] 

1. “The DRI work focused on four major points...: 

1. 2–Door vehicles represented a significant portion of the light duty fleet and should not 

be ignored; 

2. Directional control and therefore crash avoidance improves with a reduction in curb 

weight; 

3. The occupants of the impacted vehicle, or ‘‘collision partner’’ benefit from being 

impacted by a lighter vehicle; 

4. Rollover fatalities are reduced by a reduction in curb weight due to lower centers of 

gravity and lower loads on the roof structures.” 

The four major points listed in Section III.F.4 of the Proposed Rule are only some of the 

points and conclusions in DRI’s work. The DRI work focused on the effects of vehicle 

size and weight (i.e., curb weight, wheelbase, and track) on vehicle crash avoidance, 

crash-worthiness, and compatibility, based on accident and fatality data. There were 

numerous conclusions in addition to those listed, including the benefits of both increased 

size and reduced weight. [OAR-2009-0472-7238.1, pp.5-6] 

For example, Tables 1 and 2 summarize the DRI results that for both the passenger car 

fleet and light truck and van fleet, weight reduction produces a statistically significant 

decrease in estimated fatalities, while track reduction results in a statistically significant 

increase in estimated fatalities. In addition, for the passenger car fleet, wheelbase 

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EPA Response to Comments 

reduction also produces a statistically significant increase in fatalities. Overall these 

results indicate a consistent trend for both fleets. These trends are also consistent with the 

DRI results for the “1991-1998 4-door non-police passenger car only” fleet preferred by 

NHTSA, as shown subsequently in Table 4. It is unknown why NHTSA was unable to 

reproduce these results, however several possible reasons are discussed herein. [OAR2009-0472-7238.1, p.6] 

2. “Directional control and therefore crash avoidance improves with a reduction in curb 

weight.” 

This is an accurate but incomplete summary of one of DRI’s conclusions. The empirical 

results in Table 3 of the 2005 DRI report indicated that crash avoidance improves with 

reduction in curb weight and/or with increases in wheelbase and track. The 2005 DRI 

also offered possible explanations for these results in Section III of the report, noting that 

“Crash avoidance can depend, amongst other factors, on the vehicle directional control 

and rollover characteristics.” As just one example, wheelbase is a parameter in the quasisteady vehicle directional equations of motion. These equations “indicate that passenger 

cars with shorter wheelbases tend to have smaller characteristic speeds, resulting in 

higher [yaw rate] natural frequency and less damping, based on analysis of quasi-steady 

vehicle equations-of-motion.” Therefore, based on various theoretical models and 

empirical crash data, DRI concluded that “These results indicate that vehicle weight 

reduction tends to decrease fatalities, but vehicle wheelbase and track reduction tends to 

increase fatalities.” [OAR-2009-0472-7238.1, p.8] 

3. “...when DRI and NHTSA separately analyzed individual vehicle attributes of mass, 

wheelbase and track width, DRI and NHTSA obtained different results for passenger 

cars.” 

This is an accurate statement which warrants further explanation. The differences found 

may be due to the different assumptions about the linearity of the curb weight effect and 

control variables for driver age, vehicle age, road conditions, and other factors. NHTSA's 

analysis was based on a bi-linear model for curb weight with two different weight groups 

(less than 2950 lbs, and greater than or equal to 2950 lbs). The DRI analysis assumed a 

linear model for curb weight with a single weight group. The bi-linear model used by 

NHTSA may be over-parameterized because it has one additional curb weight coefficient 

to be estimated as well as a smaller curb weight range to estimate each curb weight 

coefficient, compared to the DRI analysis. NHTSA also used 8 different control variables 

for driver age instead of the three variables used in the 1997 NHTSA analysis and DRI 

analyses. It is also unclear what other control variables were used in the comparison to 

the DRI results. The control variables in the DRI analyses were originally those selected 

by Kahane. This bi-linear approach used by NHTSA approach and possible differences in 

the control variables could explain the 'widely differing results.' [OAR-2009-0472-

7238.1, pp.8-9] 

This difference between the NHTSA and DRI methods seems to be related to differences 

in the basic research question and related assumptions and the available data used. A 

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brief chronology of the NHTSA and DRI reports is listed in Table x, for reference. The 

objective of the DRI study was to estimate the first-order (i.e., linear) independent effects 

of vehicle curb weight, wheelbase, and track on safety (i.e., assuming that these effects 

are linear). The objective of the NHTSA study appears to be to estimate both the firstorder and the second-order (i.e., non-linear) effects of curb weight (which was assumed 

to be a surrogate for both vehicle size and weight) on safety (i.e., assuming that the size 

and weight effects are fully correlated with each other and inseparable). In our opinion it 

is not possible to estimate both the first-order (i.e., linear) and the second-order (i.e., bilinear) effects of vehicle curb weight, wheelbase, and track on safety, and at the same 

time to have both the first-order and second-order terms be statistically significant, given 

the available historical data. Therefore, the NHTSA objective appears to have been selfdefeating from the start. [OAR-2009-0472-7238.1, pp.9-10] 

EPA Response: 

EPA acknowledges that the points listed in the preamble to the proposed rule, cited in the 

DRI comment, were not comprehensive, and were better interpreted as some of the major 

contrasts between Kahane’s and DRI’s methodology and results. The four points are as 

follows, with #1 and #4 discussed in greater detail below. 

1. 2-Door vehicles represented a significant portion of the light duty fleet and should 

not be ignored. 

2. Directional control and therefore crash avoidance improves with a reduction in 

curb weight and/or increases in wheel base and track. 

3. The occupants of the impacted vehicle, or “collision partner” benefit from being 

impacted by a lighter vehicle. 

4. Rollover fatalities are reduced by a reduction in curb weight due to potentially 

lower center of gravity and lower loads on the roof structures. 

In addition to DRI’s comments on EPA’s results summary, DRI identified a clarification 

required for the second point (as it was stated in the NPRM). DRI commented that a 

decrease in wheel base or track could result in an increase in fatalities. DRI offered 

results from the application of the “quasi-steady vehicle directional equations of 

motion”. These results show “that passenger cars with shorter wheelbases tend to have 

smaller characteristic speeds, resulting in higher [yaw rate] natural frequency and less 

damping, based on analysis of quasi-steady vehicle equations of motion”. The EPA 

concurs with DRI’s analysis and has adjusted point #2 accordingly in the discussion in 

section 7.6.1 in the final RIA. 

Organization: Honda Motor Company 

Comment: 

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EPA Response to Comments 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.96-103] 

Safety and downsizing. Much has been written and researched about the impact of size, 

weight, and fuel economy regulation on safety. 

As we have previously testified, Honda believes that size is a much better attribute 

than weight, and we believe that the argument over the safety differences between a sizebased attribute and a weight-based attribute misses a larger point. The larger issue, it 

seems to us, is the need to downsize the fleet. 

The size-based attribute introduced as an option in 2008 and mandatory from 2011 

essentially reduces incentives to downsize from the current fleet mix. This means that the 

only way to improve fuel economy is through the application of technology and, 

therefore, higher costs. 

In the previous regulation, consumers could downsize their vehicles and save money. 

Downsizing the fleet with an intelligent approach to safety has the salutary effect of 

greatly lowering the cost of greenhouse gas reductions. We believe that, as the fleet size 

and weight trend down, safety can be improved on a fleet-wide basis and efficiency can 

be improved at a lower overall cost to consumers. 

Towards that end, the cap on passenger car requirements below 41 square feet, roughly 

the smallest 10 percent of the market, is an important step in the right direction. We 

recommend that a similar cap be set on the smallest 10 percent of the truck market as 

well. 

Overall consideration should be given towards encouraging more fleet downsizing in 

order to promote safety and lower the cost of greenhouse gas reductions. 

EPA Response: 

The agencies acknowledge Honda's position in support of the footprint based attribute 

curve, and the relationship between vehicle size and safety. Both NHTSA and EPA offer 

this statement as corroborating and validating the agencies’ goal of developing standards 

based on the footprint attribute in a manner which provides no encouragement or 

incentives to produce smaller vehicles as a compliance strategy. 

4.7. Endangered Species Act 

Organization: Center for Biological Diversity 

Comment: 

As noted in our previous comments on the DEIS, incorporated herein by reference, the 

agencies must also conduct an Endangered Species Act Section 7 consultation to fully 

inform their decision making prior to issuing final standards. [OAR-2009-0472-7265.1, p. 

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EPA Responses on Joint Issues and Technical Work 

25] Previous comments submitted on the DEIS review Endangered Species Act 

requirements; assert that direct, indirect and cumulative emissions from regulated 

vehicles “may affect” listed species and that NHTSA must therefore initiate consultation 

under Section 7; refer to several listed species (including polar bears and listed coral 

species) and include an exhibit identifying 143 listed species for which a recovery plan 

has been adopted that references climate change or a projected impact of climate change 

as a threat to the species; and assert that the rule will impact species in ways beyond 

global warming and ocean acidification with a reference to vehicles as a primary source 

of excess nitrogen which contributes to several environmental issues. [NHTSA-2009-

0059-0053.1, p. 9; NHTSA-2009-0059-0090.1] 

EPA Response: 

EPA has considered the commenter’s reference to Endangered Species Act (ESA) 

Section 7 consultation as well as the separate comment addressing ESA issues submitted 

by the same commenter and others (which is incorporated by reference into this 

comment) on NHTSA’s DEIS for their CAFE Standards. EPA has worked with NHTSA 

to assess ESA requirements and develop the agencies’ responses to these comments. 

EPA notes that NHTSA’s response to the comment submitted on its DEIS is found in 

Appendix G of its Final EIS. As set forth below, EPA adopts the reasoning of NHTSA’s 

response as applied to EPA’s rulemaking action. 

ESA Section 7(a)(2) 

Section 7(a)(2) of the ESA requires federal agencies, in consultation with the National 

Oceanic and Atmospheric Administration Fisheries Service (NOAA Fisheries) and/or the 

U.S. Fish and Wildlife Service (FWS, and, with NOAA Fisheries, the Services), to ensure 

that actions they authorize, fund or carry out are not likely to jeopardize the continued 

existence of federally-listed threatened or endangered species, or result in the destruction 

or adverse modification of designated critical habitat of such species. 16 U.S.C. § 

1536(a)(2). Under relevant implementing regulations, consultation is required only for 

actions that “may affect” listed species or critical habitat. 50 CFR § 402.14. Consultation 

is not required where the action has “no effect” on such listed species or critical habitat. 

Under this standard, it is the federal agency taking the action that evaluates the action and 

determines whether consultation is required. See 51 FR 19926, 19949 (June 3, 1986). 

The effects of the action are defined by regulation to include both the direct and indirect 

effects on species or critical habitat. 50 CFR § 402.02. Indirect effects are those that are 

caused by the action and are later in time, but still are reasonably certain to occur. Id.; 

Cf., 51 FR at 19932-19933 (discussing “reasonably certain to occur” in the context of 

cumulative effects analysis and noting that only matters that are likely to occur – and not 

speculative matters – are included within the standard). 

Pursuant to Section 7(a)(2) of the ESA, EPA has considered the effects of its rule and has 

reviewed applicable ESA regulations, case law, and guidance to determine what, if any, 

impact there may be to listed species or designated critical habitat. EPA has considered 

issues relating to emissions of carbon dioxide (CO2) and other greenhouse gases (GHGs) 

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EPA Response to Comments 

as well as issues relating to emissions of non-GHG air pollutants. Based on this 

assessment, EPA has determined that the agency’s rulemaking action, which, as 

described below, will generally result in emissions reductions from what would otherwise 

occur in the absence of the rule, does not require consultation with the Services under 

Section 7(a)(2) of the ESA. 

Department of the Interior Views Regarding ESA Requirements and GHG 

Emissions 

The FWS and Department of the Interior (DOI) have considered issues concerning ESA 

Section 7(a)(2) requirements in the context of federal agency actions relating to sources 

of GHG emissions on a number of occasions. In the context of the final listing of the 

polar bear as a threatened species under the ESA (73 FR 28212 (May 15, 2008)), FWS 

determined, with supporting analysis provided by the U.S. Geological Survey, that the 

best currently available scientific data do not support drawing a causal connection 

between GHG emissions from particular sources and effects on listed species or their 

habitats, for ESA purposes. In addition, FWS explained that it does not believe there is 

sufficient data to establish that any such impacts are reasonably certain to occur, for ESA 

purposes. Based on these conclusions, FWS determined that federal action agencies need 

not consult under Section 7(a)(2) of the ESA with respect to any such impacts.15 

As FWS explained in the final polar bear listing: 

Formal consultation is required for proposed Federal actions that “may affect” a 

listed species, which requires an examination of whether the direct and indirect 

effects of a particular action meet this regulatory threshold. GHGs that are 

projected to be emitted from a facility would not, in and of themselves, trigger 

formal section 7 consultation for a particular licensure action unless it is 

established that such emissions constitute an “indirect effect” of the proposed 

action. To constitute an “indirect effect,” the impact to the species must be later 

in time, must be caused by the proposed action, and must be “reasonably certain 

to occur” .... [T]he best scientific data available today are not sufficient to draw a 

causal connection between GHG emissions from a facility in the conterminous 48 

States to effects posted to polar bears or their habitat in the Arctic, nor are there 

sufficient data to establish that such impacts are “reasonably certain to occur” to 

polar bears. Without sufficient data to establish the required causal connection – 

to the level of “reasonable certainty” – between a new facility’s GHG emissions 

and impacts to polar bears, section 7 consultation would not be required to 

address impacts to polar bears. 

15 See Memorandum from H. Dale Hall, Director, U.S. Fish and Wildlife Service re: “Expectations for 

Consultation on Actions that Would Emit Greenhouse Gases” (May 14, 2008), Docket No. EPA-HQ-OAR2009-0472-11676; Memorandum from Mark D. Myers, Director, U.S. Geological Survey re: “The 

Challenges of Linking Carbon Emissions, Atmospheric Greenhouse Gas Concentrations, Global Warming, 

and Consequential Impacts” (May 14, 2008), Docket No. EPA-HQ-OAR-2009-0472-11677. 

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EPA Responses on Joint Issues and Technical Work 

73 FR at 28300. Subsequent to the final polar bear listing, DOI issued a Solicitor’s 

Opinion explaining DOI’s view that actions that involve the emission of GHGs do not 

meet the “may affect” threshold set forth in the ESA regulations and therefore do not 

trigger the consultation requirements of Section 7(a)(2) of the ESA.16 The Solicitor’s 

Opinion explains that, for purposes of the ESA “may affect” test, neither direct effects 

nor indirect effects would result from GHG emissions from particular sources. The 

Opinion concludes that where the effect at issue is climate change, proposed actions that 

involve the emission of GHGs cannot pass the “may affect” test and therefore are not 

subject to ESA consultation. 

FWS also addressed this issue in finalizing a special rule to protect the polar bear under 

Section 4(d) of the ESA, 16 U.S.C. § 1533(d). 73 FR 76249, 76265-76266 (December 

16, 2008). At that time, FWS again considered whether federal actions associated with 

GHG emissions require consultation under ESA Section 7(a)(2). As FWS stated: 

We have specifically considered whether a Federal action that produces GHG 

emissions is a “may affect” action that requires section 7 consultation with regard 

to any and all species that may be impacted by climate change. As described 

above, the regulatory analysis of indirect effects of the proposed action requires 

the determination that a causal linkage exists between the proposed action, the 

effect in question (climate change), and the listed species. There must be a 

traceable connection from one to the next, and the effect must be “reasonably 

certain to occur.” This causation linkage narrows Section 7 consultation 

requirements to listed species in the “action area” rather than to all listed species. 

Without the requirement of a causal connection between the action under 

consultation and effects to species, literally every agency action that contributes 

greenhouse gases to the atmosphere would arguably result in consultation with 

respect to every listed species that may be affected by climate change. This 

would render the regulatory concept of “action area” meaningless. There is 

currently no way to determine how the emissions from a specific action both 

influence climate change and then subsequently affect specific listed species. As 

we now understand them, the best scientific data currently available do not draw a 

causal connection between GHG emissions resulting from a specific Federal 

action and effects on listed species or critical habitat by climate change. 

73 FR at 76266. FWS also cited to the October 3, 2008, DOI Solicitor’s Opinion 

confirming the conclusions that, given the current state of available science, a causal link 

cannot be made between GHG emissions associated with a proposed federal action and 

specific effects on a listed species. Id. FWS thus concluded that GHG emissions from 

such actions cannot pass the “may affect” test and are not subject to consultation under 

the ESA and its implementation regulations. Id. 

16 See Memorandum from David Longly Bernhardt, Solicitor, U.S. Department of the Interior re: 

“Guidance on the Applicability of the Endangered Species Act’s Consultation Requirements to Proposed 

Actions Involving the Emission of Greenhouse Gases” (Oct. 3, 2008), Docket No. EPA-HQ-OAR-2009-

0472-11678. 

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EPA Response to Comments 

The FWS’ final rule under Section 4(d) became effective on January 15, 2009. 

Following the change in administration, FWS reviewed and retained the 4(d) rule without 

alteration. As FWS stated during that review: 

It is currently not possible to directly link the emission of greenhouse gases from 

a specific power plant, etc. to effects on specific bears or bear populations. This 

direct “connect the dots” standard is required under the Act and court rulings. 

Therefore, Fish and Wildlife Service’s policy guidance to its field staff is not to 

require such consultations....Pending further review and analysis, the Department 

does not believe that a project-by-project ESA review of proposed actions that 

have the potential to increase greenhouse gas emissions, regardless of where they 

occur or how much they contribute to global greenhouse gas emissions, is the 

appropriate tool for addressing climate change impacts. 

U.S. Department of the Interior, Polar Bear 4(d) rule – Q’s and A’s (May 8, 2009).17 

Consistent with FWS’ and DOI’s guidance, EPA agrees that there must be a causal 

connection between a federal action and a potential effect on listed species or designated 

critical habitat for Section 7(a)(2) consultation requirements to apply, and that the 

potential effect must be reasonably certain to occur. EPA believes that any possible 

impacts on listed species or critical habitat of changes in GHG emissions associated the 

light duty motor vehicle rule fall within the analytical framework laid out in the polar 

bear documents and Solicitor’s Opinion, in which FWS concluded that consultation under 

Section 7(a)(2) of the ESA was not required. 

EPA’s Prior Analysis of ESA Requirements and GHG Emissions 

EPA has also previously considered issues relating to GHG emissions from stationary 

sources in connection with the requirements of ESA Section 7(a)(2). In correspondence 

to the Services, EPA has acknowledged that the legal and technical analysis undertaken 

by FWS and DOI concludes that Section 7(a)(2) consultation on single-source GHG 

emissions is not required due to an absence of causation and reasonably certain effects, 

for ESA purposes.18 As an additional basis for considering Section 7(a)(2) obligations, 

17 Available at: http://www.fws.gov/home/feature/2009/pdf/QandApolarbear4drule.pdf (last accessed Feb. 

19, 2010). FWS has continued to consistently state this view of ESA requirements in connection with 

GHG emissions, including in its recent proposal of designated critical habitat for the polar bear. See 74 FR 

56058, 56070 (Oct. 29, 2009) (stating that the underlying causes of climate change are complex global 

issues beyond the scope of the ESA); Polar Bear Proposed Critical Habitat Questions & Answers 

(reaffirming that the current state of the science is unable to connect a particular source of GHG emissions 

to effects on listed species or critical habitat). Available at: 

http://alaska.fws.gov/fisheries/mmm/polarbear/pdf/PB%20PropCH.QsAs.Final.pdf (last accessed February 

18, 2010). 

18 See Letter from Robert J. Meyers, Principal Deputy Assistant Administrator, Office of Air and Radiation 

re: “Endangered Species Act and GHG Emitting Activities (Oct. 3, 2008), Docket No. EPA-HQ-OAR2009-0472-11679. 

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EPA Responses on Joint Issues and Technical Work 

EPA also conducted a modeling analysis of single-source GHG emissions to assess the 

potential risk of harm to listed species – including the polar bear and listed coral species 

under NOAA Fisheries’ jurisdiction. In light of EPA’s considerable expertise in global 

climate change research and experience in utilizing available models to analyze GHG 

emissions, EPA believes that this prior analysis remains both relevant and instructive to 

our determination that the light duty motor vehicle rule is outside the scope of ESA 

consultation. 

In this prior analysis, EPA noted that to date, research on how emissions of CO2 and 

other GHGs influence global climate change and associated effects has focused on the 

overall impact of emissions from aggregate global sources. EPA also stated that the 

climate change research community has not yet developed tools specifically intended for 

evaluating or quantifying end-point impacts attributable to the emissions of GHGs from a 

single source, and that EPA was not aware of any scientific literature regarding the 

climate effects of individual, facility-level GHG emissions. Additionally, because the 

global and regional-scale models lack the capability to represent explicitly many 

important small-scale processes, EPA further noted that confidence in regional- and subregional-scale projections is lower than at the global scale. There is thus limited 

scientific capability in assessing, detecting, or measuring the relationship between singlesource emissions of GHGs and any localized impact on a listed species, its habitat, or its 

members for ESA purposes. EPA affirmed that its understanding of the available 

modeling tools was consistent with statements made by the U.S. Geological Survey (see 

footnote 1 above) in the context of the polar bear listing (i.e., that it is beyond the scope 

of existing science to identify a specific source of CO2 emissions and designate it as the 

cause of specific biological responses). 

Notwithstanding the inherent uncertainties associated with modeling single-source 

emissions and localized regional or sub-regional end-point impacts, EPA analyzed the 

potential effect on temperature and tropical ocean pH of emissions from a hypothetical 

single source, which, as described in EPA’s letter, was a substantially larger source of 

emissions than any actual facility then awaiting permitting action by EPA.19 EPA’s 

analysis projected at most only extremely small impacts on average global temperature 

and global atmospheric CO2 concentrations over and beyond the anticipated functional 

lifetime of the hypothetical source. Although regional modeling and associated 

downscaling introduced untested approaches and additional uncertainties, EPA 

downscaled the projected global temperature changes to the Arctic and Caribbean regions 

in light of expected higher relative temperature increases at the poles. Ultimately, EPA 

concluded that any temperature and ocean acidification outputs from the modeled source 

would be extremely small, beyond physical measurement or detection in the habitat of 

listed corals or polar bears, and at a scale below any specific adverse temperature or 

19 For GHGs, EPA’s analysis used emissions estimates of 14,132,586 metric tons per year of CO2, 273.6 

metric tons per year of nitrous oxide, and 136.8 metric tons per year of methane. With regard to non-GHG 

pollutants, the analysis used: Ozone (180.7 metric tons per year of volatile organic compounds); Carbon 

monoxide (6019 metric tons per year); Sulfur dioxide (3609 metric tons per year); and Nitrogen oxides 

(3018.5 metric tons for first five years, then 2326.2 annual metric tons for the remaining 45 years). In 

addition, EPA assumed that the model facility would have a useful life of approximately 50 years. 

4-99
 
 

EPA Response to Comments 

acidification effects identified in the scientific literature for those species. Because the 

principal climate model used in the analysis would be the first step in any similar 

assessment for any species, EPA determined that similar conclusions would also apply to 

other species and locations. EPA concluded: 

In these circumstances, and also in light of the uncertainties in attempting to use 

the models’ outputs to predict impacts at a local level, EPA has determined that 

the risk of harm to any listed species, including the listed corals or polar bears, or 

to the habitat of such species based on the anticipated emissions of the model 

facility as described above, or any facility with lower emissions, is too uncertain 

and remote to trigger ESA section 7(a)(2) obligations. Section 7(a)(2)’s purpose 

of ensuring no likely jeopardy to listed species and no destruction or adverse 

modification of designated critical habitat is not implicated by such remote 

potential risks. See, e.g., Ground Zero Center for Non-Violent Action v. U.S. 

Department of the Navy, 383 F.3d 1082 (9th Cir. 2004) (where the likelihood of 

jeopardy to a species is extremely remote, consultation is not required). This 

reasoning is consistent with the conclusion reached by FWS and DOI that 

consultation under ESA section 7(a)(2) is not required for GHG emissions from a 

single source.20 

EPA’s ESA Analysis Re: GHGs 

The comment states that EPA must conduct ESA Section 7 consultation on its 

rulemaking action. Among other things, the comment submitted on NHTSA’s DEIS 

(which is incorporated by reference in the comment submitted on the rules) identifies 143 

listed species for which, the comment asserts, “a recovery plan has been adopted that 

specifically identifies climate change or a projected impact of climate change as a direct 

or indirect threat to the species, as a critical impact to be mitigated, as a critical issue to 

be monitored, and/or as a component of the recovery criteria.” See Docket No. NHTSA2009-0059-0090.1. Although EPA agrees that climate change and related issues are 

relevant considerations in regard to the recovery of many species, including species listed 

under the ESA, EPA believes that, as applied to EPA’s rulemaking, the comment 

generally misunderstands the effect of EPA’s action, and misapplies ESA Section 

7(a)(2)’s requirements. 

For instance, the comment appears to attribute the entire volume of emissions from the 

regulated sector – including a reference at one point to “increased greenhouse gas 

emissions” – to the current actions. Id. EPA notes, however, that at present, there are no 

federal restrictions on GHG emissions from new light duty motor vehicles. In fact, 

EPA’s light duty vehicle GHG rule, for the first time, adopts federal controls on those 

emissions. It does not license, issue permits for, or otherwise allow emissions to occur. 

Rather, the rule controls emissions of GHGs pursuant to, and subject to the requirements 

20 See supra footnote 4. 

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EPA Responses on Joint Issues and Technical Work 

of, section 202(a)(1) of the Clean Air Act.21 EPA has consequently analyzed the rule’s 

impacts in terms of the GHG emission reductions achieved by the rule.22 Because EPA’s 

rule results in the reduction of GHG emissions from the regulated sector, the rule would 

reduce the severity of climate change as analyzed at a global scale and can, therefore, be 

expected to have a beneficial effect with respect to global climate change (and therefore 

could not have an adverse effect on listed species that are negatively affected by climate 

change). The comment presents no information and raises no issue with regard to these 

potential effects and ESA considerations. 

EPA is also mindful of the significant legal and technical analysis undertaken by FWS 

and DOI as well as EPA’s prior analysis regarding GHG emissions and the ESA. With 

regard to the light duty motor vehicle rule, EPA’s analysis determined that the rule would 

reduce GHG emissions over the lifetime of MY2012-2016 passenger cars and light trucks 

in the amount of 962.0 million metric tons of CO2 equivalent. RIA Table 5-3. Based on 

these reductions, EPA modeled the anticipated potential effect on climate change and 

found that in year 2100, the rule would reduce temperature increases by 0.006-0.015 

degrees Celsius, and the reduction in sea-level rise would be 0.06-0.14 centimeters. EPA 

has also projected a reduction in CO2 concentration of 2.9 parts per million in 2100, 

which corresponds to a projected ocean pH increase of 0.0014 units in 2100. See RIA 

chapter 7.4.2. Thus, EPA expects the agency’s action would have a beneficial overall 

effect on temperature, sea level rise and ocean acidification by decreasing the severity of 

climate change and CO2 concentration as assessed on a global scale. However, as 

described above in the prior analyses undertaken by FWS, DOI, and EPA, any efforts to 

translate these small global changes to effects in the specific habitats of any listed species 

or to effects on such species is problematic. 

For instance, as noted above, EPA believes that changes in GHG emissions associated 

with the rule are within the framework of the FWS/DOI analysis, which concluded that 

Section 7(a)(2) consultation is not required due to the absence of a causal connection and 

reasonably certain effects on listed species. Although this rule involves GHG emissions 

reductions from mobile sources rather than from a single stationary source, EPA believes 

that FWS’/DOI’s analysis regarding causation would be identical for the mobile sources 

regulated by the rule. In this regard, FWS’/DOI’s analysis and conclusion that it is 

impossible, for ESA purposes, to trace a causal link between a single stationary source’s 

GHG emissions and any reasonably certain effect on a specific species in a specific 

habitat would apply equally to the reductions of emissions from this rule relating to 

mobile sources. The commenter presents no information to the contrary. 

21 That provision requires, for instance, that EPA’s standards be premised on a finding of technological 

feasibility, taking costs into consideration, and that there be sufficient lead time “to permit the development 

and application of the requisite technology.” See generally 74 FR at 49464-65. This means, among other 

things, that EPA cannot adopt such infeasible and cost-prohibitive measures as prohibiting all GHG 

emissions from the regulated vehicles. Nor can EPA’s rule force the use of control technologies beyond 

the point of their availability, taking costs into account, during model years 2012-2016. The basis for the 

stringency of the standard is set out in section III.D of the preamble to the final rule. 

22 EPA analyzed impacts on criteria pollutants in the same manner. See Preamble section III.G. 

4-101
 
EPA Response to Comments 

In addition, as EPA has previously done in the context of stationary sources, EPA has 

considered the magnitude of change to GHG emissions resulting from implementation of 

the rule. As described above, notwithstanding uncertainties and novel model 

applications, EPA previously attempted to analyze the emissions of a single large 

stationary source with respect to impacts on temperature and tropical ocean pH. EPA’s 

conclusion was that any such potential effects would be so small as to be beyond physical 

measurement or detection in the habitats of listed species and outside the scope of any 

potential effect on such species/habitat identified in the scientific literature that EPA 

reviewed. EPA has determined that the same conclusion applies to changes in GHG 

emissions associated with the light duty motor vehicle GHG rule. The commenter 

presents no information to the contrary. 

EPA notes that the predicted changes in global mean temperature and oceanographic pH 

attributable to this rule are roughly one to one and one-half orders of magnitude greater 

than those evaluated by EPA in the October 3, 2008, Meyers letter, and are also 

directionally different – i.e., improvements in climate-related effects rather than 

decrements. These slight differences in the climate signal do not change EPA's ultimate 

conclusion. The predicted effects remain directionally important, yet small and 

attenuated in time. EPA knows of no modeling tool which can link these small, timeattenuated changes in global metrics to particular effects on listed species in particular 

areas. Extrapolating from global metric to local effect with such small numbers, and 

accounting for further links in a causative chain, remain beyond current modeling 

capabilities. EPA has particularly evaluated the potential effect of the predicted 

improvement in oceanographic pH on listed corals, since the chain of causation between 

CO2 concentration and corals is somewhat less indirect than chains of causation for other 

listed species (e.g., climate effects on polar bears which, among other things, involve 

assessments of additional complex factors relating to the life history of the species and 

polar sea ice dynamics). Even in this instance, the predicted improvements in pH are so 

small that there is no evidence in the literature that there would be an effect on listed 

coral species. The commenter presents no information to the contrary. 

Based on these results, and consistent with EPA’s prior analysis and the Ground Zero 

decision noted above, EPA also believes that any potential for a specific impact to listed 

species in their habitats associated with these very small changes in average global 

temperature and ocean pH is too remote to trigger the threshold for ESA Section 7(a)(2) 

consultation. 

EPA’s Analysis Re: Other Air Pollutant Emissions 

EPA has also carefully considered issues relating to changes in non-GHG emissions 

expected to result from implementation of the rule. As part of its rulemaking, EPA has 

estimated the total changes in national criteria and air toxic pollutant emissions annually 

to 2030. For most pollutants, there is a net decrease in emissions as the rule is 

implemented. For other pollutants, there are small emissions increases as the rule is 

implemented over time. For all of the non-GHG pollutants, the estimated national 

reductions – and, for a few pollutants, the estimated potential increases – are of extremely 

4-102
 
 

 

 

EPA Responses on Joint Issues and Technical Work 

small magnitudes (substantially smaller by several orders of magnitude than estimated 

reductions in GHG emissions). The following chart provides EPA’s estimated changes 

for each of the non-GHG pollutants. 

Impacts of Program on Non-GHG Emissions (Short Tons per year) 

POLLUTANT 

CALENDAR 

YEAR 

2020 

% 

CHANGE 

VS. 2020 

REFEREN 

CE 

CALEND 

AR YEAR 

2030 

% 

CHANGE 

VS. 2030 

REFEREN 

CE 

Δ 1,3-Butadiene -95.1 -0.38% -21.1 -0.10% 

Δ Acetaldehyde 760.0 2.26% 668.1 2.18% 

Δ Acrolein 0.8 0.01% 4.7 0.07% 

Δ Benzene -889.9 -0.48% -523.1 -0.29% 

Δ Carbon Monoxide 3,980.3 0.01% 170,648.6 0.56% 

Δ Formaldehyde -49.4 -0.06% 15.1 0.02% 

Δ Oxides of Nitrogen -5,916.1 -0.02% -21,845.0 -0.07% 

Δ Particulate Matter 

(below 2.5 micrometers) -2,402.9 -0.03% -4,574.8 -0.05% 

Δ Oxides of Sulfur -13,853.4 -0.42% -27,492.8 -0.82% 

Δ Volatile Organic Compounds -60,305.4 -0.51% -115,816.5 -1.02% 

Source: RIA Table 5-2 

EPA has carefully considered the potential effects of these pollutants and is unaware of 

information identifying any effects on listed species from such small fluctuations in 

pollutant amounts.23 Further, EPA notes that the modeling tools available for EPA’s 

regulatory analysis are not designed to trace fluctuations in ambient concentration levels 

to potential impacts on particular species. EPA believes that such models do not, 

therefore, attribute any biological response or impact on listed species to the ambient 

concentration changes with the degree of reasonable certainty required under the ESA. 

The commenter again has presented no information challenging this conclusion. For 

similar reasons as explained above regarding GHG emission changes, EPA thus believes 

that ESA consultation is not required with respect to non-GHG emission changes 

attributable to the light duty motor vehicle rule. 

23 Among other things, EPA’s review included consideration of the information contained in the Integrated 

Science Assessments for both Particulate Matter and Ozone (see U.S. EPA 600/R-08/139F, “Integrated 

Science Assessment for Particulate Matter” (2009), Docket No. EPA-HQ-OAR-2009-0472-11295; US 

EPA, 600/R-05/004aF-cF “Air Quality Criteria for Ozone and Other Photochemical Oxidants” (2006), 

Docket Nos. EPA-HQ-OAR-2009-0472-0099, -0100, -0101). These documents are developed pursuant to 

section 108(a)(2) of the Clean Air Act, and “accurately reflect the latest scientific knowledge useful in 

indicating the kind and extent of all identifiable effects on public ... welfare which may be expected from 

the presence of such pollutant in the ambient air.” 

4-103
 
 

 

EPA Response to Comments 

i

 “Relationships Between Fatality Risk, Mass, and Footprint in Model Year 1991-1999 and Other Passenger 

Cars and LTVs,” Charles J. Kahane, NCSA, NHTSA, March 2010, available within Docket NHTSA-2009-

0059. We note that this report has not yet been externally peer-reviewed, but that NHTSA has begun the 

process for peer review in accordance with OMB guidance by the time of publication of this final rule. The 

results of the peer review and any subsequent revisions to the report will be made available in a public 

docket and on NHTSA’s website as they are completed.

ii “Supplemental Results on the Independent Effects of Curb Weight, Wheelbase and Track on Fatality 

Risk”, Dynamic Research, Inc., DRI-TR-05-01, May 2005. iii “An Assessment of the Effects of Vehicle Weight and Size on Fatality Risk in 1985 to 1998 Model Year 

Passenger Cars and 1985 to 1997 Model Year Light Trucks and Vans”, Van Auken, M., Zellner J.W., SAE 

Technical Paper Number 2005-01-1354, 2005. 

iv “Blood and Oil: Vehicle Characteristics in Relation to Fatality Risk and Fuel Economy”, L.S. Robertson, 

American Journal of Public Health, Vol. 96, No. 11, November 2006. v

 “2009 Cadillac Presidential Limousine” David Gluckman, Car and Driver Magazine, January 2009. 

4-104
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

5. EPA Vehicle Program, Feasibility, and Estimated Impacts ....................................................... 2 

5.1 Vehicle Categories and Test Procedures.............................................................................. 2 

5.2 Reserved............................................................................................................................. 17 

5.3. EPA Averaging, Banking, and Trading Provisions ........................................................... 17 

5.4 Temporary Lead-time and Small Volume Manufacturers................................................. 36 

5.5. N2O and CH4 standards .................................................................................................... 91 

5.6. EPA Small Entity Exemption .......................................................................................... 120 

5.7 EPA Additional Credit Opportunities for CO2 Fleet Averaging Program....................... 123 

5.8 Feasibility of the CO2 Standards...................................................................................... 280 

5.9. Reserved........................................................................................................................... 288 

5.10. EPA Certification, Compliance, and Enforcement ........................................................ 288 

5.11. EPA Estimates of GHG Emissions Reductions and Their Associated Effects.............. 385 

5.12. EPA Estimated Impact on Non-GHG Emissions and Their Associated Effect............. 395 

5.13 EPA Estimated Cost, Economic, and Other Impacts..................................................... 403 

5.14. Statutory and Executive Order Reviews........................................................................ 447 

5.15. Comments on EPA Regulatory Text.............................................................................. 457 

5-1 
EPA Response to Comments 

5. EPA Vehicle Program, Feasibility, and Estimated Impacts 

5.1 Vehicle Categories and Test Procedures 

5.1.1. Vehicle Categories 

Organization:Ford Motor Company 

Hyundai Motor Company 

California Air Resources Board 

National Association of Clean Air Agencies (NACAA) 

National Automobile Dealers Association (NADA) 

Toyota Motor North America 

Comment: 

Ford Motor Company 

Ford supports the use of footprint-based standards with separate car and truck fleets based on 

NHTSA vehicle definitions for both the GHG and CAFE programs. Ford and the auto industry 

have long supported separate car and truck attribute-based standards because cars and trucks 

have different functional characteristics even if they have the same footprint. For example, the 

Edge and the Taurus have the same footprint (and base curb weights within 100 lbs), but 

significantly different towing capabilities. The Edge can tow up to 3500 lbs with the trailer tow 

package, but the Taurus can only tow 1000 lbs. Some of the key features incorporated on the 

Edge that enable the larger tow capability include an engine oil cooler, larger radiator, and 

updated cooling fans. This is one of many examples that show the functional difference between 

car and truck and further support the need to maintain separate car and truck attribute-based 

standards. [OAR-2009-0472-7082.1, p. 2] 

Hyundai Motor Company 

NHTSA is required by the Energy Independence and Security Act to maintain separate passenger 

car and truck CAFE compliance categories, but EPA has authority to implement a single fleet 

program. We would support a single fleet program, because it would provide greater compliance 

flexibility for manufacturers, while maintaining energy and environmental benefits. 

Of course, for the two agencies to diverge on compliance categories would reduce the 

harmonization between the two programs. Thus, it would be optimal if the statutory 

inconsistencies could be resolved to allow a single national program with a single fleet. If 

statutory inconsistencies are not resolved, then harmonization between EPA and NHTSA 

programs should remain a priority. Regardless, any future changes to compliance categories and 

vehicle classifications within those categories should provide ample lead time prior to 

adoption. [OAR-2009-0472-7231.1, p.3] 

California Air Resources Board 

5-2
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

EPA requested comment on whether the proposed separate car and light truck standards are 

sufficient to avoid concerns over emission reductions that could be lost if vehicles are upsized. 

CARB supports separate greenhouse gas standards for passenger cars and light-duty trucks as 

proposed. As noted in the Joint Proposal, vehicle attributes such as load carrying and towing 

capacity differ between these two categories and, therefore, are appropriately addressed by 

separate fleet average requirements. [OAR-2009-0472-7189.1, p.10] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. See 

docket number OAR-2009-0472-7283, pp. 21-27] 

National Association of Clean Air Agencies (NACAA) 

Finally, in November 26, 2008 comments to EPA on the agency’s Advance Notice of Proposed 

Rulemaking on regulating GHG emissions under the Clean Air Act, NACAA encouraged EPA to 

develop and enforce GHG standards for all key vehicle, engine and equipment subsectors within 

the overall transportation sector. We reiterate this recommendation now, especially with respect 

to onroad heavy-duty engines for which EPA should develop federal regulations without delay in 

close cooperation with the states. States are keenly aware of the pressing environmental need to 

garner GHG emissions reductions from onroad heavy-duty engines. In the absence of federal 

action, states will be pressed to move ahead using other authorities under the Clean Air Act so 

that emissions reductions from this sector can be achieved as soon as possible. [OAR-2009­

0472-7071.1, p.4] 

National Automobile Dealers Association (NADA): 

The National Program should only apply to passenger cars and light trucks with a gross vehicle 

weight rating (GVWR) of up to 10,000 lb. (excepting large pick-up trucks and cargo vans (“work 

trucks”) and certain vehicles manufactured in two or more stages). Existing definitions set out in 

49 CFR Part 523 should be retained. EISA did not make, let alone suggest changes to existing 

vehicle classification definitions, least of all that certain SUVs and all minivans be reclassified as 

passenger cars”. Moreover, for purposes of the National Program, EPA must harmonize its 

definitions to those set out in 49 CFR Part 523. [OAR-2009-0472-7182.1, p.9] 

Toyota Motor North America: 

As required by law, NHTSA proposes to set CAFE standards for three regulated fleets - 

domestically produced passenger vehicles (domestic cars), non-domestically produced passenger 

vehicles (import cars), and non-passenger vehicles (trucks) . Under NHTSA's CAFE proposal, 

the footprint-based attribute curve for both domestic cars and import cars in a given model year 

is based on a single maximum feasible target curve when considering the combined fleet of 

import and domestic cars . While there is but a single target curve established for cars each 

model year, compliance with the target curve must be calculated separately for import cars and 

domestic cars (in addition to a separate domestic car anti-backsliding standard). [OAR-2009­

0472-7291, p.6] 

5-3 
EPA Response to Comments 

Unlike NHTSA, EPA is not required by law to regulate vehicle GHGs or tailpipe CO2 using any 

predetermined vehicle fleets. As such, EPA proposes to regulate based on two vehicle fleets - 

cars and trucks. For the purpose of regulating GHGs, EPA also proposes to use the same 

regulatory definition for 'cars' and 'trucks' as used by NHTSA in the CAFE program, albeit 

without the distinction between import and domestic car for compliance calculations. [OAR2009-0472-7291, p.6] 

Toyota supports EPA's proposal to regulate based on two fleets (cars and trucks), as well as 

EPA's proposal to use the same definitions of 'car' and 'truck' as NHTSA. While EPA's proposal 

is not perfectly harmonized with NHTSA's three-fleet approach, both agencies are, in fact, 

setting just two sets of target curves - one for cars and one for trucks. The harmonization 

difference lies in the compliance calculations, and the fact that NHTSA is forced by statute to 

require separate calculations for import cars and domestic cars. Toyota supports EPA's use of 

two fleets for its program because it provides greater compliance flexibility for manufacturers 

without creating additional burden. [OAR-2009-0472-7291, pp.6-7] 

EPA also requests comments on combining the entire fleet into a single compliance category, 

with a single target curve for the fleet each model year. If faced with just one federal program 

with which to comply, Toyota may not object to a combined fleet standard, since it would 

arguably provide manufacturer's with the greatest level of flexibility to comply and it would 

remove any concerns about vehicle classifications . However, due to the lack of harmonization 

with NHTSA's program that would result, and the inflexibility afforded NHTSA in the existing 

CAFE statute, Toyota would not support EPA setting a single target curve for the entire fleet of 

cars and trucks even though it would result in the greatest level of flexibility. [OAR-2009-0472­

7291, p.7] 

Concerning EPA's adoption of NHTSA's car and truck definitions for the purpose of vehicle 

GHG regulations, Toyota supports this approach in order to maintain harmonization and avoid 

complex bookkeeping requirements that would be needed in the absence of harmonized 

definitions. The issue of whether NHTSA (and by extension EPA) should revise the current 

definitions of cars and trucks for fuel economy and GHG regulation purposes is addressed later 

in these comments. [OAR-2009-0472-7291, p.7] 

EPA Response: 

In general there was widespread support for separate car and truck attribute-based standards 

based on harmonized definitions of car and truck between the EPA and NHTSA programs. 

Although Hyundai commented that “We would support a single fleet program, because it would 

provide greater compliance flexibility for manufacturers, while maintaining energy and 

environmental benefits,” they acknowledged that there were statutory constraints that would 

prohibit a harmonized program based on a single fleet. Hyundai concluded that harmonization 

of the two programs was the first priority, and thus in the absence of statutory changes there 

should be separate but harmonized fleets. 

As explained in section III.B.1 of the preamble to the proposed rule (74 FR at 49516/2), and 

reiterated in the preamble to the final rule and supported by many of the public comments, EPA 

5-4
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

is not finalizing a single fleet standard. First, some vehicles classified as trucks (such as pick-up 

trucks) have certain attributes not common on cars which contribute to higher CO2 emissions— 

notably high load carrying capability and/or high towing capability. Due to these differences, it is 

reasonable to separate the automobile fleet into two segments. Second, the segmentation of the 

automobile fleet is a key program design element of the GHG standards that EPA believes 

should be harmonized with NHTSA’s CAFE program. NHTSA is required by statute to set 

separate standards for passenger cars and for non-passenger cars. Finally, because manufacturers 

are able to transfer credits between their car and truck fleets under both the NHTSA and EPA 

programs, most of the advantages raised by commenters of a single fleet standard for all 

automobiles are also present in the two-fleet program being finalized. Because EPA is allowing 

credit transfers between a manufacturer’s car and truck fleets, the two fleets can effectively be 

viewed as a single fleet when manufacturers consider compliance strategies. The one benefit of a 

single light-duty fleet not captured by a two-fleet approach is that a single fleet prevents potential 

“gaming” of the car and truck definitions, whereby manufacturers might try to design vehicles 

most similar to passenger cars but which meet the regulatory definition of trucks. EPA does not 

believe at this time that concern is sufficient to outweigh the other reasons for separate car and 

truck fleet standards. 

Consistent with the comment from NADA, EPA is finalizing as proposed the overall fleet 

covered by the standards, i.e., all vehicles up to 8500 pounds GVWR plus the limited category of 

passenger vehicles between 8500 and 10,000 pounds GVWR known as medium-duty passenger 

vehicles. These are the vehicles to which the current Tier 2 emission standards apply, and, 

starting with the 2011 model year, to which the CAFE program will apply (the CAFE program 

expands to cover the medium-duty passenger vehicles starting in the 2011 model year). 

The National Association of Clean Air Agencies (NACAA) recommended that EPA regulate 

GHG emissions for all key engine and equipment subsections within the overall transportation 

sector, “especially for onroad heavy-duty engines for which EPA should develop federal 

regulations without delay in close cooperation with the states.....In the absence of federal action, 

states will be pressed to move ahead using other authorities under the Clean Air Act so that 

emissions reductions from this sector can be achieved as soon as possible.” 

On October 20, 1999, the International Center for Technology Assessment (ICTA) and 18 other 

environmental and renewable energy industry organizations filed with EPA a “Petition for 

Rulemaking and Collateral Relief Seeking the Regulation of Greenhouse Gas Emissions from 

New Motor Vehicles under Section 202 of the Clean Air Act.” As discussed in the proposal (74 

FR 49507, September 28, 2009), on April 2, 2007, the U.S. Supreme Court held in 

Massachusetts v. EPA that greenhouse gases were air pollutants under the Clean Air Act and 

remanded the case to the U.S. Court of Appeals for the District of Columbia Circuit for further 

action. Heavy-duty vehicles are among the vehicle classes addressed by the petition and it is 

likely that EPA will respond to the petition as part of a future rulemaking. 

In addition, EISA added a new provision, 49 U.S.C. 32902 (k), requiring DOT, in consultation 

with DOE and EPA, to examine the fuel efficiency of commercial medium- and heavy-duty onhighway vehicles and work trucks and determine the appropriate test procedures and 

methodologies for measuring their fuel efficiency, as well as the appropriate metric for 

5-5 
EPA Response to Comments 

measuring and expressing their fuel efficiency performance and the range of factors that affect 

their fuel efficiency. DOT is authorized to develop fuel economy standards for these vehicles as 

part of this effort. Work on addressing these requirements is on-going. 

5.1.2. Test Procedures 

Organization:Association of International Automobile Manufacturers (AIAM) 

Manufacturers of Emission Controls Association 

National Renewable Energy Laboratory 

American Council for an Energy Efficient Economy 

Sierra Club 

Cummins Inc. 

Fisker Automotive, Inc. 

University of California, Santa Barbara, Bren Working Group on Vehicle Fuel 

Economy 

U.S. Coalition for Advanced Diesel Cars 

Hyde, James
 

Comment: 

Association of International Automobile Manufacturers (AIAM): 

AIAM does not support fundamentally changing the fuel economy/greenhouse gas test 

procedures at this time. Our reluctance to support such changes is due to the impact that such 

changes could have on the effective stringency of the standards. Any future changes should be 

accompanied by offsetting changes in the stringency of the standards and should provide 

adequate lead-time for manufacturers to make necessary changes to test equipment and reflect 

the new procedures in their compliance plans. [OAR-2009-0472-7123.1, p.17] 

It is necessary to have consistent and similar test procedures for battery electric vehicles, plug-in 

hybrids, and fuel cell vehicles. AIAM urges EPA to pursue the development of such test 

procedures in conjunction with the Society of Automotive Engineers. [OAR-2009-0472-7123.1, 

p.17] 

[AIAM also submitted these comments as testimony at the Los Angeles public hearing. See 

docket LA EPA Hearing EPA-HQ-OAR-2009-0472-7283, pp. 28-32] 

Manufacturers of Emission Controls Association: 

MECA supports 5-cycle approach: MECA believes that any regulatory requirements associated 

with greenhouse gas emissions should be based on real-world driving or usage patterns in order 

to ensure that regulatory standards reflect actual vehicle operations and deliver the greenhouse 

gas emission reductions that are needed. [OAR-2009-0472-7108.2, p.6] 

National Renewable Energy Laboratory: 

5-6
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

In the alternate SCO3 test procedure, there is only a 10 minute soak with solar lamps. This is not 

a sufficient duration for thermal load reduction technologies to have a significant impact on 

interior temperatures. A longer thermal soak period with lamps is recommended. [OAR-2009­

0472-4798.1, p.1] 

Thermal preconditioning of the passenger compartment is being considered to reduce A/C fuel 

use in PHEVs and EVs. When using grid power, this strategy effectively reduces vehicle 

powered A/C usage and eliminates the cool down A/C fuel use. It is not clear if this strategy 

would be allowed under the proposed test procedure. It is recommended that the test procedure 

allow the use of cabin thermal preconditioning as a method to reduce A/C fuel use. [OAR-2009­

0472-4798.1, p.1] 

American Council for an Energy Efficient Economy: 

EPA should take the opportunity offered by the new regulatory regime for GHGs to establish an 

emissions test that reflects real-world emissions to the extent possible. As EPA demonstrated in 

its rulemaking to update fuel economy labels, the best available estimate of real world fuel 

economy is some twenty percent lower on average than the CAFE value. The discrepancy 

between label values and CAFE values is a constant source of confusion to consumers and 

legislators, and may also constitute an obstacle to achieving fuel use and GHG emissions 

reductions in a timely fashion [OAR-2009-0472-7260.1, p.14] 

While NHTSA cannot change fuel economy test procedures for cars without a change in law, 

this need not hinder EPA’s adoption of realistic test methods. EPA and NHTSA standards could 

still be harmonized with the use in the near term of a “correction factor” to reconcile test 

differences, just as EPA has allowed manufacturers to generate label values on an interim basis 

through calculations using the outdated city and highway test values. [OAR-2009-0472-7260.1, 

pp.14-15] 

Further work beyond that done for EPA’s labeling rule may be warranted to produce a 

satisfactory vehicle testing protocol update. If this work cannot be completed before the light 

duty vehicle GHG rule is finalized, EPA should state in the rule a date certain, within the next 

few years, by which the switch to a more accurate testing protocol will be adopted. [OAR-2009­

0472-7260.1, p.15] 

Recommendation: Include in the final rule a statement that GHG emissions testing will be 

improved to represent real-world emissions and provide a date by which this improvement will 

occur. [OAR-2009-0472-7260.1, p.15] 

Sierra Club: 

Finally, the need for off-cycle credits highlights the inadequacy of current test procedures. 

Although the 5-cycle test is a much improved approach, compared to the FET and HFET, there is 

a clear need to update certification test procedures to account for all available technologies as 

well as current driving conditions and behaviors. Updating test procedures will allow for broader 

5-7 
EPA Response to Comments 

integration of “off-cycle” technologies in future rounds of standards. We discuss updating 

certification test procedures later in our comments. [OAR-2009-0472-7278.1, p.15] 

Cummins Inc.: 

Cummins recommends that EPA and NHTSA adopt test procedures and methodology to measure 

fuel economy and GHG emissions that are more reflective of real-world conditions. This would 

ensure a fair and level playing field for all technologies based on their inherent strengths, and 

above all ensure that the proposed regulations maximize the societal benefits. [OAR-2009-0472­

7205.1, p.2] 

Cummins urges EPA to update its test procedure and calculations to reflect real-world driving. 

EPA has adopted a 5-cycle fuel economy test for fuel economy labeling purposes, but for CAFE, 

the Agency still uses the 2-cycle test made up of the Federal Test Procedure-75 (FTP, or “city” 

driving) and the Highway Fuel Economy Test (HFET, or “highway” driving). In order to 

maximize the societal benefits the standards are meant to produce, EPA and NHTSA should 

adopt test cycles and procedures which reflect realworld driving. Administering standards based 

on test cycles the agencies know are not reality-based will lead to the design of vehicles 

according to artificial standards and will fail to maximize the societal benefits. [OAR-2009­

0472-7205.1, p.2] 

Fisker Automotive, Inc.: 

Fisker Automotive recommends the following process to calculate emissions and fuel economy. 

[OAR-2009-0472-8732.1, p.7] 

1. Collect data directly from a range of vehicles to assess driver behavior specific to vehicle 

class. Data should come directly from vehicles—via data loggers and GPS— rather than via 

survey methods, in order to yield reliable data and reduce costs. 

2. Define drive cycles that characterize a vehicle. For example, sweep through the full range of 

acceleration profiles and speeds possible by the vehicle at various loads and conditions. 

3. Digitally map the test results of #2 to the class-specific driver behavior data of #1. This will 

yield how the tested vehicle will perform as drivers of that class will use them. 

4. Report the average of these #3 results onto the fuel economy label, as shown in Figure 3. 

Make additional data available online. 

5. Allow automakers to submit their own data on how their specific vehicle is being used and 

actually performing. This data would supplant data from #1 and 2, respectively. This will 

encourage a plethora of fuel-saving and behavior-changing practices and technologies that fall 

outside possible drive cycles. Some examples include the following. 

a. Displays that communicate and reward efficient driving 

b. Automaker promotion of efficient driving 

5-8
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

c. GPS route optimization, including traffic 

d. More convenient charging methods for plug-in vehicles 

e. Photovoltaics (solar panels) [OAR-2009-0472-8732.1, p.7] 

Drive cycles that attempt to imitate average driver behavior encourage automakers to design for 

the drive cycles, which inevitably disregards a great deal of vehicle operation. Corrective 

calculations which aim to adjust the cycle data to approximate reality further distance these 

figures from the original intent, and do not apply well to diverse technologies. For example, 

electric, hybrid, and gasoline powertrains have wildly different efficiency maps. Even within the 

same category, these efficiency maps vary widely depending on the specific architecture and 

components used. Correction calculations based on the US light duty vehicle fleet may apply 

moderately well for the most common types of vehicles, but vehicles that fall outside the 

majority will be unjustly rewarded or penalized by calculations that do not apply well to the 

specific vehicle. [OAR-2009-0472-8732.1, p.7] 

University of California, Santa Barbara, Bren Working Group on Vehicle Fuel Economy: 

Current Emissions Testing Protocols 

We commend the EPA’s efforts to develop tests that provide an accurate method for anticipating 

fuel economy achieved in real world driving; however, we have found some areas of concern in 

the current testing procedures and we see potential for improvement in methodology. Our first 

concern is the discrepancy between testing procedures for cars versus light trucks. We propose 

that cars and light trucks be tested using as similar a methodology as possible. There are also 

concerns over the brief testing time of 10 minutes, which does not reflect the average US 

commute times of 24.3 minutes. We encourage the EPA to increase the length of testing time to 

reflect these figures and allow more opportunity for variable conditions during testing. Another 

area where we would like to see increased testing is in the number of new vehicles lines 

analyzed. The EPA reports that 30 percent of new vehicle models are tested. To get the best 

measure of total fleet efficiency, we think that a greater percentage of models should be tested 

off the line. Additional concerns include constant temperature, pressure and engine fluid volume 

assumptions that likely do not reflect real world conditions. We suggest more variation be added 

to these tests to cover a more accurate range of on-road vehicle conditions. [OAR-2009-0472­

7188.1, p. 9] 

[University of California, Santa Barbara, Bren Working Group on Vehicle Fuel Economy also 

submitted these comments as testimony at the Los Angeles public hearing. See docket number 

OAR-2009-0472-7283, pp.119-121] 

U.S. Coalition for Advanced Diesel Cars: 

The Coalition takes note of EPA's conclusion, based on a computer simulation, that light duty 

diesels are not a 'viable or cost effective option.' EPA makes this statement even as 2009 demand 

for diesel engines by American consumers is strong on vehicles where a powertrain choice is 

available. In fact, after only a year in the market, the percent of customers selecting clean diesel 

engines has already matched or eclipsed the percent selecting gasoline hybrids on vehicles that 

offer consumers a choice . Further, EPA's computer-model driven conclusions are completely at 

5-9 
 

 

EPA Response to Comments 

odds with market realities in Europe, a carbon-constrained region where advanced diesel 

technology continues to set the bar for drivability, fuel consumption and GHG emissions in realworld driving. In fact, for the Top 10 vehicles sold in Europe last year, diesel-powered versions 

delivered 17 percent lower GHG emissions than the nearest comparable gasoline engine 

available. [OAR-2009-0472-7496, p.4] 

The Coalition urges EPA to reflect on a few fundamental questions: 

-How would the agency's conclusion on diesel technology change if its modeling functions were 

not anchored on obsolete driving patterns?
 

-How would it change if the model comprehended off cycle emissions holistically across all 

technologies, rather than the narrow and selective treatment found in the proposed rules?
 

-How would it change if the Agency factored in the off-cycle performance of technologies on 

light duty vehicles American's use to earn a living? [OAR-2009-0472-7496, p.4] 

Each day in our country, millions of Americans use their vehicles to load, haul and tow and they 

are the backbone of our economy. We urge EPA to bring this real-world perspective into the 

rulemaking so Americans have an opportunity to buy vehicles that deliver the best fuel-saving 

performance in real-world duty cycles. And the best cost/benefit equation for real-world 

American families. [OAR-2009-0472-7496, p.4] 

The Coalition believes Congress has made its intent clear: sharply reduce light duty petroleum
 

consumption and GHG emissions by 2020 while protecting the consumer's right to affordable 

and safe products without systematically diminishing consumer choice. The intent of Congress 

will be frustrated by a regulatory approach that is reliant on paper-based fleet 

reduction calculations versus one that is built atop real-world conditions where American fuel is 

consumed and GHG emissions are created. [OAR-2009-0472-7496, pp.4-5] 

To better understand driving habits of U.S. consumers, EPA proceeded to complete an 

exhaustive analysis of real-world driving patterns in the U.S. and the impact of driving patterns 

and off-cycle energy consumption (e.g., mobile air conditioners) on real-world fuel consumption. 

This authoritative analysis resulted in the promulgation of new rules in 2006, in which EPA 

asserted: 

'A fundamental issue with today's fuel economy estimates is that the underlying test and 

calculation procedures do not fully represent current real-world driving conditions.' [OAR-2009­

0472-7496, p.5] 

Changing the test cycle weighting based on EPA data is a step in the right direction to reality that 

can and should be done now. The Collation believes it is EPA's obligation: (1) To provide the 

automotive industry with a reality-based calculation procedure on which to compare the 

effectiveness of technology choices to regulated parties under rapidly changing limits, and (2) to 

align these choices with a reasonable estimate of the petroleum fuel and GHG emissions 

reductions policy makers can expect to achieve as a result of the Administration's rules. [OAR2009-0472-7496, p.5] 

5-10
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

[[See Docket Number OAR-2009-0472-7496, pp.5-7 for a background discussion on CAFE and 

Label Fuel Economy.]] 

Maximize Fuel and GHG Efficiency for Highest Per Capita Fuel Users is Vital 

According to data compiled by the U.S. Department of Transportation, the average owner of a 

new passenger car accumulates 14,200 miles per year while the average light truck owner 

accumulates 16,100 miles per year. These values for the 'average' American connect to the EPA's 

2006 analysis that proved 57 percent of national vehicle miles traveled were at speeds akin to 

highway conditions, or above a speed cut point of 45 mph. DOT's analysis shows a substantial 

share of the American driving public is accumulating miles at a rate above the national average. 

In fact, the data shows 25 percent of all light vehicle owners accumulate more than 18,000 miles 

per year with nearly 9 percent accumulating more than 36,000 miles per year. The Coalition 

urges EPA to recognize the following: 

-Above average American drivers, in all likelihood, are accumulating more than 57 percent of 

their annual miles in highway conditions. 

-These Americans are the highest per capita consumers of petroleum fuel in the nation where 

consumption is a function of vehicle efficiency and distance traveled. [OAR-2009-0472-7496, 

p.7] 

We believe EPA should embrace rules, policies and procedures that do not penalize 

manufacturers that choose to commercialize vehicle technologies that maximize fuel and GHG 

efficiency in higher speed, higher load operating conditions. EPA should not deter manufacturers 

from commercializing fuel and GHG reducing technologies that appeal to the highest per capita 

users of fuel in the U.S. Clearly, vehicle fuel economy and GHG certification calculations that 

over-weight stop-and-go city driving by 28 percent and understate highway driving by 27 

percent (55/45 vs. 43/57) will bias manufacturer technology implementation away from 

operating conditions in which the majority of U.S. fuel is consumed. [OAR-2009-0472-7496, 

p.7] 

EPA Proposes Continued Inconsistencies Through 2016 

In summary, EPA is employing entirely inconsistent calculation methods as it embarks on 

ground-breaking GHG regulations that will fundamentally govern forward research, technology 

implementation, capital investment, and job creation in the automobile industry. 

-For purposes of regulating vehicles and manufacturers as well as for educating American 

consumers, EPA proposes to maintain a test cycle weighting that places the primary emphasis on 

city driving (55/45) 

-For purposes of measuring national fuel consumption and GHG emissions reductions - the 

benefits to be delivered by its rules - EPA is utilizing a mileage weighting that places the 

emphasis on highway driving (43/57). [OAR-2009-0472-7496, pp.7-8] 

Mr. James Hyde: 

5-11 
EPA Response to Comments 

Temperature Impacts: All the testing done for the proposed CAFE and C02 standards would be 

done at in the specified temperature range for EPA testing of 68 to 86°F. The origin of this 

temperature range is somewhat obscure, but originated when the testing was done primarily for 

purposes related to summertime ozone problems and to easily accommodate test cell controls. 

EPA has espoused the concept of 'proportional benefits'. That is, a reduction of a certain 

magnitude in the test would be reflected by a real-world reduction of about the same magnitude. 

Perhaps this assumption was valid in the past. There is amble evidence that this does not apply in 

all circumstances with regard to technologies incorporated for fuel economy increases. There is 

currently a cold (20° F) standard for carbon monoxide; and this will be extended to 

hydrocarbons. Regulating and measuring C02 and fuel economy at reduced temperatures is 

important as most driving is done at temperatures outside the EPA certification temperature 

range. [OAR-2009-0472-7258.1, p. 1] 

It has also been well established that not all fuel economy and emission control measures are as 

effective at lower (or higher) temperatures as they are at the current test temperatures. This is 

very clear for hybrid electric vehicle (HEV) technology which is often disabled at low 

temperatures as an element of the vehicle's design. Design elements which are less effective 

outside standard test temperatures should not be credited with fuel or C02 reductions which the 

vehicles do not achieve in actual year-round operation. [OAR-2009-0472-7258.1, p. 1] 

C02 Measurement Issues: The current proposal would result in a fleet average C02 level of 250 

g/mi by 2016. Based on EPA's assumption that the 250-g/mi standard would be met by passenger 

cars achieving an average of224 g/mi and light trucks an average of302 g/mi, and assuming that 

City emissions are 1.5 times Highway emissions 1 , the expected emissions of C02 are shown in 

Table 2. [OAR-2009-0472-7258.1, p. 4] [See OAR-2009-0472-7258.1, p. 4 for Table 2] 

These averages can only be achieved by having a substantial number of vehicles with C02 

emissions below the average. But the averages themselves are extremely low compared to the 

C02 emissions currently measured. For model year 2009 the fleet average was 440 g/mi 

compared to the expected 2016 average of 250 g/mi. In fact for all the vehicle tests reported for 

model year 2009 only four had City emissions at or below 264 g/mi; and only six had Highway 

emissions below 176 g/mi. This indicated that what is now a rare occurrence will be 

commonplace in 2016. [OAR-2009-0472-7258.1, p. 4] 

The ability of the test procedures in 40 CFR Part 86 to measure C02 accurately and precisely at 

these levels needs to be investigated. Because of the reciprocal relationship between C02 

emissions and fuel economy, the uncertainly in fuel economy measurements increases 

dramatically as the C02 level is reduced. This is illustrated in figure below. [OAR-2009-0472­

7258.1, p. 4] [See OAR-2009-0472-7258.1, p. 4 for the figure] 

The larger, red triangles on the base are the observed average for MY2009 and the two standard 

deviation range boundaries. About 95% of the observed values were in this range. To achieve an 

average of 250 g/mi the center red triangle would need to move from its current location at 440 

g/mi to the smaller green triangle on the left. [OAR-2009-0472-7258.1, p. 5] 

5-12
 
 

 

EPA Vehicle Program, Feasibility, and Estimated Impacts 

In the new range of C02 measurements the change in mpg resulting from a 1.0 g/mi C02 change 

would be about 0.1 to 0.3 mpg instead of the 0.02 to 0.15 mpg now encountered. When EP A 

regulated the impacts of certification gasoline on fuel economy they stated: [OAR-2009-0472­

7258.1, p. 5] 

EPA believes that test fuel specifications, are sufficiently tight when changes in fuel property 

values within the specified tolerance do not change fuel economy test results by more than 0.01 

miles per gallon (mpg). This is the degree of precision EPA has used in determining the effect of 

other test procedure changes on CAFE. This precision is necessary since as little as 0.01 mpg can 

affect manufacturers' CAFE as rounded off to the nearest 0.1 mpg. [OAR-2009-0472-7258.1, p. 

5] 

Clearly this goal cannot be met with current measurement methods. [OAR-2009-0472-7258.1, p. 

5] 

EPA Response: 

Major Test Procedure Changes 

Many commenters supported using the current city and highway test procedure for CAFE and 

greenhouse gas emissions.1

 However, comments from the American Council for an Energy 

Efficient Economy, Cummins, Fisker Automotive, Sierra Club, U.S. Coalition for Advanced 

Diesel Cars and the University of California, Santa Barbara recommended that EPA make major 

changes to test procedures so that the tests would more accurately reflect real-world conditions. 

For example, the American Council for an Energy Efficient Economy recommended that EPA 

“Include in the final rule a statement that GHG emissions testing will be improved to represent 

real-world emissions and provide a date by which this improvement will occur.” 

The Manufacturers of Emission Controls Association “supports a 5-cycle approach.” 

Fisker recommended that EPA “Define drive cycles that characterize a vehicle. For example, 

sweep through the full range of acceleration profiles and speeds possible by the vehicle at 

various loads and conditions. Digitally map the test results to the class-specific driver behavior 

data. Allow automakers to submit their own data on how their specific vehicle is being used and 

actually performing. This will encourage a plethora of fuel-saving and behavior-changing 

practices and technologies that fall outside possible drive cycles.” 

1

 Comments from the Alliance did not directly address the city/highway test procedure, but did indirectly support the 

use of the current city and highway test procedures. For example, Alliance comments indicated that “The Alliance 

supports the joint rulemaking, including the proposed coordinated framework and structure. Further, the Alliance 

supports the proposal that both NHTSA and EPA use an attribute-based approach.” AIAM indicate that “AIAM 

does not support fundamentally changing the fuel economy/greenhouse test procedures at this time. Our reluctance 

to support such changes is due to the impact that such changes could have on the effective stringency of the 

standards.” 

5-13 
EPA Response to Comments 

Mr. James Hyde (public citizen) commented that it may not be appropriate for EPA to require 

proposed CAFE and CO2 testing to be conducted at the EPA certification temperature range of 

68 to 86 degrees F. Mr. Hyde commented that “There is currently a cold (20°F) standard for 

carbon monoxide; and this will be extended to hydrocarbons. Regulating and measuring CO2 

and fuel economy at reduced temperatures is important as most driving is done at temperatures 

outside the EPA certification temperature range.” Regarding hybrid vehicles, Mr. Hyde’s 

comments indicate that hybrid electric vehicle technology “is often disabled at low temperatures 

as an element of the vehicle’s design. Design elements which are less effective outside standard 

test temperatures should not be credited with fuel or CO2 reductions which the vehicles do not 

achieve in actual year-round operation.” 

The U.S. Coalition for Advanced Diesel Cars commented that “We believe EPA should embrace 

rules, policies and procedures that do not penalize manufacturers that choose to commercialize 

vehicle technologies that maximize fuel and GHG efficiency in higher speed, higher load 

operating conditions.” Their comments also indicated that “Further, EPA's computer-model 

driven conclusions are completely at odds with market realities in Europe, a carbon-constrained 

region where advanced diesel technology continues to set the bar for drivability, fuel 

consumption and GHG emissions in real-world driving. In fact, for the Top 10 vehicles sold in 

Europe last year, diesel-powered versions delivered 17 percent lower GHG emissions than the 

nearest comparable gasoline engine available.” 

University of California, Santa Barbara commented that “We commend the EPA’s efforts to 

develop tests that provide an accurate method for anticipating fuel economy achieved in real 

world driving.” However, their comments also provided several recommendations including 

increasing the length of the testing time to “allow more opportunity for variable conditions 

during testing;” to increase the number of vehicles tested by EPA, and suggested that “more 

variation be added to these tests to cover a more accurate range of on-road vehicle conditions.” 

The American Council for an Energy-Efficient Economy (ACEEE), Cummins, and Sierra Club 

all suggested using more real-world test procedures. 

It is not feasible at this time to base the final CO2 standards on EPA’s five-cycle fuel economy 

formulae. Consistent with its name, these formulae require vehicle testing over five test cycles, 

the two cycles associated with the CO2 standards, plus the cold temperature FTP, the US06 high 

speed, high acceleration cycle and the SC03 air conditioning test. EPA considered employing 

the five-cycle calculation of fuel economy and GHG emissions for this rule, but there were a 

number of reasons why this was not practical or otherwise appropriate. As discussed extensively 

in the Joint TSD, setting the appropriate levels of CO2 standards requires extensive knowledge of 

the CO2 emission control effectiveness over the certification test cycles. Such knowledge has 

been gathered over the FTP and HFET cycles for decades, but is severely lacking for the other 

three test cycles. EPA simply lacks the technical basis to project the effectiveness of the 

available technologies over these three test cycles, and therefore could not adequately support a 

rule which set CO2 standards based on the five-cycle formulae. The benefits of today’s rule do 

presume a strong connection between CO2 emissions measured over the FTP and HFET cycles 

and onroad operation. Since CO2 emissions determined by the five-cycle formulae are believed 

to correlate reasonably with onroad emissions, this implies a strong connection between 

5-14
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

emissions over the FTP and HFET cycles and the five cycle formulae. However, while we 

believe that this correlation is reasonable on average for the vehicle fleet, it may not be 

reasonable on a per vehicle basis, nor for any single manufacturer’s vehicles. Thus, we believe 

that it is reasonable to project a direct relationship between the percentage change in CO2 

emissions over the two certification cycles and onroad emissions (a surrogate of which is the 

five-cycle formulae), but not reasonable to base the certification of specific vehicles on that 

untested relationship. Furthermore, EPA is allowing for off-cycle credits to encourage 

technologies that may not be not properly captured on the 2-cycle city/highway test procedure 

(although these credits could apply toward compliance with EPA's standards, but not toward 

compliance with the CAFE standards for the reasons given in the next paragraph). For future 

analysis, EPA will consider examining new drive cycles and test procedures for fuel economy 

Second, any possible revision to the existing test procedures would also need to consider 

potential implications for other programs, including the stringency of EPA emission standards 

(for criteria pollutants and CO2 emissions); fuel economy labeling requirements, and notably, 

CAFE requirements and gas guzzler requirements. In addition, for CAFE testing of passenger 

cars EPA is required by statute to “use the same procedures for passenger automobiles the 

Administrator used for model year 1975 (weighted 55 percent urban cycle and 45 percent 

highway cycle), or procedures that give comparable results;” Section 49 USC 32904(c) and 40 

CFR 600.510-08. Although EPA is not prohibited from developing a different test procedure to 

evaluate fuel economy of light duty trucks, doing so would yield a mismatch in testing 

procedures (an undesirable result, as noted by the University of California Working Group in 

their comments), and would lead to disharmonized programs, undermining a key and legitimate 

objective of the joint rulemaking effort. In any case, doing so in this rulemaking is well beyond 

its scope as explained above and in section III.B.1. 

Third, to revise the city and highway test procedures would be expected to increase the burden 

on the automobile industry substantially. Thus, EPA would need to consider appropriate lead 

time for automakers to address changes in test procedures. 

Fourth, the 43/57 weighting factors developed during the 5-cycle fuel economy labeling rule are 

directly and inherently connected with the use of five-cycle estimates for both city and highway 

driving the resulting fuel economy values. These weighting factors are not independent and 

should not be applied to city and highway fuel economy estimates (or CO2 emission values) 

based solely on the FTP and HFET test cycles. For example, when the methodology used to 

develop the 43/57 weighting factors is applied to city and highway driving based on the FTP and 

HFET test cycles, respectively, the result is essentially 55/45, not 43/57. Thus, it would not be 

consistent with the technical underpinnings of the 5-cycle fuel economy label rule to change the 

weighting factors used in the present rule. 

In summary, EPA considers any major revisions to city and highway test procedures to be 

outside of the scope of this GHG rule. However, EPA will consider test procedures in the 

context of future rules setting standards for GHG emissions. 

Note that additional information about test procedures is contained in section 5.10.2 of this 

Response to Comments document. 

5-15 
EPA Response to Comments 

Test Procedures for Advanced Technology Vehicles 

AIAM commented that “It is necessary to have consistent and similar test procedures for battery 

electric vehicles, plug-in hybrids, and fuel cell vehicles. AIAM urges EPA to pursue the 

development of such test procedures in conjunction with the Society of Automotive Engineers.” 

Although EVs and FCVs will have compliance values of zero grams/mile, PHEV compliance 

values will be determined by combining zero grams/mile for grid electricity operation with the 

GHG emissions from the 2-cycle test results during operation on liquid fuel, and weighting these 

values by the percentage of miles traveled that EPA believes will be performed on grid 

electricity and on liquid fuel, which will vary for different PHEVs. EPA is currently considering 

different approaches for determining the weighting factor to be used in calculating PHEV GHG 

emissions compliance values. EPA will consider the work of the Society of Automotive 

Engineers Committee J1711, as well as other relevant factors. EPA will issue a final rule on this 

methodology by the fall of 2010, when EPA expects some PHEVs to initially enter the market. 

Accuracy of the CO2 Test Procedure 

Mr. James Hyde (public citizen) commented that in the future model years, the CO2 levels of 

some vehicles will become much lower than the CO2 levels of current vehicles, e.g. less than 

176 grams/mile. Mr. Hyde recommended that “The ability of the test procedures in 40 CFR Part 

86 to measure CO2 accurately and precisely at these levels needs to be investigated. Because of 

the reciprocal relationship between CO2 emissions and fuel economy, the uncertainty in fuel 

economy measurements increases dramatically as the CO2 level is reduced.” 

EPA Response: 

EPA is confident that the current CO2 analyzers are more than adequate to measure CO2 

emissions at these levels. The same general type of analyzers which are used to measure CO2 

emissions are also used to measure carbon monoxide (CO) emissions. We note typical CO 

emission levels on the city and highway tests are approximately two to three orders of magnitude 

lower than typical CO2 emissions. For example, the current Tier 2 Bin 5 (50,000/120,000 mile 

useful life) emission standards for CO on the FTP (city) test are 3.4 and 4.2 grams/mile, 

respectively. Typical CO emission levels range from 0.1 to 4.2 grams/mile on the city and 

highway tests. 

Beyond the accuracy of the equipment used to measure CO2 emissions, EPA is concerned, as a 

matter of principle moving into a new era of greenhouse gas control, that greenhouse gas 

reductions reported for purposes of compliance with the standards adopted in this rule will be 

reflected in the real world and not just as calculated fleet average emission levels or measured 

certification test results. Therefore EPA will pay close attention to technical details behind 

manufacturer reports. For example, EPA intends to look closely at each manufacturer’s 

certification testing procedures, GHG calculation procedures, and laboratory correlation with 

EPA’s laboratory, and to carefully review manufacturer pre-production, production, and in-use 

testing programs. In addition, EPA plans to monitor GHG performance through its own in-use 

5-16
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

surveillance program in the coming years. This will ensure that the environmental benefits of the 

rule are achieved as well as ensure a level playing field for all. 

5.2 Reserved 

5.3. EPA Averaging, Banking, and Trading Provisions 

Organization:Alliance of Automobile Manufacturers 

General Motors Corporation 

Toyota Motor North America 

Hyundai 

Mercedes-Benz USA 

Volkswagen 

Ford Motor Company 

Ferrari S.p.a 

Environmental Defense Fund 

Public Citizen and Safe Climate Campaign 

Sierra Club 

Bright Automotive 

Porsche 

Comment: 

Alliance of Automobile Manufacturers 

Compliance flexibilities are absolutely necessary to meet the challenging fuel economy and 

greenhouse gas emissions standards that are being proposed. The flexibilities are crucial because 

they enable companies to choose different paths for achieving the same CO2 reductions and fuel 

economy improvements. As a result, the anticipated benefits of the proposed standards will be 

realized while enabling companies to comply in the most efficient way given specific product 

plans and business circumstances. EPA has long recognized that flexible compliance 

mechanisms such as those being proposed are a necessity for achieving both environmental 

protections and economic growth, and for this reason have been a staple of EPA emissions 

regulations. 

It is precisely this combination of environmental benefit and implementation efficiency that 

made the proposed compliance flexibilities integral to the various stakeholders being able to 

reach consensus on the National Program. [OAR-2009-0472-6952.1, p. 7] 

General Motors Corporation 

GM especially supports: ... the recognition of the need for mechanisms to provide for 

compliance flexibility in the face of great uncertainty over future technology developments and 

costs, customer acceptance of these technologies, and the price of fuels that consumers may see 

in the marketplace. All of these factors make it critical that automakers have some ability to cope 

with changes or unexpected outcomes, and we believe the proposed rules provide essential 

flexibility. [OAR-2009-0472-6953.1, p. 2] 

5-17 
EPA Response to Comments 

Toyota Motor North America 

The agencies propose a variety of credit programs and compliance flexibilities, which Toyota 

generally supports. Not only are these credits and flexibilities consistent with the agreements 

signed last May and the joint NOI published last spring, but they were integral to Toyota's 

decision to enter into a commitment. Flexible credit programs allow manufacturers to better 

manage technology investment and deployment while achieving overall environmental goals. 

[OAR-2009-0472-7291.1, p. 14] 

Toyota generally supports EPA's proposed credit trading program, although it remains unclear, 

for competitive or other reasons, the extent to which manufacturers will engage in trading with 

one another or in trading through a third party. Nonetheless, this uncertainty does not argue 

against establishing such a program in the event credit trading makes sense for the parties 

involved. [OAR-2009-0472-7291, p.19] 

Hyundai 

Hyundai is pleased that EPA proposed various forms of credits for compliance flexibility in the 

joint proposal. Credits can be important for providing a cost-effective means of achieving the 

standards. [OAR-2009-0472-7231.1, p. 3] 

Mercedes-Benz U.S.A 

The flexibilities and credits proposed for the greenhouse gas program are essential to allow 

limited-line manufacturers, such as DAG, to meet these dual responsibilities. They are the only 

mechanism through which companies in DAG’s position can meet the proposed requirements for 

these model years and continue to invest in advanced technologies that will significantly reduce 

greenhouse gas emissions over the longer term. [OAR-2009-0472-7193.1, p. 2] 

Volkswagen 

Volkswagen especially supports the work by both agencies to form their respective regulations to 

allow averaging, banking, and trading as similar as possible in both programs, and to provide as 

many credit flexibilities as possible that accommodate the wide range of manufacturers. [OAR2009-0472-7210.1, p. 2] 

Ford Motor Company 

CO2 Averaging, Banking and Trading Program 

Part §86.1865-12, 'How to comply with the fleet average CO2 standards,' states that 'there are no 

property rights associated with CO2 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 a rulemaking'. 74 FR at 49761. 

5-18
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

The need for this provision is unclear, and it should be dropped. Compliance planning is a 

complex coordinated process that considers many factors including vehicle refreshening 

cadence, manufacturability and credit management. The availability of credits is an important 

part of a manufacturer's plan to comply with the regulations, and manufacturers rely on the 

existing rules and credit provisions in their planning process. Abrupt changes in the credit system 

could upend a manufacturer's plans, potentially making compliance impossible or necessitating 

drastic, costly actions in order to maintain compliance. The regulations should be designed to 

prevent the occurrence of such situations. If the agency decides to terminate or limit any flexible 

mechanisms, then the rules should require adequate lead time for a manufacturer to develop 

alternative credit schemes and to make the necessary adjustments to its compliance plan. Since 

manufacturers typically begin to firm up their product plans roughly five years in advance of 

actual production, the regulation should be amended to allow at least 5 years' lead-time in 

advance of any changes to the credit provisions of the rules. [OAR-2009-0472-7082.1, p. 10] 

Ferrari S.p.a 

Ferrari strongly supports the Averaging, Banking, and Trading (ABT) program for CO2 

emissions credits, because this approach gives more flexibility to comply without any negative 

effects for the National Program final target to reduce GHGs. [OAR-2009-0472-7214.1, p.7] 

Environmental Defense Fund 

You asked a question about all of the various flexibility proposals. We support them all, 

including obviously trading among manufacturers. The more flexible the better, so long as the 

accounting is good, the reporting, the monitoring is good and the enforcing is good, but there are 

cost differences that ought to be respected. [These comments were submitted as testimony at the 

New York public hearing. See docket number EPA-HQ-OAR-2009-0472-4621, p. 124.] 

Public Citizen and Safe Climate Campaign 

Banking, borrowing, transfer and trading also obfuscates automakers’ compliance with 

the program. In the fuel economy program, banking and borrowing alone, without transfer and 

trading, make it nearly impossible to know whether a manufacturer has complied in a particular 

model year. The long window in which automakers can trade credits back and forth obscures 

compliance in a given model year, impeding clear reporting of whether automakers are meeting 

or falling short of standards. Based on publicly available data, Public Citizen was not able to 

verify that Ford, GM, Chrysler and Nissan had complied with standards for several model years 

from 1978-2007. An analysis of records of automaker use of carry-forward and carry-back 

credits used from 1978-2008 Public Citizen obtained from NHTSA through a Freedom of 

Information Act (FOIA) request, revealed that Detroit manufacturers avoided $3.1 billion in 

CAFE fines that otherwise would have been paid, and delayed oil savings associated with 

these shortfalls. [OAR-2009-0472-7050.1, p.4] 

Sierra Club 

5-19 
EPA Response to Comments 

Ensure that credits do not undermine oil savings and emissions reduction goals. History has 

shown that credits weaken the standards and erode oil savings. We urge that the agencies avoid 

repeating this history by establishing credits that will undermine needed oil savings and pollution 

reductions. EPA proposes a range of new credits that [OAR-2009-0472-7278.1, p.14] can be 

banked, borrowed and traded to increase flexibility. We are concerned that a broad range of 

credits may erode oil savings and cause emission reductions to go unrealized. To achieve the oil 

savings and greenhouse gas emission reductions goals President Obama announced, credits (if 

awarded) must be tied to actual emission reductions and be part of a transparent system that is 

publicly reviewable. [OAR-2009-0472-7278.1, p.15] 

It is critical that the credits banked, borrowed and traded within this system represent actual 

emissions reductions. To ensure emission reductions, credits that do not represent actual 

reductions, including FFV credits and advanced technology vehicle credits, should not be traded 

or transferred. Additionally, manufacturers should not be allowed to trade or transfer borrowed 

credits. The vast array of credits and the wide flexibilities proposed for credit banking, 

borrowing, and trading create a compelling need for compliance transparency. [OAR-2009-0472­

7278.1, p.16] 

Bright Automotive 

Number two is the trading component of this could be a significant incentive or 

driver, particularly if trading is harmonized. There's one series of product to be traded, not one 

for NHTSA and not one for EPA, to be able to decide and meet the overall oil and carbon 

production objectives at the least cost so a company like Bright Automotive would be to able to 

receive credits to incentivize more production of our vehicles and accelerate their development. 

Porsche 

Fourth, EPA should modify the credit program so that deficits reflect real world manufacturerspecific lifetime vehicle miles traveled. As proposed by EPA, debits are to be calculated based 

on a fleet average vehicle miles traveled figure for all of industry as follows: 

Debits = [mfr's CO2 deficit x vehicles sold x vehicle lifetime miles)/1,000,000 

Where, for passenger cars, vehicle lifetime miles = 190,971 for light trucks, vehicle lifetime 

miles = 221,199 

If a manufacturer can demonstrate to EPA that its passenger car or light truck fleet vehicle 

lifetime mile numbers are less than the industry averages proposed for inclusion in the above 

formula, then the deficit should be reduced accordingly. 

EPA Response: 

Averaging, Banking and Trading Flexibilities 

5-20
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

In general, there was considerable support for the proposed averaging, banking and trading 

flexibilities. Manufacturers generally view these provisions as essential for implementing the 

GHG standards. 

EPA is finalizing an overall credit program which is very similar to that proposed (although we 

are finalizing a number of detailed changes to the individual credit programs for advanced 

technology vehicles, alternative fuel vehicles, air conditioning leakage, air conditioning 

efficiency, and off-cycle technology credits). In the main ABT credit program, the manufacturer 

will average the CO2 emissions within each of the two averaging sets (passenger cars and trucks) 

for each model year’s production and compare that with its respective fleet average standards 

(which in turn will have been determined from the appropriate footprint curve applicable to that 

model year and averaging set). In addition to this within-company averaging, when a 

manufacturer’s fleet average CO2 values of vehicles produced in an averaging set over-complies 

compared to the applicable fleet average standard, the manufacturer could generate credits that it 

could save for later use (banking) or could sell or otherwise distribute to another manufacturer 

(trading). Implementation of the credit program generally involves two steps: calculation of the 

credit amount and reporting the amount and the associated data and calculations to EPA. 

EPA continues to believe the ABT provisions are an essential part of the overall program. As 

noted in section III. C of the preamble to the final rule, ABT is important because it can help to 

address many issues of technological feasibility and lead-time, as well as considerations of cost. 

For the GHG standards, which include consideration of credit availability and use, ABT is an 

integral part of the standard setting itself, and is not just an add-on to help reduce costs. See 

Husqvarna AB v. EPA, 254 F. 3d 195, 202 (D.C. Cir. 2001) (use of ABT as a factor in providing 

proper consideration of cost and lead time)In many cases, ABT resolves issues of lead-time or 

technical feasibility, allowing EPA to set a standard that is either numerically more stringent or 

goes into effect earlier than could have been justified otherwise. This provides important 

environmental benefits and at the same time it increases flexibility and reduces costs for the 

regulated industry. 

Averaging, Banking, and Trading (ABT) of emissions credits have been an important part of 

many mobile source programs under CAA Title II, both for fuels programs as well as for engine 

and vehicle programs. These programs have operated successfully and without incident for 

many years with some degree of transparency, and EPA continues to work to improve the 

transparency of these programs. For example, EPA routinely publishes vehicle emission test 

results that are associated with the manufacturers’ compliance with the Tier 2 ABT program, and 

in recent years an annual compliance report has provided details regarding the fleet average 

emissions achieved by manufacturers under the Tier 2 emissions program. Given the successful 

operation of existing ABT programs, EPA is confident that modeling the new GHG program on 

these programs is appropriate. EPA will track the use of ABT through its certification and 

compliance program and, in response to commenters’ concerns regarding transparency, plans to 

make compliance information publicly available, as discussed below. EPA believes that ABT 

provisions will help manufacturers comply with emissions standards and achieve the emissions 

reductions associated with the standards. 

Credits Must be Tied to Actual Emission Reductions 

5-21 
 

EPA Response to Comments 

The Sierra Club commented that EPA should ensure that credits do not undermine oil savings 

and emissions reduction goals and recommends that “credits (if awarded) must be tied to actual 

emission reductions and be part of a transparent system that is publicly reviewable.” Public 

Citizen and Safe Climate Campaign recommended that EPA limit the level by which credit 

transfers and credit trades may reduce a manufacturer’s standard, in line with the limitations 

contained in the fuel economy program. 

EPA is finalizing several key changes to the credit programs which we believe will address the 

comments of the Sierra Club. We believe that these changes (combined with the limitations 

being finalized on credit transfers and trades) will also address the concerns of Public Citizen 

and Safe Climate Campaign.2 For example, EPA is finalizing the following provisions: (1) the 

phase-out in the 2016 model year of the credit program for flexible-fueled vehicles (FFVs) that 

are based on the EISA calculation methodology (consistent with EPA’s proposal); (2) the phaseout in the 2016 model year of the credit program using the EISA methodology for dedicated 

alternative fuel vehicles (again, as EPA proposed); (3) changes in the implementation of the offcycle technology credit program; and (4) changes to the provisions for advanced technology 

vehicle incentives for electric vehicles, plug-in hybrids, and fuel cell vehicles, as outlined below. 

Flexible Fueled Vehicles: EPA acknowledges that prior to MY 2016, FFV credits may not 

necessarily represent real-world emissions reductions. However, as EPA noted in the proposal 

(74 FR 49531), and as many automotive manufacturers confirmed and documented in their 

public comments, it is necessary to retain these credit opportunities through MY 2015 because 

automakers have acted in reliance upon them and would lack needed lead time to meet the 

standards without these opportunities. See also the discussion in section III.C.2 of the preamble 

to the final rule. 

As proposed, in the 2016 and later model years, the calculation of FFV emissions differ 

substantially from prior years in that the determination of the CO2 value to represent an FFV 

model type will be based upon the actual use of the alternative fuel and on actual emissions 

while operating on that fuel. In essence, these vehicles will largely be evaluated like all others 

for purposes of ABT starting with MY 2016, so that actual emissions performance will 

determine potential credit generation. EPA’s default assumption in the regulations is that the 

alternative fuel is used negligibly, and the CO2 value that will apply to an FFV by default would 

be the value determined for operation on conventional fuel. However, if the manufacturer 

believes that the alternative fuel is used in real-world driving and that accounting for this use 

could improve the fleet average, the manufacturer has two options. First, the regulations allow a 

manufacturer to request that EPA determine an appropriate weighting value for an alternative 

fuel to reflect the degree of national use of that fuel in FFVs relative to real-world use of the 

conventional fuel. Section III.C of the preamble describes how EPA might make this 

determination. Any value determined by EPA will be published by EPA, and that weighting 

value would be available for all manufacturers to use for that fuel. The second option allows a 

manufacturer to determine the degree of alternative fuel use for their own vehicle(s), using a 

2

 EPA is not finalizing credit transfer and trading limits similar to those contained in the fuel economy program as 

recommended by Public Citizen and Safe Climate Campaign. However EPA is finalizing several key changes to 

EPA’s credit programs and several proposed limitations on buying and selling credits to better assure that any 

credits transfers or trades are tied to actual in-use GHG emission reductions. 

5-22
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

variety of potential methods. Both the method and the use of the final results must be approved 

by EPA before their use is allowed. In either case, whether EPA supplies the weighting factors 

or EPA approves a manufacturer’s alternative fuel weighting factors, the CO2 emissions of an 

FFV in 2016 and later would be based on real-world emissions, as follows (assuming non-zero 

use of the alternative fuel): 

(W1×CO2conv)+(W2×CO2alt), 

where W1 and W2 are the proportion of miles driven using conventional fuel and alternative 

fuel, respectively, CO2conv is the CO2 value while using conventional fuel, and CO2alt is the 

CO2 value while using the alternative fuel. Comments on the FFV credits provisions are 

discussed in detail in section 5.7.2. 

Dedicated alternative fueled vehicles: For MY 2016 and later, like the FFV credit program 

described above, these credits will be treated differently in the first years of the program than in 

the 2016 and later model years. In fact, these credits are essentially identical to the FFV credits 

except for two things: (1) there is no need to average CO2 values for gasoline and alternative 

fuel; and (2) in 2016 and later there is no demonstration needed to get a benefit from the 

alternative fuel. The CO2 values are essentially determined the same way they are for FFVs 

operating on the alternative fuel. 

Off-Cycle Technology Credits: For off-cycle credits, EPA has taken steps to ensure that credits 

are based on real-world emissions reductions. Indeed, the real issue is transparency of 

documentation. As proposed, off-cycle technology credits will be available for certain new or 

innovative technologies that achieve real-world CO2 reductions that aren’t adequately captured 

on the city or highway test cycles used to determine compliance with the fleet average standards. 

Like the air conditioning credits, these credits are independent of the fleet average calculation. 

EPA finalized two options for generating these credits: either using EPA’s 5-cycle fuel economy 

labeling methodology, or if that method fails to capture the CO2-reducing impact of the 

technology, the manufacturer could propose and use, with EPA approval, a different analytical 

approach to determining the credit amount. Like the air conditioning credits, these credits will 

have to be determined separately for cars and trucks because of the differing lifetime mileage 

assumptions between cars and trucks. 

Using the 5-cycle approach is relatively straightforward, and because the 5-cycle formulae 

account for nationwide variations in driving conditions, no additional adjustments to the test 

results would be necessary. The manufacturer would simply calculate a 5-cycle CO2 value with 

the technology installed and operating and compare it with a 5-cycle CO2 value determined 

without the technology installed and/or operating. Existing regulations describe how to calculate 

5-cycle fuel economy values, and the GHG regulations contain provisions that describe how to 

calculate 5-cycle CO2 values (see section 600.114-08 (to be codified in 40 CFR)). The 

manufacturer will have to design a test program that accounts for vehicle differences if the 

technology is installed in different vehicle types, and enough data will have to be collected to 

address data uncertainty issues. Manufacturers seeking to generate off-cycle credits based on a 

5-cycle analysis will be required to submit a description of their test program and the results to 

5-23 
EPA Response to Comments 

EPA for approval. Given that this procedure will involve application of an existing test 

procedure, EPA does not believe public notice and comment would be necessary. 

As discussed in Section 5.7.4, the manufacturer-developed testing, data collection, and analysis 

program will require additional EPA approval. EPA received considerable comment from 

environmental and public interest organizations, as well as from Honda, suggesting that EPA’s 

decisions about which technologies merit off-cycle credit and the amount of such credit should 

be subject to public notice and comment. Environmental organizations were generally concerned 

about ensuring that credits under this program are associated with real-world emission 

reductions, while Honda expressed an interest in maintaining fairness among auto manufacturers. 

EPA agrees that a public process will help ensure a fair review and alleviate concerns about 

potential problems with the off-cycle credit calculation and accounting methodology. Therefore 

EPA intends provide public notice and to seek public comment whenever manufacturers apply 

for off-cycle credit and do not use the 5-cycle approach to quantify emission reductions. In such 

instances, EPA will consider any comments it receives in determining whether and how much 

credit is appropriate. Manufacturers should submit proposals well in advance of their desired 

decision date to allow time for these public and EPA reviews. 

Advanced Technology Vehicle Incentives for Electric Vehicles, Plug-in Hybrids, and Fuel Cell 

Vehicles: Comments and responses on advanced technology vehicle incentives are provided in 

section 5.7.3. 

Transparency 

In general, EPA agrees with Sierra Club’s comments that GHG compliance information should 

be part of a transparent system that is publicly reviewable. EPA’s response to comments related 

to program transparency is provided in section 5.10.1. 

EPA’s Ability to Terminate or Limit Credit Provisions 

The proposed regulations contained text about the credit process, stating that “Nothing in this 

part or any other provision of law should be construed to limit EPA’s authority to terminate or 

limit authorization through a rulemaking.” (74 FR 49761). Ford Motor Company commented 

that this statement should be dropped because of lead-time concerns. Ford stated that “Since 

manufacturers typically begin to firm up their product plans roughly five years in advance of 

actual production, the regulation should be amended to allow at least 5 years lead-time in 

advance of any changes to the credit provisions of the rules.” 

This language, which has been incorporated in every light-duty ABT program to date, ensures 

that EPA has the regulatory authority to make appropriate determinations regarding credit 

balances when issuing new regulations. For example, if EPA were to issue another GHG 

regulation taking effect in 2017, the incorporation of this regulatory language would allow EPA 

to decide the extent to which manufacturers may or may not continue to hold or use credits from 

the prior GHG program. However we believe that the rulemaking process is quite robust in 

nature and more than adequate to consider manufacturers’ lead-time needs. Indeed, as noted 

above and in section III.C.2 of the preamble, legitimate considerations of lead time are the reason 

5-24
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

EPA is not adjusting FFV credits until model year 2016. While each rulemaking involves a 

unique set of circumstances, EPA has historically attempted to balance the genuine concerns and 

needs of the automobile industry as part of its consideration of availability of control technology, 

cost, necessary lead time and other factors relevant under section 202 (a) (1) consistent with the 

ultimate statutory objective of improved health and welfare of the American public. In 

summary, EPA understands the concerns of the commenter, but continues to believe that our 

cautionary statement is both needed and appropriate. 

Manufacturer-Specific Lifetime VMT for Credit Calculations 

Porsche recommended that “EPA should modify the credit process so that deficits reflect real 

world manufacturer-specific lifetime vehicle miles traveled.” 

As explained in the proposal, the purpose of assigning lifetime VMT values to credits is to allow 

fungible credit transferring (from car to truck programs and vice-versa) and fungible credit 

trading programs between manufacturers, given the fact that trucks are typically driven more 

miles than cars. It is important for the regulations to account for the difference in expected 

lifetime vehicle miles traveled (VMT) between cars and trucks in order to preserve CO2 

reductions when credits are transferred between cars and trucks. Assigning lifetime VMT 

values to car/truck credits and debits thus enables an important flexibility to manufacturers – the 

ability to transfer credits across fleets. For example, as stated in the proposal (74 FR 49516) 

“Because EPA is proposing to allow unlimited credit transfer between a manufacturer’s car and 

truck fleets, the two fleets can essentially be viewed as a single fleet when manufacturers 

consider compliance strategies. Manufacturers can thus choose on which vehicles within their 

fleet to focus GHG reducing technology and then use credit transfers as needed to demonstrate 

compliance, just as they would if there was a single fleet standard.” 

Regarding Porsche’s request to allow the use of manufacturer-specific VMT, such an approach 

would introduce an immense level of complexity into the process of buying and selling credits 

and raises significant questions and concerns about implementation and transparency. For 

example, if EPA were to consider such a request, the next logical step would be to differentiate 

VMT by vehicle models, or by technologies. For example, are Ford Mustangs driven more miles 

than Chevrolet Corvettes? Or are convertibles driven fewer miles than non-convertibles? Is there 

a difference in VMT between minivans and two-door sedans? Or between one person and their 

neighbor? The answer to all of these questions may be yes (or ‘sometimes’), but EPA simply 

does not have the capacity to readily, accurately, and fairly consider these issues at this point in 

time or to include such consideration in the final rule. If EPA were to entertain Porsche’s 

concept, EPA would be obligated to evaluate the driving behavior of all manufacturers’ vehicles 

to ensure a level playing field between manufacturers whose vehicles are driven more miles and 

those whose vehicles are driven fewer miles. 

Additionally, if EPA were to allow such an option, manufacturers would only request use of this 

option if it were to their benefit. In other words, manufacturers earning deficits would seek to 

use lower VMT values so that they would have to offset a smaller deficit (as is the case with 

Porsche; the specifically stated that they believe their vehicles are driven fewer miles), and 

manufacturers earning credits would seek to enhance their earnings by requesting to use higher 

5-25 
 

EPA Response to Comments 

VMT values. Thus the only equitable way to account for differing VMT across manufacturers 

would be to require every manufacturer to provide EPA with a rigorous and statistically 

significant analysis that would estimate the lifetime VMT of their fleet. Continual updates would 

be required to reflect changes to a manufacturer’s fleet that occur with each model year, as well 

as changing driving behavior and conditions. Such a program would quickly become 

unmanageable and unduly complicated from a bookkeeping and transparency perspective. EPA 

recognizes that fundamentally any vehicle make or model may be driven more or less than 

another make or model, and that the use of an average lifetime VMT factor will, by definition, 

not represent the specific experience of every manufacturer, make, or model. However, as noted 

above, the purpose of the lifetime VMT factor is to preserve emission reductions when 

transferring vehicles between car and truck fleets, and EPA believes that this purpose is served 

adequately by the use of average lifetime VMT values. 

EPA and NHTSA Credit Programs 

Bright Automotive suggests that there should not be separate and independent credits systems for 

the EPA and NHTSA programs. EPA understands that one system might offer advantages for 

manufacturers but EPA believes that the two programs must remain separate. The two programs 

have been carefully constructed to achieve similar objectives from a fuel economy and CO2 

reduction stand-point. However, the two agencies’ programs have several differences, due to 

differences in statutory authority and EPA’s program includes several credit programs that are 

not part of the NHTSA program. This and other differences make the suggested approach 

unworkable. 

5.3.1. Five Year Carry-forward/Three Year Carry-back 

Organization:Hyundai Motor Company 

Center for Biological Diversity 

Toyota Motor North America 

Natural Resources Defense Council 

United Auto Workers 

Kia Motors 

Chew, Yuli 

Comment: 

Hyundai Motor Company 

EPA will use the same five-year carry-forward and three-year carry-back time periods for credits 

allowed under NHTSA's CAFE program. Additionally, we support a phase-out or discounting of 

credits under EPA's GHG program after the five-year carry-forward period. To align with the 

California GHG program in this area, we recommend that EPA adopt the credit discounting 

permitted under California's GHG program as follows: [OAR-2009-0472-7231.1, p.3] 

[Following comments are from LA Testimony, OAR-2009-0472-7283 p.67-72] 

5-26
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

EPA-HQ-OAR-2009-0472-6185, pp. 80-81.]] 

More specifically, we support the proposed credit carry-forward and carry-back time periods 

under both EPA and NHTSA programs. 

In addition, we would support expanding the carry-forward provisions under the GHG program 

to include a phase-out or discounting of credits after the five-year period. This practice was 

permitted under the California regulations and would provide even further compliance flexibility. 

Center for Biological Diversity 

Third, deficit “carry-back” credits must be avoided. As proposed, manufacturers who fail to 

comply with the standards for up to three years could earn credits if they exceed the standards in 

the following year, and use these credits to avoid penalties for having failed to comply in the 

preceding years. “Carry-back” credits, however, undermine the purpose of the Agencies’ efforts 

not only because they would incentivize delays in investment and technological innovation and 

thus undercut EPCA’s intent, but also because the benefits of avoiding the emission of a ton of 

GHGs today exceed the benefits of avoiding the release of the same ton of GHGs several years 

from now. In fact, the Proposed Rule already recognizes this fact but fails to apply it. As the 

Proposed Rule correctly notes, GHGs remain in the atmosphere for decades and, in the case of 

CO2, for millenia. Proposed Rule, 74 Fed. Reg. 49583. “A substantial portion of CO2 emitted 

into the atmosphere is not removed by natural processes for millennia, each unit of CO2 not 

emitted into the atmosphere avoids essentially permanent climate change on centennial time 

scales.” 74 Fed. Reg. 49589. As a consequence, remedial efforts get more expensive the longer 

they are delayed: "SCC is expected to increase over time, because future emissions are expected 

to produce larger incremental damages as physical and economic systems become more stressed 

as the magnitude of climate change increases. Indeed, an implied growth rate in the SCC can 

beproduced by most of the models that estimate economic damages caused by increased GHG 

emissions in future years." 74 Fed. Reg. 49613. Or, as stated elsewhere in the Proposed Rule, 

“[d]elaying mitigation efforts could result in substantially higher costs of stabilizing CO2 

concentrations.” 74 Fed. Reg. 49613. Even setting aside the potential of triggering catastrophic 

events and assuming arguendo that the SCC grows by no more than a linear 3% per annum as 

EPA assumes, it is undoubtedly vastly preferable to remove a given ton of carbon in Year 1 

rather than in Year 4, when it has wrought that much more damage.23 Moreover, also as 

acknowledged elsewhere in the Proposed Rule, “voluntary non-compliance is impermissible for 

the GHG standards proposed under the CAA,” 74 Fed. Reg. 49522; thus, a rule allowing 

manufacturers to choose not to comply with a standard in any given year is illegal. In sum, 

deficit “carry back” credits are bad economic and environmental policy as well as in violation of 

EPCA and the CAA. 

Fourth, while over-compliance “carry forward” credits (i.e., the ability to apply credits for overcompliance in Year 1 to remedy compliance failures in Year 1+n) are commendable within limits 

because they indeed incentivize early technological investment and innovation, and initially 

accelerate the rate of removal of GHGs from the atmosphere, allowing such “carry forward” 

credits for a period of five years is excessive. A five year “carry forward” period would remove 

5-27 
EPA Response to Comments 

the incentive to incorporate newly developed technology into the nation’s vehicle fleet for far too 

long, and, after the initial spurt, stagnate rather than drive progress. These detriments could be 

balanced against the evident benefits of limited “carry forward” credits by selecting a shorter 

application period, such as one or two years. Moreover, no such credits should be allowed unless 

a manufacturer can demonstrate additionality and quantify and verify the amount by which its 

performance actually exceeded the standard. [EPA-OAR-HQ-0472-7265.1] 

Toyota Motor North America 

As directed by EISA and interpreted by NHTSA in previous rulemakings, CAFE credits earned 

by a manufacturer in a model year after 2007 can be applied (subject to certain adjustments and 

limits) for a period of up to five model years after the year in which they were earned. This 5­

year 'carryforward' provision is also proposed by EPA, although subject to different adjustments 

and limits . Further, EISA provides manufacturers the flexibility to 'borrow' credits up three 

years into the future (again, with certain adjustments and limits) to address potential compliance 

shortfalls in a given model year. This 3-year 'carryback' provision is also proposed by EPA, 

although subject to different adjustments and limits. [OAR-2009-0472-7291, p.18] 

Notwithstanding the comments above concerning the adjustment factors proposed by the 

agencies for transferring credits, Toyota supports the 5-year carryforward and 3-year carryback 

proposals by EPA in order to maintain consistency between the two programs for the purpose of 

technology and product planning. [OAR-2009-0472-7291, pp.18-19] 

Natural Resources Defense Council 

Restrictions on Average, Banking, and Trading Provisions for GHG Standards are Necessary to 

Preserve Environmental Benefits and Avoid Delays in Adoption of New Technologies 

NRDC does not oppose EPA’s proposal for MYs 2012 to 2016 to limit credit banking to five 

years and deficit carry-forward to three years. We recommend, however, that EPA evaluate the 

credit banking and deficit carry-forward time periods to determine if they can be reduced for MY 

2017 and subsequent model years. Long banking and borrowing periods have the potential delay 

deployment of cost-effective GHG control technologies. As MY 2012-2016 vehicles are 

produced and sold, EPA should carefully evaluate whether or not the allotted banking and deficit 

carry-forward time periods are necessary for cost-effective achievement of the GHG emissions 

standards. [OAR-2009-0472-7141.1, p. 9] 

Finally to prevent any credit “shell games” from delaying the adoption of new technologies, 

manufacturers should also be prevented from banking, transferring or trading credits in any given 

year if they are running deficit [sic] in either their car or truck fleet in that year. This prevents, 

for example, any manufacturer from simultaneously banking credits while carrying forward a 

deficit. [OAR-2009-0472-7141.1, p. 10] 

United Auto Workers 

5-28
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

Third, the UAW supports the proposals in the regulations for program flexibilities to help 

automakers achieve compliance with the tougher standards. These provide a sensible transition 

to a regime of annual increases in light-duty vehicle fuel efficiency after a long period of 

regulatory inaction. We believe that EPA made the correct decision that it should limit its 

proposal for carry-back and carry-forward credits to the limits established by the Energy Policy 

and Conservation Act for the CAFE program. [OAR-2009-0472-7056.1, p.3] 

Kia Motors 

[These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number EPA-HQ-OAR-2009-0472-7283, p.172] 

While we fully support the five-year carry-forward period for credits under both the greenhouse 

gas and fuel economy programs, we would also support the addition of a phase-out or 

discounting of credits under the greenhouse gas program after the five-year carry-forward period. 

Chew, Yuli 

For EISA transfer caps issue, I notice that the limit of 1-year carry-forward and 3-year carrybackward is different from what had been adopted in CARB’s Greenhouse Gas Regulation. 

While the Regulation is stricter than CARB’s, it will create confusion among CA and other 

Section 177 States. I support that GHG standard should have a 5-year carry-forward as specified 

by CARB for Large Volume Manufacturers to allow for advance notice period. [OAR-2009­

0472-7042.1, p.1] 

As consistent in California’s Greenhouse Gas Standards, I support that the carry-forward of 

GHG credits be allowed for Small Volume and Independent Volume Manufacturers until 2016 

Model Year or 3 Model Years after their size category classification changed to Large Volume 

Manufacturers. [OAR-2009-0472-7042.1, p.1] 

I support harmonization with California’s Standard of using a 5-years fleet average method, 

which means, 5 years carry-back provision as compared to 3 year carry-back provision as in 

EISA. Any deficit at the end of 5 years will have to be made whole or face CAA violation at the 

end of the following year. [OAR-2009-0472-7042.1, p.1] 

I am concerned that the two fleet approach will result in some manufacturers would begin 

producing bigger trucks and thus able to gain a lot of credits to subsidize the deficiency in the 

passenger car standard. I would suggest that the credits from trucks have a useful lifespan of just 

2 years if they are use to equalize the deficits in the passenger cars. This will maintain the stricter 

standard of passenger car and reducing the incentives of “gaming” the benefits of gaining large 

quantities of credits from trucks which are based on looser standards. [OAR-2009-0472-7042.1, 

pp.2-3] 

For the compliance program, I am concerned about the divergence from CARB’s Regulation on 

the time limit on the compliance, such as based on 5-year Fleet Average as in CARB as 

expressed in. I am also concerned that Intermediate Volume Manufacturers is treated the same 

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EPA Response to Comments 

way for compliance, 1-year carry forward credits and 3-year carry backward provisions without 

given them sufficient time to comply. [OAR-2009-0472-7042.1, p.4] 

EPA Response: 

EPA received a number of comments regarding the credit carry-back and carry-forward 

provisions. Many supported the proposed consistency of these provisions with EISA and the 

flexibility provided by these provisions, and several offered qualified or tentative support. For 

example, NRDC encouraged EPA to consider further restrictions in the 2017 and later model 

years. Public Citizen expressed concern regarding the complexity of the program and how these 

provisions might obscure a straightforward determination of compliance in any given model 

year. The Center for Biological Diversity expressed concerns regarding the provisions, 

particularly with respect to allowing manufacturers to carry a deficit forward. At least two 

automobile manufacturers suggested modeling the program after California, which allows credits 

to be carried forward for 5-years, plus a phase-out or discounting of credits in the 6th year 

(discounted to 50%) and the 7th year (discounted to 25%). In the California program, any unused 

credits would expire after the end of the seventh year. 

For other of its Title II emission control programs, EPA has sometimes initially restricted credit 

life to allow time for the Agency to assess whether the credit program is functioning as intended. 

When EPA first offered averaging and banking provisions in its light-duty emissions control 

program (the National Low Emission Vehicle Program), credit life was restricted to three years. 

The same is true of EPA’s early averaging and banking program for heavy-duty engines. As 

these programs matured and were subsequently revised, EPA became confident that the 

programs were functioning as intended and that the standards were sufficiently stringent to 

remove the restrictions on credit life. EPA has also previously allowed a limited deficit carryforward, for example in the NLEV and Tier 2 programs. EPA is therefore acting consistently 

with our past practice in finalizing reasonable restrictions on credit life and a limited deficit 

carry-forward in this new program. Section 202(a)(1) of the Clean Air Act clearly allows EPA 

the discretion to include provisions such as these, and as noted above EPA has used these 

provisions in the past in programs that have significantly advanced environmental protection and 

air quality improvements. 

The inclusion of these provisions in these regulations accounts for the ability of credit 

generation as well as limited deficit carry-forward to address lead time issues such as a variation 

in the percentage of models that are redesigned each year by a manufacturer, as discussed in 

Section III.D of the preamble, and to address inaccuracies that can occur in a manufacturer’s 

projections for future vehicle sales for any given model year, leading to not achieving the fleet 

average for that model year. For example, fuel price fluctuations and other factors can influence 

consumer attitudes and buying behavior. By the time it becomes clear at the end of a model year 

that the manufacturer did not achieve their fleet average standard, their product line for the next 

model year is essentially locked in and the subsequent model years are already well along in the 

development process. EPA believes that allowing a deficit carry-forward of three years gives 

manufacturers enough time to adequately respond to variations in a model year with appropriate 

limitations that provide for continued improvements in emissions. In particular, note that the 

regulations provide restrictions on carrying deficits forward that prevent a “shell game” of 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

continually moving deficits forward and never actually being in compliance. These provisions 

require that manufacturers not have a deficit in any year in which they are paying off a deficit 

from a prior year. For example, if a manufacturer incurs a deficit in three consecutive model 

years, then they have to “pay off” all three years of deficits. They are not allowed to pay off the 

deficit from three years in the past and carry forward the deficit forward from the other past 

years; allowing this would clearly allow a continual shifting forward of deficits that would be 

unacceptable. (See the following response for the applicable regulatory citations.) In addition, 

the long term nature of the greenhouse gases at issue means that there is no significant 

environmental difference by allowing this limited carry-forward. EPA believes that this and 

other provisions provide effective protections and that the environmental benefits of the program 

are not at risk as a result of the deficit/credit provisions. Finally, EPA notes that this is also 

consistent with the CAFE program being adopted by NHTSA. 

The Agency believes that a credit life of five years represents an appropriate balance between 

promoting orderly redesign and upgrade of the emissions control technology in the 

manufacturer’s fleet and the policy goal of preventing large numbers of credits accumulated 

early in the program from interfering with the incentive to develop and transition to other more 

advanced emissions control technologies. Early credits generated by a manufacturer are also 

subject to the five year credit carry-forward restriction based on the year in which they are 

generated. This limits the effect of the early credits on the long-term emissions reductions 

anticipated to result from the new standards. EPA continues to believe that the approach of five 

year carry-forward and three year carry-back of credits is appropriate. 

Banking and Trading Restrictions: 

The National Resources Defense Council (NRDC) recommended that manufacturers should “be 

prevented from banking, transferring or trading credits in any given year if they are running [a] 

deficit in either their car or truck fleet in that year. This prevents, for example[,] any 

manufacturer from simultaneously banking credits while carrying forward a deficit.” 

Regarding the NRDC comments, EPA proposed that the manufacturer must use any credits 

earned to offset any deficit that had accrued in the current year or in a prior model year that had 

been carried over to the current model year. Thus EPA proposed, and is finalizing, exactly what 

NRDC recommended. Specifically, section 86.1865-12(k)(7)(i) in the final regulations states: 

“Before trading or carrying over credits to the next model year, a manufacturer must apply 

available credits to offset any deficit, where the deadline to offset that credit deficit has not yet 

passed.” NRDC also commented that such a provision is necessary to prevent credit “shell 

games” from delaying the adoption of new technologies. EPA’s Tier 2 program includes such a 

restriction, and EPA is applying an identical restriction to the GHG program. Simply stated, a 

manufacturer may not bank (or carry forward) credits if that manufacturer is also carrying a 

deficit. In such a case, the manufacturer is obligated to use any current model year credits to 

offset that deficit. Specifically, section 86.1865-12(k)(8)(i) of the final regulations addresses this 

concern by requiring that “Manufacturers are not permitted to have a credit deficit for four 

consecutive years.” In other words, if they have carried a deficit forward for three years after the 

year in which it is generated, as allowed by the regulations, they can not have a deficit in the 

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EPA Response to Comments 

following model year. This prevents the “shell game” approach of continually being in a deficit 

situation. 

5.3.2. Credit Transfers 

Organization:Ford Motor Company 

Alliance of Automobile Manufacturers (Alliance) 

Toyota Motor North America 

State of New Jersey 

Chew, Yuli 

Comment: 

Ford Motor Company 

Ford supports EPA's streamlined megagram approach to account for expected vehicle lifetime 

miles traveled (VMT) between cars and trucks in order to preserve CO2 reductions when credits 

are transferred between cars and trucks. [OAR-2009-0472-7082.1, p. 9] 

Alliance of Automobile Manufacturers (Alliance) 

Vehicle Miles Traveled Adjustment Factors 

In NHTSA’s MY 2011 final rule, the agency requires an adjustment to credits for lifetime 

vehicle miles traveled (VMT). NHTSA’s finalized adjustment factors are 152,000 miles for 

domestic and imported passenger cars and 179,000 miles for light trucks. 74 Fed. Reg. at 14,432. 

[OAR-2009-0472-6952.1, p.53] 

In the joint 2012-2016 proposal, EPA proposes that VMT adjustment factors should be 190,971 

for cars and 221,199 for trucks. 74 Fed. Reg. 49,572. [OAR-2009-0472-6952.1, p.54] 

Recommendation: 

These adjustment factors are almost identical. To better harmonize the 2012-2016 regulations, 

the Alliance recommends that the agencies agree upon one set of VMT adjustment factors for 

use in credit calculations for both EPA and NHTSA. [OAR-2009-0472-6952.1, p.54] 

Toyota Motor North America 

NHTSA's existing CAFE regulations specify the method by which credits (or deficits) are 

calculated for a regulated fleet in a given model year. In its rulemaking establishing 2011 model 

year CAFE standards, NHTSA established an adjustment factor to be applied when credits are 

transferred from one fleet into another. The procedure takes into account the difference in base 

fuel economy of the fleet generating the credits and the fleet to which credits are transferred, and 

also takes into account the different lifetime mileage accumulation between cars and trucks 

(when credits are transferred between one of the car fleets and the truck fleet, or vice-versa). 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

These adjustments are intended to 'balance' the fuel savings when credits are transferred, and are 

intended to address the sales-weighted harmonic averaging basis of CAFE compliance. [OAR2009-0472-7291, p.18] 

Because CO2 emissions are mass-based, EPA proposes that credits (or deficits) be calculated on 

the basis of a sales-weighted arithmetic averaging of emissions within a fleet, expressed in mega 

grams. Toyota supports this approach. Because these credits (or deficits) are mass-based, the 

only adjustment needed when transferring between fleets is to account for differences in lifetime 

mileage accumulation between the fleets in which credits are earned and used. EPA proposes 

lifetime mileage accumulation rates for cars and trucks this purpose. [OAR-2009-0472-7291, 

p.18] 

In essence, both agencies are seeking to accomplish the same objective - that is, to base credits 

transferred between fleets on 'consumption' in order to value credits on a one-to-one basis, 

regardless of the fleet in which the credit is generated or the base fuel economy (or emission) 

level of the fleet. Toyota recognizes the rationale for this approach, but urges the agencies to use 

the same mileage accumulation rates for cars and trucks in order to maintain relative equivalency 

in each program for credits transferred between fleets. Toyota has no preference concerning the 

use of EPA's mileage accumulation rates or NHTSA's rates, but common values should be used 

for cars and trucks in both programs. [OAR-2009-0472-7291, p.18] 

Credit Transfers Between Fleets 

Toyota fully supports EPA's proposal to allow unlimited credit transfers between the car and 

truck fleets (subject to the carryforward and carryback provisions). From an environmental 

viewpoint, offsetting a compliance shortfall in one fleet with over compliance in another fleet 

achieves the same result as marginal compliance in both fleets. The atmosphere does not 

recognize the difference between a ton of carbon saved from a car or from a truck, nor is there a 

difference between saving a gallon of gasoline from a car or truck - both have equal energy 

security benefits. Toyota has long held the view that artificial limits on credit transfers between 

regulated fleets in the CAFE program are counterproductive, serve to reduce manufacturer 

flexibility and increase costs for consumers. [OAR-2009-0472-7291, p.19] 

State of New Jersey 

The Department supports the proposal's determination to express credits based on vehicle 

lifetime mileage estimates. [OAR-2009-0472-7109.1, p.8] 

Chew, Yuli 

I would suggest limit the usefulness of credits obtained from trucks for MY 2012-2016 to 

equalize the deficits of passenger cars to just two years or less. After which, these credits can 

only be used for trucks only. [OAR-2009-0472-7042.1, p.6] 

In the final rule, I suggest limit the usefulness of the credits from trucks to be able to counter the 

deficits from the passenger cars to just, say 3 years or less; alternatively, slowly phrase down the 

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EPA Response to Comments 

percentage of deficits from passenger cars that can be balanced by credits from trucks over a 

period, e.g. reducing 20% per year from 2012 and these trucks credits cannot be used to average 

out the deficits in the passenger cars. [OAR-2009-0472-7042.1, p.6] 

Public Citizen and Safe Climate Campaign 

The agencies both propose to allow manufacturers to bank, borrow, transfer and trade credits. 

Automakers have availed themselves of the option to bank and borrow credits for their respective 

car and light truck fleets since the fuel economy program started in 1978. EPCA, as amended by 

EISA, provides clear restrictions on the extent to which credit transfer and trading can degrade 

the level of fuel economy a manufacturer achieves in a given model year. Although the CAA 

does not have a specific restriction regarding credit transfer and trading, EPA does not propose 

limiting it. EPA also proposes to adopt the three years of carry-back and five-years of carryforward from the fuel economy standards in the interest of harmonizing the two programs. EPA 

need not water down the stronger statutory authority of the CAA to suit NHTSA’s standard 

setting under EPCA. The CAA expressly requires that EPA issue protective standards to ensure 

public health and welfare. It is particularly egregious to then extend the weaknesses of EPCA 

further than NHTSA has in its standards. [OAR-2009-0472-7050.1, p3] 

EISA extended the carry-forward window from three to five years, and allowed for credit 

transfer between fleets and trading among manufacturers. These changes were made based on 

recommendations in the 2002 National Academy of Sciences (NAS) evaluation of the fuel 

economy program. Since credit trading and transfer will not occur under the fuel economy 

program until the 2011 model year, we have no data on how manufacturers might use this 

program. There is significant uncertainty about whether automakers would actually trade credits 

and the implications of creating a market for these credits. To the extent that credits are traded 

among manufacturers in both programs, we urge that EPA limit the level by which credit transfer 

and trading may reduce a manufacturer’s standard, in line with the limitation contained in the 

fuel economy program. [OAR-2009-0472-7050.1, p.3] 

EPA Response: 

Overall Credit Transfer Approach 

Ford, Toyota and the State of New Jersey supported the proposed unlimited credit transfers 

between car and truck programs. They also supported EPA’s proposed megagram approach to 

account for expected vehicle lifetime miles traveled (VMT) differences when transferring credits 

between cars and trucks (and visa-versa), which is discussed below. EPA is finalizing these 

approaches with very little change from the proposal. 

Mr. Yuli Chew recommended “limiting the usefulness of credits obtained from trucks for MY 

2012-2016 to equalize the deficits of passenger cars to just two years or less. After which, these 

credits can only be used for trucks only.” Regarding Mr. Chew’s recommendation, EPA finalized 

averaging, banking, and trading provisions which are generally consistent with those included in 

the CAFE program, with a few notable exceptions. As with EPA’s approach, the CAFE rules 

allow five year carry-forward of credits and three year carry-back. Under CAFE, transfers of 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

credits across a manufacturer’s car and truck averaging sets are also allowed, but with limits 

established by EISA on the use of transferred credits. The amount of transferred credits that can 

be used in a year is limited, and transferred credits may not be used to meet the CAFE minimum 

domestic passenger car standard. CAFE rules allow credit trading, but again, traded credits 

cannot be used to meet the minimum domestic passenger car standard. EPA did not propose, and 

is not adopting, these constraints on the use of transferred credits. Commenters did not submit 

any analysis justifying such restrictions, and EPA continues to believe that such restrictions 

would be inappropriate, adding costs to the CAA program by reducing manufacturers’ 

flexibilities, and would do so without corresponding environmental benefit since the overall 

stringency of the GHG standards could be affected. 

Mr. Chew’s recommendation was not adopted in the final rule because EPA continues to believe 

that the proposed approach is reasonable and does not believe there is a reason provided that 

would justify making a change to the program. 

In general, EPA is also not adopting the limits on credit transfers and trading that are contained 

in the NHTSA program. EPA historically has not placed limits on the amount of credits that 

may be transferred or traded in light-duty vehicle programs such as Tier 2 and does not believe 

such limits are necessary for the GHG program. Where needed, EPA is placing restriction on 

certain credit provisions such as MY2009 early credits, as described in section 5.7. EPA is also 

finalizing certain credit restrictions in the TLAAS program as described in 5.4. EPA believes it 

is appropriate to narrowly tailor credit restrictions where necessary to address specific issues 

rather than a general restriction on how credits may be transferred or traded. 

VMT Adjustment Factors for Passenger Car and Truck Credits 

The Alliance, AIAM and Toyota commented that the NHTSA and EPA should use the same 

lifetime vehicle miles traveled (VMT) adjustment factors to facilitate GHG credit transfers 

between car and trucks. EPA is promulgating VMT values that differ from the proposal. The 

difference is attributable to lower projected fuel prices relative to those used in the NPRM 

analysis. EPA’s proposed and finalized VMT values are as follows: 

Vehicle Type Proposed VMT Finalized VMT 

Car 190,971 195,264 

Truck 221,199 225,865 

The regulations use these VMT values to account for the difference in expected lifetime 

vehicle miles traveled (VMT) between cars and trucks in order to preserve CO2 reductions when 

credits are transferred between cars and trucks. As directed by EISA, NHTSA accomplishes this 

in the CAFE program by using an adjustment factor that is applied to credits when they are 

transferred between car and truck compliance categories. Rather than use a conversion factor 

that would apply to credit transactions, EPA is expressing credits when they are generated in 

total lifetime Megagrams (metric tons). In this way credits may be freely exchanged between car 

and truck compliance categories without the need for adjustment. A discussion of the derivation 

of the estimated expected vehicle lifetime miles traveled can be found in Chapter 4 of the Joint 

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EPA Response to Comments 

Technical Support Document. NHTSA’s response to this issue can be found in Chapter VIII of 

NHTSA’s Final Regulatory Impact Analysis. 

5.4 Temporary Lead-time and Small Volume Manufacturers 

5.4.1 Temporary Lead-time Program 

Organization:Jaguar Land Rover 

Mercedes-Benz (Daimler AG) 

Association of International Automobile Manufacturers (AIAM) 

Alliance of Automobile Manufacturers (Alliance) 

Volkswagen Group of America (Volkswagen) 

Toyota Motor North America 

BMW of North America, LLC (BMW) 

Center for Biological Diversity 

Public Citizen and Safe Climate Campaign 

Union of Concerned Scientists 

American Council for an Energy Efficient Economy 

Sierra Club 

National Automobile Dealers Association (NADA) 

Society of Motor Manufacturers and Traders Limited 

Porsche Cars North America, Inc. 

New York State Department of Environmental Conservation 

Mass Comment Campaign (2,332) (unknown organization) 

Pendleton, Tom 

Comment: 

Jaguar Land Rover 

Following separation from Ford Motor Company in June 2008, JLR has become a low volume 

niche manufacturer producing on average 60,000 vehicles (per model year) across both brands 

for the US market. In California JLR is recognized as an Intermediate Volume Manufacturer and 

consequently adheres to alternative emissions regulations. Prior to separation, JLR comprised 

just 3% of Ford's US Passenger Car and Light Duty Truck fleet. [OAR-2009-0472-7504, p.2] 

The Temporary Lead-Time Allowance Alternative Standard enables qualifying manufacturers to 

achieve a target which is 125% of the footprint based target for a limited number of vehicles 

between 2012 and 2015. This flexibility was recognized and supported by the wider industry in 

the Alliance of Automobile Manufacturers comments on this rule. [OAR-2009-0472-7504, p.6] 

JLR also submitted substantial information regarding their product plans and emissions reduction 

capabilities. This information was submitted as confidential business information. 

Mercedes-Benz (Daimler AG) 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

The Temporary Lead Time Allowance Alternative Standards (TLAAS) is critical to ensuring that 

the National Program actually works. EPA has carefully constructed the TLAAS to provide 

essential lead time for limited-line, lower-volume manufacturers to transition to a GHG program 

that is devoid of the compliance alternative available in the CAFE program. As a mechanism to 

provide lead time to a defined subset of manufacturers, the TLAAS falls squarely within and is 

an appropriate exercise of EPA’s discretion. 

When prescribing regulations to reduce air pollutants, the Clean Air Act directs EPA to consider 

the time “necessary to permit the development and application of the requisite technology.” 42 

U.S.C. § 7521(a)(2). The Clean Air Act entrusts the scope of lead-time allowances to the sound 

discretion of EPA. See, e.g., Husqvarna AB v. EPA, 254 F.3d 195, 202 (D.C. Cir. 2001) 

(showing lead-time provisions evaluated by courts for “substantial evidence”); Natural 

Resources Defense Council, Inc. v. EPA, 22 F.3d 1125, 1137-40 (D.C. Cir. 1994) 

(acknowledging that EPA has authority to select implementation deadlines where statute does 

not specify deadlines explicitly). 

Courts have repeatedly deferred to the Agency’s evaluation of the time needed to implement the 

technology contemplated in a new rule. See National Resources Defense Council, Inc. v. EPA, 

655 F.2d 318, 331 (D.C. Cir. 1981). This is largely because courts have recognized that the 

Agency is best placed to evaluate the various factors that tell in favor of lead time. See, e.g., 

Geier v. American Honda Motor Co., Inc., 529 U.S. 861, 879 (2000) (acknowledging four 

factors cited by NHTSA justifying the lead-time period for passive restraints in automobiles); 

Sierra Club v. EPA, 325 F.3d 374, 378 (D.C. Cir. 2003) (acknowledging the Agency’s discretion 

to consider various factors in fashioning lead-time provisions). 

Indeed, EPA has previously implemented or supported targeted lead-time provisions, similar to 

the TLAAS, with the approval of the federal courts. When promulgating new levels of 

acceptable lead additives in gasoline, for example, EPA “exempted small refiners from the lead 

content rules . . . in recognition of the special lead-time problems faced by this group.” Similarly, 

EPA’s 1997 Rule concerning Compliance Assurance Monitoring (CAM) incorporated a 

staggered lead-time provision that afforded different “sources” different amounts of time to 

comply. 

EPA has properly recognized the need for limited-line, lower-volume manufacturers to be 

accorded sufficient lead time to enable their fleets to transition to the structure of the GHG 

program. Significantly, the TLAAS does not alter these companies’ responsibility to comply, but 

rather makes allowance so that the standard applicable to these companies better reflects the 

traditional composition of their fleets in the U.S. market during the model years covered by this 

regulation. The necessity and structure of the TLAAS fall squarely within the types of lead time 

allowances EPA has adopted and the federal courts have previously approved as an appropriate 

exercise of agency authority under the Clean Air Act. 

Just as with the passive restraint phase-in upheld in Geier, various considerations support the 

TLAAS. First, the proposed standards are aggressive and will require not only the provision of 

various new technologies, but also a transition of the fleet. This transition requires additional 

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EPA Response to Comments 

flexibilities for limited-line manufacturers with fewer vehicles and lower-volumes able to be 

transitioned in the shorter term. 

Second, the program eliminates the traditional compliance alternative available to limited-line 

manufacturers in the CAFE program. Companies that have previously met their obligations 

through monetary payment in order to continue to offer substantially advanced vehicles must 

transition to a new regulatory regime in which that option is no longer available. 

Third, the TLAAS helps to provide leeway for industry leaders such as DAG to continue to 

pioneer advanced technologies, such as fuel cell and full battery electric vehicles, while 

simultaneously meeting the aggressive standards applicable to their lower-volume fleets. As 

such, the TLAAS continues to facilitate the development of new technology. 

Fourth, recognizing that the companies entitled to the TLAAS have also been technology 

leaders, the TLAAS promotes further public acceptance of new powertrains and furthers the 

commercialization of new vehicle types. This is particularly significant since DAG’s consumer 

base (like that of similarly situated companies) is often more able and more willing to try new 

technology – and especially new vehicle technologies – than the majority of the public. 

Finally, the benefits far outweigh the costs. EPA’s own data confirms that any adverse 

environmental impact from these lead-time provisions will be negligible. The agency estimates 

that the maximum potential impact of the TLAAS is for GHG emissions to increase by no more 

than 0.4% over the lifetime of the affected vehicles. Yet, by encouraging the further 

commercialization of more advanced powertrains during the same time frame, the longer term 

GHG benefits are substantial. See Bluewater Network, 372 F.3d at 412. [OAR-2009-0472­

7193.2, p.5] 

[Mercedes-Benz also submitted these comments as testimony at the New York public hearing. 

See docket number EPA-HQ-OAR-2009-0472-4621, pp. 51-52.] 

Alliance of Automobile Manufacturers (Alliance) 

In general the Alliance supports all aspects of the flexibilities that EPA has proposed for 

compliance, including the provisions of the Temporary Lead-time Allowance Alternative 

Standards (TLAAS). Some Alliance member companies intend to file separate comments 

regarding additional flexibilities beyond TLAAS for very small volume manufacturers (below 

100.000 units/year). [OAR-2009-0472-6952.1, p.8] 

Volkswagen Group of America (Volkswagen) 

An important aspect of the EPA proposal is the EPA's Temporary Lead-time Allowance 

Alternative Standard (TLAAS) fleet. Volkswagen supports this concept and believes the 

Administration and the EPA realized that some manufacturers may need additional time and 

flexibility to adjust their product plans to a new regulation administered under the Clean Air Act. 

The TLAAS provision will allow smaller vehicle manufacturers that have paid CAFE fines in the 

past or smaller manufacturers with a limited product line additional time and flexibility to 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

prepare for a new era of fuel economy and GHG control. We support the EPA and the White 

House efforts to create a fair and balanced transitional period that allows all manufacturers the 

ability to react to these very challenging and historic proposed regulations. [OAR-2009-0472­

7210.1, p.3] 

[[Volkswagen also submitted these comments as testimony at the Detroit public hearing, See 

docket number EPA-HQ-OAR-2009-0472-6185, p. 113.]] 

With regards to the additional restrictions the EPA has applied to the TLAAS pathway, 

Volkswagen believes that these restrictions are contrary to the concept of providing flexibility to 

the regulation for smaller volume automakers. The EPA has proposed that manufacturers 

choosing to utilize the TLAAS provision can only do so if all existing banked credit is 

transferred within the manufacturer's fleets to minimize debits and all banked credit available 

within the manufacturer's fleet is exhausted. Volkswagen does not believe that the restrictions 

are necessary. Our understanding is that the EPA already accounted for the GHG impact of the 

TLAAS fleet assuming that all manufacturers that qualified for the provision utilized it to the 

maximum extent possible. It is also our understanding that the air quality impact is negligible 

even if the TLAAS provision is fully utilized by all manufacturers qualified to use it. Per the 

EPA's calculation cited on page 49522 of the notice, if every manufacturer eligible for the 

TLAAS utilized the option to the fullest extent, the increase on the total fleet GHG emissions is 

less that 0.4 percent. Due to this small impact we do not see the need to place additional 

restrictions on the use of a potential TLAAS fleet. [OAR-2009-0472-7210.1, p.3] 

Toyota Motor North America 

Toyota understands that additional lead time through relaxed standards may be necessary for the 

unique circumstances described in the proposal. To ensure the provisions are limited to the 

intended purpose and to avoid potential gaming, Toyota agrees that robust conditions and 

restrictions must govern access to and continued use of the program. In particular, Toyota fully 

supports the requirement that all credits must be exhausted before entering the TLAAS program 

and that credits may not be banked while participating in the program. The ability to participate 

in the program while having a positive credit balance would indicate the TLAAS provision is 

unnecessary. To ensure a level playing field, it is critical that the TLAAS program encourages 

the proper investment in CO2 compliance technologies and a timely exit from the program. 

[OAR-2009-0472-7291, p.32] 

BMW of North America, LLC (BMW) 

BMW sells neither pickup trucks nor lightweight large-wheelbase vehicles that receive special 

flexibility in the calculation method and curves. Based on a projection of the composition of 

BMW's fleet in model year 2016, EPA estimates using the footprint-based calculation that 

BMW's fleet average will need to meet a nearly 4% more stringent fleet standard than the 

projected combined US fleet average of 250 grams CO2 /mile. At an average 4% reduction per 

year for the US fleet, this means BMW will have to meet an extra year's worth of reductions by 

2016. Other limited-line manufacturers are in the same situation. Therefore, the greenhouse gas 

5-39 
EPA Response to Comments 

and CAFE compliance options for flexibility outlined in this proposal are, in our view, essential 

to the successful and fair implementation of a national program. [OAR-2009-0472-7145.1, p.5] 

In particular, the proposed optional temporary lead-time allowance alternative standards that 

would be available in model years 2012-2015 for auto manufacturers such as BMW with model 

year 2009 U.S. vehicle sales of less than 400,000 is a fair option for manufacturers who sell 

'feature-dense' vehicles and no pickup trucks. Furthermore, it will be limited to a maximum of 

100,000 vehicles total for 4 years, and ends in model year 2015, before the most stringent target 

year of 2016. This flexibility is needed because most of the companies with limited lines will 

have to meet a more stringent fleet standard by 2016 than full-line manufacturers. [OAR-2009­

0472-7145.1, p.5] 

[BMW of North America also submitted these comments as testimony at the New York public 

hearing, See docket number EPA-HQ-OAR-2009-0472-4621, pp. 133-135.] 

Now, TLAAS may seem unusual to some, but it must be remembered that many of the 

companies with limited lines will have to meet a more stringent fleet standard by 2016 than full 

line manufacturers. TLAAS is so constructed and the other components of flexibility are so 

designed that no one gets a free ride. Every manufacturer contributes their fair share to the 

improvement. [These comments were submitted as testimony at the New York public hearing. 

See docket number EPA-HQ-OAR-2009-0472-4621, p. 135.] 

National Automobile Dealers Association (NADA) 

The proposed TLAAS provides additional compliance lead time for certain manufacturers that 

historically may have paid penalties in lieu of compliance under CAFE. The necessity for 

TLAAS demonstrates the folly of trying to regulate fuel economy under the CAA, a statute that 

was not designed for that purpose. Since, as is discussed below, the CAA’s mobile source 

penalty structure is particularly ill-suited for fuel economy regulation, the TLAAS was devised 

to avoid driving certain automakers out of the U.S. market. Importantly, manufacturers who will 

qualify for this program are committed to continuous fuel economy improvements, but tend to be 

narrow line manufacturers with generally heavier and more powerful vehicles. [OAR-2009­

0472-7182.1, p.7] 

[National Automobile Dealers Association also submitted these comments as testimony at the 

New York public hearing, See docket number EPA-HQ-OAR-2009-0472-4621, pp. 88-89] 

Society of Motor Manufacturers and Traders Limited 

The proposed temporary lead-time alternative allowance standard and small entity conditional 

exemption will not, in their proposed format, offer a suitable solution for UK based niche and 

small volume manufacturers. SMMT fully expects its individual members to be making more 

detailed submissions to EPA/NHTSA to set out some possible solutions. SMMT hopes that these 

can be developed by the stakeholders to ensure challenging yet achievable long term targets for 

manufacturers can be set. [OAR-2009-0472-7229.1, p.1] 

5-40
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

Within the EPA/NHTSA proposal the ‘Temporary Lead-time Alternative Allowance Standard’ 

(TLAAS) to 2016 is welcome. This allows manufacturers selling less than 400,000 cars to apply 

for a target of 125% of proposed industry-wide footprint target level. However, due to the high 

initial target faced by UK niche/SVMs this flexibility is insufficient to enable them to comply 

with the standard. The benefit of TLAAS to niche manufacturers is also limited by the 100,000 

volume cap on eligible vehicles, compelling such manufacturers to use their 100,000 allowance 

in the early years of the rule, thus increasing the shortfall in later years. SMMT would therefore 

support an increase in this cap to 200,000 over the same period. In addition, the unrealistically 

high footprint based target for niche manufacturers would remain unachievable once the benefit 

of the TLAAS has ended. SMMT would therefore support an extension in the provision of the 

TLAAS or an equivalent for a further period to be agreed with the regulatory 

authorities. [OAR-2009-0472-7229.1, pp.3-4] 

An alternative approach to provide additional flexibilities for niche manufacturers would be to 

adopt a similar mechanism to the EU CO2 legislation within the existing TLAAS provision. 

SMMT would support such a provision, providing an alternative CO2 reduction target for 

manufacturers who utilize the TLAAS but may still need additional flexibility to comply. Such a 

target would exceed the estimated industry average reduction requirement of 22% but be lower 

than the fleet based target faced by qualifying manufacturers. This target could be available for 

manufacturers responsible for fewer than 100,000 new Passenger Car and Light Duty Truck sales 

in the US per model year in order to minimize the impact on the overall US car fleet. [OAR2009-0472-7229.1, p.4] 

The proposed TLAAS allowance is also only available to vehicle manufacturers with vehicles 

for sale in MY 2009. Some SVMs are not currently selling into the US market, in part due to the 

current economic climate. They would therefore be excluded from being able to use the TLAAS 

in future. [OAR-2009-0472-7229.1, p.4] 

Porsche Cars North America, Inc 

Unlike the situation with CAFE where a manufacturer has the ability to pay a CAFE penalty for 

failure to comply with the fleet average requirement, this is not the case with the C02 rule 

proposed by EPA. As discussed in the NPRM, if a manufacturer does not meet the fleet average 

standard and the manufacturer is unable to acquire credits to offset its debits, then the 

manufacturer will likely pay civil penalties and certificates for vehicles in production or already 

sold with be voided. Absent credits, some modification to the credit program, deficit reduction 

measures, or an alternative standard, the imposition of these enforcement measures will almost 

certainly force Porsche out of the U.S. market. There is simply no business case to support 

buying back vehicles or paying large civil penalties. And since the footprint approach makes 

compliance not feasible for many years, we would anticipate a ratcheting up of the civil penalties 

to a point where in a short period of time they could be far larger than any profit associated with 

selling the vehicle. As a result, we believe that the rule as proposed, absent some modification to 

the rule or a merger with a larger multi-line manufacturer, we would be forced us out of the 

market. Based on today's numbers, this could result in the closure of 86 standalone Porsche 

dealers who employ 4,049 persons. It could also negatively impact another 115 dualed dealers 

who employ 9,933 persons. Two hundred fifty plus persons employed by Porsche Cars North 

5-41 
EPA Response to Comments 

America, Inc. would also lose their jobs. Port jobs and shipping jobs would also be lost. These 

are the direct job losses that could be expected. There are certainly many more indirect supplierrelated jobs linked to Porsche both in the U.S. and abroad that would be lost as well. [OAR2009-0472-7431.1, pp.8-9] 

First, for small limited-line manufacturers like Porsche, the required cumulative percent 

improvement relative to a manufacturer's current baseline performance should not exceed the 

annual percent improvement which the agencies' are using to establish standards for larger 

multiline manufacturers. In other words, if EPA and DOT finalize standards based on a goal of 

improving fuel economy annually by 5%, the percent improvement required of small niche 

limited-line manufacturers like Porsche should then also not exceed the 5% per year 

improvement which EPA and DOT believe to be the maximum feasible improvement 

practicable. Hence, for the 2012MY to 2016MY period, relative to our current baseline 

performance, the improvement required of small niche limited-line manufacturers like Porsche 

should not exceed 25% (5% times five model years). This limit would serve to correct for the 

fact that the assumed relationship of FE/C02 vs. footprint does not work well for our sports carbased passenger car fleet, and importantly, the limit would not reduce the burden on Porsche in a 

way that is inconsistent with the goal of the regulation. 

Second, as an alternative to the modification above, we would recommend that EPA modify the 

proposed Temporary Lead-time Allowance Alternative Standards (TLAAS) provision by 

establishing standards for small limited line manufacturers that are consistent with the 5% per 

year limit. Given that it is EPA's intention to eventually establish standards through the 2020 

model year, we recommend that the TLAAS provision be made available until that time. 

Third, EPA should modify the credit program so as to provide manufacturers greater certainty 

that credits will actually be available. Because our competitors are unlikely to help us stay in the 

market by selling us credits, we recommend that EPA modify the rule to specify that 

manufacturers' expiring credits, which would otherwise be worthless, be sent to an EPA credit 

pool account for acquisition by those companies with deficits. We would recommend that 

manufacturers tasked with implementing the largest percent improvements be given priority in 

acquiring credits from this account. Manufacturers with credit balances should not be permitted 

to use this pool to acquire additional credits. Also, to assist manufacturers in future compliance 

planning, EPA/DOT should publish annual reports online showing the credit/deficit balances for 

each manufacturer. [OAR-2009-0472-7431.1, pp.9-11] 

Center for Biological Diversity 

The Agencies propose an exception that would provide for an additional temporary leadtime 

allowance for manufacturers that produce less than 400,000 vehicle sales per year and make 

“high performance” vehicles with high CO2 emissions, but sell no high mileage cars against 

which to balance those emissions. Proposed Rule, 74 Fed. Reg. 49483.20 No such exception is 

allowed under either EPCA or the Clean Air Act. Moreover, it would reward manufacturers 

flouting the rules while penalizing those that have complied and indeed surpassed past standards. 

In addition, such manufacturers have other options: they could begin to offer vehicles that truly 

are “high performance” in terms of fuel efficiency; they could “decreas[e] the mass of the 

5-42
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

vehicles and/or decreas[e] the power output of the engines,” 74 Fed. Reg. 49554; they could 

purchase credits from other manufacturers; or they could take advantage of “off-cycle technical 

credits” the Agencies intend to introduce – i.e., those that improve fuel efficiency but are not 

captured by current testing methodologies, such as solar panels, adaptive cruise control, or active 

aerodynamics. In short, this proposal is bad public policy, unnecessary, and illegal. [OAR-2009­

0472-7265.1, p. 15] 

Public Citizen and Safe Climate Campaign 

EPA proposes to allow all but the six largest manufacturers to create a separate averaging fleet 

for up to a total of 100,000 vehicles for model years 2012-2015. Currently, the six largest 

manufacturers are Toyota, GM, Ford, Honda, Chrysler and Nissan, meaning that manufacturers 

like BMW and Daimler are given this dispensation even though they produce 400,000 vehicles 

per year. Companies like BMW and Daimler, who pride themselves on being technologically 

advanced, should be subject to the same standards as Ford, GM, and Toyota. EPA explains that 

the purpose of providing additional lead time is to permit manufacturers who have traditionally 

met their CAFE obligations by paying fines to come into compliance with the greenhouse gas 

emissions program. The CAA does not have a mechanism for manufacturers to pay fines to come 

into compliance, and the CAA penalties are much steeper than the CAFE fines. [OAR-2009­

0472-7050.1, p.7] 

We urge the EPA to retain its position on trading from a company’s special averaging fleet to it's 

primarily fleet. If the agency does not explicitly prohibit such trades, it might create an incentive 

for manufacturers to take advantage of the TLAAS system to generate additional credits. [OAR2009-0472-7050.1, p.7] 

Union of Concerned Scientists 

While consumers and the environment would be better off if all automakers had to meet EPA’s 

standards on the same schedule, we acknowledge the EPA’s rationale for this allowance because 

its effect will be to phase out NHTSA’s system of fines that allow some manufacturers to pay to 

avoid meeting fuel economy standards. Manufacturers that have previously relied on the 

payment of fines as a regulatory compliance option no longer have that option under the Clean 

Air Act, and limited interim year leniency at the level proposed will help transition those 

manufacturers to the more stringent system. That said, in order to prevent this flexibility from 

becoming simply another loophole eroding energy and emissions savings, it is critical that the 

temporary lead-time allowance alternative standards be kept at the proposed levels and, further, 

kept as a temporary measure. This is a transition mechanism that will allow certain 

manufacturers to shift from one form of compliance to another; broadening the scope of these 

[OAR-2009-0472-7181.1, p.11] allowances or extending their use beyond this period would 

undermine the goal of assisting in a swift transition to adoption of clean technologies. [OAR2009-0472-7181.1, p.12] 

Additionally, with respect to EPA’s proposal to restrict the use of banking and trading between 

companies of credits in the primary program in years in which the TLAAS is being used, UCS 

concurs and supports such a restriction. [OAR-2009-0472-7181.1, p.12] 

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EPA Response to Comments 

American Council for an Energy Efficient Economy 

The Temporary Lead Time Allowance Alternative Standards (TLAAS) should be eliminated, or 

at least more carefully tailored to meet the needs of low-volume manufacturers. The suggested 

sales cutoff of 400,000 is too high and allows certain manufacturers that fall just below that 

cutoff to shirk their fuel economy and GHG reduction responsibilities. It also discriminates 

against U.S. manufacturers by providing luxury European manufacturers with more lead time to 

adapt to new fuel economy and GHG standards. These manufacturers face ambitious GHG 

reduction standards in their primary (EU) markets, and permitting them to delay their responses 

to new standards on either side of the Atlantic will not serve any parties well. 

ACEEE’s estimates of possible per-vehicle emissions increases resulting from the TLAAS start 

at 2.4 grams per mile in 2012 and decline to 0.5 grams per mile in 2016. These figures are very 

close to the Upper Bound Scenario provided by EPA (DRIA p.5-43). EPA estimates that the 

actual values will be only 15-20 percent of these upper bounds, but it is unclear how the agency 

arrived at those estimates. 

Recommendations: 1. Exclude the TLAAS from the final rule. 2. If the TLAAS are included, 

reevaluate the criteria for eligibility and ensure that no extension of the program occurs in future 

rulemakings. EPA should also justify its estimate of the likely impact of the alternative 

standards. 

[ACEEE also submitted these comments as testimony at the New York public hearing, See 

docket number EPA-HQ-OAR-2009-0472-4621, pp. 139-140.] 

Sierra Club 

Under the Clean Air Act, automakers will no longer be able to pay fines as a compliance option. 

EPA’s proposal for Temporary Lead-time Allowance Alternative (TLAA) Standards, if included 

in the final rule, should contain the limitations in the proposed rule and EPA should be clear that 

TLAA Standards are temporary and will not be revived in standards beyond 2016. Many 

automakers who stand to benefit from this program already meet more stringent standards in the 

European Union. We support the EPA proposal to restrict the use of banking and trading of 

credits between companies in the primary program during the TLAA Standards timeframe. 

[OAR-2009-0472-7278.1, p.15] 

New York State Department of Environmental Conservation 

EPA proposes an interim program for intermediate volume manufacturers, the Temporary Leadtime Allowance Alternative Standards, which allows some vehicles to be certified to a 

significantly less stringent standard: Manufacturers making use of these provisions [OAR-2009­

0472-7454, p.1] should not be accumulating credit balances else where in the model years in 

which they are utilizing the Temporary Lead-time Allowance Alternative Standards. [OAR2009-0472-7454, p.2] 

Mass Comment Campaign (2,332) (unknown organization) 

5-44
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

The 'luxury loophole' for small volume manufacturers must not become a boon to manufacturers 

currently meeting or exceeding standards. Any manufacturer taking advantage of extra lead time 

must be barred from trading credits. [OAR-2009-0472-5747, p.1] 

Pendleton, Tom 

The proposed rules provide that automakers that sell fewer than 400,000 vehicles in the United 

States would be allowed to meet a weaker standard to keep per-unit costs down. This group 

includes Mercedes-Benz, BMW, Volkswagen and Subaru. 

Mercedes Benz should NOT be eliminated from this standard as they also have a diesel powered 

high mileage vehicle in their "A" series that should do well here. Subaru could also easily meet 

the new standards even if forced to do so by bouncing the Tribeca and improving the remainder 

of the fleet. BMW and VW both have high mileage diesels and should also be forced to adhere to 

the new standards... 

The BMW, Ford, Mercedes-Benz, Subaru and VW companies operate in the EU with those strict 

standards so why can't they do the same here in the USA? Is this political gamesmanship or 

something uglier? [OAR-2009-0472-2094, pp. 2-3] 

EPA Response: 

Base TLAAS Program 

After carefully considering the public comments, EPA continues to believe that the TLAAS 

program is essential in providing necessary lead time and flexibility to eligible manufacturers in 

the early years of the standards. First, EPA believes that it is acting well within its legal 

authority in adopting the various TLAAS provisions. EPA is required to provide sufficient lead 

time for industry as a whole for standards under section 202 (a) (1), which mandates that 

standards are to take effect only “after providing 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, although section 

202 (a)(1) does not explicitly authorize this or any other specific lead time provision, it affords 

ample leeway for EPA to craft provisions designed to provide adequate lead time, and to tailor 

those provisions as appropriate. See Husqvarna AB v. EPA, 254 F. 3d 195, 202 (D.C. Cir. 2001) 

(upholding provisions adopted under section 213 (b) (a provision worded nearly identically to 

section 201 (a) (2) with respect to consideration of cost and lead time) which allowed for 

additional lead time for manufacturers with smaller production levels). The types of technology 

penetrations required for TLAAS-eligible vehicles in the program’s earlier years raise critical 

issues as to adequacy of lead time. As discussed in the EPA feasibility analysis provided in 

preamble section III.D.6 and III.D.7, several manufacturers eligible for TLAAS are projected to 

face a compliance shortfall in MY2016 without the TLAAS program. This is projected to occur 

even with the full application of technologies assumed by the OMEGA Model, including hybrid 

use of up to 15 percent. These manufacturers include BMW, Daimler, Jaguar Land Rover, 

Porsche, and Volkswagen In addition, the smaller volume manufacturers of this group (i.e., 

Jaguar Land Rover and Porsche) face the greatest shortfall (see preamble Table III.D.6-4). Even 

5-45 
EPA Response to Comments 

with TLAAS, these manufacturers will need to take technology steps above and beyond those of 

other manufacturers to comply with standards. These manufacturers have relatively few models 

with high baseline emissions and this flexibility allows them additional lead time to adapt to a 

longer term strategy of meeting the final standards within their vehicle redesign cycles. Also, for 

CAFE, they have paid fines occasionally, and therefore have greater emissions reductions to 

achieve in order to comply with standards. 

Second, EPA has carefully evaluated other means that eligible manufacturers can use to meet the 

standards, such as utilizing available credit opportunities. Indeed, eligibility for the TLAAS, and 

for temporary deferral of regulation for very small volume manufacturers, is conditioned on first 

exhausting the various programmatic flexibilities including credit utilization. At the same time, 

a basic reason certain manufacturers are faced with special lead time difficulties is their inability 

to generate credits which can be then be averaged across their fleet because of limited product 

lines. And although purchasing credits is an option under the program, there are no guarantees 

that credits will be available. Historic practice in fact suggests that manufacturers do not sell 

credits to competitors. Although some of the smaller manufacturers covered by the TLAAS 

program may be in a position to obtain credits, they are not likely to be available for the TLAAS 

manufacturers across the board in the volume needed to comply without the TLAAS provisions. 

At the same time the TLAAS provisions have been structured such that any credits that do 

become available would need to be used before a manufacturer would turn to the more restricted 

and limiting TLAAS provisions. 

As discussed in preamble Section III.C., off-cycle credits are available if manufacturers are able 

to employ new and innovative technologies not already in widespread use, which provide realworld emissions reductions not captured on the current test cycles. Further, these credits are 

eligible only for technologies that are newly introduced on just a few vehicle models, and are not 

yet in widespread use across the fleet. The magnitude of these credits are highly uncertain 

because they are based on new technologies, and EPA is not aware of any such technologies that 

would provide enough credits to bring these manufacturers into compliance without TLAAS lead 

time flexibility. Manufacturers first must develop these technologies and then demonstrate their 

emissions reductions capabilities, which will require lead time. Moreover, the technologies 

mentioned in the proposal which are the most likely to be eligible based on present knowledge, 

including solar panels and active aerodynamics, are likely to provide only small incremental 

emissions reductions. 

We agree with the comment from Citizens for Biodiversity that reducing vehicle mass or power 

are potential methods for reducing emissions that should be employed by TLAAS-eligible 

manufacturers to help them meet standards. However, based on our assessment of the lead time 

needed for these manufacturers to comply with the standards, especially given their more limited 

product offerings and higher baseline emissions, we believe that additional time is needed for 

them to come into compliance. EPA can permissibly consider the TLAAS and other 

manufacturers’ lead time, cost, and feasibility issues in developing the primary standards and has 

discretion in setting the overall stringency of the standards to account for these factors. Natural 

Resources Defense Council v. Thomas, 805 F. 2d 410, 421 (D.C. Cir. 1986) (even when 

implementing technology-forcing provisions of Title II, EPA may base standards on an industrywide capability “taking into account the broad spectrum of technological capabilities as well as 

5-46
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

cost and other factors” across the industry). EPA is not legally required to set standards that 

drive these manufacturers or their products out of the market, nor is EPA legally required to 

preserve a certain product line or vehicle characteristic. Instead, EPA has broad discretion under 

section 202(a)(1) to set standards that reasonably balance lead time needs across the industry as a 

whole and that consider vehicle availability. In this rulemaking, EPA has consistently 

emphasized the importance of obtaining very significant reductions in emissions of GHGs from 

the industry as a whole, and obtaining those reductions through regulatory approaches that avoid 

limiting the ability of manufacturers to provide model availability and choice for consumers. 

The primary mechanism to achieve this is the use of a footprint attribute curve in setting the 

increasingly stringent model year standards. The TLAAS provisions are a temporary and 

strictly limited modification to these attribute standards allowing the TLAAS manufacturers lead 

time to upgrade their product lines to meet the 2016 MY GHG standards. EPA has made a 

reasonable choice here to preserve the overall stringency of the program, and to afford increased 

flexibility in the program’s early years to a limited class of vehicles to assure adequate lead time 

for all manufacturers to meet the strictest of the standards by MY 2016. 

DAG comments that the TLAAS program also allows them and other smaller volume 

manufacturers to continue to pioneer advanced technologies, such as fuel cell and full battery 

electric vehicles, while simultaneously meeting the aggressive standards applicable to their 

lower-volume fleets. As such, the TLAAS continues to facilitate the development of new 

technology. EPA understands that some smaller volume manufacturers are developing advanced 

technologies to achieve future emissions reductions and the TLAAS program provides them with 

more time to continue with the development of technology. 

EPA agrees with comments that the program should remain limited and temporary. Although 

EPA has added some limited additional flexibility and lead-time for manufacturers with annual 

sales below 50,000 vehicles, EPA has tailored the program as narrowly as possible to address 

lead-time concerns and the program will be phased-out by MY 2016 for most eligible 

manufacturers. 

With regard to the 400,000 unit eligibility cut-point, ACEEE comments that the cut-point is too 

high and “allows certain manufacturers that fall just below that cutoff to shirk their fuel economy 

and GHG reduction responsibilities. It also discriminates against U.S. manufacturers by 

providing luxury European manufacturers with more lead time to adapt to new fuel economy and 

GHG standards.” EPA continues to believe the 400,000 unit cut-point is appropriate and is 

retaining it. For reasons described above, manufacturers falling below this threshold need the 

additional lead-time provided by TLAAS. EPA reviewed the sales volumes of manufacturers 

over the last few years, and determined that manufacturers below this level typically fit the 

characteristics discussed above, and manufacturers above this level did not. Thus, EPA chose 

this level because it functionally identifies the group of manufacturers (i.e., manufacturers who 

have traditionally paid CAFE fines instead of complying with the CAFE fleet average, and as a 

result at least part of their vehicle production currently has significantly higher CO2 and lower 

fuel economy levels than the industry average), recognizing that there is nothing intrinsic in the 

sales volume itself that warrants this allowance. EPA was not able to identify any other 

objective criteria that would more appropriately identify the manufacturers and vehicle fleets 

described above. 

5-47 
EPA Response to Comments 

This approach seeks to balance the need to provide additional lead-time without reducing the 

environmental benefits of the proposed program. EPA believes that 100,000 units over four 

model years achieves an appropriate balance as the emissions impact is quite small, but does 

provide companies with some flexibility during MY 2012 – 2015. For example, for a 

manufacturer producing 400,000 vehicles per year, this would be a total of up to 100,000 

vehicles out of a total production of up to 1.6 million vehicles over the four year period, or about 

6 percent of total production. In addition, EPA has quantified the potential impact of the 

program (see RIA chapter 5A). As shown there, the likely impact of the program is less than a 

1% loss of emission reductions (assuming feasibility in early model years for all manufacturers – 

an unlikely assumption) and less than 3% even assuming the unrealistic possibility of completely 

maximized use of the program. Given the very considerable issues relating to needed lead time 

for TLAAS-eligible manufacturers and these modest emission increases associated with the 

provision, EPA believes it a reasonable balance of considerations of technological feasibility and 

lead-time to provide the temporary allowance. See Sierra Club v. EPA, 325 F. 3d 374, 378 (D.C. 

Cir. 2003) (weighing of statutory factors of cost and lead time in determining stringency and 

phasing in of technology-forcing standards). EPA also notes that the provisions apply not only to 

European manufacturers but to all manufacturers below the eligibility cut-point. 

In response to comments that certain TLAAS-eligible manufacturers could meet standards by 

selling diesels, EPA recognizes that diesels offer CO2 emissions reductions. However, due to the 

high cost of diesel technology, EPA is not projecting significant market penetration for diesels. 

EPA also notes that diesel fuel has a higher carbon concentration than gasoline and so diesels are 

not as effective from a CO2 stand-point as they are from a fuel economy perspective. 

EPA does not agree with NADA comments that the “necessity for TLAAS demonstrates the 

folly of trying to regulate fuel economy under the CAA”. The CAA provides broad discretion 

for EPA to consider the lead-time needed by manufacturers and the ability to provide additional 

flexibility as needed. Provisions are often included in CAA-based mobile source rulemaking to 

address lead-time issues and these provisions are tailored to the particular needs for the rule. 

Additional Flexibility for Smaller Volume Manufacturers 

EPA received extensive comments that the TLAAS program would not provide sufficient lead 

time and flexibility for companies with sales of significantly less than 400,000 vehicles. Jaguar 

Land Rover, which separated from Ford in 2008, commented that it sells products only in the 

middle and large vehicle segments and that its total product range remains significantly more 

limited in terms of segments in comparison with its main competitors which typically have 

approximately 75% of their passenger car fleet in the small and middle segments. Jaguar Land 

Rover also commented that it has already committed $1.3 billion of investment to reducing CO2 

from its vehicle fleet and that this investment is already delivering a range of technologies to 

improve the fuel economy and CO2 performance of its existing vehicles. Jaguar Land Rover 

submitted confidential business information regarding their future product plans and emissions 

performance capabilities of their vehicles which documents their assertions. 

5-48
 
 

EPA Vehicle Program, Feasibility, and Estimated Impacts 

Porsche commented that their passenger car footprint-based standard is the most stringent 

of any manufacturer and this, combined with their high baseline emissions level, means that it 

would need to reduce emissions by about 10 percent per year over the 2012 – 2016 time-frame. 

Porsche commented that such reductions were not feasible. They commented that their 

competitors will be able to continue to offer their full line of products because the competitors 

have a wider range of products with which to average. Porsche further commented that their 

product development cycles are longer than larger competitors. Porsche recommended for small 

limited line niche manufacturers that EPA require an annual 5 percent reduction in emissions 

from baseline up to a total reduction of 25 percent, or to modify the TLAAS program to require 

such reductions. Porsche noted that this percent reduction would be in line with the average 

emissions reductions required for larger manufacturers. 

EPA also received comments from several very small volume manufacturers that, even with the 

TLAAS program, the proposed standards are not feasible for them, certainly not in the MY 

2012-2016 MY time frame. These comments are addressed in Section 5.4.2 

EPA carefully considered the comments of smaller volume manufacturers and believes 

additional lead time is needed. After assessing the issues raised by commenters, EPA believes 

there are two groups of manufacturers that need additional lead time. The first group includes 

manufacturers with annual U.S. sales of less than 5,000 vehicles per year. Comments regarding 

these small volume manufacturers are addressed in Section 5.4.2, below. The second group 

includes manufacturers with MY 2009 U.S. sales of less than 50,000 vehicles but above the 

5,000 vehicle threshold being established for small volume manufacturers. EPA has selected a 

cut point of 50,000 vehicles in order to limit the additional flexibility to only the smaller 

manufacturers with much more limited product lines over which to average. EPA has tailored 

additional TLAAS flexibility for these manufacturers as narrowly as possible to provide 

additional lead time only as needed by these smaller manufacturers. We estimate that the 

TLAAS program, including the changes below, will result in a total decrease in overall emissions 

reductions of about one percent of the total projected GHG program emission benefits. The basis 

for these estimates is provided in RIA Chapter 5 Appendix A. 

As discussed in the EPA feasibility analysis provided in section III.D.6 and III.D.7 of the 

preamble several manufacturers eligible for TLAAS are projected to face a compliance shortfall 

in MY2016 without the TLAAS program, even with the full application of technologies assumed 

by the OMEGA Model, including hybrid use of up to 15 percent. These include BMW, Daimler, 

Jaguar Land Rover, Porsche, and Volkswagen In addition, the smaller volume manufacturers of 

this group (i.e., Jaguar Land Rover and Porsche) face the greatest shortfall (see preamble Table 

III.D.6-4). Even with TLAAS, these manufacturers will need to take technology steps to comply 

with standards above and beyond those of other manufacturers. These manufacturers have 

relatively few models with high baseline emissions and this flexibility allows them additional 

lead time to adapt to a longer term strategy of meeting the final standards within their vehicle 

redesign cycles. 

For some of the companies such as Jaguar Land-Rover and Porsche, the reduction from baseline 

CO2 emissions required to meet the standards is clearly greater than for other TLAAS-eligible 

manufacturers (to say nothing of other manufacturers). Compared with other TLAAS-eligible 

5-49 
 

EPA Response to Comments 

manufacturers, these companies also have more limited fleets across which to average the 

standards. These companies have only a few vehicle models all of a similar utility, and thus their 

averaging abilities are extremely limited posing lead time issues of greater severity than other 

TLAAS-eligible manufacturers. In addition, with fewer models with which to average, there is a 

higher likelihood that phase-in requirements may conflict with normal product redesign cycles. 

EPA’s feasibility analysis provided in preamble Section III.D. shows that these companies face a 

compliance shortfall significantly greater than other TLAAS companies (see preamble Table 

III.D.6-4). . 

Therefore, for manufacturers with MY2009 U.S. sales of less than 50,000 vehicles, EPA is 

finalizing additional TLAAS compliance flexibility through model year 2016. These 

manufacturers will be allowed to place up to 200,000 vehicles in the TLAAS program in 

MY2012-2015 and an additional 50,000 vehicles in MY2016. To be eligible for the additional 

allotment above the base TLAAS level of 100,000 vehicles, manufacturers must demonstrate 

each year that they have diligently make a good faith effort to purchase credits from other 

manufacturers in order to comply with the base TLAAS program, but that sufficient credits were 

not available. Manufacturers must secure credits to the extent they are reasonably available from 

other manufacturers to offset the difference between their emissions reductions obligations under 

the base TLAAS program and the expanded TLAAS program. Manufacturers must document 

their efforts to purchase credits as part of their end of year compliance report. All other aspects 

of the TLAAS program, including the 1.25x adjustment to the standards and the credits provision 

restrictions, remain the same as described above for the same reasons. This will still require the 

manufacturers to reduce emissions significantly in the 2012-2016 time-frame and to meet the 

final emissions standards in MY2017. The standards remain very challenging for these 

manufacturers but these additional provisions will allow them the necessary lead time for 

implementing their strategy for compliance with the final, most stringent standards. 

The eligibility limit of 50,000 vehicles will be treated in a similar way as the 400,000 vehicle 

eligibility limit is treated, as described above. Manufacturers with model year 2009 U.S. sales of 

less than 50,000 vehicles are eligible for the expanded TLAAS flexibility. Manufacturers whose 

sales grow in later years above 50,000 vehicles without merger or acquisition will continue to be 

eligible for the expanded TLAAS program. However, manufacturers that exceed the 50,000 

vehicle limit through mergers or acquisitions will not be eligible for the expanded TLAAS 

program in the model year following the merger or acquisition, but may continue to be eligible 

for the base TLAAS program if the MY2009 sales of the new company would have been below 

the 400,000 vehicle eligibility cut point. The use of TLAAS by all the entities within the 

company in years prior to the merger must be counted against the 100,000 vehicle limit of the 

base program. If the 100,000 vehicle limit has been exceeded, the company is no longer eligible 

for TLAAS. 

Porsche commented that EPA should modify the credits program to provide manufacturers with 

greater certainty that credits will be available to purchase from other manufacturers. EPA is not 

finalizing any mechanisms that would compel manufacturers with credits to sell those credits to 

other manufacturers. It is not clear how to implement such mechanisms, but EPA will monitor 

the credits market, and EPA plans to make this type of information available to the public. 

5-50
 
 

EPA Vehicle Program, Feasibility, and Estimated Impacts 

Please see Section 5.10.1 for EPA’s full response to comments regarding data transparency and 

availability. 

In response to smaller volume manufacturer lead-time concerns, EPA is modifying the TLAAS 

program to provide smaller manufacturers with more lead-time, as noted above. 

Credit Restrictions 

EPA received several comments in support of the proposed credit restrictions for the TLAAS 

program including from Toyota, Public Citizen and Safe Climate Campaign, Union of 

Concerned Scientists, and Sierra Club. On the negative side, Volkswagen commented that the 

restrictions were not necessary, saying that the restrictions are counter to providing 

manufacturers with flexibility and that the emissions impacts estimated by EPA due to the full 

use of the program are small. However, EPA continues to believe that the restrictions are 

appropriate to prevent the potential gaming described below, and to ensure that the TLAAS 

program is used only by those manufacturers that have exhausted all other readily available 

compliance mechanisms and consequently have legitimate lead time issues. 

EPA is thus finalizing a number of restrictions on credit trading within the TLAAS program, as 

proposed. EPA is concerned that if credit use in the TLAAS program were unrestricted, some 

manufacturers would be able to place relatively clean vehicles in the TLAAS fleet, and generate 

credits for the primary program fleet. First, credits generated under TLAAS may not be 

transferred or traded to the primary program. A consequence of this restriction is that any 

unused credits under TLAAS expire after model year 2015 (or 2016 for manufacturers with 

annual sales less than 50,000 vehicles). EPA believes that this is necessary to limit the program 

to situations where it is needed and to prevent the allowance from being inappropriately 

transferred to the long-term primary program where it is not needed. 

Second, EPA is finalizing two additional restrictions on the use of TLAAS by requiring that for 

any of the 2012-2015 model years for which an eligible manufacturer would like to use the 

TLAAS, the manufacturer must use two of the available flexibilities in the GHG program first in 

order to try and comply with the primary standard before accessing the TLAAS -- i.e., TLAAS 

eligibility, which is premised on the need for additional lead time, is not available to those 

manufacturers with other readily-available means of compliance . Specifically, before using the 

TLAAS a manufacturer must: (1) use any banked emission credits from previous model years; 

and, (2) use any available credits from the companies’ car or truck fleet for the specific model 

year (i.e., use credit transfer from cars to trucks or from trucks to cars). That is, before using the 

TLAAS for either the car fleet or the truck fleet, the company must make use of any available 

intra-manufacturer credit transfers first. Finally, EPA is restricting the use of banking and 

trading between companies of credits in the primary program in years in which the TLAAS is 

being used. No such restriction is in place for years when the TLAAS is not being used. EPA 

continues to believe this provision is necessary to prevent credits from being earned simply by 

removing some high-emitting vehicles from the primary fleet. Absent this restriction, 

manufacturers would be able to choose to use the TLAAS for these vehicles and also be able to 

earn credits under the primary program that could be banked or traded under the primary 

program without restriction. 

5-51 
 

 

EPA Response to Comments 

Emissions Impact Calculations 

ACEE expresses two concerns regarding EPA’s analysis of emissions impacts associated with 

the TLAAS program: 1) that EPA did not provide documentation of the impact calculations for 

the TLAAS program, and 2) that EPA underestimated the impact of the program. 

Regarding the first point, a detailed methodology of the impact calculations concerning TLAAS 

was made available in DRIA chapter 5, Appendix A. In this final rule, similar calculations are 

documented in RIA Chapter 5, Appendix A. As in the proposal, the calculations are also 

separately available in the docket, in a spreadsheet titled “Achieved CO2 standards worksheet.” 

While ACEE provided contrasting estimates of TLAAS impacts, it did not provide its 

calculations. EPA disagrees with the commenter’s estimates of the impacts from the TLAAS 

program, and is concerned that several errors may have been made. It appears that the 

commenter may have projected the TLAAS impacts ending in MY 2016, but in fact the TLAAS 

program, for most eligible manufacturers (those above 50,000 vehicle sales but below 400,000 

sales) ends in 2015. Further, ACEE projected impacts that are near or above EPA’s highly 

unlikely “upper bound scenario” where every eligible manufacturer is projected to fully utilize 

the TLAAS program for the full program allotment, and place its largest vehicles in the program 

(RIA Chapter 5A). This would require companies such as Porsche and BMW to sell specific 

vehicle models (such as the Boxster and Phantom) in unprecedented numbers. 

EPA’s analysis shows that even if the TLAAS program was fully utilized, the emission impacts 

are still slight relative to the overall benefits of the program. Further, EPA considers it highly 

unlikely that every manufacturer will utilize the full TLAAS program for each year which the 

manufacturer is eligible. Several manufacturers which are eligible for the TLAAS program 

currently produce vehicle fleets with fuel economy ratings which are higher than required by the 

MY 2008 or MY 2011 standards. 

Further, utilizing the TLAAS program potentially offers several distinct disadvantages. The 

manufacturers with vehicles in the TLAAS program will need to be in compliance with the main 

program when the TLAAS program ends, and consequently need to be making continual 

progress toward meeting the MY2016 standard. Further, manufacturers utilizing the TLAAS 

program will be subject to several restrictions on credit banking and trading. 

EPA therefore disagrees with the commenter on both points. 

TLAAS Eligibility Comments 

Organization: Association of International Automobile Manufacturers (AIAM) 

 Ford Motor Company 

 National Automobile Dealers Association (NADA) 

Saab Automobile AB (Saab) 

Volvo Car Corporation 

 Cummins Inc. 

Comment: 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Association of International Automobile Manufacturers (AIAM) 

AIAM has one other serious concern with the TLAAS program as it is proposed by EPA. As 

proposed, “manufacturers with no U.S. sales in model year 2009 would not qualify for the . . . 

program.” See 74 FR at 49523. This criterion is patently unfair to manufacturers which may 

decide to market vehicles in the U.S. in the future but did not do so in the 2009 MY. EPA should 

redefine the program to allow such manufacturers to qualify for this program. Additionally, any 

new SVMs entering the market should be treated similarly as SVMs currently marketing vehicles 

in the U.S. [OAR-2009-0472-7123.1, p.11] 

[AIAM also submitted these comments as testimony at the Los Angeles public hearing. See 

docket LA EPA Hearing EPA-HQ-OAR-2009-0472-7283, pp. 28-32] 

National Automobile Dealers Association (NADA) 

The TLAAS should not be limited only to manufacturers with sales in the US in MY 2009. 

[OAR-2009-0472-7182.1, p.7] 

Ford Motor Company 

Temporary Lead-time Allowance Alternative Standards 

EPA proposes to allow 'temporary lead-time allowance alternative standards' (TLAAS) for 

manufacturers who sell vehicles in the U.S. in MY 2009 whose vehicle sales in that model year 

are below 400,000 vehicles. According to the proposal, total sales of would be aggregated in the 

same manner as CAFE, and '[c]orporate ownership or control relationships would be based on 

determinations made under CAFE for model year 2009.' Based on our understanding of the 

preamble and the proposed rule at 86.1818-12(e) there would be a onetime determination of 

eligibility for TLAAS based on the relationships that exist in the 2009 model year. 

A one-time determination of eligibility for TLAAS would base future regulatory obligations on a 

snapshot of the industry as it exists in the 2009 model year. It would not take into account the 

fact that corporate relationships in the auto industry are in flux, and will continue to change in 

the 2010 model year and beyond. To the extent that further changes in corporate relationships 

result in the creation or spin-off of new entities with vehicle sales below 400,000-unit cut-point 

prior to the 2016 model year, these entities should qualify for TLAAS as well. Such entities 

would have 'a limited line of vehicles' and be 'unable to take advantage of averaging emissions 

performance across a full line of production,' cited by EPA as the reasons for allowing TLAAS 

in the first place. To deny such entities access to TLAAS would be to place them at a regulatory 

disadvantage vis-a-vis their direct competitors. Likewise, a smaller-volume manufacturer that 

becomes part of a larger one should not continue to qualify for TLAAS. A more flexible 

provision is needed to allow for changes to the industry over time. 

Ford has two recommendations here. First, the initial determination of eligibility for TLAAS 

should be based on corporate determinations for CAFE in the 2010 model year, not the 2009 

model year. The GHG rules will not be final until approximately April 1 of 2010, when the 2010 

5-53 
EPA Response to Comments 

model year is well underway and manufacturers will already be selling some 2011 model year 

vehicles. Corporate relationships that existed in the 2009 model year may already be outdated by 

the time these rules are finalized. Second, Ford recommends that qualification for the alternative 

standard should be reassessed in each model year subsequent to the 2010 model year based on 

control relationships in existence during each model year. A small manufacturer spun off from a 

larger one in 2010 should have the same compliance opportunities as any other small 

manufacturer. Likewise, if a small manufacturer becomes part of a larger one, it should not 

continue to qualify for a compliance option that other similarly-situated manufacturers cannot 

utilize. It may be appropriate to pro-rate the total of 100,000 vehicles that are subject to the new 

standards based on the total number of model years that the manufacturer is eligible for TLAAS. 

[OAR-2009-0472-7082.1, pp. 24-25] 

Saab Automobile AB (Saab) 

Saab appreciates that the EPA recognizes the difficulties of a lower volume limited line 

manufacturer in meeting the requirements of the proposed rule by providing the flexibility 

inherent in the Temporary Lead-Time Allowance Alternative Standards (TLAAS). Unfortunately 

due to the proposed definition of a TLASS “qualifying manufacturer”, Saab would be excluded 

from utilizing the flexibility of this provision. [OAR-2009-0472-7103.1, p.1] 

The proposal applies the definition to the 2009 model year, even though many manufacturing 

relationships will be radically different when the rule takes effect. For example, in the 2009 

model year Saab was owned by General Motors (GM). Due to this ownership, Saab would be 

excluded as a TLAAS qualifying manufacturer. However, in February 2009 GM announced that 

it was selling or closing Saab by the end of the 2009 calendar year. That sale is nearing 

completion and when final will create a small fully independent Saab that under the proposed 

definition would still be excluded from utilizing the TLAAS. Following is Saab’s 

recommendation: 

In §86.1818-12 (e) (i) EPA proposed the definition of a qualifying manufacturer as: A 

qualifying manufacturer is a manufacturer with sales of 2009 model year combined passenger 

automobiles and light trucks in the United States of less than 400,000 vehicles, except that 

manufacturers with no U.S. sales in the 2009 model year do not qualify for the optional interim 

standards. [OAR-2009-0472-7103.1, p.1] 

Saab recommends the following addition to §86.1818-12 (e) (i): 

A qualifying manufacturer may include a manufacturer that during the 2009 model year was 

wholly owned by a large volume manufacturer and as a result of a change in corporate 

relationship reported to the NHTSA pursuant to 49 CFR Part 534, subsequently separated from 

the larger manufacturer before the end of calendar year 2010, provided that the branded sales of 

the smaller manufacturer for 2009 model year combined passenger automobiles and light trucks 

in the United States would have been less than 400,000 vehicles if said manufacturer sales were 

totaled separately. [OAR-2009-0472-7103.1, p.1] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

This addition to the definition of qualifying manufacturer accommodates the extraordinary 

developments that have been occurring in the US automotive industry. By incorporating this 

addition, a more equitable application of the TLAAS will be possible while maintaining and 

strengthening its original intent. [OAR-2009-0472-7103.1, p.2] 

Volvo Car Corporation 

The discussion in the preamble further explains that “the total sales number applies at the 

corporate level, so if a corporation owns several vehicle brands the aggregate sales of the 

corporation would be used . . . In other words, corporations grouped together for purposes of 

meeting CAFE standards, would be grouped together for determining whether or not they are 

eligible under the 400,000 vehicle cut point.” 1 Based on our understanding of the preamble, 

EPA’s current assumption is that there would be a one-time determination of eligibility for 

TLAAS based on the corporate relationships and production volumes that exist in the 2009 

model year. This approach is arbitrary and it is not consistent with either the stated purpose 

behind TLAAS, or the regulatory language proposed for codification at section 86.1818-12(e). 

As explained below under I. B, the proposed regulatory language can be reconciled with the 

purpose and intent behind TLAAS, even if EPA chooses not make appropriate clarifications, and 

in spite of the way EPA describes the criteria in the preamble. 

A one-time determination of eligibility for TLAAS would base future regulatory obligations on a 

snapshot of the industry as it exists in the 2009 model year. It would not take into account the 

fact that corporate relationships in the auto industry are in flux, and will continue to change in 

the 2010 model year and beyond. To the extent that further changes in corporate relationships 

result in the creation or spin-off of new entities with vehicle sales below 400,000-unit cut-point 

prior to the 2016 model year, these entities should qualify for TLAAS as well. Such entities 

would have 'a limited line of vehicles' and be 'unable to take advantage of averaging emissions 

performance across a full line of production,' cited by EPA as the reasons for allowing TLAAS 

in the first place. To deny such entities access to TLAAS would place them at a regulatory 

disadvantage vis-à-vis their direct competitors. 

VCC fits squarely within the categories of manufacturer that TLAAS was designed to address. 

EPA’s proposal expressly recognizes the need for additional lead-time requirements for 

companies with fleets traditionally subject to CAFE penalties and/or companies with a limited 

line of vehicles unable to take advantage of averaging emissions performance across a full line of 

products. Consistent with the purposes of TLAAS, the allowance should be made available to 

manufacturers whose products have been sold in the U.S. but which have previously been 

aggregated into the fleet of a full-line, larger-volume manufacturer. 

Access to TLAAS is especially appropriate for a newly independent company that has 

traditionally been a leader in bringing advanced safety technology to the market, like Volvo. 

Such access will allow VCC to continue that leadership while simultaneously working towards 

full compliance with the GHG program. TLAAS would not change VCC’s responsibility to 

comply with the program on the same timeframe as other similarly sized manufacturers. Instead 

it would simply establish a standard for VCC that better reflects the composition of its fleet as a 

5-55 
EPA Response to Comments 

stand-alone manufacturer and the fact that has previously been aggregated into a larger fleet with 

the other brands of its parent company. 

EPA has also correctly recognized that the ability of a manufacturer to successfully implement 

new technologies necessary to meet increased emissions standards is proportional to the size a 

manufacturer’s total annual production of vehicles. In light of this fact, it would be arbitrary and 

inappropriate to allow manufactures with 2009 sales of up to 400,000 vehicles to use TLAAS, 

while prohibiting significantly smaller volume producers like VCC from participating in the 

program. As noted above, VCC’s recent annual U.S. sales of approximately 100,000 are only 

25% of the maximum threshold for TLAAS. 

The special circumstances of a newly independent manufacturer fall squarely within EPA’s 

discretion under the Clean Air Act to consider and adjust appropriate lead-time allowances. See 

42 U.S.C. § 7521(a)(2). Similar lead time provisions have been provided and upheld by the 

federal courts. See, e.g., Ethyl Corp. v. EPA, 541 F.2d 1 

VCC recommends the following regarding TLAAS: 

First, the initial determination of eligibility for TLAAS should be based on the actual corporate 

status and relationship in the calendar year in which the GHG regulations apply (2012-2016). 

Alternatively, at the very soonest, eligibility should be based on actual corporate status and 

relationships that exist in calendar year 2010, when the final regulations are adopted, not the 

2009 model year as proposed. The GHG rules will not be final until approximately April 1 of 

2010, when the 2010 model year is well underway and manufacturers will already be selling 

some 2011 model year vehicles. Corporate relationships that existed for the 2009 model year 

may already be completely outdated by the time these rules are finalized. As explained above, 

the arbitrary selection of model year 2009 would be especially harmful to VCC. Similarly, the 

initial fleet size determination should be based on the 2010 model year at the earliest, which will 

be the current model year at the time the final regulation is published, and not the 2009 model 

year as proposed. 

Second, the qualification for the alternative standard should be reassessed in each model year 

subsequent to the 2010 model year based on control relationships in existence during each model 

year. A small manufacturer spun off from a larger one in 2010 should have the same compliance 

opportunities as any other small manufacturer. Likewise, if a small manufacturer becomes part of 

a larger one, it should not continue to qualify for a compliance option that other similarlysituated manufacturers cannot utilize. 

Finally, EPA should clarify the regulations and preamble discussion to make it clear that 

manufacturers that meet the definition of “manufacturer” under the CAFE program qualify for 

TLAAS, regardless of whether their vehicles were aggregated with another manufacturer’s fleet 

under the definition of “automobiles manufactured by a manufacturer.” [OAR-2009-0472­

7168.1, pp.2-6] 

Cummins Inc. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Cummins supports the temporary lead time allowance alternative standards (TLAAS) proposed 

by EPA as a mechanism to provide lead time to certain manufacturers (e.g. small volume 

manufacturers with a very limited range of vehicles). The environmental impact of such 

provision is expected to be small and at the same time provides the necessary lead time for 

manufacturers to comply with strict GHG standards in the MY 2012-2016 timeframe. However, 

EPA is proposing that a manufacturer with no U.S. sales in MY 2009 does not qualify for 

TLAAS. Cummins strongly urges EPA to revise this proposal. New manufacturers entering the 

U.S. market are likely to have relatively small fleets (footprint range) and would face the same 

challenge as other existing small volume manufacturers with limited product line-up. Hence, it is 

reasonable to extend the TLAAS to new manufacturers. Such provision would support new 

manufacturers entering the market with promising GHG reduction technologies. [OAR-2009­

0472-7205.1, p.5] 

EPA Response: 

EPA received several comments on its proposed approach of basing eligibility on MY2009, 

including comments that there are companies in the U.S. market are in the process of becoming 

independent and should be eligible and comments that companies entering the market later 

should be eligible. EPA also received comments that companies that are initially eligible should 

lose eligibility if they merge with larger companies 

EPA understands the concerns raised by Volvo and Saab that basing eligibility strictly on 

MY2009 sales would be problematic for these companies, which are being spun-off from larger 

manufacturer in the MY2009 time frame due to the upheaval in the auto industry over the past 

few years. They offer a variety of suggestions including using MY2010 as the eligibility cut-off 

instead of MY2009, reassessing eligibility on a year-by-year basis as corporate relationships 

change, or allowing companies separated from a larger parent company by the end of 2010 to use 

their MY2009 branded U.S. sales to qualify for TLAAS. In response to these concerns, EPA 

recognizes that these companies currently being sold by larger manufacturer will share the same 

characteristics of the manufacturers for which the TLAAS program was designed and is needed. 

As newly independent companies, these firms will face the challenges of a narrower fleet of 

vehicles across which to average, and may potentially be in a situation, at least in the first few 

years, of paying fines under CAFE. Lead time concerns in the program’s initial years are in fact 

particularly acute for these manufacturers since they will be newly independent, and thus would 

have even less of an opportunity to modify their vehicles to meet the standards. Therefore, EPA 

is finalizing an approach that allows manufacturers with U.S. “branded sales” in MY2009 under 

the umbrella of a larger manufacturer that become independent by the end of calendar year 2010 

to use their MY2009 branded sales to qualify for TLAAS eligibility. In other words, a 

manufacturer will be eligible for TLAAS if it produced vehicles for the U.S. market in MY 2009, 

its branded sales of U.S. vehicles were less than 400,000 in MY2009 but whose vehicles were 

sold as part of a larger manufacturer, and it becomes independent by the end of calendar year 

2010, if the new entity has sales below 400,000 vehicles. This approach is consistent with the 

recommendations provided by SAAB, and we believe addresses Volvo’s concerns as well, and 

EPA believes it is a reasonable approach to addressing the issue. 

5-57 
EPA Response to Comments 

EPA does not support comments from Ford, AIAM, NADA, and Cummins suggestion of a yearby-year eligibility determination because it opens up the TLAAS program to an unknown 

universe of potential eligible manufacturers, with the potential for gaming. Year-by-year 

eligibility determinations would open the program to post-2009 MY new entrants to the U.S. 

market, such EPA does not believe the TLAAS program should be available to new entrants 

since these manufacturers are not transitioning from the CAFE regime which allows fine paying 

as a means of compliance to a CAA regime which does not, and hence do not present the same 

types of lead time issues. Manufacturers entering the U.S. market for the first time thus will be 

fully subject to the GHG fleet-average standards. 

Ford also commented that a smaller-volume manufacturer that becomes part of a larger one 

should not continue to qualify for TLAAS. EPA agrees with this comment. EPA recognizes the 

dynamic corporate restructuring occurring in the auto industry and believes it is important to 

structure additional provisions to ensure there is no ability to game the TLAAS provisions and to 

ensure no unintended loss of feasible environmental benefits. Therefore, EPA is finalizing a 

provision that if two or more TLAAS eligible companies are later merged, with one company 

having at least 50% or more ownership of the other, or if the companies are combined for the 

purposes of EPA certification and compliance, the TLAAS allotment is not additive. The 

merged company will only be allowed the allotment for what is considered the parent company 

under the new corporate structure. Further, if the newly formed company would have exceeded 

the 400,000 vehicle cut point based on combined MY2009 sales, the new entity is not eligible for 

TLAAS in the model year following the merger. EPA believes that such mergers and 

acquisitions would give the parent company additional opportunities to average across its fleet, 

eliminating one of the primary needs for the TLAAS program. This provision will not be 

retroactive and will not affect the TLAAS program in the year of the merger or for previous 

model years. EPA believes these additional provisions are essential to ensure the integrity of the 

TLAAS program by ensuring that it does not become available to large manufacturers through 

mergers and acquisitions. 

Additional TLAAS Comments 

Organization: Mitsubishi Motors R & D of America (MRDA) 

Comment: 

Limited line manufacturers specifically need additional lead-time and compliance flexibility, 

especially considering that Mitsubishi Motors was not subject to the California AB1493 GHG 

regulations until the MY 2016. [OAR-2009-0472-7125.1, p.1] 

Mitsubishi Motors supports the Temporary Lead-time Allowance Alternative Standards 

(TLAAS) program to remedy the unique concerns of all limited line manufacturers. [OAR-2009­

0472-7125.1, p.2] 

Market fluctuations cause greater risk of noncompliance for limited line manufacturers. For 

instance, for a manufacturer with few models, what if consumer acceptance of a particular model 

is much lower than its projected sales? As explained to industry, the TLAAS program was 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

intended to help reduce limited line manufacturers’ costs and burdens to meet the new GHG 

emissions standards. [OAR-2009-0472-7125.1, p.3] 

EPA should craft the TLAAS program to be beneficial to all limited line manufacturers as 

indicated in the Notice of Intent (NOI). TLAAS as currently drafted has limited flexibility to 

account for unanticipated market fluctuations. As currently proposed, some limited line 

manufacturers will not use TLAAS and only Automakers who traditionally pay CAFE fines will 

use it. [OAR-2009-0472-7125.1, p.4] 

TLAAS should accomplish two tasks: 

1. Allow limited additional time for resource constrained, limited line manufacturers to cost 

effectively develop and produce low GHG emission vehicles to comply with the proposed 

standards, and 

2. Provide some protection against market fluctuations [OAR-2009-0472-7125.1, p.4] 

The NOI indicated that the TLAAS program would be available to manufacturers producing a 

specific number of vehicles, i.e. 400,000 in a predetermined MY, i.e. MY 2008 or MY 2009. The 

NPRM introduced new threshold criteria - eligible manufacturers must first demonstrate that 

they have tried to use banked or transferred credits and are still unable to meet the standard. 

[OAR-2009-0472-7125.1, p.4] 

As written, TLAAS severely restricts the ability of limited line manufacturers to utilize the 

TLAAS program. Interpretation of the NPRM suggests that eligible manufacturers, prior to the 

start of a model year, must determine whether or not to participate in the TLAAS program. For 

example, due to market fluctuations, manufacturers committing to using the TLAAS program, in 

a year in which it is not actually needed, could result in the loss of credits. Alternatively, 

manufacturers committing to forgo the use of the TLAAS program may be subject to 

noncompliance due to market fluctuations. EPA should carefully review the regulatory language 

to clearly allow limited line manufacturers to “opt-in” or “opt-out” of the TLAAS program at the 

conclusion of the model year. [OAR-2009-0472-7125.1, p.4] 

Another concern with the TLAAS program as described in the NPRM is the complete loss of 

credits in the primary fleet, i.e. the non-TLAAS fleet, whenever a manufacturer chooses to 

participate in the TLAAS program. This leaves limited line manufacturers again at significant 

risk of noncompliance from market fluctuations. Given this particular restriction on banking 

credits, the TLAAS program does not effectively provide relief to all limited lane manufacturers. 

[OAR-2009-0472-7125.1, p.4] 

Mitsubishi Motors recommends that upon exiting the TLAAS program, Automakers should be 

allowed to carry forward only the primary fleet credits the Automaker earns in its last TLAAS 

program year. Given EPA’s own estimates, the impact of the TLAAS program upon GHG 

reductions is minimal and will not impact the National Program’s overall GHG reduction goals, 

and therefore should be allowed. [OAR-2009-0472-7125.1, p.4] 

5-59 
EPA Response to Comments 

[The following comments are from LA Testimony, OAR-2009-0472-7283, pp.85-87] 

Intermediate volume manufacturers like Mitsubishi face additional challenges in attaining these 

standards. Smaller companies have less financial resources and fewer vehicle lines to implement 

cost-effective major changes. This makes the credit flexibilities outlined in the NPRM 

very important, easing the transition to these new standards. 

I remind you that this is especially important considering that Mitsubishi Motors was not subject 

to California AB 1493 regulations until the 2016 time frame. Therefore, one of the important 

methods to ease this transition is the temporary lead-time allowance EPA is proposing to help 

smaller manufacturers adapt to these new regulations. 

EPA Response: 

Mitsubishi commented that the program is restrictive due to the requirement that manufacturers 

must decide prior to the start of the model year whether or not and how to use the TLAAS 

program. EPA did not intend for manufactures to have to make this determination prior to the 

start of the model year. EPA expects that manufacturers will provide a best estimate of their 

plans to use the TLAAS program during certification based on projected model year sales, as 

part of their pre model year report projecting their overall plan for compliance (as required by 

§600.514-12 of the regulations). Manufacturer must determine the TLAAS program’s actual use 

at the end of the model year during the process of demonstrating year-end compliance. EPA 

recognizes that depending on actual sales for a given model year, a manufacturer’s use of 

TLAAS may change from the projections used in the pre-model year report. Also, 

manufacturers can make an annual decision on whether or not to use the TLAAS program for 

that year at the end of the model year. 

For reasons discussed above in the previous response, EPA is retaining the credit restrictions 

regarding earning credits in the primary program during years that the TLAAS program is being 

used. Credits generated in the primary program in years that a manufacturer is using TLAAS 

may not be banked or traded. EPA continues to believe this provision is necessary to prevent 

credits from being earned simply by removing some high-emitting vehicles from the primary 

fleet. 

Organization:Hyundai Motor Company 

 Kia Motors 

Comment: 

Hyundai Motor Company 

Under the California greenhouse gas (GHG) program, Hyundai was exempt from the early years 

of the program due to our status as an intermediate volume manufacturer (IVM). EPA also 

provides a relief mechanism in its proposed GHG program, the TLAAS, to assist intermediate 

and smaller automakers in achieving the Federal standards. However, Hyundai is not eligible for 

relief through TLAAS. Despite the disparity in Hyundai's treatment between the California and 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Federal programs, we do not seek parity with the relief we were afforded by California. As a fuel 

economy leader, Hyundai does not need special treatment. In addition, the use of a TLAAS-like 

provision would not be consistent with our overall corporate responsibility to address fuel 

efficiency, energy security and the environment. [OAR-2009-0472-7231.1, p.7] 

Kia Motor Company 

 [These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number EPA-HQ-OAR-2009-0472-7283, p.172] 

On the subject of alternative standards, Kia does not expect to be eligible for the temporary leadtime allowance alternative standards as proposed in the EPA regulations. Although this does not 

provide us with the same relief afforded to us under the CARB regulations, we support the 

EPA proposal. 

EPA Response: 

EPA understands that the TLAAS program is structured differently than the California 

intermediate volume manufacturer provisions and that the commenters are not seeking 

harmonization. EPA appreciates the comments supporting the proposed approach. 

Organization: Chrysler Group LLC (Chrysler) 

Comment: 

EPA proposes a 'temporary lead-time allowance alternative standard' ('TLAAS') to address 

situations where 'more lead time is needed, based on the level of emissions control technology 

and emissions control performance currently exhibited by certain vehicles.' EPA envisions that 

this program will provide the additional lead time necessary for certain manufacturers 'who have 

traditionally paid CAFE fines' or 'who have a limited line of vehicles and are unable to take 

advantage of averaging emissions performance across a full line of production.' While Chrysler 

supports the concept of this program, we disagree with its limitation to manufacturers with total 

2009 model year U.S. sales of less than 400,000 vehicles. [NHTSA-2009-0059-0124, p.33] 

Any loosening of the greenhouse gas standards for a limited number of manufacturers places the 

remaining manufacturers, the majority of which are domestic manufacturers, at an economic and 

competitive disadvantage, especially in the early program years where the proposed standards 

represent an extremely large passenger car efficiency increase from the 2011 model year CAFE 

standards. EPA notes that 'Porsche, Tata, Mazda, Mitsubishi, Suzuki, Daimler, Subaru, BMW, 

Volkswagen, Hyundai, and Kia' are potentially eligible for the TLAAS program. [NHTSA-2009­

0059-0124, p.23] 

All manufacturers will need to invest in greenhouse gas emission improvements; a competitive 

advantage is gained by those who are allowed additional time to make the necessary investments. 

The TLAAS program allows those eligible manufacturers, many of which are the most profitable 

in the U.S. market, to defer some investments to later model years, whereas larger manufacturers 

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EPA Response to Comments 

must make the investments immediately to meet the aggressive 2012 and subsequent model year 

passenger car standards, immediately placing those manufacturers at an economic and 

competitive disadvantage. [NHTSA-2009-0059-0124, p.34] 

Recommendation: 

Chrysler recommends that the TLAAS program be expanded to all manufacturers. [NHTSA2009-0059-0124, p.34] 

An expansion of the TLAAS program to all manufacturers regardless of size will not result in a 

significant reduction in greenhouse gas benefits, but will remove the competitive inequity 

created by the program as currently proposed. The TLAAS program is very strictly proscribed to 

prevent a manufacturer who must use it from gaining greenhouse gas credit advantages by 

shifting a portion of their fleet to a lower standard. These measures will effectively limit the 

programs use to only those manufacturers who absolutely need the program to allow additional 

time to develop technologies to meet the normal standards. Given current economic conditions 

within the automotive industry including the recent bankruptcies of General Motors and Chrysler 

LLC, an expansion of the program to all manufacturers will level the playing field for larger 

manufacturers. [NHTSA-2009-0059-0124, p.34] 

EPA Response: 

EPA does not believe that it would be appropriate to allow large manufacturers to use the 

TLAAS program. EPA developed the wide range of flexibilities in the primary program with 

large full-line manufacturers in mind. Averaging, credit banking, and credit transfers, along with 

the opportunity to generate credits such as early credits and FFV credits, will provide full-line 

manufacturers with sufficient flexibility to transition to the new standards. Smaller volume 

manufacturers have less ability to use some of these flexibilities due to their narrow product 

lines. For example, averaging and credit transfers are less helpful to such manufacturers. In 

addition, as discussed in detail above, smaller volume manufacturers have higher baseline 

emissions and therefore must achieve larger reductions to meet emissions standards. Finally, if 

all manufacturers were allowed to use the TLAAS program, the stringency of the overall 

program would be significantly reduced and EPA would forego emissions reductions that are 

feasible and cost effective during the early years of the program. 

5.4.2 Small Volume Manufacturer Provisions 

Organization:Ferrari S.p.a 

Aston Martin Lagonda 

Association of International Automobile Manufacturers (AIAM) 

Volkswagen Group of America (Volkswagen) 

Vehicles Services Consulting, Inc 

National Automobile Dealers Association (NADA) 

Society of Motor Manufacturers and Traders Limited 

Lotus Cars Ltd. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Koenigsegg Automotive AB 

Lance Tunick 

MD McLaren Automotive Ltd. 

Morgan Motor Company Ltd. 

Spyker Cars 

KTM-Sportsmotoercycle AG 

European Small Volume Car Manufacturers' Alliance (ESCA) 

Artega Automobil GmbH & Co. KG 

Wiesmann GmbH 

Comment: 

Ferrari S.p.a 

For small-volume niche manufacturers there has never been a bigger challenge than this 

proposed rule. Without some further flexibility for such manufacturers it will be extremely 

difficult to continue to certify vehicles in U.S.A. in the future. In fact, taking into account the 

technical (and economic) infeasibility of achieving the proposed standards, even with the use of 

best availability technology that can be adopted in certain types of vehicles, along with the 

prerequisite of maintaining their distinctive characteristics (otherwise they cannot be sold) and 

the great uncertainty regarding the availability on the market of CO2 credits for small-volume 

manufacturers, Ferrari feels that further flexibilities must be present in this rule. The EPA 

assumptions that small-volume manufacturers can comply with the proposed standards are based 

on an optimistic forecast. EPA should also consider a worst-case scenario where no credits will 

be available to offset debits. [OAR-2009-0472-7214.1, p.2] 

Specific provisions for SVMs and small-volume test groups should be part of the future EPA 

GHG final rule, to be consistent with the EPA (and CARB) longstanding policy to guarantee 

more flexibility for such categories of manufacturers/vehicles on the grounds of technical 

feasibility, limited car lines, and negligible contribution to the annual GHG emissions, along 

with the gasoline consumed. Moreover it is well known that to comply with CO2 standards is 

different to comply with criteria pollutants standards. [OAR-2009-0472-7214.1, p.5] 

The category of small-volume manufacturers is clearly defined in both federal (EPA), California 

(ARB) regulations as well as in FMVSSs (NHTSA). SVMs are typically those that within the 

criteria you have mentioned are much smaller than intermediate or large manufacturers. The 

threshold of < 400,000 vehicle sold in U.S.A. in model year 2009 is two orders of magnitude 

larger than what the typical small-volume manufacturer produces. In any case, we kindly point 

out that you cannot consider that really small companies like Ferrari could solve the compliance 

problem with the same temporary allowance for very big companies (based on worldwide 

production, and U.S. sales). In other words, we deem not fair to give the same temporary 

allowance for manufacturers that belong to completely different categories. Both EPA and 

CARB have implemented rules with specific provisions for small-volume manufacturers. CARB 

makes further distinctions of manufacturer categories: Small, Independent-Low, IntermediateVolume, and Large. [OAR-2009-0472-7214.1, p.6] 

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EPA Response to Comments 

The Temporary Lead-time Allowance Alternative Standards (TLAAS) allows for up to a total of 

100,000 vehicles in MYs 2012-2015 for manufacturers that sold less than 400,000 vehicles in 

U.S.A. in 2009 MY. This provision seems tailored for intermediate and large manufacturers. 

Small-volume manufacturers can use it as well, but it does not solve the problem for them 

because: 

• the 25% higher standards is not sufficient, taking into account the achievable CO2 level of 

certain kinds of vehicles, likewise high-performance sports cars; and 

• the compliance problem for small vehicle companies is not temporary, but strictly related to 

vehicle characteristics that cannot be completely changed. 

Consequently, it cannot be fixed only by adding more lead-time. Now it seems that EPA’s 

position is that it is logical to offer the same temporary allowance of alternative standards for 

small and large companies. As noted in EPA’s analysis, the above mentioned temporary 

alternative higher standards could be used by really large or even giant manufacturers, simply 

because they sold less than 400,000 vehicle in U.S.A. in 2009 MY. Such manufacturers have a 

wide range of different types of vehicles, with many different engines, transmissions and 

footprints. We do not oppose to temporary measures Docket No. EPA-HQ-OAR-2009-0472 and 

NHTSA-2009-0059 – NPRM GHG-CAFE MYs 2012-16 – Ferrari Comments. 7 for them, but 

we kindly request other more specific provisions for the well defined category of small-volume 

manufacturers. If all manufacturers eligible certify to these higher standards up to the max. 

100,000 total sales during the first four model years of the rule, a few hundreds thousands 

vehicles could be certified with such higher stds. The related total increase of CO2 emissions due 

to this allowance could correspond to the total CO2 emissions of the entire small-volume 

manufacturer’s fleets for several model years in U.S.A. [OAR-2009-0472-7214.1, p.6] 

In summary, Ferrari supports the following specific provisions for small-volume manufacturers: 

a) Specific CO2 standards, based on the average value of the most recent model years of the 

vehicles certified by SVMs in U.S.A., and on the feasible improvements that can be reasonably 

achieved, using the best technologies that can be adopted, taking into account the need to keep 

the distinctive characteristics of the affected vehicles. b) The specific CO2 standards should be 

defined not only for the first model years of the proposed rule, but beyond the 2016 MY, because 

the technical infeasibility to respect the general standards is related to the vehicle characteristics. 

Eventually, the standards could be revised after a certain period. They could be higher in the first 

model years (2012-2016) and reduced later. 

c) Alternatively, instead of CO2 standards equal for the category of small-volume manufacturers, 

EPA could define CO2 standards tailored for each SVM, i.e. on a case-by-case basis. [OAR2009-0472-7214.1, p.10] 

There is some inconsistency in the A/C efficiency leaks and maximum allowed credits. We 

caution EPA that, even with the best solution that should be available to reduce both direct and 

indirect A/C system emissions, these contributes are not sufficient to comply for small-volume 

manufacturers, based on the present certification data. [OAR-2009-0472-7214.1, p.11] 

Comments Submitted by Ferrari on 2/3/2010 via e-mail 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Subject: Small Volume Manufacturer (SVM) Recommendations 

Thank you for meeting with Ferrari SpA and Ferrari North America, Inc. representatives on 

January 25, 2010 to discuss the issue of treatment of Ferrari as a "Small Volume Manufacturer" 

(SVM) under the proposed GHG rules. Ferrari produces approximately 6000 vehicles per year 

worldwide. Ferrari's U.S. sales average about 1500 per year. As noted in previous comments 

submitted to EPA, Ferrari's operations are completely independent of any other vehicle 

manufacturer. Therefore, Ferrari believes it is critical to the company's survival to retain this 

status, as decided some time ago by EPA, CARB, NHTSA (Attached are two recent 

determinations NHTSA has made under the Safety Act regarding Ferrari vehicles). We also 

agree that a specific GHG standard should be set for Ferrari, as for other Small Volume 

Manufacturers. [ Redacted text] 

As a result of this set of problems, Ferrari has examined the existing EPA SVM regulations, as 

well as directives by the European Union, the text of EPCA, and California's A.B. 1493 

regulations to determine an approach which could be implemented by EPA that would allow 

independent companies like Ferrari to remain in SVM status, while not having the unintended 

consequence of creating problems for other manufacturers. Ferrari believes a strict percentage 

ownership test does not fully recognize the independence of companies such as Ferrari from 

those who may have an ownership interest. 

The existing EPA SVM regulations contain an aggregation of sales based primarily on a 

percentage ownership test. Ferrari proposes to keep this as a primary means, but to allow a 

manufacturer to apply to EPA to maintain (or establish) SVM status based on the independence 

of its R &D, testing, design and manufacturing from another firm that may have an ownership 

interest in the manufacturer. To establish this status, a manufacturer would need to present 

information to EPA that demonstrates that its R & D and design efforts, testing and 

manufacturing/production facilities are independent of another firm who may own an interest in 

the manufacturer. 

In order to accomplish this, EPA could revise the existing 40 CFR 1838-01(b)(3) to read: 

(3) Sales aggregation for related manufacturers Except as provided in (v), the projected or 

actual sales from different firms shall be aggregated in the following situations: ... 

(v) Upon application by any firm, the Administrator may determine that such firm's 

sales shall not be aggregated with any other firm upon showing that it operates its research, 

development and design, testing and production facilities separately from any other firm. 

As noted above, this approach is consistent with the European Union EC 443 / 2009 Article 11 

approach, and is consistent with determinations NHTSA has made under the Safety Act. 

Further, it conforms with the structure in EPCA for small volume manufacturers contained in 49 

USC 32902(d) and the definition in 49 USC 32901 (a)(4), which is based on control versus a 

percentage ownership test. Finally, California has chosen to defer the application of the A.B. 

1493 GHG standards to small independent companies. 

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EPA Response to Comments 

[ Redacted text ] 

You had asked at the meeting for a number of vehicles that should be eligible for SVM status 

under the GHG rules. To retain a consistent approach with the European Union Directive and 

EPCA, Ferrari recommends a level of 10,000 vehicle sales per year (or a total of 30,000 per three 

consecutive years, which is current CARB practice) in the U.S. However, it also recommends 

that the 15,000 level be retained for other emission standards. 

In the event a manufacturer's status should change due to altered circumstances, it is important 

that EPA provide some period during which that manufacturer can operate in the SVM status. 

An abrupt "light-switch" approach would cause huge disruption, and as noted above, could have 

serious unintended consequences for other manufacturers. Thus, a period of 5 years should be 

provided to allow both the SVM and any other manufacturer to accommodate this change in 

status. 

Finally, you have asked for a level that should apply to Ferrari assuming it retains SVM status. 

Since this information will contain CBI, we will submit this to you under separate cover. 

Thank you for working with Ferrari on a matter that is critical to its U.S. operations. Ferrari will 

be happy to respond to any questions you may have regarding this matter. 

Ferrari also submitted confidential business information regarding their product plans and 

emissions reduction capabilities. 

Aston Martin Lagonda 

Aston Martin is an independent automotive manufacturer based in the UK, with a long history of 

specializing in the design and manufacture of high-end luxury sports cars. Aston Martin annual 

global volume prior to the economic downturn was circa 7,000 units (2007 calendar year), with 

exports forming approximately 75% of this output. 

Aston Martin is committed to doing its fair share in reducing overall CO2 emissions. We are 

committed to reducing our fleet CO2 emissions and between 2000 and 2008 have achieved a fleet 

average reduction of circa 25%. For comparative purposes, this is approximately double the 

improvement found across the EU new car market over the same period. [OAR-2009-0472­

7217.1, p.1] 

It is the view of Aston Martin that the TLAAS does not provide sufficient lead times for SVMs 

and that EPA should defer SVM compliance with its GHG standards until MY 2016.2 EPA’s 

usual policy is to allow SVMs to defer compliance with a new requirement until the end of a 

phase-in. See e.g. 40 CFR 1811-04. Under the proposed EPA CO2 rule, the period 2012-2015 is 

analogous to a phase-in of the new GHG requirements, and accordingly, EPA should defer SVM 

compliance until after this period, i.e. until 2016 and later. [OAR-2009-0472-7217.1, p.3] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Aston Martin is committed to doing its fair share in reducing CO2 emissions. As such, we 

support a consistent and harmonized national standard, whilst raising the issue that such a 

standard should promote diversity of the industry and maintain choice for the consumer. 

Aston Martin recommends that Small Volume Manufacturers are deferred during the effective 

phase-in period (in line with the California SVM provisions), to allow sufficient time for product 

plans to be aligned with legislative requirements. 

Aston Martin further recommends that the definition of a Small Volume Manufacturer, for the 

purposes of this legislation, is in accordance with the current EPA definition. The EPA definition 

of a Small Volume Manufacturer is one who sells fewer than 15,000 vehicles in all states and 

territories of the United States within a given model year. Aston Martin believes that a 

manufacturer with sales figures above this threshold could reasonably be expected to meet either 

the large volume requirements, or such requirements adjusted by the TLAAS allowance. Aston 

Martin further believes that the application of such a threshold based on vehicle sales within US 

territories and states represent the best determination for whether to classify a manufacturer for 

small volume allowances. Manufacturers who sell vehicles in other territories, which may have 

significantly differing regulatory requirements, are not necessarily better positioned to meet the 

legislative requirements of EPA and/or NHTSA. 

Proposal in summary: 

• SVM compliance starts at end of effective phase-in period 

• SVM definition as per EPA legislation 

• SVM compliance through parallel referral to the stricter CARB GHG rule (enabling 

challenging yet fair options for SVM compliance) 

The joint EPA/NHTSA legislative proposal seeks to “achieve substantial reductions of 

greenhouse gas (GHG) emissions and improvements in fuel economy from the light-duty vehicle 

part of the transportation sector”. Due to the particularly low volumes of vehicle involved, Aston 

Martin asserts that the above recommended amendments to the proposed regulations will not 

have any significant impact on the ability of such legislation to achieve these aims within the 

transportation sector. [OAR-2009-0472-7217.1, p.6] 

Aston Martin also submitted confidential business information regarding their product plans and 

emissions reduction capabilities. 

Association of International Automobile Manufacturers (AIAM) 

The proposed greenhouse gas regulatory program makes accommodations for two groups of 

smaller manufacturers. For mid-sized companies (those with U.S. annual sales levels below 

400,000 units), EPA has proposed “temporary lead-time allowance standards.” EPA states that 

these alternative standards provide additional compliance lead-time for mid-sized manufacturers 

that offer narrow product lines in the U.S. Some of these companies have traditionally paid 

5-67 
EPA Response to Comments 

CAFE civil penalties as an alternative to compliance, but would not be able to follow that 

approach under greenhouse gas standards. For these companies, EPA proposes to provide 

additional compliance lead-time for model years 2012-15. See proposed section 86.1818-12(e). 

EPA has also proposed to defer setting standards for entities that meet “small business” size 

criteria under U.S. Small Business Administration (SBA) regulations, 13 CFR 121.201. See 

proposed section 86.1801-12(j). The small business entities that would be exempted include two 

manufacturers, Saleen and Tesla, as well as independent commercial importers and alternative 

fuel vehicle converters. See preamble at 49745. For a manufacturer to qualify as a small 

business, it must have no more than 1000 employees. EPA justifies this exemption based on the 

minimal greenhouse gas emissions of these companies due to their very small volume. See, e.g., 

preamble at 49629. [OAR-2009-0472-7123.1, p.8] 

There are a small number of manufacturers that fall between the two size categories addressed by 

EPA and for whom no relief is proposed by EPA. These companies produce a very limited 

number of models consisting entirely of luxury/high performance vehicles that, because of their 

essential features would not be able to meet greenhouse gas standards. Aston Martin and 

McLaren are examples of independent companies of this type. Ferrari and Maserati are 

independently operated companies that also fall into this category. These vehicles are very 

expensive, are sold in very small volumes, and are inherently unique and special high 

performance vehicles that typically accumulate few miles per year. As a result, their impact on 

total greenhouse gas emissions is negligible, as with the small business category. [OAR-2009­

0472-7123.1, p.9] 

While it is reasonable to project some improvement in greenhouse gas emissions for this 

category of vehicles, it is unrealistic to project that these vehicles could meet the generally 

applicable standards in the 2012-2016 period. While it is possible that these small volume 

manufacturers (SVMs) might be able to comply with greenhouse gas standards by purchasing 

credits from other manufacturers, this is far too speculative a solution. The market for credits is 

unpredictable at this point. Other than exiting the U.S. market, therefore, the only other possible 

solution for an independent SVM would be to sell an equity interest in the company to a larger, 

full-line manufacturer, so that the emissions of the luxury vehicles could be averaged in with the 

much larger volume of other vehicles produced by the major manufacturer, This cannot possibly 

be the outcome EPA intends, especially when measured against the minimal, if any, 

environmental benefit that would result. The proposed regulations recognize the acute difficulty 

which SVMs may face in complying with the fleet average emission and fuel economy 

requirements. In discussing the proposal for the Temporary Lead-Time Allowance Alternative 

Standards (TLAAS), EPA states: 

Manufacturers with limited product lines may be especially challenged in the early years of the 

proposed program. Manufacturers with narrow product offerings may not be able to take full 

advantage of averaging or other program flexibilities due to the limited scope of the types of 

vehicles they sell. For example, some smaller volume manufacturers focus on high performance 

vehicles with higher CO2 emissions, above the CO2 emissions target for that vehicle footprint, 

but do not have other types of vehicles in their production mix with which to average. Often, 

these manufacturers pay fines under the CAFE program rather than meeting the applicable 

CAFE standard. See 74 FR at 49483. [OAR-2009-0472-7123.1, p.9] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

AIAM believes that this assessment is correct and that either a more generous lead-time 

allowance or an alternative, relaxed standard would be the appropriate solution for these types of 

SVMs. [OAR-2009-0472-7123.1, p.9] 

There is ample legal authority for EPA to provide SVMs a more generous lead-time allowance or 

an alternative standard. Indeed, EPA recognizes such authority in the proposal for a small entity 

deferment (for those companies defined under the Small Business Administration's regulations), 

see 74 FR at 49574, and in the TLAAS. These provisions are consistent with previous EPA 

rulemaking under the Clean Air Act which offer relief to SVMs. For example, in the Tier 2 

program, EPA exempted SVMs from the phase-in requirements in the early model years of the 

emission exhaust and evaporative standards. See 40 C.F.R. § 86.1811-04(k)(5). In doing so, EPA 

correctly found that “phase-in schedules, in general, add little flexibility for manufacturers with 

limited product offerings because a manufacturer with only one or two test groups can not take 

full advantage of a 25/50/75/100 percent or similar phase in.” See Control of Air Pollution From 

New Motor Vehicles: Tier 2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control 

Requirements; Final Rule, 65 FR 6698, 6743 (February 10, 2000). Accordingly, “[f]or 

manufacturers meeting EPA’s definition of ‘small volume manufacturer,’ [EPA] proposed to 

exempt those manufacturers from the phase-in schedules and require them to simply comply 

with the final 100% compliance requirement.” Id. Other agencies likewise offer such relief for 

SVMs that may face particular compliance hurdles on account of their size. See, e.g., Nat’l 

Highway Traffic Safety Administration, Early Warning Reporting Regulations, 74 FR 47740 

(September 17, 2009) (creating a small manufacturer exemption where the underlying statute 

was silent on the availability of such exemption). It should also be noted that the NHTSA CAFE 

program and the California greenhouse gas standards program both provide relief for 

manufacturers in the size range in question, although the NHTSA program is statutorily 

mandated. In fact, the California standards exempt SVMs (and intermediate sized manufacturers) 

until the 2016 MY. There is also nothing in the Clean Air Act that would prevent EPA from 

providing an alternative and more relaxed emissions standard for SVMs. Section 202(a) does not 

require a one-size-fits-all standard that would be applicable to each and every manufacturer. 

Rather, that section requires EPA 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.” 42 USC § 

7521(a) (emphasis added). The statute does not restrict EPA’s discretion in how the “classes of 

new motor vehicles” should be defined. [OAR-2009-0472-7123.1, pp.9-10] 

While AIAM believes the correct approach is for EPA to set an alternative, relaxed standard for 

SVMs, we recognize that there is insufficient time available in this rulemaking proceeding 

between now and the final rule projected for completion by March 31, 2009, for EPA to collect 

the relevant product plans and technology feasibility information from SVMs, conduct the 

necessary reviews and modeling that may be needed, consult with the stakeholders, issue a 

supplemental proposal for an alternative, relaxed standard for SVMs for public comments, and 

then determine the appropriate final standard. Indeed, when California adopted its GHG vehicle 

standards in 2004 it recognized the difficulties in grouping all SVMs together and provided three 

compliance options for them. One California SVM compliance option is an alternative standard, 

but California, even then, recognized that lead-time would be needed to develop an alternative 

standard and provided for development of an SVM standard by 2012 for compliance in 2016. 

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EPA Response to Comments 

Therefore, we believe it appropriate for EPA to defer decisions on the SVM alternative standard 

to the next rulemaking for the 2017+ MY. [OAR-2009-0472-7123.1, p.10] 

For these reasons, AIAM recommends that EPA adopt the same approach for SVMs as it 

proposed for the small business entities. EPA should defer setting standards for these companies 

now, but should consider setting standards in a future proceeding. Conceptually, the future small 

volume standards should be set on a class basis for all vehicles produced by these companies. 

Such a standard could assure that these vehicles make a contribution to reducing overall 

greenhouse gas emissions, although their total emissions are extremely small. The nature of the 

small volume class standard should reflect the fundamental nature of the vehicles. AIAM also 

urges EPA to apply the definition of SVM used in the EPA current small volume certification 

program of less than 15,000 annual U.S. sales. See 40 CFR § 86.1838-01(b)(1)(i). [OAR-2009­

0472-7123.1, p.10] 

Volkswagen Group of America (Volkswagen) 

An additional topic that could lend flexibility to the regulation is consideration of small volume 

test group or brands. EPA considered this possibility when it issued last year's ANPRM, 

'Regulating GHG Emissions Under the Clean Air Act'. In an EPA document published June 23, 

2008 entitled, 'Light-Duty Vehicle Greenhouse Gas (GHG) Certification and Compliance 

Program Options' (Karl Simon Memorandum - Docket 10 No. EPA-HQ-OAR-2008-0318), EPA 

discussed the possibility of allowing separate standards for a small volume of vehicles such as 

sports cars or exotic vehicles that do not have a large percentage of the market and have a small 

contribution to the GHG emission related to light duty vehicles. EPA ultimately concluded that 

the volume of vehicles allowed under the current small volume test provisions (15,000 vehicles) 

would result in a volume of vehicles not subject to fleet average standards that was excessive. 

The EPA also noted concern that a small volume test group provision could result in gaming by 

manufacturers. Volkswagen recommends that EPA revisit this concept and consider a permanent 

small volume of vehicles that are exempt from the fleet average approach and that comply with a 

fixed value. As noted in the Karl Simon Memorandum, the fixed standard would still ensure that 

even high performance exotic vehicles have a significant task to reduce GHG emissions. We 

believe the volume and gaming issues could be resolved by limiting the provision to existing 

small brands under the financial control of a parent company but with an independent business 

plan and independent styling and marketing functions. [OAR-2009-0472-7210.1, p.7] 

Vehicles Services Consulting, Inc 

This comment will address the proposed EPA GHG standard from the point of view of small 

volume automobile manufacturers (SVMs). The EPA proposal jeopardizes the stated goal of 

consumers having a full range of vehicle choice in that it endangers the ability of certain SVMs 

to sell into the US market. [OAR-2009-0472-7083.1, p.2] 

As an initial matter, when VSCI uses the term “SVM”, we mean the definition of SVM as 

currently found in EPA’s regulations, that is, a company with fewer than 15,000 USA sales per 

year, calculated in accordance with EPA’s “10% related-company aggregation rule”. [OAR2009-0472-7083.1, p.2] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

EPA expressly solicited comment on the question of SVM lead-time. The proposal states: 

'... EPA recognizes that [s]ome ... companies ... are significantly smaller niche firms, with sales 

volumes closer to 10,000 vehicles per year worldwide; an example of this type of firm is Aston 

Martin. EPA anticipates that there are a small number of such smaller volume manufacturers, 

which have claimed that they may face greater challenges in meeting the proposed standards due 

to their limited product lines across which to average. EPA requests comment on whether the 

proposed ...program ... provides sufficient lead-time for these smaller firms to incorporate the 

technology needed to comply with the proposed GHG standards.” [OAR-2009-0472-7083.1, p.2] 

EPA SHOULD DEFER SVM COMPLIANCE UNTIL AFTER MY 2016 

EPA should defer SVM compliance with its GHG standards until after 2016.3 EPA’s usual 

policy is to allow SVMs to defer compliance with a new requirement until the end of a phase-in. 

See e.g. 40 CFR 1811-04. Under the proposed EPA CO2 rule, the period 2012-2016 is analogous 

to a phase-in of the new GHG requirements, and accordingly, EPA should defer SVM 

compliance until after this period, i.e. until 2017 and later. [OAR-2009-0472-7083.1, p.2] 

EPA failed to include such an SVM deferral provision in its proposal. Rather, EPA proposed two 

provisions that addressed lead-time but failed to provide the needed SVM flexibility: 

-First, EPA proposed a temporary lead-time allowance for manufacturers whose MY 2009 

vehicle sales are below 400,000 vehicles. This 400,000 unit per year proposal is certainly not an 

SVM proposal, since EPA defines SVM as a company with fewer than 15,000 USA sales per 

year. See proposed regulation, section 86.1818-12(e). [OAR-2009-0472-7083.1, p.3] 

-Second, EPA proposed a provision allowing a GHG exemption BUT ONLY FOR CERTAIN 

small businesses – those that meet the Small Business Administration (SBA) criteria contained in 

13 CFR 121.201.6 With this limitation, however, the proposed exemption appears to apply only 

to USA companies. The “US only” limitation may be in violation of WTO requirements. In 

addition, the “small entity” provision is limited to auto manufacturers with fewer than 1000 

employees – a criterion that is irrelevant to a manufacturer’s ability to comply with emissions 

standards (whereas the factor historically determining SVM status – vehicle sales – does affect 

ability. [OAR-2009-0472-7083.1, pp.3-4] 

SVMs Face Lead-Time Problems Meeting The Proposed Standards Due To Their Limited 

Product Lines Across Which To Average 

EPA has acknowledged that SVMs face lead-time problems meeting the proposed standards due 

to their limited product lines across which to average. EPA stated: 

Manufacturers with limited product lines may be especially challenged in the early years of the 

proposed program. Manufacturers with narrow product offerings may not be able to take full 

advantage of averaging or other program flexibilities due to the limited scope of the types of 

vehicles they sell. For example, some smaller volume manufacturers focus on high performance 

vehicles with higher CO2 emissions, above the CO2 emissions target for that vehicle footprint, 

5-71 
EPA Response to Comments 

but do not have other types of vehicles in their production mix with which to average. Often, 

these manufacturers pay fines under the CAFE program rather than meeting the applicable 

CAFE standard. See 74 Fed. Reg. at 49,483. [OAR-2009-0472-7083.1, p.4] 

The simple fact is that an SVM whose product line consists of a single type of vehicle (such as 

sports cars) simply is not in a position to have a diverse fleet which permits use of the averaging 

approach. [OAR-2009-0472-7083.1, p.4] 

As recognized by California in its staff report supporting the California GHG rule, “low volume 

manufacturer offerings need to be preserved in the marketplace to ensure continued consumer 

choice of specialty vehicles. Given their more limited resources to make major revisions to their 

powertrains, it was also important to provide such manufacturers with greater lead time to make 

improvements to their products. In addition, staff needed to consider that major volume 

manufacturers could produce specialty offerings in direct competition with these smaller 

manufacturer offerings, but offset their potentially poorer GHG emission performance by making 

other easier to control cars in their fleet incrementally cleaner.” See Exhibit 1. [OAR-2009-0472­

7083.1, p.4] 

Moreover, many SVMs are dependent on large manufacturers for their powertrains and since the 

large manufacturer can take advantage of averaging, an SVM is often unsure when the specific 

drivetrain that the SVM is using will in fact on its own meet a given requirement. In addition, 

because the new CO2 requirements are challenging – a fact acknowledged in the proposal -- 

major engine technology suppliers will concentrate their efforts on working with large volume 

manufacturers, and, thus, SVMs will, at first, have limited access to advanced technology. 

Further complicating matters, because SVMs build so few vehicles, the costs of developing new 

engine systems compared to potential profits discourages suppliers from cooperating with SVMs. 

[OAR-2009-0472-7083.1, p.5] 

Additional Reasons Why Deferral Of The SVM Compliance Date Is Appropriate 

There are three additional reasons why deferral of the SVM compliance date is appropriate: 

1. The proposed EPA enforcement mechanism would render illegal the vehicles of an SVM that 

could not comply with the CO2 standard. This is a harsh penalty (as compared to the CAFÉ 

enforcement mechanism whereby fines are imposed). EPA has explained that the structure of the 

Clean Air Act mandates the enforcement scheme EPA proposed. Assuming this to be the case, 

the equitable solution is to defer SVM compliance to allow EPA and SVMs more time to identify 

a reasonable compliance strategy. 

2. The effect on the environment from an SVM deferral date would be de minimis – the net 

increase in greenhouse gas emissions would be less than 0.1%. See Lotus Cars Limited analysis 

attached as Exhibit 2. The vehicles of SVMs are typically very expensive, sold in very small 

volumes, and are inherently unique and special high performance vehicles that typically 

accumulate few miles per year. As a result, their impact on total greenhouse gas emissions is 

negligible. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

3. The proposal’s credit provisions do not help SVMs during the period 2012- 2016. The credit 

provisions in EPA’s proposal are illusory as regards SVMs during the period MY 2012-2016. 

EPA provided no explanation of how credits will be available for purchase during this period. 

Indeed, the whole reason for the EPA GHG proposal is that the national vehicle fleet is not 

sufficiently efficient, so it is difficult to understand how credits would be generated for use 

during the period MY2012-2016. [OAR-2009-0472-7083.1, p.5] 

EPA SHOULD ALSO PROMULGATE AN SVM HARDSHIP PROVISION, THE SAME AS 

WHAT WAS PROMULGATED IN THE FEBRUARY 2000 EPA TIER 2 RULE 

In its February 2000 Tier 2 rule, EPA included a hardship provision for SVMs (40 CFR 1811­

04(q) which allowed, upon a showing of need, an extra year of lead-time on a case-by-case basis. 

EPA should adopt a similar provision in its GHG rule. [OAR-2009-0472-7083.1, p.6] 

GHG AND SVMs FOR MY 2017 AND LATER: TWO POSSIBLE APPROACHES 

Even with a deferral of the SVM GHG effective date until MY 2017, the question remains “what 

is the appropriate SVM GHG regulatory strategy after MY 2016?” [OAR-2009-0472-7083.1, 

p.6] 

The EPA proposal of September 28, 2009 is at times described by the agencies as covering only 

MY 2012-2016. For example, the Federal Register notice states as follows: “This joint proposal 

covers passenger cars, light-duty-trucks, and medium-duty passenger vehicles built in model 

years 2012 through 2016. ... [The agencies will have] a future rulemaking to address standards 

for model year 2017 and thereafter.” [OAR-2009-0472-7083.1, p.6] 

On the other hand, the preamble to the EPA proposed regulations also states: “The 2016 CO[2] 

standards would remain in place for 2017 and later model years, until revised by EPA in a future 

rulemaking.” [OAR-2009-0472-7083.1, p.6] 

Indeed, the proposed regulatory language in 40 CFR 86.1818-12 sets a GHG standard for “MY 

2016 and later”. [OAR-2009-0472-7083.1, p.7] 

Taking the view that the EPA notice proposes to set GHG standards for the period after MY 

2016, SVMs require one of two possible regulatory approaches to be included in the EPA final 

rule: either (1) finalize 40 CFR 1801-12(j) so that it applies to all SVMs, not just “small entities”; 

or (2) include an SVM “California Compliance Option” in the final rule. [OAR-2009-0472­

7083.1, p.7] [[See Docket Number OAR-2009-0472-7083.1, pp.7-9 for a detailed discussion on 

the tow possible regulatory approaches mentioned above]] 

National Automobile Dealers Association (NADA) 

EPA also proposes to completely exempt manufacturers with less than 1000 employees. This 

proposed exemption should be replaced with one exempting all manufacturers with less than 

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EPA Response to Comments 

15,000 annual U.S. vehicle sales. Note that CARB’s fuel economy/GFIG rules regulate only 

some 6—7 automakers and exempt all others. [OAR-2009-0472-7182.1, p.7] 

[National Automobile Dealers Association also submitted these comments as testimony at the 

New York public hearing, See docket number EPA-HQ-OAR-2009-0472-4621, pp. 88-89.] 

Society of Motor Manufacturers and Traders Limited 

SMMT is concerned that the proposed standards will be impossible for niche and small volume 

manufacturers to meet. These manufacturers represent approximately 0.5% of US registrations. 

They typically have a limited model range, occupying particular segments of the market, rather 

than the broad ranges of a volume manufacturer. They do not have the same economic or 

technical resources available to meet the standards. They will be further penalized by the 

proposed footprint metric. [OAR-2009-0472-7229.1, p.1] 

Niche and small volume manufacturers understand they have to make improvements in their 

environmental impact, and in many cases they are very efficient in their own particular segments. 

If they were to be forced out of the US market along with their innovative technologies, this 

would have little environmental impact and would be to the detriment of market 

diversity/consumer choice and have a large economic impact: 10,000 US jobs, 80,000 UK jobs 

and £2bn export value. [OAR-2009-0472-7229.1, p.1] 

 SMMT is particularly concerned about how niche and small volume manufacturers (SVMs) will 

be treated within the proposed legislation. Definitions: 

-In previous legislation the EPA defines SVMs as those selling less than 15,000 vehicles per 

annum in the USA (see EPA’s ‘10% related-company aggregation rule’ - 40 CFR 86.1838­

01). [OAR-2009-0472-7229.1, p.2] 

-Niche manufacturers we would define as typically selling less than 100,000 units per year in the 

US. Such manufacturers do not operate in all segments of the market but primarily specialize in 

particular types of vehicle. They require special consideration as they can face more stringent 

targets and have less flexibility to meet them than competitors who happen to operate across all 

market segments. [OAR-2009-0472-7229.1, p.2] 

SMMT is very mindful of the importance of the US market for UK producers and that failure to 

meet the proposed targets would exclude them from the US market. UK niche and small volume 

manufacturers employ almost 10,000 people in the USA, through headquarters, dealers and 

servicing centers. A further 80,000 plus jobs are dependent upon those manufacturers back in the 

UK. Approximately 25% of what is built by these manufacturers is exported to the USA, with a 

value of some £2 billion. If these UK manufacturers were to be forced out of the US market this 

would jeopardize exports to other countries in North and South America that are reliant upon 

linked export lines. Also, given the importance of US sales volumes, this would put the entire 

business case for those UK companies at risk. [OAR-2009-0472-7229.1, p.2] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

UK niche/SVMs are independent companies, without the significant resources and economies of 

scale available to the volume manufacturers. They also have a limited model range (in some 

cases just one model) and predominantly occupy specific market segments, such as sports cars 

and 4x4s, which tend to be higher CO2 emitting. [OAR-2009-0472-7229.1, p.3] 

These types of products may also be further penalized by the footprint metric. Sports cars tend to 

be small, with powerful engines, while 4x4s often also have higher CO2 emissions than standard 

saloon cars because they need more powerful engines to perform the off road tasks they are 

legitimately designed for. [OAR-2009-0472-7229.1, p.3] 

Having a limited model range creates less ability to spread the impact of the regulation. Given 

the limited resources low volume manufacturers may tend to also have longer model replacement 

cycles (needing greater time to recover investment costs), ensuring a more limited ability to 

develop the vehicles. Furthermore, as low volume manufacturers often buy-in technologies from 

volume manufacturers there maybe be a time lag on when those technologies are 

available. [OAR-2009-0472-7229.1, p.3] 

Independent SVMs are often competing against brands that are part of larger manufacturer 

groups, who sell across a wider segment range. Those brands that are part of a wider group will 

be in a better position to off-set their performance than an independent manufacturer. They 

would also have the resources available to them of the larger manufacturers, which a niche/SVM 

would not. [OAR-2009-0472-7229.1, p.3] 

Whilst the trading element could provide a possible remedy for meeting the targets, this creates a 

large element of uncertainty: will allowances be available and at what price? This would be 

difficult to build into a business plan. These companies want to be able to comply. They do not 

want to be left with no option but to plan to buy credits from a company that we must not forget 

is a competitor. SMMT believes it would be better regulation to structure the proposal to enable 

them to comply and make a direct contribution to its aims. [OAR-2009-0472-7229.1, p.3] 

Exclusion from the US market would also lead to job losses in the US, through closure of dealer 

and servicing centres, as well as distribution and marketing companies. It could also threaten the 

overall viability of those businesses in total, with the US representing up to 40% of their 

worldwide sales (average 25%). [OAR-2009-0472-7229.1, p.5] 

Lotus Cars Ltd. 

Lotus Cars is concerned that the costs generated by EPA and NHTSA for analysis are not 

applicable to small volume manufacturers. In effect, the engineering effort and development cost 

to re-engineer a part/system with the goal of increased efficiency will likely remain relatively 

consistent irrespective of future production volume. However, when that cost is evaluated as a 

'cost per vehicle', a small volume manufacturer has far fewer production vehicles over which to 

spread the cost, hence the cost per vehicle will be dramatically higher. Lotus Cars does not 

believe that the EPA and NHTSA joint Technical Support Document provides consideration of 

'cost per vehicle' technology introduction with regard to small volume manufacturers. 

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EPA Response to Comments 

Furthermore, searches of the EPA and NHTSA joint Technical Support Document using terms 

such as 'small volume', 'SVM', 'niche', etc, yield zero results. This is understandable, as 

attempting to quantify the predicted cost effects of the proposed legislation for small volume 

manufacturers would simply demonstrate that a 'one size fits all approach' is not appropriate for 

these manufacturers. The unique nature of small volume manufacturers necessitates legislation 

that retains a sufficient degree of flexibility to maximize emissions improvements without 

regulating such manufacturers out of the market. [OAR-2009-0472-7249, pp.6-7] 

TLAAS is effectively a flexible phase-in allowance on route to total compliance with the fleet 

average greenhouse gas emissions standards. EPA has requested comment from small volume 

manufacturers, as to whether TLAAS provides sufficient lead-time for achievement of the fleet 

average greenhouse gas standards. As the proposed legislation is not currently considered 

appropriate for small volume manufacturers, Lotus Cars asserts that the TLAAS allowance is not 

conducive to effective greenhouse gas emission reductions from manufacturers within this 

classification. It is, however, important to note that small volume manufacturers are often reliant 

on inheriting new technology from large volume manufacturers. Such technology is generally 

only available for a small volume manufacturer to develop and incorporate into future products 

once one or more large volume manufacturers has the technology in full production. Therefore, 

lead-time allowances for small volume manufacturers are an important consideration with all 

new legislation that is at least partially reliant upon newer technologies. Lotus Cars has 

previously found EPA's standard procedure for small volume manufacturers to be appropriate, 

whereby an exclusion from new legislation is permitted during any phase-in period. This is 

considered reasonable given the limited production volumes, access to new technology, and very 

limited number of models produced by such manufacturers. 

Partial justification for the TLAAS allowance is attributed to the following statement: EPA 

projects that the environmental impact of the proposed TLAAS program will be very small. If all 

companies eligible to use the TLAAS use it to the maximum extent allowed, total GHG 

emissions from the proposal will increase by less than 0.4% over the lifetime of the MY 2012­

2016 vehicles. This allows for a number of manufacturers (11 in total, based on 2008MY sales 

figures) to produce 100,000 vehicles each over a 4 model year period with significantly higher 

greenhouse gas emissions (total 1.1 million vehicles). A small number of small volume 

manufacturers each producing less than 15,000 vehicles per annum with fleet average 

greenhouse gas emissions higher than the standards applicable for large volume manufacturer 

fleet averages, would clearly have a minute impact on total greenhouse gas emissions in 

comparison. Such figures could be used to demonstrate that greenhouse gas limiting legislation is 

not appropriate in any way to small volume manufacturers, and that removing SVM's from all 

such legislative requirements would have no significant impact on total greenhouse gas 

emissions. However, Lotus Cars does not believe that this sets an appropriate example, and as 

such seeks to achieve an appropriate level of legislation that would both encourage and require 

greenhouse gas emissions reductions, whilst still supporting both new and existing small volume 

manufacturers. [OAR-2009-0472-7249, pp.7-8] 

Lotus recommends revisions to the proposed legislation that would provide similar small volume 

manufacturer provisions to current CAFE legislation, whereby small volume manufacturers 

would have the ability to petition EPA/NHTSA with proposed green house gas fleet average 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

emissions targets. Such petitions should contain evidence as to the relevance of the proposed 

target (considering the vehicle type(s) in production), together with details of the work a 

manufacturer is undertaking to reduce greenhouse gas emissions of its vehicles, irrespective of 

vehicle type(s). In accordance with EPA's standard procedure for new legislation, Lotus Cars 

recommends that small volume manufacturers are excluded from legislative requirements during 

the effective phase-in period, to allow sufficient time for product plans to be aligned with 

legislative requirements. Lotus further recommends that the definition of a small volume 

manufacturer, for the purposes of this legislation, is in accordance with the current EPA 

definition. The EPA definition of a small volume manufacturer is one who sells fewer than 

15,000 vehicles in all states and territories of the United States within a given model year. Lotus 

Cars believes that it is correct to define a manufacturer with sales figures below this threshold as 

a small volume manufacturer, given the different product lines and development procedures 

employed. Lotus Cars further believes that the application of such a threshold based on vehicle 

sales within US territories and states represents the best determination for whether to classify a 

manufacturer for small volume allowances. Manufacturers who sell vehicles in other territories, 

which may have significantly differing regulatory requirements, are not necessarily better 

positioned to meet the legislative requirements of EPA and/or NHTSA. 

Proposal in summary: 'SVM compliance starts at end of effective phase-in period 'Manufacturer 

specific GHG emission targets for SVM's' Targets determined through manufacturer proposal, 

with administrator final decision 'SVM definition as per EPA legislation. 

The joint EPA/NHTSA legislative proposal seeks to 'achieve substantial reductions of 

greenhouse gas (GHG) emissions and improvements in fuel economy from the light-duty vehicle 

part of the transportation sector'. Due to the particularly low volumes of vehicle involved, Lotus 

Cars asserts that the above recommended amendments to the proposed regulations will not have 

any significant impact on the ability of such legislation to achieve these aims within the 

transportation sectors. Indeed, calculations using worst case emissions and sales figures show 

that the proposed amendments would affect net greenhouse gas emissions from new vehicles in 

the light-duty vehicle industry by less than 0.1%. [OAR-2009-0472-7249, p.9] 

Lotus also submitted confidential business information regarding their product plans and 

emissions reduction capabilities. 

Koenigsegg Automotive AB 

We hereby support the comment filed by Vehicle Services Consulting, Inc. as regards the GHG 

proposal and small volume manufacturers. [OAR-2009-0472-7194.1, p.1] [See Vehicle Services 

Consulting, Inc.'s comments in outline section 5.4.2.] 

Tunick, Lance 

This comment is being filed on behalf of small volume specialty vehicle manufacturers who do 

not qualify as 'Small Volume Manufacturers' (SVM) under EPA regulations. 

5-77 
EPA Response to Comments 

This comment concerns EPA and NHTSA's joint proposal to establish a National Program 

consisting of new standards for light-duty vehicles that will reduce greenhouse gas emissions and 

improve fuel economy. 74 FR 49454, September 28, 2009 . EPA is proposing greenhouse gas 

emissions standards under the Clean Air Act, and NHTSA is proposing Corporate Average Fuel 

Economy standards under the Energy Policy and Conservation Act, as amended. These standards 

would apply to passenger cars, light-duty trucks, and medium-duty passenger vehicles, covering 

model years 2012 through 2016, and represent a harmonized and consistent National Program. 

We address here the proposed EPA C02 standard from the point of view of a small volume test 

group (SVTG) of a small volume specialty vehicle manufacturer that: --does NOT qualify as an 

SVM under EPA regulations (40 CFR 86.1838) only due to the fact that it is part of a larger 

automobile group and hence lose SVM status under the EPA '10% aggregation rule' that governs 

how to calculate US sales when considering the 15,000/yr SVM limit, but --operates its own 

engineering center and production facilities. 

In this comment, the above type of manufacturer will be referred to as a 'Operationally 

Independent Small Volume Manufacturer', 'OI-SMV'. 

We fully support a GHG standard that makes OI-SVMs do their fair share and that does not give 

them a 'free ride'. There is, however, a significant factor that must be considered when deciding 

what is 'fair share': OI-SVMs that manufacturer high performance specialty vehicles cannot, by 

virtue of their characteristics, meet the C02 requirements proposed by EPA. 

We therefore propose that for a SVTG of an OI-SVM there be a special C02 rule as discussed 

below. There is already an important EPA precedent for the idea of certain SVTG having a 

special rule allowing reduced compliance: in 40 CFR 86.1845, the in-use testing requirement, 

certain very low volume SVTG are exempt from such testing if the annual US sales of the test 

group are below 5001. We propose a similar C02 rule for SVTG that have fewer than 5001 US 

sales. 

A special SVTG rule as regards C02 could follow one of two possible paths: 1. The first path is 

the one already taken by the European Union (see Article 11 of Regulation (EC) No 443/2009). 

The essence of the rule would be that as regards an SVM or an OI-SVM having an SVTG with 

fewer than 5001 US sales, the SVM or OI-SVM would receive an alternative C02 standard 

determined on a case-by-case basis based on feasibility. 1 2. The second possible path is to 

follow the theory behind EPA's entire C02 proposal - to reduce C02 emissions in MY 2016 by 

20% as compared to MY 2008. To this end, EPA could calculate the average C02 emissions 

from MY 2008 SVTGs having fewer than 5001 US sales, and then require for MY 2016 a 20% 

reduction of the MY 2008 value for all such SVTG. 

We further propose that final rule delay the effective date of the EPA C02 standard until MY 

2016 for SVTG of OI-SVM that have fewer than 5001 US annual sales in order to allow an 

orderly compliance transition. 

The joint proposal does not adequately address the needs of SVTGs of OI-SVM. To this end, the 

final rule should delay the effective date of the EPA C02 standard until MY 2016 for certain 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

SVTG as discussed above and should, as regards model years starting with 2016, adopt one of 

the SVTG strategies set forth above. [OAR-2009-0472-7208.1, pp.1-2] 

[[These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number EPA-HQ-OAR-2009-0472-7283, pp. 140-144]] 

First, EPA's usual policy is to allow SVMs to defer compliance with a new requirement until 

the end of phase-in. In my opinion, under the proposed EPA rule, the period 2012 through 2015 

is analogous to a phase-in, and, accordingly, EPA should defer SVM compliance until after this 

period, that is, until 2016. That is what California is doing in its GHG rule. 

But, again, EPA failed to include any such deferral. Instead, EPA only proposed a temporary 

 lead-time allowance for manufacturers with vehicle sales below 400,000. This 400,000-unitper-year proposal, however, is certainly not an SVM proposal. 

Once again, we urge that the final rule defer SVM compliance until 2016 as California did in its 

rule. 

And, in fact, EPA has acknowledged the potential need for this deferral. In the preamble, EPA 

recognized that some manufacturers are niche firms with sales volumes well below 10,000 

vehicles per year worldwide. And, in fact, EPA gave the example of Aston Martin. 

EPA correctly anticipated that a number of SVMs will face greater challenges in meeting the 

 proposed standards due to their limited product lines and limited with no ability to average. 

EPA therefore requested comment on whether the proposed 400,000-unit-per-year program 

provided sufficient lead time for these SVMs in order for them to incorporate technology 

needed to comply with the proposed standards. 

The California type of section that I am urging would require SVMs to meet, beginning in 2016, 

the average CO2 equivalent emissions of all 2012-comparable vehicles produced by the major 

vehicle manufacturers. 

My third point today is that the SVM provision that EPA did include in its proposal concerns 

certain limited SVM exemptions, but the exemptions are only for SVMs that meet the Small 

 Business Administration criteria contained in 13 CFR. 

With this limitation, the proposed exemptions appear to apply only to American companies. 

This U.S.A-only limitation may very well run afoul of the World Trade Organization 

 requirements. 

Fourth, the credit provisions in EPA's proposal do not offer a solution for SVMs during the 

 period 2012 to 2015. It is difficult to understand how credits will be available to SVMs in the 

short term, that is, during this 2012 to 2015 period. 

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EPA Response to Comments 

It is certainly risky at best for an SVM to plan its compliance strategy around the possibility of 

such credits being available. 

My fifth and last point is that the proposed EPA enforcement mechanism would render illegal 

SVM vehicles that did not comply with the CO2 standard. This is a very harsh penalty as 

 compared, for example, to the CAFE enforcement program that has monetary fines. 

But EPA has explained that the structure of the Clean Air Act mandates the enforcement scheme 

 that EPA has proposed. Assuming this to be the case, the equitable solution is to adopt a 

reasonable GHG standard for SVMs. 

MD McLaren Automotive Ltd. 

EPA proposed a temporary lead-time allowance for MY 2009 manufacturers based on vehicle 

sales below 400,000 vehicles. This 400,000 unit per year proposal is not consistent with an SVM 

proposal, because EPA defines SVM as a company with fewer than 15,000 USA sales per year. 

This proposal also states that this allowance is not applicable to new manufacturers introducing 

products to the market that did not sell vehicles under their nameplate in the US in MY 2009, a 

criterion that is not relevant to a manufacturer's ability to comply with emissions standards. 

The EPA should consider that in the case of McLaren Automotive, we have been designing and 

producing cars that are homologated and sold in the US market since 2003, including MY 2009. 

However, since the 716 SLR McLaren cars sold during this time in the US were sold under the 

Mercedes badge, we would not be eligible for any type of TLAAS. Additionally, we have been 

developing the MP4-12C model since well prior to this proposed rulemaking, investing capital 

with the anticipation of distributing, selling and servicing our cars through a U.S. distribution 

network that will employ over 200 people. 

The TLAAS provision does not provide McLaren Automotive, as an SVM, with an achievable 

GHG limit: McLaren Automotive has a limited product line focused on the sports car segment 

and cannot therefore average. Large volume manufacturers are able to offset emissions from 

higher emission vehicle types, with lower emissions from lower performance vehicle types. In 

this way, several large manufacturers will be allowed to sell cars in the marketplace that compete 

directly against our MP4-12C, but have much higher C02 emissions, while we would be 

excluded from the market. McLaren Automotive's new models are class-leading and introduce 

new technologies into the auto industry, but no technologies exist, or will exist in the near future, 

that will permit the cars we produce to meet the current required fleet average. Any allowances 

or deferrals are currently not applicable to McLaren Automotive as we technically did not sell a 

car in the US in MY 2009 under our own nameplate. 

As such, the proposed TLASS provision is inappropriate for both McLaren Automotive and 

other small volume manufacturers. 

McLaren Automotive would like to propose that under the TLAAS rule, the period 2012-2016 is 

analogous to a phase-in of the new GHG requirements, and accordingly. EPA should defer SVM 

compliance until after this period (i.e. until 2017 and later)B. This would align with EPA's usual 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

policy to allow SVM's to defer compliance with a new requirement until the end of a phase-in. 

(See e.g. 40 CFR 1811-04). 

The proposed provision allowing an SVM exemption for the period 2012-2016 is only for certain 

small businesses; those that meet the Small Business Administration criteria contained in 13 

CFR 121.201.10. With this limitation, however, the proposed exemption appears to apply only to 

US companies, which would exclude the vast majority of SVM's. McLaren Automotive would 

like the rulemaking to clarify that this deferment applies to non-US companies or adopt an 

additional standard for a deferment that does apply to SVM companies such as McLaren 

Automotive that plan to distribute, sell and service their vehicles in the US. 

In addition, the SBA provision is limited to auto manufacturers with fewer than 1000 employees. 

McLaren Automotive believes that this criterion is not relevant to a manufacturer's ability to 

comply with emissions standards (as significant portions of work could be outsourced to give an 

appearance of fewer than 1000 employees) and would propose that if EPA leaves in place the 

employee standard that it also incorporate an alternative standard that relates to vehicle sales. 

One such approach would be for EPA to consider the historically determining EPA SVM status 

of 15,000 vehicle sales as the standard. 

Under the Small Entity Deferment, EPA embraced both the idea of omitting certain small entities 

from the final rule, as well as the idea that SVM's, such as McLaren Automotive, need a 

specially structured program. Since the total SVM GHG effect on the environment is minimal, it 

would be logical to follow this approach. McLaren Automotive proposes that the same statutory 

authority permitting the small entity exemption applies to SVM's and requests that EPA extends 

the idea to all SVM's, rather than only some. [NHTSA-2009-0059-0078, pp.6-7] 

McLaren Automotive achieved class leading CO2 and safety results without any assistance from 

large OEM's. We expect the 12C to sell between 250-350 cars annually into the US market. 

Moving forward, McLaren Automotive has planned a range of other models which will not only 

significantly reduce the price point of models available with these technologies, but will also 

introduce (over the next 3-5 years) new, innovative technologies designed to improve efficiency 

even further. Over this time period, we hope to grow US sales annually through a US distribution 

system that will employ over 200 people. Thus, we are clearly in a class of small manufacturers 

that would be eliminated from the U.S. marketplace under the proposed rule. 

The best approach to this issue is that taken by the State of California staff report supporting the 

California GHG rule: 'low volume manufacturer offerings need to be preserved In the 

marketplace to ensure continued consumer choice of specialty vehicles. Given their more limited 

resources to make major revisions to their powertrains, it was also important to provide such 

manufacturers with greater lead-time to make improvements to their products. In addition, staff 

needed to consider that major volume manufacturers could produce specialty offerings in direct 

competition with these smaller manufacturer offerings, but offset their potentially poorer GHG 

emission performance by making other easier to control cars in their fleet incrementally cleaner 

The California SVM provisions provided an exemption from the phases in period and proposed a 

methodology for an alternative SVM standard. [NHTSA-2009-0059-0078, p.5] 

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EPA Response to Comments 

EPA suggests that 'for a few very small volume manufacturers, EPA projects that manufacturers 

will likely comply using a combination of credits and technology.' 

The proposal's credit provisions do not help SVM's during the period 2012-2016. Large 

manufacturers may themselves need to balance the credits between their own fleets and there is 

no requirement for large manufacturers to sell credits, nor is there an agreed price or proposal of 

how the credits will be available for purchase during this period. A large manufacturer that also 

produces sports cars that compete directly against McLaren Automotive would certainly prefer to 

exclude a competitor from the market rather than sell it credits at a fair price so that it could 

compete. 

As such, the market for credits is unpredictable and there is no guarantee that credits will be 

available to an SVM during the period 2012-2016. [NHTSA-2009-0059-0078, p.7] 

[The following is from NHTSA-2009-0059-0078, p.8] 

McLaren Automotive proposes that EPA include the definition of an SVM within the new 

proposal. The EPA definition of a small volume manufacturer is one who sells fewer than 15,000 

vehicles in all states and territories of the United States within a given model year. EPA should 

then defer the GHG standards for SVM's to at least 2017 Model Year, considering the methods 

below: 

1. Under the proposed TLAAS rule, the period 2012-2016 is analogous to a phase-in of the new 

GHG requirements, and accordingly, EPA should defer SVM compliance until after this period, 

(i.e. until 2017 and later). This would align with EPA's usual policy to allow SVM's to defer 

compliance with a new requirement until the end of a phase-in. 

2. Include the SVM definition in the conditional exemption from greenhouse gas emissions 

standards permitting the small entity exemption to all SVM's. 

3. Deferrals included in the proposal should not be limited to sales in any previous Model Year, 

but should be made available to all new entrants to encourage the introduction of new 

innovations. 

4. EPA could then consider appropriate GHG standards for SVM's as part of a future regulatory 

action. 

5. EPA should apply the historic definition of an SVM. 

Note that during this period, McLaren Automotive, and other SVM's, would still be required to 

meet all NHTSA CAFE and CARB regulations. 

In addition, McLaren Automotive proposes that the GHG standards should follow a similar 

process to the current NHTSA CAFE legislation. The SVM should have the ability to petition 

EPA with a proposed GHG fleet average target based on the model mix. This will ensure that a 

vehicle from a SVM has a comparable GHG target when assessed against a comparable vehicle 

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from a large manufacturer. The petitions should contain evidence as to the relevance of the 

proposed target together with details of the work a manufacturer is undertaking to reduce 

greenhouse gas emissions of its vehicles, irrespective of vehicle type. 

A second approach to handling the post 2016 Model Year period for SVM's would be to adopt an 

SVM 'California Compliance Option' which would allow SVM's to comply with the SVM 

provisions in the California GHG standard as a means of achieving federal compliance. 

California, under CAA waivers, has routinely established SVM standards that differ from 

California standards for large volume manufacturers. 

There is clear EPA precedent for a California Compliance Option approach such as the OBD 

requirements set forth in 40 CFR 1806-05. Under that section, compliance with California OBD 

regulation satisfies EPA requirements. The EPA has already considered the question of whether 

a 'California Compliance Option' is permissible under the CAA, and has, without hesitation, 

concluded that it is. The same rationale should apply here. 

McLaren also submitted confidential business information regarding their product plans and 

emissions reduction capabilities. 

Morgan Motor Company Ltd. 

Morgan Motor Company Ltd files these comments as regards EPA and NHTSA's joint proposal 

to establish a National Program consisting of new standards for light-duty vehicles that will 

reduce greenhouse gas emissions and improve fuel economy. 74 FR 49454, September 28, 2009. 

We hereby support the comment filed by Vehicle Services Consulting, Inc. as regards the 

GHG proposal and small volume manufacturers. 

Spyker Cars 

We hereby support the comment filed by Vehicle Services Consulting, Inc. as regards the GHG 

proposal and small volume manufacturers. [See Vehicle Services Consulting, Inc.'s comments in 

outline section 5.4.2.] 

KTM-Sportsmotoercycle AG 

We hereby support the comment filed by Vehicle Services Consulting, Inc. as regards the GHG 

proposal and small volume manufacturers. [See Vehicle Services Consulting, Inc.'s comments in 

outline section 5.4.2.] 

The temporary lead-time alternative allowance standard is more applicable to firms significantly 

larger than us, and that the proposed footprint metric will further penalize our particular type of 

product. [OAR-2009-0472-7183, p.1] 

We would like better provision for small volume manufacturers to be developed, as established 

in the European Union’s new car CO2 regulation, so we can contribute to reducing CO2 

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EPA Response to Comments 

emissions but in a manner that adequately reflects our economic and market potential and that 

also ensure diversity within the market place can continue. [OAR-2009-0472-7183, p.1] 

There are several ways forward that we would support, such as developing specific emissions 

target reductions for small volume manufacturers as in the EU new car CO2 regulation makes 

provision for. [OAR-2009-0472-7183, p.1] 

KTM is developing a number of initiatives to reduce our CO2 and other GHG emissions. 

However, we are a very low volume producer, with limited economic and technical resources, 

especially when compared with a volume manufacturer. [OAR-2009-0472-7183, p.1] 

European Small Volume Car Manufacturers' Alliance (ESCA) 

ESCA members represent less than 0.5% of US registrations. They typically have a limited 

model range, occupying particular segments of the market, rather than the broad ranges of a large 

volume manufacturer. They do not have the same economic or technical resources available to 

meet the standards. They will be further penalized by the proposed footprint metric. Exclusion 

from the US market would lead to job losses in the US, through closure of dealer and servicing 

centers, as well as distribution and marketing companies. It could also threaten the overall 

viability of those businesses in total, with the US representing up to 40% of worldwide sales 

(average 25%). [OAR-2009-0472-7287.1, p.1] 

ESCA member companies welcome challenging but achievable emissions reduction targets. 

European based manufacturers have invested significant sums of money in developing lower 

emitting vehicles and low volume manufacturers in particular have been innovative, particularly 

in terms of light-weighting products, such as use of aluminum chassis, carbon fiber and bonded 

rather than welded structures. [OAR-2009-0472-7287.1, p.1] 

Access to the US market is critical for European SVMs. Failure to meet the proposed targets 

would exclude ESCA member companies entirely from selling automobiles in the US. Small 

volume manufacturers understand the need for improvements in their environmental impact and 

in many cases they are very efficient in their own particular segments. If they were to be forced 

out of the US market along with their innovative technologies, this would have little 

environmental impact and would be to the detriment of market diversity/consumer choice and 

have a large economic impact namely, up to 10,000 US jobs, 100,000 EU jobs and up to € 21⁄2 

billion export value. [OAR-2009-0472-7287.1, p.2] 

ESCA is particularly concerned about how SVMs will be treated within the proposed legislation. 

In previous legislation the EPA defines SVMs as those selling less than 15,000 vehicles per 

annum in the USA (see EPA’s ‘10% related-company aggregation rule’ - 40 CFR 86.1838-01). 

The proposed temporary lead-time alternative allowance standard and small entity conditional 

exemption will not, in their proposed format, offer a suitable solution for European small volume 

manufacturers. ESCA hopes that solutions can be developed to ensure challenging yet achievable 

long term targets for manufacturers. Our evaluation of the EPA/NHTSA proposal is attached as 

an annex. [OAR-2009-0472-7287.1, p.2] 

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ESCA companies are also now looking forward to complying with the requirements of the panEuropean new car CO2 regulation, which begins in 2012. Article 11 of this regulation makes a 

provision for SVMs to agree targets more appropriate to their economic and technological 

potential (see Regulation 443/2009, Art. 11). ESCA is particularly concerned that in the current 

US proposal for lower volume manufacturers, the temporary lead time allowance alternative 

standards and the small entity conditional exemption, do not offer a suitable provision for 

European SVMs. [OAR-2009-0472-7287.1, p.2] 

 ESCA member companies have limited ability to spread the impact of the proposed US 

regulation. Given limited resources low volume manufacturers may tend to also have longer 

model replacement cycles (needing greater time to recover investment costs), ensuring a more 

limited ability to develop vehicles. Furthermore, as low volume manufacturers often buy-in 

technologies from volume manufacturers there may be a time lag for when those technologies 

are available. Also, we compete against brands that are part of larger manufacturer groups, who 

sell across a wider segment range. Large manufacturers have resources available to them which 

SVMs do not. [OAR-2009-0472-7287.1, p.2] 

Whilst the trading element could provide a possible remedy for meeting the targets, this creates a 

large element of uncertainty: will allowances be available and at what price? This would be 

difficult to build into a business plan. These companies want to be able to comply. They do not 

want to be left with no option but to plan to buy credits from a company that we must not forget 

is a competitor. ESCA believes it would be better regulation to structure the proposal to enable 

them to comply and make a direct contribution to its aims. [OAR-2009-0472-7287.1, p.2] 

Europe’s SVMs remain committed to lowering CO2 emissions, improving fuel economy and 

providing consumers with choice and diversity. European SVMs represent less than 0.5% of US 

sales, but are keen to participate. However, the limitations of their financial resources and ability 

to develop or access technology need to be taken into account. [OAR-2009-0472-7287.1, p.3] 

Within the EPA/NHTSA proposal the ‘Temporary Lead-time Alternative Allowance Standard’ 

(TLAAS) to 2016 is welcome. This allows manufacturers selling less than 400,000 cars to apply 

for a target of 125% of proposed industry-wide footprint target level. However, due to the high 

initial target faced by European SVMs this flexibility is insufficient to enable them to comply 

with the standard. [OAR-2009-0472-7287.1, p.4] 

The proposed TLAAS allowance is also only available to vehicle manufacturers with vehicles 

for sale in MY 2009. Some SVMs are not currently selling into the US market, in part due to the 

current economic climate. They would therefore be excluded from being able to use the TLAAS 

in future. [OAR-2009-0472-7287.1, p.4] 

Artega Automobil GmbH & Co. KG 

As an EU based small volume manufacturer we believe the proposed standards will be 

impossible to meet. We would like better provision for small volume manufacturers to be 

developed, as established in the European Union's new car CO2 regulation, so we can contribute 

to reducing CO2 emissions but in a manner that adequately reflects our economic and market 

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EPA Response to Comments 

potential and that also ensure diversity within the market place can continue. [OAR-2009-0472­

7481.1, p.1] 

The temporary lead-time alternative allowance standard is more applicable to firms significantly 

larger than us, and that the proposed footprint metric will further penalize our particular type of 

product. [OAR-2009-0472-7481.1, p.1] 

There are several ways forward that we would support. such as extending the small entity 

conditional exemption to all small volume manufacturers, or developing specific emissions target 

reductions for small volume manufacturers as in the EU new car CO2 regulation makes provision 

for. [OAR-2009-0472-7481.1, p.2] 

Artega Automobil GmbH & Co. KG is developing a number of initiatives to reduce our CO2 and 

other GHG emissions. However, we are a very low volume producer with limited economic and 

technical resources, especially when compared with a volume manufacturer. [OAR-2009-0472­

7481.1, p.2] 

Wiesmann GmbH 

As an EU based small volume manufacturer we believe the proposed standards will be 

impossible to meet. We would like better provision for small volume manufacturers to be 

developed, as established in the European Union’s new car CO2 regulation, so we can contribute 

to reducing CO2 emissions but in a manner that adequately reflects our economic and market 

potential and that also ensure diversity within the market place can continue. [OAR-2009-0472­

7198, p.1] 

The temporary lead-time alternative allowance standard is more applicable to firms significantly 

larger than us, and that the proposed footprint metric will further penalize our particular type of 

product. [OAR-2009-0472-7198, p.1] 

There are several ways forward that we would support, such as developing specific emissions 

target reductions for small volume manufacturers as in the EU new car CO2 regulation makes 

provision for. [OAR-2009-0472-7198, p.1] 

Wiesmann is developing a number of initiatives to reduce our CO2 and other GHG emissions. 

However, we are a very low volume producer, with limited economic and technical resources, 

especially when compared with a volume manufacturer. [OAR-2009-0472-7198, p.1] 

IMPCO Technologies, Inc. 

EPA is proposing to defer setting greenhouse gas emissions standards for entities meeting the 

Small Business Administration criteria of a Small Business. 

IMPCO falls under the definition of a “Small Entity”, however, because IMPCO is part of a 

larger holding company, the overall organization does not qualify as a Small Entity. Therefore, 

IMPCO would be subject to the same CH4, and N2O emissions standards as those for automotive 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

manufacturers. Given the relative size of IMPCO’s U.S. operations and volume of fuel systems 

to be sold, this directly puts IMPCO at a tremendous disadvantage. [OAR-2009-0472-7282.1 

p.3] 

EPA Response: 

EPA agrees with comments that the standards would be extremely challenging and potentially 

infeasible for very small volume manufacturers, absent credits purchased from other 

manufacturers, and that such credit availability at this point is highly uncertain. Although these 

companies are planning to introduce significant GHG-reducing technologies to their product 

lines, they are still highly unlikely to meet the standards by MY2016. Because the products 

produced by these manufacturers are essentially unique, these manufacturers were not included 

in EPA’s OMEGA modeling assessment of the technology feasibility and costs to meet the 

proposed standards. These manufacturers have only a few models and have very high baseline 

emissions. TLAAS manufacturers are projected to be required to reduce emissions by up to 

39%, whereas SVMs in many cases would need to cut their emissions by more than half to 

comply with MY2016 standards (e.g., Based on MY2009 CAFE levels, one of these 

manufacturers has baseline emissions of 468 g/mile). 

Given the unique feasibility and related lead time issues raised for these manufacturers, EPA is 

deferring establishing CO2 standards for manufacturers with MY2008 or MY2009 sales of less 

than 5,000 vehicles. This will provide EPA more time to consider the unique challenges faced 

by these manufacturers. The deferment only applies to CO2 standards; SVMs must meet N2O 

and CH4 standards. EPA plans to set standards for these manufacturers as part of a future 

rulemaking in the next 18 months. This future rulemaking will allow EPA to fully examine the 

technologies and emissions levels of vehicles offered by small manufacturers and to determine 

the potential emissions control capabilities, costs, and necessary lead time. This timing may also 

allow a credits market to develop, so that EPA may consider the availability of credits during the 

rulemaking process. See State of Mass. v. EPA, 549 U.S. at 533 (EPA retains discretion as to 

timing of any regulations addressing vehicular GHG emissions under section 202 (a)(1)). We 

expect that standards would begin to be implemented in the MY2016 time frame. Several 

commenters supported the approach of deferring standards to a future rulemaking. This 

approach is also consistent with that envisioned by California for these manufacturers, as noted 

by several commenters. EPA estimates that eligible small volume manufacturers currently 

comprise less than 0.1 percent of the total light-duty vehicle sales in the U.S., and therefore the 

deferment will have a very small impact on the GHG emissions reductions from the standards. 

In addition to the 5,000 vehicle per year cut point, to be eligible for deferment each year, 

manufacturers must also demonstrate due diligence in attempting to secure credits from other 

manufacturers. Manufacturers must secure credits to the extent they are available at a reasonable 

price from other manufacturers to offset the difference between their baseline emissions and 

what their obligations would be under the TLAAS program starting in MY2012. Several small 

volume manufacturers commented that they would be willing to purchase credits from other 

manufacturers as a way to comply with standards, assuming that the credits are available at a 

reasonable cost. 

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EPA Response to Comments 

Several commenters noted in their recommendations that EPA has historically used an annual 

sales cut point of 15,000 vehicles in defining small volume manufacturers in the past for Tier 2 

and other rules. EPA, however, believes 5,000 vehicles is sufficient to address small volume 

manufacturers and that using 15,000 vehicles would not result in covering additional 

manufacturers. Small volume manufacturers, including many of those that commented in 

support of additional leadtime, typically sell 1,000-2,000 vehicles per year and therefore the 

5,000 vehicle cut point provides a reasonable margin for sales growth. In the interest of 

establishing the small volume manufacturer provisions as narrowly as possible while still 

accomplishing the purpose of the provisions, EPA has decided to use a cut-point of 5,000 

vehicles. 

EPA received comment from Ferrari that EPA should allow a manufacturer to apply to EPA to 

establish small volume manufacturer status based on the independence of its research, 

development, testing, design, and manufacturing from another firm that may have an ownership 

interest in that manufacturer. EPA has reviewed these comments, but is not finalizing such a 

provision at this time. EPA believes that this issue likely presents some competitive issues, 

which we would like to be fully considered through the public comment process. Therefore, 

EPA plans to consider this issue and seek public comments in our proposal for small volume 

manufacturer CO2 standards, which we expect to complete within 18 months. In determining 

eligibility for SVM deferment, manufacturers must be aggregated according to the provisions of 

40 CFR 86.1838-01(b)(3), which requires the sales of different firms to be aggregated in various 

situations, including where one firm has a 10% or more equity ownership of another firm, or 

where a third party has a 10% or more equity ownership of two or more firms. 

Small Volume Test Groups 

EPA received comments that EPA should consider exempting small volume test groups from the 

fleet average approach and allow them to comply with a fixed value. This concept is similar to 

establishing separate standards for small volume manufacturers, but would allow all 

manufacturers to use the separate standards for a subset of their fleet. EPA did not propose this 

concept and is not including such a provision in the final rule. Instead, EPA has included a wide 

range of flexibilities available to manufacturers it believes will be sufficient to address issues 

with low volume test groups. These flexibilities include averaging, TLAAS, and credits 

programs. 

Comments Concerning Natural Gas Vehicles 

Organization: NGVAmerica 

Clean Energy Fuels 

Comment: 

NGV America 

EPA’s notice exempts small volume manufacturers and aftermarket conversion manufacturers 

who are small businesses from having to meet the new greenhouse gas emission regulations. See 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

EPA NPRM, p. 49629. The proposed rule also includes a phase-in period for small volume 

manufacturers. Aftermarket conversion manufacturers who satisfy the small volume 

manufacturer requirements potentially would qualify for the phase-in. There would be no 

exemption for aftermarket conversion manufacturers who are not small businesses, however. See 

EPA NPRM, p. 49575. We agree with EPA’s assessment that exempting small businesses from 

the proposed regulation will have a negligible impact on greenhouse gas emissions. [OAR-2009­

0472-7236.1, p.11] 

EPA should also exempt aftermarket conversion manufacturers of alternative fuel systems who 

are not small businesses from having to comply with the greenhouse gas regulations. These 

manufactures currently provide a valuable service by offering systems that enable vehicles to 

operate on alternative fuels. In the light duty vehicle market, there are few original equipment 

manufacturer (OEM) options for consumers interested in acquiring natural gas fueled vehicles. 

The alternative fuels industry benefits from having large businesses manufacture, certify and sell 

aftermarket conversion systems. Subjecting the larger businesses to requirements that are 

different from their smaller competitors could discourage such businesses from providing 

aftermarket alternative fuel systems. In addition, the new requirements will be equally difficult 

for both large and small aftermarket manufacturers since both rely on the catalysts used by the 

original equipment manufacturer. EPA should exempt large businesses that provide aftermarket 

conversion systems for alternative fuel vehicles. [OAR-2009-0472-7236.1, p.11] 

Clean Energy Fuels 

EPA's notice exempts small volume manufacturers and aftermarket conversion manufacturers 

who are small businesses from having to meet the new GHG emission regulations. See EPA 

NPRM, p. 49629. The proposed rule also includes a phase-in period for small volume 

manufacturers. Aftermarket conversion manufacturers who are not small businesses, however, 

are expected to comply with the new GHG emission requirements. See EPA NPRM, p. 49575. 

We agree with EPA's assessment that exempting small businesses from the proposed regulation 

will have a negligible impact on GHG emissions. [OAR-2009-0472-7220.1, p.9] 

EPA and NHTSA should also exempt aftermarket conversion manufacturers of alternative fuel 

systems who are not small businesses from having to comply with the GHG regulations. These 

manufactures currently provide a valuable service in providing alternative fuel systems, which 

for the most part are not available from original equipment manufacturers. We think the 

alternative fuels industry benefits from having large businesses manufacture, certify and sell 

aftermarket conversion systems. Subjecting the larger businesses to requirements that are 

different from their smaller competitors could discourage such businesses from providing 

aftermarket alternative fuel systems. Thus, EPA should exempt large businesses that provide 

aftermarket conversion systems for alternative fuel vehicles. [OAR-2009-0472-7220.1, p.9] 

EPA Response: 

EPA is deferring standards for small volume manufacturers with sales of less than 5,000 vehicles 

regardless of the size of the company, as discussed above. EPA believes that it is appropriate for 

large companies producing more that 5,000 vehicles to be covered by the program. Allowing 

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EPA Response to Comments 

natural gas vehicle manufacturers regardless of the size of the business or the number of vehicles 

produced to be exempt from the standards is not warranted. Natural gas vehicle manufacturers 

raised concerns about meeting the proposed CH4 standards, and while EPA believes the CH4 

standards are feasible, EPA nevertheless is allowing vehicles to comply with the standards on a 

CO2 equivalent basis to address these concerns. (See Section 5.5). Therefore, EPA does not 

anticipate that natural gas vehicles will have difficulty meeting the standards. 

Comments Concerning Manufacturers in Developing Countries 

Organization: People's Republic of China 

Comment: 

It provides for the “Special and Differential Treatment of Developing Country Members” in 

Article 12 of the WTO/TBT Agreement, which stipulates the obligation of developed Members 

in this respect. For manufacturers of developing countries, there is still a long way to go to meet 

the requirement of the notified regulation, requiring long-term and huge input in technical R&D 

and product test, etc. We suggest the United States considering providing developing countries 

with longer transition period and preparatory period, and offering technical assistance to 

developing countries, such as offering testing technology and testing equipment, etc. [OAR2009-0472-11269, p.3] 

We note that, vehicles of the small entity are not subject to the restriction of the notified 

regulation, and are deferred implementing GHG emissions reduction standards. We believe, 

small volume of import vehicles will have a negligible impact on the GHG emissions reductions, 

in order to reflect the sufficient competition of the market, and according to the National 

Treatment principle of WTO, small volume of import vehicles should be treated according to 

relevant regulations for vehicles of small entity. It is suggested that small volume is defined as 

the annual import volume in a single model year is not greater than 0.01% of American annual 

total sales volume. [OAR-2009-0472-11269, p.3] 

EPA Response: 

Developing country members' automobile manufacturers, as well as U.S. manufacturers that 

meet the small entity business size criteria are eligible for the small entity exemption. EPA is 

also deferring standards for small volume manufacturers with U.S sales of less 5,000 vehicles in 

MY2008 or MY2009, as discussed above. EPA does not believe it is appropriate to extend the 

SVM deferment to larger companies selling more than 5,000 vehicles or those not already 

established in the U.S. market. This would open up the deferment to an unknown universe of 

potential eligible manufacturers, with the potential for gaming. In addition, the TLAAS 

flexibilities would also apply to eligible developing country manufacturers. Lastly, the primary 

purpose of this program is to protect public health and welfare. We do not believe it is therefore 

appropriate or necessary to provide any additional flexibilities beyond the ones included in the 

final program, similar to how we have treated this issue under previously adopted mobile source 

programs. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

5.5. N2O and CH4 standards 

Organization: Alliance of Automobile Manufacturers (Alliance) 

Association of International Automobile Manufacturers (AIAM) 

Yuli Chew, Private Citizen 

Center for Biological Diversity 

Chrysler Group LLC (Chrysler) 

Clean Energy Fuels 

Cummins Inc 

Environmental Defense Fund 

Ferrari S.p.a 

Ford Motor Company 

Georgia Department of Natural Resources 

Honda Motor Company 

IMPCO Technologies, Inc 

Manufacturers of Emission Controls Association (MECA) 

Mercedes-Benz (Daimler AG) 

Mississippi Department of Environmental Quality 

Mitsubishi Motors R & D of America (MRDA) 

National Association of Clean Air Agencies (NACAA) 

Natural Resources Defense Council 

Northeast States for Coordinated Air Use Management (NESCAUM) 

New York University School of Law, Institute for Policy Integrity (IPI) 

NGV America 

State of New Jersey 

Toyota Motor North America 

University of California, Santa Barbara, Bren Working Group on Vehicle Fuel 

Economy 

Volkswagen Group of America (Volkswagen) 

Volvo Car Corporation 

Comment: 

Alliance of Automobile Manufacturers (Alliance) 

• EPA would not be saddled with establishing and maintaining “backstop” standards for CH4 

and N2O that may or may not be applicable to all fuels and/or vehicle technologies. [OAR-2009­

0472-6952.1, p.44] 

• Since EPA has already proposed an assigned DF for CO2, all other DF issues would be 

eliminated. [OAR-2009-0472-6952.1, p.44] 

EPA should establish that the CH4+N2O factor be set equal to 1.9 gm/mile, which is the same as 

the factor that is allowed for California Air Resources Board CO2-equivalent calculations. If, in 

the future, EPA should determine that CH4 or N2O are becoming larger contributors to the CO2- 

equivalent value, they could simply increase the CH4+N2O factor to account for the change. 

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EPA Response to Comments 

This proposal would achieve the GHG reductions as the EPA proposal, but in a much more 

simplified and cost-effective fashion. [OAR-2009-0472-6952.1, p.44] 

• N2O Is not currently measured in a high-production certification-quality volume. To do so will 

require major test facility upgrades which will take several years to complete because of the 

technical challenges that have not yet been resolved with regard to the measurement of N2O. 

There is insufficient lead time to accomplish these tasks in time for MY 2013 implementation. 

• The proposed “backstop” standard is too stringent and may preclude the introduction of some 

alternative technology vehicles. 

• The proposal to have N2O be a useful life standard will require manufacturers to establish 

deterioration factors (DFs), and this will require manufacturers to rerun all forms of durability 

and data vehicle testing for MY 2013. [OAR-2009-0472-6952.1, p. 43] 

• Manufacturers would not be required to upgrade all test facilities to measure N2O, thereby 

making the rule more cost-effective. [OAR-2009-0472-6952.1, p.44] 

N2O Measurement Devices and Interference Verification for N2O Analyzers (Proposed 

regulations in 40 C.F.R. 86.167-12 and 86.168-12) 

The proposed regulations contain multiple references to 40 C.F.R. Part 1065 (1065.145, 

1065.205, 1065.275, 1065.307, 1065.342, 1065.750). These sections in turn reference other Part 

1065 sections which affect other test site hardware, software, calculations and procedures. One 

example of this can be found in 40 C.F.R. 86.167-12(a) which states: 

General component requirements. We recommend that you use an analyzer that meets the 

specifications in Table 1 of 40 C.F.R. 1065.205. Note that your system must meet the linearity 

verification in 40 C.F.R. 1065.307. [OAR-2009-0472-6952.1, p.44] 

The linearity verification in 40 C.F.R. 1065.307 requires non-N2O chassis dynamometer gas 

analyzers to meet the heavy duty engine dynamometer Part 1065 requirements. In addition, other 

chassis dynamometer systems will have to comply with Part 1065, including exhaust gas dilution 

systems (CFV’s) and their related pressures, temperatures, and batch sampler flow rates; gas 

dividers, PM balance; barometer; exhaust back pressure; and stand-alone test cell pressures and 

temperatures. This reference may also bring in new requirements relating to the chassis 

dynamometer torque, speed and total work (even though these are listed for an engine 

dynamometer). [OAR-2009-0472-6952.1, pp.44-45] 

Recommendation: 

Making generic references to the heavy duty Part 1065 procedures quickly affects most of 

today’s light-duty test cell systems, could affect stringency, and is contrary to Part 86, Part 600 

and California ARB regulations. The Alliance therefore recommends these 1065 references be 

deleted and replaced with specific language compatible with Parts 86, 600 and California ARB 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

regulations. In support of this approach recognize the small N2O contribution to GHG emissions 

as follows. [OAR-2009-0472-6952.1, p.45] 

While CO2 represents 95% of transportation GHG emissions (per GWP), EPA acknowledges 

that N2O only accounts for 1.6% of these transportation GHG emissions. Other studies also 

support this low number for N2O emissions. A 1999 study by Ford Motor Company (Environ. 

Sci. Technol., 1999, 33, 4134-4139) estimated that between 1-3% of the transportation 

greenhouse gases was attributable to N2O. In addition, a review of over 200 representative 

tests conducted by vehicle manufacturers on gasoline and E85 (shown in the summary chart 

below) shows that N2O emissions from cars and trucks are negligible in comparison to CO2. 

[OAR-2009-0472-6952.1, pp.45-46] 

The Alliance acknowledges that more data is needed concerning N2O contribution and supports 

EPA’s efforts to expand the current N2O knowledge base for inventory purposes. However, 

EPA’s proposed approach for generating the desired N2O information during the emissions 

certification and fuel economy testing processes would entail time and expense that is 

disproportionate to the overall GHG contribution of N2O emissions. Instead, the Alliance urges 

EPA to enter into a joint test program with industry as a cost-effective means to learn more 

about N2O emissions. The results of this test program could then be used to determine whether 

separate measurement of N2O emissions is warranted. [OAR-2009-0472-6952.1, pp.46-47] 

Absent any new data from a joint test program, EPA is urged to consider allowing the use of a 

default value for N2O (0.006 grams per mile) in lieu of measuring N2O in the exhaust. This 

factor is identical to that allowed for use by ARB and can be further refined through future 

studies. [OAR-2009-0472-6952.1, p.47] 

As for the proposed N2O measurement and reporting provisions, there is a high level of concern 

about incorporating the engine dynamometer test procedures specified in 40 C.F.R. §1065 into 

the chassis dynamometer test procedures for light-duty vehicles, light-duty trucks, and mediumduty passenger vehicles. 40 C.F.R. §1065 is a complete rewrite of many engine dynamometer 

test procedures such as heavy-duty on and off road engines, locomotive, marine, small spark 

ignition, etc. Many of these procedures, specifications, hardware requirements and equations are 

not compatible with current light-duty test sites and, in some cases, contradict current light- and 

medium-duty regulations. More specifically: 

• Adopting 40 C.F.R. §1065 equipment requirements into the chassis-certified regulations could 

impact the stringency of current standards for the light-duty vehicles, light-duty trucks, and 

medium-duty passenger vehicles that certify to current regulations with existing test facilities, 

equipment, procedures and diagnostics. 

• The requirements of 40 C.F.R. §1065, will conflict with the requirements of 40 C.F.R. §86 and 

§600 for light-duty vehicles, light-duty trucks, and medium-duty passenger vehicles. 

Specifically, the standard setting sections, 40 C.F.R. §86 Subparts A & S and 40 C.F.R. §600, 

require the use of the test procedures set forth in 40 C.F.R. §86 Subparts B & C for certification. 

In addition, the requirements of 40 C.F.R. §1065, will conflict with the state of California 

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EPA Response to Comments 

regulations (and the regulations of other states “Cal LEV” states), because the California 

regulations base their test procedures on those in 40 C.F.R. §86 and §6005. 

• 40 C.F.R. §1065 provisions will require significant hardware, software, license and acquisition, 

and procedural and diagnostic modifications to existing chassis dynamometer test facilities. 

These changes will be expensive depending upon the number of test cells at each manufacturer 

and it will not be possible for manufacturers to modify today’s robust chassis dynamometer 

certification test sites by MY 2013 (certification testing done in CY2012). 

• N2O emissions measurement requires a new N2O calibration gas to be NIST (National Institute 

of Standards and Technology) traceable, typically within ±1.0% of the NIST accepted value. To 

our knowledge, there are no such standards available “off the shelf” from vendors or NIST. 

NIST has in the past analyzed special batches of N2O gas for industry, but these were one-off 

custom bottles. [OAR-2009-0472-6952.1, p.47] 

For the above reasons, the Alliance recommends that all 40 C.F.R. §1065 requirements be 

deleted from all chassis dynamometer certification testing of light-duty vehicles, light-duty 

trucks, and medium-duty passenger vehicles. We recommend retaining the existing Parts 86 and 

600 requirements with modifications to include N2O instrument specific test procedures in the 

appropriate sections of 40 C.F.R. §86 Subpart B. These modifications could be similar to the 

analyzer specific procedures being proposed for 40 C.F.R. §1065 minus any criteria that are 

contrary to current Parts 40 C.F.R. §86 and §600. [OAR-2009-0472-6952.1, p.48] 

By doing this, EPA would bring executable measurement certainty for the OEMs trying to meet 

the GHG requirements and will provide compatibility with the existing light-duty, Part 86 

compliant test equipment, software and procedures. In addition, deleting the Part 1065 references 

provides OEMs with firm guidance as to what the requirements are for long term facility 

planning purposes, and removes the uncertainty with the evolving nature of the HD Part 1065 

procedures. [OAR-2009-0472-6952.1, p.48] 

In the event that EPA decides to pursue actual N2O measurement and reporting, as proposed, 

EPA should provide sufficient lead-time (at least until MY 2013) to implement such a program. 

EPA should also limit the certification test modes for N2O emissions measurement (e.g., FTP 

mode on emission data vehicle only) to minimize manufacturers' burden. [OAR-2009-0472­

6952.1, p.48] 

Note that the N2O measurement issues could also be avoided if EPA accepts the previously 

stated recommendation to eliminate the N2O emission standard. [OAR-2009-0472-6952.1, p.48] 

Association of International Automobile Manufacturers (AIAM) 

EPA proposes capping emission rates for nitrous oxide and methane at current emissions levels. 

As EPA notes, even after adjusting for the higher global warming potential of these substances, 

they collectively account for less than 1 percent of light vehicle greenhouse gas emissions. See 

74 FR 49507. EPA initially projects no economic impact resulting from these caps (see 74 FR 

49511); however, the Agency later notes that this is not the case. Measuring and reporting these 

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emissions will involve additional costs for manufacturers, particularly in the case of nitrous 

oxide. Additional test equipment will be needed to measure nitrous oxide emissions, with 

resulting facility costs for manufacturers. Id., at 49525. Our members report that the currently 

available commercial laboratory test equipment for nitrous oxide measurement is not capable of 

accurately and repeatably measuring the very low levels of nitrous oxide emissions, i.e., 0.001 

g/mile level, in vehicle exhaust, thus potentially increasing overall test burden due to voided tests 

as well as normal testing. [OAR-2009-0472-7123.1, p.5] 

In addition, the nitrous oxide standard proposed by EPA is a vehicle-specific standard, not a fleet 

average standard as is provided for carbon dioxide, potentially creating an additional burden on 

manufacturers to assure consistent compliance across all vehicle models. EPA notes that nitrous 

oxide emissions vary with different types of catalyst designs, so it would be necessary for 

manufacturers to assure that each catalyst design in their fleet of vehicles would not increase 

emissions of that substance. Since current emission control technologies for NOx emissions also 

tend to control N2O, there is no current basis for concluding that overall N2O emissions could 

increase in the future. [OAR-2009-0472-7123.1, p.5] 

AIAM concludes that a methane cap is unnecessary. The only potential scenario for an increase 

in vehicle methane emissions cited by EPA is a substantial increase in the production of CNG 

vehicles. Id. at 49525. EPA notes that current emission controls tend to achieve reductions in 

methane as well, so there is no basis for anticipating that methane emissions would generally 

increase. EPA subsequently states that recent CNG vehicles meeting Tier 2 standards have had 

methane levels consistent with conventional vehicles. See Id at 49526. [OAR-2009-0472­

7123.1, p.5] 

Available data and information provide no basis for anticipating that either nitrous oxide or 

methane emissions will increase in the future, and current Tier 2 (and potentially future standards 

as well) would tend to reduce emissions of these substances. Additional testing and 

administrative burdens would be required to comply with the proposed caps, and new test 

equipment would be needed to measure nitrous oxide emissions. For these reasons, we urge EPA 

to adopt a default CO2 equivalent emission value for these substances for the 2012-2016 model 

years, similar to the approach that CARB took. Testing and reporting of these emissions should 

not be required. Certification should be based on manufacturers’ providing engineering 

evaluations and statements. [OAR-2009-0472-7123.1, pp.5-6] 

If EPA believes further information is needed to assure that emissions of these substances do not 

increase, we urge the agency to work with auto manufacturers to pursue a research-type program 

to conduct testing of new vehicles for these substances. The level of testing for such a program 

would be less than that required if standards were adopted and would focus on technologies that 

EPA believes are most likely to produce higher emissions of the two substances. AIAM would 

be willing to support a request to Congress for additional budget resources for EPA to conduct 

such a program. As noted below, AIAM proposes a similar approach to address speculative 

concerns about in-use deterioration of greenhouse gas emissions and testing of air conditioning 

systems. [OAR-2009-0472-7123.1, p.6] 

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EPA Response to Comments 

Notwithstanding the concerns expressed above, should EPA determine that nitrous oxide and 

methane regulation in some form are necessary, those substances should be regulated on a 

carbon dioxide-equivalent, fleetwide default basis, as California has done. In that way, 

manufacturers would have greater flexibility in choosing methods to achieve equivalent levels of 

greenhouse gas emission reductions. However, in the case of nitrous oxides, if EPA should adopt 

testing requirements, then significant lead-time is needed to address the measurement accuracy 

and quality control issues mentioned above. In the case of methane, current EPA test methods 

and required equipment allow the measurement of this gas; therefore, AIAM members are 

willing to voluntarily collect and report that information as part of certification testing. [OAR2009-0472-7123.1, p.6] 

Center for Biological Diversity 

(v) EPA Should Seek to Reduce the Emissions of Nitrous Oxide and Methane, Rather Than Just 

Holding Their Emissions Constant 

EPA proposes to hold emissions of greenhouse gases other than carbon dioxide (nitrous oxide 

and methane) to a constant level, rather than attempting to reduce these emissions, at zero cost to 

the auto industry. Proposed Rule, 74 Fed. Reg. 49511. The agency states that it has not identified 

“clear technical steps” available today to “significantly reduce” these emissions, 74 Fed. Reg. 

49513. However, EPA fails to analyze whether any technologies are available to reduce these 

emission by any amount, and if so, what the costs and benefits might be. This failure is arbitrary 

and capricious. EPA justifies its position by pointing out that methane and nitrous oxide 

emission levels “are extremely low and represent only about 1% of total light vehicle GHG 

emissions.” Id. However, particularly in light of the potent warming potential of both methane 

(25 times that of carbon dioxide over a 100 year period) and nitrous oxide (298 times that of 

CO2 over a 100 year period), that approach cannot be justified. Indeed, in its proposed 

Endangerment Finding, EPA has already rejected any claims that GHG emission reductions are 

unnecessary because their impact is relatively small: “Importantly, because no single greenhouse 

gas source category dominates on the global scale, many (if not all) individual greenhouse gas 

source categories could appear too small to matter, when, in fact, they could be very significant 

contributors in terms of both absolute emissions or in comparison to other similar source 

categories within the U.S.” Endangerment Finding, 74 Fed. Reg. 18907. The Proposed Rule 

should be revised to remedy these deficiencies. [footnote] While we believe a CO2 equivalency 

standard is necessary and should be set, we also advocate for separate emission levels for all 

other greenhouse gases to allow more targeted application of relevant technologies. [OAR-2009­

0472-7265.1, p. 18] 

Chew, Yuli, Private Citizen 

I favor a “technology-forcing” approach for proposed N2O and CH4 standards, similar to 

NMOG Standard in CARB’s Regulation. For example, there are already CARB SULEV certified 

CNG / LPG vehicles, there is no reason to “cap” the standard at a static level of say, Tier 2 Bin 5. 

This will also ensure that more of the alternative fuel aftermarket engines can be retrofitted into 

used vehicles with equal to or better than the original standards. [OAR-2009-0472-7042.1, p.3] 

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Chrysler Group LLC (Chrysler) 

N2O is currently not measured during certification testing and will require additional resources 

and test facility upgrades if standards are adopted. N2O is an insignificant portion of the exhaust 

composition of gasoline-fueled vehicles and is less than two percent of the total greenhouse gas 

contribution. The N2O standard as proposed could also pose an impediment to the widespread 

introduction of promising advance lean-bum technologies that have been demonstrated to reduce 

greenhouse gas emissions. [NHTSA-2009-0059-0124, p.38] 

Recommendations: 

Since N2O is a relatively insignificant vehicle greenhouse gas and requires additional analytical 

resources and costly test facility upgrades to measure, manufacturers should be provided with the 

option to use assigned values for a representative vehicle/fuel technology. [NHTSA-2009-0059­

0124, p.38] 

Clean Energy Fuels 

EPA is proposing a methane (CH4) emissions standard or cap of 0.03 g/mi as measured on the 

Federal Test Procedure, to apply beginning with model year 2012 for both cars and trucks. EPA 

further believes that this level for the standard would be met by current gasoline and diesel 

vehicles, and 'would prevent large increases in future methane in the event that alternative fueled 

vehicles with high methane emissions, like some past dedicated compressed NGVs, become a 

significant part of the fleet.' However, EPA also notes that this source of emissions accounts for 

as little as 0.2% of the GHG gases from cars and light trucks. [OAR-2009-0472-7220.1, p.7] 

Clean Energy is concerned that the notice appears to take the position that the cap is not 

technologically forcing but rather is meant to ensure methane emissions do not increase. The 

notice states that '[t]hese caps are designed to ensure that N2O and CH4 emission levels do not 

rise in the future, rather than to force reductions in the already low emission levels .... these 

standards are not designed to require automakers to make any changes in current vehicle 

designs.' At the same time, EPA appears aware that NGV s in the past have had much higher 

methane emissions than gasoline vehicles. EPA appears to be confident that controls necessary to 

meet the more demanding Tier 2 standards will result in lower levels of CH4 emissions for 

NGVs. But the notice offers up no data or citations to support these conclusions. Without the 

ability to review the same data that EPA is relying upon, we lack the confidence that EPA 

apparently has regarding the ability of NGVs to meet the proposed CH4 cap. As noted above, our 

research into this issue has not revealed any data showing that NGVs will meet the proposed cap. 

[OAR-2009-0472-7220.1, p.8] 

Even if some NGVs can meet the cap, we believe adopting a CO2 equivalent average is 

warranted with methane and nitrous oxide emissions appropriately weighted for their global 

warming potential. Providing a CO2 equivalent approach as part of the rule would ensure that the 

caps do not become an obstacle to NGVs, while at the same time ensuring GHG emissions from 

such vehicles are no greater than for gasoline vehicles. Therefore, we strongly urge EPA and 

NHTSA to allow NGVs to meet an average standard that includes averaged emissions for CO2, 

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EPA Response to Comments 

CH4, and N2O. If this is done, we are confident that NGVs will not only achieve the standard 

but surpass gasoline powered vehicles. Failure to adopt such a standard would seem illogical as 

the result would disallow vehicle strategies that could provide less overall GHG gas emissions on 

a WTW basis. [OAR-2009-0472-7220.1, p.8] 

[[Clean Energy also submitted these comments as testimony at the Detroit public hearing, See 

docket number EPA-HQ-OAR-2009-0472-6185, pp. 137-139.]] 

Cummins Inc. 

EPA is proposing stand-alone N2O and CH4 standards for light-duty vehicles. Cummins 

recognizes that EPA is setting such standards to cap emissions of N2O and CH4 to ensure that 

these emissions do not increase in the future with the introduction of new CO2- reducing 

technologies. While Cummins supports the overall goal, we believe that EPA can achieve the 

same results with a less costly and less burdensome approach. The new standards would require 

that all manufacturers upgrade their facilities to measure N2O and CH4. The California Air 

Resources Board proposed a set value of N2O and CH4 emissions which manufacturers can use 

to calculate equivalent CO2 emissions from a vehicle. This approach makes sense since it is 

known that N2O and CH4 are a small percentage of overall greenhouse gas emissions from 

vehicles. This set value could be adjusted in the future if new GHG-reducing technologies 

increase the N2O and CH4 emissions compared to average values of N2O and CH4 emitted by 

current vehicles. This would also ensure that a new technology which reduces the overall GHG 

emissions is not prevented from entering the market because of the stand-alone N2O and CH4 

standards. Cummins recommends that EPA adopts an approach similar to California to account 

for N2O and CH4 emissions. [OAR-2009-0472-7205.1, p.5] 

Environmental Defense Fund 

Just as important as EPA’s choice to regulate light-duty vehicles is EPA’s decision to include 

carbon dioxide (CO2 ), methane (CH4), nitrous oxide (N2O) and hydrofluorocarbons (HFCs) as 

regulated GHGs under the proposal rule which account for the preponderance of light-duty GHG 

emissions when weighted by global warming potential.38 Whether these compounds are 

considered individually or collectively, EPA has a statutory duty to establish “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.”39 See 42 U.S.C. 

§7521(a)(1). [OAR-2009-0472-7285.1, p. 10] 

Ferrari S.p.a 

CH4 is currently measured to determine NMHC emissions, whereas the N2O measurement 

requires additional instruments for emission laboratories, with increased costs. Since present 

emission control technologies for NOx emissions also tend to control N2O, there is no current 

basis for concluding that overall N2O emissions could increase in the future. The same 

conclusion could be drawn for methane. The burdens (laboratory update, testing, reporting) 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

associated with the measurement of tailpipe nitrous oxide is not justifiable in terms of 

costs/benefits analysis. For these reasons, we deem that it is not necessary to set these new 

additional exhaust standards for CH4 and N2O. [OAR-2009-0472-7214.1, p.3] 

Ford Motor Company 

We do not believe EPA is compelled to establish full useful life standards for N2O and CH4; the 

attachment addresses this in more detail. To the extent that EPA desires to pursue this issue 

nonetheless, the regulations could continue to allow manufacturers to make an 'engineering 

judgment' attestation - in lieu of formal compliance testing -- beyond just the first couple of years 

as proposed. Alternatively, EPA could establish generic emissions factors for N2O and CH4 and 

roll these into the proposed CO2 standard. [OAR-2009-0472-7082.1, Cover letter, p. 2] 

As we continue to move towards an integrated approach that considers the vehicle, the fuel, and 

the consumer, it is worth highlighting other policies that could do more to reduce greenhouse gas 

emissions from actual in-use operation of motor vehicles compared to some of the additional 

requirements that EPA is proposing under this rulemaking. For example, EPA is proposing full 

useful life standards for CH4 (methane) and N2O (nitrous oxide) in addition to the fleet-average 

CO2 requirements. The relative contribution of methane and nitrous oxide to a vehicle's overall 

greenhouse gas emissions is small compared to CO2 - on the order of 1-3% and 0.3-0.4% 

respectively. The benefit of expanding the existing criteria pollutant emissions durability 

requirements to include these greenhouse gases is negligible, relative to other potential measures 

that could have a much more significant impact on actual in-use greenhouse gas emissions. 

[OAR-2009-0472-7082.1, Cover letter, p.] 

Regulating Methane(CH4 and Nitrous-oxide (N20) 

Ford does not support EPA's proposal to regulate CH4 and N20 as stand-alone greenhouse gases. 

It is well documented that CO2 comprises greater than 90% of the total greenhouse gas 

emissions from vehicles. There is a simple relationship between CO2 emissions and fuel 

economy for gasoline and diesel fueled vehicles. In addition, studies conducted by Ford and 

others in the research arena have shown that the relative contribution of methane and nitrous 

oxide to a vehicle's overall greenhouse gas emissions is small compared to CO2 - on the order of 

1-3% and 0.3-0.4% respectively. Therefore, Ford does not support EPA's proposal to regulate 

CH4 and N20 as stand alone greenhouse gases. 

In addition, regulating CH4 and N20 could have an unintended negative CO2 impact and 

severely limit, restrict, or legislate out of existence CO2-friendly technologies such as CNG, E85 

(nominally 85% ethanol/15% gasoline), HCCI, pHCCI, lean gasoline, or clean diesel in the U.S. 

market. For example, a cap on CH4 could limit compressed natural gas technologies. 

EPA is not compelled to establish not-to-exceed standards for N20 and CH4. Under Section 202 

(a)(1) of the CAA, the Administrator has considerable discretion to determine whether or not an 

air pollutant 'causes or contributes' to an endangerment of public health and welfare and 

therefore regulation. EPA need not regulate every emission or substance no matter how small or 

inconsequential its effect. In Ethyl Corp. v. EPA, 541 F.2d 1, (D.C. Cir., 1976), the court 

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EPA Response to Comments 

considered a similar issue under Section 211 of the CAA. The court held that even under a 

'cumulative impact theory' in which all emissions of a substance are believed to contribute to an 

environmental problem, 'emissions must make more than a minimal contribution to total 

exposure in order to justify regulation under § 211 (c)(1 )(A).' 541 F. 2d. at 31, note 62. Here, in 

light of the minor contributions of N20 and CH4 relative to that of CO2, we believe EPA has the 

discretion to refrain from regulating the emission of these substances from motor vehicles on the 

grounds that their overall contribution to GHG emissions is minimal. 

To the extent that EPA desires to pursue this issue nonetheless, the regulations could continue to 

allow manufacturers to make an 'engineering judgment' attestation -- in lieu of formal 

compliance testing -- beyond just the first couple of years as proposed. Alternatively, EPA could 

establish generic emissions factors for N20 and CH4 and roll these into the proposed CO2 

standard. According to the latest Intergovernmental Panel on Climate Change Radiative Forcing 

of Climate Change Report, the global warming potentials of N20 and CH4 are 296 and 23, 

respectively. Prior CARB analysis suggests that the average values for N20 and CH4 are 0.006 

and 0.005. Based on this information, Ford recommends the following factor to be used to 

determine a carbon dioxide equivalent (CO2e) equation, in lieu of regulating CH4 and N20 as 

standalone components. 

Recommended equation: 

CO2e(gas) = CO2 (gas) + 296N20+23CH4 

= CO2 (gas)+ 296 (0.006) +23 (.005) 

 =CO2 (gas) + 1.9 g/mi 

[OAR-2009-0472-7082.1, pp. 11-12] 

[Ford also submitted these comments as testimony at the Detroit public hearing, See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 15-16.] 

[Ford also submitted these comments as testimony at the New York public hearing, See docket 

number EPA-HQ-OAR-2009-0472-4621, pp. 31-32.] 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.90-96] 

For example, EPA is proposing full useful life standards for CH4, methane, and N2O, 

nitrous oxide, in addition to the fleet average CO2 requirements. The relative contribution of 

methane and nitrous oxide to a vehicle's overall greenhouse gas emissions is small compared to 

CO2, on the order of 1 to 3 percent and 0.3 to 0.4 percent, respectively. 

The benefit of expanding the existing criteria pollutant emissions durability requirements to 

include these greenhouse gases is minimal relative to other potential measures that could have a 

much more significant impact on actual in-use greenhouse gas emissions. Such measures would 

go beyond the vehicle's design. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

For example, significant additional greenhouse gas emissions reductions could be achieved by 

reducing the carbon intensity of the nation's overall fuel supply through the introduction of 

alternative low-carbon fuels. 

In addition, further reductions could also be achieved through more efficient 

transportation control measures designed to manage increased travel demand. These could 

include congestion mitigation initiatives, eco-driving education and awareness programs, and 

other incentives to encourage consumers to drive more efficiently. 

We do not believe EPA is compelled to establish full useful life standards for N2O and CH4, and 

our written comments will address this in more detail. 

To the extent that EPA desires to pursue these issues nonetheless, the regulations could continue 

to allow manufacturers to make an engineering judgment attestation in lieu of a formal 

compliance testing beyond just the first couple of years as proposed. 

Alternatively, EPA could establish generic emissions factors for N2O and CH4 and roll 

these into the proposed CO2 standard. 

Georgia Department of Natural Resources 

Also, EPA states in the proposed rule that emissions of N2O and CH4 are low and that the rule is 

not designed to require technology to reduce emissions of N2O and CH4 at this time. EPA then 

justifies the inclusion of the proposed emission standards with the unsupported and conflicting 

statement that the agency is concerned about those emissions increasing in the future. Because of 

the enormous, unintended consequences of regulating GHG emissions under the Clean Air Act at 

this time, and because the proposed rule does not result in any emission reductions of N2O or 

CH4, EPA should not finalize any emission standards for N2O or CH4 as part of this 

rulemaking. [OAR-2009-0472-7150.1, pp.4-5] 

Honda Motor Company 

EPA requested comment on the idea of developing CO2-equivalent emissions standard for model 

years 2012 through 2016. Honda is concerned that newer technologies currently under 

investigation (HCCI, direct injection and others) may be adversely affected by EPA’s proposed 

cap. Since methane and nitrous oxide can easily be converted into CO2-equivalent emissions, 

Honda recommends taking a CO2-equivalent approach which AIAM also recommends, and 

Honda supports. [NHTSA-2009-0059-0095.1, pp.6-7] 

As the measurement of N2O is phased-in, as recommended above, Honda suggests that EPA use 

a fixed number for CH4 and N2O emissions (e.g., 1.9 g/mile allowed by California Air Resources 

Board (CARB)). Additionally, the CO2 standard needs to be adjusted upward to become a CO2e 

standard, taking into consideration CH4 and N2O, for example, 250 grams/mile target for the 

2016 fleet becomes 251.9. [NHTSA-2009-0059-0095.1, p.7] 

IMPCO Technologies, Inc. 

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EPA Response to Comments 

For over 50 years IMPCO has been the leader in the industrial, power generation and stationary 

engines sectors. At one time IMPCO was the leader in the U.S. automotive market, but has not 

been involved in this market segment for over 10 years. IMPCO is reentering the North 

American alternative fuel vehicle market. To confirm this commitment, in February IMPCO 

formed its US Automotive Operations Division, dedicated to the design, development, and 

certification of fuel systems that enable vehicles to operate on alternative fuels. This NPRM 

directly affects IMPCO’s ability to enter the U.S. automotive market. 

Fuel Systems Solutions, Inc. (Nasdaq: FSYS) is the holding entity for two companies: IMPCO 

Technologies, Inc. based in California, and BRC S.r.L. based in Italy. Both IMPCO and BRC are 

engaged in designing, manufacturing, marketing and supplying advanced products and systems 

to enable internal combustion engines to run on clean-burning gaseous fuels such as natural gas 

and propane. In 2008 alone, over 800,000 engines around the globe were converted to operate on 

these alternative fuels using IMPCO and BRC fuel systems. 

EPA has proposed very stringent CH4 and N2O emissions standards for alternative fuel vehicles 

without using substantiating data from alternative fuel vehicles. Meeting these standards could 

require expensive catalyst design and validation, which would have a significant impact upon the 

time and cost involved to certify these alternative fuel systems. 

Without sufficient evidence to demonstrate that the gasoline–specific and diesel–specific 

emissions data presented in the NPRM are representative of emissions from natural gas or 

propane vehicles, IMPCO proposes the following: 

• Implement a CO2-equivalent greenhouse gas emission standard with an optional default N2O 

value; or 

• Allow manufacturers to choose whether to meet a CO2–equivalent standard or meet separate 

CO2, CH4, and N2O emissions standards; or 

• Postpone this NPRM as it applies to CH4 and N2O emissions standards for natural gas and 

propane vehicles until alternative fuel–specific data can be collected and evaluated IMPCO 

sincerely appreciates the opportunity to comment on the subject Proposed Rulemaking as this 

topic is of paramount importance to IMPCO and to the alternative fuel vehicle industry as a 

whole. 

1. Implement a CO2-Equivalent Approach for Alternative Fuel Vehicles Given that the goal of 

this NPRM is to reduce greenhouse gases from light-duty vehicles, a CO2-equivalent approach is 

the most practical and cost–effective method in which to achieve this goal. Setting individual 

CH4 and N2O emissions standards does not help to achieve this goal. [OAR-2009-0472-7282.1, 

p.5] 

2. N2O Emissions Standards – Aftermarket Vehicles IMPCO performs all of its vehicle 

emissions testing at outside laboratories. These laboratories are currently not capable of 

measuring N2O, therefore, IMPCO is relying on them to upgrade their equipment. One local 

laboratory will charge an additional $250 per emissions test to measure N2O. This will add 

several thousand dollars to the development and certification cost of the fuel system. Given the 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

inherently low total greenhouse gas emissions from natural gas and propane vehicles, directly 

measuring and controlling N2O will provide no environmental benefit. 

IMPCO proposes that EPA offer an optional default N2O value that can be used in lieu of 

directly measuring these emissions. For example, the California Air Resources Board allows 

manufacturers to use N2O = 0.006 grams per mile in lieu of measuring N2O exhaust emissions. 

Alternatively, the GREET N2O emission factor of 0.012 grams per mile could be used. [OAR2009-0472-7282.1, p.1] 

Manufacturers of Emission Controls Association 

While total N2O emissions are much lower than CO2 emissions, N2O is approximately 310 

times more powerful than CO2 at trapping heat in the atmosphere. One of the anthropogenic 

activities producing N2O in the U.S. is fuel combustion in motor vehicles. In 2006, N2O 

emissions from mobile source combustion were approximately 9% of total U.S. N2O emissions. 

It is estimated that the N2O emissions account for about 2% of the total GHG emissions from a 

typical light-duty vehicle. N2O is emitted directly from motor vehicles and its formation is 

highly dependent on temperature and the type of emission control system used. Temperatures 

favorable for N2O formation are achieved inside catalytic converter systems, especially during 

cold-start conditions when engine exhaust temperatures are lower. 

Catalyst efficiency and age are also important factors in N2O formation. At higher efficiencies 

and lower ages, N2O formation is lower. In addition to direct N2O emissions, NOx emissions 

from mobile and stationary sources have a significant impact on atmospheric N2O levels. On late 

model light-duty gasoline vehicles, modern three-way catalyst-based emission control 

technology combined with effective cold-start engine calibration strategies are very effective at 

controlling vehicle nitrous oxide emissions. Light-duty vehicle N2O emission tests results 

recently published by ARB and Environment Canada in Atmospheric Environment (vol. 43, 

2009) indicate that vehicles certified to the lowest emission certification categories (e.g., 

certified to ARB’s SULEV standards) also have extremely low N2O emissions (in the range of 

0.0-1.5 mg/km). 

Tightening of hydrocarbon and NOx emission standards over time with the parallel introduction 

of more effective emission control systems have resulted in lower emissions of N2O from 

today’s vehicles compared to older vehicles certified to less stringent hydrocarbon and NOx 

standards. The performance of NOx emission control technologies for diesel vehicles such as 

SCR catalysts and lean NOx adsorber catalysts can also be optimized to minimize N2O 

emissions from diesel engines. 

According to the United Nation’s International Panel on Climate Change (IPCC), methane is 

more than 20 times as effective as CO2 at trapping heat in the atmosphere. Over the last 250 

years, the concentration of CH4 in the atmosphere has increased by 148%. Methane is a 

byproduct of imperfect fuel combustion. Methane emissions from mobile sources are emitted 

from exhaust from vehicles using hydrocarbon fuels, but the anthropogenic contribution of road 

transport to the global methane inventory is less than 0.5%. Emissions of CH4 are a function of 

the type of fuel used, the design and tuning of the engine, the type of emission control system, 

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EPA Response to Comments 

the age of the vehicle, as well as other factors. Although CH4 emissions from gasoline vehicles 

are small in terms of global warming potential when compared to N2O emissions, they can be 

high in natural gas-fueled vehicles, as methane is the primary component of natural gas. 

On light-duty gasoline vehicles, modern three-way catalyst-based emission control technology is 

effective at reducing all hydrocarbon exhaust emissions including methane. Tightening of 

hydrocarbon emission standards over time with the parallel introduction of more effective 

emission control systems have resulted in lower emissions of methane from today’s vehicles 

compared to older vehicles certified to less stringent standards. Catalyst designs can also be 

optimized in concert with engine control strategies to oxidize methane exhaust emissions from 

motor vehicles, including vehicles that operate exclusively on natural gas or bi-fuel vehicles that 

can operate on either natural gas or gasoline. 

Advanced gasoline and diesel powertrains for light-duty vehicles in conjunction with advanced 

emission control technologies can be optimized to minimize emissions of both N2O and CH4 

emissions. In their proposal, EPA has included an emissions cap for both N2O (a 10 mg/mi cap 

over the FTP test cycle) and CH4 emissions (a 30 mg/mi cap over the FTP test cycle) to ensure 

that climate change impacts of these two potent greenhouse gases are minimized on future lightduty vehicles. These proposed emission caps are absolute with no provisions for averaging 

among light-duty vehicles included in the proposal. MECA believes that these emission caps are 

achievable with today’s light-duty vehicle powertrain options and should be included in the final 

EPA regulations. 

Mercedes-Benz (Daimler AG) 

DAG strongly supports the recommendations set forth by the Alliance of Automobile 

Manufacturers with regard to the proposed CH4 and N2O standards. The standards as proposed 

would have a deleterious impact on both clean diesel vehicles and direct-injection gasoline 

vehicles, as well as CNG vehicles. DAG welcomes the opportunity to work with EPA to develop 

data and analysis that can better support and define these standards and to ensure that appropriate 

facilities can be in place for testing and certification to these standards. DAG supports 

establishment of a focused research program to study a sample of vehicles rather than a reporting 

and testing program for all vehicles. Doing so would provide EPA with detailed and robust data 

on these GHGs while reducing time and cost burdens on manufacturers. [OAR-2009-0472­

7193.2, p.21] 

Mississippi Department of Environmental Quality 

Also, EPA admits that emissions are low and that the proposed rule is not designed to require 

technology to reduce emissions of N2O and CH4 at this time. EPA then justifies the inclusion of 

the proposed emission standards with conflicting statement that it is concerned about those 

emissions increasing in the future. Because of the enormous, unintended consequences of 

regulating GHG emissions under the Clean Air Act at this time, and because the proposed rule 

does result in any emission reductions of N2O or CH4, EPA should not finalize any emission 

standards for N2O or CH4 as part of this rulemaking. [OAR-2009-0472-7102.1, p.5] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Mitsubishi Motors R & D of America (MRDA) 

Mitsubishi Motors does not support the new requirement to measure nitrous oxide (N2O) which 

will require the acquisition of expensive analyzers that are currently not available on the market. 

[OAR-2009-0472-7125.1, p.2] 

EPA proposes a cap on N2O emissions with very little data on the amount of N2O actually 

emitted from vehicles. Additionally, it is unknown whether the stringency of the proposed cap 

will affect the introduction of any advanced technologies to improve fuel economy. Clearly, EPA 

should better understand N2O emissions before establishing standards. Therefore, we propose 

that EPA should conduct a research test program to determine whether standards are necessary 

and if so, the appropriate level and measurement method. [OAR-2009-0472-7125.1, p.3] 

During their N2O emissions data collection, EPA should consider adopting the method proposed 

by California in their GHG regulations. This method creates a default value for N2O emissions, 

which would ease the increased expense and uncertainty Automakers would encounter 

developing a process to measure and report N2O emissions. Even though EPA has provided an 

extra year, i.e. MY 2013, before requiring N2O emissions to be reported, there are still many 

challenges for Automakers. Since true N2O emissions are unknown and not measureable, 

Automakers will find it difficult to state “vehicles meet the standard (cap) for MY 2012,” 

especially if added enforcement of in-use or confirmatory N2O testing for MY 2012 will be 

required. Further, a full useful life standard for N2O emissions will require Automakers to 

conduct extensive test programs to establish deterioration factors – for a compound with an 

undetermined measurement method. MMC has serious practical concerns on how to measure 

N2O. [OAR-2009-0472-7125.1, p.3] 

MMC currently does not own an appropriate N2O analyzer and has never measured N2O 

emissions at the levels proposed. There are a limited number of N2O analyzers marketed, none 

of which can accurately measure to the levels required in the proposed regulation. At this time, 

one leading analyzer manufacturer estimates at least one more year of research is needed before 

an appropriate measurement method will be determined. Then, a commercial analyzer will need 

to be developed. Consequently, to meet the current regulatory proposal, analyzer prices will be 

very high and delivery time will create a significant compliance risk. Analyzers are not the only 

instruments that will be needed for Automakers to measure N2O emissions - many other facility 

changes will be necessary, including software and computer upgrades requiring significant leadtime. [OAR-2009-0472-7125.1, p.3] 

National Association of Clean Air Agencies (NACAA) 

Fifth, we are pleased that EPA is seeking to establish standards that would control emissions of 

CO2, hydrofluorocarbons, nitrous oxide and methane from light-duty vehicles. However, we 

recommend that the agency also establish standards to regulate black carbon, which recent 

scientific evidence shows is another important pathway for climate change. [OAR-2009-0472­

7071.1, p. 3] 

Natural Resources Defense Council 

5-105 
EPA Response to Comments 

Nitrous Oxide and Methane Emissions Should be Regulated by Standards that Apply to the 

Useful Life of Vehicles 

NRDC strongly supports the proposed standards for nitrous oxide (N2O) and methane (CH4). 

According to EPA, these high global warming potential greenhouse gases account for 2.9 percent 

of emissions from cars and light duty trucks. Placing a standard on these emissions will ensure 

that their contribution does not grow, even with new technology introduction. EPA notes that 

inattention in the design of nitrogen oxides (NOx) emissions control technology, especially for 

lean burn gasoline and diesel engines, could result in increases in N2O. However, the tradeoff is 

not necessary and having a standard in place will signal to developers of control technology that 

N2O emissions must not increase. [OAR-2009-0472-7141.1, p. 11] 

A standard on CH4 emissions is also critical to preventing emissions increases, especially if 

automakers produced more vehicles powered by natural gas. Today, CH4 can be controlled using 

catalyst control technology required for Tier 2 NMOG certification. However, unburned fuel 

from natural gas vehicles has the potential to slip by the catalyst causing CH4 emissions. We 

support EPA’s proposal to set standards on CH4 emissions to ensure that engine and exhaust 

controls are maintained on future natural gas—and other vehicles—to prevent CH4 emission 

increases. [OAR-2009-0472-7141.1, pp. 11-12] 

Standards on N2O and CH4 should apply for the useful life of the vehicles. Therefore, auto 

manufacturers should demonstrate that N2O and CH4 controls are have the durability to 

maintain emissions levels at or below the standard levels. [OAR-2009-0472-7141.1, p. 12] 

NESCAUM 

NESCAUM commends EPA for proposing to regulate nitrous oxide, methane, and 

hydrofluorocarbons in addition to CO2. These gases have very high global warming potential 

and as such should be regulated in addition to CO2. Carbon dioxide represents 95 percent of 

global warming emissions from light-duty vehicles, but nitrous oxide, hydrofluorocarbons, and 

methane are potent greenhouse gases, and thus it is appropriate that these gases should be 

controlled in addition to CO2. EPA’s ability to regulate GHG emissions from all aspects of 

vehicle operation and all vehicle-related pollutants will maximize reductions from the national 

program. We ask, however, that the agency include other pollutants in the final rule such as 

black carbon which is a potent greenhouse forcing agent. Ozone is also a greenhouse gas, and 

while the pollutants that contribute to ozone are regulated under the Tier 2 program, there should 

be a mechanism to quantify the impact of ozone on global warming and to require more stringent 

standards if it is deemed necessary. At a minimum, we ask the agency to establish a mechanism 

to evaluate and include additional pollutants as scientific understanding of climate forcing agents 

evolves. [OAR-2009-0472-7235.1, p. 6] 

New York University School of Law, Institute for Policy Integrity (IPI) 

4) Caps for Methane and Nitrous Oxide 

EPA proposes separate regulations imposing a per-vehicle cap on emissions of methane (CH4) 

and nitrous oxide (N2O), two potent GHGs, from cars and light trucks. EPA should rethink these 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

separate caps, and consider combining these gases into a single standard along with carbon 

dioxide (CO2) emissions, accounting for all gases on a CO2-equivalent basis. [OAR-2009-0472­

7232.3, p. 16] 

EPA’s proffered justification for this policy choice is that vehicles produce CH4 and N2O 

“largely independent[ly]” of CO2, and that potential control technologies and strategies for these 

pollutant differ. EPA also notes that it lacks information on the emissions of CH4 and N2O from 

vehicles. [OAR-2009-0472-7232.3, p. 16] 

Even if these gases are produced “largely” independently of one another, there is still some 

overlap as emissions of all these gases are caused by vehicles’ combustion systems. Motor 

vehicles emit carbon dioxide during the fossil fuel combustion process. During combustion, the 

carbon stored in the fuels is oxidized and emitted as CO2 and smaller amounts of other carbon 

compounds. Motor vehicles emit methane through methane content in motor fuel, hydrocarbons 

passing uncombusted through the engine, and any post-combustion control of hydrocarbon 

emissions (such as catalytic converters). Motor vehicles produce nitrous oxide when nitrogen 

and oxygen react during fuel combustion. [OAR-2009-0472-7232.3, p. 16] 

Current and future control technologies for these pollutants may overlap or may not. That is, 

however, irrelevant. EPA’s goal in these regulations is to attempt to reduce global warming 

effects by reducing the amount of GHGs emitted by motor vehicles. In order to do this in the 

most efficient and effective way, EPA should create a single standard to allow manufactures the 

most flexibility in achieving GHG reductions to allow for the most cost-effective 

compliance. [OAR-2009-0472-7232.3, pp. 16-17] 

EPA’s proposed scheme limits manufacturers’ ability to reduce GHG emissions in the most 

efficient way possible. For example, it may be cheaper for a manufacturer to produce a vehicle 

that emits additional methane but less carbon dioxide, rather than maintain the vehicle’s current 

methane emission level and decrease CO2 emission only. EPA’s goal is to achieve the most 

GHG reductions at the least cost, but the proposed regulations would not allow the manufacturer 

to opt for that cheaper option. [OAR-2009-0472-7232.3, p. 17] 

Further, EPA’s choice to introduce different rules for these two gases further complicates an 

already complex regulatory scheme, imposing more compliance costs on manufacturers. 

Manufactures must now comply with CAFE standards, carbon dioxide standards, methane 

standards, and nitrous oxide standards—and achieving reductions in one area cannot be counted 

toward meeting reductions in another area. A simpler and more efficient regulation would set 

one standard for all GHG emissions on a carbon-dioxide equivalent basis. [OAR-2009-0472­

7232.3, p. 17] 

It is unclear what additional information EPA needs to make this policy choice. As long as a 

single standard takes into consideration all GHGs produced by the vehicles and weighs them on 

a CO2-equivalent basis, that standard will not allow for any total GHG emission increase. [OAR2009-0472-7232.3, p. 17] 

NGV America 

5-107 
EPA Response to Comments 

NGVAmerica and the Canadian Natural Gas Vehicle Alliance respectfully submit the following 

comments in regards to the U.S. Environmental Protection Agency’s (EPA) proposed 

greenhouse gas emission standards for new light-duty vehicles. These comments arise from the 

concern that the proposed rules will seriously impact and inhibit natural gas vehicle production 

in North America to the detriment of realizing the environmental benefits of increased use of 

natural gas vehicles. Our organizations are very concerned that the proposed methane cap will 

discourage large manufacturers, including original equipment manufacturers (OEMs), from 

offering natural gas vehicles. We also are concerned about the negative impact the rules could 

have on aftermarket conversion manufacturers. While the proposed rules exempt small volume 

manufacturers of natural gas vehicles if they are small businesses, small volume manufacturers 

who are not small businesses are not exempt from coverage. Thus, in the case of aftermarket 

conversion manufacturers, the proposed rules could have the unintended consequence of 

discouraging large businesses from continuing to offer aftermarket conversion systems. [OAR2009-0472-11310, p. 1] 

NGVAmerica previously submitted comments on this issue prior to the close of the comment 

period. In its comments, NGVAmerica urged EPA to develop a carbon dioxide equivalent 

standard as opposed to a cap on methane and nitrous oxide emissions. We believe that a carbon 

dioxide equivalent approach is more appropriate. However, we would support a cap on methane 

emissions -- if properly structured. The comments submitted here underscore the importance of 

this issue to our associations, and come at a time when Canadian officials are considering similar 

regulations, largely based on EPA’s proposed regulations. [OAR-2009-0472-11310, p. 1] 

Based on discussions with EPA, it also has become evident that additional data could assist 

authorities in making a more reasoned decision. Therefore, these comments provide data 

recently collected from NGV manufacturers. [OAR-2009-0472-11310, p. 2] 

If EPA does move forward with a methane cap, our primary concern with the proposed 

regulations is the plan to impose a cap of 0.03 gram per mile for CH4 emissions. EPA has 

indicated that the cap is designed to limit future emissions increases, primarily from natural gas 

vehicles, and prevent backsliding from current emissions levels by gasoline and diesel fueled 

vehicles. EPA’s preamble also indicates that the cap on methane emissions is not designed to 

require automakers to make any changes to emission control designs. Moreover, EPA has 

indicated that proposed cap on methane emissions will have no economic impact on 

manufacturers. [OAR-2009-0472-11310, p. 2] 

Comments 

It is respectfully submitted that the proposed methane cap of 0.03 gram per mile is unreasonable 

with respect to dedicated and bi-fuel natural gas vehicles (NGVs). It appears that the decision to 

impose such a standard on natural gas vehicles has largely been made based on the current 

performance of gasoline- and diesel-fueled vehicles and noton the emissions performance of 

current NGVs. Based on data collected from NGV manufactures and provided below, we 

propose that a more appropriate standard for such vehicles is 0.5 g/mile. Although higher than 

that proposed by EPA, the cap we proposed would not negate the fact that NGVs produce less 

overall greenhouse gas emissions than petroleum fueled vehicles. As with gasoline- and diesel5-108
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

fueled vehicles, the methane level we propose would ensure that there is no backsliding with 

respect to current methane emissions from NGVs. [OAR-2009-0472-11310, p. 2] 

Based on data collected from natural gas vehicle manufacturers, methane emissions for NGVs 

appear to fall within the range of about 0.1 - 0.4 g/mile -- an insignificant global warming 

potential compared to vehicles’ CO2 production. The resulting increase in methane emissions 

for NGVs compared with that of other vehicles does not undermine the 20–30% reduction in 

CO2 values arising from use of these vehicles. Limiting the use of NGVs through an 

unreasonable cap, therefore, would be counterproductive to reducing greenhouse gases compared 

with the environmental benefits of their increased use. [OAR-2009-0472-11310, p. 2] 

It is evident that EPA did not have access to representative CH4 emissions data for NGVs. 

NGVAmerica and the Canadian Natural Gas Vehicle Alliance have therefore assembled a set of 

emissions data from North American manufacturers, representative of the industry norm for CH4 

emissions. The emissions data covers both dedicated and bi-fuel NGVs from MY 2005–MY 

2009. [OAR-2009-0472-11310, p. 2] 

Table 1 [See OAR-2009-0472-11310, p. 5 for Table 1] shows the useful life NGV emissions by 

model year, model, and fuel configuration for CH4, CO2, and N2O emissions for a 

representative sample of five vehicles. The Table includes data with global warming potential 

factors applied to CH4 and N2O emissions, resulting in total global warming potential of all 

emissions in g/mile, and the percentage increase in the total global warming potential compared 

to the CO2 baseline. [OAR-2009-0472-11310, pp. 2-3] 

Table 2 [See OAR-2009-0472-11310, p. 6 for Table 2] shows CH4 and CO2 emissions data from 

16 representative bi-fuel MY07–09 NGVs, including CO2e/CO2 ratios. [OAR-2009-0472­

11310, p. 3] 

Table 3 [See OAR-2009-0472-11310, p. 7 for Table 3]shows CH4 and CO2 emissions data from 

6 representative MY06–09 dedicated NGVs, including CO2e/CO2 ratios. [OAR-2009-0472­

11310, p. 3] 

Two significant conclusions can be drawn from this data. The first is that the industry norm, 

covering both bi-fuel and dedicated NGVs, is 0.1–0.4 g/mile CH4. The second is that, at these 

levels, the increase in global warming potential created by CH4 and N2O from natural gas 

vehicles is in the order of 1% over that of CO2 alone. This should be compared against the 20– 

30% reduction in total global warming potential realized by NGVs compared with gasoline 

vehicles. [OAR-2009-0472-11310, p. 3] 

Reducing CH4 emissions from these values would create a significant economic impact on 

manufacturers, with minimal environmental benefit, and cause changes to current designs, 

including replacing OEM catalysts with expensive methane specific catalysts having higher 

loadings of precious metals. EPA has indicated that it does not intend the caps to impose 

additional costs or require new emission controls. With respect to methane and nitrous oxide 

emissions, EPA’s preamble acknowledges that it “has not identified clear technological steps 

5-109 
EPA Response to Comments 

available to manufacturers today that would significantly reduce current emission levels.” [OAR2009-0472-11310, p. 3] 

Conclusion 

NGVAmerica and the Canadian Natural Gas Vehicle Alliance urge EPA to give full 

consideration to these comments and accordingly modify its proposed regulations with respect to 

natural gas vehicles. Based on the industry norm of CH4 emissions data shown above, and 

recognizing that manufacturers normally calibrate to certify their emissions at about 50% of the 

standard, we urge EPA to adopt a CH4 cap at 0.5 g/mile methane for natural gas fueled vehicles. 

This proposal is in line with the logic followed by EPA with respect to the limits it has proposed 

for such emissions from gasoline vehicles. This will allow manufacturers to continue to produce 

NGVs on an economic basis, without any backsliding, while providing significant greenhouse 

gas reductions. [OAR-2009-0472-11310, p. 4] 

With respect to methane emissions (CH4) and nitrous oxide (N2O) emissions, EPA has proposed 

a cap, limiting CH4 emissions for all vehicles to no more than 0.030 g/mi and N2O emissions to 

0.010 g/mi. With respect to these two pollutants, manufacturers are not free to sell vehicles with 

emission higher than the cap. In addition, the proposed regulations do not allow manufacturers to 

use CO2 reductions to offset higher CH4 or N2O emissions. [OAR-2009-0472-7236.1, p.6] 

NGVAmerica has several concerns with respect to the CH4 and N2O caps proposed by EPA. 

Providing an average for CO2, while imposing a cap on other greenhouse gas emissions, goes 

against the trend in how most analyses look at greenhouse gas emissions. In fact, California 

opted for a CO2-equivalent average that included CO2, methane, and nitrous oxide emissions. 

We believe an averaging approach is optimal if the goal is reducing greenhouse gas emissions. 

We also are concerned that the proposed regulation focuses exclusively on tailpipe emissions and 

ignores the upstream emissions or full fuel cycle impacts of operating motor vehicles. The focus 

on tailpipe emissions might be necessary in terms of the actual regulation but upstream emissions 

should not be ignored. As indicated above, NGVs provide real reductions in terms of full fuel 

cycle greenhouse gas emissions when compared with gasoline vehicles. This is especially true 

with respect to renewable natural gas. These benefits should be taken into account when deciding 

whether to allow averaging of different pollutants and also when developing the credit program. 

As currently proposed, it is not clear that the benefits of NGVs will be delivered if the caps 

imposed on methane emissions are adopted. [OAR-2009-0472-7236.1, p.6] 

Based on a search of available emission studies, NGVAmerica could not find any instances of 

NGVs able to meet the proposed CH4 limit of 0.030 g/mi – despite having significantly less 

CO2-equivalent tailpipe emissions when methane and nitrous oxides are included. A review of 

the results from the GREET model’s full-fuel cycle analysis further indicates that typical NGVs 

are unlikely to be able to meet the proposed cap. GREET currently estimates that vehicle related 

emissions of methane are about 0.146 g/mi for dedicated NGVs. Thus, it appears that the current 

proposal could be prohibitive for manufacturers wanting to produce and sell NGVs in the U.S. It 

is not clear whether EPA has fully considered the proposed rules impact on NGVs. The rule does 

provide ample discussion of the issue, however, it is not clear what data EPA is relying upon for 

its conclusions and it is not clear whether the conclusions regarding the ability to meet the 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

methane cap apply to NGVs or whether these conclusions pertain to gasoline powered vehicles. 

[OAR-2009-0472-7236.1, pp.6-7] 

EPA’s notice indicates that the intent of the caps is to ensure that emission levels of these 

pollutants do not increase as CO2 emissions are reduced. EPA also indicates a number of times 

that the imposition of the caps is not intended to be technology forcing. At the same time, EPA 

appears aware that NGVs in the past have had much higher methane emissions than gasoline 

vehicles. EPA appears to be confident that controls necessary to meet the more demanding Tier 2 

standards will result in lower levels of CH4 emissions for NGVs. But the notice provides no data 

or citations to support these conclusions. Without the ability to review the same data that EPA is 

relying upon, we lack the confidence that EPA apparently has regarding the ability of NGVs to 

meet the proposed CH4 cap. As noted above, our research into this issue has not revealed any 

data showing that NGVs will meet the proposed cap. [OAR-2009-0472-7236.1, p.8] 

Even if some NGVs can meet the cap, we believe adopting a CO2-equivalent average is 

warranted with methane and nitrous oxide emissions appropriately weighted for their global 

warming potential. Providing a CO2-equivalent approach as part of the rule would ensure that 

the caps do not become an obstacle to NGVs, while at the same time ensuring greenhouse gas 

emissions from such vehicles are no greater than for gasoline vehicles. Therefore, we strongly 

urge EPA to allow NGVs to meet an average standard that includes averaged emissions for CO2, 

CH4, and N2O. If this is done, we are confident that NGVs will not only achieve the standard 

but surpass gasoline powered vehicles. [OAR-2009-0472-7236.1, p.8] 

CARB currently allows manufacturers to use a static value of 0.006 g/mi for N2O emissions 

instead of requiring direct measurement of such emissions. Since N2O is currently not measured 

over the federal test procedures for emissions and since many emission testing shops are unlikely 

to have such equipment for several years, it would be advisable to accept the CARB default 

measurement. This is necessary because the aftermarket industry relies on emission testing 

facilities operated by other businesses. While the new rule appears to require facilities to upgrade 

equipment in order to be able to test for N2O emissions, aftermarket conversion system suppliers 

are concerned that they will be unable to satisfy the new N2O requirements if businesses they 

rely on for emission testing do not acquire the necessary equipment. Therefore, in lieu of 

requiring testing for N2O emissions, we urge EPA to allow the use of the default figure used by 

CARB. [OAR-2009-0472-7236.1, pp.8-9] 

State of New Jersey 

The Department is supportive of the USEPA's proposed approach to regulate methane (CH4) and 

nitrous oxide (N2O) by means of per-vehicle emission standards that would act to cap emissions 

for model years 2012 through 2016 at the current levels. The USEPA's proposal to separately 

regulate methane for the first time is a particularly important initial step to ensure that this high 

global warming potential gas is controlled in the transportation sector. [OAR-2009-0472-7109.1, 

pp.9-10] 

Toyota Motor North America 

5-111 
EPA Response to Comments 

Toyota has concerns with setting separate emission standards for N2O and CH4 proposed by 

EPA. The proposed level only serves as a backsliding measure and offers little in terms of GHG 

reduction benefits. Furthermore, Toyota is concerned with the prospect that these standards may 

inhibit future technology introduction needed to comply with this regulation. Specifically, EPA 

should not set the proposed N2O cap standard because emissions from direct injection lean burn 

and diesel engines tend to be higher and these technologies were not considered in developing 

the cap. EPA should not set the CH4 cap standard because it may exclude the introduction of 

CNG technology as a means to mitigate CO2. If EPA does intend to move forward with a CH4 

standard, Toyota would like EPA to strongly consider allowing exemption for carryover 

vehicles. [OAR-2009-0472-7291, p.9] 

Instead of separate emission standards, Toyota suggests EPA incorporate N20 and CH4 into a 

fleet average calculation. The fleet average adjustment would resemble the AB 1493 calculation 

of: {CO2 + 296 x N2O + 23 x CH4} . For N2O, Toyota proposes to use a constant value (i.e. 

N2O = 0.006 grams/mile, per AB1493). Merits of the fleet average proposal include the fact that 

the fleet average does not obstruct the introduction of specific technologies that may be needed 

to comply with EPA's rule. Toyota's proposal to use the N2O concept also eliminates the 

challenge of N2O measurement accuracy at the proposed level of .010 gram per mile. [OAR2009-0472-7291, p.9] 

EPA proposes a per-vehicle N2O emission standard, measured over the FTP, which would 

become effective in 2012MY. EPA believes that current technology gasoline vehicles can meet 

the standard at no cost and acknowledges that diesels may have modest associated costs to meet 

the standard. EPA acknowledges the short lead time for facility upgrades necessary for N2O 

measurement and will allow a compliance statement for 2012MY. [OAR-2009-0472-7291, p.8] 

University of California, Santa Barbara, Bren Working Group on Vehicle Fuel Economy 

Standards for Non-CO2 GHGs 

We support the EPA's proposal to cap non-CO2 GHG emissions at their current levels—CH4 at 

0.030 g/mile (p. 49525) and N2O at 0.010 g/mi (p. 49524)—due to their respective multiplicative 

global warming potential of 21 and 310 times greater than CO2. The emissions of N2O and CH4 

contribute significantly to total CO2-equivalent emissions of GHGs from the lifecycle of 

conventional and alternative transportation fuels and technologies. Emissions from these potent 

GHGs vary significantly depending on a number of factors, including the type of fuel consumed. 

As Table 1 illustrates [See OAR-2009-0472-7188.1, p. 7 for Table 1], N2O and CH4 jointly 

account for approximately 15% of the lifecycle CO2-equivalent GHG emission impacts from 

conventional gasoline vehicles, and more than 29% from some alternative fuel vehicles. [OAR2009-0472-7188.1, p. 6] 

Unlike CO2, CH4 and N2O are a function of many complex dynamics, such as the combustion 

pressure, temperature, and air-to-fuel ratio, the type of fuel used, as well as the age and type of 

emission control systems operating. CH4 and N2O emissions cannot be derived from one or two 

basic characteristics of a fuel, thus the EPA’s plan to measure CH4 and N2O emissions during 

the CAFE tailpipe test will ensure a more accurate assessment. [OAR-2009-0472-7188.1, p. 7] 

5-112
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

Placing a cap on non-CO2 GHG emissions at current levels and disallowing fleet averaging or 

emission-level trading is a straightforward means of assuring that CH4 and N2O levels do not 

increase per vehicle. This approach, as opposed to embedding non-CO2 GHG emissions as CO2­

equivalent emissions in the ruling, discourages manufacturers from making other changes to 

avoid delivering significant CO2 reductions. [OAR-2009-0472-7188.1, p. 7] 

Vehicle age affects N2O and CH4 emissions. Sasaki and Kameoka found that older vehicles 

produced much higher emissions than newer vehicles with similar emission control equipment. 

In this study, the oldest vehicle tested (which had an odometer reading of 52,000 km) produced 

several times the N2O emissions of the newest vehicle (with only 1,000 km of use). Lipman & 

Delucchi research also suggests that for most fuels—both nonpetroleum and petroleum based 

fuels—CH4 emissions increase with the age of the catalyst. Based on these findings, it becomes 

increasingly important to test CH4 and N2O emissions over the vehicle lifetime, and we 

recommend these tests be included and reported as part of the In-Use Verification Program 

(IUVP). While the EPA claims not to have 'sufficient data' to determine the appropriate 

thresholds for CO2, N2O, and CH4 emissions, we do not agree with excluding these emissions 

from the In-Use Confirmatory Program (IUCP). Given that the goal of this ruling is to reduce 

overall GHG emissions, and the fact that this decision will have ramifications for many years to 

come, it is important the EPA ensure that the fleet maintains, within reason, the standards 

established in this ruling. [OAR-2009-0472-7188.1, p. 7] 

While we encourage the EPA to enforce the cap on CH4 and N2O emissions, we also 

recommend that the EPA remain flexible with regard to possible future technologies. New 

technologies may significantly reduce the level of carbon dioxide while slightly increasing CH4 

or N2O, but result in a net reduction to overall CO2 emissions equivalents. This is due to the 

characterization factors assigned to CH4 and N2O, as shown in the following: [OAR-2009-0472­

7188.1, p. 7] 

CO2 emission standard/footprint > 21 * ΔCH4 + 310 * ΔN2O + -ΔCO2 

For instance, a technology change in air conditioning could improve fuel consumption by as 

much as 20%, thus reducing not only pressure on fuel sources, but also emissions of CO2 and 

other tailpipe emissions. However, it may be denied employment despite the offsetting effects of 

reductions to fuel consumption due to a small non-CO2 increase in GHGs directly from use. If 

the impacts from CH4 and N2O are increased, but the total emission of CO2-equivalent is 

lowered by using the new technology, the technology should be permitted. However, all 

emissions must remain below the approved CAFE standards for the proposed year. [OAR-2009­

0472-7188.1, p. 7] 

[The following comments are from LA Testimony, OAR-2009-0472-7283, pp.118-119] 

Our third point concerns standards for non-CO2 GHGs. We support the EPA's proposition to cap 

methane and nitrogen dioxide at current levels due to their respective multiplicative global 

warming potential of 21 and 310 times greater than CO2 according to the IPCC. 

5-113 
EPA Response to Comments 

We agree that the cap on methane and nitrogen dioxide is more effective than using CO2 

equivalency measures as such measures dilute the primary goal of reducing CO2. 

However, we ask that the EPA remain flexible with regard to possible future technologies that 

might reduce the level of carbon dioxide while increasing methane and nitrogen dioxide or 

vice versa but result in a net reduction in global warming potential. However, total CO2 

emissions must remain below the approved CAFE standards for the proposed year. 

Given the potency of methane and nitrogen dioxide in contributing to climate change, we 

also request the inclusion of incentives, such as a credit system, for reducing nitrogen dioxide 

and methane emissions below the proposed cap as a means to motivate innovation in clean 

technologies. 

Volkswagen Group of America (Volkswagen) 

Volkswagen does not believe standards for CH4 and N2O are necessary or warranted, at least in 

the timeframe of this rulemaking. As EPA points out in the NPRM, the contributions from N2O 

(2.7%) and CH4 (0.2%) to the total GHG emissions attributed to passenger cars and light-duty 

trucks is small. In addition, Volkswagen is concerned that the levels proposed by the EPA could 

result in precluding some future powertrain concepts with significant C02 reduction potential. 

Initial test results Volkswagen performed on a CNG vehicle and a flexible fuel concept indicate 

that the CH4 standard as proposed by EPA may prevent future certification of alternate fuel 

vehicles. Additionally the N2O results as measured on the CNG concept shows a variability 

which needs to be investigated in detail. [OAR-2009-0472-7210.1, p.2] 

With the test results above, Volkswagen believes that more data are necessary to set a reasonable 

and appropriate CH4 standard. It appears the CH4 standard in the NPRM is derived from the 

EPA's database but is focused on conventional concepts only. The source for the N2O standard 

proposed is not obvious but the first test results on an alternate vehicle concept using CNG 

indicate that more data specifically on these concepts are necessary. Based on these results 

Volkswagen strongly recommends to postpone the standards in the current CO2 proposal and 

delay regulatory actions on CH4 and N2O to a later point, allowing more time for engineering 

evaluation on possible and appropriate standards. As initially stated, it is possible these cap 

standards may be challenging for certain concepts with significant CO2 reduction potential. 

[OAR-2009-0472-7210.1, p.6] 

The cap standards as proposed by EPA are full useful life standards. These will result in 

manufacturers establishing deterioration factors and a certification level lower than the proposed 

standards. We question the usefulness of the proposed cap standards. [OAR-2009-0472-7210.1, 

p.6] 

Also, by EPA's admission there is not a large amount of data available for these emission 

compounds. In EPA's Memorandum to the Docket dated November 19,2009 entitled, 'Derivation 

of Proposed N2O and CH4 Cap Standards' (Docket EPA-HQ-OAR-2009-0472), EPA 

acknowledges that there is little data available regarding CH4 and N2O. For this additional 

reason Volkswagen suggests delaying consideration of standards for N2O and CH4 until more 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

emission data is available and a better understanding of trade-offs with CO2 reduction strategies 

is available. EPA notes it is concerned with the possibility of increased CH4 and N2O emission 

levels in the future and suggests that the proposed standards would act as caps to prevent future 

increases. Volkswagen maintains there is time to examine this issue in more detail and still issue 

standards in the future if an increase In these emissions is noted or a future cap is warranted. 

[OAR-2009-0472-7210.1, p.6] 

In addition, addling standards for N2O and CH4 result in a testing burden. As EPA notes, new 

test equipments is required to measure N2O. [OAR-2009-0472-7210.1, p.6] 

As discussed, due to the small GHG impact, the possible challenges to alternative fuel vehicles, 

the lack of test data, the in-use compliance issues, and the increased test burden, we recommend 

EPA postpone setting standards for N2O and CH4 until more study of the overall impact of such 

standards is understood. [OAR-2009-0472-7210.1, p.7] 

If EPA is compelled to account for CH4 and N2O emissions, Volkswagen supports the Alliance 

comments that a CO2 equivalent factor is appropriate. The application of a factor at least 

eliminates concerns regarding test burden and in-use issues. [OAR-2009-0472-7210.1, p.7] 

Volvo Car Corporation 

EPA requests comments on N2O and CH4 emission standards. Given the insignificant 

contribution of N2O and CH4 from vehicles and the burden of implementing such standards, 

VCC supports the Alliance proposing that EPA instead rely on the use of a factor to account for 

these emissions. This approach would enable introduction of certain vehicle technologies that 

have an overall GHG benefit. [OAR-2009-0472-7168.1, p.7] 

EPA Response 

N2O and CH4 Standards – General 

EPA received many comments on the proposed N2O and CH4 "cap" standards. A range of 

stakeholders supported the proposed approach of "cap" standards and the proposed emission 

levels, including most states and environmental organizations that addressed this topic. These 

commenters stated that EPA needs to address all mobile greenhouse gases under the Clean Air 

Act, and N2O and CH4 are both more potent contributors to global warming than CO2. The 

Manufacturers of Emissions Controls Association (MECA) was also supportive. 

EPA agrees with the NGO, state, and other commenters that light-duty vehicle emissions of these 

two compounds are currently small but important contributors to the U.S. inventories of 

emissions. As discussed in detail in Section III.A.2 of the preamble, under section 202(a) (1) the 

Administrator has significant discretion in how to structure the standards that apply to the 

emission of the air pollutant at issue here, the aggregate group of six greenhouse gases, including 

N2O and CH4. EPA has the discretion under section 202(a) (1) to adopt separate standards for 

each gas, a single composite standard covering various gases, or any combination of these. In 

this rulemaking EPA is finalizing separate standards for nitrous oxide and methane, and a CO2 

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EPA Response to Comments 

standard that provides for credits based on reductions of HFCs, as the appropriate way to issue 

standards applicable to emission of the single air pollutant, the aggregate group of six 

greenhouse gases. 

Some auto industry commenters proposed that EPA not set standards at this time, but rather, 

organize a government-industry test program to better understand N2O emissions characteristics 

and controls. Since as discussed below the cap standards we are establishing are well above 

most emission levels of most current conventional vehicles, we do not believe that there is a need 

to delay the setting of standards while gathering additional data. In the future, further such 

research could be warranted if EPA were considering more stringent, technology-forcing 

standards. 

Stringency of the N2O and CH4 "Cap" Standards 

A number of commenters, primarily auto manufacturers, expressed concerns that the levels of 

the proposed cap standards for N2O and CH4 could pose technological challenges for some 

vehicle technologies and potentially restrict the development of some technologies that could 

reduce overall GHG emissions. Auto industry commenters, including the Alliance and AIAM, 

were concerned that the N2O standard could impede the introduction of, for example, lean-burn 

gasoline and diesel technologies. Also, these organizations, as well as natural gas vehicle 

advocates, were concerned that the CH4 standard could impede the expanded production and sale 

of CNG or LNG vehicles. 

Notably, the focus of these organizations' concerns about the stringency of the standards is on 

alternative technologies and fuels, not on conventional vehicles. As we discuss in detail in 

Section III.B.7 of the preamble, EPA's intent was to establish the cap standards at levels 

consistent with those seen in the vast majority of conventional gasoline and diesel vehicles, 

which we expect to be able to comply with little or no new technological effort or expense on the 

part of auto manufacturers. 

However, we recognize that, in the absence of a limitation, the potential for significant emission 

increases exists with the evolution of new vehicle and engine technologies or the expanded 

penetration of existing low-production technologies into the fleet. Indeed, several industry 

commenters concede as much in stating that they are contemplating introducing vehicle 

technologies that could result in emissions exceeding the cap standard levels. For example, 

Volkswagen provided limited data on compressed natural gas (CNG) and FFV concept cars and 

NGV America provided limited data on several vehicles (although some of these were vehicles 

certified as heavy-duty vehicles, so those results are not relevant to this rule). These data 

generally show higher N2O and/or CH4 levels than current gasoline and diesel vehicles. The 

organizations submitting this data do not specify any new or improved emission control 

technologies that could be applied to these vehicles, or how costly such improvements might be. 

Clearly, manufacturers wishing to introduce or significantly expand production of vehicles 

incorporating some of these alternative vehicle or fuel technologies may need to make 

improvements, or make use of the optional CO2 equivalent compliance approach described 

below, in order to achieve N2O and/or CH4 emission levels similar to conventional gasoline 

vehicles and meet the cap standards. Given this lack of information and the availability of a 

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CO2-equivalent compliance option, as described below, EPA does not ascribe costs to the N2O 

and CH4 cap standards. 

Although the overall GHG program that EPA is establishing is designed to encourage innovative 

technological responses to GHG standards, our general intent is not to trade off emissions of one 

GHG for another. We recognize that catalytic NOx control technologies can maintain or reduce 

N2O emissions in certain cases – for example, NOx control approach used on current Tier 2­

compliant diesel vehicles do not tend to favor the formation of N2O emissions – while in other 

cases these technologies can also increase N2O emissions. Diesel cars and light trucks with 

advanced emission control technology, for example, are in the early stages of development and 

commercialization. To the extent that this segment of the vehicle market develops, the N2O 

standard could require these manufacturers to incorporate control strategies that would minimize 

N2O formation above the cap standard. (Available approaches for these vehicles may include 

using electronic controls to limit catalyst conditions that might favor N2O formation and 

consideration of different catalyst formulations.) Although some of these approaches may have 

modest associated costs, EPA believes that they will be small compared to the overall costs of 

the advanced NOX control technologies already required to meet Tier 2 standards. In any event, 

these phenomena are not well understood or easily predictable today. 

Similarly, hydrocarbon control catalysts can be designed to reduce CH4 emissions – for example, 

Honda has certified a dedicated CNG vehicle for several years with CH4 emissions well below 

the new CH4 cap standard – while some designs of natural gas and ethanol fueled vehicles can 

produce higher levels of CH4 emissions than do similar gasoline fueled vehicles. Thus, the cap 

standards we are establishing for both N2O and CH4 are meant to encourage developers of new 

vehicle technologies to address all vehicle GHG emissions simultaneously as these technologies 

enter the market more broadly (e.g., N2O control for lean-burn combustion technologies, and 

CH4 controls for natural gas or ethanol fuel technologies.) For each of these potential of 

existing (low-production) vehicle and fuel technologies, there are as yet no clear indications from 

manufacturers for significant production plans. 

As the data from commenters above reinforces, some new technologies would need more 

technological effort to reach the cap standards than others. Also, as discussed below, 

manufacturers have raised concerns about test burdens. For these reasons, the final rule includes 

an approach to N2O and CH4 standards providing an optional pathway to compliance if a 

manufacturer chooses to market a vehicle with N2O and/or CH4 emissions approaching or 

exceeding the cap standards. The final regulations thus allow a manufacturer to use an optional 

CO2-equivalent approach, as suggested by several commenters. In the proposal, EPA sought 

comment on an approach of expressing N2O and CH4 in common terms of CO2-equivalent 

emissions and combining them into a single standard along with CO2 emissions. 74 FR at 

49524. (California’s “Pavley” program adopted such a CO2-equivalent emissions standards 

approach to GHG emissions.) Several auto industry commenters and the Institute for Policy 

Integrity (NYU) supported this type of compliance approach. In lieu of complying with the 

separate N2O and CH4 cap standards, the compliance alternative allows a manufacturer 

(including manufacturers that convert vehicles to alternative fuels) to choose to convert its N2O 

and CH4 test results (or, as described below, substitute a default N2O value for MY 2012-2014) 

into CO2-equivalent values and add this sum to their CO2 emissions. To avoid issues of 

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EPA Response to Comments 

consistency across a manufacturer's product line, a manufacturer choosing this option for one test 

group will need to apply this approach to all of the test groups in its fleet. This approach is more 

environmentally protective overall than the cap standard approach, since the manufacturer will 

need to reduce its CO2 emissions to offset the higher N2O (and/or CH4) levels, but will not be 

allowed to increase CO2 above its footprint target level by reducing N2O (or CH4). 

Manufacturers using the compliance alternative to address N2O and/or CH4 challenges with an 

alternative vehicle or fuel technology should face no additional compliance costs. This is 

because in most cases the alternative vehicle and fuel technologies would likely result in CO2 

levels lower than comparable conventional vehicles, and so could comply without additional 

expenditures on controls of N2O or CH4 emissions. 

The N2O and CH4 values to be used in the optional CO2-equivalent formula will be the measured 

emission values for these GHGs, except N2O in model years 2012 through 2014. For these 

model years, in response to manufacturer testing concerns discussed below, manufacturers may 

use a default N2O value of 0.010 g/mi, the same value as the N2O cap standard. For MY 2015 

and later, the manufacturer would need to provide actual test data on the emission data vehicle 

for each test group. (That is, N2O data would not be required for each model type, since EPA 

believes that there will likely be little N2O variability among model types within a test group.) 

EPA believes that its selection of 0.010 g/mi as the N2O default value is an appropriately 

protective level, on the high end of current technologies, as further discussed in Section III.B.7 

of the preamble. 

Two commenters, the Center for Biological Diversity (CBD) and a private citizen, supported 

more stringent cap standards. CBD commented that in light of the potency of these compounds, 

EPA should develop standards that do not just maintain current levels, but reduce emissions over 

current levels and that EPA had not analyzed either the technologies or the costs of doing so. 

EPA did not propose and is not prepared at this time to establish "technology forcing" standards 

for N2O and that would require manufacturers to reduce emissions of these compounds below the 

levels generally seen in current conventional gasoline and diesel vehicles. We believe that the 

stringent Tier 2 program and the associated NOX fleet average requirement already result in 

significant N2O control in conventional gasoline vehicles, and the agency does not expect current 

N2O levels to rise for these vehicles. Moreover, EPA believes that the CO2 standards will be 

challenging for the industry and that these standards should be the industry’s chief focus in this 

first phase of vehicular GHG emission controls.3

 Further, to reduce current emissions would 

result in costs that would need to then be included in the overall economic impacts of the 

program and accounted for in establishing a different, potentially less stringent CO2 standard. 

Although as discussed above we recognize that some technological approaches may exist for 

vehicles with alternative fuel and vehicle technologies to address N2O or CH4 emissions above 

the cap standards, we are not aware of technologies that could in the time frame of this rule 

reduce these emissions significantly and consistently below the cap levels, since this could 

require broad improvements to gasoline vehicle emission controls across the fleet. The 

3

 See Massachusetts v. EPA, 549 U.S. at 533 (EPA has significant discretion as to timing of GHG regulations); see 

also Sierra Club v. EPA, 325 F. 3d 374, 379 (D.C. Cir. 2003) (upholding anti-backsliding standards for air toxics 

under technology-forcing section 202 (l) because it is reasonable for EPA to assess the effects of its other 

regulations on the motor vehicle sector before aggressively regulating emissions of toxic vehicular air pollutants. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

commenters do not suggest any technologies that could do so. EPA could revisit this decision 

in the future if such technologies emerge. 

Test Burden Issues for N2O 

Auto manufacturers were almost unanimous in raising concerns about the impacts of a new 

testing requirement for N2O on their test facilities, equipment, and procedures. On the other 

hand, there were very few concerns about new burdens for CH4 testing. This disparity in 

comments can be explained by the fact that manufacturers have historically developed CH4 

testing capability and experience for a number of purposes, including compliance with nonmethane organic gases (NMOG) standards. Thus, for CH4, the new CH4 cap standard will not 

result in new test burdens. 

We recognize that N2O testing will be new to most manufacturers. However, we do not believe 

that such testing will impose unreasonable new burdens, especially in relation to the cost of 

complying with the overall GHG standards. As discussed in Section III.B.7 of the preamble, 

N2O measurement equipment capable of accurate measurement of emissions in the range of the 

cap standard is now readily available at costs that, while not trivial, are not unreasonable 

compared to other traditional emission measurement equipment. For example, EPA in the last 

two years has purchased and installed cost-effective photo-acoustic analysis equipment and has 

been using it successfully for N2O and other testing. Manufacturers ,may need to modify their 

test facilities and patterns of testing to integrate N2O testing into their emission testing programs, 

but again, these changes are not unusual and will not be excessively costly in most if not all 

cases. 

Still, given the relatively short lead-time before the N2O cap becomes effective and the newness 

of N2O testing to this industry, EPA proposed that manufacturers be able to apply for a 

certificate of conformity with the N2O standard for model year 2012, provided that they supply a 

compliance statement based on good engineering judgment. Under the proposal, beginning in 

MY2013, manufacturers would have needed to base certification on actual N2O testing data. 

This approach was intended to reasonably ensure that the emission standards are being met, 

while allowing manufacturers lead time to purchase new N2O emissions measurement 

equipment, modify certification test facilities, and begin N2O testing. After consideration of the 

comments, EPA agrees with manufacturers that one year of additional lead-time to begin actual 

N2O measurement across their vehicle fleets may be still be insufficient for manufacturers to 

efficiently make the necessary facility changes and equipment purchases. Therefore, EPA is 

extending the ability to certify based on a compliance statement for two additional years, through 

model year 2014. For 2015 and later model years, manufacturers will need to submit 

measurements of N2O for compliance purposes. We believe that this additional leadtime before 

testing is required also addresses more detailed technical concerns manufacturers raised about 

N2O testing early in the program. 

Other Comments 

Some manufacturers raised questions and concerns about how EPA could best address 

potential deterioration of emissions of N2O and CH4 over the life of the vehicles. Although 

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EPA Response to Comments 

catalytic emission control systems generally deteriorate in effectiveness over time, EPA is not 

aware of information on current technology vehicles that would allow specific conclusions on 

the degree of emissions deterioration. (One commenter, the Bren Working Group at UC Santa 

Barbara, referenced studies from 1992 and 2002 that indicated that vehicles of those relative eras 

showed significant deterioration of N2O and CH4, respectively.) EPA believes that some degree 

of emissions deterioration in current catalytic control systems is likely, but given the limited 

information available on current technology vehicles, we are not able to determine appropriate 

independent values for such deterioration. However, we are not aware of information on current 

vehicles that would indicate that deterioration of these emissions would be significantly different 

– higher or lower – than those of similar conventional emissions. EPA recognizes that 

manufacturers may not be able to develop DFs for N2O and CH4 for all their vehicles in the 2012 

model year, and thus EPA is allowing the use of alternative values through the 2014 model year. 

For N2O the alternative value is the DF developed for NOX emissions, and for CH4 the 

alternative value is the DF developed for NMOG emissions. 

Auto industry commenters also expressed concerns that requiring measurement of N2O using 

newer, more general test procedures developed to apply to all types of vehicles and engines 

would inherently require a wholesale shifting by manufacturers away from traditional light-duty 

test procedures. We believe that the requirements we proposed and are now finalizing do not 

have this effect, and that the manufacturers' concerns are unfounded. The regulatory language 

being finalized is very specific, referring to 40 CFR Part 1065 in a targeted way to only make 

reference to those requirements necessary for measurement of N2O. The regulations state very 

clearly and unambiguously that it is N2O measurement devices alone -- not laboratory hardware, 

software, calculations, or procedures -- that must meet Part 1065 specifications. That is, a 

manufacturer can continue to use current light-duty test procedures for all other purposes while 

using the N2O analyzer specifications in Part 1065 for N2O testing. 

A commenter from the natural gas vehicle industry suggests that EPA include upstream fuel 

GHG emissions in its compliance approach. We agree that the production and distribution of 

natural gas can produce lower emissions of GHGs than comparable upstream emissions from the 

petroleum fuels. However, EPA as discussed in detail in Section III.C.3 of the preamble, EPA 

has concluded that for this rule, we will only consider upstream emissions for electric vehicles, 

given that electricity upstream GHG emissions are about three times higher than gasoline 

upstream GHG emissions. By comparison, the difference in upstream GHG emissions for both 

diesel fuel from oil and CNG from natural gas are relatively small compared to differences 

associated with electricity. EPA will continue to assess the issue of upstream emissions in future 

rulemakings. 

5.6. EPA Small Entity Exemption 

Organization: Association of International Automobile Manufacturers (AIAM)

 Vehicles Services Consulting, Inc

 KTM-Sportmotorcycle AG

 Clean Energy Fuels 

 European Small Volume Car Manufacturers' Alliance (ESCA) 

 Artega Automobil GmbH & Co. KG 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

 Wiesmann GmbH 

Comment: 

Association of International Automobile Manufacturers (AIAM) 

The regulatory language proposed in section 86,1801-12(j) is as follows: 

Businesses meeting the Small Business Administration size standard defining a small business as 

described in 13CFR 121.201 are eligible for exemption from the greenhouse gas emission 

standards specified in § 86.1818–12and associated provisions. 

So, in order to qualify for the small business exemption, the manufacturer must meet the SBA 

“size standard.” The “size standards” in 13 CFR 121.201 are specified only in terms of a number 

of employees, 1000 in the case of vehicle manufacturers. The EPA regulation does not state that 

the manufacturer must meet the definition of “small business concern” (which excludes foreign 

entities) under the Small Business Act in order to be exempted. There is no justifiable reason to 

limit the small business exemption to U.S. based companies, and doing so would present serious 

concerns under international trade agreements. If EPA decides to maintain this small business 

exemption in the final rule, it should clarify that the exemption is available to small entities 

regardless of location. This issue could be avoided entirely if EPA adopts our recommendation to 

use the small volume certification criterion of 15,000 units U.S. sales annually to exclude small 

manufacturers for the 2012-16 period. 

Vehicle Services Consulting, Inc. 

EPA proposed a provision allowing a GHG exemption BUT ONLY FOR CERTAIN small 

businesses – those that meet the Small Business Administration (SBA) criteria contained in 13 

CFR 121.201.6 With this limitation, however, the proposed exemption appears to apply only to 

USA companies. The “US only” limitation may be in violation of WTO requirements. In 

addition, the “small entity” provision is limited to auto manufacturers with fewer than 1000 

employees – a criterion that is irrelevant to a manufacturer’s ability to comply with emissions 

standards (whereas the factor historically determining SVM status – vehicle sales – does affect 

ability. [OAR-2009-0472-7083.1, pp.3-4] 

KTM-Sportsmotorcycle AG 

The small entity conditional exemption appears to be only available to US based firms [OAR2009-0472-7183, p.1] 

There are several ways forward that we would support, such as extending the small entity 

conditional exemption to all small volume manufacturers. [OAR-2009-0472-7183, p.1] 

Clean Energy Fuels 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

EPA-HQ-OAR-2009-0472-6185, p. 140.]] 

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EPA Response to Comments 

In terms of the Proposal to Defer Standards For Manufacturer's Meeting SBA's Definition of 

Small Businesses: 

Clean Energy believes this deferral is appropriate, and we look forward to working closely with 

EPA and NHTSA in the coming years to design appropriate GHG standards for small volume 

manufacturers as part of a future regulatory action. 

European Small Volume Car Manufacturers' Alliance (ESCA) 

There is a provision in the regulation for the ‘small entity conditional exemption’. However, the 

definition applied to small volume manufacturers in this instance is the Small Business 

Administration criteria (<1,000 employees), which only allows for US producers to apply for the 

SECE. If the SECE was extended beyond SVMs based in the US, then this would allow several 

EU SVMs to participate. [OAR-2009-0472-7287.1, p.4] 

ESCA would also support the definition of small entities being based on less than 15,000 sales in 

the US per annum, rather than the SBA definition. Several ESCA members have submitted 

detailed proposals. We hope that EPA/NHTSA is able to consider these proposals and work with 

the European industry to achieve a workable solution for both the regulator and the businesses. 

[OAR-2009-0472-7287.1, p.4] 

Artega Automobil GmbH & Co. KG 

The small entity conditional exemption appears to be only available to US based firms. [OAR2009-0472-7481.1, p.1] 

Wiesmann GmbH 

The small entity conditional exemption appears to be only available to US based firms [OAR2009-0472-7198, p.1] 

There are several ways forward that we would support, such as extending the small entity 

conditional exemption to all small volume manufacturers. [OAR-2009-0472-7198, p.1] 

Society of Motor Manufacturers and Traders Limited 

There is a provision in the regulation for the ‘small entity conditional exemption’. However, the 

definition applied to small volume manufacturers in this instance is the Small Business 

Administration criteria (<1,000 employees), which only allows for US producers to apply for the 

SECE. If the SECE was extended beyond SVMs based in the US, then this would allow several 

UK (and EU) SVMs to participate. [OAR-2009-0472-7229.1, p.4] 

SMMT would also support the definition of small entities being based on <15,000 sales in the 

US per annum, rather than the SBA definition. [OAR-2009-0472-7229.1, p.4] 

EPA Response: 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

EPA is clarifying that foreign as well as U.S. manufacturers meeting the SBA size criteria are 

eligible for the exemption. EPA in fact intended this result at proposal, although the commenters 

properly pointed out that this intent was not clearly expressed. EPA is retaining the SBA size 

criteria to define small entities and believes that it is important to do so to ensure that all small 

entities are exempt regardless of sales volume. EPA also proposed that otherwise-exempt small 

entities submit a one-time notification to EPA. For the reasons stated in Section III.B.8 of the 

preamble to the final rule, EPA has determined that such a condition is unnecessary. 

Consequently, small entities (as defined using SBA size criteria) are exempt from all 

requirements of the final rule. 

In addition, EPA is also deferring standards for small volume manufacturers until a future 

rulemaking. Comments regarding small volume manufacturers and how EPA is implementing 

the small volume manufacturer deferment, including determining small volume manufacturer 

eligibility, are discussed in Section 5.4.2. 

5.7 EPA Additional Credit Opportunities for CO2 Fleet Averaging Program 

5.7.1. Air Conditioning Related Credits 

Organization:Chrysler Group, LLC (Chrysler) 

Alliance of Automobile Manufacturers (Alliance) 

Volkswagen Group of America (Volkswagen) 

Toyota Motor North America 

BMW of North America, LLC (BMW) 

Honeywell International, Inc. 

Nissan North America, 

SABIC Innovative Plastic 

Pittsburg Glass Works 

California Air Resources Board 

State of New Jersey 

National Renewable Energy Laboratory 

University of California – Santa Barbara 

Guardian Industries Corp. 

Environment Michigan 

Schade, Michael T. 

Comment: 

Chrysler Group, LLC 

Adjustment of NHTSA Standards for EPA Air Conditioning Credits 

Harmonization between the NHTSA and EPA programs is a key component to successful 

implementation of a single National Program. Both agencies realized the importance of 

harmonization in the Notice of Intent, in which harmonization is mentioned nine times. That 

Notice describes the harmonization of the EPA and NHTSA programs as follows: 

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EPA Response to Comments 

'EPA and NHTSA intend to propose two separate sets of standards, each under their respective 

statutory authorities. EPA expects to propose a national CO2 vehicle emissions standard .... 

NHTSA expects to propose appropriate related CAFE standards.' [NHTSA-2009-0059-0124, 

p.11] 

We believe that there is a significant discrepancy between the NHTSA and EPA standards when 

addressing air conditioning credits. In EPA's portion of the NPRM, investments made in A/C 

system improvements to lower greenhouse gas emissions are explicitly recognized with 

greenhouse gas credits. A/C credits are not explicitly available in the NHTSA CAFE rule; credits 

are assumed in the development of the NHTSA attribute-based standards in order to ensure the 

'appropriately related' threshold is met. However, the standards remain inconsistent. [NHTSA2009-0059-0124, p.11] 

We believe not all factors were adequately taken into account (e.g. phase-in of alternative 

refrigerants) to arrive at the industry average AIC credit approximation. [NHTSA-2009-0059­

0124, p.11] 

The issue here has to do with harmonizing the two rules - a key objective of a successful 

National Program. Manufacturers still have to meet the overall stringency of the joint program. 

[NHTSA-2009-0059-0124, p.12] 

Recommendation: 

Chrysler recommends that NHTSA recognize each manufacturer's air conditioning improvement 

plan for 2012-16 model years. [NHTSA-2009-0059-0124, p.14] [[See NHTSA-2009-0059-0124, 

pp.11-15 for more discussion on this issue]] 

Provision of Fuel Economy Air Conditioning Credits 

Chrysler believes that the EPA Administrator has authority to define and calculate a 

manufacturer's average fuel economy. See 49 U.S.C. § 32904(c) ('the Administrator shall 

measure fuel economy for each model and calculate average fuel economy for a manufacturer 

under testing and calculation procedures prescribed by the Administrator.'). EPCA provides the 

EPA Administrator with broad discretion to determine how to calculate a manufacturer's average 

fuel economy. [NHTSA-2009-0059-0124, p.16] 

The Administrator therefore may exercise her discretion to calculate fuel economy in a manner 

that recognizes the GHG reduction from improved air conditioning systems. She can do this by 

adding the value of the A/C credits to each model's fuel economy when calculating a 

manufacturer's corporate average fuel economy. [NHTSA-2009-0059-0124, p.16] 

In effect, the NPRM already accomplishes part of this task by setting forth industry average A/C 

credits and requiring that they be taken into account when GHG values are translated to fuel 

economy values. Unfortunately, the NPRM' s use of average A/C credits for this translation, 

rather than the earned A/C credits, creates a discrepancy between the GHG values and A/C 

credits that is contrary to the regulatory compatibility goal of the National Program. In addition, 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

it discourages manufacturers from applying technology that will exceed the industry average, as 

the benefits from that added technology will not be recognized in the CAFE program. [NHTSA2009-0059-0124, p.16] 

It is important to note that the process through which the agencies can apply A/C credits in the 

CAFE program involves only the calculation of a manufacturer's average fleet fuel economy. It 

does not involve in any way the process through which each vehicle model is to be tested and its 

fuel economy measured. [NHTSA-2009-0059-0124, p.16] 

Alliance of Automobile Manufacturers (Alliance) 

The Alliance supports the inclusion of credits for mobile air conditioner (MAC) improvements in 

EPA’s GHG regulation. If structured appropriately, these MAC provisions can provide 

significant near-term GHG benefits at comparatively low cost. The inclusion of MAC credit 

provisions was a critical element that enabled the industry to reach agreement in May 2009 with 

the Administration on a regulatory path forward to reduce vehicle GHG emissions. [OAR-2009­

0472-6952.1, p.8] 

Volkswagen Group of America (Volkswagen) 

Volkswagen supports the comprehensive comments the Alliance has issued in the topic of air 

conditioning credit. [OAR-2009-0472-7210.1, p.4] 

Toyota Motor North America 

`To comply with the CO2 fleet-wide average standards, EPA proposes that manufacturers be 

able to generate and use credits for improved air conditioner (A/C) systems. EPA has structured 

the A/C provisions to account for A/C direct emissions (leakage reductions) and A/C indirect 

emissions (efficiency improvements). Additionally, the proposed leakage reduction credit would 

take into account the reduced GHG impact from the use of an alternative refrigerant. [OAR2009-0472-7291, p.20] 

In general, Toyota supports the inclusion of credits for MAC (mobile source air conditioner) 

improvements in EPA's GHG regulation. The comments provided are aimed at ensuring that 

MAC credit provisions remain effective in delivering the appropriate GHG reduction credits and 

for providing some incentive for introducing future MAC technology improvements. [OAR2009-0472-7291, p.20] 

BMW of North America, LLC (BMW) 

BMW supports credits for improved air conditioning systems as an effective method for 

reducing GHG emissions and improving fuel economy provided vehicle test procedures remain 

unchanged. [OAR-2009-0472-7145.1, p.7] 

The proposal on mobile air conditioning neglects measures which reduce the transmission of 

solar energy into a vehicle's interior and the demand for cooling. Therefore, as a technology to 

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reduce GHG emissions, improved glazing and shading should also be taken into account and 

receive appropriate credit. More specifically, we suggest revising the proposed regulatory 

language at §86.1866-12 (c) Credits for improving air conditioning system efficiency to state that 

air conditioning efficiency credits will also be made available for other technologies, upon 

approval by the EPA Administrator, if the manufacturer demonstrates that such technologies 

allow the air conditioning system to achieve C02-equivalent grams per mile emissions reductions 

comparable to those associated with the technologies identified in §86.1866-12 (c)(l) (i)-(vi). 

[OAR-2009-0472-11294.1, pp. 1-2] 

Honeywell International, Inc. 

Honeywell supports the establishment of credit opportunities for improved air conditioner (A/C) 

systems and leakage control technologies to be used in compliance with the fleet wide CO2 

emissions average standards. [OAR-2009-0472-7206.1, p.3] 

Nissan North America 

Similarly, Nissan has invested and will continue to invest in advancements to reduce CO2 

emissions associated with air conditioning. The early air conditioning credits as well as the 

ongoing air conditioning credits, serve to promote ongoing advances to a vehicle system with the 

potential to significantly reduce CO2 emissions regardless of vehicle miles traveled. This is 

particularly true because the structure of the proposed air conditioning credit programs predicates 

credits upon exceeding a baseline average for the industry. Only those manufacturers who 

exceed the industry average can earn credits. [OAR-2009-0472-6798.1, p.6] 

SABIC Innovative Plastic 

The Air Conditioning Credit Should Not Discourage or preclude Polycarbonate Glazing. 

Because polycarbonate is significantly less dense and weighs substantially less than traditional 

glass, it offers substantial greenhouse gas reduction opportunities when used in glazing. The 

potential for polycarbonate to be incorporated in to areas of fixed glazing-roof panels, rear 

quarter panels and backlites - during the model years covered by this rulemaking is strong unless 

EPA discourages the development by incorporating to the list of air conditioning technologies 

one which is focused on reducing solar generation to the cabin through the use of solar reflective 

and absorbing technologies designed specifically for glass. Including these technologies would 

have the unintended effect of discouraging adoption of lightweight polycarbonate glazing. 

The EPA greenhouse gas program should not incorporate into its credit system technologies that 

would have the result of discouraging the greenhouse gas emissions achievable through lighter 

weight polycarbonate glazing. [OAR-2009-0472-7080.1, p.4] 

Pittsburg Glass Works 

It has been estimated by the EPA and Department of Energy’s National Renewable Energy 

Laboratory (NREL) that about 7 billion gallons of fuel are used annually for air conditioning in 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

light duty vehicles. Of this 7 billion gallons, almost 2.5 billion gallons of fuel could be saved 

with technologies that reduce AC power by 30%. Fortunately, several technologies are 

commercially available that can accomplish this objective. A national fuel savings of 2.5 billion 

gallons annually, and GHG emissions reduction of 22 billion Kg annually could be accomplished 

with the heat load reduction technology. The current proposal by EPA would not credit these 

technologies because the test procedures do not allow for the evaluation of these technologies. 

A recent study conducted by NREL under the auspices of the Society of Automotive Engineers 

and sponsored by the EPA demonstrated that heat load reduction of 30% is possible with 

commercially available technologies. The heat load reduction technologies resulted in 12 deg C 

reduction in breath air temperature when compared to a base line vehicle. This temperature 

reduction was then shown to reduce the Air Conditioning load by 30%. Based on 11,998 annual 

vehicle miles traveled, and average Air Conditioning use of 32.6%, NREL calculated that the 

average fuel consumption could be decreased by 11.2 gallons on an annual basis. When 

multiplied by the total number of vehicles on the road, these fuel savings would amount to over 

2.5 billion gallons on an annual basis. 

The current and proposed test procedures call for a 10 minute heat soak before the SCO3 test 

cycles begins. This test soak is performed at 85 deg F. Firstly, these conditions do not reflect real 

world conditions where vehicles are parked in the sun for long durations. It is our 

recommendation that the soak time be extended to thirty (30) minutes to allow for a more real 

world heat soak. 

The value of heat load reduction technology has an even greater fuel economy and CO2 impact 

on vehicles using hybrid and electric technologies. Recent testing with NREL 

(www.osti.gov/servlets/purl/957994-YmvAS2/) has shown that using Infra-Red Reflective 

Glazing on the windshield and rear window in a Plug-in Hybrid Vehicle will increase the 

adjusted, utility factor-weighted fuel economy from 36.8 to 42.9 miles per gallon during the 

UDDS cycle. Since the use of Plug-in Hybrid vehicles is projected to increase in the coming 

years, the reduction of CO2 emissions from these vehicles will be too large to ignore. 

Infra-Red Reflective glazing has been commercially used in the United States since 1990. The 

technology has been proven to lower the interior cabin temperature and reduce the air 

conditioning fuel usage. Recent regulations issued by the California Air Resources Board 

(http://www.arb.ca.gov/cc/cool-cars/cool-cars.htm) require the use of heat load reducing glass, 

starting with the 2012 Model Year vehicles sold in California. The performance requirement is 

strengthened to all-around glazing starting with the 2016 Model Year. CARB has calculated the 

fuel savings and CO2 benefits of the glazing technology and determined that it has a net cost 

savings for the consumer. If the EPA/NHTSA recognize the national impact of these 

technologies, the cost effectiveness of the glazing technology will improve even further. Since 

the technology is already going to be commercially available and used by the auto 

manufacturers, it is only natural for the EPA/NHTSA to recognize the contribution this 

technology makes to the CO2 reduction on a national basis. 

Fuel consumption and CO2 emissions can be reduced with heat load reduction technologies that 

are currently not credited by the EPA/NHTSA. Sufficient scientific data exists to corroborate the 

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value of the these technologies in the real world. Savings of over 2.5 billion gallons of fuel and 

reduction of CO2 emissions over 22 billion Kg annually are going to be wasted if these 

technologies are not included amongst the technologies by the EPA/NHTSA. Economic analysis 

by CARB has shown that the Infra-Red Reflective glazing will actually save the consumer 

money while reducing the CO2 emissions. This is an overwhelming argument for the 

EPA/NHTSA to consider in its evaluation of technologies to reduce fuel consumption and reduce 

CO2 emissions. 

We would be glad to provide any further information that the EPA/NHTSA may need for its 

analysis. [OAR-2009-0472-7244.1, pp.1-3] 

California Air Resources Board 

CARB staff conducted a comparison of the AC credit approach in this proposed rulemaking 

against California’s Pavley I program in effect and the more recent Environmental Performance 

Label regulation. The analysis addresses a need to understand how the various AC credit 

schemes compare and the reason for differences in the credit amounts. CARB’s analysis was 

provided to EPA for reference. Overall expected AC emissions credits and associated GHG 

reductions appear similar. While CARB is not suggesting changes to the Final Rule, we 

recommend that CARB and EPA continue dialogue on this issue to reconcile the California and 

federal approaches so that one uniform approach could apply for the 2017 and later model years. 

[OAR-2009-0472-7189.1, p.13] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. See 

docket number OAR-2009-0472-7283, pp. 21-27] 

State of New Jersey 

It is clear based on numerous studies that air conditioners while in use reduce motor vehicle 

miles per gallon in the range of 20 percent or more, and that because they are used on the 

average on a national basis about 25 percent of the time, air conditioners decrease overall fleet 

mileage by 5 percent or more. To encourage automobile manufacturers to produce more efficient 

air conditioning systems, the Department supports the USEPA's proposal to amend the current 

CAFE fuel economy test procedures for light-trucks to provide for air conditioner operation 

during testing and to take other steps for improving the accuracy and representative of fuel 

economy measurements. These steps should be taken as soon as practical and the Department 

agrees that having the implementation of these amendments begin in model year 2017 seems 

reasonable. The Department also supports the more immediate interim alternative step of 

providing CAFE program credits under the authority of 49 U.S.C. 32904(c) for light trucks 

equipped with relatively efficient air conditioners for model years 2012-2016. The Department 

agrees that if such credits were adopted, it would be necessary to reflect them in the setting of the 

CAFE standards for light trucks for the same model years. Since this available data on the 

impacts of air conditioning demonstrates that the fleetwide average fuel economy obtained from 

the implementation of this joint rulemaking in actuality will be at least 5 percent less than the 

commitment of 35 mpg, it is critical that air conditioning operation and use be considered in all 

future standard settings. [OAR-2009-0472-7109.1, p.7] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

National Renewable Energy Laboratory 

In Table III.C.1.1, there are no credits available for passenger compartment thermal load 

reduction technologies. Reducing the thermal load reduces the A/C fuel use during passenger 

compartment cool down and steady state. It is recommended to provide credits for thermal load 

reduction technologies that would encourage use of these technologies and result in further 

reductions in GHG emissions. [OAR-2009-0472-4798.1, p.1] 

University of California – Santa Barbara, Bren Working Group on Vehicle Fuel Economy 

Mobile Air Conditioning (MAC). Given the potency of CH4, N2O, and other non-CO2 gases in 

contributing to climate change, we also recommend that efficient air conditioning units be treated 

as a fuel saving technology. Thus we encourage the EPA to include incentives, such as a credit 

system, for reducing N2O and CH4 emissions below the proposed cap as a means to motivate 

innovation in clean technologies. [OAR-2009-0472-7188.1, p. 8] 

One pound of HFC-134a (a common GHG used in MAC) released to the atmosphere has the 

same global warming potential as 1,300 pounds of CO2. In the United States alone, MAC use 

consumes over 7 billion gallons of gasoline every year, emitting over 58 million metric tons of 

carbon dioxide. Refrigerant leakage adds the equivalent of over 50 million metric tons of CO2 to 

the atmosphere. The National Oceanic and Atmospheric Administration (NOAA) reports that 

20% of the HFC-134a present in equipment is emitted to the atmosphere each year. In 2004, 

MAC use emissions accounted for 52% of total U.S. HFC-134a emissions: 24,539 metric tons, 

equivalent to 35,090,770 metric tons of CO2. Though this represents only 0.1 percent of global 

greenhouse gas emissions from all human activities, reducing these higher forcing substances 

can yield extra positive effects by increasing fuel efficiency. [OAR-2009-0472-7188.1, p. 8] 

Industry experts have recognized the ability to cut emissions and produced a list of 

recommended actions for doing so in a 2007 report to the EPA. Because of the amplified effects 

of refrigerants on climate change, the EPA should take special care to regulate and encourage the 

reduction of leakage. [OAR-2009-0472-7188.1, p. 8] 

In addition to refrigerant leakage, MAC use reduces efficiency of gas consumption. Well 

engineered MAC systems account for about 5% of a car’s real fuel consumption, while poorly 

engineered and low cost systems can use 20% or more. A European study showed that by 

changing the technology of MAC in a car, fuel efficiency was improved by 0.3 liters/100km and 

CO2 tailpipe emissions were reduced by 7 grams/km.23 The total CO2 equivalent reduction for 

such a technology change was 12g/km. By reducing the use of these higher forcing substances, 

extra positive effects can also result from increasing fuel efficiency. [OAR-2009-0472-7188.1, 

pp. 8-9] 

Changes in MAC efficiencies can reduce CO2 emissions not only directly, but also indirectly via 

better fuel consumption. Furthermore, more efficient systems can keep refrigerants with more 

forcing power than CO2 captured within the system. We believe this multiple impact merits 

attention from the EPA. [OAR-2009-0472-7188.1, p. 9] 

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EPA Response to Comments 

Guardian Industries Corp. 

Guardian is committed to the improvement of fuel economy through technology advances. We 

note, however, that proposals to improve the efficiency of air conditioning systems miss the clear 

benefit provided by reducing the actual heat load on vehicle cabins. Focusing on actual load 

reduction through technologies that can keep the heat out can actually have greater total benefit 

than improving the efficiency of mechanical cooling systems. [OAR-2009-0472-7124.1, p.2] 

The California Air Resources Board (CARB) has recognized this fact. On June 25, 2009, CARB 

adopted a regulation requiring reduced solar transmission of the glazed openings in vehicles in 

California starting with model year 2012. CARB based its benefit calculations on testing 

published by NRELIEP A demonstrating that vehicle soak temperatures can be significantly 

reduced using solar reflective glazing. The estimated cool-down load reduction results in a 26% 

drop in A/C fuel consumption. CARB estimated that the rule as adopted in California will reduce 

CO2 emissions by approximately 0.861 MMT per year and if carried nationwide could generate 

a saving of 8.30 MMT per year. This estimated benefit is based only on soak temperature 

reduction and ignores the additional dynamic benefit of heat load reduction while operating the 

vehicle. Glazing heat load reduction technology will pay for itself over time at the consumer 

level through reduced fuel consumption while providing a more comfortable environment for 

vehicle occupants. The CARB estimated that the fuel savings generated would pay back the 

option cost to the consumer in approximately 7 years after which savings would continue to 

accrue for the life of the vehicle. [OAR-2009-0472-7124.1, p.2] 

Guardian recommends that any Federal emissions standard allow credit for heat load reduction 

through reduced solar transmission through the glazing openings of the vehicle. Allocating 

appropriate emissions credits to heat load reduction technologies will add a proven effective 

method for OEM's to meet the ultimate requirements for efficiency. [OAR-2009-0472-7124.1, 

p.2] 

Environment Michigan 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

EPA-HQ-OAR-2009-0472-6185, p. 68.]] 

Credits for air conditioning have already allowed the Department of Transportation to set a fuel 

economy standard of 34.1 mpg, lower than the President's goal of 35.5 miles per gallon. The 

administration should not further weaken the program by allowing automakers to rack up 

unnecessary credits and comply with the standards without building more efficient vehicles. 

Schade, Michael T. 

A/C on or off? I would doubt that many people could explain how A/C operation is addressed in 

calculating the window sticker numbers that they use to help decide upon a vehicle purchase. 

Almost every vehicle now has A/C and the manufacturers just don’t have much of an incentive 

to design and supply more efficient A/C systems. Is that because they know that there has been

no direct CAFÉ benefit because the A/C systems are mandated to be off during fuel economy 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

testing? On a personal basis, my family drives Ford Focuses and my observed fuel economy 

penalty is 10% on the highway and 15 to 20% in the city based upon repeated observations with 

each vehicle. And the damper ventilation system always heats the ambient air 12 degrees before 

entering the passenger space so I need to use A/C most of the year. My family has had three 

Focuses and they are all the same. Yes, a poor design, but is it atypical? Probably not. Again, a 

legislative fix to include realistic levels of A/C operation is probably required. But let’s do it 

now in a clear and unambiguous manner with a simple and straightforward description of how 

A/C plays into the fuel economy. [OAR-2009-0472-7261.1, p.2] 

EPA Response: 

Window Glazing 

The commenters are correct that the rules do not provide air conditioner credits for the use of 

window glazing technologies, or technologies which reduce solar load. However, the EPA does 

provide for other flexibilities where technologies such as solar load-reducing window glazing 

may be eligible for “off-cycle” (rather than A/C) credits under the final rule. That is, they may 

qualify if EPA believes these technologies are “innovative and novel” and produce CO2e 

reductions which are not significantly measureable on the FTP. See section 86.1865-12 (d) (1) 

(i) and (ii). Manufacturers would have to meet the other requirements of that regulation, 

including obtaining EPA approval, before claiming such credits. 

Support for Credits 

Many commenters noted that the credits are necessary in allowing them to transition to the new 

GHG emissions standards. Many commenters also expressed support for the A/C crediting 

program. EPA is grateful for the positive support for this aspect of the program 

Consideration of A/C Credits Under CAFE 

Several commenters urged EPA to take steps to take A/C improvements into account under the 

CAFE program. Chrysler argued that EPA can do so as part of the calculation process mandated 

under 49 U.S.C. § 32904(c). Under that subsection, EPA measures fuel economy for purposes of 

assessing manufacturers’ compliance with CAFE standards and then calculates average fuel 

economy. Chrysler argued that EPA has broad discretion under EPCA (32904(a)(1)) to 

determine how to calculate average fuel economy. The State of New Jersey urged EPA to 

amend its test procedures to account for use of improved A/C systems by light trucks. In 

response, by statute, fuel economy for passenger cars must be measured using the Federal Test 

Procedure, which does not account for air conditioning since it is not turned on during the test 

procedure. See 49 USC section 32904 (c) and 74 FR at 49458 and 49465. This raises the issue 

of whether EPA has the discretion to calculate fuel economy for passenger vehicles in a manner 

that involves adding A/C improvement credits to the measured fuel economy of a vehicle. EPA 

need not reach that question as such a step would require amending its calculation procedure 

regulation. Doing so is effectively beyond the scope of this proceeding due to time limitations. 

There is no statutory bar to EPA’s amending the test procedure in measuring light truck fuel 

economy, but is not doing so in this proceeding. In addition to this effectively being beyond the 

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EPA Response to Comments 

scope of this proceeding due to time limitations, such a difference in test procedures would 

necessitate a reanalysis of the maximum feasible average fuel economy level for light trucks for 

each model year under EPCA. 

5.7.1.1. A/C Leakage Credits 

Organization:Ford Motor Company 

Jaguar Land Rover 

Toyota North America 

European Automobile Manufacturers Association 

Association of International Automobile Manufacturers (AIAM) 

Chrysler Group, LLC (Chrysler) 

Alliance of Automobile Manufacturers (Alliance) 

Volvo Car Corp. 

Hyundai Motor Company 

Union of Concerned Scientists 

Honeywell International, Inc. 

New York State Department of Environmental Conservation 

Comment: 

Ford Motor Company 

With regard to determining direct air conditioning emissions credits for low leak systems, Ford 

supports EPA's use of the latest version of the Society of Automotive Engineers (SAE) 

International Surface Vehicle Standard, J2727, to estimate annual refrigerant leakage from motor 

vehicles air conditioning systems. SAE J2727 includes conservative allowances for part 

variability and assembly robustness and is more representative and more conservative than bench 

tests and is correlated to real-world leakage. Ford believes these reliability improvements 

carryover the life of the vehicle resulting in reduced service and fewer re-charges. Ford strongly 

supports the use of SAE J2727 to quantify mobile air conditioning refrigerant reductions as it 

provides a common approach for all manufactures to evaluate their A/C systems direct 

emissions. [OAR-2009-0472-7082.1, p. 5] 

Jaguar Land Rover 

Jaguar Land Rover supports the principle of using leakage data generated by SAE J2727 to 

estimate refrigerant leakage from mobile air conditioning systems. Since the leakage formula 

published in the August 2008 version of SAE J2727 differs slightly from that published in the 

July 2007 version of SAE J2727, Jaguar Land Rover wishes to state that it regards the August 

2008 formula as being the correct version to use. [OAR-2009-0472-7213, p.1] 

Toyota Motor North America 

EPA's A/C leakage credits assign larger credits to system designs that are expected to result in 

greater leakage reduction and are proportionally larger for lower GWP refrigerants over the 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

current R134a. The proposed method for calculating these credits is to choose from a menu of 

equipment and components and establish a leakage score. Credits would be generated from 

leakage reduction improvements that exceed average fleet-wide leakage rates. [OAR-2009-0472­

7291, p.20] 

EPA's NPRM A/C leakage credit proposal is based closely on that being developed through 

IMAC and the SAE Surface Vehicle Standard J2727, August 2008 version. In the NPRM, EPA 

references the J2727 leakage scoring system as generally representing a reasonable correlation 

with real world leakage in vehicles. Similarly, EPA's proposed credit approach would associate 

each component with a specific leakage rate in grams per year, which is identical to the values in 

J2727. The proposed A/C leakage credit provision also provides larger credits as the GWP 

(Global Warming Potential) value approaches zero. Hypothetically, a refrigerant with a GWP of 

1 would attain maximum credits because the GHG concern from leakage would be 

eliminated. [OAR-2009-0472-7291, p.20] 

Toyota supports EPA's proposal for calculating the amount of credit based on J2727 scores. 

However, Toyota believes that EPA should directly reference and incorporate the J2727 

methodology since requirements to calculate these J2727 scores are currently in place in 

Minnesota and in California for ARB's Environmental Performance Label. In doing so, EPA's 

regulation would harmonize with the other regulations and provide consistency for 

manufacturers to provide the same J2727 reporting data. [OAR-2009-0472-7291, p.20] 

European Automobile Manufacturers Association 

Credits for leakage reduction 

Calculation of leakage rate of refrigerant should be defined by reference to SAE J2727 and not 

by separate definition. Reason: any technical improvement of the SAE J2727 would imply a 

revision of the law. [OAR-2009-0472-7444.1, p.1] 

Association of International Automobile Manufacturers (AIAM) 

AIAM supports EPA’s proposal to rely on a menu-based approach to assess air conditioning 

refrigerant leakage, as set forth in proposed section 86.166-12. The leakage rate of refrigerants is 

very low, and direct measurement of leakage would require expensive new test facilities and the 

development of new test procedures, as EPA notes. See preamble at 49527. Moreover, given 

anticipated movement toward lower global warming potential (GWP) refrigerants, leakage 

impacts on climate change will likely be substantially reduced. However, EPA should allow the 

flexibility for manufacturers to provide data to substantiate the achievement of lower leakage 

rates than predicted by the EPA menu that is based on SAE Standard J2727. [OAR-2009-0472­

7123.1, p.11] 

EPA proposes to use a slightly modified version of the SAE J2727 protocol for the menu-based 

leakage assessment. Instead, EPA should rely on the J2727 protocol as adopted by SAE. The 

SAE Interior Climate Control Committee reviews the standard regularly and updates it as 

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EPA Response to Comments 

needed. EPA will obtain the best engineering estimates for leakage by using the most current 

version of J2727 without modification. [OAR-2009-0472-7123.1, p.12] 

AIAM supports the Agency’s proposed approach for credits for alternative refrigerants with low 

Global Warming Potential. We believe it is appropriate to base these credits on the relative GWP 

values of the current versus alternative refrigerants. In addition, we support EPA’s proposal for 

additional credit for the end-of-life benefits associated with alternative refrigerants. [OAR-2009­

0472-7123.1, p.13] 

Since the legacy fleet of vehicles, which uses the current refrigerant with a higher GWP, will be 

in use for many vehicles into the future, AIAM encourages EPA to work with the SAE 

committee, auto manufacturers, and the auto service industry to enhance air conditioning 

maintenance and refrigerant recovery/recycling. [OAR-2009-0472-7123.1, p.13] 

Chrysler Group, LLC (Chrysler) 

Leakage Credit and SAE J2727 Methodology 

The EPA direct credit methodology assumes zero credit for vehicles above a set leakage 

threshold (20.7 gm/year for trucks and 16.6 gm/year for cars) and clips the credit amount for 

vehicles below a leakage threshold (8.3 g/year for cars and 10.4 gm/year for trucks). The 

Minnesota Pollution Control Agency 2009 MY leakage reporting database illustrates that EPA is 

not counting approximately 22% (58 plus 22 out of 363 vehicles) of the vehicle population by 

setting these thresholds. The lower and upper limits are disincentives to air conditioning system 

leakage improvements. [NHTSA-2009-0059-0124, p.17] 

Recommendation: 

The practice of excluding vehicles does not follow the attribute-based approach used for other 

facets of this rule. EPA should base credits on a continuous curve and recognize the entire range 

of potential leakage rates. [NHTSA-2009-0059-0124, p.17] 

Effects of System Aging to Leakage 

Chrysler believes there would be no benefit in modifying SAE J2727 to account for system aging 

effects. There is very limited data to support modifications of this type. A properly designed 

research program to define such modifications would take considerable time. [NHTSA-2009­

0059-0124, p.17] 

Recommendation: 

Based on industry and government anticipation of the quick adoption of a low global warming 

potential ('GWP') refrigerant, the development of such modifications are not required. The 

NPRM provides incentive to reduce leakage in the short term while final preparation is done to 

introduce low GWP refrigerants. [NHTSA-2009-0059-0124, p.18] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Alliance of Automobile Manufacturers (Alliance) 

The Alliance supports EPA’s proposal to utilize the unmodified SAE J2727 standard for 

estimating refrigerant leakage as a basis for awarding credits for MAC refrigerant leakage 

reductions. The SAE J2727 standard is a design-based calculation that was developed based on 

its correlation with vehicle fleet tests and bench test data in a mini-shed. The results have been 

correlated well to mini-shed tests and vehicle fleet tests conducted in Europe and Japan. The 

SAE Improved Mobile Air Conditioning (“IMAC”) program also showed good correlation 

between SAE J2727 and SAE J2763 mini-shed tests. We agree with EPA’s conclusion that an 

actual vehicle or bench test program for leakage mandated by this regulation would be 

exceedingly difficult to conduct, and would provide little useful additional information. 

Furthermore, the SAE calculation includes conservative adjustments for assumed error rates in 

assembly, whereas any test program would use correctly assembled systems. Thus, SAE J2727 

provides an accurate -- or even somewhat conservative -- estimate of MAC leakage rates for new 

vehicles. We also agree with EPA’s determination that MAC service and repair needs will be 

reduced as leakage rates fall, and that service-related emissions should be expected to fall 

proportionally. [OAR-2009-0472-6952.1, p.9] 

In addition, requirements to calculate J2727 scores are currently in place in Minnesota and in 

California for ARB’s Environmental Performance Label. Automobile manufacturers have 

systems in place to gather this data, and the Alliance would encourage EPA to remain 

harmonized with these other regulations through the use of unmodified J2727 data. [OAR-2009­

0472-6952.1, p.9] 

The Alliance also supports EPA’s proposal for calculating the amount of credit to award based 

on the J2727 scores. This formula awards credits for improvements down to the level of a J2727 

score of approximately 8 grams per year of refrigerant leakage. The industry-wide database 

compiled by the state of Minnesota for 2009 models shows that almost no vehicles currently 

achieve such a low score. Thus, an appropriate incentive would be created for essentially all 

vehicles to make improvements in system integrity, and we would expect prompt and broadbased 

action by the industry to implement vehicle improvements under this framework, resulting in 

significant cost-effective GHG reductions. [OAR-2009-0472-6952.1, p.9] 

EPA is incorrect, however, in assuming that electric compressors will not achieve significant 

penetration levels within the time frame of this regulation. In fact, electric compressor 

penetrations could become high enough to be meaningful, and this technology should be 

encouraged. The Alliance therefore recommends that EPA add a provision allowing a higher 

level of MAC direct credit for systems that use an electric compressor. [OAR-2009-0472-6952.1, 

p.9] 

There would be little value in modifying the J2727 standard for these credit provisions, such as 

by attempting to account for system aging effects that would occur later in the vehicle’s life. 

There is no data on which to base any factors to adjust SAE J2727 calculations for in-use 

deterioration over time. A new research program to gather this data would be needed, and this 

would take time to conduct. Given the favorable outlook for introducing a new, low-GWP 

refrigerant in the next few years, the development of a SAE J2727 aging factor need not be a 

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EPA Response to Comments 

high priority. EPA makes a reasonable assumption that the improvements in new vehicles 

leak rates should result in proportional reductions throughout the life of the vehicle. The current 

EPA proposal provides a good, workable incentive structure that will significantly improve 

MAC leak rates in the near term; in the longer term, leak rates will not be an environmental 

issue, since low GWP refrigerants will predominate. [OAR-2009-0472-6952.1, pp.9-10] 

Volvo Car Corp. 

VCC is currently reporting annual MAC leakage to Minnesota and CARB (included in the 

MAC-credit package). Both Minnesota and CARB accepts alternative refrigerant leakage 

measurement methods. Volvo uses SAE J2763 (real measurement from mini-shed) and VCC 

would like to propose acceptance of SAE J2763 as an alternative to J2727 for leakage credit 

calculation. Please see Attachment 1. 

Mobile Air Conditioning (MAC) Credits: EPA proposes to credit manufacturers for improved 

MAC efficiencies and the use of low global warming potential refrigerants. The inclusion of 

MAC credit provisions was a critical element that enabled the industry, the Administration, and 

California to reach agreement in May 2009 on a regulatory path forward to reducing vehicle 

GHG emissions. The Alliance supports the concept of MAC credits and has provided 

constructive suggestions for improving EPA’s proposed approach, including the elimination of 

unnecessary idle air conditioning test procedures. To fulfill the objectives of this rule, EPA also 

needs to remove any obstacles (i.e., SNAP approval) to commercially available alternative 

refrigerants for the 2012 model year. 

MAC efficiency-improving technologies and credits. VCC suggests an alternative to the 

technology list (Proposed Rule making, Table III C.1-1) proposed for MAC efficiency credits. 

Such alternatives would promote development of design improvements not included in the 

proposed list. 

[[Comments on the proposed SAE standards]] 

VCC continuously develops the climate system in order to reduce AC leakage and improve 

durability. As example VCC is mostly using steel as material in the AC pipes compared to most 

manufactures who are using aluminum which has a lower yield-point, limited resistance to 

external corrosion, wear and chafing. 

VCC performs physical test mini-SHED according to test method prescribed as F-gas directive 

706/2007/EC . Volvo is convinced that physical measurements reflect real vehicle emissions 

more accurately than calculations and estimations. The new proposed leakage measurement 

standard SAE J2763 (Test procedure for determining R134a leakage rates of Mobile Air 

conditioning systems in a Mini-shed) is equal to the 706/2007/EC directive. 

VCC would like to point out several reasons why the actual measured leakage (according to SAE 

J2763) is lower than the calculated leakage (according to SAE J2727): 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

[extensive discussion and evidence on the above point continues from OAR-2009-0472-7168.1, 

pp.8-10] 

Hyundai Motor Company 

Hyundai supports EPA's proposal to base the A/C leakage credits on SAE J2727. As EPA notes, 

refrigerant leakage rates are too low to be measured with current test equipment and would 

require new test facilities and procedures in order to measure leakage rates (74 FR 49527). As a 

result, a design-based methodology is appropriate for determining A/C leakage credits. [OAR2009-0472-7231.1, p.6] 

Union of Concerned Scientists 

UCS supports the availability of credits tied to A/C leakage and efficiency improvements. 

However, we believe it is critical that credit magnitudes accurately reflect real-world emissions 

reductions. We were surprised by the discrepancy between individual credits specified in the 

proposed rule, and those previously specified by the California Air Resources Board. We 

speculate this may be a result of differing baselines chosen by EPA and CARB, though other 

factors could be contributing to this as well. Since accurately reflecting emissions benefits 

offered by improved A/C systems is the ultimate goal, we suggest EPA have additional 

conversations with CARB to assess discrepancies before issuing its final rule. [OAR-2009-0472­

7181.1, p.10] 

Additionally, on the issue of system efficiency with the use of alternative refrigerants, 

EPA states, [OAR-2009-0472-7181.1, p.11] 

It is possible that alternative refrigerants could, without compensating action by 

the manufacturer, reduce the efficiency of the A/C system (see discussion of the A/C Efficiency 

Credit below.) However, EPA believes that manufacturers will have substantial incentives to 

design their systems to maintain the efficiency of the A/C system, therefore EPA is not 

accounting for any potential efficiency degradation. [OAR-2009-0472-7181.1, p.11] 

The agency does not elaborate on the “substantial incentives” manufacturers have 

for maintaining the efficiency of the A/C system. Given that the A/C system’s efficiency (or lack 

thereof) will not appear on the 2-cycle test, it strikes us that manufacturers, rather, would 

not have the incentive to maintain the A/C efficiency system. We recommend the agency review 

this issue to account for efficiency degradation associated with certain alternative refrigerants. 

[OAR-2009-0472-7181.1, p.11] 

Honeywell International, Inc. 

Direct Emissions from A/C leakage and corresponding leakage credits should accurately reflect 

real-world scenarios and the best available science 

Leakage rates should be determined from a regional-cross section of real world operating 

conditions and vehicle life 

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EPA Response to Comments 

During Honeywell's initial reading of the Proposed Rule, it appeared that the EPA offered credits 

that were insufficient for real leakage rates in motor vehicles over time across the varying 

operating conditions. For example, the assumed emission (leakage), AvgImpact term, rates of 

16.6 to 20.7 g/year for the average annual impact of A/C leakage from the use of HFC-I 34a 

refrigerant is only representative of refrigerant emission rates for new motor vehicle A/C 

systems. These rates do not reflect leakage from vehicles that are 'off-the-lot' or 'used', which 

have higher emission rates. Aged systems experience all of the following conditions that increase 

their emission rates: seasonal, daily and in operation thermal cycles; vibrations; hardening of 

hoses and 0- rings; drying out of the shaft seal due to non-operation (or continuous operation for 

clutchless models); collisions; service (engine or mobile A/C system); and corrosion leaks. 

[OAR-2009-0472-7206.1, p.4] 

The Supplemental Draft Regulatory Impact Analysis Proposed Rulemaking to Establish Light 

Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy 

Standards, EPA-420-D-09-003, was subsequently released by EPA on September 28,2009 (the 

'DRIA'). Upon our analysis of the DRIA, the contribution of the MaxCredit term to reflect those 

conditions impacting aged systems becomes clear. As a result, Honeywell agrees with EPA that 

the magnitude of the MaxCredit term is correct to use as a multiplier in the proposed credit 

equation. [OAR-2009-0472-7206.1, p.4] 

Honeywell concurs with EPA's emissions equation to determine the net fleet effect of direct 

emissions due to refrigerant leakage. In summary, Honeywell agrees that the LeakScore may be 

used to estimate the leakage of new motor vehicle A/C systems, the MaxCredit term is the 

correct order of magnitude to account for fleet aging through the vehicle lifetime, and the GWP 

Refrigerant term accounts for the GWP impact of alternative refrigerants compared to the current 

RI34a refrigerant, GWP100 = 1430. [OAR-2009-0472-7206.1, p.4] 

EPA should update its leakage emissions assumptions based upon the best available technical 

studies 

Through our analysis of the crediting program, we identified two additional recent publications 

that we bring to EPA's attention. EPA may wish to consider adding these studies to its analysis 

as additional data sources for refrigerant leakage rates of new and used systems. Honeywell 

asserts that the addition of these studies will quantify more accurately the per-vehicle per-year 

average leakage rates and will update EPA's assumptions based upon the best-available science 

through the use of the MaxCredit and AvgImpact terms. [OAR-2009-0472-7206.1, pp.4-5] 

a. Doctoral Thesis of David Souse, Mines ParisTech, Study of Refrigerant Emissions from 

Mobile Air-Conditioning Compressor Shaft Seals, Dec 2008. This study found that compressors 

leak at rates between 5 and 40 g/year (Figure 2-27). Aged compressors tested leak at rates of 97 

to 1800 g/year when pressurized with refrigerant (Table 2-4). 

b. Denis Clodic, Final Report on Establishing the Leakage Rates of Mobile Air Conditioners, 

2004. This study found that the average leakage rate of MAC systems from 1 to 6 years old is 

52.4 g/year ± 4.6 g/year. [OAR-2009-0472-7206.1, p.5] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

The inclusion of these studies may impact EPA's assumptions regarding average leakage rates 

associated with mobile A/C systems and provide a stronger basis for understanding direct A/C 

emissions due to the leakage of the hydrofluorocarbon refrigerant in use today. [OAR-2009­

0472-7206.1, p.5] 

The SAE J 2727 Standard Mobile Air Conditioning System Refrigerant Emissions Chart is not 

an appropriate standard for measuring lifetime leakage 

EPA proposes that § 86.166-12 of the Proposed Rule utilizes the SAE J2727 design-based 

procedure as the basis for generating Leakage Credits. We disagree with the use of this standard 

because it does not adequately reflect leakage over the lifecycle of a vehicle. In the DRIA, EPA 

states that the SAE Standard J2727 - HFC-134a Mobile Air Conditioning System Refrigerant 

Emissions Chart may be used to provide an estimate of the emission rates of new, properly 

constructed passenger vehicles. However, Honeywell argues that this standard is not appropriate 

for determining the leakage rate for vehicles as they progress through their lifetime. [OAR-2009­

0472-7206.1, p.5] 

We propose that companies wishing to submit for credits based on leak tightness of their systems 

also be allowed the opportunity to design a component life test based on SAE Standard 12763, 

Test Procedure for Determining Refrigerant Emissions from Mobile Air Conditioning Systems. 

The use of test protocols would give a true indication of the correct selection of leakage 

reduction parts, as well as provide for the development of additional credit goals for 

manufactures to reduce the overall leakage rate. [OAR-2009-0472-7206.1, pp.5-6] 

The adoption of a test procedure in lieu of set credits will better quantify the A/C Leakage 

reduction credits. Honeywell recommends that these test protocols be developed through a 

consortium involving the industry with Governmental Energy Efficiency Improvement Funding. 

The consortium can build upon existing research that seeks to quantify such efficiencies. For 

example Souse, 2008, developed such a test protocol for compressor shaft seals that we feel can 

be adapted to test standstill, running mode, and endurance cycling tests to age a system over a 

temperature range, vibration conditions, and oxygen/temperature control for plastics 

embrittlement. [OAR-2009-0472-7206.1, p.6] 

New York State Department of Environmental Conservation 

Air Conditioning Leakage Credits (Preamble Section III.C.1)
 

Reductions in air conditioning refrigerant leaks can reduce overall greenhouse gas emissions. 

The regulation should provide a mechanism to encourage designs that reduce refrigerant leakage 

over the life of the vehicle, and to award appropriate credit. The Department agrees with EPA's 

proposal to use an engineering analysis based approach rather than emissions testing. [OAR2009-0472-7454, p.2] 

We question the credit formulas proposed in Section 86.1866-12, which differentiate between 

cars and trucks. While we agree that a larger system has the potential to leak a greater volume of 

refrigerant this potential is better measured by interior volume (which relates to the volume of air 

that must be controlled) rather than an arbitrary classification. Using the proposed formulas, a 15 

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EPA Response to Comments 

gram/mile CO2-equivalent HFC134a system would qualify for 1.2 grams/mile credit in a 

passenger car. The same system would qualify for 4.3 grams per mile credit in a light truck. 

[OAR-2009-0472-7454, p.2] 

EPA Response: 

Support for AC Leakage Credits 

EPA appreciates the supportive comments for our AC leakage crediting program. EPA based the 

leakage calculation method described in the regulations (§86.166-12) on the August 2008 

version of SAE J2727. Note that SAE J2727 is not incorporated by reference into the EPA 

regulations, and that any future revisions or modifications by SAE to the August 2008 version 

are not approved for calculating a leakage score unless EPA amends the regulations. While we 

agree with Honeywell that the SAE J2727-base approach to estimating refrigerant leakage can be 

improved (in terms of quantifying how leakage increases as the A/C components age), but we 

also believe that further study into the relationship between component age and leakage is 

needed before an industry-wide adjustment to the leakage impact can be considered. 

In addition, EPA recognizes that there are differences between CARB’s approach to A/C-related 

CO2 emissions and the rule we are finalizing. The principal difference between these two 

approaches is in the method used to determine the impact of direct (leakage) and indirect (A/C 

power consumption) CO2e emissions: the CARB approach used a model tailored to the climate 

and A/C usage conditions specific to California, whereas the EPA approach used a 48-State 

model for climate and use conditions. Since this is a national rule, it is reasonable to use a 48­

State model. In addition, EPA also bases leakage rates on J2727 scores, whereas CARB does not. 

Flexibility on Test Procedures 

Concerning the comment on allowing flexibility for manufacturers to demonstrate lower leakage 

rates, EPA will only allow the calculation-based method described in the regulations. While EPA 

generally prefers performance testing, for an individual vehicle A/C system or component, there 

is not a strong inherent correlation between a performance test using SAE J2763 and the designbased approach we are adopting (based on SAE J2727, as discussed below).4 The SAE J2763 

test can generate artificially low leakage rates: tests are conducted under idealized conditions 

(assembled in a laboratory and tested in a hermetically sealed chamber) which reduce the realworld influence of seal contamination and production variability. Consequently, before such test 

results could be validly considered as a surrogate for the J2727-based scores, the test method and 

the J2727 scores would have to be correlated. Establishing such a correlation would require 

testing of a fairly broad range of current-technology systems in order to establish the effects of 

such factors as production variability and assembly practices (which are included in J2727 

scores, but not in J2763 measurements). To EPA's knowledge, such a correlation study has not 

been done. At the same time, there are indications that much of the industry will eventually be 

moving toward alternative refrigerants with very low GWPs. EPA believes that even if such a 

4

 However, there is a some correlation between the two in that J2763 measurements were used in the development 

of J2727 scores and to validate the effect on leakage of various technologies, but J2763 test results were never 

found to be equivalent the J2727 (which considers other factors, such as variance in assembly procedures) . 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

correlation were established (and confirmed the appropriateness of the J2763 procedure as an 

option for assessing availability of credits), and some manufacturers were willing to accept the 

greater testing burden and expense of a J2763-based approach, the program would likely be 

obsolete at inception due to the expected transition to low-GWP refrigerants. For these reasons, 

EPA is not adopting such an optional direct measurement approach to addressing refrigerant 

leakage at this time. 

Electric A/C Compressors 

EPA acknowledges that A/C compressors powered by electric motors (e.g. as used today in 

several hybrid vehicle models) were not included in the IMAC study, and we also acknowledge 

that this type of compressor does allow for leakage emission rate reductions beyond our estimate 

for systems with conventional, belt-driven compressors. EPA agrees with these comments and 

has incorporated lower minimum emission rates (i.e. minimum allowable leakage score) into the 

formula in order to allow additional leakage reduction credits for vehicles that use sealed electric 

A/C compressors. The minimum rates allowed for electric compressors are 4.1 and 5.2 g/yr for 

cars and trucks, respectively – which is 50% lower than the rates for belt-driven compressors. 

See section 86.1866-12 (b) (2) (definition of the Leakage term in the credit equation). 

Leakage Score Calculation 

AIAM and others commented that EPA should not set a lower limit on the overall leakage score, 

even for non-electric compressors. EPA has determined not to do so. First, although there do 

exist vehicles in the Minnesota data with lower scores than our minimum scores, there are very 

few car models that have scores less than 8.3, and these range from 7.0 to about 8.0 and the 

differences are small compared to our minimum score.5

 More important, lowering the leakage 

limit would necessarily increase credit opportunities for equipment design changes, and EPA 

believes that these changes could discourage the environmentally optimal result of using low 

GWP refrigerants. Introduction of low GWP refrigerants could be discouraged because it may be 

less costly to reduce leakage than to replace many of the A/C system components. Moreover, due 

to the likelihood of some in-use deterioration, even a leak-free (according to J2727) R134a 

system will have some emissions due to manufacturing variability, accidents, deterioration, 

maintenance, and end of life emissions, a further reason to cap the amount of credits available 

through equipment design. The only way to guarantee a near zero emission system in-use is to 

use a low GWP refrigerant. For these reasons, and in view of the otherwise overwhelming 

support by commenters for the program as proposed, EPA has decided for the purposes of this 

final rule to not change the minimum score for belt driven compressors. 

Leakage Deterioration and In-Use Adjustment Factors 

Many commenters stated that no adjustments for in-use deterioration/aging in J2727 approach to 

calculating refrigerant leakage are necessary. Honeywell, however, commented that real-world 

leakage rates are higher that those we cite in our rule, and recommended that we increase the 

5

 The Minnesota refrigerant leakage data can be found at 

http://www.pca.state.mn.us/climatechange/mobileair.html#leakdata 

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EPA Response to Comments 

impact of refrigerant leakage in our analysis to account (among other things) for deterioration in 

use. Given the level of effort needed to measure in-use leakage rates due to deterioration (as well 

as the complexity in determining a statistically-significant, industry-wide leakage-vs-age 

relationship), EPA is not considering a refrigerant leakage deterioration adjustment factor for this 

rule. Awarding credits for surpassing leakage-based performance also appears to be an 

undeserved windfall: credits are based on exceeding a baseline reflecting good performance. 

Moreover, as explained in the previous response, EPA is structuring the A/C credit provisions so 

as to encourage the ultimate solution of use of low GWP refrigerants, and use of such 

refrigerants obviates any need to account for in-use deterioration. 

5.7.1.2. A/C Efficiency Credits 

Organization:Denso International America, Inc. 

Ford Motor Company 

Jaguar Land Rover 

Association of International Automobile Manufacturers (AIAM) 

Chrysler Group, LLC (Chrysler) 

Volvo Car Corp. 

Alliance of Automobile Manufacturers (Alliance) 

Toyota Motor North America 

BMW of North America, LLC (BMW) 

Public Citizen and Safe Climate Campaign 

Motor and Equipment Manufacturers Association 

Clean Energy Fuels 

Honeywell International, Inc. 

European Automobile Manufacturers Association 

New York State Department of Environmental 

Comment: 

Denso International America, Inc. 

DENSO strongly supports the inclusion of Mobile Air Conditioning (MAC) credits as part of the 

GHG Rulemaking. These MAC credits have the ability to provide significant GHG benefits in 

the very near term. Our comments on MAC credits address some of the technical aspects of how 

indirect credits are awarded and offer some technical suggestions on how the effectiveness of 

this process could be increased. 

DENSO supports the use of a menu-based approach for awarding credits as a short-term 

approach. In the absence of a well-established test methodology, it provides a clear measure for 

how credits will be awarded. To further enhance the usefulness of this menu, we would like to 

make 3 suggestions: 

1) Add compressors and internal heat exchangers (IHX) to the list of components that receive 

credit when exhibiting a COP improvement relative to the 'previous design.' Efficiency 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

improvements in the compressor and implementation of an IHX show a significant reduction in 

engine load and thus, the GHG emitted as a result of operating the MAC system. 

2) Make a graduated credit amount based on the COP improvement exhibited by each 'improved' 

air conditioning component. Such an approach would promote incremental improvements in 

technologies. Such an additional incentive would doubtless result in the additional reduction of 

GHG due to MAC systems. 

3) Remove evaporators from the list of components that are awarded credit if a COP 

improvement is exhibited. Throughout its history in the MAC system, the evaporator component 

has not been optimized for the purposes of reducing GHG. The optimizations that have been 

made to the evaporator were done to reduce packaging size while maintaining the same 

performance. This typically results in a thinner, smaller evaporator that fits into a tighter space in 

the vehicle. However, this does not add additional efficiency to the MAC system. [OAR-2009­

0472-8765, pp.1-2] 

Ford Motor Company 

Ford supports the EPA technology based approach for quantifying indirect air conditioning 

emissions credits. Ford believes that EPA should expand the technologies listed in Table III.C.1­

1 to include the technologies highlighted in red. The high efficiency blower and cooling fan 

should be separated and granted the appropriate credits listed. Recirculated air control with a 

humidity sensor should be added to the list of technologies adding a humidity sensor enables 

more aggressive use of recirculated and evaporator temperature control, thus allowing the system 

to operate more efficiently. Consistent with the Alliance comments, NC control strategies are 

more sophisticated than simply defaulting to recirculation whenever the outside ambient 

temperature exceeds 75° F and must manage a host of factors. The requirement should be 

changed to state, defaults to recirculation whenever the outside ambient temperature exceeds 75° 

F with provisions for managing cabin defogging and passenger comfort. Thermal expansion 

valves should also be added to the list of technologies as it improves the air conditioning system 

efficiency and reduces compressor loads. Likewise, the internal heat exchanger allows the 

compressor to work more efficiently and should also be added. 

For 2014 and later model years, the proposed requirement to demonstrate at least 30% 

improvement over current average efficiency levels in order to qualify for credits should be 

changed. A manufacturer should not have to achieve such a large step function in order to 

receive some credit. A more appropriate method may be to allow full credit for a system that 

achieves a 30% improvement, and partial credit for systems that achieve less, at least through 

2016. This proposal would allow systems that achieve up to 30% improvement the maximum 

credit allowed, but would also reward other systems that achieve reductions. A system that 

achieves, for example, an 18% or a 26% improvement also benefits the environment, and there is 

no valid justification for denying proportional credits for such systems. Improvement in 

performance can be demonstrated through vehicle system modeling, bench or vehicle level 

testing. See Table I below [See OAR-2009-0472-7082.1, p. 6 for Table 1] for a recommended 

approach to partial credits. 

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EPA Response to Comments 

Ford has consistently improved the efficiency of the AlC systems in its vehicles. For systems that 

use alternative refrigerants with global warming potential (GWP) < 150, Ford recommends that 

EPA extend the technology based approach through 2016 model year. As noted by the EPA, 

alternative refrigerants may have reduced efficiency. The physical properties of refrigerants are 

the primary factors in the refrigerant system efficiency. Performance assessments of alternative 

refrigerants have been conducted by the automotive industry. It has been demonstrated that the 

physical properties of the alternative refrigerant R1234yf could result in a reduction of efficiency 

by 5 to 10 percent compared to R134a in use today with a similar refrigerant system and controls 

technology. The environmental benefit of the reduction in GWP, 1430 to 4, far outweighs the 

delta in the system efficiency and thus warrants the maximum credit currently allowed. [OAR2009-0472-7082.1, pp. 5-7] 

Jaguar Land Rover 

Jaguar Land Rover supports the principle of air con credits and the credit categories suggested by 

EPA certainly form a useful basis for discussion. We believe that interaction with the industry 

will enable EPA to refine the categories and include categories not previously identified. [OAR2009-0472-7213, p.1] 

We would recommend that EPA look into: 

 introducing new credits for humidity sensors; 

 introducing new credits for efficient solar glazing; 

 establishing separate credit values for evaporators and condensers; 

 basing heat exchanger credits on best technology (not on 10% of previous condition); 

 establishing separate credit values for evaporator blower fans and condenser cooling fans; 

 introducing new credits for internal heat exchangers that boost evaporator and condenser 

performance. [OAR-2009-0472-7213, p.1] 

The comment above, on using best technology heat exchangers, recognizes that Jaguar Land 

Rover already uses state of the art heat exchangers and would have difficulty in improving by 

10% to qualify for credits. It also recognizes that other OEMs, working from an older baseline, 

might be able to improve by 10% and qualify for credits whilst still using heat exchangers less 

efficient than ours. We would like to be credited for what we already do well, not just for 

improvement. [OAR-2009-0472-7213, p.1] 

In relation to credits for the use of recirculated air, this has generated a lot of discussion. On the 

one hand, using recirculated air undoubtedly saves energy. On the other hand, excessive use of 

recirculated air can cause screen and window misting, increase CO2 levels in the cabin, cause 

dry eye problems (especially for contact lens wearers), cause odor problems and even increase 

the risk of respiratory infection. Jaguar Land Rover uses a sophisticated control strategy to 

optimize the balance of economy, comfort and safety, frequently making use of partial 

recirculation. The EPA proposal is too simple as it stands and we would encourage EPA to seek 

a consensus in the industry, on the optimum way to word this part of the credits proposal. 

[OAR-2009-0472-7213, p.1] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

One item on the current air con credits list that surprised us was credits for an electronic 

expansion valve. We don't see this as a huge benefit, as there is generally some conflict of 

interest between the attempts of the compressor to maintain a stable evaporator temperature and 

the attempts of the expansion valve to maintain a small amount of superheat. The compressor 

always wins and having an electronic expansion valve does not alter this. [OAR-2009-0472­

7213, p.1] 

Association of International Automobile Manufacturers (AIAM) 

With regard to air conditioning system efficiency credits, EPA also proposes to base credits on a 

technology menu approach, but only for model years 2012-2013. Thereafter, EPA proposes to 

require that manufacturers justify credits based on testing using an idle test developed by the 

Agency. We have several concerns regarding the Agency’s proposed idle test approach for a 

performance-based measurement of air conditioning system efficiency. There are many existing 

technologies and new ones in development to improve the energy efficiency of air conditioning 

systems. The efficiency improvement resulting from the application of each technology does not 

necessarily apply under all operating conditions. For instance, efficiency improvements in engine 

cooling fans will typically be apparent at engine idle but not necessarily at road speeds. Variable 

displacement piston compressors are the original and one of the highest value technologies for 

improving MAC energy efficiency; however, their benefit occurs at low and mid-load conditions 

- typically road speeds. Testing at high load conditions would not detect their energy benefit 

when compared to fixed displacement piston compressors. Series Reheat Reduction provides 

benefits primarily at mid-load conditions. Air Inlet Mixture control provides its benefit at mid 

and high load conditions when the HVAC system is not already in recirculation mode. [OAR2009-0472-7123.1, p.12] 

In the preamble, EPA requested comments on the potential for using the SC03 test cycle for 

assessing air conditioning efficiency. While there may be some merits of using the SC03 

cycle for this purpose, as we note below, AIAM believes that a focused test program should be 

carried out in conjunction with industry and other interested stakeholders to determine the best 

performance test for assessing air conditioning system efficiency. [OAR-2009-0472-7123.1, 

pp.12-13] 

AIAM recommends that the Agency defer action on the adoption of a performance test to assess 

air conditioning system efficiency and rely on the menu-based approach. EPA should work with 

the Society of Automotive Engineers Interior Climate Control Committee to develop a more 

robust test approach that accurately measures system efficiency over a broad range of engine 

operating conditions. This test procedure could be used to verify the accuracy of the credits set 

forth in the menu and revise those items as necessary, consistent with the research program 

recommended above. In addition, such a test program could also assess what, if any, effects new 

low GWP AC systems may have on test procedure development. It would be especially 

important to consider the impact of these new AC systems since they will be the dominant AC 

designs for the foreseeable future. It may be appropriate for EPA to consider an improved 

performance test for the 2017+ program. [OAR-2009-0472-7123.1, p.13] 

Chrysler Group, LLC (Chrysler) 

5-145 
 

EPA Response to Comments 

Re-evaluate the cap on indirect air conditioning credits. 

EPA has imposed a cap on the maximum amount of indirect credits at 5.7 g/mi. The indirect 

credit methodology is a design-based approach that picks from a menu of technologies that are 

available for credit. The menu is not inclusive of all GHG reducing technologies (e.g., humidity 

sensor). [NHTSA-2009-0059-0124, p.18] 

Recommendation: 

Chrysler supports EPA's menu-based approach, as Chrysler and EPA cooperate in this all new 

GHG reducing arena. However, we believe that the indirect credit cap should be increased to be 

more in line with NREL and ARB studies, which suggest a maximum indirect credit of 10 to 12 

g/mi. [NHTSA-2009-0059-0124, p.18] 

Design-Based Approach 

Chrysler supports a design-based approach using a technology menu as a simple method that 

comprehensively captures A/C system efficiency improvements. [NHTSA-2009-0059-0124, 

p.18] 

The OEM's ability to receive credit for indirect A/C emission improvements is limited because 

not all available technologies are on the menu. These omitted technologies offer significant 

benefits and need to be recognized for credit. [NHTSA-2009-0059-0124, p.18] 

Recommendation: 

We support EPA's technology menu design-based approach. However, EPA should consider 

adding other technologies to this menu without reallocating the current credit values. 

Reallocating the current credit values is unnecessary since total indirect credits are capped. 

Adding items to the menu only provides flexibility to manufacturers to use different approaches 

to achieve GHG reductions. [NHTSA-2009-0059-0124, p.18] 

Partial Credits 

The indirect credit technology menu should not utilize an 'all or nothing approach.' Partial credit 

should be given for partial GHG reduction. [NHTSA-2009-0059-0124, p.18] 

For example, a system with a pulse width modulated ('PWM') HV AC blower and a resistor 

controlled cooling fan should qualify for a portion of the 1.1 g/mi total credit from the PWM 

blower and fan technology menu item. The NPRM does not recognize the reduced GHG benefit 

of these partial implementations even though they provide significant GHG reductions. 

[NHTSA-2009-0059-0124, p.19] 

Recommendation: EPA needs to recognize the GHG benefits of system efficiency improvements 

with partial indirect credit. [NHTSA-2009-0059-0124], p.19 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Reduced Reheat Strategies 

Reducing the amount of air reheated after cooling is a highly effective strategy to reduce A/C 

system-related GHG emissions. [NHTSA-2009-0059-0124, p.19] 

Automatic Recirculation Strategy 

Chrysler agrees with EPA that increased use of air recirculation can significantly reduce the 

thermal load on a vehicle air conditioning system, thereby reducing the load on the evaporator 

and decreasing the compressor workload. Increasing the use of recirculation will also allow 

customers to reduce the blower speed more quickly, saving more energy. [NHTSA-2009-0059­

0124, p.20] 

The NPRM would grant credits only if the A/C system always defaults to recirculation whenever 

the outside ambient temperature exceeds 75° F. In practice, actual A/C control strategies are 

more sophisticated than this, managing factors such as passenger compartment air quality, 

window defogging, and rear passenger comfort. The definitions in the proposed rule for 

obtaining these credits require modification of these factors. [NHTSA-2009-0059-0124, p.20] 

Several studies describe the concern with cabin air quality and CO2 concentration while driving 

in recirculation mode. SAE International published the most recent study suggesting that with the 

A/C system in recirculation mode, CO2 can build-up in as little as 15 minutes during slow 

driving conditions. [NHTSA-2009-0059-0124, p.20] 

Strategies to mitigate C02 build-up such as switching to fresh mode (outside air), partial 

recirculation mode or other methods after the cool down phase of the driving cycle should be 

allowed. EPA should allow individual manufacturers flexibility in choosing and implementing 

strategies for maintaining passenger compartment air quality while still earning credits for 

efficiency improvements. [NHTSA-2009-0059-0124, p.20] 

Recommendation: 

Chrysler agrees with EPA's proposal to employ recirculated cabin air above 75 OF ambient 

temperature. Chrysler recommends that the regulation should allow flexibility in using managed 

amounts of fresh air primarily for safety and customer comfort. The proposal should not require 

100% recirculated air while the system is in heater, blend or defrost modes. [NHTSA-2009­

0059-0124, p.20] 

The regulation should require that above ambient temperatures of 75 OF the vehicle must default 

to recirculation mode during the cool down portion of the drive cycle. This portion of the drive 

cycle is defined to be when the blower is set to 50% or higher. The system may then shift to 

managed intake of outside air or partial recirculation based on customer comfort, safety or other 

factors. [NHTSA-2009-0059-0124, p.20] 

Air distribution modes that direct air to the windshield or side glass should be exempt from 

requiring recirculation mode. These modes are typically run in ambient temperatures where 

5-147 
EPA Response to Comments 

recirculation mode would not provide much energy saving to begin with but could have 

significant impact on passenger comfort and safety. A recirculation strategy that is ambient 

temperature-based and compensated for A/C system modes that distribute air to the vehicle glass 

should be qualified for A/C credit. [NHTSA-2009-0059-0124, p.20] 

Electronic Expansion Valve (EXV) 

There are concerns with electronic expansion valves harming compressor durability due to the 

risk of sending liquid refrigerant to the compressor when trying to control to low superheat. The 

benefits of the electronic expansion valve were minimized when evaluated on vehicles during the 

SAE IMAC studies. The benefit from electronic controlled expansion valves is further reduced 

when using reduced reheat strategies. [NHTSA-2009-0059-0124, p.21] 

Recommendation: 

Chrysler would recommend removing the credit for the electronic expansion valve and allow 

other GHG reducing technologies on the menu. [NHTSA-2009-0059-0124, p.21] 

Oil Separator 

Chrysler believes that better definition of an oil separator to qualify for credits is required. The 

effectiveness of an oil separator varies based on operating conditions such as evaporator and 

condenser load, ambient conditions and engine speed. [NHTSA-2009-0059-0124, p.21] 

The amount of oil must also be balanced to meet overall compressor durability. Insufficient oil 

circulation will increase compressor operating temperature and wear. Both of these conditions 

could lead to increased compressor work and reduced A/C system coefficient of performance 

('COP'). [NHTSA-2009-0059-0124, p.21] 

Recommendation: 

The definition of an oil separator should be based on an easily verifiable set of design features 

that uses centrifugal force to separate the oil from refrigerant on either the high or low pressure 

side. [NHTSA-2009-0059-0124, p.21] 

If a test is required to verify the effectiveness of an oil separator then it should be performed on 

the supplier's bench and be limited to 3000 rpm or less, (typical vehicle usage speed).[NHTSA2009-0059-0124, p.21] 

Humidity Sensor 

Mobile A/C systems remove moisture from incoming air to control air discharge temperature. 

Compressor control is one way by which this is accomplished. Compressor operation quickly 

removes sensible heat from the air thereby lowering the temperature. Frequently the compressor 

continues cooling the air by removing the latent heat due to moisture from incoming air. 

However, the compressor is cycled when occupant comfort is determined by indirect means 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

(e.g. discharge air temperature) and compressor control is less refined than could be had with a 

humidity sensor. The humidity sensor helps determine the amount of dehumidification needed to 

achieve passenger comfort and therefore the amount of compressor on-time needed. Controlling 

humidity in a passenger cabin can significantly reduce indirect GHG emissions related to A/C 

system operation. [NHTSA-2009-0059-0124, pp.21-22] 

Recommendation: 

Chrysler recommends that EPA add humidity sensor to the indirect technology menu and assign 

a value of at least 5 g/mi CO2e credit. [NHTSA-2009-0059-0124, p.22] 

Non-A/C Equipped Vehicles 

Vehicles that are not equipped with an A/C system cannot leak refrigerants and do not consume 

fuel for A/C system operation. As such they should be rewarded maximum A/C credit. [NHTSA2009-0059-0124, p.24] 

Volvo Car Corp. 

If MAC idle test is kept, VCC believes the proposal needs to be clarified. Please see MAC 

recirculation. Several studies describe concerns with CO2 concentrations in the air of the 

passenger compartment while driving in recirculation. High CO2 concentrations lead to 

drowsiness, headache, fogging etc that may reduce the driver's ability to safely drive the vehicle. 

There are several ways to mitigate CO2 build-up e.g., by switching to outside air, partial outside 

air or other methods after the cool down phase. These strategies are best managed by the vehicle 

manufacturers on a vehicle-specific basis. EPA should allow the manufacturers the flexibility to 

choose among these strategies to maintain relevant air quality levels for safe driving while still 

earning credits for efficiency improvements. 

Alliance of Automobile Manufacturers (Alliance) 

Although there are substantial potential MAC efficiency improvements based on known 

technologies, the EPA proposal needs modifications in order to create the right incentives to 

fully utilize these technological improvements. Prior to 2014, EPA proposes basing MAC 

indirect credits on the application of MAC efficiency technologies from a list, with a credit 

amount assigned to each technology on the list. Beginning with MY 2014, EPA discusses first 

testing MAC efficiency in either an idle test or a modified SC03 test, and then allowing those 

vehicles that surpass fleet averages by a minimum threshold on the test to then earn credits based 

on their use of technologies from the list. [OAR-2009-0472-6952.1, p.10] 

MAC efficiency is best evaluated over a range of operating conditions that are, in total, 

representative of the real world. Because of the wide range of temperature, humidity, solar load, 

and other climate conditions that drivers encounter in various regions and seasons, precise 

estimates of overall efficiency are best derived from analytical techniques such as computer 

simulations. The GREEN MAC Lifecycle Climate Change Performance (LCCP) model 

developed with EPA provides a good framework for evaluations across a representative range of 

5-149 
EPA Response to Comments 

operating conditions. It is not practical to attempt either vehicle or MAC system efficiency tests 

over such a wide range of conditions as are actually encountered by most drivers. While 

automobile manufacturers each have proprietary energy consumption analysis simulation tools, it 

would take some time for EPA to establish a common, public one for purposes of this regulation. 

Therefore, the proposed “menu” technology list approach is a good, simplified way to get an 

early start toward incentivizing implementation of more efficient technology. [OAR-2009-0472­

6952.1, p.10] 

Some modifications to the technology list would create a better incentive structure for rapid 

progress toward implementing these technologies. [OAR-2009-0472-6952.1, p.10] [[See OAR2009-0472-6952.1, pp.10-26 for a detailed discussion about the modifications to the technology 

list]] 

Toyota Motor North America 

EPA proposes that manufacturers making improvements in A/C systems to increase efficiency 

should be awarded credits based on the CO2 emissions reductions that would result. EPA's 

proposal uses a design based menu approach to quantify improvements in A/C efficiency and 

also proposes to begin requiring manufacturers to confirm that technologies applying for these 

efficiency credits are measurably improving the system efficiency. [OAR-2009-0472-7291, 

pp.20-21] 

Prior to 2014, EPA proposes basing MAC indirect credits on the application of MAC efficiency 

technologies from a menu, with a credit amount assigned to each technology on the menu. Figure 

10 below shows Toyota's estimates of A/C power consumption reduction that can occur through 

the adoption of improved A/C technologies. This analysis is based on Toyota Prius - a highly 

improved A/C system example. [OAR-2009-0472-7291, p.21] 

By adopting these technologies, some of which were not listed in EPA's proposed menu, A/C 

power consumption is reduced by about 50% when compared with the baseline A/C system. 

EPA proposed that the maximum A/C credit of 5.7 g/mi be based on an equivalency to A/C 

power reduction of 40%. As a result, each technology would be scaled by this 40% factor and 

therefore, Toyota suggests a modified menu sheet as shown in Table 1 using the equation below: 

Credit (g/mile) = Estimated reduction in A/C CO2 emission (%) / 40 (%) x 5.7 [OAR-2009­

0472-7291, p.21] 

BMW of North America, LLC (BMW) 

The EPA and NHTSA have succeeded in delivering a balanced approach that forces significant 

change in vehicle designs while at the same time incentivizing innovation that can be credited to 

any auto maker who can prove the benefits either during the test cycle or through their own 

documented and verified test results. Beyond this, we support the consideration of credits for 

improved air conditioning systems as an effective method for reducing greenhouse gas 

emissions. [These comments were submitted as testimony at the New York public hearing. See 

docket number EPA-HQ-OAR-2009-0472-4621, p. 136.] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

As noted in our previous submission, BMW supports credits for improved air conditioning 

systems as an effective method for reducing GHG emissions and improving fuel economy. In 

addition to the proposed AlC C02 idle test procedure and technology list, BMW recommends the 

following changes: [OAR-2009-0472-11294.1, p. 1] 

The proposed rule includes credit for reduced reheat externally-controlled and variabledisplacement compressors. Beyond these technologies, BMW suggests also approving electrical 

driven compressors since equivalent or even better performance can be achieved. [OAR-2009­

0472-11294.1, p. 2] 

Furthermore, BMW proposes to modify the definition of oil separator. The definition appears to 

describe an oil separator outside of the compressor: '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.' Since it is also possible 

to integrate an oil separator into the compressor, the definition should be modified in the 

following way: 'Oil separator means a mechanism which removes at least 50 percent of the oil 

entrained in the oil/refrigerant mixture exiting the compressor or exiting a similar compressor 

without an external oil separator and returns it to the compressor housing or compressor inlet.' 

[OAR-2009-0472-11294.1, p. 2] 

Public Citizen and Safe Climate Campaign 

EPA proposes to give credits for changing refrigerants and improving air conditioning 

efficiency. The European Union is requiring automakers to switch air conditioning refrigerants, 

so these credits will be a windfall for automakers. These credits could cause the second largest 

reductions in the standard an automaker must meet. We urge that these credits be predicated on 

“additionality.” That is, EPA must safeguard against granting automakers valuable compliance 

credits for improvements they were planning to make in absence of regulation. EPA and NHTSA 

still receive product plan information from automakers, although this information is no longer 

used as the principal basis on which the agencies set the level of the standards. The product plans 

could be used by EPA to establish whether credits for refrigerant switching are additional. 

[OAR-2009-0472-7050.1, p.8] 

Motor and Equipment Manufacturers Association 

Credits for A/C Systems Must Accurately Represent the Benefit of the Technology. 

MEMA appreciates the efforts to quantify the true affect of air conditioning systems (A/C) on 

vehicle fuel economy. Importantly, the credit system proposed can provide the incentive to 

invest in the additional technologies/products needed to help reduce the fuel consumption by the 

A/C system. To accomplish this, the credit system must accurately represent the benefits of the 

significant energy saving technologies. [OAR-2009-0472-7121.1, p.7] 

[See Docket OAR-2009-0472-7121.1, pp. 7-9 on detailed comments pertaining to Energy 

Calculations and Credits, Revise the Single-Vehicle Test Protocol, and Summary of 

Recommended Emission Credits. Also see OAR-2009-0472-7121.1, Appendix A for Summary 

of 2000 Compressor Power Consumption Study] 

5-151 
EPA Response to Comments 

Clean Energy Fuels 

Clean Energy would like to better understand the proposal for air conditioning credits based on 

Table III.A.3-2, whereas projected FFV credits receive 6 credits in 2012 and 0 credits in 2016 

and air condition efficiency credits receive 3.1 credits in 2012 and 10.6 credits in 2016. While 

we support and courage federal efforts that verify that FFVs and dual-fueled alternative fuel 

vehicles actually operate on alternative fuels beginning in 2016, we believe dual-fueled 

alternative fuel vehicles powered by natural gas - due to their significant incremental costs - are 

more likely to operate on natural gas due to cost savings associated with the fuel whereas the 

cost savings are more questionable with ethanol. Specifically, the cost of a NGV conversion is 

significantly greater than the conversion costs associated with Ethanol 85 vehicle. Failure to take 

advantage of the cost savings associated natural gas as a transportation fuel defeats the very 

economic reason for performing a NGV conversion. [OAR-2009-0472-7220.1, p.7] 

With this understanding of dual-fueled alternative fuel vehicles powered by natural gas, it is 

difficult to understand how improving the air conditioning efficiencies of a vehicle receives more 

credits than dual-fueled alternative fuel vehicles. dual-fueled alternative fuel vehicles, that 

demonstrate the use the alternative fuel, provide both GHG and foreign oil displacement 

benefits. Air conditioning units, on the other hand, appear to only address GHG emissions and, 

yet, they receive more credit. This seems counter-intuitive to the proposed National Program's 

multiple goals as something that achieves half of the objectives should only receive half of the 

credit. Clean Energy is further concerned that, by providing generous credits to air conditioning 

efficiency improvements, this will provide yet another obstacle to the production of vehicles that 

are more efficient, operate on low to ultra low carbon fuels, or combine both strategies. Clean 

Energy opposes this generous issuance of credits as it clearly is intended to water down the 

rulemaking. [OAR-2009-0472-7220.1, p.7] 

[[Clean Energy also submitted these comments as testimony at the Detroit public hearing, See 

docket number EPA-HQ-OAR-2009-0472-6185, pp. 136-137.]] 

Honeywell International, Inc. 

Recommendations to improve A/C efficiency credits proposal (indirect emissions) 

Honeywell supports EPA's proposal to make available A/C Efficiency Credits for actions 

manufacturers can take to improve air conditioning efficiency and reduce fuel consumption. 

However, we argue that EPA can improve its proposed program so that availability of A/C 

system credits are based upon verifiable data and the best available science. The Proposed Rule 

provides credits for A/C system efficiency improvements based on a checklist style approach 

that Honeywell feels is not warranted for efficiency credits for operating systems over wide 

ranges of operating conditions. In lieu of this approach, we recommend components of A/C 

system efficiency are tested individually where such testing is feasible. [OAR-2009-0472­

7206.1, p.6] 

5-152
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

For example, we concur with EPA's estimate of a 0.9 g/mi CO2 A/C efficiency potential credit 

for Improved Blower and Fan Motor Control. However, instead of a pre-established credit, we 

believe that the blower and fan pulse width modulation ('PWM'), credits may be quantified easily 

and tested independently of A/C performance testing using a simple procedure based on the time 

spent with blower and engine cooling fan 'on time' due to operation of the A/C and heater 

controls. While a specific procedure currently does not exist, it is easy to visualize a simple timeweighted test based on the typical usage parameters like those in the Green-MAC-LCCP and 

outlined in SAE Standard 12766 - Life Cycle Analysis to Estimate the CO2 -Equivalent 

Emissions from MAC Operation to develop the correct on/off times and associated energy 

savings. An approach that implements some test certification, instead of the checklist strategy, is 

critical to reflect real-life operating conditions because substantial variance that results from the 

type of implementation of the fan, its blower PWM controls, and the strategy utilized to improve 

the energy efficiency. The mere presence of a PWM control does not necessarily optimize the 

use of the controller and thus save energy; as ,such a check-list credit will not reflect accurately 

actual avoided GHG emissions. [OAR-2009-0472-7206.1, p.6] 

EPA states that manufacturers seeking to generate A/C Efficiency Credits use specific 

performance tests for model years 2014 and later. We believe that EPA should expedite the use 

of specific performance tests to reflect real-world operating conditions and emission 

displacement. We recommend the use of the SAE Standard 12765- Procedure of Measuring 

System COP of a Mobile Air Conditioning System on a Test Bench provides the best 

methodology of gaining energy-efficiency based credits. SAE Standard 12765, when coupled 

with the Green-MAC-LCCP developed with support of EPA and outlined in SAE Standard 

12766 - Life Cycle Analysis to Estimate the CO2 - Equivalent Emissions from MAC Operation, 

can correctly weight the different operating modes found in the United States to determine an 

overall country weighting of the vehicle miles traveled for the fleet. [OAR-2009-0472-7206.1, 

p.7] 

With respect to the individual efficiency-improving A/C Technologies and Credits proposed in 

Table III C. 1-1 of the Preamble, we provide the following comments and suggestions: [OAR2009-0472-7206.1, p.7] 

Honeywell disagrees with the calculation of reduced reheat using an externally-controlled, 

variable-displacement compressor credit 

Honeywell questions whether an external control delivers better energy efficiency of compressor 

operation over internal controls based on conditions within the A/C system. This inference is not 

founded fundamentally since the external effect directly impacts the internal controls, i.e. if the 

cooling load is high with high temperature air flowing over an evaporator core. In this scenario, 

the evaporation pressure in the evaporator is also high, as the thermostatic expansion valve 

allows more refrigerant to flow through the evaporator to carry away heat through the pure fluid 

pressure-temperature relationship (PT chart). If the cooling load is low, then the reduced 

airstream temperature corresponds to a low evaporation pressure, which can be used as a control 

to reduce the compressor displacement and save energy. Both internal controls and external 

controls can give the desired efficiency improvements if implemented correctly. [OAR-2009­

0472-7206.1, p.7] 

5-153 
EPA Response to Comments 

In the DRIA, EPA suggests that reheat is a penalty on system efficiency. While this assessment 

is correct for dry regions, reheat is a method to control the humidity in an operating system, 

particularly in the eastern U.S. where humidity levels can be very high during the summer 

months. Since both internal and external controls typically feed to the onboard computer for 

system operation, both types of controls can manage system operation effectively. [OAR-2009­

0472-7206.1, p.7] 

Internal, external, and compressor controls should be validated through a testing protocol such as 

SAE Standard J2765 - Procedure of Measuring System COP of a Mobile Air Conditioning 

System on a Test Bench. Honeywell suggests that the credits be applied for optimization of all 

types of system controls relative to the total energy saved to a current production system. [OAR2009-0472-7206.1, pp.7-8] 

Reduced reheat using an externally-controlled, fixed displacement or pneumatic variabledisplacement compressor credit 

Honeywell's comments are the same as in section 2.1, above. [OAR-2009-0472-7206.1, p.8] 

Defaulting to recirculated cabin air credit 

EPA proposes to provide a credit for A/C systems that default to recirculated cabin air whenever 

the outside ambient temperature is higher than 75 degrees Fahrenheit. While Honeywell agrees 

that the use of recirculated air does reduce the energy required to operate the vehicle air 

conditioning during times of high ambient temperature, we also believe that placing a default 

position to recirculation may cause other problems specific to the automotive application. 

Specifically, while the humidity can be managed through the use of a humidity sensor, the indoor 

air quality or CO2 concentrations may exceed the ASHRAE 62 guideline value of 1,000 ppm for 

normally occupied spaces. Note that due to occupant respiration the CO2 value may rise to a 2 

percent saturation value and induce a state of drowsiness, or in the extreme, driving while 

impaired ('DWl'). [OAR-2009-0472-7206.1, p.8] 

Honeywell recommends that if a default recirculation door placement is to be specified by the 

credit rule, then additional safety devices will be required for driver/occupant operational safety. 

[OAR-2009-0472-7206.1, p.8] 

Improved blower and fan motor controls credit 

Honeywell concurs with EPA's estimate of a 0.9 g/mi CO2 A/C Efficiency Credit for Improved 

Blower and Fan Motor Control. Instead of a pre-established credit, however, we believe that the 

blower and fan PWM credits may be quantified easily and tested independently of A/C 

performance testing using a simple procedure based on the time spent with blower and engine 

cooling fan 'on time' due to operation of the A/C and heater controls. While a specific procedure 

does not exist currently, it is easy to visualize a simple time weighted test based on the typical 

usage parameters like those in the GreenMAC- LCCP and outlined in SAE Standard J2766 - Life 

Cycle Analysis to Estimate the CO2 -Equivalent Emissions from MAC Operation to develop the 

correct on/off times and associated energy savings. Once again, a testing procedure is preferable 

5-154
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

to a checklist strategy here because of the variable impacts of implementation of the fan, the 

blower PWM controls, and the strategy utilized to improve the energy efficiency. In production, 

these systems will be supplier dependent with some suppliers providing a superior strategy to 

provide an energy saving system (controller and motor combination), while other suppliers may 

only provide a basic PWM system that is not optimized and thus insufficient to save energy or 

GHG equivalents. [OAR-2009-0472-7206.1, p.8] 

Electronic expansion valve credit 

Honeywell requests the EPA revise its assumptions related to the Electronic Expansion Valve 

('EXV') and modify the available A/C Efficiency Credit accordingly. Unfortunately, the 

description of the operation of a conventional thermostatic expansion valve ('TXV') provided in 

the DRIA is incorrect. EPA states that a TXV uses an internal temperature reference to assure a 

constant temperature level for the expanded refrigerant gas typically a few degrees Celsius above 

the freezing point of water. However, Honeywell suggests that a properly operating TXV does 

not control the evaporator temperature to a constant value a few degrees Celsius above the 

freezing point of water. In contrast, a correct TXV maintains a constant superheat of generally 2 

to 5 degrees Celsius above the boiling point imposed by the evaporator loading. That is, a 

properly sized TXV design is intelligent enough to sense when cooling is required based on the 

cooling characteristic imposed by the operator. The TXV then adjusts to feed or restrict flow to 

the evaporator based on the amount of refrigerant needed to balance the load. Proper TXV 

selection also involves determination of a default size, where as the freezing point of water is 

approached the flow of refrigerant is maintained such that the evaporator is not over-cooled, 

wasting energy and causing core freeze up. The general operation of electronic expansion valve 

is to take a measurement of the suction pressure and cooled air output temperature to determine 

the proper algorithm for opening or closing the valve. [OAR-2009-0472-7206.1, p.9] 

While the electronic expansion valve may offer some advantages when vehicle operation is on 

the border of conventional TXV control bands, we question that the mere inclusion of an 

electronic expansion valve is sufficient to determine the proper setting of the valve and control 

algorithm. We advise that advancements with the electronic expansion valve over the TXV be 

demonstrated by the vehicle or component manufacture over a base operation valve over a range 

of operating conditions such as those found in SAE Standard J2765. [OAR-2009-0472-7206.1, 

p.9] 

Improved-efficiency evaporators and condensers credit 

EPA proposes an Efficiency Credit for the use of improved evaporators and condensers. 

Honeywell concurs with EPA that SAE Standard J2765 - Procedure of Measuring System 

Coefficient of Performance of a Mobile Air Conditioning System on a Test Bench should be 

used to show system improvements in energy efficiency and cooling capacity of systems. [OAR2009-0472-7206.1, p.9] 

Oil separator credit 

5-155 
EPA Response to Comments 

EPA proposes an Efficiency Credit for manufacturers if oil is prevented from circulating 

throughout the A/C System due to inefficiencies resulting from heat transfer effectiveness. 

While large amounts of oil circulating in an operating system can impact the overall efficiency of 

a system, Honeywell suggests that if the oil separator is not properly designed, the pressure drop 

losses due to the flow of refrigerant through such a device may negatively impact the efficiency 

of a system. EPA calculates the credit based upon the findings of the SAE IMAC team for a 

standard credit of 0.6 g/mi CO2. Instead, we submit that the impact of oil separators be tested 

identically to evaporators and condensers by using SAE Standard J2765- Procedure of 

Measuring System COP of a Mobile Air Conditioning System on a Test Bench to determine the 

overall efficacy and resulting credit of such an additional device. Using the SAE Standard J2765 

will enable the accurate determination of the efficiency of such a technology. [OAR-2009-0472­

7206.1, pp.9-10] 

European Automobile Manufacturers Association 

Credits for improving efficiency 

The EPA proposal combines credits for improved evaporators and condensers, and PWM fan and 

PWM blower. ACEA proposes not to combine the credits for the components, because every 

optimized component represents an improvement. Each improvement should achieve a credit. If 

one of the optimized components will be used, a credit should be realized. 

Default recirculation: 

It is not always favorable to use recirculation at 75F, because there are a lot of different 

parameter which influences the benefit: The benefit of recirculation depends on set point air 

temperature and also on different external conditions like heat pick up from engine hood. So it 

should be possible to get the credit if there is an intelligent air recirculation control, which takes 

into account these different parameters. [OAR-2009-0472-7444.1, p.1] 

Credits for reduced reheat: it is also possible to realize reduced reheat by an electrical 

compressor, so we suggest to adjust the wording like that: “..Reduced reheat, with either 

externally-controlled, variable-displacement compressor, or fixed / internally controlled 

compressor with a control of the ON/OFF temperature threshold , or electrical compressor: 1.7 

g/mi.; [OAR-2009-0472-7444.1, p.1] 

Credits for improving efficiency (2) 

Oil separator: the definition describes an oil separator outside the compressor: “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”. 

[OAR-2009-0472-7444.1, p.2] 

As it is possible to integrate an oil separator into the compressor the definition should be 

independent. [OAR-2009-0472-7444.1, p.2] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Credits for improving efficiency (3) 

Improved evaporators and condensers : the definition references to a standard which is not 

defined: “Improved evaporators and condensers 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 “Procedure for 

Measuring System COP of a Mobile Air Conditioning System on a Test Bench,” when compared 

to a system using standard, or prior model year, component designs. SAE J2765 is incorporated 

by reference; see §86.1.” [OAR-2009-0472-7444.1, p.2] 

The reference to prior model year means that OEM which uses already improved heat 

exchangers in the prior model year, do not get any credit. So we suggest to make an absolute 

definition like an heat exchanger efficiency. For evaporators / condensers we recommend 

thresholds based on current technology, e.g.: 

Improved evaporators (tube to tube spacing <14 mm) and condensers (tube to tube spacing <12 

mm) [OAR-2009-0472-7444.1, p.2] 

These are the same thresholds as in our recommendation on page 12 -- The following 

recommended thresholds represent high efficiency standards based on the current state of 

technology: Condensers: Micro channel tubes with optimized flat tube-to-tube spacing ≤ 12mm. 

Evaporators: Optimized flat tube-to-tube spacing ≤ 14 mm. [OAR-2009-0472-7444.1, p.2] 

An internal heat exchanger should be added to the list of components/credits. [OAR-2009-0472­

7444.1, p.2] 

Credits for improving efficiency (4) 

Credits for improved glazing and shading: We suggest to integrate possible credits for improved 

glazing and integrated shading in the GHG. [OAR-2009-0472-7444.1, p.2] 

New York State Department of Environmental Conservation 

Air Conditioning Efficiency Credits (Preamble Section III.C.1) 

EPA is also proposing an engineering analysis based credit program for air conditioning 

efficiency. Beginning with the 2014 Model Year a vehicle will have to meet a threshold test in 

order to be eligible for the credits. This threshold is a maximum of 14.9 grams/minute higher 

CO2 emissions at idle with the air conditioning on than with the air conditioning off. [OAR2009-0472-7454, p.2] 

Testing by the Department suggests that many existing vehicles, particularly smaller cars, can 

nearly meet the proposed threshold. However, a minivan exhibited emissions more than twice 

the proposed threshold. This suggests that large interior volume vehicles may have no chance of 

meeting the threshold for credits. In that case manufacturers have no incentive to invest design 

and production resources into improving the efficiency of the air conditioning systems for these 

vehicles. This deprives the environment of the benefits of improvements to the largest air 

5-157 
EPA Response to Comments 

conditioning systems. EPA should consider an alternate threshold that varies with interior 

volume, at least until a certification emissions testing method for the incremental emissions due 

to air conditioner operation can be developed. [OAR-2009-0472-7454, p.2] 

EPA Response: 

A/C Idle Test Threshold 

Several commenters noted that the proposed 30% reduction in emissions on the A/C Idle Test to 

qualify for efficiency credits was not desirable, as vehicles which came close to, but did not 

exceed, the threshold would receive zero credit for any of the efficiency-improving technologies 

on their vehicles. In addition, the New York State Department of Environmental Conservation 

commented that small cars could easily meet the proposed threshold, whereas vehicles with 

larger interior volumes would not. EPA examined the results of vehicles tested during 

development of the A/C Idle Test and found little correlation between interior volume and the 

incremental change in idle test results (A/C on vs off). Because there is environmental benefit 

(reduced CO2) from the use of even some of these efficiency-improving technologies, EPA 

believes it is appropriate to scale the A/C efficiency credits to account for these partial 

improvements. We therefore are modifying our proposed approach on this issue by allowing 

some credit to still be earned on those vehicles which do not meet or exceed the threshold, while 

making a multiplicative credit adjustment factor to the eligible credits. This factor will be scaled 

from 1.0 to 0, with vehicles demonstrating a 30% or better improvement (14.9 g/min or lower) 

receiving 100% of the eligible credit (adj. factor = 1.0), and vehicles demonstrating a 0% 

improvement - 21.3 g/min or higher result -- receiving no credit (adj. factor = 0)). See 86.1866­

12 (c)(5) (iii) (B). 

Elimination of EXV Technology from the Menu 

Many comments were received stating that the EPA estimate for EXV efficiency was too high, 

that no manufacturers were developing this technology within the timeframe of this rulemaking, 

and that it should not be included on the list of efficiency-improving technologies. These 

commenters noted that the SAE IMAC report (from which we referenced the expected efficiency 

improvement) utilized an EXV in conjunction with a more efficient compressor – and not as a 

standalone technology. Given the uncertainty in the effectiveness of EXV technology, and that 

no manufacturers seem to plan on utilizing it, we have removed this technology from the list of 

efficiency-improving technologies and credits. 

Inclusion of IHX Technology in the Menu 

Many commenters requested that an internal heat exchanger, or IHX, be added to the design 

menu. EPA initially considered adding this technology, but in our initial review of studies on this 

component, we had understood that the value of the technology is limited to systems using the 

alternative refrigerant HFO-1234yf. Some manufacturers, however, commented that an IHX can 

also be used with systems using the current refrigerant HFC-134a to improve efficiency, and that 

they plan on implementing this technology as part their strategy to improve A/C efficiency. 

Based on these comments, and projections in a more recent SAE Technical Paper, we project 

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that an IHX in a conventional HFC-134a system can improve system efficiency by 20%, 

resulting in a credit of 1.1 g/mi.6 

Control of Recirculated Cabin Air 

In response to comments concerning the applicability and effectiveness of technologies that were 

or were not included in our analysis, we have made several changes to the design-based menu.7 

First, we have separated the credit available for ‘recirculated air’8

 technologies into those with 

closed-loop control of the air supply and those with open-loop control. By “closed-loop” control, 

we mean a system that uses feedback from a sensor, or sensors, (e.g., humidity, glass fogging, 

CO2, etc.) to actively control the interior air quality. For those systems that use “open-loop” 

control of the air supply, we project that since this approach cannot precisely adjust to varying 

ambient humidity or passenger respiration levels, the relative effectiveness will be less than that 

for systems using closed-loop control. Consequently, such systems should not automatically 

receive the same credit as an open-loop system. The final rule therefore provides that open-loop 

control at different temperatures may receive credits on a case-by-case basis upon EPA approval 

of an engineering analysis submitted by the manufacturer. See 86.1866-12 (c) (iii). 

Improved Evaporators and Condensers 

In response to comments, we have modified the definition of ‘improved evaporators and 

condensers’ to recognize that improved versions of these heat exchangers may be used separately 

or in conjunction with one another, and that an engineering analysis must indicate a COP 

improvement of 10% or better when using either or both components (and not a 10% COP 

improvement for each component). Furthermore, we have modified the text of the regulation 

from proposal to clarify what are considered to be the ‘baseline’ components for this analysis. 

See 86.1866-12 (c) (v). We consider the baseline component to be 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 components are then compared to the new 

components, and an engineering analysis is required to demonstrate the COP improvement. 

Efficiency Difference Between HFO1234yf and R-134a Refrigerants 

In the proposal, EPA had requested comments on whether the efficiency credit for alternative 

refrigerants should be adjusted. Although a few commenters noted that the efficiency of an 

HFO1234yf system may differ from a current HFC-134a system,9

 we believe that this difference 

does not take into account any efficiency improvements that may be recovered or gained when 

6

 Mathur, Gursaran D., "Experimental Investigation with Cross Fluted Double-Pipe Suction Line Heat Exchanger to 

Enhance A/C System Performance,” SAE 2009-01-0970, 2009. 

7

 Commenters included the Alliance of Automobile Manufacturers, Jaguar Land Rover, Denso, and the Motor and 

Equipment Manufacturers Association, among others. 

8

 Recirculated air is defined as air present in the passenger compartment of the vehicle (versus outside air) available 

for the A/C system to cool or condition. 

9

 Ford noted that “the physical properties of the alternative refrigerant R1234yf could result in a reduction of 

efficiency by 5 to 10 percent compared to R134a in use today with a similar refrigerant system and controls 

technology.” 

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EPA Response to Comments 

the overall system is specifically designed with consideration of the new refrigerant’s properties 

(as compared to only substituting the new refrigerant). In addition, Ford noted that the 

environmental benefit of reducing the GWP from 1430 to 4 far outweighed any potential 

decrease in system efficiency, and that they supported the maximum credit for use of an 

alternative refrigerant, as provided by this rule. EPA agrees with these points. Moreover, the 

agency believes that the idle test used from MY 2014 on as a precondition to obtaining efficiency 

credits will help ensure that the alternative refrigerant systems will be properly calibrated for 

efficiency (at least at idle) so as to minimize “backsliding”. EPA is therefore not adjusting the 

credits based on efficiency differences for this rule. 

Modifications to the Design-Based Menu 

Several commenters requested that adjustments be made to the design-based menu for certain 

technologies, or that partial credits be granted for technologies which come close to, be do not 

meet, the requirements set forth in this rule. EPA acknowledges that any design-based approach 

is imperfect (in that it cannot capture every design nuance or technology advance that may occur 

during the timeframe of the rule), but we feel that this approach is sufficient in that it encourages 

the use of current state-of-the-art A/C technologies on vehicles. For technologies such as scroll 

compressors, which operate more efficiently at high engine speeds than at idle speeds, we 

believe that the A/C Idle Test is still a valid tool for quantifying the overall efficiency of an a 

A/C system, as idle time is a significant portion of daily driving. It thus is reasonable to use an 

idle test as a screening tool. Moreover, any vehicle with a compressor design, or A/C component, 

which does work effectively at idle will likely exhibit poor cooling system performance under 

this condition (i.e. when interior cooling is especially desired by consumers), and so is unlikely 

to be used in high volumes by manufacturers. 

5.7.1.3. Idle Test Procedure 

Organization:Ford Motor Company 

Honda Motor Company 

Association of International Automobile Manufacturers (AIAM) 

Chrysler Group, LLC 

Environmental Defense Fund 

Alliance of Automobile Manufacturers (Alliance) 

Toyota Motor North America 

National Renewable Energy Laboratory 

California Air Resources Board 

Honeywell International, Inc. 

European Automobile Manufacturers Association 

New York State Department of Environmental Conservation 

Yuli Chu 

Comment: 

Ford Motor Company 

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Ford has concerns regarding vehicle testing such as the A/C idle Test as an accurate means to 

measure the effect of A/C operation. Using the delta between two tests increases uncertainty and 

is not a robust test approach. Ford performed a simple control parameter study, via Computer 

Aided Engineering (CAE), that shows inherent variability in the proposed idle test. The results 

are shown in Chart I: Compressor Power Variability below. [See OAR-2009-0472-7082.1, p. 7 

for Chart I] 

Ford has experience in running A/C on versus A/C off fuel consumption tests in climatic wind 

tunnels. As shown in Table II [See OAR-2009-0472-7082.1, p. 7 for Table II] the data shows 

inherent variability. Idle conditions are the most difficult to control. Facility correlation across 

industry and government laboratories is also a concern. 

In addition, A/C idle results for HEV are highly dependent on the state of charge (SOC) of the 

vehicle prior to the test. Preconditioning of the vehicle does not define SOC starting 

requirements for this test. A/C idle test cell ambient conditions will require all idle tests to be 

conducted in environmental chambers which are already fully utilized for other required 

certification tests. Ford validates ambient test cell environments at 68-86 °F and 50 ± 10 gr/lb. 

The proposal is for 75±2°F and 50±5 gr/lb. While Ford has a set point of 75°F, the tight control 

on temperature and humidity could only be achieved in an environmental chamber. This is 

impractical from a facility standpoint. Ford recommends that the temperature not vary more than 

± 5°F from the start of the test and that the humidity be expanded to 50±10 from ±5 gr/lb. 

Inclusion of the SC03 test (air conditioning test procedure) into the 5-cycle FE requirement has 

already taxed the fully utilized environmental chambers. Adding another SC03 cycle would 

require significant incremental facility investments. The proposed SC03 test for A/C credits 

would be conducted at environmental conditions different from FE tests meaning that additional 

environmental chamber testing is required. In addition, the proposed test cycle includes phases 

without A/C operation and at manual A/C operation points that are not included in the FE test 

which also prevents optimizing facility usage. [OAR-2009-0472-7082.1, pp. 7-8] 

Jaguar Land Rover 

Jaguar Land Rover understands the intention of the proposed air con idle test, as a simple test 

that could be carried out in existing emission facilities. However, we consider it would not be a 

reliable indicator of overall air con efficiency. For instance, consider the case of a vehicle fitted 

with a scroll compressor. Such compressors are among the most efficient at normal road speeds, 

but do not perform well at low speed, including idle conditions. Vehicles equipped with scroll 

compressors would therefore be unfairly penalized in this test. [OAR-2009-0472-7213, p.2] 

Honda Motor Company 

EPA proposes a new idle-test to determine whether or not a vehicle qualifies for the designbased air conditioning credits. Honda has three concerns with this approach. First, the idle-test, 

proposed by EPA, does not adequately represent a good metric to determine whether an A/C 

system is improved or not. Second, EPA’s idle-stop capable vehicles’ exemptions from the idle 

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EPA Response to Comments 

test, and third, the idle test threshold is an “all or nothing” condition that results in unfair 

treatment. [NHTSA-2009-0059-0095.1, p.8] 

Idle Test 

In general, the idle test that EPA describes, represents only one condition among many in typical 

driving cycles. This test will potentially disadvantage technologies which are less effective at 

idle yet more effective at a higher rpm ranges (e.g. scroll-type compressors). We support 

AIAM’s proposal for studying a better approach with a 3rd party, together with EPA and 

industry. [NHTSA-2009-0059-0095.1, p.8] 

Exemption from Idle Test 

In the idle-test, EPA offers an exemption from the “threshold” if the vehicle’s air conditioning 

system is “solely powered by electricity” and can operate while the engine remains off for “at 

least 2 minutes.” [NHTSA-2009-0059-0095.1, p.8] 

Honda believes that these criteria are unnecessarily restrictive. Honda’s Civic Hybrid has an air 

conditioning system that has two sources of power: electric and engine. During idle stop, this 

system is able to operate electrically for limited periods of time, but it is not exclusively, nor 

“solely” powered by electricity. Further, the 2 minute requirement is very restrictive. Honda’s 

own testing of typical driving scenarios in the U.S. (California), Europe (Spain) and Asia (Japan) 

indicate that the vast majority (more than 90%) of idle events are less than 60 seconds in length 

(see Attachment 4). Although Honda’s idle stop duration is less than EPA’s 2 minute 

requirement, based on market research it provides significant value. Honda trusts that it was not 

the intent of EPA to exclude technologies like the A/C system in the Civic Hybrid. [NHTSA2009-0059-0095.1, p.9] [[See NHTSA-2009-0059-0095.1, p.17 for Attachment 4]] 

Idle Test Threshold 

EPA has established a performance threshold on the air conditioning idle test in order to qualify 

for design-based A/C credits. This threshold creates an “all-or-nothing” condition, which is bad 

policy, and bad regulation. These “step functions” unintentionally create winners and losers 

based on potentially minute and insignificant differences in performance. For example, an A/C 

system whose idle test score is slightly higher than the threshold would not be rewarded for its 

improved efficiency. This is a big downside of this policy. In Attachment 5 we show examples of 

vehicles that have improved air conditioner performance and just miss the threshold of 14.9 

grams/minute. Honda does not propose to relax the 14.9 grams/minute threshold, rather, we 

suggest that EPA create a linear function that seamlessly transitions from 0% of the A/C credits, 

based upon some average grams/minute value, to 100% of the A/C credits, based upon the 14.9 

grams/minute threshold. In this manner, EPA will eliminate the arbitrariness of a single value. 

[NHTSA-2009-0059-0095.1, p.9] [[See NHTSA-2009-0059-0095.1, p.18 for Attachment 5]] 

Association of International Automobile Manufacturers (AIAM) 

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Testing at idle is not reliably repeatable due to changes in the engine idle speed and especially 

due to changes/variances in vehicle front-end airflow and temperature due to front-end 

recirculation (engine heat recirculating to the front face of the condenser). Available field data 

indicate that engine idling accounts for only 15 to 20% of vehicle use. Therefore, testing only at 

one engine condition, an idle condition, would not be repeatable nor is it representative of the 

widely varying conditions and therefore energy used by the MAC system. Relying on the idle 

test would encourage the use of technology that reduces energy usage at idle in low to mid 

ambient temperature conditions at the expense of energy efficiency at road speeds and other 

conditions. Some of the most energy efficient technologies would not show any benefit at this 

condition – Air Inlet Mixture control (which is capable of up to a 35% reduction in overall A/C 

energy usage) would not likely show any savings in the proposed EPA test procedure. In 

summary, the proposed test would not encourage the implementation of many of the most 

promising technologies that have been developed or are under development. [OAR-2009-0472­

7123.1, p.12] 

We are also concerned about the impact that the Agency’s idle test approach would have on 

manufacturer and Agency resources. The Agency’s proposed concept would establish a new test 

that would have to be performed by manufacturers and the Agency on large numbers of vehicles 

to provide data for greenhouse gas compliance purposes. [OAR-2009-0472-7123.1, p.12] 

However, if EPA insists that the idle test approach must be included in the final rule, that test 

should be considered as only one of the parameters that determines the air conditioning credit. In 

addition, it is unclear why EPA has proposed to grant efficiency credits only if gains in 

efficiency of at least 30 percent are achieved. See preamble at 49530. Under proposed section 

86.1866-12(c)(5)(iii), only air conditioning systems that increase emissions by less than 14.9 

grams per minute, as measured under the Agency’s idle test, would qualify for credits. The 

Agency should encourage all efficiency improvements, and lesser improvements should receive 

proportionately smaller credits. [OAR-2009-0472-7123.1, p.13] 

Hyundai Motor Company 

For MY 2012-2013 MY, EPA proposes to use a technology menu approach for determining A/C 

efficiency credits. Beginning in MY 2014, EPA proposes the use of an idle test for credit 

determination and requires a minimum 30 percent system efficiency improvement. We support 

the comments made by the Association of International Automobile Manufacturers (AIAM) 

regarding the idle test, including: 

• The idle test only represents one aspect of A/C system use. 

• Testing at idle may not be reliably repeatable due to changes in the engine idle speed and frontend recirculation (engine heat recirculation to the front face of the condenser). 

• New A/C technologies with the potential to improve efficiency may not have efficiency 

benefits realized during vehicle idle and thus may not be captured by an idle test. 

• The idle test will impose a new test procedure and test burden on both industry and EPA. 

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EPA Response to Comments 

 Like AIAM, Hyundai supports continuing the technology menu approach past MY 2013 and 

recommends that EPA work with industry to develop an appropriate performance test for 

potential application with MY 2017 and later GHG standards. [OAR-2009-0472-7231.1, p.6] 

Chrysler Group, LLC 

The A/C idle test's objective is to quantify GHG emissions related to A/C system operation at a 

given test condition applicable to all vehicles. The GHG emissions associated with A/C-on 

operation during the idle test are determined and compared against the GHG emissions 

associated with the A/C system off. A value of 14.9 grams/minute CO2 is employed, regardless 

of cabin volume or vehicle footprint, as a threshold below which the A/C system passes. Passing 

the idle test allows the OEM to use the menu approach to validate A/C indirect credit. Concern 

exits with the A/C idle test as currently conceived. [NHTSA-2009-0059-0124, p.23] 

A concern is that the menu items offering credit will not always contribute to lowered GHG 

emissions as measured by the A/C system idle test. The three most valuable indirect menu items 

may not be effective and therefore not captured by idle test: 

• Automatic recirculation at 75°F - Due to ambient temperature tolerances, the 75°F automatic 

recirculation strategy may not be active. 

• Variable Displacement Compressor or Fixed Displacement Compressor with reduced reheat 

strategy - The manual idle test is performed at full cold where a reduced reheat strategy would 

not be active or at diminished capacity. 

• The PWM blower contribution is maximized at low to medium blower speeds not captured by 

the idle test. The PWM cooling fan is not a major contributor since the fan duty cycle at 75°F 

and idle engine speed is not considered high. [NHTSA-2009-0059-0124, p.23] 

Automatic temperature control A/C systems greatly benefit during the A/C idle test by providing 

lowered GHG emissions and also provide customer satisfaction benefits for occupant comfort. 

While this is desirable for OEMs, not all vehicle segments support an automatic climate control 

system over the standard manual system due to price point. [NHTSA-2009-0059-0124, p.23] 

Vehicles with manual temperature control are at a distinct disadvantage relative to those with 

automatic temperature control systems during the A/C system idle test procedure due to the test 

boundary conditions. The test boundaries do not represent real world use conditions. [NHTSA2009-0059-0124, p.23] 

Recommendation: 

The A/C idle test was developed by testing many different vehicles representing different levels 

of A/C control strategy sophistication and technology. As can be seen in the scatter of the A/C 

idle test results, EPA has not correlated A/C idle test performance with vehicle or A/C system 

parameters, preferring a 'one size fits all' approach of a 14.9 gram CO2/minute 

threshold. [NHTSA-2009-0059-0124, p.23] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Chrysler believes correlation could be achieved between A/C system parameters and GHG 

emissions levels and supports investing resources as needed to develop a vehicle A/C test that 

robustly captures GHG emissions reductions. Chrysler believes the current A/C idle test can be 

improved by defining baseline sets of vehicle parameters such as compressor type, oil separator 

type, automatic recirculation, etc., and evaluating the parameters and correlating the results that 

show a trend. This could be used to fully validate the indirect technology menu in time for the 

2017 model year. [NHTSA-2009-0059-0124, pp.23-24] 

Environmental Defense Fund 

The Proposed Air Conditioning Credits for Determining Compliance with the Clean Air Act 

Standards Incentivize Reductions in Hydrofluorocarbon Refrigerants, Which Are Potent 

Greenhouse Gases. 

EPA proposes compliance credits for reducing the greenhouse gases associated with air 

conditioning systems, a policy approach that provides a strong incentive for mitigating 

hydrofluorocarbon refrigerants, which are powerful greenhouse gas pollutants, as well as the 

greenhouse gas emissions due to the load associated with the air conditioning operation. 74 Fed. 

Reg. at 49,482. [OAR-2009-0472-7285.1, pp. 24-25] 

The environmental performance and economic flexibility inherent in the overarching systems 

based approach under the federal Clean Air Act enable manufacturers to secure cost-effective 

emissions reductions in non-CO2 greenhouse gases and to efficiently optimize CO2 emissions 

reductions across the entire vehicle system including the air conditioning operations: 

EPA is proposing an approach that allows manufacturers to generate credits by reducing GHG 

emissions related to A/C systems. Specifically, EPA is proposing a test procedure and method to 

calculate CO2 equivalent reductions for the full useful life on a grams/mile basis that can be used 

as credits in meeting the fleet average CO2 standards. EPA’s analysis indicates this approach 

provides manufacturers with a highly cost effective way to achieve a portion of GHG emissions 

reductions under the EPA program. 74 Fed. Reg. at 49,482. [OAR-2009-0472-7285.1, p. 25] 

Under the CAFÉ program, these reductions are disallowed for passenger cars. 74 Fed. Reg. at 

49,468. EDF strongly supports the proposed EPA standards that incentivize reductions in the 

harmful greenhouse gases associated with air conditioning systems, an approach consonant with 

the provisions of the Clean Air Act and sound public policy. [OAR-2009-0472-7285.1, p. 25] 

Alliance of Automobile Manufacturers (Alliance) 

If a test is to be used, designing the specific test procedure is very important. It would be 

especially important that any tests include an evaluation of energy consumption at moderate 

MAC loads. Not only are moderate loads the most commonly encountered conditions in the U.S., 

but the most attractive near term energy efficiency technologies, such as many of those 

demonstrated in the IMAC program, tend to give their benefits under moderate loads. At high 

loads, systems with variable compressors, sophisticated computer control strategies, and other 

key IMAC technologies may be indistinguishable from older designs without these 

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EPA Response to Comments 

improvements. In order to provide the right incentives to fully utilize these technologies, the 

credit program must identify them as beneficial and award credits accordingly. [OAR-2009­

0472-6952.1, p.26] 

The modified SC03 and idle tests discussed by EPA are not representative of real world 

conditions, since they are not performed over a range of temperatures and air conditioner 

operating conditions. Some efficiency technologies work well at low loads and others at high 

loads, and a good test would need to cover a variety of conditions like those encountered in the 

real world. The SC03 cycle is not a good, representative test because it only includes high loads. 

An SC03 cycle at more moderate temperatures, such as 75o

 F, would be more representative, but 

still suffers from the limitations of any test done under a single climate condition. [OAR-2009­

0472-6952.1, p.26] 

The proposed idle test would also be unrepresentative of actual driving conditions, and would 

tend to overestimate air conditioner energy consumption. Idle speeds are reduced to absolute 

minimum levels to improve fuel economy ratings. Idle speeds may therefore be increased in 

actual driving conditions as accessory loads are added, which would tend to make A/C fuel usage 

appear to be a higher percent of total fuel usage than under a more representative drive cycle. 

Other factors also tend to make an idle test overestimate air conditioner energy consumption. 

Engine heat and pavement heat tend to raise compressor loads during prolonged idle to a much 

greater extent than occurs in normal driving. Hybrid vehicles or any vehicle with start-stop 

technology might not adequately be assessed in this test because there would be no guarantee 

that the engine would be running. [OAR-2009-0472-6952.1, p.26] 

Finally, some specific requirements that might be applied, such as no recirculation unless 

automatically controlled and max settings for all manual systems, are not representative of real 

world conditions, and thus unfairly penalize certain designs. In any test performed under a single 

set of climate conditions, a great deal will depend on the specific circumstances and whether or 

not a vehicle’s efficiency technologies start to operate and show their benefits under those 

specific conditions (and not at a slightly lower or higher load). [OAR-2009-0472-6952.1, p.26] 

Any laboratory test program inherently involves thorny problems of test variability, differences 

among test facilities, test procedure definitions, etc. By creating incentives for applications of 

known efficiency technologies, the proposed design-based menu approach would capture most of 

the benefits in this area. Ultimately, the goal should be a more sophisticated system of 

simulations, or other analytical procedures, that can evaluate system efficiency across the full 

range of operating conditions. The EPA should utilize the “menu” approach (and eliminate the 

A/C idle test or any other vehicle testing for the analysis of A/C efficiency) until a common 

analytical approach for evaluating the efficiency of MAC systems is developed. [OAR-2009­

0472-6952.1, p.27] 

Test Facilities Impact 

The humidity control levels proposed by EPA are typically not met in normal fuel economy test 

facilities during the summer (four to five months of the year), and more expensive SC03 

facilities would be needed during those times. The cost associated with using the more expensive 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

SC03 test facilities is an additional undesirable impact of the proposed test. [OAR-2009-0472­

6952.1, p.27] 

In addition, in §86.165-12 New Air conditioning idle test procedure, EPA has proposed a new 

idle CO2 test to determine the increase in CO2 emissions with AC operation on and off. 

Concerns are: 

• Maintaining the average ambient air temperature of “75 ± 2 °F” over the test duration may 

require expensive climatic test chambers versus a normal emissions test site. 

• §86.165-12 (d)(4), “cumulative flow rate” should be “cumulative mass rate” 

• §86.165-12 (d)(5), not sure if it is possible to set a vehicle automatic air conditioning system 

setting, on all vehicles, to “9 °F” below ambient temperatures. Should allow an alternative if not 

possible. [OAR-2009-0472-6952.1, p.27] 

MAC Test Groups 

MAC systems typically use common components across all variants of a vehicle “platform.” 

Variants might include body styles, such as sedan, coupe, or wagon, as well as various 

powertrain combinations. While hose lengths and joints may differ slightly in order to be routed 

around the different engines, the overall variations in J2727 scores are usually very small. The 

systems would all use the same refrigerant as well as the same efficiency technologies. Thus, the 

EPA MAC program can effectively cover all vehicles using relatively few “tracking vehicles” or 

test vehicles. This situation differs from tailpipe emissions or fuel economy testing, where many 

more configurations would need to be tracked in order to gain a representative estimation of fleet 

averages. [OAR-2009-0472-6952.1, p.27] 

Due to these considerations, EPA should only require a single MAC certification for each 

vehicle platform in order to earn MAC credits for all the vehicles built on that platform. This 

tracking vehicle could be chosen based on an engineering assessment that identifies the “worst 

case” MAC variant for the platform. If both single and dual evaporator systems are used on a 

platform, there should be separate tracking of the single and dual systems. If some variants of a 

platform use electric compressors, such as hybrid vehicles, the electric compressor variants 

would also need to be tracked separately. [OAR-2009-0472-6952.1, p.27] 

Toyota Motor North America 

Beginning in 2014 MY, EPA is considering first testing MAC efficiency using an A/C CO2 Idle 

Test and then allowing those vehicles that surpass fleet averages by a minimum threshold of 30% 

on the test to then earn credits based on their use of technologies from the list. [OAR-2009-0472­

7291, p.21] 

Toyota supports the structure and intent of the credit proposal. However, Toyota is concerned 

that the A/C Idle CO2 Test is poor representation for evaluating A/C system efficiency because it 

would tend to overestimate A/C energy consumption. As a result, systems forced to comply with 

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EPA Response to Comments 

this test requirement may lead to inappropriate design of A/C systems. Furthermore, hybrid 

vehicles or any vehicle with start-stop technology might not adequately be assessed in this test 

because there would be no guarantee that the engine would be running. [OAR-2009-0472-7291, 

pp.21-22] 

Toyota suggests the use of an alternative test procedure for evaluating the A/C efficiency and 

assigning indirect A/C credit. Toyota proposes the methodology used on the California 

Environmental Performance label, which incorporates the use of SC03 data. Specifically; 

Although it can be argued that the load in the SC03 may be a bit higher, Toyota feels that the 

absolute value of A/C SCO3 CO2 emission being higher better reflects the actual A/C 

performance over that of the proposed A/C Idle CO2 test. Furthermore, this proposal 

incorporates a scheme already in place in California and can address measurement concerns on 

HV and PHEV technology vehicles. However, Toyota has concerns whether the test vehicle 

selected for this type of testing (SC03+FTP) would be representative. If the selection of the A/C 

system test vehicle is based solely on the emission data vehicle, it is conceivable that the A/C test 

results might be compromised. To ensure representative testing and reduce testing burden, A/C 

test groups can be established by system configuration. [OAR-2009-0472-7291, pp.22-23] 

This proposed idea would be less burdensome because it incorporates existing data so a new test 

would be unnecessary. Finally, using this approach would provide some incentive for 

manufacturers to improve the A/C system efficiency performance at the higher load conditions. 

[OAR-2009-0472-7291, p.23] 

National Renewable Energy Laboratory 

It is uncertain if A/C systems optimized for reduced A/C fuel use at idle (maximize GHG credit) 

will have an A/C fuel use reduction during real world driving. Figure 2-4 in the DRIA is plots 

data at idle. Is there corresponding data for A/C fuel use over the SCO3? In testing to support the 

proposed regulation, EPA encountered a good example of this situation (in the text at the bottom 

of page 2-34 of the DRIA). In this case, a manufacturer acknowledged that their A/C system has 

low fuel use and low cooling capacity at idle, but off-idle performed very well. Care needs to be 

exercised in developing this regulation to encourage A/C fuel use reduction during all phases of 

driving and not just at idle. [OAR-2009-0472-4798.1, p.1] 

The proposed A/C fuel use idle test does not incorporate a thermal soak period with solar lamps. 

This provides no incentive for automobile manufacturers to reduce the thermal loads on the 

passenger compartment and realize GHG emission reductions beyond improved efficiency A/C 

equipment. A soak period with solar lamps is recommended. [OAR-2009-0472-4798.1, p.1] 

One issue to consider is how to compare A/C systems with different cooldown rates. An 

automobile manufacturer might choose to incorporate a large A/C system to cool occupants 

quickly while another may choose a low power system that cools slowly. The fuel use during the 

cooldown for the large system would be high but the duration would be short. In the idle test, 

EPA is assuming 50% cooldown and 50% steady state A/C fuel use for vehicles with manual 

A/C control. In the SCO3 test option, it is assumed the first cycle measures cooldown A/C fuel 

use and the second cycle is steady state. Then the 2 results are averaged to obtain the A/C fuel 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

use. Both of these approaches assume the cooldown is accomplished during the first cycle and 

half of the A/C usage occurs during cooldown mode while the other half is steady state. It is 

recommended EPA assess the 50/50 weighting assumption and provide supporting information. 

An alternative is to calculate an average A/C fuel use by weighting the cooldown and steady 

state components based on vehicle and A/C use characteristics. A small A/C system would have 

a higher weighting for the cooldown since this mode of operation occurs more often than with a 

large A/C system. [OAR-2009-0472-4798.1, p.1] 

California Air Resources Board 

CARB believes EPA should develop and utilize a performance test to quantify AC indirect credit 

in the future. We support EPA’s suggestion of a modified SC03 test procedure and not the idle 

test. The proposed AC Idle Test will not capture real world driving conditions because it lacks 

adequate engine load and speed variance. In the interim, a menu-driven option for assessing AC 

indirect emission may buy some time for test development. 

Honeywell International, Inc. 

Whenever feasible, EPA should utilize the best available testing procedures to measure the 

performance of A/C efficiency to quantify accurately the reduction of GHG emissions, and the 

resulting Efficiency Credits. By adopting testing procedures that incorporate the most up-to-date 

research and technical information underlying the performance of A/C Systems, the proposed 

credit programs can help meet the President's greenhouse gas emissions targets and provide 

integrity to the credit program. [OAR-2009-0472-7206.1, p.10] 

European Automobile Manufacturers Association 

Air conditioning Idle test 

ACEA promotes a worldwide harmonized testing approach. The test does not cover the average 

condition. The set temperature of 66 (=75-9) °F is very low and seems not to be the average set 

point of the customers. We propose 71°F. [OAR-2009-0472-7444.1, p.2] 

New York State Department of Environmental Conservation 

We also believe that EPA should consider the development of an air conditioner incremental 

emissions certification test. EPA suggests modifying the SC03 test cycle from the Supplemental 

Federal Test Procedure (SFTP) for this purpose. We concur with EPA's view that the extreme 

test cell conditions of the current SC03 are inappropriate. We also believe that it is not necessary 

to simulate solar radiation, as is done in the SFTP. Simulating solar radiation, while it may make 

for a more 'real' load on the vehicle, would be a significant expense in an area where relatively 

small improvements (a maximum credit of < 6 grams per mile) are expected . We believe that 

this level of expense will result in an economic decision by manufacturers to not pursue these 

credits. [OAR-2009-0472-7454, pp.2-3] 

Chu, Yuli 

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I support the collaboration effort between EPA, industry, the California Air Resources Board, 

and other stakeholders to move toward increasingly robust performance tests for A/C and may 

include such changes in this final rule. [OAR-2009-0472-7042.1, p.3] 

EPA Response: 

A/C Idle Test 

Many commenters questioned the ability of the A/C Idle Test to measure the improved efficiency 

of certain A/C technologies, noting that the test would overestimate fuel consumption, and in 

general that the test was not representative of real-world driving conditions. However, although 

EPA acknowledges that this test directly simulates a relatively limited range of technologies and 

conditions, it accurately estimates A/C efficiency and performance under those conditions, and 

we believe that it is sufficiently robust for the screening purpose of demonstrating that the 

system design changes are indeed implemented properly and are resulting in improved efficiency 

of a vehicle’s A/C system, at idle as well as under a limited range of operating conditions. Since 

idle is significant part of real world and FTP drive cycles (idle represents 18% of the FTP), EPA 

believes that the focus in this rulemaking on A/C system efficiency under idle conditions, as a 

screening measure, is justified. Moreover, we believe that a performance test is necessary to 

assure that efficiency-improving technologies are implemented properly and that the vehicle’s 

A/C system operates in an efficient manner under idle conditions. The design of the A/C CO2 

Idle Test represents a balancing of the need for performance tests whenever possible to ensure 

the most accurate quantification of efficiency improvements, with practical concerns for testing 

burden and facility requirements. (Thus, EPA is not adopting the SCO3 test, which contains 

more drive cycles, but imposes significantly greater testing burden.) EPA believes that the Idle 

Test adds to the robust quantification of A/C credits that will result in real-world efficiency 

improvements and reductions in A/C-related CO2 emissions. Use of the Idle Test as a precondition in order to generate A/C Efficiency Credits will not be required until MY 2014 to 

allow sufficient time for manufacturers to make the necessary facilities improvements and to 

gain experience with the test. 

Adapting or Modifying Other Test Cycles to Measure Impact of A/C Loads 

In the proposal, EPA invited comment on a more comprehensive testing approach to quantifying 

A/C CO2 emissions – an approach that could be somewhat more technically robust, but would 

require more test time and test facility improvements for many manufacturers. EPA also invited 

comment on using an adapted version of the SCO3, test (an existing test procedure that is part of 

the Supplemental Federal Test Procedure). There were many comments opposed to this proposal, 

and very few supporters. Most of the comments opposing this approach echoed the concerns 

made by in the NPRM. These included excessive testing burden, limited test facilities and the 

cost of adding new ones, and the concern that the SC03 test may not be sufficiently 

representative of in use A/C usage. Some commenters supported a derivative of the SCO3 test 

or multiple runs of other urban cycles (such as the LA-4) for quantifying A/C system efficiency. 

While EPA considers a test cycle that covers a broader range of vehicle speed and climatic 

conditions to be ideal, developing such a representative A/C test would involve the work of 

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many stakeholders, and would require a significant amount of time, exceeding the scope of this 

rule. 

Working to Develop an Improved A/C Test Procedure 

 EPA expects to continue working with industry, the California Air Resources Board, and other 

stakeholders to move toward increasingly robust performance tests and methods for determining 

the efficiency of mobile A/C systems and the related impact on vehicle CO2 emissions, including 

a potential adapted SC03 test. 

5.7.2. Flex Fuel and Alternative Fuel Vehicle Credits 

Organization:Environmental Defense Fund 

Hyundai Motor Company 

Toyota Motor North America 

Public Citizen and Safe Climate Campaign 

Union of Concerned Scientists 

Natural Resources Defense Council 

American Petroleum Institute 

Sierra Club 

United Auto Workers 

California Air Resources Board 

National Automobile Dealers Association (NADA) 

State of New Jersey 

Cummins Inc. 

New York State Department of Environmental Conservation 

Washington State Department of Commerce 

Chew, Yuli 

Comment: 

Environmental Defense Fund 

In terms of flexible fuel vehicles, I think it would be safe to say that we prefer the California 

approach, which is you don't get any credit without demonstrating actual use, but, on the other 

hand, we recognize that NHTSA is under its own rules and so on under some obligation to give 

some kind of credit, so I think what EPA is proposing for its own program makes sense, at least 

we're willing to support it, where there is some kind of a credit, but that credit will be phased out 

and will be phased out entirely by 2016 absent an actual showing, and then you also ask a 

question about, well, how could the manufacturers demonstrate use, and I think you identify the 

two principal ways of doing it, one is a national calculation, the number of cars out there, the 

total amount of ethanol or biofuels of some sort being used by vehicles and you sort of allocate 

those across the board. Another is to use the onboard computer. I mean, and my understanding is 

that the onboard computer in a flex fuel vehicle has to know which fuel is being burned when 

because the engine may operate a little bit differently depending on which fuel, whether it's an 

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ethanol or biofuel or gasoline, so it should be possible. And, again, there was testimony during 

the Vermont Pavley trial about this to adjust that to store information about actual fuel use that 

could be downloaded during inspection times or otherwise. [These comments were submitted as 

testimony at the New York public hearing. See docket number EPA-HQ-OAR-2009-0472-4621, 

pp. 120-121.] 

Hyundai Motor Company 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.67-72] 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

EPA-HQ-OAR-2009-0472-6185, p. 81.] 

We also believe that the CAFE flexible fuel credit calculation overstates the current real-world 

use of alternative fuels. However, we understand that this is a calculation prescribed by statute. 

Toyota Motor North America 

EPA proposes adopting a flexible fuel vehicle (FFV) credit mirroring NHTSA's FFV credit, 

through 2015 model year. After 2015 model year, EPA proposes that FFV credits could be 

earned to the extent manufacturers could demonstrate use of ethanol in FFVs. [OAR-2009-0472­

7291, p.23] 

Toyota supports EPA's adoption of the FFV credit for producing flexible fuel vehicles (FFVs) 

through 2015 model year. Because actions taken by manufacturers to comply with EPA's 

regulation will, to a large extent, be the same as those taken to comply with NHTSA's CAFE 

regulation, it is appropriate for EPA to consider flexibilities contained in the CAFE program that 

clearly impact product plans and technology deployment plans already in place or nearly in 

place. Adopting the FFV credit for a transitional period of time appears to recognize this reality, 

while providing a pathway to eventually phase-out the flexibility. [OAR-2009-0472-7291, p.23] 

For post-2015 model year, EPA proposes to continue to allow a manufacturer to earn the FFV 

credit if the manufacturer can demonstrate use of ethanol in FFVs. Toyota does not oppose this 

demonstration, but suggests that such credit should only be allowed with a demonstration of low 

life-cycle carbon ethanol usage. As EPA's objective is reduction of GHGs, simply replacing 

gasoline with ethanol of the same or similar GHG life-cycle impact does not further this 

objective. Notwithstanding the above comments, Toyota is highly uncertain whether an 

appropriate and robust demonstration of low life-cycle carbon fuel usage can be made for the 

purposes of generating GHG credits. Substantial challenges are likely to be encountered due to 

the uncertainty of fueling pattern for in-use vehicles, and the difficulty in retroactively adjusting 

credits earned in a model year based on evidence of improper fuel use later in the lifetime of the 

vehicle. Regrettably, Toyota is not sure these concerns can be adequately addressed by EPA or 

any other entity at this time. [OAR-2009-0472-7291, p.23] 

Public Citizen and Safe Climate Campaign 

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The flex fuel vehicle (FFV) credit is an unjustifiable loophole that has allowed manufacturers to 

evade up to 1.2 mpg of fuel economy obligation for building vehicles that are capable of running 

on (but do not actually have to use) a blend of 85 percent ethanol (E85). EISA extended the FFV 

credits through 2019, although the value of the credit phases out beginning in 2014. EPA 

proposes to apply the FFV credit consistent with NHTSA’s standards through 2015; after that 

date, the credit would be based on actual use of E85. We acknowledge that the credit provided in 

NHTSA’s fuel economy program is a legislatively mandated extension of an existing program. 

[OAR-2009-0472-7050.1, p.7] 

The FFV credit, offered since the 1988 Alternative Motor Fuels Act (AMFA) was enacted, and 

extended multiple times, has not worked. Its original intent was to encourage ethanol 

infrastructure, but it did not. The 2002 NAS study on the fuel economy program estimated that 

FFVs ran on ethanol less than one percent of the time, and recommended that the FFV credit 

program be abolished. [OAR-2009-0472-7050.1, p.7] 

A sharp uptick in availability of ethanol blended fuel and refueling infrastructure (which is still a 

minimal fraction of the total refueling infrastructure) occurred only after the Energy Policy Act 

of 2005 (EPAct 2005) mandated the production of a certain volume of ethanol. Then in 2004, 

California and several other states switched from methyl tert-butyl ether (MTBE) to ethanol to 

meet oxygenate requirements for summer blend gasoline, which increased demand for 10 percent 

ethanol (E10). The mandated volume of ethanol was increased and expanded in EISA, to rise to 

36 billion gallons by 2022. [OAR-2009-0472-7050.1, pp.7-8] 

The AMFA credit is limited, which effectively caps the number of vehicles it can encourage each 

manufacturer to build, limiting the usefulness of the credit. AMFA credits have not had a 

meaningful impact on E85 consumption. Ethanol producers, unable to increase the market 

penetration of ethanol without increasing the blending percentage of ethanol in gasoline for wide 

consumption, have begun to press that policy. [OAR-2009-0472-7050.1, p.8] 

EPA raises the option of capping the FFV credits based on vehicle size instead of using the 

limitation contained in the CAFE program. We strongly urge EPA not adopt this basis for setting 

the FFV credit. The credit has already been shown to have little value in increasing the market 

penetration of ethanol, and setting the credit on an attribute basis for the greenhouse gas program 

will do nothing to improve its effectiveness. [OAR-2009-0472-7050.1, p.8] 

Public Citizen has long supported predicating the fuel economy credit for FFVs on actual 

consumption of E85, something EPA proposes to do in model years 2015 and after. EPA’s recent 

proposal on its revised Renewable Fuel Standard (RFS2) illustrates the fact that it is difficult to 

measure the greenhouse gas emissions from ethanol. The agency has not stated how it will 

estimate the greenhouse gas emissions from ethanol in E85, or whether there will be different 

values for different feedstocks and production methods of ethanol. We urge that EPA devise a 

way to weight the greenhouse gas emissions from ethanol based on the values for different 

feedstocks and production methods, consistent with what it has done for RFS2. [OAR-2009­

0472-7050.1, p.8] 

Union of Concerned Scientists 

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UCS has long opposed the industry’s use of flex fuel vehicle (FFV) credits to lower fuel 

economy obligations given the facts that the credits are overly generous and very few vehicles 

outfitted with FFV technology are regularly operated on E85. We applaud EPA for their proposal 

to phase this loophole out by model year 2016 and require that any post-model year 2015 credits 

accrued under the program be based on actual E85 use rather than vehicle capability. The 

loophole created by these credits has eroded oil savings and pollution reductions for more than a 

decade and, while it is currently set to phase out by 2020 under EPCA, this is not guaranteed; 

historically, FFV credits have seen multiple extensions beyond their originally prescribed 

duration. If the FFV program were to continue in its current state, it would likely erode the 2016 

fleet average between 0.5 and 0.8 mpg-equivalent, depending on the extent of the credit’s use. 

[OAR-2009-0472-7181.1, p.12] 

UCS strongly urges that EPA follow through with its proposed handling of FFV credits for 

model years 2016 and beyond, without modification. [OAR-2009-0472-7181.1, p.12] 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.103-113] 

Finally, flex-fuel vehicle credits must be terminated. Currently EPA standards allow automakers 

to use flex-fuel vehicle credits to achieve compliance in the early years of the program. 

Historically automakers have used FFV credits to lower their fuel economy obligations despite 

the fact that very few of the vehicles were ever run on these alternative fuels, such as E85. 

Beginning in model year 2016, EPA proposes that any FFV credits accrued under its program 

be based on actual E85 use as opposed to just vehicle capability. This change would close the 

FFV loophole and finally make the federal program consistent with California's. 

This loophole created by these credits has eroded oil savings and pollution reductions for 

decades. It is critical that the EPA follow through with its modification of these credits, FFV 

credits, in 2016. If the FFV program were to continue in its current state, it would erode the 2016 

proposed fleet standard. 

Natural Resources Defense Council 

Credits generated through sales of flex fuel vehicles (FFVs) and the advanced technology 

multiplier do not represent actual GHG reductions. Therefore, we recommend that manufactures 

be barred from banking, transferring or trading these credits to ensure they do not undermine the 

environmental and technology-forcing goals of the GHG standards. [OAR-2009-0472-7141.1, p. 

10] 

Flex-Fuel Vehicle Credits Should Be Phased Out No Later than 2015 

NRDC strongly supports EPA’s proposal to fully phase out flex-fuel vehicle (FFV) credits by 

MY 2015. While EPCA authorized FFV credits under the CAFE program to promote alternative 

fuel use, the government’s own reports have concluded that FFVs are typically fueled by 

petroleum, not an alternative fuel. Furthermore, the CAFE credit has allowed manufacturers to 

sell vehicles that have lower fuel economy than would be required without the credit and 

therefore increase petroleum consumption and increase greenhouse gas emissions. For these 

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reasons, EPA should phase out current FFV credits as soon as possible and no later than MY 

2015. [OAR-2009-0472-7141.1, p. 19] 

NRDC agrees with EPA’s proposal to only allow FFV credits beyond MY 2015 if it can be 

demonstrated in an enforceable manner that the FFVs are consuming significant volumes of 

alternative fuel beyond that existing in low-level blends of gasoline and diesel. The level of 

eligible credits should be based on the amount of alternative fuel used and the full fuel cycle 

emissions impacts of that fuel. For non-petroleum fuels, emissions during fuel production must 

be included since their full fuel cycle carbon pollution change compared to petroleum fuels is 

largely based on the emissions that occur during the alternative fuel production (e.g. the use of 

cellulosic biofuels in internal combustion engine vehicles can result in lower carbon pollution 

than petroleum due to carbon absorption during the feedstock growing process). [OAR-2009­

0472-7141.1, p. 19] 

American Petroleum Institute 

Flexible Fuel Vehicle Credits: In Section III (C)(2)(b), EPA proposes that emissions standards 

for Flexible Fuel Vehicles (FFVs) be based on their actual carbon dioxide emissions in 2016 and 

later. The manufacturer would also be required to demonstrate that the alternative fuels are 

actually being used in the vehicles. EPA considers two methods for compliance, a top down 

approach based on aggregate data from the Department of Energy‘s Energy Information 

Administration, or a survey program based on data recorded in on-board systems and transmitted 

back to the manufacturer. The NPRM does not dictate the details on the second option, but 

requires that the program be based on sound statistical methodology. API supports the concept of 

basing fuel emissions standards on actual emissions, but questions the delay until 2016. The 

DOE EIA top down data approach to compliance does not necessitate any equipment changes 

and can be implemented much sooner than 2016. Fuel economy credits for FFV production were 

originally designed to stimulate ethanol production. The Renewable Fuel Standard requires 36 

billion gallons of ethanol per year by 2022 and far exceeds any ethanol market stimulation 

created by FFV manufacturing. The NPRM proposes to continue a program of FFV credits until 

2016. This program should be eliminated within a much shorter time frame.[OAR-2009-0472­

7143.1, p.11] 

Dedicated Alternative Fuel Vehicles: Fuel economy calculations for dedicated alternative fuel 

vehicles should be based on a sound scientific approach, not a policy approach. API requests that 

EPA remove the multiplier and establish a method of determining the actual GHG impact from 

dedicated alternative fuel vehicles.[OAR-2009-0472-7143.1, p.12] 

Sierra Club 

We welcome EPA’s decision to exclude FFV credits in 2016 – one of the transitional aspects of 

this proposal. FFV credits under the CAFE system have long been recognized as flawed, leading 

to increased oil consumption. While NHTSA is bound by EISA to phase out FFV credits by 

2019, EPA’s action is a much needed shift away from credits that, in reality, have undermined 

the oil savings from the fuel economy program. [OAR-2009-0472-7278.1, p.16] 

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EPA Response to Comments 

EPA proposes to shift to awarding FFV credits in 2016 and beyond to actual use of E-85. Recent 

scientific reports have concluded that on a lifecycle basis, corn ethanol may in fact increase 

greenhouse emissions. We would urge EPA to consider not giving credits for E-85 consumption. 

Fuel volumes are mandated under RFS2 and the fuel is otherwise subsidized through other 

policies. The cost to automakers to produce FFVs is nominal and need not be incentivized 

through vehicle program with the potential cost of increased greenhouse gas emission. In 

testimony at the Renewable Fuel Standard hearing on June 9th, 2009, Sierra Club urged the 

administration to consider emissions from the transportation sector as a whole– getting standards 

for vehicles and fuels right as well as reducing how much we drive. As the fuel mix in the US 

diversifies with more biofuels and unfortunately more Canadian tar sands and other dirty fuels, 

the impact of emissions from these non-conventional fuels on the transportation sector, on a 

lifecycle basis, must be accounted for to ensure we do not erode the reductions promised from 

these standards. We urge that EPA use a realistic greenhouse gas factor for E-85 in determining 

the credits for use of the fuel. EPA should provide this factor for corn ethanol grandfathered 

under EISA. [OAR-2009-0472-7278.1, p.16] 

EPA’s Clean Air Act authority is consistent with a full lifecycle accounting of fuels and should 

be used to ensure that a consistent and correct GHG metric is established that also avoids 

unintended consequences. Given the controversy that has surrounded FFV credits, we urge EPA 

to set clear guidelines for E-85 in the vehicle program context. [OAR-2009-0472-7278.1, p.16] 

United Auto Workers 

The UAW also supports the agencies proposals on flex-fuel and alternative-fuel vehicle credits. 

We believe that sufficient quantities of alternative fuels will be available and in use to make 

these credits useful after 2015 in the EPA’s program. The proposed rule also correctly applies the 

statutory intent regarding the application of these credits under the CAFE regulations. [OAR2009-0472-7056.1, p.3] 

California Air Resources Board 

In addition to the non-zero grams/mile ZEV upstream factor discussed earlier, we have the 

following comments on other aspects of the proposed crediting system. EPA has proposed credit 

provisions designed to provide manufacturers with compliance flexibility, help ease the 

transition into the national GHG program, and provide incentives for the development and 

production of advanced GHG technologies. Consistent with the Low-Emission Vehicle and 

Zero-Emission Vehicle programs for light-duty vehicles, CARB includes similar provisions in its 

GHG program and is generally supportive of including such provisions in the national GHG 

program. However, while we agree that including credit mechanisms in the national GHG 

program is appropriate, we believe that such provisions should not undercut the primary 

objective of the program, namely achieving significant reductions of GHG emissions from lightduty vehicles. 

EPA requested comment on its proposed FFV crediting. CARB recognizes that FFV credits 

without a specific demonstration of alternative fuel usage are included in EPA’s GHG program 

for model years 2012-2015 in consideration of manufacturers’ lead time requirements. While 

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CARB does not believe that such credits are necessary, or even appropriate for a GHG program, 

we are pleased that EPA will base these credits on verifiable alternative fuel usage beginning in 

2016. We also agree with EPA that such credits should not be available in model years 2009­

2011. [OAR-2009-0472-7189.1, p.12] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. See 

docket number OAR-2009-0472-7283, pp. 21-27] 

National Automobile Dealers Association (NADA) 

Under EISA, flex fuel credits are available until MY 2019 for automakers using such technology. 

EPA proposes to phase out this credit in MY 2015. To be “consistent and harmonized,” EPA 

should adopt the policy Congress has and not one CARB favors. [OAR-2009-0472-7182.1, p.8] 

State of New Jersey 

[State of New Jersey also submitted these comments as testimony at the New York public 

hearing, See docket number EPA-HQ-OAR-2009-0472-4621, pp. 115-117.] 

Flexible Fueled Vehicle (FFV) program and its associated credits: We support the proposal to 

only allow FFV credits if they are based on a manufacturer's demonstration that the alternative 

fuel is actually being used in the vehicles. This approach will ensure that these emission 

reduction credits are based upon real and verifiable reductions. The Department also supports the 

USEPA's statement that the ability to generate credits upon a demonstration of usage of the 

alternative fuel will provide an actual incentive to see that such fuels are used. However, we 

stress that the use of credits for FFVs should be allowed only if the credits are based on actual 

CO2 emission reductions (both fuel usage and emission rates). Therefore, in crafting the 

requirements for that demonstration, we support following a method that is the same or similar to 

the California Air Resources Board's method of verification through either: 1) scientific 

sampling and survey; or 2) the service data when the vehicles are brought back for servicing at 

their dealership. [OAR-2009-0472-7109.1, p.4] 

Cummins Inc. 

Cummins supports EPA’s proposal to provide CO2 credits for Flexible Fueled Vehicles (FFV) 

corresponding to the amount allowed by the amended Energy Policy and Conservation Act 

(EPCA). However, EPA is proposing these credits only for 2012-2015 model years (MYs). To 

keep as much consistency as possible with the CAFE program, we urge EPA to extend the FFV 

credit availability until MY 2019 (same as CAFE). [OAR-2009-0472-7205.1, p.4] 

Starting in MY 2016, EPA is proposing to remove the 0.15 “volumetric conversion factor” in 

CO2 emissions calculations for FFVs and also require manufacturers to demonstrate that the 

actual fuel is being used in their vehicles. As mentioned earlier, Cummins believes that EPA 

should adopt a holistic view of life-cycle analysis to determine CO2 benefits of alternative fuels 

like ethanol and bio-diesel. The life-cycle analysis could then be used to determine a ‘credit’ 

based on CO2 reductions compared to a conventional (gasoline or diesel) vehicle, which a 

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EPA Response to Comments 

manufacturer would be able to claim based on the number of such vehicles produced and by 

demonstrating the actual use of bio-fuel. Such ‘credit’ is necessary to recognize the true CO2 

benefits of such low carbon intensity bio-fuels and encourage their use by providing a level 

playing field with other CO2-reducing technologies employed on the vehicles. [OAR-2009-0472­

7205.1, p.4] 

New York State Department of Environmental Conservation 

Flexible Fuel Vehicles (FFVs) and Alternative Fuel Vehicle Credits (Preamble Section III.C.2) 

We support EPA's intention to eliminate the arbitrary, unscientific, and unsupportable, 0.15 

emissions multiplier from the tailpipe greenhouse gas emissions calculation for FFVs and 

alternative fueled vehicles beginning with the 2016 model year. We would prefer its immediate 

elimination. We also support EPA's requirement that manufacturers demonstrate that alternative 

fuel is actually used before including the alternative fuel CO2 emissions in the calculation of the 

FFV's overall certification emissions. Again we favor implementing this provision with the 2012 

model year, rather than waiting until the 2016 model year. [OAR-2009-0472-7454, p.3] 

Washington State Department of Commerce 

[Following comments are from LA Testimony, OAR-2009-0472-7283, p.126] 

We support allowing for reasonable credits for flex-fuel vehicles only based on 

demonstration that these vehicles are running on alternative fuel. We intend to submit separate 

documentation with some ideas on how this demonstration could be achieved. 

Chew, Yuli 

After MY 2015, I support EPA’s proposal to allow FFV credits only based on a manufacturer’s 

demonstration that the alternative fuel is actually being used in the vehicles. I support following 

CARB’s method of verification either through: 1) scientific sampling and survey; or 2) through 

the service data when the vehicles are brought back to service in their dealership. The alternative 

fuel usage percentage data are captured as part of OBDII criteria. [OAR-2009-0472-7042.1, p.1] 

I am concerned about too much “windfall” credits from the trucks. FFV credits can only be 

obtained as what alternative fuels are being used in CARB’s Regulation. I support the credits be 

revised after 2016 based on the actual environmental impacts for the useful life of the 

vehicles.[OAR-2009-0472-7042.1, p.3] 

I welcome EPA develop a mechanism based on the same treatment of alternative fuel use by 

CARB, either through scientific surveys or data recorded in the actual OBDII data. The credits 

should be based on the actual usage and the amount of greenhouse gas saved on a lifetime wellto-wheel analysis approach without the FFV credits. [OAR-2009-0472-7042.1, pp.3-4] 

I welcome EPA’s real-world reductions approach for alternative fuel vehicles. I would also 

suggest to limit the percentage of credits from trucks that can be used to normalize the debits for 

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the cars, or diminish the value of the credits from trucks that can be carryforward, e.g. decrease 

20% of the worth over the next model year. [OAR-2009-0472-7042.1, p.4] 

EPA Response: 

For the GHG program, EPA is allowing FFV credits corresponding to the amounts allowed by 

the amended EPCA but only during the period from MYs 2012 to 2015. EPA received 

comments supporting and opposing its approach for MY2012-2015 FFV credits. Several 

commenters, while not favoring EPA’s approach for MY 2012-2015, focused their comments on 

supporting EPA’s approach for MY 2016 and later. EPA continues to believe that several 

manufacturers have already taken the availability of FFV credits into account in their near-term 

future planning for CAFE and this justified reliance indicates that these credits need to be 

considered in assessing necessary lead time for the CO2 standards. A number of manufacturers 

in fact commented that EPA’s credits programs are necessary in allowing them to transition to 

the new standards. EPA thus believes that allowing these credits, in the near term, is needed to 

provide adequate lead time for manufacturers to implement the new multi-year GHG standards, 

but that for the longer term there is adequate lead time without the use of such credits. 

As proposed, for MY 2016 and later manufacturers will need to consider actual vehicle 

performance in assessing whether credits would be generated, and in doing so reliably estimate 

the extent to which the alternative fuel is actually being used by vehicles in order to count the 

alternative fuel use in the vehicle’s CO2 emissions level determination. Beginning in MY2016, 

the FFV credits as described above for MY2012-2015 (including the 0.15 factor and the 

assumption for 50% alternative fuel/50% gasoline used) will no longer be available for EPA’s 

GHG program. Rather, GHG compliance values will be based on actual emissions performance 

of the FFV on conventional and alternative fuels, weighted by the actual use of these fuels in the 

FFVs. 

Starting with model year 2016, as proposed, EPA thus will no longer allow manufacturers to 

base FFV emissions on the use of the 0.15 factor credit, and on the use of an assumed 50% usage 

of alternative fuel. Instead, EPA believes the appropriate approach is to ensure that FFV 

emissions are based on demonstrated emissions performance. This will promote the 

environmental goals of the final program. EPA received several comments supporting its 

proposal to use this approach for MY2016 and later instead of the EPCA approach. Under the 

EPA program in MY2016 and later, manufacturers will be allowed to base an FFV’s emissions 

compliance value in part on the vehicle test values run on the alternative fuel, for that portion of 

its fleet for which the manufacturer demonstrates utilized the alternative fuel in the field. 

Without this demonstration, the default rule is to assume FFVs operate on 100% gasoline, and 

the emissions value for the FFV vehicle will be based on the vehicle’s tested value on gasoline. 

However, if a manufacturer can demonstrate that a portion of its FFVs are using an alternative 

fuel in use, then the FFV emissions compliance value can be calculated based on the vehicle’s 

tested value using the alternative fuel, prorated based on the percentage of the fleet using the 

alternative fuel in the field. EPA believes this approach will provide an actual incentive to 

ensure that such fuels are used. The incentive arises since actual use of the flexible fuel typically 

results in lower tailpipe GHG emissions than use of gasoline and hence improves the vehicles’ 

performance, making it more likely that its performance will improve a manufacturers’ average 

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EPA Response to Comments 

fleetwide performance. Based on existing certification data, E85 FFV CO2 emissions are 

typically on average about 5 percent lower on E85 than CO2 emissions on 100 percent gasoline. 

Moreover, currently there is little incentive to optimize CO2 performance for vehicles when 

running on E85. EPA believes the above approach provides such an incentive to manufacturers 

and that E85 vehicles could be optimized through engine redesign and calibration to provide 

additional CO2 reductions. 

This approach will promote greater use of alternative fuels, as compared to a situation where 

there is no usage requirement. This is also consistent with EPA’s overall commitment to the 

expanded use of renewable fuels under the rules implementing section 211 of the Act. 

Therefore, for these additional reasons, EPA is basing the FFV program for MYs 2016 and 

thereafter on real-world reductions: i.e., actual vehicle CO2 emissions levels based on actual use 

of the two fuels, without the 0.15 conversion factor specified under EISA. 

EPA received a few comments that the credits based on the EPCA methodology should be 

allowed through MY2019, as they are in the CAFE program. As noted above, EPA included 

FFV credits based on the EPCA methodology for the early years of the program because some 

manufacturers have already incorporated the credits into their near-term product plans and to not 

allow them could be very disruptive. As part of providing needed lead time, EPA believes it is 

appropriate not to undermine this legitimate reliance by manufacturers and so to allow FFV 

credits based on the EPCA methodology for a limited, needed period. By MY 2016, 

manufacturers will have sufficient time to plan to meet standards without generating further FFV 

credits based on the EPCA methodology. EPA believes it is important to transition to a 

methodology that bases FFV emissions values on the actual use of the fuel and the actual 

emissions of the vehicle when operated on the fuel. Unlike EPCA, CAA section 202(a) (1) does 

not mandate that EPA treat FFVs in a specific way. Instead EPA is required to exercise its own 

judgment and determine an appropriate approach that best promotes the technology-based, 

emission reduction goals of this CAA section. Under these circumstances, EPA will treat FFVs 

for model years 2012-2015 the same as under EPCA, as part of providing sufficient lead time 

given manufacturers’ compliance strategies which rely on the existence of these EPCA statutory 

credits, as explained above. Several commenters supported EPA’s proposed approach for 

MY2016 and later. 

EPA received comments that EPA should restrict banking, transferring or trading MY2012-2015 

credits because the credits do not represent actual GHG reductions. EPA did not propose or 

request comment on such restrictions and has not adopted any credit restrictions for FFV credits. 

EPA believes that retention of such banking, transferring and trading of credits is needed through 

MY 2015 for the same reason that the credits themselves need to be retained. Manufacturers 

have indicated reasonably that these strategies incorporating such credits are already part of their 

compliance strategies, and that they cannot readily change course. Thus, in order to provide 

needed lead time in the first program model years, EPA is not altering banking, trading, and 

transferring of these credits. 

Sierra Club submitted comments urging EPA to consider not giving credits for E-85 

consumption for MY2016 and later. Sierra Club commented “fuel volumes are mandated under 

RFS2 and the fuel is otherwise subsidized through other policies. The cost to automakers to 

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produce FFVs is nominal and need not be incentivized through vehicle program with the 

potential cost of increased greenhouse gas emission.” As noted above, GHG compliance values 

will be based on actual emissions performance of the FFV on conventional and alternative fuels, 

weighted by the actual use of these fuels in the FFVs. The only “credit” available to 

manufacturers is through their optimization of the FFV’s emissions performance on the 

alternative fuel and the real-world use of the fuel. 

Comments regarding the use of life-cycle emissions in FFV credits calculations are addressed 

below. Comments regarding FFV credits caps for MY2012-2015 are also addressed below. 

Natural Gas Vehicle Comments 

Organization:NGVAmerica 

Clean Energy Fuels 

Comment: 

NGVAmerica 

NGVAmerica supports EPA’s plan to provide CO2 credits to manufacturers of alternative fueled 

vehicles based on the credit mechanism currently provided for such vehicles under the fuel 

economy regulations. The fuel economy regulations use a factor of 0.15 for alternative fuel 

vehicles. Under EPA’s proposal, this same factor would be used to reduce the greenhouse gas 

emissions output of alternative fuel vehicles, thus enhancing the potential credits that such 

vehicles could earn. The proposed GHG regulations would provide the enhanced credits for 2012 

– 2015 after which time they would no longer be provided for flex-fueled or dual-fueled 

alternative fuel vehicles. In fact, starting in 2016, EPA only take into account the emission 

benefits of flex-fueled or dual-fueled alternative fuel vehicles if the manufacturer can verify or 

appropriately estimate the level of alternative fuel utilization in its alternative fuel vehicles. 

Dedicated alternative fueled vehicles, however, would be assumed to operate on alternative fuel 

since they can only operate on one fuel. Thus, dedicated vehicles would continue to earn credits 

based on their use of alternative fuel but they would no longer benefit from the enhanced credits 

provided in years 2012 – 2015. [OAR-2009-0472-7236.1, p.9] 

We support EPA’s proposed enhanced credits for 2012 - 2015 but note that these credits do not 

apply to the caps imposed on CH4 and N2O emissions. As we understand the current proposal, 

the enhanced credits only apply with respect to CO2 emissions. Thus, the cap on methane 

emissions, unless changed, would still be a burden on manufacturers and potentially limit the 

introduction of some NGVs. Assuming our concerns regarding the caps are addressed, we 

believe the credit program and the added incentive provided for alternative fuel vehicles could 

encourage manufacturers to increase their NGV offerings. If EPA adopts a CO2-equivalent 

approach for all vehicles, the enhanced greenhouse gas emission credits for alternative fuel 

vehicles should be based on the average of the three pollutants multiplied by 0.15. If EPA as an 

alternative only provides a CO2-equivalent approach for NGVs and other alternative fuel 

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vehicles, we advocate that the factor of 0.15 be applied only against the CO2 emissions of NGVs 

for purposes of the greenhouse gas credit program. [OAR-2009-0472-7236.1, p.9] 

NGVAmerica also believes the proposal regarding alternative fuel vehicles should be expanded. 

As proposed, the credit program would not provide enhanced incentives for manufacturers of 

NGVs after 2015, and there are no early credits for such vehicles. EPA’s proposal, however, 

would provide incentives for electric vehicles and other advanced technology vehicles until 

2016; it also would provide early credits for such vehicles beginning in 2009. In addition, the 

credits for advanced technology vehicles are structured differently than those for alternative fuel 

vehicles, potentially making them more valuable. The credits assume that electric vehicles 

replace comparable gasoline powered vehicles and operate on electricity. The credit mechanism 

magnifies the benefits of these vehicles by multiplying each produced vehicle by 1.2 – 2.0, so 

that it appears that a manufacturer has produced a larger number of such vehicles for purposes of 

averaging CO2 emissions. [OAR-2009-0472-7236.1, p.10] 

Providing the credits proposed for advanced technology vehicles while not also providing similar 

credits for NGVs is inherently unfair since it is not at all clear that such vehicles will provide 

real-world benefits that are superior to NGVs or even gasoline vehicles when full-fuel cycle 

emissions are considered. As the NAS report indicates, it is not clear that electric and plug-in 

electric vehicles will provide any benefits over higher fuel-efficiency gasoline vehicles. Given 

these factors, we urge EPA to provide the following additional incentives for dedicated and dualfuel NGVs: 1) provide early credits for dedicated vehicles going back to MY 2009 as proposed 

for other vehicles, and 2) extend the enhanced credits using the 0.15 conversion factor for two 

additional model years (2016 – 2017) for manufacturers of dedicated and bi-fuel vehicles 

capable of demonstrating that the vehicles operate a majority of the time on alternative fuel. 

[OAR-2009-0472-7236.1, p.10] 

The current proposal provides enhanced credits for alternative fuel vehicles without any showing 

that such vehicles operate on alternative fuels. These credits are available until 2015 after which 

time enhanced credits are no longer provided and alternative fuel use is only taken into account if 

the manufacturer can demonstrate the alternative fuel is used. We believe an added incentive for 

dedicated vehicles and dual-fuel vehicles that actually use alternative fuel is warranted as a way 

of encouraging manufacturers to increase their offerings of dedicated vehicles and in order that 

they would take a stronger interest in ensuring that the vehicles they make actually operate on 

alternative fuels. Under our proposal, manufacturers of all dedicated vehicles and dual-fuel 

vehicles which are demonstrated to operate more than 50 percent of the time on alternative fuel 

would continue to receive enhanced credits for such vehicles in model years 2016 and 2017. 

[OAR-2009-0472-7236.1, pp.10-11] 

Clean Energy Fuels 

Clean Energy supports EPA's plan to provide CO2 credits to manufacturers of alternative fueled 

vehicles based on the credit mechanism currently provided for such vehicles under the fuel 

economy regulations. The fuel economy regulations use a multiplier of 0.15 to factor the fuel 

economy of alternative fuel vehicles. This same factor would be used to reduce the GHG 

emissions output of alternative fuel vehicles, thus enhancing the potential credits that such 

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vehicles could earn. The proposed GHG regulations would provide the enhanced credits for 2012 

- 2015 after which time they would no longer be provided for FFVs or dual-fueled alternative 

fuel vehicles. In fact, starting in 2016, EPA would no longer take into account the emission 

benefits of FFVs or dual-fueled alternative fuel vehicles unless the manufacturer can verify or 

appropriately estimate the level of alternative fuel utilization in its alternative fuel vehicles. 

Dedicated alternative fueled vehicles, however, would be assumed to operate on alternative fuel 

since they can only operate on one fuel. Thus, dedicated vehicles would continue to earn credits 

based on their use of alternative fuel but they would no longer benefit from the enhanced credits 

provided in years 2012 - 2015. [OAR-2009-0472-7220.1, p.8] 

We support EPA's providing the proposed enhanced credits for 2012 - 2015 but note that these 

credits do not apply to the caps imposed on CH4 and N2O emissions. As we understand the 

current proposal, the enhanced credits only apply with respect to CO2 emissions. Thus, the cap 

on methane emissions, unless changed, would still be a burden on manufacturers and potentially 

limit the introduction of some NGVs. Assuming our concerns regarding the caps are addressed, 

we believe the credit program and the added incentive provide for alternative fuel vehicles could 

encourage manufacturers to increase their NGV offerings. If EPA and NHTSA adopt a CO2e 

approach for all vehicles, the enhanced GHG emission credits for alternative fuel vehicles should 

be based on the average of the three pollutants multiplied by 0.15. If EPA and NHTSA as an 

alternative only provides a CO2e approach for NGVs and other alternative fuel vehicles, we then 

would advocate that the factor of 0.15 be applied only against the CO2 emissions of NGVs for 

purposes of the GHG credit program. [OAR-2009-0472-7220.1, p.8] 

Clean Energy also believes the proposal regarding alternative fuel vehicles should be expanded. 

As proposed, the credit program would not provide enhanced incentives for manufacturers of 

NGVs after 2015, and there are no early credits for such vehicles. EPA's and NHTSA's proposal, 

however, would provide incentives for electric vehicles and other advanced technology vehicles 

until 2016; it also would provide early credits for such vehicles beginning in 2009. In addition, 

the credits for advanced technology vehicles are structured differently than those for alternative 

fuel vehicles, potentially making them more valuable. The credits assume that electric vehicles 

replace comparable gasoline powered vehicles and operate on electricity. The credit mechanism 

magnifies the benefits of these vehicles by multiplying each produced vehicle by 1.2 - 2.0, so 

that it appears that a manufacturer has produced a larger number of such vehicles for purposes of 

averaging CO2 emissions. [OAR-2009-0472-7220.1, pp.8-9] 

Providing the credits proposed for advanced technology vehicles while not also providing similar 

credits for NGVs is inherently unfair since it is not at all clear that such vehicles will provide 

real-world benefits that are superior to NGVs or even gasoline vehicles when full-fuel cycle 

emissions are considered. As the NAS report indicates, it is not clear that electric and plug-in 

electric vehicles will provide any benefits over higher fuel-efficiency gasoline vehicles. Given 

these factors, we urge EPA to provide the following additional incentives for dedicated and dualfuel NGVs: 1) provide early credits for dedicated vehicles going back to MY 2009 as proposed 

for other vehicles, and 2) extend the enhanced credits using the 0.15 conversion factor for two 

additional model years (2016 - 2017) for manufacturers of dedicated and bi-fuel vehicles capable 

of demonstrating that the vehicles operate a majority of the time on alternative fuel. [OAR-2009­

0472-7220.1, p.9] 

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The current proposal provides enhanced credits for alternative fuel vehicles without any showing 

that such vehicles operate on alternative fuels. These credits are available until 2015 after which 

time enhanced credits they are no longer provided and alternative fuel use in only taken into 

account if the manufacturer can demonstrate the alternative fuel is used. We believe an added 

incentive for dedicated vehicles and dual-fuel vehicles that actually use alternative fuel is 

warranted as a way of encouraging manufacturers to increase their offerings of dedicated 

vehicles and in order that they would take a stronger interest in ensuring that the vehicles they 

make actually operate on alternative fuels. Under our proposal, manufacturers of all dedicated 

vehicles and dual-fuel vehicles which are demonstrated to operate more than 50 percent of the 

time on alternative fuel would continue to receive enhanced credits for such vehicles in model 

years 2016 and 2017. [OAR-2009-0472-7220.1, p.9] 

[[Clean Energy also submitted these comments as testimony at the Detroit public hearing, See 

docket number EPA-HQ-OAR-2009-0472-6185, pp. 139-140.]] 

EPA Response: 

The commenters are requesting additional credits for natural gas vehicles, and suggest extending 

the use of the 0.15 factor discussed above for MY2012-2015, to additional model years. EPA is 

retaining the use of the 0.15 factor for FFVs, dual-fuel vehicles, and alternative fuel vehicles 

through MY 2015 as proposed. Natural gas vehicles will be eligible for these credits. As 

described above, EPA is not extending the use of the 0.15 factor beyond MY2015. EPA did not 

expand the advanced technology vehicle credits to cover other technologies beyond PHEVs, 

EVs, and fuel cell vehicles for reasons described in Section 5.7.3 of this RTC and Section III.C.3 

of the preamble to the final rule. EPA also does not believe that it would be appropriate to create 

a unique credit opportunity for natural gas vehicles by extending the use of the 0.15 factor for 

natural gas vehicles beyond the MYs 2012-2016. Several commenters strongly supported EPA 

moving away from using this factor as soon as possible because the factor is not based on actual 

emissions reductions. 

The commenter also raises an issue regarding the interplay between standards for N2O and CH4 

and credit generating opportunities if compliance is measured on a CO2-equivalent basis. As 

discussed in Section 5.5 and Section III.B.7. of the preamble to the final rule, EPA is allowing 

manufacturers to comply with N2O and CH4 standards on a CO2 equivalent basis. The 

commenter states that “if EPA adopts a CO2-equivalent approach for all vehicles, the enhanced 

greenhouse gas emission credits for alternative fuel vehicles should be based on the average of 

the three pollutants multiplied by 0.15.” EPA believes the commenter meant the sum rather than 

the average of the three pollutants. In response, manufacturers must apply the 0.15 factor to only 

the CO2 emissions value and not to the N2O and CH4 CO2-equivalent values when summing the 

emissions under the FFV credits provisions. Applying the 0.15 factor to CH4 and N2O emissions 

under the CO2 equivalent approach (thereby reducing the emissions values by 85 percent) would 

provide the manufacturer with credits not envisioned in the proposal and not included in the 

CAFE program, and would result in the loss of feasible, cost-effective emissions reductions. 

Moreover, any credits under this rule for N20 or CH4 reductions are not justified, since the 

standards themselves are no-backsliding caps, and credits should only be earned for performance 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

which surpasses some benchmark representing good performance. See Section III.B.7 to the 

preamble to the final rule. Although EPA is not extending the use of the 0.15 factor to model 

years other than 2012-2016, natural gas vehicle manufacturers are eligible to earn early credits if 

they meet the requirements of the early credits program being adopted. 

Biofuels Life-cycle Emissions Comments 

Organization:Georgia-Pacific (GP) 

American Forest and Paper Association (AF&PA) 

 Dinter, Bridget 

 Schade, Michael 

Comment: 

Georgia-Pacific (GP) 

Tailpipe Emission Standards Should Exempt CO2 from Combustion of Biomass derived Fuels. 

If EPA nevertheless promulgates GHG tailpipe emission standards, those emission standards 

should recognize that CO2 emissions from the combustion of fuels derived from biomass 

(“biofuels”), because of the principle of carbon neutrality and best Carbon accounting practices, 

do not contribute to climate change and should not be counted against the proposed grams per 

mile emission standards. This would (1) make the GHG tailpipe emission standards consistent 

with the endangerment that the standards are supposed to be mitigating and (2) encourage the 

substitution of renewable fuels for fossil fuels, which EPA already is seeking to accomplish 

through other provisions in the proposed Tailpipe Rule. In fact, since the carbon-neutral motor 

vehicle emissions of CO2 from biofuels do not contribute to the increase in atmospheric CO2 

concentrations which constitute the public endangerment in EPA’s view, EPA lacks a statutory 

basis for restricting motor vehicle CO2 emissions to the extent that they result from use of 

biofuels. 

[See Docket Number OAR-2009-0472-7122.1, pp.6-9 for detailed comments pertaining to: 

Biofuel Combustion Is Carbon-Neutral and EPA Must Account for the CO2-Neutrality of 

Biofuels To Be Consistent With Its Endangerment Finding] 

American Forest and Paper Association (AF&PA) 

Tailpipe Emission Standards Should Exempt CO2 from Combustion of Biomass-derived Fuels 

If, despite the reasons set forth above, EPA nevertheless promulgates GHG tailpipe emission 

standards, those emission standards should recognize that CO2 emissions from use of fuels 

derived from biomass (“biofuels”), because of the principle of carbon neutrality and best carbon 

accounting principles, do not contribute to climate change and should not be counted against the 

proposed grams/mile emission standards. This would (1) make the GHG tailpipe emission 

standards consistent with the endangerment that the standards are supposed to be mitigating and 

(2) encourage the substitution of renewable fuels for fossil fuels, which EPA already is seeking 

to accomplish through other provisions in the proposed GHG tailpipe standards. In fact, since the 

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EPA Response to Comments 

carbon-neutral motor vehicle emissions of CO2 from biofuels do not contribute to the increase in 

atmospheric CO2 concentrations which EPA has proposed to find endangers public health and 

welfare, EPA would lack a statutory basis for restricting motor vehicle CO2 emissions to the 

extent that they result from use of biofuels. [OAR-2009-0472-7126.1, p.5] 

[See Docket Number OAR-2009-0472-7126.1, pp.6-9 for detailed comments pertaining to: 

Biofuel Combustion Is Carbon-Neutral, EPA Must Account for the CO2-Neutrality of Biofuels 

To Be Consistent With Its Endangerment Finding, and The Proposed GHG Tailpipe Standards 

Could Be Modified To Recognize Biofuel CO2-Neutrality] 

Weber, David 

There is no mention in the test procedure of a factor for bio-derived fuels. For example, there 

needs to be some allowance for OEM's to make arrangements to sell B100 diesel trucks to fleets 

and that the fuel economy number should count a B100 diesel truck as a zero CO2 g/mi vehicle. 

This would need for the fleet owner to sign a written contract that he will only use the truck with 

B100 fuel for the life of the vehicle. 

If CO2 g/mi is a metric that is important, then the metric should actually be non-renewable (& 

verifiable) CO2 g/mi. That is, B100 usage should count as zero CO2 g/mi. If energy dependency 

is important, then biodiesel will be more home-grown, so the balance of trade will be improved. 

[OAR-2009-0472-1410, pp. 2] 

Dinter, Bridget 

I support the overall goal of greenhouse gas reduction, but find that the alternative fuel credit 

program proposed by the EPA has a serious flaw. This flaw is that the credit program only 

considers the emissions of the vehicle without regard to the emissions created by production of 

the fuel for the vehicle. [OAR-2009-0472-7250.1, p. 1] 

The credit program designed by the EPA must be changed to include emissions involved in the 

production of alternative fuels. The current program only considers emissions that come directly 

from the vehicle as shown by the proposal’s statement that, “...the CO2 emissions of FFV’s will 

be represented by the average of two things: the CO2 emissions while operating on gasoline, and 

the CO2 emissions operating on the alternative fuel multiplied by 0.15” 74 Fed. Reg. at 49,780. 

Calculating the carbon emissions in this manner is inaccurate because it does not take into 

account the difference in carbon emissions in production of the fuels. Because of this inaccurate 

calculation method, the credit program creates incentives to produce vehicles that will lead to an 

overall increase in carbon emissions. [OAR-2009-0472-7250.1, p. 1] 

The EPA must consider the emission of carbons in the production of alternate fuels when giving 

alternative fuel credits or the overall emissions of carbon and other harmful pollutants may 

increase. A popular alternative fuel is corn ethanol. Under the current EPA proposal 

manufacturers of vehicles that run on corn ethanol will receive credits for emitting fewer 

greenhouse gases, but corn ethanol actually is worse for the environment than gasoline. In the 

article Total versus urban: Well-to-wheels assessment of criteria pollutant emissions from 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

various vehicle/fuel systems, researchers studied the overall carbon emissions of alternative fuels 

versus gasoline. Even though the researchers assumed future technological advancement in 

ethanol production, the study found that using vehicles run on corn ethanol instead of vehicles 

run on gasoline would result in significantly higher carbon emissions associated with use of 

vehicles. In addition to emitting more carbon, corn ethanol fueled vehicles emit 17-23% more 

volatile organic compounds, have up to 143% more emissions of PM�2.5, and have significantly 

greater NOx emissions (Hong, 1800-1802). The researchers who published Climate change and 

health costs of air emissions from biofuels and gasoline agree that corn ethanol would increase 

carbon and other dangerous emissions. Comparing combined climate change and health costs 

from emissions of gasoline run vehicles and those of corn ethanol run vehicles, these researchers 

found that corn ethanol vehicles always incurred larger costs. The combined climate change and 

health costs for gasoline run vehicles is $469 million while corn ethanol run vehicles have a 

combined climate change and health cost ranging from $472 million to $952 million depending 

on production methods. These studies make it very apparent that using corn ethanol as a fuel 

alternative would cause an increase in carbon emissions and other harmful emissions. This is 

why the EPA must rewrite the proposal to take into account the production emissions of fuels 

when determining whether or not to award credits for flexible fuel vehicles. [OAR-2009-0472­

7250.1, pp. 1-2] 

The EPA’s current proposal for vehicle emission standards contains a credit program to reward 

companies that invest in alternative fuel vehicles. This program is flawed because it does not 

have measures to insure that the alternative fuels decrease carbon emissions when considering 

production of fuels. If the EPA does not take measures to ensure that credits are only given to 

alternative fuels that will not cause more harm than gasoline, these fuel emission standards will 

only lead to greater environmental degradation. This is why the EPA must investigate alternative 

fuels to ensure that these fuels will not worsen the environment before giving the automobile 

manufacturers incentives to create vehicles that use them. [OAR-2009-0472-7250.1, p. 2] 

Schade, Michael 

The premise that the contained renewable ethanol is completely free of net carbon emissions is 

part of the E85 example calculation. Has the heavy energy input to the crop production, 

conversion to ethanol, and transportation of raw materials and ethanol been premised to be zero? 

If yes, should a pragmatic estimate of those energy inputs and their carbon content be included as 

a partial offset to the premised E85 net carbon benefit? [OAR-2009-0472-7261.1, pp. 5] 

EPA Response: 

Georgia-Pacific and the American Forest & Paper Association commented that EPA’s emission 

performance methodology should include lifecycle GHG emission reductions associated with 

biofuel use. Furthermore, if vehicles are fueled with biofuels that do not contribute to climate 

change, then they should not be counted against the gram/mile tailpipe emission standards. 

Citizens Bridget Dinter and Michael Schaede commented that EPA should include the lifecycle 

performance of biofuels in its final FFV credit program and consider the fact that that not all E85 

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EPA Response to Comments 

has the same lifecycle GHG performance, e.g., ethanol made from corn versus cellulosic 

biomass. 

EPA believes that tailpipe emissions from all vehicles including those fueled by biofuels must be 

controlled under the standards established by this rule regardless of upstream emissions. After 

considering these comments, EPA is not including the lifecycle GHG performance of biofuels 

(e.g., E-85 and B100) in its tailpipe emission standards or its FFV credit program. EPA 

recognizes that every motor vehicle fuel and fuel production process has unique upstream GHG 

emissions impacts, but fuel life-cycle GHG emissions impacts are beyond the scope of this 

rulemaking. EPA believes that tailpipe emissions from all vehicles including those fueled by 

biofuels must be controlled under the standards established by this rule regardless of upstream 

emissions. EPA has wide discretion under section 202(a)(1) and has chosen to first focus on 

vehicle tailpipe GHG emissions, both because tailpipe emissions are the largest single source of 

vehicle life-cycle GHG emissions, and because the EPA motor vehicle program has traditionally 

focused on tailpipe emissions. In addition, the nation is already on track for increasing biofuel 

use in response to the Energy Independence and Security Act of 2007 (EISA). EISA set 

aggressive biofuel targets reaching 36 billion gallons of renewable fuel by 2022, 21 billion 

gallons of which are advanced second-generation biofuels. The potential lifecycle GHG benefits 

associated with increased biofuel usage are already captured under EPA’s recently-finalized 

RFS2 program and therefore should not be double-counted under today’s Light-Duty Vehicle 

GHG program. Not only will it be challenging enough for automakers to demonstrate FFV E85 

usage, the fungible nature of the fuel distribution system will make it difficult to determine the 

feedstocks used to make the biofuel portion of the fuel. And since the RFS2 rule already 

requires refiners and importers to blend an increasing amount of advanced biofuels into their fuel 

(e.g., cellulosic ethanol), the improved lifecycle performance of E85 is already captured under 

that program. 

EPA’s authority to adopt emissions standards under section 202(a)(1) is not limited to motor 

vehicles powered by fuels other than biofuels. Vehicles operating on biofuels do emit GHGs, 

and as discussed in the preamble, from a lifecycle perspective biofuels such as ethanol are not 

carbon neutral in the sense the commenter uses. EPA’s recently promulgated Renewable Fuel 

Standard Program shows that, when you take into account aggregate lifecycle emissions 

including non-tailpipe GHG emissions (such as feedstock growth, transportation, fuel 

production, and land use), ethanol from corn using advanced production technologies emits 

about 20 percent less GHG than gasoline from oil.10 

EPA considered the issue of upstream emissions and aggregate lifecycle GHG emissions of 

vehicles in the context of compliance values to use for vehicles that operate in whole or in part 

on electricity, as well as flex fuel vehicles (such as vehicles that operate on either gasoline or E85). See preamble section III.C.3. From this it is appropriate to include biofuel-powered 

vehicles in the emissions standards, and to assign their measured tailpipe emissions of GHGs as 

their compliance value for purposes of this rulemaking. They do emit GHGs as tailpipe 

emissions, and their aggregate lifecycle emissions are not very different from the gasoline or 

diesel they replace. The renewable fuel program already provides a mandate for increased use of 

10 Regulation of Fuels and Fuel Additives: Changes to Renewable Fuel Standard Program (75 FR 14670, March 26, 

2010) 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

such biofuels, and a change in the emissions standards in this rulemaking is not needed to 

provide an additional incentive. The FFV credit in place through MY2015 already provides an 

incentive for manufacturers to produce vehicles capable of using a biofuel, and this rulemaking 

is directed at automobile manufacturers and what they can do, not the operators of the vehicle 

who actually choose whether to use the biofuel. Changing the emissions standards for vehicles 

that use biofuels would not likely change how much biofuels are actually used. For example, 

data show that, on average, FFVs operate on gasoline over 99 percent of the time, and on E85 

fuel less than 1 percent of the time.11 This has occurred notwithstanding the CAFE credit for 

FFVs. 

This is also fully consistent with the endangerment and contribution findings. EPA included all 

motor vehicles emissions in calculating emissions for purposes of the contribution finding, and 

did not exclude emissions from vehicles operated by biofuels. In addition, the content or form of 

the emissions control to follow under section 202(a)(1) was not relevant to the determination that 

the air pollution of atmospheric concentrations of GHGs endanger public health and welfare. 

Single Fleet-wide Cap Comments 

Organization:Honda Motor Company 

Association of International Automobile Manufacturers (AIAM) 

Comment: 

Honda Motor Company 

In the preamble, EPA and NHTSA state the intention of this regulation “...is to set forth a 

carefully coordinated and harmonized approach to implementing these two statutes.” While 

harmonization is good, clearly the intent is not to make the regulations identical. EPA has sought 

to increase flexibility wherever possible, and this is often not the case where NHTSA is 

constrained by statute. Flexible Fuel Vehicle (“FFV”) credits is one such case. EPA 

acknowledges that OEMs have relied in their planning on credits associated with FFVs, and is 

therefore planning to allow FFV credits through 2015, and thereafter intending to allow FFV 

credits only where fuel use can be proven. EPA’s credit limits for FFVs (Table III.C.2-1) 

continue NHTSA’s statutory-requirement to limit FFV credits by Car and Truck fleets. 

[NHTSA-2009-0059-0095.1, p.5] 

Since EPA is not required to follow NHTSA’s statutory limits and EPA is interested in 

maximizing flexibility, Honda recommends that each OEM be allowed to maximize its FFV 

credits on a fleet-wide basis. Each OEM could calculate its own car & truck fleet mix and apply 

this to the limits described in the aforementioned table. In the case where an OEM has a 70% 

mix of passenger cars and a 30% mix of light trucks in MY2012, an OEM could determine its 

fleet-wide credit limits as follows: 

11 EPA 2010, Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis, Section 1.7.4. EPA-420-R10-006. February 2010. Docket EPA-HQ-OAR-2009-0472-11332 

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EPA Response to Comments 

70% x 9.8 g/mile (car FFV credit limit in 2012) + 30% x 17.9 g/mile (truck FFV credit limit in 

2012) 

This approach enables Honda to offer E85 models that make the most sense for customers and 

their interest in fuel use. For example, by focusing exclusively on E85 trucks, Honda can 

maximize its E85 market and the potential for actual E85 fuel use. [NHTSA-2009-0059-0095.1, 

p.5] 

Association of International Automobile Manufacturers (AIAM) 

Under the proposal, flexible fuel vehicle (FFV) credit caps are applied separately to each 

manufacturer’s car and truck fleet. In the case of the CAFE standards, this approach is required 

by statute. The effect of the separate caps is to require manufacturers to market FFVs in both 

fleets if they want to earn the maximum credit. However, the marketability of FFVs varies 

depending on such factors as the local availability of refueling infrastructure and the type of 

vehicle. AIAM urges EPA to establish a single cap for all FFVs and allow manufacturers to 

allocate the credit between their car and truck fleet as they deem most appropriate. By 

eliminating the separate caps, manufacturers would receive enhanced compliance flexibility 

while reducing consumer cost impacts. We recognize that our recommendation would involve 

reduced harmonization between the CAFE and greenhouse gas programs, but in this case the 

flexibility benefits outweigh the loss in harmonization. We would support a legislative 

amendment that would allow the same approach to be taken with regard to the CAFE program. 

[OAR-2009-0472-7123.1, p.15] 

EPA Response: 

EPA understands the comments that allowing manufacturers to combine their car and truck fleets 

into a single fleet for purposes of generating MY2012-2015 FFV standards would give them 

more flexibility to target their FFVs to the market segments they believe are most likely to use E85. EPA also agrees that although this is not allowed under EPCA, the CAA would allow EPA 

discretion to structure the program in this way. However, the lead time concerns that persuaded 

EPA to replicate the EPCA FFV credits in the GHG rule through MY 2015 result from 

manufacturers’ reliance on the EPCA regime, which does not include these additional 

flexibilities. 

Additional Comments 

Organization: Ford Motor Company 

Chrysler Group LLC (Chrysler) 

Comment: 

Ford Motor Company 

FFV Credits 

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Ford supports the inclusion of FFV credits in the EPA program. The Energy Independence and 

Security Act of 2007 (EISA) defines the credits allowed in the CAFE program. Ford agrees with 

EPA that by calculating the FFV CO2 credit limit based on the individual manufacturer standards 

calculated from the footprint curves tracks more closely to the CAFE FFV credit limits. In order 

to harmonize the EPA and NHTSA programs to the greatest extent possible, Ford does not 

support the use of the proposed FFV CO2 Standard Credit Limits for cars and trucks shown in 

Table III.C.2-1 of the preamble. Rather, to ensure that the proper amount of credit is allocated to 

a manufacturer, Ford recommends adoption of the calculated method for the FFV CO2 credit 

limit. 

FFV Credits-Demonstration of Alternative Fuel Usage / Ratio of Operation 

Ford urges the agencies to provide manufacturers with flexibility in demonstrating alternative 

fuel use and ratio of operation, and agrees that the 'top-down' approach described in the preamble 

of the proposed rule is reasonable and should be retained. This method, which uses national 

alternative fuel use data coupled with a VMT analysis using the EPA Motor Vehicle Emission 

Simulator model to determine the ratio of alternative fuel and base fuel for new vehicles being 

sold, is the most cost-effective and least error-prone option. A cost-effective alternative is 

essential to provide manufacturers with adequate incentives to continue producing FFVs (which 

may have difficulties and/or additional cost in meeting certain requirements). Allowing the use 

of national alternative fuel use data would eliminate the expense of adding an on-board data 

collection system, as well as the difficulty of accessing such systems and the chance of errors in 

gathering the data. 

Of course, the addition of a fuel-use requirement only serves to penalize the automobile 

manufacturers for the lack of an adequate E85 fueling infrastructure. The agencies should 

institute additional programs to promote the availability of E85 at filling stations around the 

country, so that consumers will be able to take full advantage of the flex-fuel capabilities of the 

many FFVs on the road. 

Ford also recommends that differences in refueling frequency of newer and older FFVs be 

accounted for. Awareness of FFV capability (and therefore likelihood of refueling) is higher for 

current models than older models, and will increase further as the alternative fuel becomes more 

available. Therefore, these newer vehicles should be given appropriately larger portion of the 

alternative fuel use credit. This portion or amount could be determined by EPA with surveys of 

current and past FFV customers as well as other analysis. [OAR-2009-0472-7082.1, pp. 8-9] 

Chrysler Group LLC (Chrysler) 

Chrysler supports the inclusion of flexible fuel and alternative fuel vehicle incentives. These 

incentives encourage manufacturers to continue production of vehicles capable of running on 

alternative fuels as the production and distribution systems of such fuels are developed. The 

lower carbon intensity of such fuels is an opportunity for further greenhouse gas reductions and 

increased energy independence. The continuance of such incentives recognizes the important 

potential of this technology to reduce GHGs. [NHTSA-2009-0059-0124, p.35] 

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However, Chrysler is concerned that the proposed flexible fuel and alternative fuel vehicle 

credits are not harmonized between the EPA and NHTSA programs. The EPA flexible fuel 

vehicle greenhouse gas credits are capped in a manner inconsistent with NHTSA's CAFE 

program. The caps result in more stringent greenhouse gas standards than CAFE standards. 

[NHTSA-2009-0059-0124, p.35] 

EPA Response: 

Credit Limits 

The FFV credit limits for CAFE are 1.2 mpg for model years 2012-2014 and 1.0 mpg for model 

year 2015.12 In CO2 terms, these declining FFV credit limits translate to declining CO2 credit 

limits over the four model years. As the CAFE standard increases numerically, the credit limit 

becomes a smaller fraction of the standard. EPA proposed, but is not adopting, credit limits 

based on the overall projected industry average CO2 standards for cars and trucks. EPA also 

requested comments on basing the calculated CO2 credit limits on the individual manufacturer 

fleet-average standards calculated from the footprint curves. Ford commented supporting this 

approach and also in support of harmonizing with CAFE to the greatest extent possible. EPA 

also received comments from Chrysler recommending that the credit limits for an individual 

manufacturer be based instead on that manufacturer’s fleet average performance. The 

commenter noted that this approach is in line with how CAFE FFV credit limits are applied. 

This is due to the fact that the GHG-equivalent of the CAFE 1.2 mpg cap will vary due to the 

non-linear relationship between fuel economy and GHGs/fuel consumption. EPA agrees with 

Chrysler’s suggested approach since it best harmonizes how credit limits are determined in 

CAFE and is needed to address issues of lead time, as explained above.. EPA intended and 

continues to believe it is appropriate to provide essentially the same FFV credits under both 

programs for MYs 2012-2015. Therefore, EPA is finalizing FFV credits limits for MY2012­

2015 based on a manufacturer’s fleet-average performance. For example, if a manufacturer’s 

2012 car fleet average emissions performance was 260 g/mile (34.2 mpg), the credit limit in CO2 

terms would be 9.5 g/mile (34.2 mpg – 1.2 mpg = 33.0 mpg = 269.5 g/mile) and if it was 270 

g/mile the FFV credit limit would be 10.2 g/mile. 

Methodology for MY2016 and Later Demonstration of Actual Alternative Fuel Usage 

In the proposal, EPA considered an option of establishing a rebuttable presumption using a “topdown” approach based on national E-85 fuel use to assign credits to FFVs sold by manufacturers 

under this program. For example, national E-85 volumes and national FFV sales could be used 

to prorate E-85 use by manufacturer sales volumes and FFVs already in-use. EPA would 

conduct an analysis of vehicle miles travelled (VMT) by year for all FFVs using its emissions 

inventory MOVES model. Using the VMT ratios and the overall E-85 sales, E-85 usage could 

be assigned to each vehicle. This method would account for the VMT of new FFVs and FFVs 

already in the existing fleet using VMT data in the model. The model could then be used to 

determine the ratio of E-85 and gasoline for new vehicles being sold. Fluctuations in E-85 sales 

and FFV sales would be taken into account to adjust the credits annually. 

12 49 U.S.C 32906 (a). 

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Ford commented in support of this type of methodology and recommended “that differences in 

refueling frequency of newer and older FFVs be accounted for. Awareness of FFV capability 

(and therefore likelihood of refueling) is higher for current models than older models, and will 

increase further as the alternative fuel becomes more available. Therefore, these newer vehicles 

should be given appropriately larger portion of the alternative fuel use credit. This portion or 

amount could be determined by EPA with surveys of current and past FFV customers as well as 

other analysis.” EPA is finalizing its intention to conduct a top-down analysis upon written 

request. EPA will consider Ford’s comments regarding vehicle refueling frequency in conducting 

this analysis, with the understanding that VMT and refueling frequency are closely related. 

EPA understands that Ford would like EPA to promote the availability of E-85 refueling stations. 

However, these comments regarding refueling infrastructure are beyond the scope of this 

rulemaking. 

5.7.3 Advanced Technology Vehicle Incentives for Electric Vehicles, Plug-in Hybrids, and 

Fuel Cells 

In the proposal, EPA stated the following: “EPA is proposing additional credit opportunities to 

encourage the early commercialization of advanced vehicle powertrains, including electric 

vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCVs). These 

technologies have the potential for more significant reductions of GHG emissions than any 

technology currently in commercial use, and EPA believes that encouraging early introduction of 

such technologies will help to enable their wider use in the future, promoting the technologybased emission reduction goals of section 202(a)(1) of the Clean Air Act.” 

Specifically, EPA proposed two mechanisms by which advanced technology vehicles could earn 

credits: 1) a zero grams/mile compliance value for EVs, FCVs, and PHEVs when operated on 

grid electricity, and 2) a vehicle multiplier in the range of 1.2 to 2.0. EPA requested comment on 

providing some type of incentive for advanced technology vehicles, the appropriateness of both 

the zero grams/mile and vehicle multiplier incentive mechanisms, and on any alternative 

approaches for addressing advanced technology vehicle incentives. 

EPA received significant public comment on this issue. Most of the commenters responded 

directly to EPA’s request and focused their comments on the proposed zero grams/mile and 

vehicle multiplier mechanisms. Accordingly, there is significant overlap among the comments 

on this issue, and the structure of this section is to provide a comprehensive sampling of excerpts 

of 49 of the most detailed public comments on this topic (in Section 5.7.3.1), in alphabetical 

order, followed by an EPA response to the comments organized into 4 sections: 

 Whether to provide an incentive for advanced technology vehicles (Section 5.7.3.1) 

 The zero grams/mile compliance value for EVs, FCVs, and PHEVs when operated on 

grid electricity (Section 5.7.3.2) 

 The vehicle multiplier (Section 5.7.3.3) 

 Miscellaneous issues related to the advanced technology vehicle incentive program 

(Section 5.7.3.4) 

5.7.3.1 Comments 

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Organization: 

Alliance of Automobile Manufacturers (Alliance) 

American Council for an Energy Efficient Economy 

BMW of North America, LLC (BMW) 

BorgWarner 

California Air Resources Board 

Chew, Yuli 

Chrysler Group LLC (Chrysler) 

Clean Energy Fuels 

Cummins Inc. 

Ecology Center 

Energy, Environmental & Public Utility Practice Group 

Environment Michigan 

Environment New Jersey 

Environmental Defense Fund 

eTec 

Fisker Automotive, Inc. 

Ford Motor Company 

Glasser, Mark 

Honda Motor Company 

Honeywell Transportation Systems 

Hyundai Motor Company 

International Council on Clean Transportation 

Investor Network on Climate Risk 

Karplus, Valerie J. 

Massachusetts Department of Environmental Protection 

Mercedes-Benz (Daimler AG) 

Mitsubishi Motors R & D of America (MRDA) 

Motor and Equipment Manufacturers Association 

National Association of Clean Air Agencies (NACAA) 

National Automobile Dealers Association (NADA) 

Natural Resources Defense Council 

New York State Department of Environmental Conservation 

New York University School of Law, Institute for Policy Integrity (IPI) 

Nissan North America 

Northeast States for Coordinated Air Use Management 

Physicians for Social Responsibility, Los Angeles 

Public Citizen and Safe Climate Campaign 

SABIC Innovative Plastic 

Sierra Club 

South Coast Air Quality Management District 

State of New Jersey 

State of Washington Department of Ecology 

Toyota Motor North America 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Union of Concerned Scientists 

United Auto Workers 

University of California, Santa Barbara, Bren Working Group on Vehicle Fuel Economy 

University of Pennsylvania, Environmental Law Project 

U.S. Coalition for Advanced Diesel Cars 

Volkswagen Group of America (Volkswagen) 

Comment: 

Alliance of Automobile Manufacturers (Alliance) 

Tailpipe CO2 from EVs and the Electric-Only Portion of PHEVs/EREVs 

EPA proposes to include EVs in the fleet average calculation at a rate of zero g/mi. EPA likewise 

proposes to include as zero g/mi of CO2 the electric portion of PHEVs, EREVs, and fuel cell 

vehicles. 74 Fed. Reg. 49,533-4. The Alliance supports this approach since customers need to 

receive a clear signal that they have made the right choice by preferring an EV, PHEV or EREV. 

However, the Alliance recognizes the need for a comprehensive approach with shared 

responsibility in order to achieve an overall carbon reduction. [OAR-2009-0472-6952.1, p. 29] 

Advanced Technology Vehicle Credit Multiplier 

EPA has taken into consideration the additional effort that manufacturers will take in introducing 

Advanced Technology Vehicles (ATVs) to the public. 74 Fed. Reg. 49,533. It is also extremely 

important that this multiplier be treated the same for all ATVs; the battery electric 

vehicles, extended range electric vehicles, plug-in hybrid electric vehicles and fuel cell vehicles 

EPA mentions in the NPRM. Moreover, the hydrogen internal combustion engine vehicle should 

also be included as an advanced technology vehicle covered by the multiplier. This technology is 

under development by some manufacturers today and has zero CO2 emissions. The H-ICE 

vehicle needs to receive the same credit multiplier and advanced technology vehicle treatment to 

prevent EPA from showing technology preferences or limiting possible technologies. [OAR2009-0472-6952.1, pp.29-30] 

Considering all of the issues and challenges to introduce ATVs, the 2.0 multiplier is needed 

longer than a single model year. Instead of decreasing the ATV multiplier by a factor of 0.2 each 

year, with the multiplier completely phased out by the 2017 model year, EPA should maintain a 

2.0 credit multiplier until ATVs make a 10% penetration into the vehicle market. Without this 

penetration level, it will be impossible for the true environmental benefits of ATVs to be 

realized. Extending the 2.0 multiplier will make ATV costs more reasonable and promote these 

technologies. [OAR-2009-0472-6952.1, p.30] 

While building ATVs is the responsibility of the automotive industry, it takes more than just 

production for true emissions reductions from ATVs to be realized. It is necessary to have 

fueling and service infrastructure to support these technologies. Customers will not purchase 

ATVs if they can neither fuel them nor have them repaired. Developing and establishing this 

infrastructure for the nation will take a long time -- far more than a single year, or even the time 

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EPA Response to Comments 

frame outlined within this regulation. In fact, when examining all of these issues, a multiplier 

even greater than 2.0 should be considered. [OAR-2009-0472-6952.1, p.30] 

In encouraging these technologies, Congress has repeatedly provided consumers with tax credits 

for their purchase of ATVs. The reason behind these tax credits are to offset the additional cost 

of purchasing an ATV and the environmental benefit each ATV provides. The same reasoning 

holds true to manufacturers: each ATV is very expensive, and manufacturers need the additional 

credits to help offset the expense, especially given the infrastructure challenges, fluctuating fuel 

prices and the resulting difficulty of predicting consumer demand. [OAR-2009-0472-6952.1, 

p.30] 

American Council for an Energy Efficient Economy 

ACEEE does not support the use of Advanced Technology Vehicle (ATV) credits. ATV credits 

would apply weights of greater than one to certain vehicles in calculating manufacturer average 

emissions, in effect crediting those vehicles with greater reductions than they will actually 

provide. Use of such credits would detract from the emissions reductions achieved by the 

proposed standards. A reasonably stringent GHG emissions standards program provides an 

incentive for the production of low-emitting vehicles simply by virtue of those vehicles’ ability 

to help manufacturers reach the required average emissions levels. 

ACEEE actively supports government programs to accelerate the development and deployment 

of advanced technology, high-efficiency vehicles, including for example existing tax credits for 

hybrids and plug-in hybrids, as well as the $2.4 billion allocated by the 2009 American Recovery 

and Reinvestment Act for battery manufacturing, electric drive programs and the deployment of 

electric vehicles. A standards program is not, however, well-suited to incentivizing particular 

technologies, because the result is to undermine the standards. Such incentives can also have 

unintended, adverse consequences, as the dual fueled vehicle (AMFA) credit demonstrates. The 

AMFA credit both reduces the fuel savings of the CAFE program and allows manufacturers to 

lag in developing high-efficiency vehicles. The AMFA credit also illustrates how difficult it is to 

eliminate a credit of this kind once it has been put in place, even when it is broadly 

acknowledged that the program does not serve the intended purpose and in fact is 

counterproductive. 

By contrast, off-cycle technology credits should be considered if they can be plausibly shown to 

deliver actual reductions that otherwise would go unrecognized under the rule. Further, EPA 

should take into account the potential for emissions reductions from off-cycle technologies in 

setting the level of standards beyond 2016. This will increase the emissions reductions that can 

be achieved through the rule. 

Recommendations: 1. Attribute to advanced technology vehicles only those emissions reductions 

they are expected to achieve. If ATV credits must be created, minimize the multiplier used and 

ensure that the program is not extended beyond 2016. 2. Consider permitting off-cycle credits for 

vehicle technologies that can be shown to achieve quantifiable reductions in emissions; take into 

account potential reductions from these technologies in setting standards beyond 2016. 3. For 

purposes of the rule, define emissions of EVs as full fuel cycle emissions, adjusted as appropriate 

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to account for upstream emissions from gasoline vehicles. 4. Calculate EV emissions to reflect i) 

the efficiency of the vehicle (kwh per mile), and ii) emissions associated with electricity 

generation in the power pool where the vehicle is purchased, using marginal emissions rates 

based on reasonable assumptions about time-of-day charging patterns. 

[ACEEE also submitted these comments as testimony at the New York public hearing, See 

docket number EPA-HQ-OAR-2009-0472-4621, pp. 140-144.] 

BMW of North America, LLC (BMW) 

Advanced technology vehicles play a major role in attaining sustainable mobility in the long 

term. Therefore, the right framework has to be established early on for less carbon-intensive 

vehicles which are currently available but face uncertain market and customer expectations. The 

regulatory framework also strongly determines how advanced technology vehicles are perceived 

in the market. Consequently, BMW supports EPA's proposal regarding the greenhouse gas 

emissions calculation for electric vehicles and multipliers for advanced technology vehicles. 

[OAR-2009-0472-7145.1, p.5] 

An increase in advanced technology vehicles will result in a mix of fuels and electric power used 

in the transportation sector. The environmental impact of the latter strongly depends on the mix 

of fossil and non-fossil power generation which is defined by national or the utilities' corporate 

energy policies and beyond the control of vehicle manufacturers. By proposing to calculate the 

emissions of an electric vehicle with 0g/mi, EPA is properly endorsing the concept of shared 

responsibility. BMW therefore would greatly appreciate the promulgation of a final regulation 

that considers only tailpipe emissions and treats electric vehicles with 0g/mi. This is a clear 

signal for sustainable mobility and suggests to customers that they have made the right choice. 

[OAR-2009-0472-7145.1, p.5] 

The intention of EPA and NHTSA is to achieve the highest possible degree of harmonization in 

both regulations. Therefore, BMW recommends treating electric vehicles in the GHG regulation 

in the same way as in the CAFE regulation. For CAFE purposes, the electric energy consumption 

is converted into a petroleum equivalent fuel economy ''mpge”= 82,049[Wh/gall]/ Energy 

Consumption [Wh/mi]. To be treated equally in both regulations for electric vehicles a much 

higher mpg figure should be achieved by the conversion of electric energy consumption into 

mpge, as there indeed is no gallon consumption. [OAR-2009-0472-7145.1, p.6] 

In order to reflect a proper consideration of other advanced technology vehicles, i.e. rangeextender vehicles or plug-in hybrids, these vehicles should be evaluated in relation to electric 

vehicles and their greenhouse gas impacts. [OAR-2009-0472-7145.1, p.6] 

Beyond the regulatory framework directly and exclusively addressing the auto industry, and with 

respect to overall greenhouse gas reduction and shared responsibilities, a comprehensive 

approach should be considered which addresses the stakeholders involved. Instruments such as 

cap-and-trade, carbon taxes, etc. which are currently under discussion should be evaluated to 

implement a comprehensive approach for the de-carbonization of the transportation sector in the 

most effective and cost-efficient manner. [OAR-2009-0472-7145.1, p.6] 

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EPA Response to Comments 

Multiplier for Advanced Technology Vehicles 

In addition to the calculation of greenhouse gas emissions from advanced technology vehicles, 

EPA is proposing to grant multipliers for a certain time period. In order to encourage the market 

penetration of these vehicles, BMW believes a constant multiplier of 2 is appropriate. Beyond 

this, BMW also recommends considering multipliers for clean diesel vehicles that meet 

California's strict emissions requirements for criteria pollutants in order to increase their market 

share and deliver a clear signal by regulators in support of this highly cost efficient and rapidly 

available policy option. As clean diesel vehicles contribute significantly to reduced greenhouse 

gas emissions at a reasonable price, a multiplier of up to 1.5 should be appropriate. [OAR-2009­

0472-7145.1, p.6] 

With respect to this joint rulemaking and to achieve as much consistency between both the GHG 

and CAFE standards as possible, BMW recommends adoption of multipliers for advanced 

technology vehicles in the CAFE regulation as well. [OAR-2009-0472-7145.1, p.6] 

As an incentive for performance improvement, we also strongly support the proposed credit 

options available to all manufacturers, including availability of advanced technology credits in 

the form of a multiplier to encourage commercialization of electric vehicles and off cycle 

innovative credits for new CO2 emissions reductions technologies whose benefits are not 

currently captured in the test procedures. [These comments were submitted as testimony at the 

New York public hearing. See docket number EPA-HQ-OAR-2009-0472-4621, pp.135-136.] 

BorgWarner 

Moreover, the joint proposal allows for varying credit options and multipliers for vehicles 

operating on different fuels. Because these vehicles compete in the same market, it creates 

market deformation. For example, the suggested allowance under the advanced technology 

credits for plug-in electric or plug-in hybrid electric vehicles provides for a 0 (g/ml) CO2 

measurement and counts the vehicle volumes as two times their actual value. This drives very 

aggressive support for vehicle electrification and associated technologies. In today's atmosphere 

of limited capital this could also impede the development and market introduction of more 

conventional, cost-effective solutions that utilize existing infrastructure in large volumes 

resulting in better real-world results. [OAR-2009-0472-7289, p.2] 

California Air Resources Board 

Second, EPA needs to assign a non-zero upstream greenhouse gas emission factor for zeroemission vehicles (ZEVs). EPA has proposed to make additional credits available for advanced 

technology vehicles such as electric vehicles (EVs), plug-in hybrids and fuel cells. However, 

EPA is proposing to ignore the lifecycle greenhouse gas emissions of these vehicles by assigning 

a value of zero grams per mile towards compliance with the national standard. Furthermore, the 

NPRM proposes that a multiplier ranging from 1.2 to 2.0 be assigned for each vehicle. While the 

intent is to encourage the early development and production of advanced vehicle powertrains – a 

goal with which CARB agrees – the proposed credits for these technologies are excessive. In 

light of some manufacturers’ announcements for large scale production of EVs, the potential 

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magnitude of these credits may delay the implementation of improved GHG technologies on 

conventional vehicles, thereby reducing the effectiveness of the proposed program. 

Accordingly, EPA should strike a balance between encouraging advanced vehicle development 

and protecting greenhouse gas reductions by assigning lifecycle emissions to these vehicles. 

Several studies suggest that a lifecycle emission value of 200 grams per mile would be 

appropriate for EVs on the national grid. Assigning that or a similar supported value will provide 

appropriate credit applying the 1.2-2.0 vehicle multiplier. Because significant numbers of 

commercially available EVs and fuel cell vehicles will be needed in the 2020 timeframe to 

achieve the greenhouse gas reductions required to meet the long term goal of reducing global 

warming, such credits should be restricted to EVs and fuel cell vehicles only. [OAR-2009-0472­

7189.1, p.2] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. See 

docket number OAR-2009-0472-7283, pp. 21-27] 

Chew, Yuli 

However, in order to advance newer and efficient technologies, I believe that there still need to 

have multipliers for Battery Electric Vehicles (BEV) over 100 miles range and Fuel Cell 

Vehicles (FCV) to meet one of our energy goals: energy independence. [OAR-2009-0472­

7042.1, p.3] 

I support the second issue by expressing credits based on vehicle lifetime mileage estimates. A 

typical lifetime miles for cars is less than for trucks. A dirtier truck will have more 

environmental impact when putting into service as compared to a Partial Zero Emission Vehicle 

that has a warranty of 15 years or 150,000 miles. The environmental impact on a truck can be 

tens of times over the introduction of a battery electric vehicle into the same marketplace. [OAR2009-0472-7042.1, p .3] 

I support the use of “bonus” credits to encourage the earlier introduction of new technologies 

vehicles. However, the approach should be similar to what CARB adopted in ZEV Regulation. 

This can vary from giving a factor of 1.0 for utility EV with less than 50 miles range to 7.0 for 

Type V FCV that can travel over 300 miles range and has a fast charge of less than 15 minutes. 

The three technologies, EV, PHEV and FCV should not be given the same value. They are 

preferred to phrase down over the same block of time range as CARB’s ZEV Regulation, 2009 ­

2011, 2012 – 2014, and 2015 and beyond. I would support “bonus” multiplier be allowed for 

FCV beyond 2017 and BEV that can travel beyond 100 miles range BEV. [OAR-2009-0472­

7042.1, p.4] 

Rather than treating EV having 0 g/mi of GHG, I would prefer that it the EV should just get the 

benefits of what the grid offers. Similar to California’s grid, EV is still considered to have an 

upstream emission of 130 g/mi. Over time, it should be based on the weighted average of these 

advance vehicles technologies are applied. [OAR-2009-0472-7042.1, p.4] 

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EPA Response to Comments 

For multiplier of EV after 2016, while awarding different multipliers based on different grids are 

difficult to achieve, EPA should based the actual contribution to the greenhouse gas reduction 

based on the distribution of the vehicles based on the weighting contribution of the grid at which 

these vehicles are deployed. [OAR-2009-0472-7042.1, p.4] 

Chrysler Group LLC (Chrysler) 

Chrysler agrees with the EPA that incentives should be provided to 'encourage the early 

commercialization of advanced vehicle powertrains.' [NHTSA-2009-0059-0124, p.26] 

Advanced Technology Vehicle Volume Multiplier 

Although great strides have been taken recently in the development and commercialization of 

advanced technology vehicles, the incremental costs of these technologies remain high. Volume 

multipliers effectively reduce the technology cost per ton of emissions reduced to a level more 

equivalent to that of applying improvements to conventional technologies. As shown in the table 

below, Chrysler estimates a volume multiplier of 3-6X for advanced technology vehicles is 

necessary to achieve cost parity with the cost / benefit ratios assumed by EPA for conventional 

technology improvements. As a marketplace develops increasing volumes, the incremental costs 

of the technology drop, but the cost to emission benefit ratio continues to remain much higher. 

[NHTSA-2009-0059-0124, p.26] 

Recommendation 

Chrysler recommends that a minimum volume multiplier of 3-6X be applied to advanced 

technology vehicles as an incentive for early production of advanced technology vehicles. 

[NHTSA-2009-0059-0124, p.26] 

Phase Down of the Advanced Technology Vehicle Volume Multiplier 

Advanced technology vehicle volume production is still in its infancy. Aside from a few small 

volume manufacturers producing a handful of vehicles per year, no manufacturer has placed a 

significant number of advanced technology vehicles in the hands of common customers. In the 

near term, the ability to apply advanced technology powertrains to vehicles is limited by several 

factors including the lack of a commercially viable and affordable battery, vehicle 

redesign/refresh schedules and current economic conditions. [NHTSA-2009-0059-0124, p.27] 

The historical market penetration of hybrid electric vehicles (HEV) suggests that significant 

volumes of advanced technology vehicles will not occur within the time frame of this 

rulemaking. The first modem mass market HEV (Honda Insight®) was introduced in 1999.5 

Four years later (2003) the HEV market penetration was only 0.3%.6 The next five years saw a 

market penetration growth of approximately 0.5% per year, reaching 2.6% in 2008. 7 To this 

day, hybrid electric vehicles still have not become a common consumer choice in the 

marketplace, almost ten years after their mass market introduction. Given that advanced 

technology vehicles also require infrastructure changes for viability (such as home and public 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

electrical charging stations) and higher price, these vehicles are likely to have similarly slow 

market penetration rates. [NHTSA-2009-0059-0124, p.27] 

Recommendation 

Chrysler recommends that the volume multiplier not be phased down for the period considered 

by this rulemaking. [NHTSA-2009-0059-0124, p.27] 

Volume Multipliers for Different Advanced Technology Vehicle Types 

At this early stage of advanced technology vehicle development there are no clear 'winners'. 

Chrysler recommends that the vehicle multiplier should be the same for all advanced technology 

vehicles. [NHTSA-2009-0059-0124, p.27] 

Assignment of an Electric Vehicle Operation Emission Value of 0 g/mi 

Chrysler supports the assigned value of 0 g/mi greenhouse gas emissions for the electric portion 

of the operation of advanced technology vehicles. This approach is consistent with other federal 

programs, by not forcing upstream emission accounting on downstream manufacturers. For 

example, electric generation power plants do not account for emissions associated with 

producing their energy feedstock. The approach is also consistent with existing light-duty vehicle 

Tier 2 emission regulations in which vehicle manufacturers are responsible for emissions 

produced by vehicles, but are not responsible for controlling emissions associated with the 

production and transportation of conventional fuels. [NHTSA-2009-0059-0124, p.27] 

Advanced technology vehicle credits will not result in a lack of innovation and application of 

greenhouse gas reducing technologies on conventional internal combustion engine fleets. 

Oral testimony at the Detroit, MI public hearing on this Proposed Rule indicated some concern 

that manufacturers may be able to fore go significant improvements in conventional fleets based 

on producing significant volumes of advanced technology vehicles. However, in the time frame 

of this rulemaking, advanced technology vehicles are not expected to achieve significant market 

penetration. Furthermore, to remain competitive, all manufacturers, regardless of advanced 

technology vehicle production, will need to make similar gains in conventional vehicle 

efficiency. [NHTSA-2009-0059-0124, p.28] 

Clean Energy Fuels 

[These comments were submitted as testimony at the Detroit public hearing. See docket number 

EPA-HQ-OAR-2009-0472-6185, pp. 134-136.] 

Tank to Wheels Undervalues Low to Ultra Low Carbon Fuels 

and Potentially Overvalues Zero Emission Vehicle Strategies 

Clean Energy believes it is potentially irresponsible, and possibly hazardous, to exclusively 

regulate vehicles on a 'tank to wheels' basis, as such an analysis fails to evaluate the upstream 

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EPA Response to Comments 

emissions associated with the very strategies a rulemaking aims to promote. For example, 

according to the lifecycle pathways provided by the California Air Resources Board for various 

fuels, electric vehicles that draw on a California marginal electricity mix of natural gas and 

renewable energy sources (which is the best case scenario) achieve a carbon intensity value of 

38.78 g/MJ CO2eq whereas a CNG light-duty vehicle powered by bio-methane produced from a 

California landfill can achieve 11.26 G/mj CO2eq target (or roughly a 71 percent advantage over 

an electric vehicle). By not accounting for upstream emissions, the bio-methane advantage 

would be erased and the new value for that CNG vehicle would be 68 g/MJ CO2 eq or a 43 

percent disadvantage. That's a problem because it sends exactly the wrong message to the 

market. Any rulemaking that places the lowest carbon fuel strategies at a disadvantage to poorer 

strategies is counterproductive, and we encourage both EPA and NHTSA to revise the 

rulemaking to prevent such an outcome. By evaluating zero emission vehicle strategies from a 

'tank to wheel' only perspective, the rule fails to capture the actual greenhouse gas benefit, in 

fact, it overestimates it, and it prevents superior strategies from entering the transportation 

market. We highly discourage this practice. 

Cummins Inc. 

EPA is proposing credits for advanced technologies such as fuel cell vehicles, plug-in hybrid 

electric vehicles, etc. to encourage their development. Cummins supports providing such credits 

to manufacturers in the form of a volume multiplier and 0 g/mile CO2 emissions for electric 

operation for MY 2012-2016. Cummins urges that, after MY 2016, EPA should take a holistic 

view of CO2 emissions from such vehicles, including upstream emissions from electricity 

generation. This would ensure a level playing field for all CO2-reducing technologies in the 

light-duty vehicle market. [OAR-2009-0472-7205.1, p.4] 

Ecology Center 

The Ecology Center would like to comment on the Advanced Technology Vehicle Credits 

provision in the proposed rule, aimed at incentivizing early commercialization of electric vehicle 

technologies. While we are supportive of the general intent of the proposed credits, we are 

concerned that the combination of both a multiplier and a zero grams/mile of CO2 value for 

electric propulsion may be overly generous and could unfairly skew a manufacturer's compliance 

obligations. We also understand that the intent is for use only in the 2012 - 2016 timeframe, but 

are concerned that these credits could become increasingly part of a firm's compliance strategy 

toward the end of the compliance period when the credits would be scheduled to end. It would 

seem to make more sense to phase-down any credits allowed in a manner similar to the dual-fuel 

vehicle credits. In general, however, we believe more work is needed to study both the potential 

affect of this proposed provision on compliance and achieved emission levels, as well as the way 

the credits are structured, including their timing. [OAR-2009-0472-4068, p.2] 

Energy, Environmental & Public Utility Practice Group 

How the Rule Could Encourage Public Charging Infrastructure 

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The EPA and NHTSA have a unique opportunity finally to help solve this dilemma by making 

PCI eligible for CO2 credits under the Rule, like advanced air conditioners credits and other 

technologies. The importance of deploying vehicles and refueling infrastructure in a single 

coherent system is a consistent theme in prior analyses of transition barriers to alternative fuels. 

By classifying PCI as a technology eligible for CO2 credits EPA could help support a business 

case for the deployment of PCI in advance of PEVs, thus helping to create the necessary market 

conditions for electric technology to take root. Absent such support it seems unlikely that the 

Rule will induce a significant level of vehicle electrification. The Agency readily admits that the 

proposed standards can be met with existing enhancements to internal combustion engine 

technology and with little to no penetration of diesel engines, hybrid electric vehicles (HEV), 

plug-in hybrid electric vehicles (PHEV), or pure-battery electric vehicles (BEV). In other words, 

by themselves, the CO2 standards will not necessarily induce investment in electric technology. 

More will be needed. [OAR-2009-0472-7251.1, p.3] 

By allocating CO2 credits to PCI under the Rule, EPA would align the benefits of PCI with 

primary beneficiaries in the value chain, the vehicle OEMs, by monetizing the fuel economy 

benefits of charging infrastructure. In turn, the Agency could help to solve the longstanding 

'chicken or egg' problem of how to pay for alternative fuel infrastructure before significant 

numbers of alternative fuel vehicles are on the road. At the same time EPA and NHTSA would 

reduce the costs of compliance with the Rule by expanding the supply of credits available to 

OEMs. [OAR-2009-0472-7251.1, p.3] 

To create market conditions that will spur investment in public charging infrastructure, the 

Agency should provide CO2 credits to public charging stations at a level approximating their 

impact on fuel economy and market development. This approach is similar to the Agency’s 

proposal to provide air conditioning leakage credits of between 12.6 and 15.7 g/mi CO2e for 

investments in improvements to A/C systems. [OAR-2009-0472-7251.1, p.3] 

[See Docket Number OAR-2009-0472-7251.1, pp.1-4 for detailed comments pertaining to: Why 

Lack of Public Charging Infrastructure is a Barrier to PEV Market Penetration and How the Rule 

Could Encourage Public Charging Infrastructure] 

Why EPA Should Provide Credits for Public Charging Infrastructure 

Sustained government policies will be crucial to the deployment of PCI, a key enabler of vehicle 

electrification and enhanced petroleum and carbon reduction. Much like how fiber optic 

infrastructure investment in the late 1990’s fostered an explosion of information technology, 

abundant PCI will be a critical factor in the electrification of vehicles. By crediting PCI under the 

Rule, EPA could encourage deployment of PCI and thereby achieve greater petroleum and 

carbon reduction. [OAR-2009-0472-7251.1, p.8] 

See Docket Number OAR-2009-0472-7251.1, pp.4-23 for detailed comments pertaining to: 

Background on PEV Charging and Why EPA Should Provide Credits for Public Charging 

Infrastructure] \ 

Environment Michigan 

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EPA Response to Comments 

[These comments were submitted as testimony at the Detroit public hearing. See docket number 

EPA-HQ-OAR-2009-0472-6185, pp. 68-69.] 

Second, we're concerned that electric vehicles will be given lavish credits that will undercut the 

actions automakers must take to reduce emissions from the rest of their fleet. The proposal 

ignores the very real emissions that result when electric vehicles are charged with electricity that 

is often generated from coal and natural gas. 

Environment New Jersey 

We also want to make sure that although Environment America and Environment New Jersey are 

huge supporters of alternative technologies like electric cars, we do want to ensure that the 

credits are not so much that they will undercut actions the automakers would do to reduce 

emissions from the rest of their fleet. [EPA-HQ-OAR-2009-0472-4621, p.76] 

Environmental Defense Fund 

The Final Standards Should Be Designed to Account for the Real-World Greenhouse Gas 

Emissions Associated with Electric Vehicles 

EPA’s proposed treatment of emissions from electric vehicles profoundly under counts the actual 

global warming emissions that will occur. The Agency has proposed to include electric vehicles 

(“EVs”) in each manufacturer’s fleet-wide standard and to treat EVs as if they had emissions of 

zero grams per mile of CO2. As EPA notes, “in reality, the total emissions off-set ... is not zero, 

as there is a corresponding increase in upstream CO2 emissions due to an increase in the 

requirements for electric utility generation.” [OAR-2009-0472-7285.1, p. 24] 

While we appreciate the agency’s interest in promoting advanced technologies such as EVs, 

there are a host of policies to support the advancement of EVs and the zero grams per mile 

standard is plainly unrepresentative of the environmental realities of using EVs. A recent 

National Research Council study concluded that the health and non-climate related 

environmental impacts of traditional pollutants associated with EVs are comparable to, and in 

some cases higher than, those associated with conventional gasoline and diesel engines, on a 

lifecycle basis. When considering greenhouse gas emissions of different types of vehicles, the 

same report concluded that EVs caused lower CO2 emissions than conventionally-fueled 

vehicles, but higher emissions than vehicles fueled by hydrogen or certain types of E85 fuel. 

Furthermore, when the California Air Resources Board (“CARB”) considered the same question, 

CARB determined that EVs account for 130 grams per mile of upstream emissions. CARB built 

flexibility into the analysis by allowing manufacturers to lower the 130 grams per mile number 

by demonstrating, among other things, the percentage of electricity generated in California by 

renewable sources. [OAR-2009-0472-7285.1, p. 24] 

The greenhouse gas emissions profile of the nation’s electricity generating portfolio varies 

considerably from state-to-state and across regional electricity grids. Further, the greenhouse gas 

burden of EVs will depend not only on the emissions profile of the grid but the volume and time 

of use. While EDF supports commercialization of these advanced technologies, we also strongly 

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request that Agencies ensure analytical rigor in their deployment. Accordingly, we ask that EPA, 

with its considerable institutional expertise at the convergence of electricity and the environment, 

develop a rigorously tailored emissions rate associated with upstream electricity generation that 

is properly applied to EVs. [OAR-2009-0472-7285.1, p. 24] 

You asked some questions about your proposals for electric vehicles and plug-in hybrid electric 

vehicles. These are very exciting technologies and I think you're right to think about ways of 

encouraging them, particularly in the early years. Some kind of an early commercialization credit 

probably makes sense. Whether it should start off at two in an earlier year like 2011 or 2012 may 

be fine. Scaling it down, in our view, we would recommend that you phase it out by 2016, the 

same year in which you're phasing out the flex fuel vehicle credit absent actual showing. I think 

you do propose phasing it out by 2017, but that, of course, is a future rulemaking. So it seems to 

me there would be some -- after all, that's still, you know, eight model years away or seven 

model years away, I guess, six model years away, but that's what we would, you know, urge you 

to do. [These comments were submitted as testimony at the New York public hearing. See 

docket number OAR-2009-0472-4621, p. 122.] 

eTec 

I am aware that the commenting period is over for the CAFE standards, but I was hoping to 

submit my suggestions nonetheless. 

I have attached an article that is to be published in the next issue (January/February) of the 

International Journal of Electric and Hybrid Vehicles (IJEHV) that discusses hybrid vehicle 

nomenclature and fuel economy procedures for plug-in hybrids. I would be happy to discuss my 

thoughts with the relevant EPA personnel, and I can be reached at this email address. [OAR2009-0472-7670, p.1] 

[Comment referenced above, Docket Number OAR-2009-0472-7670.1, is a copyrighted 

document.] 

Fisker Automotive, Inc. 

In alignment with the goals to reduce fuel consumption and emissions, Fisker Automotive 

encourages correlating credits and deficits to a metric that reflects this directly—fuel savings. 

The proposed regulation currently reads, 

“The amount of credit earned is determined by multiplying the number of tenths of a mpg by 

which a manufacturer exceeds a standard for a particular category of automobiles by the total 

volume of automobiles of that category manufactured by the manufacturer for a given model 

year.' [OAR-2009-0472-8732.1, p.2] 

MPG is the inverse of consumption: as consumption approaches zero, MPG approaches infinity. 

This opens a window for automakers to game the regulation. Conceivably, an automaker could 

sell a PHEV with a large electric range to achieve hundreds of MPG and earn thousands of 

credits. This would then allow the automaker to offset hundreds of vehicles that fail to meet 

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EPA Response to Comments 

baseline requirements. This counters the regulation goals. Figure 1 below illustrates the problem. 

We compare credits earned to fuel savings for a base requirement of 30.2 mpg (average 

passenger car requirement in 2011). [OAR-2009-0472-8732.1, p.2] [See Docket Number OAR2009-0472-8732.1, pp.2-4 for more detailed discussion on this issue] 

Ford Motor Company 

Advanced Technology Vehicle Credit 

To promote the research, development and manufacture of advanced technology vehicles, Ford 

supports the use of a volume multiplier of 2.0 for all electric vehicles (EVs), plug-in electric 

vehicles (PHEVs), and fuel cell vehicles for 2012 - 2016 model years. Also, putting EVs into the 

CO2 calculation at 0 grams/mile is appropriate to support the introduction of new technology in 

the marketplace. The proposed phase-down or discounting of the volume multiplier for this 

rulemaking is not appropriate. Once consumers have accepted the advanced technology and there 

is adequate volume in the market, minimum 10% volume, Ford believes it would then be 

appropriate to differentiate between EVs and PHEVs for advanced technology credits. Both 

types of technologies are capable of relatively wide ranges of petroleum or CO2 displacement 

over the life of the vehicle. The different operating characteristics, including climate sensitivity, 

and projected miles travelled would also be factors for differentiating and applying appropriate 

credits. [OAR-2009-0472-7082.1, p. 8] 

Glasser, Mark 

[These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number EPA-HQ-OAR-2009-0472-7283 p.204-205] 

And my major concern with these credits, these carbon credits, that these are not allowed to so 

dilute the real meaning of what you're doing here and what we're doing here because electric cars 

do -- just like Lucas picked up, they have a carbon imprint, and that needs to be adjusted to, you 

know, automakers that are coming out with wonderful electric vehicles. But to have them say 

that there's no imprint, I think, is really going to dilute the power of the bill and -- or the 

legislation that you're doing. 

And to me, the most important thing is that we don't let those credits really become a way to 

easily avoid the intent of what you are trying to do and what we all need to be done 

Honda Motor Company 

EPA proposes to set the upstream portion of EVs, PHEVs and FCEVs to zero grams/mile. EPA 

requests comments on this approach. Honda believes that EPA should separate incentives and 

credits from the measurement of emissions. Honda believes that without accounting for the 

upstream emissions of all fuels, inaccurate comparisons between technologies will take place. 

Relying upon EPA’s regulation, policy makers – in the U.S. and around the world – may make 

unfavorable technology comparisons and set misdirected policies as a result. [NHTSA-2009­

0059-0095.1, p.2] 

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A compelling example exists. According to DOE’s GREET model, the upstream emissions of a 

Toyota Prius are 46 grams/mile, and the tailpipe emissions are 198 grams/mile, for a total of 244 

grams/mile. By contrast, the GREET model estimates the average upstream emissions of a 

comparably sized Battery Electric Vehicle (BEV) are 256 grams/mile. Without commenting on 

the merits of creating incentives for electric vehicles, it is clear that zero grams/mile for the BEV 

would lead one to believe that BEVs have a clearly superior greenhouse gas profile compared to 

similarly sized hybrid gasoline vehicles. [NHTSA-2009-0059-0095.1, pp.2-3] 

EPA’s regulations need to be comprehensive and transparent. By zeroing out the upstream 

emissions, EPA is conflating incentives and credits with emission accounting. In discussions 

with EPA staff, the question of “double counting” arose. This argument points out that electric 

power generation is under its own regulations, and including the upstream emissions in this 

regulation would result in “double counting.” Honda observes that upstream emissions are 

necessarily correlated with the intensity-based emissions regulation of light duty automobiles. In 

the case of petroleum refineries, significant increases in fuel economy on the part of automobile 

manufacturers could result in a “windfall” for the refineries’ if their tonnage caps were not 

adjusted accordingly. These two arguments suggest that not only the upstream emissions of 

electricity but the upstream emissions of all fuels ought to be included in EPA’s regulation. 

[NHTSA-2009-0059-0095.1, p.3] 

EPA could take two different approaches to the upstream issues: 1) All greenhouse gas targets 

could be increased to reflect the upstream emissions of gasoline, or 2) set all greenhouse gas 

standards based on gasoline-fueled vehicles and then adjust all other fuels to use a credit for the 

comparable upstream gasoline-fuel. Honda recommends the latter approach, simply because of 

the wide communication of the 2016 goals set by EPA of 250 grams/mile. According to the 

GREET model, referenced above, the upstream emissions of the gasoline fuel are equivalent to 

23% of the gasoline vehicle’s tailpipe emissions. [NHTSA-2009-0059-0095.1, p.3] 

Advanced Technology Vehicles Credits 

In Section III, EPA requests comment on their proposed “multiplier” for EVs, PHEVs and 

FCEVs. Comment is requested on three aspects of this incentive, including: a) the level of the 

multiplier, b) on how the multiplier might differentiate various technologies, and c) on the timing 

and rate of phasing out the multiplier. [NHTSA-2009-0059-0095.1, p.4] 

Honda supports introduction of a multiplier. As we project much more stringent standards in the 

not-too-distant future, it is beneficial, yet extraordinarily expensive, for OEMs to bring more 

advanced technology to market. The early introduction of technology has the salient benefit of 

helping to mature the technology in small volumes before it is required in large volumes to meet 

future regulations. The forecasted stringency by some policy makers (not the least of which 

includes California’s Air Resources Board, “CARB”) for the next ten to twenty years is 

staggering. Considering this, incentives that strictly follow the greenhouse gas benefits miss a 

larger point. Advanced Technologies are usually costly and uncertain; encouraging all 

technologies, at this early stage is helpful. [NHTSA-2009-0059-0095.1, p.4] 

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EPA Response to Comments 

Honda recommends that the multiplier differentiates between more and less advanced 

technology. For example, a BEV with a 50 mile range is significantly less advanced than a 100 

mile range BEV. Honda proposes a formula for establishing the relative multiplier for PHEV, 

BEV and FCEVs: 

((EAER / 40) x Quick Refueling Multiplier) + 1 

EAER is the all electric or equivalent all electric range of the PHEV, BEV or FCEVs 

Quick Refueling Multiplier has two values: 1 for vehicles with no quick fueling capability 

(defined as being capable of replacing 95% of the vehicles range in ≤ 15 minutes, the same 

definition used by CARB in its ZEV Regulation) and 2 for vehicles capable of quick fueling. 

Examples: 

A 40 mile EAER (or AER) PHEV 40/40 x 1 + 1 = 2.0 

A 100 mile AER BEV 100/40 x 1 + 1 = 3.5 

A 300 mile Range FCEV 300/40 x 2 + 1 = 16.0 [NHTSA-2009-0059-0095.1, p.4] 

These values are greater than those initially envisioned by EPA (between 1.2 and 2.0), however, 

the greater values are essential if EPA is determined to truly incentivize these costly, advanced 

technologies. Further, Honda does not believe the multiplier should phase out before 2016. The 

transition to advanced technologies will take many years, and OEMs do not expect the costs 

associated with these vehicles to be reduced dramatically by 2016. [NHTSA-2009-0059-0095.1, 

p.5] 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.96-103] 

First, the zero-grams-per-mile CO2 for electric vehicles. EPA proposes to set the CO2 value for 

the electric portion of plug-in electric vehicles and battery electric vehicles to zero, and EPA 

further proposes to set the CO2 value for fuel cell electric vehicles to zero as well. 

Honda believes that this policy is misguided and creates significant incorrect perceptions about 

the relative merits of various vehicle technologies. Honda has worked on alternative fuel vehicle 

technologies and their social benefits for more than two decades, but the social benefits of any 

technology must be understood and measured on a well-to-wheel basis. 

It is clear that there are no special virtues to be associated with zero tailpipe greenhouse gas 

emissions if the well-to-tank portion is very high. 

Additionally, without a comprehensive well-to-wheel assessment of greenhouse gases, EPA and 

others who rely upon EPA's assessments will improperly favor or signal preferred 

technologies. If the agencies want to promote electric vehicles, it can do so through Super 

Credits as we discuss below. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Super Credits. We understand and support EPA's effort to encourage the introduction of plug-in 

hybrid electric vehicles, battery electric vehicles, and fuel cell electric vehicles. However, these 

technologies do not necessarily warrant the same credit multiplier solely because they qualify as 

one of these technologies. 

There's a great deal of difference between a 50-mile battery electric vehicle and a 100­

mile battery electric vehicle for example. And fuel cell electric vehicles represent significantly 

more challenging technology sets. 

In order to achieve our long-term social goals, it is important to recognize and reward 

more advanced and sophisticated technology. We are ready to work with EPA on developing an 

appropriate performance-based metric that will more accurately differentiate advanced 

technologies. 

Honeywell Transportation Systems 

EPA historically has developed regulations that establish hard emissions targets while providing 

the industry the flexibility to develop new technologies to meet its compliance obligations, 

without technology forcing. However, in its Proposed Rule EPA deviates from its traditional 

method of regulation and seeks to favor certain technologies. EPA proposes additional credit 

opportunities for certain technologies such as electric vehicles ('EV'), plug-in electric vehicles 

('PHEV'), and fuel cell vehicles, including a multiplier in the range of 1.0 to 2.0 applied per 

vehicle sold. Honeywell believes that it is in the interest of better regulation and good 

governance not to force technology. While it supports EPA's proposal to phase out the multiplier 

after 2016, Honeywell also suggests that EPA phase out the proposed EV credits after 2016. As 

proposed, this credit program is inconsistent with EPA's historical practice of implementing 

emission control requirements in a manner that allows for technological flexibility. [OAR-2009­

0472-7165.1, p.6] 

Honeywell has two recommendations to ensure that the EV credit allocation adopted reflects the 

real world operating conditions of PHEV s and results in actual reductions in CO2 emissions. 

First, in order to meet EPA's GHG emission reduction goals, it is critical to account for the 

emissions involved with generating the electricity used to charge the EVs. Applying upstream 

emissions to EV or to the plug-in portion of PHEV will ensure actual GHG emissions targets are 

met, as proposed by the California Air Resource Board ('CARB'). This will ensure that carbon 

dioxide emission reductions are achieved, rather than merely being transferred from one source 

to another excluded source. [OAR-2009-0472-7165.1, pp.6-7] 

Next, Honeywell suggests that EPA establish a mechanism based on best available science to 

verify that the plug-in capability of PHEV s is in fact utilized for those vehicles in order to earn 

commensurate credits. Verification will minimize the over-allocation and exploitation of credits 

by accurately determining the emissions associated with actual plug-in use. Preventing the overallocation of credits is critical for EPA to meet its GHG reduction goals, especially if the credits 

are to be extended beyond 2016. [OAR-2009-0472-7165.1, p.7] 

Hyundai Motor Company 

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EPA Response to Comments 

EPA proposes a credit multiplier of 2.0 for advanced technologies, like plug-in hybrid electric 

vehicles (PHEV), electric vehicles (EV) and fuel cell vehicles (FCV). Hyundai supports the use 

of the multiplier but believes that the various advanced technology types (i.e. EV, PHEV, and 

FCV) should not receive an equally-valued credit multiplier. While we do not believe that the 

application of the credit multiplier should be overly complex, like California's method for 

applying ZEV credits by technology type with additional criteria such as battery power, range, 

etc., we do support a reasonable, unique credit multiplier for each specific technology. [OAR2009-0472-7231.1, p.4] 

International Council on Clean Transportation 

EPA proposed to assign zero carbon emissions for electricity used by vehicles. The agency 

acknowledges that in reality CO2 emissions would be higher due to emissions from electric 

utility generation and that this is not an appropriate long-term approach. However, EPA sees a 

value in using zero carbon emissions as an interim solution in order to promote electric vehicles 

and asks for comments on this proposal. 

ICCT recognizes that there is sound justification for providing a temporary incentive for electric 

vehicles in order to help them overcome market and infrastructure barriers. However, we are 

concerned that applying a zero carbon value for electric vehicles creates a loophole enabling 

OEMs to comply with the standards primarily by producing and offering a relatively small 

number of electric vehicles. This would allow manufacturers to either scale back the use of 

efficiency technology on the majority of their vehicles or to use the technology to enhance 

vehicle performance, putting manufacturers that did not offer electric vehicles at a competitive 

disadvantage and continuing the horsepower wars. 

ICCT was founded around the Bellagio Principles, which were set forth by principal regulators 

around the world in 2001. This was a consensus document on preferred government policies for 

shaping the future of motor vehicle technology and transportation fuels worldwide. The second 

Bellagio principle states: “Base policies solely on performance compared to societal objectives, 

and not give special consideration to specific fuels, technologies, or vehicle types.” In keeping 

with this principle, we recommend that the agencies include a realistic assessment of incremental 

upstream emissions from passenger vehicles. 

The multiplier used for electric vehicles and plug-in hybrids for 2012 through 2015 already 

provides an incentive for electricity use. Funding and financial incentives offered by federal, 

state, and other governments provide additional incentives for electric vehicles. Thus, there is no 

need for an additional incentive, especially one that could distort the efficiency of the standards. 

In the long run, it is important to address the issue of enormous regional differences in carbon 

from electricity generating power plants. For example, based on current electricity generation, 

electric cars would be a great idea for reducing CO2 emissions in France because of its heavy 

reliance on nuclear energy, but would not be so good in Germany because of the high percentage 

of coal use. Similar regional differences in carbon intensity exist from state to state in the US. It 

is important for EPA to address these differences when developing a sustainable policy on 

electricity use in vehicles. [OAR-2009-0472-7156.1, pp.12-14] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

[ICCT also submitted these comments as testimony at the Detroit public hearing, See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 62-63.] 

Investor Network on Climate Risk 

I would like to raise one concern that could potentially undermine the effectiveness of the 

National Program and that other [These comments were submitted as testimony at the New York 

public hearing. See docket number EPA-HQ-OAR-2009-0472-4621, p. 152.] panelists have 

addressed today as well. Specifically, the proposed advanced technology credits for electric 

vehicles and plug-in hybrid electric vehicles. Unless such credits account for the greenhouse gas 

emissions resulting from electricity generation, greenhouse gas emissions from such vehicles are 

likely to be underestimated. [These comments were submitted as testimony at the New York 

public hearing. See docket number EPA-HQ-OAR-2009-0472-4621, p. 153.] 

Karplus, Valerie J. 

I write to comment on the treatment of plug-in hybrid electric vehicles (PHEVs) and electric 

vehicles (EVs) in the proposed per mile CO2 emissions rule for light-duty vehicles. As currently 

written, the regulation has the potential to be both costly and ineffective, because it incorrectly 

omits electricity-related emissions from PHEVs and EVs, and weights their contribution more 

heavily towards meeting the regulatory target. These distortions could potentially lead to a 

worsening of total CO2 emissions relative to the projected baseline over the 2012 to 2016 

compliance period (see attached file for detailed supporting information and calculations). The 

EPA should revise the rule to include the CO2 emissions from generating electric power used for 

vehicle propulsion. Even with the most aggressive targets for investment in renewable electricity 

sources, the emissions intensity of grid-supplied electricity will not fall substantially over the 

next 10 to 15 years, the period used to assess impact of the new regulation. A reasonable 

measure could be based on average (or the average marginal) national grid CO2 emissions per 

kilowatt-hour, adjusted for modest expected grid efficiency improvements over a vehicle’s 

lifetime. Moreover, the time scales involved in any transition to low carbon vehicle and fuel 

technologies at scale may call for a longer time horizon for compliance (for example, 2020 or 

beyond), and perhaps also a more stringent target. In doing so, the EPA would allow time for 

carefully considered investment in development and adoption of technologies that would most 

cost-effectively lead to deep reductions in light-duty vehicle emissions. [OAR-2009-0472-7280, 

p. 1] [See OAR-2009-0472-7280.1 for a detailed discussion of this issue.] 

Massachusetts Department of Environmental Protection 

Massachusetts agrees that all-electric vehicles and plug-in hybrids are an important part of the 

strategy to reduce greenhouse gas emissions from the motor vehicle sector and that it is 

appropriate to provide incentives for this purpose. However, we have two primary concerns 

about EPA's proposal to give EVs a greenhouse gas (GHG) rating of zero emissions and to 

provide a credit multiplier. 

(a) Lifecycle greenhouse gas analyses conducted by EPA and by the California Air Resources 

Board (CARB) have found that vehicles powered by electricity have substantially lower GHG 

emissions per mile traveled than gasoline fueled vehicles. However, these emissions are not zero, 

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EPA Response to Comments 

and EPA should not count EVs as having zero emissions. Instead, EPA should use the best 

available science to estimate the upstream emissions from generation of electricity, and combine 

that with the greater efficiency of electric vehicles to obtain an appropriate value for those 

vehicles in grams of carbon per mile driven. 

(b) Utilizing a multiplier to increase the weighting of EVs within the overall fleetwide MPG 

calculation for an automobile manufacturer should be done with great caution, and would 

preferably be based on an analysis of the incentives needed to achieve a level of acceptance 

where EVs can be sold in the market without incentives. The multiplier should be at the lower 

end of the range that EPA and NHTSA are considering, such as 1.2, rather than at the high end of 

1.8. Allowing the use of a higher multiplier could result in a manufacturer with significant sales 

of EVs substantially increasing its fleetwide average GHG emissions and decreasing its miles per 

gallon (MPG). With a multiplier of 1.8, the average could be allowed to drop by perhaps 10 

miles per gallon or more and increase C02 emissions greatly, depending on the number of EVs 

and the other characteristics of the fleet. This would be a disastrous result given the need to 

greatly reduce GHG emissions to achieve our shared climate goals. In addition, as EPA has 

discussed, any multiplier utilized should be designed to phase out over a few years, by around 

2016, so that manufacturers do not develop a large stake in its continuance. [OAR-2009-0472­

7195.1, pp.1-2] 

Mercedes-Benz (Daimler AG) 

DAG strongly supports the provision of credits in the EPA program for advanced powertrains. 

These credits supply needed public policy support for the commitment by DAG and others to 

produce more fuel efficient and lower emitting vehicles. DAG not only will be introducing into 

the United States market zero emission vehicles, such as the Mercedes Benz F-cell and a fully 

battery operated smart car, but also will continue to increase its offerings of other forward 

technologies, such as clean diesel vehicles and plug in hybrids. Public policy should favor not 

only fuel cells and batteries, but also the bridging technologies that can significantly reduce CO2 

emissions in the short term while the marketplace for zero emission mobility develops. 

EPA proposes advanced powertrain credits at a multiplier between 1.2 and 2.0 for full electric, 

plug in hybrid and fuel cell vehicles. EPA seeks comment on whether the multiplier should be 

the same for all advanced technologies or should be scaled and whether it should be phased 

down over time. DAG suggests that a multiplier be applicable to all advanced powertrain 

technologies in accordance with the amount of CO2 reductions they provide as compared to 

traditional gasoline internal combustion engines. 

Specifically, DAG suggests a credit system as follows: (i) BEV and FCEV zero emission 

vehicles would receive a multiplier of 2.0; (ii) plug-in hybrids, range extenders and hydrogenICE vehicles would receive a multiplier of 1.8; (iii) electric hybrids with either diesel or gasoline 

would receive a multiplier of 1.5; and natural gas, clean diesels and vehicles with stratified direct 

injection gasoline would receive a multiplier of 1.2. This multiplier system both rewards 

manufacturers for investing in zero emission and far-forward technologies and also encourages 

manufacturers to increase the transformation of traditional products from pure gasoline-based 

powertrains to hybrids and diesels. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Pure zero emission vehicles should receive the maximum benefit and manufacturers should be 

encouraged to bring to market the most advanced technologies. Battery and hydrogen vehicles 

that are not zero emissions should receive the next most significant multiplier. The U.S. 

government currently encourages the marketing of clean diesels and hybrids through federal tax 

credits that expire in MY 2011. These vehicles continue to offer substantial benefits over 

traditional gasoline vehicles. While diesels produce more CO2 per gallon than gasoline engines, 

they produce less CO2 per mile than gasoline engines. The additional fuel economy of a diesel 

engine overcompensates, from a CO2 emissions standpoint, for the higher per gallon emission of 

CO2. Mercedes Benz diesel engines have up to an approximate 40% fuel economy advantage 

and an emissions benefit of up to 22% compared to their gasoline counterparts. In addition, EPA 

estimates an up to 26% CO2 reduction for light-duty diesels equipped with SCR. EPA should not 

allow support in the near term for these technologies to undercut their introduction. Rather, EPA 

should continue to encourage these technologies upon the expiration of the federal tax credits by 

providing them a multiplier of 1.5. A final category for natural gas, lean burn diesel and stratified 

direct injection gasoline vehicles would encourage their introduction, as the fuels for these 

vehicles become more available in the United States. 

Also significant is that the multipliers be available at the same levels throughout the model years 

covered by this rulemaking. As EPA has stated, these model years constitute a transitional period 

into a CO2 regulatory regime. The deployment of both advancing and advanced powertrains is 

critical throughout this time frame. Scaling down credits previously available is more applicable 

to credit programs that are phasing out reliance on a particular technology, such as flex fuel 

vehicles, rather than those that are intended to encourage reliance and commercialization of the 

technologies under consideration. [OAR-2009-0472-7193.2, p.17] 

Similarly, we hope that every vehicle we introduce will be an instant success, but experience 

shows that there are always inevitable growing pains. Our relative experience with clean diesels 

in the U.S. demonstrate [These comments were submitted as testimony at the New York public 

hearing. See docket number OAR-2009-0472-4621, pp. 50.] that customers need time and added 

incentives to widely adopt new technology. Our company, like several others, plans to soon 

introduce a limited quantity of battery electric vehicles and hydrogen fuel cell vehicles into the 

U.S. market. The advanced vehicle technology credits are critical incentive for early introduction 

of these vehicles by all manufacturers during this critical final proving stage. [These comments 

were submitted as testimony at the New York public hearing. See docket number OAR-2009­

0472-4621, p. 51] 

Mitsubishi Motors R & D of America (MRDA) 

Mitsubishi Motors supports the advanced technology vehicle multiplier and zero gram/mile CO2 

emission level for battery electric vehicles (BEVs). These important regulatory mechanisms 

provide significant temporary support as Automakers begin to commercialize advanced 

technology vehicles. [OAR-2009-0472-7125.1, p.2] 

Mitsubishi Motors supports the availability of advanced technology vehicle (ATV) credits. The 

proposed 2.0 multiplier and zero gram/mile CO2 emission level for battery electric vehicles 

(BEVs) help justify the capital investment needed for this technology. These regulatory 

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mechanisms will also promote ATV introduction into the market. These measures incentivize the 

effort needed to build infrastructure for these vehicles – the infrastructure will create the 

sustainable market. [OAR-2009-0472-7125.1, p.2] 

Considering the challenges facing ATV introduction, it is apparent that the proposed 2.0 

multiplier is needed beyond MY 2012. It would be more beneficial to maintain a 2.0 credit 

multiplier until ATV sales reach 10% of the annual fleet sales volume. The true environmental 

benefits of ATVs are unlikely to be measurable before this penetration level – this is an 

investment in only near term technology that can provide significant long term GHG reductions. 

If this approach is not palatable, another approach to encourage the production of ATVs would 

be to allow each manufacturer to have their own 2.0 multiplier and associated phase-in period as 

each manufacturer introduces ATVs. It maintains credits for OEMs, who are only able to 

develop ATVs later and will need ATVs to be competitive in the future. [OAR-2009-0472­

7125.1, p.2] 

By extending the 2.0 multiplier, it will make ATV costs more reasonable and further promote 

these technologies. While building ATVs is the responsibility of the automotive industry, it takes 

more than just ATV production for true emissions reductions from ATVs to be realized. It is 

necessary to have fueling and service infrastructure to support and sustain these technologies. No 

one would purchase ATVs if they can neither fuel them nor have them repaired. Developing and 

establishing this infrastructure for the nation will take a lot of time, far more than a single year or 

even the time frame outlined within this regulation. [OAR-2009-0472-7125.1, p.2] 

Once ATVs are sustainably commercialized, we believe it is appropriate to differentiate highly 

developed, efficient ATVs with an efficiency factor. This factor should be based on 

demonstrated vehicle performance as measured on the FTP and highway test cycles. [OAR2009-0472-7125.1, p.3] 

Some parties desire to assign electric power generation emissions to the vehicle – this is 

unprecedented and introduces an artificial burden on this emerging technology. Historically, fuel 

production (“well-to-tank”) emissions were never assigned to the vehicle utilizing the fuel. 

Vehicle emissions are currently measured and regulated by the amount of compounds directly 

emitted by the vehicle. Obviously, BEVs do not emit CO2, therefore the proposed zero g/mile 

emission level is appropriate. [OAR-2009-0472-7125.1, p.3] 

Additionally, Congress has provided consumers with tax credits to encourage their purchase of 

ATVs. The reason behind these tax credits are to offset the additional cost of purchasing an ATV 

and are justified by the environmental benefit each ATV provides. The same reasoning holds 

true for Automakers, since each ATV is very expensive and Automakers need the additional 

credits to help offset the expense, especially given the ultimate size of the ATV market is 

uncertain. [OAR-2009-0472-7125.1, p.3] 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.85-87] 

Another opportunity for technological and environmental progress is the advanced 

technology vehicle credits, both the zero grams per mile emissions rate and the multiplier. These 

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measures will make the near-term advanced technology vehicles more cost-effective and 

promote these technologies in the U.S. market. 

Also, please remember advanced technology vehicles will only be successful with 

the construction of their fueling infrastructure. 

Motor and Equipment Manufacturers Association 

Lastly, regarding EPA's request for comment on advanced technology vehicle credits for electric 

vehicles, plug-in hybrids, and fuel cells, MEMA supports the additional credits proposed. Also, 

we support the assignment of zero gm/mile CO2 emissions for electric vehicles and plug-in 

hybrid vehicles when operating in the all electric mode, and fuel cell vehicles for early credits 

and for the 2012-2016 timeframe. [OAR-2009-0472-7121.1, p.6] 

[See Docket [OAR-2009-0472-7121.1, pp.5-6 for detailed comments on Hybrid and 

Electrification/Accessory Technologies] 

National Association of Clean Air Agencies (NACAA) 

NACAA would also like to take this opportunity to offer comments on several other issues 

related to this proposal. First, NACAA supports the concept of providing credits for the 

production of advanced vehicles to incentivize full commercialization of electric drive 

technologies, such as battery electric and fuel cell vehicles. We urge, however, that EPA assign a 

national average upstream emissions factor to each advanced technology (taking into account the 

lifecycle emissions of the vehicle system), rather than assuming zero grams per mile CO2 for all 

electric-powered vehicles, which could significantly and inappropriately erode the actual GHG 

emissions reductions to be achieved by the national program. We note that there are various 

studies available – including ones conducted by the California Air Resources Board, MIT, 

Argonne/GREET, the University of California-Davis and the U.S. Department of Energy – that 

can be used to estimate national average upstream CO2 emissions for emerging electric drive and 

fuel cell vehicles. [OAR-2009-0472-7071.1, p.3] 

National Automobile Dealers Association (NADA) 

ATV credits are a cornerstone to incentivizing the introduction of cutting edge and often very 

expensive technologies. Such credits should be technology-neutral and should be set at a 

multiplier level generous enough and be available long enough to serve as a successful incentive. 

In all likelihood, this may mean making such credits available beyond MY 2016. This is 

particularly critical given that ATVs do not involve a simple “if you build it they will come” 

proposition. Their successful introduction will require huge investments in refueling and service 

infrastructure. For dealerships, this will mean new service and repair tools, parts inventories, 

technician training, service information, and possibly new on-site refueling infrastructure. 

Extensive new customer point-of-sale education and support likely will require a focus on at 

home or business refueling options. On this latter point, the National Program should include 

credits for manufacturers who market through their dealers the advanced technology home or 

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EPA Response to Comments 

business refueling systems that may be needed for some of these vehicles. [OAR-2009-0472­

7182.1, p.8] 

The proposal doesn’t and shouldn’t take into account upstream GHG emissions for electric 

propulsion, just as it doesn’t and shouldn’t do so for other propulsion systems/fuels. If and when 

Congress decides to regulate upstream GHG emissions, it will do so. [OAR-2009-0472-7182.1, 

p.8] 

Natural Resources Defense Council 

Treating Advanced Technology Vehicles as “Zero” Emissions Undermines Pollution and 

Technology Benefits of Program 

NRDC believes the emission scoring for all vehicles should be based on their true full fuel cycle 

emission impacts. EPA has proposed to assign electric-drive vehicles, such as plug-in hybrid 

electric vehicles, battery electric vehicles and hydrogen fuel cell vehicles, an emissions rate of 0 

gCO2/mi. However, in reality these vehicles have non-zero emissions rates due to the upstream 

production and transmission of their fuel source, electricity or hydrogen. As discussed in more 

detail below, EPA should specify an upstream emissions factor for these fuels to be used for 

calculating their GHG emissions compliance value. The upstream emissions factor should be 

multiplied by a vehicle’s efficiency to determine its emissions per mile. 

EPA’s proposal that electric-drive vehicles be treated as “zero emissions” and given credit 

multipliers of up to two-fold will undermine the emission benefits of the program and will have 

the unintended consequence of slowing the deployment of conventional cleaner vehicle emission 

reduction technologies into the fleet. 

To illustrate our concerns, we estimate the impact of the EPA proposal on Nissan’s compliance 

strategy. Nissan has indicated that they could produce at least 100,000 Leaf electric cars annually 

by MY 2016, which is about 10 percent of their expected overall car sales. If the EVs are 

assigned a 0 g/mi emission rate and a 2.0 multiplier, we estimate that the Nissan’s gasoline car 

fleet would average about 8 mpg lower fuel economy than if Nissan did not produce any EVs, 

about 31.5 vs. 39.5 mpg. That is, Nissan would have to do very little, if anything to improve the 

performance of their gasoline-powered car fleet from today’s levels. 

An electric-drive vehicle’s emissions compliance value (in gCO2/mile) should be calculated as 

the product of that vehicle’s individual efficiency (in kWh/mile) measured during compliance 

testing and a national grid emissions factor (in gCO2e/kWh), which would be specified by EPA 

for each model year. For plug-in hybrid electric vehicles, which use a combination of electricity 

and gasoline fuel, the emission rate should be a weighted average of the electric miles emissions 

rate and gasoline miles emissions rate using an electric-drive utility factor. 

The grid-electricity greenhouse gas emissions factor (in gCO2e/kWh) should be based on the 

marginal emissions of electricity generation and delivery to support vehicle charging. 

The emissions factor should include both CO2 and non-CO2 GHGs from all steps in the 

electricity production and delivery chain from primary fuel extraction to electricity transmission 

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and vehicle charging for end users. To the extent practical, EPA should incorporate marginal 

emissions into the MY 2012-2016 rule, using the best available public data on electricity 

emissions. Future rulemakings should leverage a well developed, transparent analytical 

framework for marginal emissions. 

Using the framework, the EPA should provide near- and medium-term estimates of grid emission 

factors in a way that both enables stakeholders to estimate the emissions impacts of fleets of 

plug-in vehicles and provides automakers with a clear indication of how electric-drive vehicles 

in future model years can contribute to standards compliance. If policies are adopted that will 

change electricity emissions factors, then EPA should update the emissions factors after public 

notice and review. 

Once the annual electricity grid emission factors on a national or regional basis are determined, 

EPA should calculate a grid emissions factor (again in gCO2e/kWh) that can be applied to 

specific vehicle model years. A vehicle’s emissions scoring will be the product of the grid 

emissions factor assigned to that vehicle model year and the vehicle efficiency. The model year 

values would be the average of the annual electricity grid emission factors (calculated above) 

over the years that comprise the bulk of the operational years for the model years in question. 

The averaging to calculate the model year grid factor should include weighting toward the in the 

earlier years of a model year’s operation due to typical scrappage and VMT degradation that will 

reduce electricity use by that model year over time. 

NRDC recommends setting the model year grid factor in five-model-year p. The five modelyear set value would then be the compliance grid emission factor for all the vehicles within those 

five model years. The specification of a grid emissions factor for a set of model years is preferred 

over an individual factor for each model year because it will discourage manufacturers from 

delaying the introduction of an advanced vehicle by a year or two to take advantage of a lower 

grid emissions factor under a situation where the grid is cleaning up rapidly. 

Below is an illustrative example of how the emission scoring would be calculated for a vehicle 

once the grid emissions factor for the model year has been determined. The calculation results in 

a scoring of 147 gCO2/mi for an electric vehicle such as the Nissan Leaf. While not zero, the 

vehicle’s emissions rate is 67 grams lower than the MY 2016 value for a vehicle of similar 

footprint, which could continue to provide a significant incentive for automakers to build the 

vehicle. 

Example of Electric Drive Vehicle Emissions Scoring (Note: all values are for illustrative 

purposes only) 

The equation that describes the overall calculation is: 

Emission Rate (gCO2/mi) = Model Year Grid Emissions Factor (gCO2e/kWh) * 

Adjusted Vehicle Efficiency (kWh/mi) – Upstream Gasoline Emissions Adjustment 

Three major steps are necessary to determine the values for the equation: 

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1. Model Year Grid Emissions Factor is set for all vehicles in a five-model-year block. 

Calculating the grid emissions factor for the model years involves a series of analyses as 

described previously in this section. For simplicity, we assume a value for the set of model-years 

based on the marginal electricity generation for charging those vehicles that is 50 percent from 

coal plants and 50 percent from natural gas plants. Under this assumption, the Model Year Grid 

Emissions Factor is 790 gCO2e/kWh. 

2. Adjusted Vehicle Efficiency is determined by first stating with the efficiency rating over the 

same 2-cycle Federal Test Procedure (FTP) used to test conventional vehicles. For our 

illustrative calculation, we use 0.224 kWh/mi to approximate the Nissan Leaf expected 

performance. The FTP value is then corrected upward to account for electricity losses that occur 

from converting the AC wall outlet electricity to DC for charging the vehicle battery. We assume 

88 percent conversion efficiency to get a vehicle and charging efficiency of 0.254 kWh/mi. 

Multiplying by the grid emissions factor of Step 1 results in 201 gCO2/mi. 

3. To enable a fair comparison to gasoline vehicles, a final adjustment is necessary to remove the 

equivalent of the upstream gasoline emissions that are not included in the compliance calculation 

for the National Program standards. Upstream emissions are estimated by EPA to be 19,102 

gCO2e/Mbtu of gasoline. Using the energy content of gasoline and the fuel economy of a 

gasoline vehicle with a similar footprint to the Leaf, about 41.4 in MY 2016, we calculate the 

upstream adjustment to be 54 gCO2e/mi. The final vehicle efficiency value is the difference 

from Step 2 above and 54 gCO2e/mi, or 147 gCO2/mi. 

Example EV = 790 gCO2e/kWh * 0.254 kWh/mi – 54 gCO2e/mi = 147 gCO2/mi 

For comparison, a conventional MY 2016 gasoline vehicle of the same footprint would have a 

compliance standard of 214 gCO2/mi, 46 percent higher than the example EV. 

For hydrogen fuel cell and hydrogen internal combustion engine vehicles, EPA should supply a 

fuel production emissions value, in gCO2e/kgH2, following a methodology analogous to that of 

electricity. To determine the vehicle compliance emissions rate (in gCO2/mi), the hydrogen 

production emissions factor would be multiplied by the vehicle propulsion efficiency measured 

in kgH2/mi. 

Advanced Vehicle Technology Multiplier Should Be No Higher than 1.2 to Prevent Slowing 

Adoption of GHG Reduction Technologies in Conventional Vehicles 

To avoid an on-going unintended consequence of slowing conventional technology 

advancements in this rule and future rules, NRDC recommends multiplier values for advanced 

technology vehicles of 1.2. The agency should gradually phase-out the multiplier prior to MY 

2017. Phasing-out the multiplier should not pose a challenge for automakers since as EPA’s 

technical assessment demonstrates, compliance to the fleet average standards can be achieved 

using conventional technologies. 

In the Notice of Proposed Rulemaking (NPRM), EPA expresses a desire to encourage the 

introduction of electric-drive vehicles through the use of multiplier credits. Multiplier credits, 

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however, should not undermine needed advancements in conventional vehicles that serve the 

vast majority of the market. If set too large, the multiplier could actually result in fewer GHG 

reductions than are projected from the National Program met solely by conventional vehicle 

technology because the credits earned by a small number of advanced technology vehicles could 

meet a large portion of a manufacturer’s GHG reduction obligation and void the need for 

emissions reduction technology across a manufacturer’s broader fleet. [OAR-2009-0472-7141.1, 

p. 13-18; footnotes deleted] 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

EPA-HQ-OAR-2009-0472-6185, p. 23.]] 

NRDC believes that the emissions scoring for all vehicles should be based on their true full fuel 

cycle emissions impact. Electric vehicles such as plug-in hybrid electric vehicles, battery 

electric vehicles, and hydrogen fuel cell vehicles have in reality non-zero emissions rate due to 

the upstream production and transmission of their fuel source electricity or hydrogen. 

For electric, we would recommend that the emissions scoring should be based on the vehicle's 

specific efficiency test results in kilowatt hours per mile multiplied by a national grid emissions 

factor in grams of CO2 per kilowatt. 

For plug-in hybrid electric vehicles which use a combination of electricity and gasoline fuel, the 

emissions rate should be a weighted average of the electric miles emissions rate and the gasoline 

miles emissions rate using an electric drive utility factor. 

A similar approach should be applied to hydrogen fuel cell vehicles and hydrogen internal 

combustion engine vehicles with a grams of CO2 per kilogram hydrogen factor applied to the 

propulsion efficiency. 

New York State Department of Environmental Conservation 

Electric Vehicles

 EPA proposes to give credit to electric vehicles, plug-in hybrids, and fuel cell vehicles through 

several mechanisms. First, through 2016, these vehicles would be counted as two vehicles (but 

their emissions would be only counted once). Second, EPA proposes to assume that electric 

operation emissions are 0 grams/mile. [OAR-2009-0472-7454, p.3] 

We recognize the desire and need to create incentives to support deployment of advanced 

technology vehicles, and accept that crediting mechanisms such as those proposed are one means 

to do so. We are concerned, however, that if left unconstrained, this mechanism could permit less 

development of low-emitting vehicles in other portions of the fleet as electric vehicles become 

more widespread. It is therefore important that EPA revisit the crediting mechanism as advanced 

vehicle technologies mature. [OAR-2009-0472-7454, p.3] 

EPA's use of the multiplier and the decision to assume that electric vehicles have zero GHG 

emissions are policy decisions made by EPA in order to facilitate the development of electric 

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EPA Response to Comments 

vehicles. Given the current make-up of the nation's electric grid, the use of electric vehicles will 

result in upstream emissions from power plants that the federal government should address 

through other means, such as a national cap-and-trade program for carbon emissions. In the long 

term, the federal government should seek to implement policies that reduce the power sector's 

reliance on fossil fuels and enable the full emission reduction potential of electric vehicles to be 

realized. As this program evolves, EPA should strive to utilize the best science and data 

available, including calculations of upstream emissions from production of electricity and 

hydrogen (or other advanced fuels) and realistic energy storage and utilization rates. [OAR2009-0472-7454, p.3] 

New York University School of Law, Institute for Policy Integrity (IPI) 

Electric Vehicles 

EPA proposes providing incentives for automobile manufacturers to produce more electric 

vehicles. The structure of this incentive is to assign those vehicles zero carbon emissions and 

also to multiply their weight (counting them as 1.2 to 2.0 cars) during fleet averaging. EPA 

should reconsider this approach. First, EPA itself recognizes that these electric vehicles do not 

have a zero carbon emissions value: electric vehicles run on energy from an electric grid, and 

producing this electricity emits carbon. EPA’s proposal does not account for these emissions. In 

contrast, California’s standards assign electric vehicles a carbon emissions value of 130 g/mi— 

the average amount of GHGs emitted by the California grid to charge the battery and to construct 

the car. EPA should pursue a similar policy—either by assigning all electric vehicles the average 

amount of GHGs emitted by use of electricity across the country’s grid, or by requiring 

manufacturers to report the specific average amount of GHGs emitted for each electric vehicle 

model. [OAR-2009-0472-7232.3, p. 17] 

Second, by counting each electric vehicle as up to two vehicles when averaging, EPA’s proposal 

actually increases the amount of GHG emissions emitted from motor vehicles. For example, 

suppose a manufacturer’s 2016 fleet is comprised of 100 electric cars that emit 130 g/mi of 

carbon and 200 standard cars that emit 300g/mi of carbon (more than the 2016 carbon grams per 

mile standard). After accounting for electric cars as zero and doubling them, the manufacturer’s 

average would be 150 g/mi, well under EPA’s standard of 205 g/mi of carbon. However, that 

fleet is actually emitting closer to 243 g/mi of carbon—which is over EPA’s standards and 

allows for much more GHG emission. Under the credit and trading system, however, the 

manufacturer will be granted credits. It can then sell these credits to another manufacturer with a 

fleet with GHG emissions above the limit—therefore allowing for increased GHG emissions not 

only from the first manufacturer’s fleet but also from the second manufacture’s fleet. [OAR2009-0472-7232.3, pp. 17-18] 

Moreover, through this system, as more manufacturers produce electric cars, the total amount of 

GHG emissions from motor vehicles will increase. The more electric cars produced (and counted 

as zero emissions and doubled in weight during averaging), the more GHG emissions will be 

allowed from other cars, fleets, and manufacturers. In essence, EPA’s program allows for a triple 

undercounting of GHG emissions—once by not accounting for emissions from electric cars, 

twice by counting electric cars more than once when averaging, and finally by allowing the 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

credits to be traded to other manufacturers—and allowing for increases in GHG emissions at 

every step. [OAR-2009-0472-7232.3, p. 18] 

Finally, this proposal inexplicably subsidizes one form of GHG reducing technology (electric 

cars) over others. As explained, this form of subsidization actually allows for more GHGs to be 

emitted as more electric cars are produced. Any form of subsidization of new technology should 

be neutral with respect to GHG emissions—and it should definitely not contribute to their 

increase. Although it may be a valid policy goal to incentivize new technology, EPA should 

achieve this goal by providing grants and subsidies to manufacturers and scientists exploring all 

promising GHG reducing technologies. By giving inflated regulatory incentives to a certain type 

of technology rather than allowing manufacturers to find the most efficient and effective 

solution, EPA will disincentivize other forms of technology that may be more cost-effective at 

reducing GHG emissions. Moreover, by attempting to subsidize technology through use of the 

averaging and trading system, EPA undervalues the real GHG emissions of manufacturers’ fleets 

and distorts interferes with the GHG reduction benefits of the rule. [OAR-2009-0472-7232.3, p. 

18] 

Nissan North America 

Nissan strongly endorses EPA’s proposal to measure the carbon emissions value of the electric 

portion of vehicles at zero grams per mile for the model years covered by this rulemaking. 

Not only is EPA’s proposal the best policy decision to promote EV deployment, it is also legally 

required. EPA and NHTSA have chosen to utilize the current federal test procedure for 

measuring fuel economy in vehicles. Significantly, those procedures were designed to measure 

the tailpipe emissions from internal combustion engines and provide for electric vehicles to be 

assigned a measure according to a petroleum equivalency factor. The testing and calculation 

procedures to be used in the CAFE and GHG programs do not account for upstream emissions in 

the production, refining, or delivery of petroleum to vehicles operating on petroleum. 

There is no rational basis for EPA to discriminate in the regulatory program based on the form of 

fuel used, especially when doing so would detract from the very public policy EPA has endorsed. 

Were EPA to account for upstream CO2 emissions for electric vehicles and not do so for 

vehicles using other forms of propulsion, EPA would be discriminating between regulated 

products and would also be discriminating between regulated parties by virtue of the 

technologies and strategies they have chosen to comply with the regulatory requirements. 

EPA has properly, from both a policy and a legal perspective, proposed to treat all vehicles 

equally by accounting for CO2 tailpipe emissions alone. [OAR-2009-0472-6798.1, pp. 3-4] 

Finally, as noted above, Nissan endorses the policy of promoting advanced vehicles based on 

battery and fuel cell technologies. Consistent with focusing on tailpipe emissions and 

encouraging the most advanced technologies to eliminate tailpipe CO2 emissions, Nissan 

suggests that the advanced technology vehicle credits be structured to recognize zero emission 

vehicles from those that have some tailpipe emissions. Accordingly, Nissan suggests that full 

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battery electric and fuel cell vehicles be provided a maximum multiplier with plug-in hybrid 

vehicles provided a significant but lower multiplier. [OAR-2009-0472-6798.1, p.6] 

Northeast States for Coordinated Air Use Management 

EPA has proposed to allow manufacturers to receive additional credits for the placement of 

advanced technology vehicles, including pure electric vehicles, fuel cell vehicles, and plug-in 

hybrid electric vehicles. NESCAUM is concerned that the preferential crediting proposed by 

EPA may be too generous by assuming a zero (0) grams per mile CO2 equivalent for vehicles 

powered by electricity. While we strongly support incentives for the introduction of advanced 

technology vehicles, we are concerned that the magnitude of credits being offered for these 

vehicles may unnecessarily weaken the overall effectiveness of the proposed standards. We 

encourage EPA to re-evaluate its advanced technology vehicle credits to ensure an appropriate 

level of credit is provided by considering the whole vehicle, e.g., vehicle technology and fuel 

system. A number of studies are available to assist the agency in developing assumptions for the 

CO2 resulting from electricity generation as are models (such as GREET) to estimate upstream 

emissions. 

With regard to the multiplier EPA has proposed for advanced technology vehicles, NESCAUM 

urges the agencies to establish a multiplier at the lower end of the range proposed in this 

rulemaking. A multiplier of 2.0 could result in erosion of the GHG standards and fleet average 

GHG emissions significantly greater than 250 grams per mile. A multiplier on the low end of 

what EPA has proposed and ramping down to 1 by 2016 could provide incentives for 

manufacturers to place electric vehicles but would pose less of a risk of eroding the overall 

standards than will the higher multiplier. [OAR-2009-0472-7235.1, p.5] 

Physicians for Social Responsibility, Los Angeles 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.79-85] 

Additionally, EPA should reconsider its credit multiplier of two proposed for these vehicles as 

proposed. A manufacturer could accrue significant credits with electric vehicles but then do little 

to improve the rest of its fleet. This is not adequate to protect public health. 

Public Citizen and Safe Climate Campaign 

EPA’s proposed credits for advanced technology vehicles such as plug-in hybrid electric vehicles 

(PHEVs) and battery electric vehicles (EVs) must reflect real environmental benefits, must not 

be overly generous, and should be worth no more than the real world greenhouse gas reductions. 

EPA proposes to give credits for these vehicles by applying a multiplier which could range 

between 1.2 and 2, while valuing the EVs as having 0 gCO2/mi, and assigning PHEVs 0 

gCO2/mi, for the “electric portion” of operation. Part of EPA’s motivation in offering this credit 

is to encourage manufacturers to produce these vehicles. But efforts to encourage production 

should not undermine the fundamental goal of reducing greenhouse gas emissions. There are 

other, better incentives for automakers to build these vehicles, and many of the major automakers 

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have already announced plans to offer PHEVs and EVs. Some analysts project that more models 

will be offered that plug-in than hybrid electric vehicles in 2011. [OAR-2009-0472-7050.1, p.5] 

Based on publicly-announced plans for introducing EVs and PHEVs into the vehicle fleet, the 0 

gCO2/mi valuation of electric operation, combined with a multiplier of 2 could offset a 

manufacturers’ compliance burden by as much as half, in the case of Nissan’s Leaf EV, to a third 

for GM’s Volt PHEV. EPA acknowledges that the real greenhouse gas impact of EVs is not zero, 

and therefore, providing such a large volume of credits could actually result in greater 

greenhouse gas emissions from gasoline vehicles than if these vehicles were not introduced into 

the fleet. EPA should not establish a regime in which efforts to encourage production of EVs and 

PHEVs undermine the overarching goals of improving fuel economy and reducing greenhouse 

gas emissions. [OAR-2009-0472-7050.1, p.5] 

If EPA applies a multiplier for these vehicles, we suggest that it should not be higher than 1.2 

times the greenhouse gas emissions associated with a vehicle, and that it should phase out over 

the course of the program. A multiplier that phases out by 2016 retains the incentive to introduce 

EVs and PHEVs with less diminution of compliance with the standards. Phasing out the 

multiplier sends a signal to the industry that these credits will not continue into the standards for 

model year 2017 and beyond. This is appropriate given that these vehicles, while considered 

“advanced” today, would not be considered advanced a few years from now, when the next 

round of standards is being considered. To the extent that these credits entice manufacturers to 

build these vehicles sooner, phasing out the credits would also encourage manufacturers to build 

more of these vehicles earlier in the program to capture the greatest value of credits. [OAR-2009­

0472-7050.1, p.5] 

EPA should include in its final rule some more detailed discussion of its intent to update its fuel 

economy labeling program to include estimates of mpg equivalents for EVs and PHEVs. While 

we [OAR-2009-0472-7050.1, p.5] appreciate that EPA is currently working on this proposal, we 

urge that the agency make some mention of its thought process in this matter. The automakers 

have already made public claims about expected mpg equivalents for EVs and PHEVs. If EPA is 

silent on this matter, then the public message is that the claims made by the industry are correct. 

[OAR-2009-0472-7050.1, p.6] 

We urge that EPA develop a means for estimating full fuel cycle emissions, including upstream 

emissions from electricity production for EVs and PHEVs. Emissions for electric vehicles for 

compliance accounting should be measured by multiplying vehicle efficiency (kWh/mi) by a grid 

emission factor (gCO2/kWh), yielding emissions in gCO2/mi. The grid emissions factor should 

be applied on a state or regional basis to vehicles in the states in which they are first sold. This 

would account for differences in greenhouse gas intensity of electric power generation in 

different parts of the country. It would also encourage deployment of these vehicles in the 

regions where they will provide the biggest decrease in greenhouse gas emissions. EPA should 

publish state or regional greenhouse gas emission factors for multiple model years, and the 

agency should provide an opportunity for public comment on the emission factors. This will 

permit automakers to plan for compliance taking into account the emissions of EVs and PHEVs. 

[OAR-2009-0472-7050.1, p.6] 

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The EPA should develop a similar methodology for estimating the upstream fuel emissions 

component for hydrogen fuel cell and hydrogen combustion vehicles. A fuel emission factor 

must be estimated in gCO2/kgH2. The hydrogen emission factor should take a weighted average 

for different production methods of hydrogen. Emissions from hydrogen fuel cell or combustion 

vehicles would be estimated by multiplying the vehicle efficiency in kgH2/mi by the emission 

factor. [OAR-2009-0472-7050.1, p.6] 

SABIC Innovative Plastic 

SABIC-IP strongly endorses the multipliers proposed for electric, plug-in hybrid and fuel cell 

vehicles. By encouraging the deployment of these vehicle types during the time frame covered 

by the rule, the multiplier also furthers the redirection of the vehicle fleet towards one 

fundamentally designed for lower emissions and better fuel economy. [OAR-2009-0472-7080.1, 

p.3] 

Sierra Club 

Electric Vehicle Compliance Value 

Although battery electric vehicles do not emit greenhouse gases through a tailpipe when driving, 

electricity generated to power these vehicles does result in increased emissions. EPA 

acknowledges these upstream emissions in the proposed rule, stating: [OAR-2009-0472-7278.1, 

p.11] 

“In reality the total emissions off-set relative to the typical gasoline or diesel powered vehicle is 

not zero, as there is a corresponding increase in upstream CO2 emissions due to an increase in 

the requirements for electric utility generation.” [OAR-2009-0472-7278.1, p.11] 

Instead of attempting to account for upstream emissions, EPA simply ignores them. As electric 

vehicle production and use are expanded, and in future rounds of standards, it is critical that EPA 

and NHTSA treat electric vehicles in an accurate manner and in away that does not undermine 

the integrity of the program. [OAR-2009-0472-7278.1, p.11] 

In this rulemaking, EPA should derive a national grid emissions factor (in gCO2e/kWh) for each 

model year and combine that value with vehicle efficiency (in kWh/mile) to obtain a more 

accurate measure of each electric vehicle’s performance. The national grid emissions factor 

should account for upstream emissions from the marginal electricity that is generated and 

delivered for vehicle charging. Additionally, EPA could use a regional approach for emissions 

from electricity generation; creating a system that will encourage electric vehicle sales in regions 

that have the cleanest grid and will have the greatest greenhouse gas reductions. While we are 

not proposing a certain value for grid emissions, we do believe that electric vehicles emit less 

pollution than average vehicles currently on the road. A recent report by American Solar Energy 

Society, sponsored by Sierra Club, estimated that on average, electric vehicles emit 42% less 

greenhouse gases per mile than conventional vehicles, but emit more than a Toyota Prius. The 

emissions factor for electric vehicles cannot ignore emissions from generating electricity. This 

factor can be reduced over time as renewable electricity increases. If EPA finalizes a zero 

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emissions factor for EVs it will very difficult to set a different value for standards that apply in 

2017 and beyond. [OAR-2009-0472-7278.1, p.11] 

We are concerned that when combined with a compliance value of 0 grams/mile, advanced 

technology vehicle credits could allow automakers that produce a moderate number of electric 

vehicles to meet a significant portion of their compliance obligation in 2016 with advanced 

technology vehicle credits or accrue a significant amount of credits they can carry forward into 

the next round of standards. Several manufacturers, most notably Nissan, have announced plans 

to build and sell significant numbers of electric vehicles in the years covered by these proposed 

standards. These credits could enable manufacturers to produce less efficient (and more 

polluting) models in their fleets and slow the deployment of conventional technologies that can 

boost fuel economy and lower emissions now, when emissions reductions are most needed. EPA 

must ensure that all credits amount to real reductions – magnifying an unreal 0 emission value 

could undermine the program. [OAR-2009-0472-7278.1, p.12] 

Further, advanced technology credits should not be available prior to 2012. Vehicles sold 

through 2011 were planned well before these proposed standards, and credits awarded prior to 

2012 would be windfall credits. If EPA includes these credits in the final rule, we urge that 

advanced technology credits not be available for banking, carrying forward or carrying back. In a 

program designed to reduce greenhouse gas emissions, these credits do not represent actual 

emission reductions. Carrying forward advanced technology credits could slow technology 

adoption in the future, countering the intent of the credit. In sum, we oppose the use of an 

advanced technology vehicle multiplier. However, if EPA proposes a multiplier in the final rule, 

we urge that it start no higher than 1.2 in model year 2012, ramp down annually and phase out by 

2016. EPA should be very clear that this multiplier will ramp down and not be continued in the 

next round of standards. [OAR-2009-0472-7278.1, p.12] [Sierra Club also submitted these 

comments as testimony at the Detroit public hearing, See docket number EPA-HQ-OAR-2009­

0472-6185, pp. 28-29.] 

We strongly urge EPA to address both the emission factor and multiplier in the final rule. We 

believe that EVs can be a critical part of a clean vehicle future, but we are concerned that the 

credits EPA proposes will taint these vehicles as automakers use credits to offset improvements 

in their gasoline vehicle fleets or sold to another automaker. Each EV will be associated with 

increased gasoline consumption or greenhouse gas emissions. These credits could be viewed 

much like credits under the CAFE program for flexible fuel vehicles (FFVs). Automakers apply 

FFV credits (up to 1.2 mpg) toward meeting CAFE standards and the program has been 

associated with increasing oil consumption. Finally, consumers will understand that electricity 

has emissions – a zero value will mislead consumers. Fixing these problems now will give EPA 

greater flexibility in setting standards for EVs in future years. [OAR-2009-0472-7278.1, p.12] 

[The following comments were submitted as testimony at the Detroit public hearing. See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 27-28] 

The emissions associated with plug-in electric vehicles cannot be ignored. Although electric 

vehicles emit no global warming pollution while driving, producing the electricity to power them 

certainly does. Battery electric and plug- hybrid electric vehicles can provide significant 

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EPA Response to Comments 

reductions in emissions with a cleaner electrical grid and we should be encouraging the 

development and deployment of battery technologies. However, we should consider whether 

there are better ways to incentivize electric vehicles than ignoring the upstream emissions from 

electricity generation in a program designed to reduce greenhouse gas emissions. As electric 

vehicle production and use are expanded, and in future rounds of standards, it is critical that EPA 

and NHTSA treat electric vehicles in an accurate manner. 

South Coast Air Quality Management District 

Second, the South Coast AQMD staff view the EPA credits for electric vehicles as overly 

permissive. Under ARB's strict accounting of electric vehicle credits for its greenhouse gas 

standards, electric vehicles are credited with greenhouse gas emissions of 130 grams per mile 

calculated based on the average upstream emissions of the California grid. 

The California grid is heavily dominated by natural gas and renewable power sources. On a 

per capita basis, the California grid is 50 percent lower in greenhouse gas emissions than the 

national grid. 

Even with these life-cycle emission advantages for electric vehicles used in California, ARB 

insists that the upstream emissions be fully reflected in the well-to-wheel carbon accounting. 

In stark contrast, the EPA credits national electric vehicles with zero greenhouse gas 

emissions per mile thereby ignoring the upstream emissions entirely. This assumption risks 

damaging the credibility of the overall EPA greenhouse gas emissions standards program as it 

employs inappropriate carbon accounting practices. 

In addition, EPA is proposing a multiplier of up to two to one, which amplifies the impact of this 

lax EV credit criterion. As a result, 13 gasoline cars could effectively be exempted for every 

single electric vehicle credited under the EPA program. 

This dilution in program effectiveness should be minimized as much as possible. At a minimum, 

the AQMD staff recommend that EPA put a limit on the number of vehicles which would qualify 

 for the zero gram EV credit and that any credits be aligned ultimately with ARB's life-cycle 

credit methodology which suggests a credit value closer to 200 grams nationally rather than zero. 

[Comments are from LA Testimony, OAR-2009-0472-7283, pp.59-67.] 

State of New Jersey 

General advanced technology vehicle credit comments: The Department supports the promotion 

of alternative fuel vehicles, which includes electric vehicles, and advocates a diversified vehicle 

fleet as the only way the State can meet its statewide greenhouse gas reduction limits. In 

addition, the Department agrees with the USEPA that it is important to ensure that deployment of 

new vehicle technologies or fuels does not result in increases in emissions of greenhouse gases. 

Overall, we strongly support the use of appropriately valued 'bonus' credits to encourage the 

earlier introduction of new advanced vehicle power trains, including electric vehicles (EVs), 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

PHEVs and fuel cell vehicles (FCVs). The Department supports the USEPA's statement that 

these technologies have the potential for more significant reductions of greenhouse gas emissions 

than any technology currently in commercial use and that encouraging early introduction of these 

technologies will help to enable their wider use in the future. 

In administering these 'bonus' credits, the Department feels strongly that the three primary 

vehicle technologies (EVs, PHEVs and FCVs) should not be given the same value. Instead, the 

Department supports differentiating between EVs and PHEVs for advanced technology credits. 

As described by USEPA on page 49533 of the proposal, PHEVs should be provided a lesser 

multiplier compared to EVs. The PHEV multiplier should be prorated based on the equivalent 

electric range of the vehicle in order to incentivize battery technology development. In addition, 

the Department recommends a credit approach that provides different credit levels to even 

further differentiate between vehicle types, similar to the approach adopted by California in its 

Zero Emission Vehicle (ZEV) regulations. California's approach allows these credits to vary 

from a factor of 1.0 for utility EVs with less than a 50 mile range to 7.0 for Type V FCVs that 

can travel over 300 miles and have a fast charge time of less than 15 minutes, thereby providing 

increased credit for the most efficient technologies. Another possible method for determining 

credits would be to base the multipliers on the projected greenhouse gas contributions of the 

vehicles, including the contribution of the grid supplying power to the location where the 

vehicles are recharged. While we understand that this last method would be difficult to 

implement, the Department encourages the USEPA to reexamine the possibility of using a 

broader, lifecycle approach to determining these credits. 

Finally, the Department agrees with a phasing down of the credits over time as vehicle 

development and production costs decline due to economies of scale and other factors. However, 

New Jersey, instead of completely eliminating the 'bonus' credits, supports the continuation of 

some level of 'bonus' credit for FCV and longer range battery electric vehicles (BEVs). [OAR2009-0472-7109.1, p.3] 

Zero Emission Vehicle credits: The Department is concerned that the proposal's assumption of 

zero grams per mile CO2 equivalent for vehicles powered by electricity does not include the full 

life cycle emissions of ZEVs. While we agree that this approach is appropriate in the initial years 

to serve as an incentive for the production of these vehicles, it does not represent the full well-towheel emissions from these vehicles, and so should not be continued indefinitely. While we 

strongly support incentives for the introduction of advanced technology vehicles, we are 

concerned that the magnitude of credits being offered for these vehicles may, in the long term, 

unnecessarily weaken the overall effectiveness of the proposed standards. The Department 

encourages the USEPA to re-evaluate its advanced technology vehicle credits to ensure that an 

appropriate level of credit is provided by considering the entire life cycle of each vehicle, e.g., 

vehicle technology and fuel, to provide a balance between encouraging advanced vehicle 

technologies while protecting the greenhouse gas emission reductions. [OAR-2009-0472-7109.1, 

p.4] 

[State of New Jersey also submitted these comments as testimony at the New York public 

hearing, See docket number EPA-HQ-OAR-2009-0472-4621, pp. 115-117.] 

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EPA Response to Comments 

State of Washington Department of Ecology 

Ecology also takes this opportunity to comment on several other issues related to this proposal. 

First, we support EPA's proposal of additional credit to encourage the early commercialization of 

advanced vehicle power trains including electric vehicles, plug-in hybrid vehicles and fuel cell 

vehicles. As for the proposed credit multiplier approach, Ecology encourages EPA to assign a 

national average upstream emission factor to each advanced technology, rather than using the 

proposed zero gram per mile CO2, for use in calculating the credit. [OAR-2009-0472-7299, p.2] 

EPA acknowledges that for each EV sold, in reality the total emissions is not zero, since there is 

a corresponding increase in upstream CO2 emissions due to an increase in the requirements for 

electric utility generation. As such, EPA's proposal to assign zero grams per mile CO2 could 

result in credits that are large enough that they could substantially reduce, the actual greenhouse 

gas reductions provided by the national program. [OAR-2009-0472-7299, p.2] 

Toyota Motor North America 

EPA proposes to allow early advanced technology vehicle (ATV) credits for sales of EVs, 

PHEVs, and fuel cell vehicles. First, EPA proposes to assign a 'zero' GHG value for the electric 

operation portion for such vehicles, in essence providing a second incentive for such 

technologies. Second, EPA's proposal includes a sales multiplier in the range of 1.2 to 2.0 for all 

eligible vehicles. EPA is considering a phase down in sales the multiplier by model year 2016. 

[OAR-2009-0472-7291, p.24] 

Toyota agrees with the concept of providing early credits for these advanced technology vehicles 

in terms of the 'zero' assigned GHG value for the electric operation portion. While non-zero 

upstream fuel production emissions will exist for these technologies, recognizing the 'zero' tankto-wheel emissions of the vehicle itself should provide a marginal incentive for OEM's to 

consider these technologies. [OAR-2009-0472-7291, p.24] 

Toyota is concerned with EPA's proposal to offer a range of sales multipliers. The 'zero' assigned 

GHG level for these vehicles would provide an incentive, and is more directly tied to a 

performance criterion (electric operating range) than a sales multiplier. It is unclear why EPA 

proposes, in essence, a double credit for these technologies. [OAR-2009-0472-7291, p.24] 

Of course, compliance incentives alone are not sufficient to promote wide-scale deployment of 

these technologies, nor do such incentives provide any clear benefit in compelling consumers to 

actually purchase advanced technology vehicles. In order to truly promote commercialization of 

advanced technology vehicles such as plug-in hybrids, electric vehicles and fuel cells, Toyota 

urges EPA and NHTSA to continue to work with OEMs, states, energy providers, NGOs and 

others to lower the barriers to widespread commercialization of these promising technologies, 

especially adequate refueling infrastructure and the codes and standards necessary to support it. 

[OAR-2009-0472-7291, p.24] 

Union of Concerned Scientists 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

EPA has requested comment on proposed credit flexibilities that “encourage the early 

commercialization of advanced vehicle powertrains, including electric vehicles (EVs), plug-in 

hybrid electric vehicles (PHEVs), and fuel cell vehicles.” We break these flexibilities up into two 

categories. [OAR-2009-0472-7181.1, p.7] 

First, is the proposed use of advanced technology vehicle credits for EVs, PHEVs, and FCVs in 

which a multiplier is applied to the number of vehicles sold, thus counting as more than one 

vehicle in the manufacturer’s fleet average. These credits would be an additional incentive above 

and beyond existing, and substantial, vehicle R&D tax incentives, loans, grants, and joint 

development programs for such technologies. EPA proposes a multiplier in the range of 1.2 – 2.0 

and solicits comment on both its magnitude and whether it should be held constant or ramp down 

over time. [OAR-2009-0472-7181.1, p.7] 

UCS recognizes the rationale for such credits, but we are concerned about the magnitude of the 

multiplier and its effect on eroding actual emissions savings offered by the rule. At least one 

manufacturer – Nissan – has already announced plans to produce up to 150,000 EVs annually 

beginning as early as 2012. Given Nissan’s stated intentions, one questions whether advanced 

technology vehicle credits will encourage early adoption of EV technology, or whether they will 

merely provide windfall surplus credits to a company whose advanced technology development 

efforts are already underway. [OAR-2009-0472-7181.1, p.7] 

The same is especially true for model year 2009-2011 EVs, for which EPA also proposes 

providing credits. Given EPCA’s requirement of finalizing rules 18 months before the model 

[OAR-2009-0472-7181.1, p.7] year, such vehicles already have fully developed marketing plans 

that will not be affected by the MY2012-MY2016 rule. Providing credits for these model years 

simply provides the manufacturers with windfall credits, an approach fundamentally inconsistent 

with the stated objective of the policy. [OAR-2009-0472-7181.1, p.8] 

Second, EPA proposes use of an emission factor of zero g/mi in the assessment of EVs, 

(the electric portion of) PHEVs, and FCVs. While EPA acknowledges that “in reality the 

total emissions...is not zero,” it rationalizes the use of such a factor because it “is also interested 

in promoting very advanced technologies such as EVs which offer the future promise of 

significant reductions in GHG emissions.” [OAR-2009-0472-7181.1, p.8] 

UCS strongly objects to this approach, as it lacks technical justification, erodes savings of the 

program, and even stands in stark contrast to recent assessments performed by the agency itself. 

According to the joint EPA-DOE website fuel economy.gov, a recent (2003) pure electric 

vehicle is responsible for nearly half as much heat-trapping emissions as its gasoline-powered 

counter part. The 2003 RAV4 EV has a stated annual carbon footprint of 3.9 tons of CO2, while 

the gasoline (2-wheel drive, automatic transmission) version has an annual carbon footprint 

of 8.0 tons. [OAR-2009-0472-7181.1, p.8] 

Credit Consequences 

As demonstrated below, the consequences of offering either of these advanced technology 

incentives – individually or together – at volumes in line with Nissan’s stated production are not 

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EPA Response to Comments 

trivial. According to Automotive News, Nissan expects to have 20,000 Leafs pre-sold by the 

third quarter of 2010, and intends to produce 150,000 units annually starting in late 2012. For the 

purpose of examining the upper bound impacts, let us assume Nissan’s 2012 car sales reside at 

958,696 units (including electric vehicles) with a conventional passenger car fleet average 

stringency of 263 g/mi. The inclusion of 0 g/mi for 150,000 passenger car electric vehicles 

would provide Nissan with approximately 7.5 million megagrams of credit, with no multiplier in 

effect. If an advanced technology vehicle credit multiplier were used, the credit amount would 

increase further, to between 8.8 million megagrams and 13.0 million megagrams (corresponding 

to a multiplier of 1.2 and 2.0, respectively). By contrast, the use of an emission factor that 

acknowledges the upstream environmental impact of electric drive vehicles would dampen the 

quantity of surplus credits that could be accrued, resulting in credits more reflective of actual 

tons saved. Assuming no multiplier, the use of a 130 g/mi emission factor (the value assigned to 

EVs in the California Pavley program) would yield credits of 3.8 million megagrams. Multiplier 

use would increase credit amounts to between 4.4 million and 6.6 million megagrams (again, 

corresponding to a multiplier of 1.2 and 2.0, respectively). As summarized in Table 1, the effect 

of choosing a 0 g/mi factor over an alternative EV factor such as 130 g/mi yields the generation 

of between 3.7 and 6.4 million additional megagrams of credit. Similarly, as shown in Table 1, 

use of a 2.0 sales multiplier dramatically boosts manufacturer credits an additional 2.8 million to 

5.5 million megagrams. [OAR-2009-0472-7181.1, p.8] 

[See docket OAR-2009-0472-7181.1, p.9 for Table 1. Possible Credit Accrual Resulting from 

Sale of 150,000 Nissan Leaf EVs megagrams] 

Putting this into a comparative context, even assuming the more modest multiplier of 1.2, 

adoption of a 130 g/mi factor for 150,000 Leaf EVs would weaken the compliance stringency for 

Nissan’s remaining passenger car fleet from 263 g/mi to 293 g/mi. Use of a 0 g/mi factor would 

weaken the compliance stringency from 263 g/mi to a troubling 322 g/mi (an erosion of an 

astounding 6.2 mpg-equivalent from Nissan’s passenger car fleet). These values are higher than 

those of the average Model Year 2008 car and fleet. [OAR-2009-0472-7181.1, p.9] 

While UCS supports policies that encourage advanced technology development, we see no 

reasonable justification to provide windfall credits of this sort. Given the numerous incentives 

already in place to promote advanced technology development (R&D tax incentives, loans, 

grants, joint development programs, etc.), UCS strongly recommends that (a) no credits be 

offered before model year 2012 or after model year 2016 (by when commercialization decisions 

will have been made); (b) the use of a 0 g/mi emission factor be abandoned; (c) an emission 

factor reflective of actual in-use emissions, consistent with current research, be adopted; and (d) 

a multiplier no higher than 1.2 be used, with a rampdown of 0.05 per year (i.e. 1.20 in 2012; 1.15 

in 2013; declining to 1.0 in 2016). This rampdown would provide a smooth transition for 

manufacturers while rewarding the earliest actors, as well as ensure that credits see a proper 

unset. Alternatively, a more aggressive rampdown could be employed that is triggered once a 

manufacturer reaches a specific cumulative sales level, such as the first 200,000 units. [OAR2009-0472-7181.1, p.9] 

Further, it was unclear from our reading of the proposed rule whether the agency plans to allow 

trading, banking, or borrowing of advanced technology vehicle credits. UCS believes that any 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

credits accrued for advanced technologies should not be available for trading, banking, or 

borrowing. The proposed advanced vehicle credits do not represent actual emission reductions 

and thus should not be available to manufacturers for the purpose of balancing emission deficits, 

or for trading to other manufacturers. Moreover, banking of credits would slow future 

technology adoption, undermining the concept behind the credit. [OAR-2009-0472-7181.1, p.9] 

Should the agency decide to employ advanced technology credits, we urge the agency to 

consider that manufacturers have a history of becoming dependent on credits, opting to choose 

them over actual improvements when more cost effective. As such, it is critical that any 

advanced technology credits be limited in availability (quantity and duration), and that they be 

designed to truly accelerate technology as well as to minimize the loss of near term emission 

reductions that will occur. [OAR-2009-0472-7181.1, p.9] 

Lastly, on a related note, UCS questions the underlying methodology used for computing 

advanced technology vehicle credits. The calculations assume approximately 191,000 miles 

of [OAR-2009-0472-7181.1, p.9] lifetime travel for passenger cars, and more than 220,000 miles 

of lifetime travel for light trucks. We believe it is unreasonable to assume that the first round of 

advanced technologies such as EVs, FCVs and PHEVs would see lifetime VMT as high as their 

conventional counterparts, and that use of the higher VMT artificially inflates the savings that 

those vehicles could provide the environment. Technology limitations as well as infrastructure 

limitations (causing, for example, limits to EV driving range) each play into advanced vehicle 

VMT levels, and should be accounted for when assessing the value of credits accrued by such 

technologies. As such, UCS recommends the agencies modify VMT assessments for advanced 

technology vehicles in the calculation of credits. [OAR-2009-0472-7181.1, p.10] 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.103-113 (p.108)] 

Second, compliance credits should be based on real-world performance. UCS is concerned 

that the NPRM includes credits for advanced vehicles that could erode the benefits of the 

program and give automakers credit for actions undertaken to meet California's Zero Emission 

Vehicle program. 

California's ZEV program requires automakers to manufacture and sell zero emission vehicles. 

By 2014, the current California program could result in close to 60,000 plug-in hybrid electric 

vehicles as well as 7,500 pure battery electric or fuel-cell vehicles on the road. 

The proposed federal program would allow manufacturers to accrue credits for vehicles 

that incorporate advanced zero emission technologies. This credit would provide automakers 

with a credit multiplier in the range as proposed of 1.2 to 2.0 for advanced vehicles. In essence, 

this allows advanced vehicles such as plug-ins, electric, and fuel-cell vehicles to count as more 

than one vehicle in a manufacturer's fleet average. 

Compounding this is EPA's proposal to use an emissions factor of zero grams per mile 

for electric vehicles and the electric portion of plug-ins. 

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EPA Response to Comments 

While UCS supports flexibility in compliance mechanisms, credits should be based on real and 

verifiable emissions reductions. This means that credits for electric drive should be based upon 

average life-cycle emissions from electricity, including upstream emissions from power 

generation. 

The assumption that all electric vehicles have zero emissions will erode the benefits of 

the federal program and could delay widespread adoption of cost-effective technologies available 

today to reduce emissions. 

Plus, automakers already producing ZEVs to meet California's ZEV mandate will also get 

credit under a federal program, credit that might far exceed their actual life-cycle emissions. 

Therefore, UCS recommends that in this rule no advanced vehicle credits be offered before 

model year 2012 or after model year 2016 and that the use of a zero-grams-per-mile emission 

factor be abandoned and that an emission factor reflective of actual in-use emissions consistent 

with current research be adopted. 

And we recommend a multiplier of no higher than 1.2 be used; to abandon the 2.0, start with 1.2, 

and then decline to .05 per year, going to just the 1.0 in 2016 for these advanced vehicles. 

And the credits should expire once a manufacturer surpasses a certain volume threshold, such 

as 200,000 advanced vehicles sold. 

[Union of Concerned Scientists also submitted these comments as testimony at the New 

York public hearing, See docket number EPA-HQ-OAR-2009-0472-4621, pp. 99-101.] 

United Auto Workers 

We are also supportive of EPA’s proposal to provide compliance flexibility through a multiplier 

for electric-drive technologies and for so-called off-cycle technology credits. We believe 

strongly that these proposals will provide a desirable incentive to bring into production advanced 

fuel-saving technologies that have the potential to radically reduce the greenhouse gas emissions 

from motor vehicles. Although we recognize that this will cause a slight near-term reduction in 

the total amount of greenhouse gas emissions avoided, it will hasten the day when these 

technologies can be produced in large volumes. This will ultimately result in greater emissions 

reductions in the medium and long term because of the cost reductions expected with increased 

volumes of these advanced technologies. [OAR-2009-0472-7056.1, p.3] 

University of California, Santa Barbara, Bren Working Group on Vehicle Fuel Economy 

Credits for Electric Vehicles 

The EPA proposes using a multiplier (ranging from 1.2-2.0) for electric vehicles (EVs), plug-in 

hybrid electric vehicles (PHEVs), and fuel cell vehicles produced from MY 2012 through MY 

2016. As a result of a multiplier, advanced technology vehicles can be counted as up to two 

vehicles when annual fleet fuel efficiency averages are calculated. [OAR-2009-0472-7188.1, p. 

5] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Although we acknowledge that the use of a multiplier would be effectively promote utilization of 

cleaner technologies, we contend that the multiplier should be set at the lower end of the range 

(1.2) to avoid eroding the benefits of this proposed ruling. A multiplier in the higher range would 

not be conducive to curbing greenhouse gas pollution and would not be commensurate with the 

environmental benefit. Additionally, we urge the EPA to phase down the multiplier by 0.05 per 

year, so that it starts at 1.2 in 2012, and declines to 1.0 in 2016. [OAR-2009-0472-7188.1, p. 5] 

In addition to the abovementioned credits, the EPA proposes using an emissions factor of 0 g/mi 

for EVs and PHEVs. As the EPA acknowledges in the NPRM, battery-powered vehicles do not 

produce emissions at the tailpipe. However, these are not zero-emissions vehicles. Emissions are 

produced where the power is generated, and electricity production is greenhouse gas intensive. In 

fact, according to the DOE, 44.7% of the electricity generated in the U.S. is produced from coalfired power plants. [OAR-2009-0472-7188.1, p. 6] 

On average, in the United States, the generation of each kWh produces 1.36 pounds, or 617 

grams, of CO2. By comparison, combustion of a gallon of gasoline emits approximately 8,900 

grams of CO2. Therefore, one gallon of gasoline produces similar greenhouse gas emissions as 

nearly 15 kWh of electric power. For example, if the Tesla Roadster uses 21.7 kWh to travel 100 

miles, then the CO2 emissions from generating its power will be 13,389 grams (617 g x 

21.7kWh), or the equivalent of 1.5 gallons of gasoline. [OAR-2009-0472-7188.1, p. 6] 

Another consideration is that emissions change dramatically by region due to variations in the 

electricity mix. In states where nearly 80% of electric power comes from fossil fuels (such as 

Kansas and Missouri), each kWh produces 1.87 pounds or 849 grams of CO2. As a result, in 

those states the same vehicle would emit 18,423 grams of CO2 or the equivalent of 2.07 gallons 

of gasoline to travel 100 miles. This analysis shows that ignoring electric power production 

emissions provides incomplete and misleading information. The agency must account for high 

emission energy sources and rechargeable electric cars should not be given a zero emissions 

rating. [OAR-2009-0472-7188.1, p. 6] 

As noted in the proposed rulemaking, electricity generation represents the largest source of 

greenhouse gas emissions in the U.S. (p. 49508), while transportation sources are second. Giving 

excessively generous credits to vehicles that rely on grid electricity translates into simply shifting 

the burden from a tailpipe to a smokestack, without achieving significant improvements. [OAR2009-0472-7188.1, p. 6] 

University of Pennsylvania, Environmental Law Project 

Assignment of Zero Emissions to Advanced Technologies 

Currently, the proposed rule evaluates advanced technology vehicles like plug-in electrics as if 

they were responsible for no greenhouse gas emissions whatsoever. Yet these vehicles run on 

energy sources like electricity, which do generate significant greenhouse gasses in their 

production. Although these vehicles are certainly very efficient, their operation still contributes 

greenhouse gases to the atmosphere, and there is little policy justification for benefiting these 

advanced technologies so significantly over alternatives like gas hybrids. Furthermore, the sale 

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EPA Response to Comments 

of a relatively small number of these vehicles might allow a manufacturer to significantly reduce 

the extent to which it must make efficiency improvements in the rest of its fleet. [OAR-2009­

0472-7286.1, p. 18] 

U.S. Coalition for Advanced Diesel Cars 

The Coalition applauds EPA and NHTSA for championing reality-based solutions to our national 

petroleum end GHG reduction objectives. In each of the credit mechanisms described above, the 

agencies demonstrate the importance of controlling off-cycle emissions through a holistic 

approach that is not chained exclusively to a pair of 40-year old test procedures. Each of these 

reality based compliance features demonstrates recognition of a simple truth: the success of the 

proposed regulations will be based on the daily reductions in petroleum barrels and well-towheel GHG tons, not on a "fleet average" compliance certificate for the regulated parties. And to 

achieve those daily reductions, vehicles employing technologies must appeal to U.S. consumers 

and must sell in high annual volumes. 

The universe of possible fuels for light duty vehicles contains relatively few that have a higher 

energy density than gasoline. Diesel is one of those fuels. A gallon of diesel has 11 percent more 

energy than a gallon gasoline (and a gallon of B10 has 12 percent more energy than a gallon of 

E10). Because of this energy density, the transportation and distribution of diesel fuel to users 

around the country produces less GHG per usable unit of energy. Additionally, the refining of 

diesel fuel requires less energy and produces fewer GHG emissions compared to a gasoline 

baseline. Taken together, these reduced off-cycle emissions contribute additional benefits to 

society when high density diesel is substituted for lower density gasoline. Unlike its treatment of 

FFVs and other credit mechanisms proposed, however, EPA is not proposing to count these real 

diesel GHG offsets. According to recent EPA research, the up-stream GHG emissions associated 

with refining, transporting, distributing and storing transportation fuels are [that for] every gallon 

of diesel fuel substituted for a gallon of gasoline, an off cycle benefit of 280 GHG grams occurs. 

Returning to the pickup truck example shown on page 12, in which a 24 mpg diesel engine is 

sold in place of the standard 18 mpg engine, the 3,700 lifetime gallons of fuel saved would also 

generate an off-cycle GHG benefit of 1 metric ton. Over 221,199 lifetime miles traveled, this is 

the equivalent of an off cycle credit of 4.7 grams per mile. This value is on the order of the 

maximum MAC efficiency credit of 5.7 g/mile that EPA proposes under its offcycle credit 

mechanism. 

Clearly, the off cycle benefits of diesel fuel should be comprehended in EPA's historic GHG 

rulemaking process as these benefits are already documented in the agency's technical research. 

Since EPA proposes off-cycle credit mechanisms to incentivize such solutions as roof-top solar 

panels, surely the Administrator recognizes a parallel disincentive exists for proven technologies 

that are deliberately excluded from the off-cycle credit mechanism. We urge EPA to adopt rules 

that comprehend the holistic, full-cycle GHG performance recognizing that vehicles and fuels 

work as a system in our national efforts to reduce the C02 inventory and petroleum consumption. 

[OAR-2009-0472-7496, p. 13-14] 

Volkswagen Group of America (Volkswagen) 

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With regards to additional credit flexibilities, Volkswagen also supports the EPA's proposal. 

Credit for GHG reductions from air conditioning, advanced technology vehicles, C02 

performance credit and flexible fuel vehicles have the potential to offer significant GHG 

reductions and we believe it is appropriate for the EPA to recognize these reductions and provide 

an avenue for manufacturers to utilize credit for these vehicles and technologies. [OAR-2009­

0472-7210.1, pp.3-4] 

With regards to advanced technology vehicles, Volkswagen supports credit for these vehicles to 

the maximum extent possible. To that end Volkswagen believes the maximum credit proposed 

by EPA (2 credits per vehicle for fuel cell, battery electric and grid connected hybrids) Is 

appropriate over the full length of this proposed regulation. We also support the EPA proposal to 

set zero emission tailpipe performance for the electric portion of operation of a vehicle with zero 

emission capability to zero grams per mile over the length of the proposed regulatory period. 

Volkswagen believes that incentives are necessary to help the commercialization of these types 

of vehicles and the credit as proposed will provide some benefit for these vehicles as they are 

introduced to the market through the 2016 MY. The credit level and the handling of the CO2 

performance of these vehicles can be re-addressed during the regulatory process for a National 

program for 2017 and beyond. If anything, Volkswagen believes that during the 20122016 

timeframe additional credit could be allowed for these vehicles. We do not believe that volumes 

for these vehicles during this timeframe will be significant enough to result in excessive credits 

for automakers. [OAR-2009-0472-7210.1, p.4] 

Volkswagen also supports the flexibility provided in the regulation to allow credit for real world 

GHG reductions that are not captured on the relevant test cycles. We believe that these GHG 

reductions can be significant and can also offer significant benefit to consumers. We urge the 

EPA to maintain a viable pathway and mechanism for evaluating these types of technologies. 

Volkswagen also notes that some technologies may offer benefits on the relevant test cycles 

while also offering either significant or greater benefits to customers in real world usage. We 

propose that EPA accommodate this type of technology that may have benefit both on and offcycle. An example of this could be various forms of stop/start systems. It is possible that certain 

designs or strategies for stop/start systems will yield varied results over the fuel economy test 

cycles versus off-cycle modes. For example, Volkswagen believes some stop/start systems may 

yield a 1-2 percent improvement over the fuel economy test cycles but yield an 8 percent benefit 

in real world driving for the customer. Volkswagen plans to discuss this type of technology in 

more detail with EPA staff in the future, but for the purposes of this rulemaking it is important to 

establish that CO2 performance credit is possible and that a fair process is in place to evaluate 

and grant the correct credit for a given technology. In addition, Volkswagen recommends that 

credits from CO2 performance technology under real world driving conditions should be In 

effect over the full time period of this regulation. Volkswagen also notes that measurable and 

documented real world GHG reductions due to technology related improvements to vehicles 

should not be strictly related to new or innovative technical measures - it is possible that simple, 

known technology could yield significant real world GHG reductions. [OAR-2009-0472-7210.1, 

p.4] 

Volkswagen also supports the EPA's efforts to harmonize the GHG regulation with the current 

NHTSA regulation by offering GHG credits for FFV vehicles at the same level as the CAFE: 

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EPA Response to Comments 

credit available in the NHTSA CAFE: regulation through the 2012 - 2015 MY. For 2016 MY 

and beyond the application of a factor based on FFV use is appropriate. We support EPA's 

efforts to allow flexibility through two pathways (EPA factor or manufacturer factor) after the 

2015 MY. [OAR-2009-0472-7210.1, p.4] 

EPA Response: 

5.7.3.2 Comments on Whether to Provide an Incentive for Advanced Technology Vehicles 

Comments on whether EPA should provide any kind of incentive to promote advanced 

technology vehicles during the MY2012-2016 timeframe covered in this rulemaking fell into 

three general categories. While this section summarizes the overall comments with respect to the 

general concept of incentives, the following two sections provide summaries of more targeted 

comments on the zero gram/mile compliance value and the vehicle multiplier. 

The first group of commenters explicitly endorsed both the concept of providing some kind of 

incentive for advanced technology vehicles as well as at least one of the two proposed incentives 

(the zero gram/mile compliance value and the vehicle multiplier). This group included every 

automaker that commented on this topic: BMW, Chrysler, Ford, Honda, Hyundai, MercedesBenz/Daimler AG, Mitsubishi, Nissan, Toyota, and Volkswagen. In addition to individual 

automakers, several other auto industry companies and associations were represented in this 

group of commenters as well, including the Alliance of Automobile Manufacturers, Cummins, 

the Motor and Equipment Manufacturers Association, the National Automotive Dealers 

Association, SABIC Innovative Plastic, and the United Auto Workers. The State of New Jersey 

and the Washington Department of Ecology also submitted comments supporting a temporary 

incentive. Many of these comments recognized the market barriers facing advanced technology 

vehicles, and that an incentive program could promote technologies that could yield much larger 

GHG emissions benefits in the future. 

A second group of commenters expressed general support for some kind of temporary incentive 

for advanced technology vehicle incentives, but argued that EPA’s proposed incentive program, 

in its entirety, was too generous, and stated explicit opposition to one or both of EPA’s incentive 

mechanisms. These commenters included the California Air Resources Board, the Ecology 

Center, the Environmental Defense Fund, Honeywell Transportation Systems, the International 

Council on Clean Transportation, the Massachusetts Department of Environmental Protection, 

the National Association of Clean Air Agencies, the Natural Resources Defense Council, the 

New York State Department of Environmental Conservation, the Northeast States for 

Coordinated Air Use Management, the South Coast Air Quality Management District, and 

citizen Yuli Chew. These commenters generally suggested that EPA re-evaluate the overall 

incentive program to seek a better balance between promoting advanced technology vehicles and 

minimizing the loss of GHG emissions benefits of the overall program. 

A third group of commenters explicitly or implicitly opposed the concept of any incentives for 

advanced technology vehicles (note that an advanced technology vehicle could, of course, still 

earn an emissions credit based on superior emissions performance). This group included the 

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American Council for an Energy Efficient Economy, the New York University School of 

Law/Institute for Policy Integrity, Public Citizen/Safe Climate Campaign, Sierra Club, and the 

Union of Concerned Scientists. Although some of these groups discussed vehicle multipliers of 

1.2, phasing out to zero over the MY2012-2016 timeframe, it seems most likely that most or all 

of these groups cited the 1.2 vehicle multiplier only to emphasize their support for the lowest 

possible multiplier. That is, the general tone of their comments suggested that they might have 

well supported no multiplier had that been within the range of the EPA proposal. The thrust of 

these comments is that compliance values should be based on full fuel-cycle environmental 

performance and that there is no need for special regulatory incentives for advanced technology 

vehicles. 

After considering the public comments, EPA agrees with the first two groups of commenters that 

it is appropriate to provide a temporary regulatory incentive to promote early commercialization 

of technologies that have the potential to produce very large GHG emissions reductions in the 

future, but which face major market challenges. EPA believes that EVs, PHEVs, and FCVs are 

potential GHG “game changers” if major cost and consumer barriers can be overcome and if 

there is a nationwide transformation to low-GHG electricity (or hydrogen, in the case of FCVs). 

EPA has adopted the concept of advanced technology incentives in several of its most recent and 

important rulemakings under Title II of the Clean Air Act.13 EPA further agrees with the second 

group of commenters that the proposed incentive program was excessive, and is finalizing a 

restructured incentive program that EPA believes strikes a more reasoned balance between nearterm environmental performance and long-term environmental goals. Although EPA disagrees 

with the third group of commenters, who argued for no incentive program whatsoever, EPA is 

structuring the rule to cap the number of vehicles eligible for the incentive program and has 

projected the potential loss in GHG emissions benefits that could result from the restructured 

incentive program. As discussed in the preamble and RIA, EPA projects that the restructured 

incentive program could reduce the GHG emissions benefits of the program by approximately 25 

million metric tons, or less than 3 percent of the projected GHG emissions benefits of the overall 

program.

14 EPA believes this is a reasonable balance given these technologies’ potential for 

GHG reductions in a regime where upstream GHG emissions are separately controlled. Finally, 

in response to concerns expressed by many commenters, EPA emphasizes that the restructured 

incentive program only applies to the MY2012-2016 timeframe covered by this final rule, and 

that EPA will reassess the issue of whether to have any incentives for advanced technology 

vehicles for model years 2017 and beyond based on the status of advanced technology vehicle 

commercialization and other relevant factors. 

5.7.3.3 Comments on the Zero Grams/Mile Compliance Value for EVs, FCVs, and PHEVs 

When Operated on Grid Electricity 

EPA proposed a zero grams/mile compliance value for EVs and PHEVs when operated on grid 

electricity (and for FCVs, though EPA received few comments on FCVs, presumably because of 

the expectation of low sales in MY2012-2016). The zero grams/mile compliance value is an 

incentive in that, while it accurately accounts for tailpipe GHG emissions, it does not reflect the 

13 For example, the Tier 2 Light-Duty Vehicle, 2007 Heavy-Duty Highway, and Tier 4 Nonroad Diesel rulemakings. 14 See Regulatory Impact Analysis, Appendix 5.B. 

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increase in upstream GHG emissions associated with the electricity used by EVs relative to the 

upstream GHG emissions associated with the gasoline or diesel fuel used by conventional 

vehicles. For example, based on GHG emissions from today’s national average electricity 

generation (including GHG emissions associated with feedstock extraction, processing, and 

transportation) and other key assumptions related to vehicle electricity consumption, vehicle 

charging losses, and grid transmission losses, a midsize EV might have an upstream GHG 

emissions of about 180 grams/mile, compared to the upstream GHG emissions of a typical 

midsize gasoline car of about 60 grams/mile. Thus, the EV would cause a net upstream GHG 

emissions increase of about 120 grams/mile (in general, the net upstream GHG increase would 

be less for a smaller EV and more for a larger EV). The zero grams/mile compliance value 

provides an incentive because it is less than the 120 grams/mile value that would fully account 

for the net increase in GHG emissions, counting upstream emissions. The net upstream GHG 

impact could change over time, of course, based on changes in electricity generation or gasoline 

production. EPA received more comments on the proposed zero grams/mile compliance value 

for EVs (and PHEVs operated on grid electricity) than any other issue associated with advanced 

technology vehicle incentives. 

A majority of commenters were opposed to the proposed zero grams/mile compliance value for 

EVs and PHEVs operated on grid electricity: American Council for an Energy Efficient 

Economy, the California Air Resources Board, citizen Yuli Chew, Clean Energy Fuels, 

Environment Michigan, Environment New Jersey, Environmental Defense Fund, citizen Mark 

Glasser, Honda, Honeywell Transportation Systems, the International Council on Clean 

Transportation, citizen Valerie Karplus, the Massachusetts Department of Environmental 

Protection, National Association of Clean Air Agencies, Natural Resources Defense Council, the 

New York State Department of Environmental Conservation, the New York University School 

of Law/Institute for Policy Integrity, Public Citizen/Safe Climate Campaign, Sierra Club, the 

South Coast Air Quality Management District, the Washington Department of Ecology, Union of 

Concerned Scientists, the University of California/Santa Barbara Bren Working Group on 

Vehicle Fuel Economy, and the University of Pennsylvania/Environmental Law Project. The 

core of these comments was that while tailpipe GHG emissions of vehicles operated on grid 

electricity is zero, the net full fuel-cycle GHG emissions are not zero, due to the upstream GHG 

emissions associated with electricity generation, and ignoring these emissions could 

“undermine” the overall GHG benefits of the program. The Natural Resources Defense Council 

provided a specific methodology for calculating full fuel-cycle GHG emissions for EVs. While 

opposed to the zero grams/mile compliance value, the South Coast Air Quality Management 

District suggested that, if EPA were to maintain the incentive, EPA should consider limiting the 

number of vehicles which would qualify for the incentive. 

Several automobile companies and others supported the proposed zero grams/mile compliance 

value: the Alliance of Automobile Manufacturers, BMW, Chrysler, Cummins, Ford, MercedesBenz/Daimler AG, Mitsubishi, the Motor and Equipment Manufacturers Association, the 

National Automobile Dealers Association, Nissan, the State of New Jersey, Toyota, and 

Volkswagen. Several of these commenters pointed out that previous motor vehicle regulations 

have focused on tailpipe emissions only, and Nissan stated that excluding upstream GHG 

emissions is “legally required” under Clean Air Act section 202(a)(1). The National Automotive 

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Dealers Association stated that Congress will decide whether to regulate upstream GHG 

emissions from electric utilities. 

EPA’s final incentive program retains the zero grams/mile compliance value for EVs and FCVs, 

and for PHEVs when operated on grid electricity, a position supported by most automakers and a 

few other commenters. But, EPA disagrees with Nissan that excluding upstream GHGs is 

legally required under section 202(a)(1). In this rulemaking, EPA is adopting standards under 

section 202(a)(1), which provides EPA with broad discretion in setting emissions standards. 

This includes authority to structure the emissions standards in a way that provides an incentive to 

promote advances in emissions control technology. This discretion includes the adjustments to 

compliance values adopted in the final rule, the multipliers we proposed, and other kinds of 

incentives. In response to the comment of Nissan, EPA recognizes that we have not previously 

made adjustments to a compliance value to account for upstream emissions in a section 202(a) 

vehicle emissions standard, but that does not mean we do not have authority to do so in this case. 

In addition, EPA is not directly regulating upstream GHG emissions from stationary sources, but 

instead is deciding how much value to assign to a motor vehicle for purposes of compliance 

calculations with the motor vehicle standard. Although the logical place to start is the emissions 

level measured under the applicable test procedure, section 202(a)(1) does not require that EPA 

limit itself to only that level. For vehicles above the cumulative vehicle production volume caps 

described below, EPA will adjust the measured value to a level that reflects the net difference in 

upstream GHG emissions compared to a comparable conventional vehicle. This will account for 

the actual GHG emissions increase associated with the use of the EV. As shown above, upstream 

GHG emissions attributable to increased electricity production to operate EVs or PHEVs 

currently exceed the upstream GHG emissions attributable to gasoline vehicles. There is a 

rational basis for EPA to account for this net difference, as that best reflects the real world effect 

on the air pollution problem which the rule addresses. For vehicles above the cumulative vehicle 

production volume caps, EPA is reasonably and fairly accounting for the incremental increase in 

upstream GHG emissions from both the electric vehicles and the conventional vehicles. 

Consequently, EPA is not, as Nissan suggested, arbitrarily counting upstream emissions for 

electric vehicles but not for conventional fuel vehicles. EPA also agrees with the National 

Automotive Dealers Association that Congress will consider whether to regulate GHG emissions 

from utilities, and that will be one factor that EPA will consider in future deliberations about 

how to treat vehicles that operate on grid electricity. 

In response to the general concerns of many commenters about the potential of the zero 

grams/mile compliance value to possibly “undermine” the entire program, and the 

recommendation from the South Coast Air Quality Management District that EPA consider 

limiting the number of vehicles qualified to receive the incentive, EPA is adding a cumulative 

cap on the total production of EVs, PHEVs, and FCVs for which an individual manufacturer can 

claim the zero grams/mile compliance value during MY2012-2016. The cumulative vehicle 

production volume cap will be 200,000 vehicles, except those manufacturers that sell at least 

25,000 EVs, PHEVs, and FCVs in MY2012 will have a cap of 300,000 vehicles for MY2012­

2016. This higher cap option is an additional incentive for those manufacturers that take an early 

leadership role in aggressively and successfully marketing advanced technology vehicles. These 

caps are one way to limit the potential GHG benefit losses associated with the incentive program 

and therefore are another response to the concerns that the proposed incentives were excessive 

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and could significantly undermine the program’s GHG benefits. If, for example, 500,000 EVs 

were produced in MY2012-2016 that qualified for the zero grams/mile compliance value, the 

loss in GHG benefits due to this program would be about 25 million metric tons, or less than 3 

percent of the total projected GHG benefits of this program.15 EPA believes this modest 

potential for reduction in near-term GHG emissions control is more than offset by the potential 

for very large future GHG emissions reductions that commercialization of these technologies 

could promote. The rationale for these caps is that an incentive is most critical when individual 

automakers are beginning to introduce advanced technologies in the market, and less critical 

once individual automakers have successfully achieved a reasonable market share and 

technology costs decline due to greater production volumes and experience. EPA believes that 

cap levels of 200,000-300,000 vehicles over a five model year period are reasonable, as 

production greater than this would indicate that the manufacturer has overcome at least some of 

the initial market barriers to these advanced technologies. Further, EPA believes that it is 

unlikely that many manufacturers will approach these cap levels in the MY2012-2016 

timeframe. 

Production beyond the cumulative vehicle production cap for a given manufacturer in MY2012­

2016 will have its compliance values calculated according to a methodology that accounts in full 

for the net increase in upstream GHG emissions. For an EV, for example, this would involve: 1) 

measuring the vehicle electricity consumption in watt-hours/mile over the 2-cycle test (for 

example, a midsize EV might have a 2-cycle test electricity consumption of 230 watthours/mile), 2) adjusting this watt-hours/mile value upward to account for electricity losses 

during transmission and vehicle charging (dividing 230 watt-hours/mile by 0.93 to account for 

grid/transmission losses and by 0.90 to reflect losses during vehicle charging yields a value of 

275 watt-hours/mile), 3) multiplying the adjusted watt-hours/mile value by a nationwide average 

electricity upstream GHG emissions rate of 0.642 grams/watt-hour at the powerplant16 (275 

watt-hours/mile multiplied by 0.642 grams GHG/watt-hour yields 177 grams/mile), and 4) 

subtracting the upstream GHG emissions of a comparable midsize gasoline vehicle of 56 

grams/mile to reflect a true net increase in upstream GHG emissions (177 grams/mile for the EV 

minus 56 grams/mile for the gasoline vehicle yields a net increase and EV compliance value of 

121 grams/mile).17 18 This methodology is similar to that advocated by the Natural Resources 

15 See Regulatory Impact Analysis, Appendix 5.B. 

16 The nationwide average electricity upstream GHG emissions rate of 0.642 grams GHG/watt-hour was calculated 

from 2005 nationwide powerplant data for CO2, CH4, and N2O emissions from eGRID2007 

(http://www.epa.gov/cleanenergy/energy-resources/egrid/index.html), converting to CO2 -e using Global Warming 

Potentials of 25 for CH4 and 298 for N2O, and multiplying by a factor of 1.06 to account for GHG emissions 

associated with feedstock extraction, transportation, and processing (based on Argonne National Laboratory’s The 

Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) Model, Version 1.8c.0, 

available at http://www.transportation.anl.gov/modeling_simulation/GREET/). EPA recognizes that there are many 

issues involved with projecting the electricity upstream GHG emissions associated with future EV and PHEV use 

including, but not limited to, average vs marginal, daytime vs nighttime vehicle charging, geographical differences, 

and changes in future electricity feedstocks. EPA chose to use the 2005 national average value because it is known 

and documentable. Values appropriate for future vehicle use may be higher or lower than this value. EPA will 

reevaluate this value in future rulemakings. 

17 A midsize gasoline vehicle with a footprint of 45 square feet would have a MY2016 GHG target of about 225 

grams/mile; dividing 8887 grams CO2/gallon of gasoline by 225 grams/mile yields an equivalent fuel economy level 

of 39.5 mpg; and dividing 2208 grams upstream GHG/gallon of gasoline by 39.5 mpg yields a midsize gasoline 

vehicle upstream GHG value of 56 grams/mile. The 2208 grams upstream GHG/gallon of gasoline is calculated 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Defense Council, with the one meaningful difference being the use of a national average 

electricity upstream GHG emissions rate, rather than a marginal rate, an issue addressed in 

Section 5.7.3.4 below. 

The full accounting methodology for the portion of PHEV operation on grid electricity would 

use this same approach. PHEV compliance values will be determined by combining zero 

grams/mile for grid electricity operation with the GHG emissions from the 2-cycle test results 

during operation on liquid fuel, and weighting these values by the percentage of miles traveled 

that EPA believes will be performed on grid electricity and on liquid fuel, which will vary for 

different PHEVs. EPA is currently considering different approaches for determining the 

weighting factor to be used in calculating PHEV GHG emissions compliance values. EPA will 

consider the work of the Society of Automotive Engineers Hybrid Technical Standards 

Committee, as well as other relevant factors. EPA will issue a final rule on this methodology by 

the fall of 2010, when EPA expects some PHEVs to initially enter the market. 

5.7.3.4 Comments on Vehicle Multiplier 

EPA proposed a vehicle multiplier for EVs, PHEVs, and FCVs in the range of 1.2 to 2.0 and 

sought comments on the level of the multiplier and various ways it might best be structured. The 

proposed vehicle multiplier would also have been an incentive as it would have allowed an EV, 

PHEV, or FCV to count as more than one vehicle in an individual manufacturer’s fleet average 

compliance calculations. For example, a vehicle multiplier of 2.0 would have effectively 

doubled the effective credit associated with an EV, PHEV, or FCV. 

Nearly every automaker and industry-related group strongly supported a vehicle multiplier, 

including the Alliance of Automobile Manufacturers, BMW, Chrysler, Cummins, Ford, Honda, 

Hyundai, Mercedes-Benz/Daimler AG, Mitsubishi, the Motor and Equipment Manufacturers 

Association, the National Automobile Dealers Association, Nissan, SABIC Innovative Plastic, 

United Auto Workers, and Volkswagen. Some automakers supported vehicle multipliers in 

excess of the proposed range of 1.2 to 2.0, for example, Chrysler supported vehicle multipliers as 

high as 6.0 and Honda supported levels as high as 16.0 (for a FCV with a 300-mile range). 

About half of these organizations supported universal vehicle multipliers, and about half 

supported differential multipliers. Some of these commenters, such as the Alliance for 

Automobile Manufacturers, Ford, and Mitsubishi, also supported the concept of maintaining 

incentives until a certain market threshold was achieved. Also supporting a vehicle multiplier 

were the California Air Resources Board, citizen Yuli Chew, the State of New Jersey, and the 

Washington Department of Ecology. 

A second group of commenters supported, or at least appeared willing to accept, a vehicle 

multiplier of 1.2, at the low end of the proposed range. These commmenters also generally 

advocated that the vehicle multiplier be phased out by MY2016. These commenters included the 

Massachusetts Department of Environmental Protection, Natural Resources Defense Council, 

from 19,200 grams upstream GHG/mmBtu (Renewable Fuel Standard Program, Regulatory Impact Analysis, 

Section 2.5.8, February 2010) and multiplying by 0.115 mmBtu/gallon of gasoline. 18 Manufacturers can utilize alternate calculation methodologies if shown to yield equivalent or superior results and
 

if approved in advance by the Administrator.
 

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EPA Response to Comments 

Northeast States for Coordinated Air Use Management, Public Citizen/Safe Climate Campaign, 

Sierra Club, Union of Concerned Scientists, and the University of California/Santa Barbara Bren 

Working Group on Vehicle Fuel Economy. As mentioned previously, the tone of some of these 

comments suggests that some of these commenters might have supported no multiplier had that 

been within the range of the EPA proposal. 

There were a few commenters that explicitly rejected any vehicle multipliers, including the 

American Council for an Energy Efficient Economy, the New York University School of 

Law/Institute for Policy Integrity, and Toyota. The first two commenters rejected the need for 

any kind of incentive, while Toyota argued that a “double credit” was unnecessary and that the 

zero grams/mile compliance value is more directly tied to the vehicle technologies that EPA is 

incentivizing. 

EPA’s final advanced technology vehicle incentive program will not include any vehicle 

multipliers. In general, EPA agrees with the overall thrust of the majority of commenters that the 

proposed incentive program was too generous, and in particular we agree with Toyota that the 

zero grams/mile compliance value is more directly targeted to EVs, PHEVs, and FCVs than a 

vehicle multiplier, which could also apply to a wide number of other technologies. EPA agrees 

with those commenters that suggested some type of market threshold above which any incentives 

would be phased out, and we believe that the cumulative vehicle production volume caps 

discussed above reasonably implement this idea, providing a proper incentive for initial 

commercialization but limiting the potential loss in GHG emissions reductions associated with 

that incentive. 

5.7.3.5 Comments on Miscellaneous Issues Related to the Advanced Technology Vehicle 

Incentive Program 

A few commenters raised the issue of whether EPA should expand the specific technologies that 

are eligible for the advanced technology vehicle incentives. For example, the Alliance of 

Automobile Manufacturers suggested that hydrogen-fueled internal combustion engines be 

added, BMW advocated that clean diesel vehicles be included, and Mercedes-Benz/Daimler AG 

argued that both diesel vehicles and natural gas vehicles be incentivized. While not explicitly 

recommending that diesel vehicles be included in the advanced technology vehicle incentive 

program, the U.S. Coalition for Advanced Diesel Cars recommended that EPA recognize the 

full-fuel cycle GHG benefits based on diesel’s higher energy density (leading to less GHG 

emissions from fuel distribution) and lower energy losses during refining. EPA is not expanding 

the list of eligible advanced vehicle technologies primarily because all of these technologies 

utilize internal combustion engines, which have dominated the personal vehicle market in this 

country for the last 100 years and do not present the same level of market challenges to 

automakers as EVs, PHEVs, and FCVs. EPA agrees that these other technologies face market 

barriers (e.g., hydrogen fuel availability, and natural gas on-board storage), but EPA believes the 

barriers are far less than those faced by EVs, PHEVs, and FCVs. 

With respect to the arguments about diesel’s full fuel-cycle GHG emissions benefits, EPA 

reiterates that the final GHG emissions standards are tailpipe standards, and EPA is not taking 

into account fuel upstream GHG emissions issues at this time, with the single exception of 

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electricity. While the tailpipe standards are fuel neutral, EPA recognizes that every motor 

vehicle fuel and fuel production process has unique upstream GHG emissions impacts. EPA has 

discretion in this rulemaking under section 202(a) (1) on whether to account for differences in 

net upstream GHG emissions relative to gasoline produced from oil, and intends to only consider 

upstream GHG emissions for those fuels that have significantly higher or lower GHG emissions 

impacts. At this time, EPA is only making such a determination for electricity, given that 

electricity upstream GHG emissions are about three times higher than gasoline upstream GHG 

emissions. The difference in upstream GHG emissions for both diesel fuel (the U.S. Coalition 

for Advanced Diesel Cars cites a value of 11% lower for diesel fuel, based on EPA data) and 

compressed natural gas are much lower, on a relative basis. 

Related to the discussion above in Section 5.7.3.3 on the zero grams/mile compliance value, 

several commenters raised issues regarding the appropriate electricity upstream GHG emissions 

rate to use. Although EPA did not ask for comments on this issue, these comments are relevant 

in that, though EPA is retaining the zero grams/mile compliance value, vehicles produced in 

excess of the cumulative vehicle production volume caps discussed above will have their 

compliance values generated, in part, by an assumed electricity upstream GHG emissions rate. 

EPA has chosen to use the 2005 national average electricity upstream GHG emissions rate, and 

although several commenters supported this approach, others did not. Several commenters, 

including the American Council for an Energy Efficient Economy, Natural Resources Defense 

Council, and Sierra Club, recommended that EPA use a “marginal” electricity upstream GHG 

emissions rate, to account for the fact that vehicle use of grid electricity will be an additional 

demand that would likely be met by a different mix of electricity feedstocks than the national 

average. Given that many of the lowest-GHG electricity sources, such as nuclear and 

hydropower, are base sources and operated 24/7 except when forced down for maintenance or by 

extraordinary conditions, marginal electricity sources are often fueled with coal or natural gas, 

with higher GHG emissions than the typical base load. Other commenters, including the 

International Council on Clean Transportation and Public Citizen/Safe Climate Campaign, 

suggested that EPA consider differential electricity upstream GHG emissions rates reflecting the 

fact that there are significant differences in how electricity is generated in different regions and 

states. Accordingly, an EV sold in a state where coal is the dominant electricity feedstock would 

have a higher electricity upstream GHG emissions rate than an EV sold in a state where little 

coal is used. EPA recognizes that these are both legitimate issues, and that there are other 

relevant issues as well such as daytime vs nighttime vehicle charging, changes in future 

electricity feedstocks, etc. EPA has chosen to use the 2005 national average electricity upstream 

GHG emissions rate discussed above in part because it is known and documentable. Values 

appropriate for future vehicle use may be higher or lower than this value, and EPA commits to 

reevaluating these complex issues in any future rulemakings. 

Finally, Honeywell Transportation Systems suggested that EPA establish a mechanism to verify 

the percentage of PHEV vehicle miles traveled on electricity and gasoline. The vehicle miles 

traveled weighting between electricity and gasoline will be a primary determinant of the overall 

GHG emissions compliance value for a PHEV. EPA agrees with Honeywell that this is an 

important issue as the weighting factor will be a critical element in determining PHEV GHG 

emissions compliance values, as discussed above. EPA is not proposing a specific approach for 

determining or verifying the weighting factor at this time, but EPA does commit to monitor 

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EPA Response to Comments 

independent work in this area (for example, the work of Society of Automotive Engineers 

Committee J1711) and to issue a final decision on a methodology for determining this weighting 

factor by the fall of 2010. 

5.7.4. Off-cycle Technology Credits 

Organization:Ford Motor Company 

Honda Motor Company 

Mercedes-Benz (Daimler AG) 

Association of International Automobile Manufacturers (AIAM) 

Chrysler Group LLC (Chrysler) 

Alliance of Automobile Manufacturers (Alliance) 

Hyundai Motor Company 

Toyota Motor North America 

BMW of North America, LLC (BMW) 

Public Citizen and Safe Climate Campaign 

Union of Concerned Scientists 

Natural Resources Defense Council 

Sierra Club 

United Auto Workers 

State of New Jersey 

INRIX 

Chew, Yuli 

Volkswagen 

Comment: 

Ford Motor Company 

Off-Cycle Credits 

Ford agrees with EPA's approach to allow provisions that would provide additional flexibility 

through introduction of advanced technologies that achieve real-world GHG emission 

reductions. Ford is willing to work with EPA and other OEMs to facilitate consumer focus 

groups, develop education training programs and develop simulation methods to verify other 

advanced technologies that demonstrate real-world GHG emission reductions. Ford agrees with 

the Alliance that this is best handled via manufacturer guidance letters, as these technologies 

emerge and are developed. [OAR-2009-0472-7082.1, p. 8] 

Honda Motor Company 

EPA proposes optional credit opportunities for “innovative technologies that reduce vehicle CO2 

emissions but the benefits are not captured in the 2 cycle test procedures. This proposal is 

welcomed by Honda, however, to assure fairness and transparency, Honda recommends that 

EPA publish information about each proposed technology credit as well as a brief description of 

the technology and allow a sufficient time for public comment. After considering the input from 

the public, EPA could establish a final rule after which the credit would become effective one 

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year later. This would create a level playing field and assure a thorough discussion of the 

proposed technologies and their credits. [NHTSA-2009-0059-0095.1, p.10] 

Additionally, EPA proposes that the off-cycle technology “must not be significantly measurable 

over the Federal Test Procedure and the Highway Fuel Economy Test.” Honda believes this is 

unfortunate, since a technology that has significant off-cycle benefits may also have some 

measurable benefits on the 2 cycle test (FTP and HFET). EPA should not deny such technologies 

that demonstrate some benefit on FTP and HFET. [NHTSA-2009-0059-0095.1, p.10] 

EPA proposes that an OEM repeat the 5 cycle testing both with and without the proposed offcycle technology. EPA’s testing proposal works well if the technology cannot demonstrate any 

benefit on the FTP and HFET tests. On the other hand, if EPA agrees with Honda that it is 

reasonable to allow some benefit on the FTP and HFET tests, then a different comparison test is 

required, to avoid double-counting. [NHTSA-2009-0059-0095.1, p.10] 

Honda proposes that only the US06, SC03 and Cold LA-4 be repeated with and without the 

proposed technology activated in order to accurately count off-cycle credits. (see Attachment 6 

for examples). [NHTSA-2009-0059-0095.1, p.10] [[See NHTSA-2009-0059-0095.1, p.19 for 

Attachment 6]] 

Mercedes-Benz (Daimler AG) 

DAG also strongly supports the proposed credits for off-cycle technologies that are able to 

achieve substantial CO2 reductions which, like A/C improvements, are not reflected in the federal 

test procedures. These credits acknowledge that technology improvements can reduce emissions 

and improve fuel efficiency in ways that are not measured strictly through tailpipe testing. The 

European Union has already begun a similar program recognizing these benefits. The current 

proposal will further develop and expand new technologies in this area. 

DAG is committed to working with EPA to implement the proposed credit system. DAG concurs 

that the 5 cycle test is an appropriate starting point for measuring the emission reduction values 

of off-cycle technologies and that alternative pathways should also be available. In determining 

whether a particular technology is in widespread use, it will be important to take into account the 

vehicle segment. Only in that way can EPA ensure the widespread deployment of off-cycle 

technologies throughout the light duty fleet. 

[OAR-2009-0472-7193.2, p.18] 

First, the proposed rule includes incentives for early introduction of vehicle innovations that do 

not show up on the dyno test, but all of us know can have a significant effect on greenhouse gas 

emissions. For example, air conditioning refrigerants and eco-innovation such as solar panels 

result in a more significant environmental benefit than the effect it may have on the customer 

experience. The proposed rule encourages companies like ours to adopt these innovations 

regardless of the corresponding value that our customers might assign to these innovations. 

[These comments were submitted as testimony at the New York public hearing. See docket 

number OAR-2009-0472-4621, pp. 50.] 

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Association of International Automobile Manufacturers (AIAM) 

As for the off-cycle credits, EPA should facilitate transparent and fair evaluation of both the offcycle credits for technologies and of the technologies themselves, so that all companies would 

have a fair opportunity to avail themselves of the credits. EPA should publish proposed off-cycle 

approaches in the Federal Register as they are requested by a manufacturer, allow a reasonable 

amount of time for comment on the proposed approach, and then, if the request is granted, make 

the credits available one year after the final decision by the Agency. These comments on the offcycle credits apply not only to the early credits but also to those that would be used in the 2012­

2016 period. [OAR-2009-0472-7123.1, p.14] 

Chrysler Group LLC (Chrysler) 

The methodology for calculating off-cycle technology credits should not be defined for this 

rulemaking. 

At the time of this Proposed Rule, there is no clear understanding of what off-cycle technologies 

currently exist or will be invented in the future. Setting specific test requirements to prove the 

value of such technologies is therefore premature. Regulations promulgated by this rulemaking 

should simply allow for the generation of off-cycle credits without setting a specific test 

procedure. As manufacturers wish to generate these credits, methodologies could be developed 

through future guidance. [NHTSA-2009-0059-0124, p.28] 

Off-cycle Technology Credits should not be limited to only 'new or innovative' technologies. 

The restriction of off-cycle technology credits to 'new or innovative' technologies is problematic. 

The initial application of any technology by a manufacturer involves some level of learning, 

regardless of whether the technology is completely new to the industry or innovative in its 

application. In addition, both terms would appear to restrict such credits to the initial application 

of the technology within a manufacturer's fleet; once implemented other vehicle applications and 

later model years may not receive credit for the technology. [NHTSA-2009-0059-0124, p.28] 

Just as improvements to air conditioning systems will receive credit, improvements which are 

not otherwise captured by standard testing should also be given credit, regardless of how 

commonplace a certain technology becomes. [NHTSA-2009-0059-0124, p.28] 

Off-cycle technology credits should be provided for the California 'Cool Car' program. 

In June 2009, the California Air Resources Board approved new GHG standards for California 

vehicles that will impose increasingly stringent limits on the total transmission of solar energy 

(Tts) on glass used in light-duty vehicles and light-duty trucks. Those requirements, like the 

CO2 standards proposed for the National Program, will take effect in MY 2012 and become 

increasingly stringent through MY 2016. Also, like the National Program, the new California 

standards, called the 'Cool Cars' regulation, are intended to reduce GHG emissions (and thus 

increase fuel economy) through the use of smaller, more efficient air conditioners. [NHTSA2009-0059-0124, pp.28-29] 

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If California's final Cool Cars rule can not be met through compliance with the National 

Program, EPA and NHTSA should provide off-cycle technology credits for the efforts that 

manufacturers will have to undertake to meet the requirements of the Cool Cars rule. That 

recognition is appropriate from an environmental perspective, and will mitigate, to some extent. 

[NHTSA-2009-0059-0124, p.29] 

Alliance of Automobile Manufacturers (Alliance) 

Off-Cycle Credits 

EPA has proposed allowing manufacturer the opportunity to earn off-cycle credits for new and 

innovative technologies that reduce CO2. This Alliance supports the concept of providing credits 

as a way to further incentivize technology development in this area. However as proposed, the 

Alliance is concerned that the current proposal does not offer manufacturers enough certainty 

with regards to credit application and testing in order to take advantage of these credits. 

Furthermore, EPA’s proposal does not offer a level playing field to all manufacturers in terms of 

possible credit availability. [OAR-2009-0472-6952.1, p. 53] 

Recommendation: 

Rather than attempting to quantify CO2 reductions with a prescribed test procedure on unknown 

technologies at this time, EPA should handle credit application and testing guidelines via future 

guidance letters, as these technologies emerge and are developed. [OAR-2009-0472-6952.1, p. 

53] 

Hyundai Motor Company 

We support off-cycle technology credits for technologies that provide a GHG benefit in the real 

world but that are not captured during the fuel economy test cycles. Off-cycle technology credits 

will incentivize innovative GHG reduction technologies. 

Hyundai is concerned that it will be difficult to determine the real world use and/or benefits of 

the off-cycle credits. While EPA suggests that credits could be calculated using the 5-cycle fuel 

economy test cycle, this cycle will not demonstrate the benefits of many innovative fuel 

efficiency technologies, like green- or eco-driving guides, predictive cruise control, or 

econavigation routing. An example of the benefits of predictive cruise control is the ability to 

maximize fuel economy during hill climbs by reducing acceleration on the incline in anticipation 

of an oncoming decline. Preliminary studies of these technologies show a substantial fuel 

economy benefit, up to 12 percent, but such benefits would not be measurable on any 

dynamometer test cycle. Thus, in cases where the 5-cycle fuel economy test cannot provide 

meaningful measurement, EPA should allow a simple calculation of benefits based on good 

engineering judgment. We believe that off-cycle credits will be important for spurring 

technology and obtaining real world benefits; a simplified process to assess benefits will 

expedite implementation. 

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EPA Response to Comments 

EPA also noted that the off-cycle technology credits are only available for innovative 

technologies that have not been widely adopted (74 Federal Register (FR) 49534). Hyundai 

believes that it may be appropriate to provide an off-cycle credit even once widespread adoption 

of an innovative technology has occurred. One example is the reflective glazing which California 

will require on vehicles beginning in MY 2012. California believes that there is a GHG reduction 

from the application of reflective glazing materials in motor vehicles; the glazing blocks solar 

heat absorption into a parked vehicle, resulting in a cooler vehicle interior and reduced air 

conditioner (A/C) use. The extension of off-cycle credits for technologies like reflective glazing 

would provide manufacturers with an incentive to adopt the technology not just in California but 

nationwide. The off-cycle credit should be used to encourage continued application of beneficial 

off-cycle technology, whether innovative or not. [OAR-2009-0472-7231.1, p.4] 

Toyota Motor North America 

EPA proposes the opportunity to earn off cycle credits for technologies that reduce CO2, but 

where CO2 reduction benefits are not captured over the 2-cycle test procedure used for fleet 

average standard compliance (e.g. off cycle). EPA plans to approve only technologies that are 

innovative, or novel approaches to reducing GHG emissions. EPA proposes a two-tiered process 

for demonstrating the CO2 reductions not captured by the FTP and HFET test procedures. 

Manufacturers could determine benefit of the technology via the 5-cycle test methods used for 

fuel economy label values. Or, if existing test cycles are not adequate, EPA will advise 

manufacturers in developing test procedures to estimate the effectiveness of the technology. 

[OAR-2009-0472-7291, p.24] 

Toyota agrees with the concept of providing credit for CO2 reductions that can be reflected from 

off cycle contributions. In doing so, EPA is providing incentives to promote technology 

developments in this area. However, to fully take advantage of these credits, manufacturers 

require more certainty in determining credit application and testing requirements before making 

commitments to use these technologies. Toyota is concerned that the lack of specificity in the 

current proposal could result in inconsistent application of credits among manufacturers who are 

using the same technology. As a result, Toyota requests that EPA refrain from offering off cycle 

credit until the method to measure off cycle performance has been fairly established. [OAR2009-0472-7291, pp.24-25] 

BMW of North America, LLC (BMW) 

Off-cycle technologies can deliver a viable contribution to reduce greenhouse gas emissions and 

to improve fuel economy. Therefore, BMW greatly appreciates that EPA has proposed off-cycle 

technologies for compliance flexibility in this rulemaking. To bring off-cycle technologies to the 

market, an efficient approval process based on already existing or adopted procedures should be 

implemented. Further, BMW strongly supports EPA's proposed approach for evaluating credits 

from off-cycle technologies. [OAR-2009-0472-7145.1, p.6] 

Public Citizen and Safe Climate Campaign 

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EPA proposes to give automakers credits for certain advanced technologies that may reduce 

greenhouse gas emissions from motor vehicles, but for which the reductions cannot be measured 

by EPA’s current five-cycle emissions test. Examples of such technologies are active 

aerodynamics, adaptive cruise control and solar panels on hybrids. The EPA does not provide 

details on how it proposes to estimate the value of these credits or the greenhouse gas emission 

reductions related to any given technology. Presumably, the credits would vary for each specific 

technology and specific vehicle on which it is installed. [OAR-2009-0472-7050.1, p.6] 

The agency cites creating a market incentive for these technologies as motivation for providing 

them. While we acknowledge that it is possible that such credits may encourage manufacturers to 

install these technologies, we are skeptical that the credits would be sufficient to significantly 

increase technology penetration. Moreover, the setting of a strong, mandatory standard alone 

would provide ample incentive for manufacturers to pursue cost-effective technologies that 

reduce greenhouse gas emissions. In addition, manufacturers are likely to market vehicles with 

these technologies for reasons other than their environmental impact. For example, active 

aerodynamics can reduce road noise, something which may resonate strongly with consumers. 

Automakers have already begun to market adaptive cruise control as a safety technology, not an 

efficiency technology. There is especially little reason to give credits for technologies that 

automakers intend to install anyway. [OAR-2009-0472-7050.1, p.6] 

EPA cites no quantitative estimate of the greenhouse gas emission reductions associated with 

these technologies, presumably because no sufficiently rigorous estimates are available. The 

agency has not developed tests to estimate the actual greenhouse gas emissions reductions from 

these technologies in a real world context. The proposal does not even suggest that EPA has 

contemplated how it would estimate real world emission reductions from these technologies. 

Without its own framework, the agency would then be dependent on each automaker to provide 

estimates of emissions reductions from off-cycle technologies, and then there is no guarantee of 

consistency in the test procedure used to develop the [OAR-2009-0472-7050.1, p.6] estimate. If 

the automakers conduct the tests, then there would likewise be no public participation in 

developing the tests. [OAR-2009-0472-7050.1, p.7] 

EPA should not grant credits for off-cycle emissions, unless it also proposes test procedures for 

estimating the emissions reductions, comparing them to measured on-road reductions and 

ensuring that the industry will not be granted credits for technologies that amount to marketing 

gimmicks. Still, these credits, like those for advanced technology vehicles, may or may not 

provide an incentive for automakers to incorporate these technologies. These technologies in 

particular, since their impact cannot currently be measured on EPA’s emissions test, seem 

unlikely to be motivated by regulation, but rather by consumer demand and other market forces. 

EPA must not grant the automakers credits for actions automakers would take in absence of the 

regulation. [OAR-2009-0472-7050.1, p.7] 

Union of Concerned Scientists 

UCS is supportive of credits generated by “off-cycle” technologies, as long as the off-cycle 

credits being given correspond to actual greenhouse gas emissions reductions yielded by the 

technology in a real-world environment. We support the notion of measuring the credits under 

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EPA Response to Comments 

the 5-cycle test. However, the alternative option laid out in the proposed rulemaking, the caseby-case approach to assessing off-cycle credits, raises some concerns. While we wholeheartedly 

agree with EPA’s position that “the [alternative option’s] demonstration program should be 

robust, verifiable, and capable of demonstrating the real-world emissions benefit of the 

technology with strong statistical significance,” the proposal does not appear to include any 

opportunity for public comment on the approach taken to quantify credits prior to the agency’s 

acceptance of the approach. Given the broad number of stakeholders with experience in the 

issues pertaining to these technologies, we believe it would be prudent to add an additional step 

soliciting and heeding public comment on any “alternative” approach to assessing off-cycle 

credits before any credits are granted to manufacturers. [OAR-2009-0472-7181.1, p.11] 

Natural Resources Defense Council 

Off-Cycle Technology Credits Should Only Be Awarded for Real and Verifiable GHG 

Reductions 

While NRDC appreciates EPA’s efforts to evaluate GHG reduction technologies that are not 

identified under current compliance tests and to encourage continued innovation this area, EPA 

should not provide credits until such technologies can be verified as providing real and 

enforceable GHG reductions. As GHG reductions are identified and evaluated, EPA should 

consider the widespread adoption of these technologies when setting future standards. [OAR2009-0472-7141.1, p. 18] 

For MY 2012-2016, EPA should only award off-cycle credits to vehicles after the agency has 

verified actual GHG reductions through certification testing. The certification process should be 

initiated by an automaker petitioning for off-cycle credit consideration. Upon receipt of the 

petition, EPA should propose a test procedure for public review and only allow its use for credit 

generation after consideration of stakeholder comments. The magnitude of the credits offered per 

vehicle should account for any degradation in the off-cycle technology over the life of the 

vehicle and not base the credits solely on performance during the test. Additionally, test 

procedures should be subjected to period review to keep up with the latest technology 

advancements both in the off-cycle technologies and the other vehicle characteristics as each 

may impact the level of GHG reductions that should be attributed to the off-cycle technology. 

Finally, EPA should ensure that the benefits of the technology can be verified and enforced in 

use. [OAR-2009-0472-7141.1, pp.18-19] 

Sierra Club 

We support limited “off-cycle” technology credits, as long as they represent accurate, verifiable 

emissions reductions. It is critical that EPA establish an effective certification process that is 

open for public comment. We note that some have proposed that technologies such as traffic 

alerts that could redirect drivers away from traffic jams and other “eco” driving technologies be 

eligible for CAFE credits. When determining the eligibility of technologies, EPA should be clear 

that only those which relate to the vehicle, and not behavior-changing technologies, should be 

eligible. Further, technologies that receive off-cycle credits should be periodically reassessed to 

ensure the continued accuracy of emissions reductions. [OAR-2009-0472-7278.1, p.15] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

State of New Jersey 

In addition, the Department supports the option to allow manufacturers to generate credits 

through 'off-cycle' technologies that have been verified by the USEPA or the CARB. [OAR2009-0472-7109.1, p.8] 

Chew, Yuli 

I support “off-cycle” technologies that have been accepted by SAE or CARB. CARB’s study 

indicated that air-conditioning may use as much as 5.5% of the total light-duty vehicle fuel use. 

As such, I support giving GHG credits for innovative measures such as Cool Car Standard 

proposal in CARB http://www.arb.ca.gov/regact/2009/coolcars09/coolcars09.htm Manufacturers 

can claim credits up to verifiable hot soak performance tests on the GHG emission reductions 

achieved. [OAR-2009-0472-7042.1, p.2] 

Volkswagen 

Volkswagen also supports the flexibility provided in the regulation to allow credit for real world 

GHG reductions that are not captured on the relevant test cycles. We believe that these GHG 

reductions can be significant and can also offer significant benefit to consumers. We urge the 

EPA to maintain a viable pathway and mechanism for evaluating these types of technologies. 

Volkswagen also notes that some technologies may offer benefits on the relevant test cycles 

while also offering either significant or greater benefits to customers in real world usage. We 

propose that EPA accommodate this type of technology that may have benefit both on and offcycle. An example of this could be various forms of stop/start systems. It is possible that certain 

designs or strategies for stop/start systems will yield varied results over the fuel economy test 

cycles versus off-cycle modes. For example, Volkswagen believes some stop/start systems may 

yield a 1-2 percent improvement over the fuel economy test cycles but yield an 8 percent benefit 

in real world driving for the customer. Volkswagen plans to discuss this type of technology in 

more detail with EPA staff in the future, but for the purposes of this rulemaking it is important to 

establish that CO2 performance credit is possible and that a fair process is in place to evaluate 

and grant the correct credit for a given technology. In addition, Volkswagen recommends that 

credits from CO2 performance technology under real world driving conditions should be in effect 

over the full time period of this regulation. Volkswagen also notes that measurable and 

documented real world GHG reductions due to technology related improvements to vehicles 

should not be strictly related to new or innovative technical measures - it is possible that simple, 

known technology could yield significant real world GHG reductions. 

EPA Response: 

Public Citizen and Safe Climate Campaign commented that “while we acknowledge that it is 

possible that such credits may encourage manufacturers to install these technologies, we are 

skeptical that the credits would be sufficient to significantly increase technology penetration. 

Moreover, the setting of a strong, mandatory standard alone would provide ample incentive for 

manufacturers to pursue cost-effective technologies that reduce greenhouse gas emissions. In 

addition, manufacturers are likely to market vehicles with these technologies for reasons other 

5-251 
EPA Response to Comments 

than their environmental impact. For example, active aerodynamics can reduce road noise, 

something which may resonate strongly with consumers. Automakers have already begun to 

market adaptive cruise control as a safety technology, not an efficiency technology. There is 

especially little reason to give credits for technologies that automakers intend to install anyway.” 

In response, EPA disagrees that setting a strong mandatory standard alone would provide ample 

incentive for technologies that reduce emissions where those emissions reductions not captured 

by the certification test procedures. Indeed, there is some potential for the opposite result, since 

manufacturers are less likely to develop technologies which bring them no benefit in complying 

with the standards. Also, EPA has taken a rigorous approach in determining the type of 

technologies that are eligible for credits in order to provide manufacturers with an incentive to 

develop these new technologies. One of the primary criteria is that the technologies be new and 

not in widespread use. EPA does not believe it would be practical to also try to predict that the 

application of the new technology would occur at the same rate or not at all without the 

opportunity to generate credits. Nor does EPA believe that in determining eligibility that it 

should matter if candidate technologies offer additional benefits to consumers in addition to 

emissions reductions, only that the technology is new and innovative and does not provide 

significant emissions reductions on the 2-cycle test. 

The same commenter stated that “the proposal does not even suggest that EPA has contemplated 

how it would estimate real world emission reductions from these technologies.” The final rule in 

fact provides that if the 5-cycle option is utilized, the manufacturer must determine CO2 

emissions both with and without the technology installed and operating. Section 86.1866-12 (d) 

(2) (i) goes on to detail precisely how this comparison is to be effectuated. Manufacturers using 

an EPA-approved alternative methodology must make the same demonstration. Section 

86.1866-12 (d) (2) (ii) (B) and (C). In addition, the technology must be demonstrated over the 

vehicle’s useful life, the manufacturer must account for deterioration, and the technology must 

improve CO2 emissions beyond the driving conditions of the 2-cycle (FTP and HFET) test 

procedures. Section 86.1866-12 (d) (1) (ii) and (iii). 

EPA is finalizing off-cycle credit provisions for eligible innovative technologies, defined as 

technologies that are relatively newly introduced in one or more vehicle models, but that are not 

yet implemented in widespread use in the light-duty fleet. EPA will not approve credits for 

technologies that are not innovative or do not provide novel approaches to reducing greenhouse 

gas emissions. Manufacturers must obtain EPA approval for new and innovative technologies at 

the time of vehicle certification in order to earn credits for these technologies at the end of the 

model year. This approval must include the testing methodology to be used for quantifying 

credits. Further, any credits for these off-cycle technologies must be based on real-world GHG 

reductions not significantly captured on the current 2-cycle tests and verifiable test methods, and 

represent average U.S. driving conditions. 

EPA is finalizing a two-tiered process for demonstrating the CO2 reductions of an innovative and 

novel technology with benefits not significantly captured by the FTP and HFET test procedures. 

First, a manufacturer must determine whether the benefit of the technology could be captured 

using the 5-cycle methodology currently used to determine fuel economy label values. EPA 

established the 5-cycle test methods pursuant to section 206 (h) of the Act to better represent 

real-world factors impacting fuel economy (among other things), including higher speeds and 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

more aggressive driving, colder temperature operation, and the use of air conditioning. If this 

determination is affirmative, the manufacturer must follow the procedures described below (as 

codified in today’s rules). If the manufacturer finds that the technology is such that the benefit is 

not adequately captured using the 5-cycle approach, then the manufacturer would have to 

develop a robust methodology, subject to EPA approval, to demonstrate the benefit and 

determine the appropriate CO2 gram per mile credit. As discussed below, EPA is also providing 

opportunity for public comment as part of the approval process for such non-5-cycle credits. 

EPA received a few comments regarding the 5-cycle approach. Some commenters were 

supportive of the 5-cycle approach. Although not commenting directly on the 5-cycle testing 

methodology, the Alliance and some manufacturers raised general concerns that the proposed 

approach did not offer manufacturers enough certainty with regard to credit applications and 

testing in order to take advantage of the credits. The Alliance further commented that the 

proposal did not provide a level playing field to all manufacturers in terms of possible credit 

availability. The Alliance recommended that rather than attempting to quantify CO2 reductions 

with a prescribed test procedure on unknown technologies, EPA should handle credit 

applications and testing guidelines via future guidance letters, as technologies emerge and are 

developed. 

EPA believes that the 5-cycle testing methodology is one clear and objective way to demonstrate 

certain off-cycle emissions control technologies, as discussed above. It provides certainty with 

regard to testing, and is available for all manufacturers. As discussed below, there are also other 

options for manufactures where the 5-cycle test is not appropriate. EPA is retaining this as a 

primary methodology for determining off-cycle credits. For technologies not able to be 

demonstrated on the 5-cycle test, EPA is finalizing an approach that will include a public 

comment opportunity which we believe addresses commenter concerns regarding maintaining a 

level playing field. 

EPA received several comments recommending that the approval process include an opportunity 

for public comment. As noted above, some manufacturers are concerned that there be a level 

playing field in terms of all manufacturers having a reasonable opportunity to earn credits under 

an approved approach. Commenters also want an opportunity for input in the methodology to 

ensure the accuracy of credit determinations for these technologies. Commenters point out that 

there are a broad number of stakeholders with experience in the issues pertaining to the 

technologies that could add value in determining the most appropriate method to assess these 

technologies’ performance. The Alliance, Ford, Chrysler, and Toyota commented that the 

procedures should be established via future guidance documents but did not mention needing a 

public opportunity for comments. EPA agrees with comments supporting a public process, and 

is including an opportunity for public comment as part of the approval process. If and when 

EPA receives an application for off-cycle credits using an alternative non 5-cycle methodology, 

EPA will publish a notice of availability in the Federal Register with instructions on how to 

comment on draft off-cycle credit methodology. The public information available for review 

will focus on the methodology for determining credits but the public review obviously is limited 

to non-confidential business information. The timing for final approval will depend on the 

comments received. EPA also believes that a public review will encourage manufacturers to be 

thorough in their preparation prior to submitting their application for credits to EPA for approval. 

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EPA Response to Comments 

EPA will take comments into consideration, and where appropriate, work with the manufacturer 

to modify their approach prior to taking final action regarding any off-cycle credits methodology. 

EPA will give final notice of its determination to the general public as well as to the applicant. 

Off-cycle credits would be available in the model year following the final approval. Thus, it will 

be imperative for a manufacturer pursuing this option to begin the process as early as possible. 

Ensuring Real-world Emissions Reductions 

EPA received comments that credits should be real and verifiable and should take into account 

deterioration. The final rule requires exactly this: credits can be generated “by implementing 

innovative technologies that have a measurable, demonstrable, and verifiable real-world CO2 

reduction.” Section 86.1266 (d). Credits thus must be based on real additional reductions of 

CO2 emissions and must be quantifiable and verifiable with a repeatable methodology. 

Moreover, as proposed, manufacturers must quantify CO2 reductions associated with the use of 

the innovative off-cycle technologies such that the credits could be applied on a g/mile 

equivalent basis, as is the case with A/C system improvements. Again as proposed, the 

technologies upon which the credits are based would be subject to full useful life compliance 

provisions, as with other emissions controls. Unless the manufacturer can demonstrate that the 

technology would not be subject to in-use deterioration over the useful life of the vehicle, the 

manufacturer must account for deterioration in the estimation of the credits in order to ensure 

that the credits are based on real in-use emissions reductions over the life of the vehicle. We 

believe including an opportunity for public comments as part of the approval process also helps 

address commenters’ concerns regarding ensuring that credits are real and verifiable because 

interested parties will have an opportunity to evaluate these aspects of the credits. 

Test Procedures 

EPA also received comments that the off-cycle credits provision highlights the inadequacy of 

current test procedures, and that there is a clear need for updated certification test procedures. 

As discussed in preamble section III. B., EPA believes the current test procedures are adequate 

(and indeed, essential as a practical matter, and legally mandated for the CAFE standards) for 

implementing the standards finalized today. However, EPA is interested in improving test 

procedures in the future and believes that the off-cycle credits program has the potential to 

provide useful data and insights both for the 5-cycle test procedures and also for other test 

procedures that capture off-cycle emissions. 

New and Innovative Criteria 

Some commenters also raised concerns regarding the possibility of giving off-cycle credits for 

technologies that manufacturers are already using, and would therefore have serious concerns 

about an approach that did not include the eligibility requirements for new and innovative 

technologies. EPA agrees, and is thus finalizing the “new and innovative” criteria as proposed. 

That is, the potential to earn off-cycle credits will be limited to those technologies that are new 

and innovative, are introduced in only a limited number of vehicle models (i.e., not in 

widespread use), and are not significantly captured on the current 2-cycle tests. This approach 

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will encourage future innovation, which may lead to the opportunity for future emissions 

reductions. 

EPA received comments from a few manufacturers that the “new and innovative” criteria should 

be broadened. The commenters pointed out that there are technologies already in the 

marketplace that would provide emissions reductions off-cycle and that the rule should provide 

further incentives for their use. Volkswagen and Honda commented that some technologies that 

provide reductions on the 2-cycle test should be eligible for off-cycle credits. Volkswagen 

suggested that, for example, off-cycle credits should be given for start-stop technologies. EPA’s 

modeling projects that start-stop technology will be widely used by manufacturers in meeting the 

CO2 standards. Start-stop technology already achieves a significant CO2 benefit on the current 2­

cycle tests, which is why many manufacturers have announced plans to adopt it across large 

segments of the fleet. EPA recognizes there may be additional benefits to start-stop technology 

beyond the 2-cycle tests (e.g., heavy idle use), and that this is likely the case for other 

technologies on which manufacturers will rely to meet the MY2012-2016 standards. EPA plans 

to continue to assess the off-cycle potential for these technologies in the future. However, EPA 

does not believe that off-cycle credits should be granted for technologies which we expect 

manufacturers to utilize widely throughout the fleet in meeting the CO2 standards. Such credits 

could lead to double counting, as there is already some CO2 benefit over the 2-cycle tests. EPA 

expects that most if not all technologies that significantly reduce CO2 emission on the 2-cycle 

test will also reduce CO2 emissions during the wide variety of in-use operation that is not directly 

captured in the 2-cycle test. This is no different than what occurs from the control technology on 

vehicles for criteria pollutants. Thus, the catalytic converter and other emission control 

technology operate to reduce emissions throughout in-use driving, and not just when the vehicle 

is tested on the specified test procedure. The aim for this off-cycle credit provisions is to provide 

an incentive for technologies that achieve real-world CO2 emission reductions but which 

normally would not be chosen as a GHG control strategy because their GHG benefits are not 

significantly measured on the specified 2-cycle test. It is not designed to provide credits for 

technology that does provide significant GHG benefits on the 2-cycle test and, as expected, will 

also typically provide GHG benefits in other kinds of operation. 

Some commenters raised the “Cool Car” initiative in California as a potential source of off-cycle 

technology credits. The commenters note that window glazing technology provides off-cycle 

emissions reductions by reducing the demand on A/C systems. EPA did not propose and is not 

finalizing credits specifically for this technology, as it did for A/C system credits. EPA also is 

not including a final determination regarding the eligibility of any particular off-cycle 

technologies in this rulemaking, as these are case-by-case determinations made according to the 

procedures set out in 86.1866-12 (d). Manufacturers must apply for off-cycle credits, which 

includes making the case for why the technology is eligible for credits according to EPA’s 

criteria, and their proposed methodology for determining the amount of credits, as described 

above. 

Additional Comments on Specific Technologies 

Organization:INRIX 

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Herzlich Consulting, Inc. 

PurigeN98 

Comment: 

INRIX 

INRIX wishes to draw the agencies’ attention to the emergence of deeply ‘connected vehicles’ 

and their potential impact on GHG emissions and fuel economy. INRIX supplies traffic and 

routing information to SYNC2-equipped vehicles, Ford Motor Company’s groundbreaking invehicle information system as part of the Traffic, Directions and Information service available on 

Ford MY 2010 and beyond equipped vehicles. Since initial launch in May 2009, tens of 

thousands of Ford vehicles have activated services that allow their vehicles to get to their 

destination more directly via turn-by-turn navigation, and more quickly and safely, by alerting 

drivers to and routing drivers around traffic congestion, incidents, construction and other events 

that lengthen the time a specific trip takes. Early indications are that a significant percentage of 

trips are being re-routed to avoid trouble spots, impacting the distance traveled and time spent 

traveling and idling. [NHTSA-2009-0059-0079.1, pp.1-2] 

SYNC is a strategic element of Ford’s North American automobile business with over 80% of 

vehicles Ford sells now equipped with SYNC. Standard with SYNC is three years of the Traffic, 

Directions and Information service built-in the purchase price. The ground-breaking technology 

and business model is creating a groundswell of activity across the auto industry to respond and 

get new vehicles as deeply connected as SYNC. As a result, during the time period of this 

rulemaking, millions of vehicles sold will be ‘connected’ with the expressed purpose of 

increasing trip efficiencies, directly impacting fuel use/efficiency and GHG emissions for 

specific trips. Connected vehicles are more efficient than non-connected vehicles and clearly fit 

the policy framework of reducing GHG emissions and fuel consumption per unit of economic 

activity. [NHTSA-2009-0059-0079.1, p.2] 

As air conditioners and flex fuel vehicles are presently identified in the NPRM as candidates for 

credits, we strongly urge the EPA and NHTSA to coordinate closely with the USDOT’s 

Research and Technology Administration’s ITS Joint Program Office to research the impacts of 

connected vehicles on GHG emissions and MPGs and to establish the appropriate CAFE and/or 

CO2 credit regime at the earliest possible date. With our increasing pool of trip data, INRIX is 

ready to assist the agencies in this effort. [NHTSA-2009-0059-0079.1, p.2] 

Connected vehicles are smarter, more efficient vehicles. Public policy should promote their 

adoption as benefits will accrue to the broader nation, not just the individuals making better trips. 

[NHTSA-2009-0059-0079.1,p.2] 

Herzlich Consulting, Inc. 

Please include my previous August 6, 2009 comments (below) sent to Docket Management in 

response to NHTSA's call for public input into TREAD ACT tire reliability considerations. High 

purity nitrogen inflation of tires is also directly applicable to your call for technologies eligible 

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for 'Off-cycle Innovative Technology Credits'. Even though this letter describes tire reliability 

advantages gained by high purity nitrogen inflation, better inflation pressure retention resulting 

from nitrogen's molecular structure offers improved fuel economy (lower rolling resistance) for 

the billion tires travelling about 3 trillion miles per year on our roads. Tire science and peer 

reviewed rubber oxidation and diffusion chemistry already establishes that the benefits of high 

purity nitrogen inflation are real and offer an easy win-win consumer/EPA conservation 

technology that is 'shovel ready' to contribute to meeting EPA's off-cycle technology carbon 

footprint goals. [OAR-2009-0472-4567, p. 1] 

Attached is a current CV that quantifies the training and experience that I base my opinions 

on. Upon review of the NPRM, I would like to offer certain observations and recommendations 

relevant to additional opportunities to enhance tire reliability and your TREAD ACT mission. 

Inflation maintenance is an accepted requirement for satisfactory tire reliability. It is a 

demonstrated scientific fact that nitrogen inflation offers longer term pressure retention than air. 

It is a proven reality which also offers other potential tire performance improvements related to 

the accepted chemical principles describing the oxidative weakening of the tire’s structure. The 

reduced heat and strain generation associated with proper inflation will in itself slow the 

degradation chemistry. However the improved pressure retention offered by nitrogen will offer 

additional value if the purity of nitrogen in the tire reduces the oxygen content to less than 5%. 

This is a scientifically proven in papers by Baldwin of Ford. The Michelin high oxygen 

durability test (which I support) demonstrates the oxidative weakening effect even with a 

superior undamaged innerliner under short term test conditions. Tokita (Uniroyal) and Waddell 

(ExxonMobil) are just a few of the studies proving the advantage for high purity nitrogen 

inflation. Industry compounders (tire chemists) competently recognize this effect and address it 

with complex, difficult and costly antioxidant systems. However, it is realized that these systems 

are subject to fugacity as well as other longer term potency reductions. Until recently, nitrogen 

enrichment equipment reliability and a lack of infrastructure was a legitimate reason for the 

passive approach the industry took toward a more strongly worded high purity nitrogen inflation 

recommendation. A nitrogen inflation infrastructure is now commercially in place. The 

marketing segment (dealers) of the industry and State regulators are already moving forward (ie: 

CA and PA). More knowledgeable new car dealers are making it part of the prep process. I 

would estimate many tens of millions of tire miles are already benefitting from this simple tire 

enhancement technology. Higher pressure tires (lower rolling resistance) and smaller air chamber 

designs will magnify and make the advantages of high purity nitrogen pressure retention even 

more valuable to the objectives of the TREAD ACT as well as the environment. NHTSA and the 

industry should now update it’s current passive, non-objecting position and take a more proactive 

role recognizing high purity nitrogen as the inflation method of choice for best tire performance. 

Despite improvements in innerliner permeability technology, the value of high purity nitrogen 

inflation will continue to be of important value when addressing real world causes of oxidative 

intra-carcass pressurization that results when the innerliner function is compromised by impacts, 

mounting bead damage, punctures, improper repairs and structural deficiencies. [OAR-2009­

0472-4567, pp. 1-2] 

Conclusions: Reliable high purity nitrogen enrichment technology is now commercially and 

economically available. The service infrastructure is rapidly developing or already in place, 

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EPA Response to Comments 

making past technical and market related objections no longer valid. [OAR-2009-0472-4567, p. 

2] 

PurigeN98 

1. Reference 

Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009 / Proposed Rules Docket ID 

No. EPA-HQ-OAR-2009-0472 and/or NHTSA–2009–0059 Off-cycle technology credits, on 

page 49534 of the Federal Register / Vol. 74, No. 186 / Monday, September 28, 2009. [OAR2009-0472-7201, p.1] 

Off-Cycle Innovative Technology Credits - EPA is proposing a credit opportunity intended to 

apply to new and innovative technologies that reduce vehicle CO2 emissions, but for which the 

CO2 reduction benefits are not captured over the 2-cycle test procedure used to determine 

compliance with the fleet average standards (i.e., “off-cycle”). Eligible innovative technologies 

would be those that are relatively newly introduced in one or more vehicle models, but that are 

not yet implemented in widespread use in the light-duty fleet. Further, any credits for these offcycle technologies must be based on real-world greenhouse gas emission reductions not captured 

on the current 2-cycle tests and verifiable test methods, and represent average U.S. driving 

conditions. [OAR-2009-0472-7201, p.1] 

2. Suggested program 

“Inflation of vehicle tires with Nitrogen at automotive manufacturing plants and at automotive 

service providers” [OAR-2009-0472-7201, p.1] 

a. Why should EPA consider this as part of the Off-Cycle Innovative Technology Credits 

program? 

Vehicle tire under-inflation is a rampant problem in our country. While it has sometimes been 

dismissed as a minor issue, it had become a campaign issue when Candidate Barack Obama had 

stated that if all Americans inflated their tires properly ........, they could save as much oil as 

new offshore drilling would produce. Time magazine had acknowledged it is as “the cheapest, 

cleanest, quickest and easiest way to ease our addiction to oil, reduce our pain at the pump and 

address global warming. [OAR-2009-0472-7201, p.2] 

Benefits of inflating tires with nitrogen are not apparent in the current CAFÉ standard test 

methods because use over time and consumer behavior are not fully accounted for. In short term 

tests, tires perform very similarly when filled with either clean dry air or pure nitrogen. However, 

benefits of pure nitrogen become noticeable over time as tires filled with nitrogen retain pressure 

for longer time, combined with the stark reality that consumers “DO NOT” check tire pressure 

properly and do not top off tires regularly. Filling tires with nitrogen will significantly reduce the 

impact and severity of tire under-inflation and reduce vehicle fuel consumption, increase tire life 

and reduce CO2 emissions. [OAR-2009-0472-7201, p.2] 

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b. What is the problem that Nitrogen tire inflation program addresses? 

i. Filling tires with nitrogen will partially address the rampant tire under-inflation problem in our 

country as is well documented by the following information. 

1. The U.S. DOE estimated that under-inflated tires wasted a total of 1.2 billion gallons of fuel 

used in cars and LTs in 2005. 

2. 'A motorist survey this year by the RMA found that 85% of American drivers do not properly 

check tire inflation pressure. This is an alarming statistic since tires are the only part of a vehicle 

in contact with the road and a critical vehicle safety component,' said James MacMaster, 

chairman of the RMA Board of Directors. 

3. EPA’s Emission Facts (EPA420-F-00-013) indicates that a 1% decrease in CO2 emissions for 

every 1% decrease in fuel consumption. Using emission data provided in the EPA fact sheet, the 

1.2 billion gallons of wasted fuel translates to 12 million tons/yr of extra CO2 emissions resulting 

from under-inflated tires. 

4. The National Highway Traffic Safety Administration (NHTSA) estimates that under-inflated 

tires are a factor in 660 fatalities and 33,000 crash injuries each year. Additional research shows 

that 27 percent of passenger cars on U.S. roadways are driven with one or more substantially 

under-inflated tire, according to a NHTSA survey. [OAR-2009-0472-7201, p.2] 

5. 'Drivers across the U.S. can battle rising gas prices by simply maintaining proper tire 

inflation,' said Takao Oishi, Yokohama’s CEO and president. 'Current statistics indicate that 82 

million vehicles have under-inflated tires, which means more rubber is hitting the road and, 

accordingly, miles-per-gallon is lessened. In fact, tire experts speculate that 2.8 billion gallons of 

gas is wasted by U.S. drivers each year simply because they're driving on under-inflated tires.' 

6. The National Highway Traffic Safety Administration estimates that proper tire inflation could 

help save about 49-79 lives and prevent 6,585 to 10,635 injuries per year. (Source: National 

Highway Traffic Safety Administration Study on Under-Inflated Tires, August 2001). 

7. The Rubber Manufacturer's Association estimates that 250,000 car crashes a year result from 

improperly inflated tires. [OAR-2009-0472-7201, p.3] [[See Docket Number OAR-2009-0472­

7201, pp.3-7 for a detailed discussion on the following topics; What are the benefits of Nitrogen 

tire inflation, what are the potential costs, is there a cost benefit analysis to show the total 

benefits and costs of NTI on a national basis, are there technical studies conducted to prove NTI 

is superior, where is NTI used correctly, what are the future trends in tire manufacturing and 

what will be the impact of nitrogen.]] 

EPA Response: 

EPA appreciates the comments and understands that the technologies described by these 

commenters have the potential to result in emissions reductions under certain circumstances as 

well as other benefits for consumers. EPA is not establishing a specific credit for these 

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technologies in this rulemaking, as it is for A/C systems. A specific credit for “connected 

vehicles” or nitrogen tire inflation was not considered in the proposal. For off-cycle credits, it 

will be the responsibility of the manufacturers to apply for credits, if they so choose, and to show 

why the technology is eligible under the new and innovative technology criteria. Also, 

manufacturers not using the 5-cycle test procedure, as would likely be the case for the 

technology described by the commenters, must quantify emissions reductions, as discussed 

above. EPA is not making eligibility determinations on specific technologies as part of this 

rulemaking. However, we note that if the technology is in widespread use it may be difficult for 

the manufacturer to make the case that it is a new and innovative technology. With regard to 

nitrogen tire inflation, EPA believes manufacturers in determining credits would also need to 

address concerns regarding the fact that tires do not last the life of the vehicle and there would be 

some need to refill tires. There is no guarantee that consumers would use nitrogen during these 

tire-refilling events. 

Diesel Fuel Upstream Emissions 

Organization: U.S. Coalition for Advanced Diesel Cars 

Comment: 

For more than 20 years, EPA has been concerned with 'off-cycle' emissions that occur in the realworld but are not measured on the FTP or HFET drive cycles that control vehicle design, 

technology selection and calibration. In its 2006 label rulemaking, EPA made this point clear: 

'EPA had become concerned that the FTP omitted many critical driving modes and conditions 

that existed in actual use, and that emissions could be substantially higher during these driving 

modes compared to the FTP. Manufacturers frequently designed their vehicles' emission control 

systems to meet the specified FTP test conditions, often neglecting emissions control over other 

driving conditions, resulting in higher real-world emissions.' [OAR-2009-0472-7496, p.12] 

Congress called for action under sections 206(h) and 202(j) of the Clean Air Act Amendments of 

1990, leading EPA to develop new 'supplemental' test procedures that were designed to reflect 

the real-world driving conditions where fuel is consumed and emissions are created. By 2006, 

these supplemental test procedures became part of the 5-cycle methodology used by EPA to 

reflect real-world city, highway and combined fuel economy for light duty vehicles. As above, 

however, the basis for fleet average performance under CAFE and the proposed GHG rules has 

not been updated. [OAR-2009-0472-7496, p.12] 

In the current joint NPRM, EPA and NHTSA continue to state the importance of linking 

automotive technology development, production and implementation to reality-based accounting 

procedures designed to assure maximum real-world reductions in fuel consumption and GHG 

emissions. In addition to the 'zero g/mile' treatment for electricity that EPA states may be 

appropriate on an interim basis but not long-term, there are several other off-cycle credit 

mechanisms proposed: 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

-Credits for more energy efficient mobile air conditioners (MAC). Because the MAC is not 

turned on during the FTP or HFET tests, these MAC, efficiency credits would be available to 

manufacturers only if they can be demonstrated to measurably reduce GHG emissions in realworld, off-cycle conditions. 

-Credits for MAC systems designed to reduce the probability of refrigerant leaks. In the event of 

a leak, chemical refrigerants contribute GHGs to the atmospheric inventory. 

-Credits for advanced, low global warming potential (GWP) MAC refrigerants that minimize the 

GHG inventory impact even in the event of a real-world leak. 

-Flex Fuel Vehicle (FFV) credits for vehicle which, for example, can operate on either E85 or 

E10 gasoline in the future. Through 2016 and beyond, EPA will recognize the holistic, well-towheel performance of the renewable fuel content by zeroing out the GHG emissions produced. 

under EPA vehicle test procedures that are attributable to the bio component of that fuel. In other 

words, the up-stream, 'well-to-tank' GHG benefits of the renewable component are counted as an 

offset to the 'tank-to-wheels' GHG emissions EPA measures in its laboratory vehicle certification 

calculations. 

-Other off-cycle credits for technologies such as solar roof panels, active cruise control and 

active aerodynamics. These credits are proposed to be exclusively available for 'new and novel' 

technologies but only after robust demonstration of off cycle, real-world GHG reductions not 

captured on the 2-cycle tests. [OAR-2009-0472-7496, pp.12-13] 

The Coalition applauds EPA and NHTSA for championing reality-based solutions to our national 

petroleum end GHG reduction objectives. In each of the credit mechanisms described above, the 

agencies demonstrate the importance of controlling off-cycle emissions through a holistic 

approach that is not chained exclusively to a pair of 40-year old test procedures. Each of these 

reality based compliance features demonstrates recognition of a simple truth: the success of the 

proposed regulations will be based on the daily reductions in petroleum barrels and well-towheel GHG tons, not on a 'fleet average' compliance certificate for the regulated parties. And to 

achieve those daily reductions, vehicles employing technologies must appeal to U.S. consumers 

and must sell in high annual volumes. [OAR-2009-0472-7496, p.13] 

The universe of possible fuels for light duty vehicles contains relatively few that have a higher 

energy density than gasoline. Diesel is one of those fuels. A gallon of diesel has 11 percent more 

energy than a gallon gasoline (and a gallon of B10 has 12 percent more energy than a gallon of 

E10). Because of this energy density, the transportation and distribution of diesel fuel to users 

around the country produces less GHG per usable unit of energy . Additionally, the refining of 

diesel fuel requires less energy and produces fewer GHG emissions compared to a gasoline 

baseline. Taken together, these reduced off-cycle emissions contribute additional benefits to 

society when high density diesel is substituted for lower density gasoline. Unlike its treatment of 

FFVs and other credit mechanisms proposed, however, EPA is not proposing to count these real 

diesel GHG offsets. According to recent EPA research, the up-stream GHG emissions associated 

with refining, transporting, distributing and storing transportation fuels. [OAR-2009-0472-7496, 

p.13] 

For every gallon of diesel fuel substituted for a gallon of gasoline, an off cycle benefit of 280 

GHG grams occurs. Returning to the pickup truck example shown on page 12, in which a 24 

mpg diesel engine is sold in place of the standard 18 mpg engine, the 3,700 lifetime gallons of 

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EPA Response to Comments 

fuel saved would also generate an off-cycle GHG benefit of 1 metric ton. Over 221,199 lifetime 

miles traveled, this is the equivalent of an off cycle credit of 4.7 grams per mile. This value is 

on the order of the maximum MAC efficiency credit of 5.7 g/mile that EPA proposes under its 

off-cycle credit mechanism. [OAR-2009-0472-7496, pp.13-14] 

Clearly, the off cycle benefits of diesel fuel should be comprehended in EPA's historic GHG 

rulemaking process as these benefits are already documented in the agency's technical research. 

Since EPA proposes off-cycle credit mechanisms to incentivize such solutions as roof-top solar 

panels, surely the Administrator recognizes a parallel disincentive exists for proven technologies 

that are deliberately excluded from the off-cycle credit mechanism. We urge EPA to adopt rules 

that comprehend the holistic, full-cycle GHG performance recognizing that vehicles and fuels 

work as a system in our national efforts to reduce the CO2 inventory and petroleum consumption. 

[OAR-2009-0472-7496, p.14] 

EPA Response: 

The commenter is recommending broadening the off-cycle credits concept, which is focused on 

the off-cycle benefits of new and innovative vehicle technologies, to include potential upstream 

emissions reductions associated with fuels. The commenter notes that diesel fuel has higher 

energy density than gasoline and comments “[b]ecause of this energy density, the transportation 

and distribution of diesel fuel to users around the country produces less GHG per usable unit of 

energy. Additionally, the refining of diesel fuel requires less energy and produces fewer GHG 

emissions compared to a gasoline baseline. Taken together, these reduced off-cycle emissions 

contribute additional benefits to society when high density diesel is substituted for lower density 

gasoline.” Including these types of potential upstream benefits is beyond the scope of the 

proposal, as EPA did not propose or seek comments on such a concept. EPA focused its offcycle credits proposal on vehicle improvements and does not believe it is appropriate to include 

life-cycle fuels emissions in determining off-cycle credits. Please see Section 5.7.3, Incentives 

for Advanced Technology Vehicles, for a discussion of how EPA is addressing upstream 

emissions of electric vehicles and why EPA is not applying an upstream emissions approach to 

other fuel types. Please also see Section 3.4 regarding additional comments concerning upstream 

emissions attributable to fuels. 

Additional Comments 

Organization: United Auto Workers 

Comment: 

We are also supportive of EPA’s proposal to provide compliance flexibility through a multiplier 

for electric-drive technologies and for so-called off-cycle technology credits. We believe 

strongly that these proposals will provide a desirable incentive to bring into production advanced 

fuel-saving technologies that have the potential to radically reduce the greenhouse gas emissions 

from motor vehicles. Although we recognize that this will cause a slight near-term reduction in 

the total amount of greenhouse gas emissions avoided, it will hasten the day when these 

technologies can be produced in large volumes. This will ultimately result in greater emissions 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

reductions in the medium and long term because of the cost reductions expected with increased 

volumes of these advanced technologies. [OAR-2009-0472-7056.1, p.3] 

EPA Response: 

EPA appreciates the supportive comments. EPA believes the comments regarding a slight nearterm reduction in the total greenhouse gas emissions avoided was in reference to proposed 

advanced technology vehicle credits. Comments on this topic are addressed in Section 5.7.3. 

EPA is taking several steps, discussed above, to ensure that off-cycle credits are based on actual 

emissions reductions and therefore EPA does not believe off-cycle credits will result in a loss of 

emissions benefits. 

5.7.5. Early Credit Options 

5.7.5.1. Credits Based on Early CO2 Reductions 

Organization: Ford Motor Company 

Association of International Automobile Manufacturers (AIAM) 

Chrysler Group LLC (Chrysler) 

Alliance of Automobile Manufacturers (Alliance) 

Volkswagen Group of America (Volkswagen) 

Toyota Motor North America 

Public Citizen and Safe Climate Campaign 

Union of Concerned Scientists 

Natural Resources Defense Council 

Sierra Club 

California Air Resources Board 

National Automobile Dealers Association (NADA) 

State of New Jersey 

New York State Department of Environmental Conservation 

Mass Comment Campaign (2,332) (unknown organization) 

South Coast Air Quality Management District 

Environment Michigan 

Chew, Yuli 

 Seal, Kathy 

Comment: 

Ford Motor Company 

Early Credit Flexibility and Pathways 

The agencies' proposal to provide for the use of early credits in the 2009 -2011 model years is a 

reasonable approach. The early credit pathways provide flexibility and lead-time in order to 

bridge the stair-step increase in stringency between the 2011 MY CAFE standards and the 

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EPA Response to Comments 

aggressive GHG reduction targets in the 2012-2016 timeframe. The EPA proposal recognizes the 

GHG reduction technology being incorporated into the current fleet and rewards manufacturers 

for over-complying with the standards. The GHG reduction technology being implemented on 

the current fleet provides the nation with the ability to track real GHG reductions immediately. 

[OAR-2009-0472-7082.1, p. 5] 

Association of International Automobile Manufacturers (AIAM) 

AIAM supports EPA’s proposed “four pathways” approach for earning early “fleet average” 

credits as well as the early air conditioning, advanced technology, and off-cycle credits. All of 

the proposed credits are designed to appropriately reward manufacturers that achieve levels of 

efficiency that exceed expected levels. 

EPA invited comment on whether the proposed early credits provide a “windfall” and whether 

the credits reward “real world” emission reductions. EPA does not explain what is meant by 

“windfall” credits. In our view, the CAFE program and the California greenhouse gas program 

provide a general benchmark for appropriate levels of vehicle efficiency for the 2009-2011 

period. Early credits would reward companies that exceed this benchmark. In order to qualify for 

credits under EPA’s proposal, manufacturers would have to offer vehicles that achieve efficiency 

levels that exceed typical current levels. Any resulting credits would truly be earned, not a 

windfall, and would result in real world fuel savings and lower greenhouse gas emissions. [OAR2009-0472-7123.1, pp. 13-14] 

In the public hearings on the proposed standards, several parties expressed concerns regarding 

the appropriateness of the early credits that were proposed by EPA, arguing that the credits are 

too “generous.” In our view, the proposed early credits are essential to assure the feasibility of 

the proposed standards. Manufacturers’ needs for such credits should be evaluated in the context 

of the historic nature of the proposed standards (in terms of the dramatic changes the standards 

will necessitate in vehicle design) and the economic environment in which manufacturers are 

being called upon to implement these changes. The early credits provide an essential safety valve 

for the transition to the aggressive new standards program. [OAR-2009-0472-7123.1, p.14] 

Early fleet average credits under pathways 1, 2, and 3 are based on credits and debits earned in 

the California program. These provisions are necessary to counter CARB’s proposal to require 

manufacturers with net debits in California at the end of the 2011 model year to use and retire 

federal credits to make up for the California debits. To the extent that California will require that 

debits be carried over from the California to the federal program, it is only fair that credits be 

carried over as well. AIAM has opposed California’s claim to authority to cancel Federal credits. 

We urge NHTSA and EPA to support our concerns on that point. California has no direct 

regulatory authority over the Federal program, and AIAM therefore does not believe that CARB 

has the power to require a forfeiture of Federal credits. Moreover, in the 2012 model year and 

thereafter, a manufacturer will have the option under the California program of continuing to 

comply separately with the California program or transitioning fully to the federal program, in 

which case compliance with the federal program will be “deemed” to be compliance with the 

California program. Should a manufacturer transition to the federal program, the intent of the 

commitment letters signed by the parties to the national standards agreement is that it will no 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

longer have any compliance obligations with regard to California after that date. We urge 

NHTSA and EPA to address our concerns on this point. [OAR-2009-0472-7123.1, p.14] 

Chrysler Group LLC (Chrysler) 

Chrysler recommends that all of the proposed early fleet average greenhouse gas reduction 

'pathways' be included in the final rule. 

EPA notes that certain proposed pathways 'could be eliminated to simplify the program'. 

However, Chrysler disagrees that elimination of a potential early credit option would not 

diminish its overall flexibility. Given that EPA proposes to allow manufacturers to select the 

early fleet average pathway taken at the end of the 2011 model year, but proposes to disallow 

using multiple pathways for the 2009-2011 early credit program, it makes sense to provide the 

maximum number of options for evaluating potential credit scenarios. [NHTSA-2009-0059­

0124, p.29] 

For early fleet average greenhouse gas reduction credits based on California regulations 

(Pathways 1 and 2), the 2.0 g/mile adjustment to the California greenhouse gas standards is not 

appropriate if the measurement metric is carbon-related exhaust emissions. 

EPA proposes four 'pathways' through which early fleet average greenhouse gas reductions can 

receive credit in the 2009-2011 model years. Two of these pathways (Pathway 1 and Pathway 2) 

are based on California greenhouse gas regulation standards. EPA proposes to set the baseline 

standards for these pathways by lowering the California standards by 2.0 g/mile. This adjustment 

is based on the premise that N2O and CH4 'are included in the California GHG standards, but not 

included in the credits program.' [NHTSA-2009-0059-0124, pp.29-30] 

Although it is true that N2O is not included in the carbon-related emission ('CREE') metric 

proposed by EPA, CREE does include CH4 (as part of the total hydrocarbon ('THC' term) plus 

the addition of CO. It seems as though the 2 g/mi adjustment was made based on a belief that the 

metric, which would be compared to the standard, only would include the CO2 term. Chrysler 

emission test data suggests that the THC and CO components of the CREE metric will add 

approximately 0.8 (on a small car) to 3.0 (on a large truck) g/mi combined city/highway. These 

values equate to a 1.7 g/mi contribution based on a 60/40 car/truck fleet mix. [NHTSA-2009­

0059-0124, p.30] 

Chrysler recommends that no adjustment to the California standards be made for evaluating the 

early fleet average greenhouse gas reduction by Pathways 1 and 2 if CREE is used as the metric. 

[NHTSA-2009-0059-0124, p.30] 

Chrysler supports EPA's inclusion of air conditioning credits in the assessment of California and 

Clean Air Act Section 177 state fleet averages, and the availability of air conditioning credits 

outside of these states. 

EPA's proposed methodology ensures that air conditioning credits are not double counted in 

states where a greenhouse gas regulation program is in affect for the 2009 through 2011 model 

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EPA Response to Comments 

years while recognizing the surplus nature of greenhouse gas reductions which occur outside of 

these states. [NHTSA-2009-0059-0124, p.30] 

Alliance of Automobile Manufacturers (Alliance) 

The Alliance applauds the efforts of the EPA NPRM to provide as much flexibility as possible 

and we support the EPA’s efforts to provide automakers with legitimate opportunities to bank 

early fleet average credit based on real greenhouse gas (GHG) reductions from products 

designed to meet current regulations. This proposed fleet average credit provides much needed 

flexibility to the regulations and provides manufacturers with additional lead time to implement 

some of the technologies that are needed in the later years of the proposal. Nonetheless, the 

proposed regulation is stringent: it would not allow banked early fleet average credit to last into 

the later years, nor would it provide easy windfall credit that would slow the implementation of 

new technology. Even with this flexibility, all automakers will be challenged to meet this 

proposed regulation. [OAR-2009-0472-6952.1, p.7] 

The Alliance supports EPA’s proposal in the NPRM to allow early fleet average CO2 credit. 74 

Fed. Reg. 49,536. The Alliance also supports EPA’s proposal to provide flexibility by allowing 

automakers to use four different pathways to earn early fleet average credit. The EPA correctly 

observes that a wide range of automakers are currently selling vehicles in the U.S. market with 

different fleet mixes and sales volumes. The four pathways proposed provide reasonable options 

to such a diverse group of manufacturers. Also, the proposed early fleet average credit offers 

real-world CO2 reductions, rewarding automakers for providing fleet performance that exceeds 

the California and Federal standards. [OAR-2009-0472-6952.1, p.7] 

The credit and the pathways proposed by the EPA would not result in a “windfall.” Regarding 

the credit proposed under the California programs (Pathways 1, 2 and 3), since EPA has granted 

the waiver request for California’s GHG regulations, credits earned under these regulations are 

appropriate. California’s GHG regulations have been approved by the state of California since 

2004, and at least some automakers, anticipating possible waiver approval, prepared for the 

implementation of the California GHG regulations beginning as early as MY 2009. In addition, 

CARB appears to have anticipated that lead time was necessary to implement GHG reduction 

technologies and concluded that, considering needed lead time, the MY 2009 – 2011 standards 

are appropriately stringent. CARB anticipated the banking of credit during the early years of the 

California GHG regulations in anticipation of the stringent requirements in later model years. 

[OAR-2009-0472-6952.1, pp.7-8] 

It is this new technology that allows manufacturers to earn the credit. Therefore, the credit does 

not provide a “windfall” that will prevent the implementation of new technologies, but rather it 

encourages and rewards such actions. [OAR-2009-0472-6952.1, p.8] 

The EPA would also protect from excessive use of early credit with the five year carry forward 

restriction on such credit. This means the any credit earned in MY 2009, considered the best year 

for opportunity for auto manufacturers to earn credit, is not useful past MY 2013. This proposed 

additional safeguard would appropriately restrict the trading of early fleet average credit. [OAR2009-0472-6952.1, p.8] 

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The early fleet average credit pathways are also appropriate to balance the traditional credit 

allowed under the NHTSA fuel economy regulations. The EPA GHG regulation and the NHTSA 

CAFE program should mirror each other as much as possible and the early credit fleet average 

program is an important component of that harmonization. [OAR-2009-0472-6952.1, p.8] 

Volkswagen Group of America (Volkswagen) 

Regarding the credit flexibilities in the NPRM relative to the EPA GHG proposed regulation, 

Volkswagen supports the credit flexibilities outlined by the EPA. In particular, Volkswagen 

supports the early fleet credit program that provides manufacturers with the ability to outperform 

the existing NHTSA and California GHG regulation in the 2009 through 2011 timeframe to earn 

credit during these years. This provides auto manufacturers with the flexibility needed to plan 

their product strategy and the introduction of GHG reduction technologies over the course of this 

regulation. Volkswagen supports the EPA proposal to provide four different early fleet credit 

pathways, as the EPA correctly recognizes that the auto companies have very diverse sales 

volumes and fleet mixes and that various pathways are necessary to provide flexibility to all 

automakers. [OAR-2009-0472-7210.1, pp.2-3] 

In addition, providing early fleet credit flexibility is consistent with the type of carry 

forward/carry back provision allowed under the current NHTSA CAFE system. Manufacturers 

are currently allowed to bank and use CAFE credit and will fully implement this ability in the 

2009 through 2011 period in anticipation of the new NHTSA regulation beginning on 2012 

model year. In an effort to harmonize the EPA GHG and the NHTSA CAFE programs for 2012 - 

2016 as much as possible, it is entirely appropriate for the EPA to utilize early fleet credits 

during the 2009 - 2011 time period. This will allow manufacturers to utilize a similar fleet 

approach to both regulations. We do not believe early fleet credit results in windfall credit, as 

manufacturers have planned and prepared for compliance in the 2009 -2011 time period and 

deserve credit if they can exceed the applicable standards for that time window. [OAR-2009­

0472-7210.1, p.3] 

Toyota Motor North America 

Toyota supports EPA's proposal to provide credits for achieving early GHG emission reductions 

by over complying with the existing NHTSA CAFE standards or GHG standards adopted by the 

State of California (and subsequently adopted by numerous other states) during 2009 through 

2011 model years. To the extent that over compliance with these programs - and thus the 

emission benefits - are real, the overall objectives of EPA's program can be achieved while 

providing manufacturers with needed flexibility to deploy technology in a manner consistent 

with product cycles, market uncertainties, and other factors. Further, EPA has routinely provided 

early credit opportunities when adopting its regulations, including situations in which California 

regulations have preceded EPA's regulations, as is the case with the subject proposal. [OAR2009-0472-7291, p.19] 

Public Citizen and Safe Climate Campaign 

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EPA Response to Comments 

EPA proposes four opportunities for automakers to bank early windfall greenhouse gas emission 

credits for model years 2009-2011: (1) averaging credits, (2) air conditioning credits, (3) 

advanced technology vehicle credits, and (4) off-cycle credits. The averaging credits are divided 

into four pathways from which EPA proposes manufacturers may choose a pathway for earning 

early credits. Manufacturers must choose one pathway only, but they can wait until 2011 to 

choose it. [OAR-2009-0472-7050.1, p.4] 

The four pathways for averaging credits are based on over-compliance for fleets of vehicles 

either (1) nationwide, (2) in California and the other states which have adopted California’s 

standards under Section 177 of the CAA (“177 states”), (3) states outside California and the 177 

states, or (4) to forego all California-based credits and earn CAFE credits in states outside 

California and the 177 states. Pathways 1 and 2 allow manufacturers to earn credits for overcompliance with the California standards either nationwide or in California and the 177 states. 

Pathways 3 and 4 would allow manufacturers to apply credits for over-compliance with CAFE 

standards in states outside California and the 177 states. Early credits would be permitted to be 

traded and transferred without limitation. The only limitations on early credits are automakers 

would have to clear any deficit for model years 2009-2011 before it could apply credits to model 

year 2012 and beyond, and credits would be subject to the five-year carry-forward limit. [OAR2009-0472-7050.1, p.4] 

We object to granting any credits for exceeding standards in California and the 177 states in 

2009-2011. Manufacturers exceeding these requirements need not be rewarded in the National 

Program, which does not take effect until 2012. We recommend that if EPA grants any early 

action credits that it [OAR-2009-0472-7050.1, p.4] use a hybrid of Pathways 2 and 3, where 

manufacturers would earn credits for exceeding compliance with the California baseline, but 

only for the fleet of vehicles sold outside California and the 177 states. [OAR-2009-0472-7050.1, 

p.5] 

No CAFE-based credits should be granted for model years before 2011. The EISA clearly 

prohibits the trading and transfer of credits earned in these model years, and we believe this 

could function as a backdoor means by which automakers could trade credits that would 

otherwise be nontransferable. If CAFE-based credits are granted for any of the alternatives, we 

urge that EPA bar these credits from transfer or trading. [OAR-2009-0472-7050.1, p.5] 

Union of Concerned Scientists 

EPA proposes an opportunity for manufacturers to accrue “early credits” in model years 2009­

2011 by over-compliance with a baseline standard. According to EPA, [OAR-2009-0472-7181.1, 

p.10] 

The baseline standard would be set to be equivalent, on a national level, to the California 

standards. Potentially, credits could be generated by over-compliance with this baseline in one of 

two ways – over-compliance by the fleet of vehicles sold in California and the CAA section 177 

states (i.e., those states adopting the California program), or over-compliance with the fleet of 

vehicles sold in the 50 states. EPA is also proposing early credits based on over-compliance with 

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CAFE, but only for vehicles sold in states outside of California and the CAA section 177 

states. [OAR-2009-0472-7181.1, p.10] 

UCS is concerned that the approach as stated will erode the rule’s energy and emissions benefits 

because the credits offered will not reflect real, surplus emissions. In order to ensure that the 

credits accrued are based on actual emissions reductions, it is essential that the baseline for each 

model year not be defined as equivalent to the California standards, but rather as the more 

stringent of CAFE or the California standard. Because model years 2009 and 2010 will see 

California standards less stringent than CAFE standards, the rule as proposed would supply 

manufacturers with credits simply for complying with the law. Further, it also appears that based 

on the proposed rule, manufacturers may be able to acquire credits simply by shuffling cleaner 

vehicles into California or CAA Section 177 states. While we are generally supportive of 

flexibility mechanisms, we recommend that the agency modify its proposal to close these early 

credit loopholes. [OAR-2009-0472-7181.1, p.10] 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.103-113] 

Third, early credits for overcompliance must reflect real surplus emissions. EPA proposes an 

opportunity for manufacturers to accrue early credits in model years 2009 through 2011 

by overcompliance with a given baseline standard. 

However, since CAFE is actually more stringent than California standards in 2009 and 2010, 

automakers merely minimally complying with federal fuel economy standards can 

accumulate credits, extra credits, for emission standards. 

To ensure that the credits accrued are based on actual surplus, surplus emissions reductions, it is 

essential that the baseline for each model year not be defined as merely equivalent to California 

standards for those early years but, rather, as the more stringent -- in any given year, the more 

stringent of CAFE or the California standard for that year. 

Further, it also appears that, based on the proposed rule, manufacturers may be able to 

acquire credits simply by shuffling cleaner vehicles into California or other Section 177 states. 

Natural Resources Defense Council 

Early Credits Should Only Be Awarded for Real and Surplus Emissions Reductions, Eliminating 

Windfalls that Undermine Pollution and Oil Savings Benefits 

NRDC concurs with EPA’s overall objective to ensure that early credit programs result in “realworld” emission reductions that are “actual” and “surplus.” Unfortunately, it is clear that 

Pathways 1 and 2 do not meet the intent of the Agency. The reason is that in model year 2009 

(and likely model year 2010) the CAFE standards result in a lower emission rate than the 

California program’s GHG standards. As shown in the Table 1 below [See OAR-2009-0472­

7141.1, p. 12 for Table 1], the design of Pathways 1 and 2 allow automakers to accrue credits 

simply by complying with the CAFE program. [OAR-2009-0472-7141.1, p. 12] 

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EPA Response to Comments 

To eliminate this “windfall” credit opportunity, NRDC recommends that the national baseline for 

MY 2009 (and possibly MY 2010) be set at the GHG level which results from complying with 

the applicable national standards, which for that year are the CAFE standards. EPA proposes to 

prohibit the trading of early credits from MY 2009 between firms, to exclude FFV credits from 

the early credit program and to allow early credits to remain eligible for carry-forward for no 

more than five years. These limitations mitigate the problem, but they do not fully eliminate 

windfall credit generation. [OAR-2009-0472-7141.1, p. 13] 

[[NRDC also submitted these comments as testimony at the Detroit public hearing, See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 23-24.]] 

Sierra Club 

We object to proposed early action credits. These credits for vehicles sold between model years 

2009-2011 will be awarded to vehicles that were designed prior to the proposed standards. If 

early credits are to be allowed, automakers should be required to declare which pathway they 

will use before accruing credits, not at the end of 2011. Further, early credits should be based on 

the most stringent standard that applies. In several years, California’s Pavley standards are lower 

than federal CAFE standards, thereby giving automakers the opportunity to receive windfall 

credits simply by opting to comply with a weaker standard. [OAR-2009-0472-7278.1, p.15] 

[[Sierra Club also submitted these comments as testimony at the Detroit public hearing, See 

docket number OAR-2009-0472-6185, pp. 29-30] 

California Air Resources Board 

CARB does not support the proposed provisions for early credits prior to implementation of the 

national GHG program unless such credits are accrued by exceeding California’s requirements in 

California and those states that have adopted California’s program. Of the four pathways 

proposed, Pathway 2 more closely matches this criterion. Nonetheless, should EPA chose to 

retain all four pathways in the final rule, we strongly support incorporating in the final rule the 

provisions proposed by EPA to prohibit trading between manufacturers of credits earned in 

model year 2009, require the use of credits earned in 2009 to offset debits accrued in 2010-2011, 

and prohibit trading between manufacturers of credits earned in model year 2009. These are 

reasonable proposals designed to assure that credits earned in the early years do not provide a 

windfall for vehicle manufacturers and that the emission reductions envisioned for the national 

GHG program are realized. [OAR-2009-0472-7189.1, p.3] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. See 

docket number OAR-2009-0472-7283, pp. 21-27] 

National Automobile Dealers Association (NADA) 

EPA should mirror the CAFE program’s time-honored early fleet average credits as they are 

essential to compliance with the National Program’s ambitious targets. As proposed, the early 

fleet average credit scheme is too complex. especially given that CARB’s 2004 standards need 

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not be considered and, in any event, in no way trump the MY 2009-2011 CAFE standards. 

[OAR-2009-0472-7182.1, p.7] 

State of New Jersey 

The Department supports the USEPA's real-world reductions approach for alternative fuel 

vehicles, as well as its efforts to prevent unrealistic excess credits from trucks, risking a delay of 

the introduction of advanced vehicle technologies across the industry from the 2012 and later 

USEPA greenhouse gas emission standards. However, we suggest that in addition the Agencies 

limit the fraction of credits from trucks and only allow trading of credits among same vehicle 

categories. These additional precautions will ensure that the credits from trucks cannot be used to 

normalize the debits from passenger cars, or diminish the value of the credits from trucks that 

can be carry-forward. 

The Department supports the prohibition of trading proposed model year 2009 generated early 

credits between firms under the proposed Pathways 1, 2 or 3 due to the anomalous nature of 

model year 2009. If trading were allowed for the 2009 model year, there is a potential for the 

generation and trading of a large amount of credits which are in fact not excess. 

The Department seeks clarification from the USEPA on how the proposed credit Pathways 

would interface with California's and the section 177 states' (including New Jersey's) 

enforcement of the California greenhouse gas standards during the 2009 to 2011 model years. 

Finally, the Department prefers limiting the Early Fleet Average CO2 credits to Path 1 

(California-based Credits for National Fleet) and Path 2 (California-based Credits sold in 

California plus CAA 177 States) and opposes the addition of Pathways 3 and 4. Pathways 3 and 

4 could result in the generation of CAFE credits which are in fact not excess credits. [OAR2009-0472-7109.1, p.8] 

New York State Department of Environmental Conservation 

EPA proposes to allow early credits to be generated for the 2009-2011 model years, and notes 

that some manufacturers will likely generate large numbers of 2009 model year credits. To 

minimize the potential 'windfall' for manufacturers, we suggest that the 5 model year lifespan of 

these early credits should start immediately, even though there will be no deficits to offset until 

at least the 2012 model year. Thus 2009 model year credits would expire at the end of the 2014 

model year. [OAR-2009-0472-7454, p.2] 

Mass Comment Campaign (2,332) (unknown organization) 

Likewise, manufacturers must not be permitted to rack up windfall credits for exceeding the 

standard in advance of the 2011 model year. For passenger cars the existing standard has been in 

effect since 1985, and for light trucks, it has been only nominally increased in the past 20 years. 

Any credits earned for early compliance must not be available for trading among manufacturers. 

[OAR-2009-0472-5747, p.1] 

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EPA Response to Comments 

South Coast Air Quality Management District 

First, early credits under the federal program for 2012 to 2016 vehicles may be used in such a 

way as to possibly reduce the stringency of the ARB program. This would be a 

negative unintended consequence which should be avoided wherever possible. 

EPA should consider establishing a cap on the number of early credits to ensure that California's 

greenhouse gas standards are not undermined. At a minimum, the South Coast MD staff 

recommend that there be a full public accounting of these early compliance earned and traded 

credits to ensure the greatest transparency in public disclosure. 

Such disclosure may itself serve as a constraint on excessive credit reliance given the possible 

negative publicity associated with compliance via imported credit use. 

[Comments are from LA Testimony, OAR-2009-0472-7283, pp.59-67.] 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

OAR-2009-0472-6185, p. 68.]] 

Environment Michigan 

Specifically, we're concerned that the proposed standards allow automakers to rack up credits for 

new vehicles sold from 2009-2011 that exceed existing standards. These are vehicles that had 

been planned years before these new standards were announced. Automakers should not be given 

windfall credits for cars that were already in the pipeline. 

Chew, Yuli 

I support this EPA’s position in preventing unreal excess credits from trucks and prohibiting the 

trading of model year 2009 generated early credits between firms, risking a delay of additional 

technology across the industry from 2012 and later EPA CO2 standards. I would like to suggest 

that trading be limited to credits among same vehicle categories, not using credits from trucks to 

equalize the debits from the cars. [OAR-2009-0472-7042.1, p.4] 

For the four fleet average-based CO2 early credit pathways EPA is proposing, I would welcome 

just limit the Early Fleet Average CO2 credits to Path 1(California-based Credits for National 

Fleet) & Path 2 (California-based Credits sold in California plus CAA 177 States). CAFE-based 

credits shouldn’t be added to these Greenhouse Gas credits. The credits from trucks should be 

limited for use to equalize the debits from trucks only. [OAR-2009-0472-7042.1, p.4] 

 Seal, Kathy 

Second of all, please minimize the credits that automakers are allowed to receive for 

vehicles that were sold before new standards take effect in 2012. Please don't give them these 

windfall credits that have been talked about. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

EPA Response: 

EPA received comments from manufacturers in support of the proposed early credits program as 

a necessary compliance flexibility. The Alliance commented that the early credits reward 

manufacturers for providing fleet performance that exceeds California and Federal standards and 

do not result in a windfall since manufacturers have added new technology in anticipation of the 

grant of California’s waiver request and in reliance on the credit generating and banking 

provisions available under the California program. AIAM commented that early credits are 

essential to assure the feasibility of the proposed standards and the need for such credits must be 

evaluated in the context of the dramatic changes the standards will necessitate in vehicle design 

and the current economic environment in which manufacturers are called upon to make the 

changes. Manufacturers also supported retaining all four of the proposed pathways, commenting 

that eliminating pathways would diminish the flexibility of the program. 

EPA also received comments from many environmental organizations and states that the 

program would provide manufacturers with windfall credits because manufacturers will not have 

to take any steps to earn credits beyond those that are already planned and in some cases 

implemented. These commenters were particularly concerned that the California truck standards 

in MY 2009 are not as stringent as MY 2009 CAFE, so overcompliance with the California 

standards will automatically result in a windfall in MY 2009, and possibly even MY2010 (the 

truck standard in California is less stringent than that of CAFE in MY2010, but the California 

passenger car standard is more stringent than that of CAFE). These commenters supported an 

early credits program based on overcompliance with the more stringent of either the CAFE or 

California standards in any given year. CARB commented: “should EPA choose to retain all 

four pathways in the final rule, we strongly support incorporating in the final rule the provisions 

proposed by EPA to prohibit trading between manufacturers of credits earned in model year 

2009, require the use of credits earned in 2009 to offset debits accrued in 2010-2011, and 

prohibit trading between manufacturers of credits earned in model year 2009. These are 

reasonable proposals designed to assure that credits earned in the early years do not provide a 

windfall for vehicle manufacturers and that the emission reductions envisioned for the national 

GHG program are realized.” 

EPA is retaining the early credits program because EPA judges that they are not windfall credits, 

and (as documented in the comments above) manufacturers in some cases have reasonably relied 

on the availability of these credits, and have based early model year compliance strategies on 

their availability so that the credits are needed to provide adequate lead time for the initial years 

of the program. See, e.g. Comments of the Alliance. The same reasoning holds for authorizing 

early credits for exceeding CAFE standards in non-California states. However, as discussed 

below, EPA is restricting credit trading for MY2009 credits earned under the California-based 

pathways. Also, under the California-based Pathways 1 and 2, EPA is requiring manufacturers 

to cover any deficits incurred against the baseline levels established by EPA during the three 

year period 2009-2011 before credits can be carried forward into the 2012 model year. For 

example, a deficit in 2011 would have to be subtracted from the sum of credits earned in 2009 

and 2010 before any credits could be applied to 2012 (or later) model year fleets. EPA is 

including this provision to help ensure that the early credits generated under this program are 

consistent with the credits available under the California program during these model years. In 

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EPA Response to Comments 

its comments, CARB supported these restrictions as a way to prevent credits from being 

unearned windfalls, and EPA agrees with this comment. 

Credit Restrictions 

EPA received comments that the proposed approach under the California-based pathways will 

provide windfall credits to manufacturers because the MY2009 California light truck standards 

are less stringent than the corresponding CAFE standards, so that credits are necessarily 

generated for merely complying with the MY 2009 CAFE standard, which manufacturers will 

likely do in any case.. Although these credits could be considered windfalls if looked at for this 

one isolated model year, they are not when the program is viewed in proper perspective. Credits 

are not based solely on performance in MY 2009. They are based on performance over a three 

model year period, MYs 2009-2011. As noted in the proposal, EPA expects that the requirement 

to over comply over the entire three model years should mean that the credits that are generated 

are real and are in excess of what would have otherwise occurred. However, because of the 

circumstances involving the 2009 model year, in particular for companies with significant truck 

sales, there is some concern that under Pathways 1, 2, and 3, there is a potential for a large 

number of credits generated in 2009 against the California standard, in particular for a number of 

companies who have significantly over-achieved on CAFE in recent model years. Some 

commenters were very concerned about this issue and commented in support of restricting 

intercompany trading of MY2009 credits under the California-based pathways as a means of 

properly cabining generation and utilization of these credits. EPA requested comments on this 

approach and is finalizing this credit trading restriction based on continued concerns regarding 

the issue of windfall credits for MY 2009 under the California-based program. EPA wants to 

avoid a situation where, contrary to expectation, some part of the early credits generated by a 

manufacturer are in fact not excess, where companies could trade such credits to other 

manufacturers, risking a delay in the addition of new technology across the industry from the 

2012 and later EPA CO2 standards. Therefore, manufacturers selecting Pathways 1, 2, or 3 will 

not be allowed to trade any MY 2009 credits that they may generate. See section 86.1867-12 (a) 

(1) (vi), (a) (2) (ii), and (a) (2) (vii). 

UCS commented that it appears that based on the proposed rule, manufacturers may be able to 

acquire credits simply by shuffling cleaner vehicles into California or CAA Section 177 states. 

In response, EPA does not believe there will be a strong incentive for manufacturers to shuffle 

cleaner vehicles into California and 177 states due to the early credits program. EPA is adopting 

credit trading restrictions for MY 2009 California-based credits and requiring manufacturers to 

use the same pathway over the three-year period and make up deficits during any of those three 

years, as discussed above. These provisions would deter manufacturers from using this strategy 

in MY2009 when the California standard is less stringent than CAFE. Manufacturers have the 

option of earning early credits for its cleaner vehicles both inside and outside of California and 

177 states, so there would not be much incentive to shuffle cleaner vehicles. Also, significantly 

shuffling vehicles would present challenges for the manufacturer that would likely outweigh any 

possible marginal benefit. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

EPA received a variety of additional comment regarding early credit restrictions. Public Citizen 

and Safe Climate Campaign commented “No CAFE-based credits should be granted for model 

years before 2011. The EISA clearly prohibits the trading and transfer of credits earned in these 

model years, and we believe this could function as a backdoor means by which automakers could 

trade credits that would otherwise be nontransferable. If CAFE-based credits are granted for any 

of the alternatives, we urge that EPA bar these credits from transfer or trading.” The State of 

New Jersey and others commented that EPA should restrict the transfer of early credits between 

vehicle classes, and were especially concerned about truck credits being used for passenger cars. 

SCAQMD commented that EPA should consider establishing a cap on the number of early 

credits to ensure that California's greenhouse gas standards are not undermined. In response, 

EPA is not finalizing restrictions on transferring or trading credits beyond the restrictions 

discussed above for MY2009 credits under the California-based pathways. EPA understands 

that EISA does not allow credit transfers or trading until MY2011. However, EPA does not 

believe that the early credits are windfall credits because they are based on manufacturers 

achieving emissions reductions beyond those required. Therefore, EPA does not believe 

additional credit restrictions limiting how manufacturers use the credits are appropriate in 

implementing the independent authority of section 202 (a)(1). EPA does not believe the program 

will result in a “backdoor” way for manufacturers to transfer or trade credits in a manner 

forbidden under EISA since the EISA restrictions remain in place for CAFE. Also, because EPA 

does not believe that the early credits are windfall credits, EPA is not placing a cap on the 

amount of early credits a manufacturer may generate. The early credits are an important part of 

the flexibility provided to manufacturers to transition to the new standards and hence a proper 

means of providing needed lead time to meet the new standards. 

New York State Department of Environmental Conservation commented that the 5-year credit 

life should start in the year the credits are generated. For example, 2009 model year credits 

would expire at the end of the 2014 model year. The Alliance also commented on this topic, 

noting that EPA would protect from excessive use of early credit with the proposed five year 

carry forward restriction on early credit. (Note that the Alliance commented that MY2009 

credits would not be useful after MY2013. However, credits may be carried forward for five 

years after the model year in which they are earned and therefore MY2009 credits would be able 

to be used in MY2014, after which they would expire.) The recommendation is consistent with 

EPA’s proposed program and EPA is adopting this approach for the credit life of early credits in 

the final rule. (See §86.1867-12(a).) Additional comments regarding credit carry-forward are 

addressed in Section 5.3. 

Early Credit Pathways 

The Alliance, AIAM, and several manufacturers commented in support of retaining the four 

Early Credits Pathways in order for manufacturers to retain the flexibility provides by the four 

different pathway choices. 

Public Citizen and Safe Climate Campaign commented “We object to granting any credits for 

exceeding standards in California and the 177 states in 2009-2011. Manufacturers exceeding 

these requirements need not be rewarded in the National Program, which does not take effect 

until 2012. We recommend that if EPA grants any early action credits that it use a hybrid of 

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EPA Response to Comments 

Pathways 2 and 3, where manufacturers would earn credits for exceeding compliance with the 

California baseline, but only for the fleet of vehicles sold outside California and the 177 states.” 

In response, the rationale for the comment is unclear. EPA does not agree that California-based 

credits should only be allowed outside of California and the section177 states. Manufacturers 

that achieve emissions reductions beyond those required by the California standards should be 

eligible for credits in California and the section 177 states. EPA is requiring manufacturers to 

offset any credit deficits in any of the MYs 2009-2011 in order to carry California-based credits 

forward into the 2012 and later model years. Also, these credits will not be double-counted with 

California credits since California is not implementing their standards for 2012 and later model 

years. 

CARB commented that it does not support the proposed provisions for early credits prior to 

implementation of the national GHG program unless such credits are accrued by exceeding 

California’s requirements in California and those states that have adopted California’s program. 

Of the four pathways proposed, Pathway 2 more closely matches this criterion, in their view. 

The State of New Jersey and others provided similar comments. In response, EPA is retaining 

all of the proposed credit pathways, including early credits based on the CAFE standards for 

vehicles sold outside of the California and the section 177 states. EPA is restricting the trading 

of MY 2009 credits earned under the California-based pathways and also requiring 

manufacturers to offset all deficits accrued against the California-based program baseline for 

MYs 2009-2011. CARB commented in support of these provisions as a way to address windfall 

credits issues. 

Sierra Club commented that if early credits are to be allowed, automakers should be required to 

declare which pathway they will use before accruing credits, not at the end of MY 2011. The 

reasoning for the comment is unclear and EPA does not believe that this type of early election is 

necessary. EPA notes that it is requiring manufacturers to use the same pathway for the entirety 

of the early credits program, and therefore manufacturers cannot switch back-and-forth among 

options from year-to-year in order to maximize credits. Proper accounting of early credits is 

required at the end of the early credits program, and EPA must approve the early credits report 

documenting that accounting.. See section 86.1867-12 (e), (a). 

NADA commented that the early credits proposal was too complex and that EPA should allow 

credits based on CAFE standards nationwide. In response, the proposed approach of four credit 

pathways was supported by manufacturers and EPA does not believe the provisions will be too 

complex. EPA is not providing an option for CAFE-based credits nationwide because the 

California program is in effect for MYs 2009-2011 and EPA believes it is appropriate to base 

early credits on achieving GHG emissions reductions beyond those required by California and 

the section 177 states. 

Transparency 

EPA received comments that there be a full public accounting of early compliance earned and 

traded credits to ensure the greatest transparency in public disclosure. EPA plans to make this 

type of information available to the public. Please see Section 5.10.1 for EPA’s full response to 

comments regarding data transparency and availability. See also section 86-1867-12 (e) setting 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

forth the reporting requirements for early credit reporting. Such reports, among other things, 

must document both the manufacturer’s elected pathway but provide detailed documentation of 

credit calculation for each averaging set (i.e. vehicle type) for which credits are claimed to be 

generated. 

Baseline for California-based Pathways 

In establishing the baselines for California-based credits pathways, EPA proposed to adjust the 

California standards by 2.0 g/mile to account for the exclusion of N2O and CH4, which are 

included in the California GHG standards, but not included in the federal GHG credits program. 

Chrysler commented that “Although it is true that N20 is not included in the carbon-related 

emission ('CREE') metric proposed by EPA, CREE does include CH4 (as part of the total 

hydrocarbon ('THC' term) plus the addition of CO. It seems as though the 2 g/mi adjustment was 

made based on a belief that the metric, which would be compared to the standard, only would 

include the CO2 term. Chrysler emission test data suggests that the THC and CO components of 

the CREE metric will add approximately 0.8 (on a small car) to 3.0 (on a large truck) g/mi 

combined city/highway. These values equate to a 1.7 g/mi contribution based on a 60/40 

car/truck fleet mix.” Chrysler recommended that no adjustment to the California standards be 

made for evaluating the early fleet average greenhouse gas reduction by Pathways 1 and 2 if 

CREE is used as the metric. 

In response, the commenter is correct, and therefore the final levels shown in the table below are 

2.0 g/mile higher than proposed. EPA is adopting the CREE metric which already accounts for 

CH4, and EPA agrees that the THC and CO components of CREE offset the 2.0 g/mile EPA 

proposed to add to the California standards. 

California Equivalent Baselines CO2 Emissions Levels for Early Credit Generation 

Model Year 

Passenger Cars and Light 

Trucks with an LVW of 0­

3,750 lbs 

Light Trucks with a LVW of 3,751 or 

more and a GVWR of up to 8,500 lbs 

plus Medium-duty Passenger Vehicles 

2009 323 439 

2010 301 420 

California Program Debits 

AIAM commented “AIAM has opposed California’s claim to authority to cancel Federal credits. 

We urge NHTSA and EPA to support our concerns on that point. California has no direct 

regulatory authority over the Federal program, and AIAM therefore does not believe that CARB 

has the power to require a forfeiture of Federal credits. Moreover, in the 2012 model year and 

thereafter, a manufacturer will have the option under the California program of continuing to 

comply separately with the California program or transitioning fully to the federal program, in 

which case compliance with the federal program will be “deemed” to be compliance with the 

California program. Should a manufacturer transition to the federal program, the intent of the 

commitment letters signed by the parties to the national standards agreement is that it will no 

longer have any compliance obligations with regard to California after that date. We urge 

NHTSA and EPA to address our concerns on this point.” 

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EPA Response to Comments 

In response, the EPA and CARB programs will operate independently of one another. If a 

manufacturer has a deficit in California and has the option under the California program of 

offsetting that deficit with EPA surplus credits, the manufacturer would have the option of 

notifying EPA to remove a number of credits as determined by the manufacturer from their EPA 

credits bank. EPA would then confirm that the credits have been removed. This would be the 

extent of EPA's involvement. There are no requirements in EPA's regulations to compel and 

manufacturer to use their EPA credits to offset a deficit in California. However, EPA does not 

believe it should prevent a manufacturer from opting to use their surplus EPA credits in this way, 

if that is a provision of the California program. 

Enforcement 

The State of New Jersey commented that “The Department seeks clarification from the USEPA 

on how the proposed credit Pathways would interface with California's and the section 177 

states' (including New Jersey's) enforcement of the California greenhouse gas standards during 

the 2009 to 2011 model years.” EPA is adopting early credits provisions that, although based on 

the standards adopted by California, are completely independent of the California program from 

an implementation standpoint. In other words, EPA has established the baseline against which 

credits will be earned based on the California standards. However, EPA will implement its early 

credits program independently according to EPA final regulations. 

Organization: Hyundai Motor Company 

Kia Motors 

Comment: 

Hyundai Motor Company 

Hyundai supports that EPA will allow manufacturers to obtain credits for MY 2009 through 

2011 based on over-compliance with applicable California GHG and/or NHTSA CAFE 

regulations. 

Moreover, we believe that the calculation of early credits for over-compliance with the GHG 

standards should reflect the standards to which each manufacturer was actually subject during 

MY 2009 through 2011. For instance, companies that were exempt from California regulations 

should not be subject to the California baseline standard when calculating early credits from 

California and Clean Air Act Section 177 states. More specifically, we request that EPA add an 

additional early credit option based on over-compliance with CAFE standards in 50-states for 

manufacturers that were classified as IVM under the California regulations. On principle, 

manufacturers should receive credits for exceeding applicable requirements. [OAR-2009-0472­

7231.1, p.4] 

Kia Motors 

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[These comments were submitted as testimony at the Los Angeles public hearing. See docket 

number EPA-HQ-OAR-2009-0472-7283, p.172] 

However, we do believe that early credit generation should be based on the standards to 

which each manufacturer was subject under the California regulations. An additional early credit 

option based on overcompliance with CAFE standards in 50 states should be considered. 

EPA Response: 

EPA understands that some manufacturers are not subject to the California standards in MYs 

2009-2011. This does not mean that it is appropriate for such manufacturers to earn credits 

against some other baseline. EPA continues to believe that the California baseline remains the 

most appropriate to use as a measure for generating early credits. Most obviously, it is the only 

GHG standard available for comparison, and also, as discussed in section III.D.1 of the preamble 

to the final rule, a good starting measure for evaluating technical feasibility of light duty vehicle 

GHG control capability. There are no other standards that meet these criteria. Indeed, earning 

credits against standards less rigorous than California’s would raise legitimate concerns about 

windfall credits since credits could be earned for non-optimized performance. Thus, EPA is 

retaining the four early credits pathways as proposed and is not adding a fifth pathway for 50­

state CAFE-based credits. A manufacturer not being subject to the California standards of course 

does not prevent it from earning early credits using the California-based pathways. Such 

manufacturers may still earn early credits under the California-based pathways if they are able to 

demonstrate emissions reductions per the requirements of the early credits program – i.e. 

overcomplying with the levels established by those standards. 

5.7.5.2. Other Early Credits 

Organization: Alliance of Automobile Manufacturers (Alliance)

 Hyundai Motor Company 

Comment: 

Alliance of Automobile Manufacturers (Alliance) 

The EPA’s proposed implementation of the early fleet average credit is also appropriate. 

Regarding early A/C credit, the Alliance agrees with the proposal to measure early A/C credit 

per the procedures outlined in Section III.C.5.b. Applying any additional early credit such as 

FFV credit and applying vehicle definitions per the existing California regulations is practical for 

the proposed California pathways and also ensures that there are not windfall credits. [OAR2009-0472-6952.1, p.8] 

Hyundai Motor Company 

We also support EPA's early credits for air conditioner system improvements, advanced 

technology and off-cycle technology. We believe these credits provide program flexibility and 

optimize cost effectiveness, as well as rewarding early adopters. [OAR-2009-0472-7231.1, p.4] 

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EPA Response to Comments 

EPA Response: 

EPA is promulgating early credits options for A/C credits as proposed. With regard to FFVs, as 

proposed, EPA is also allowing manufacturers to include alternative compliance credits earned 

per the California alternative compliance program. These alternative compliance credits are 

based on the demonstrated use of alternative fuels in flex fuel vehicles. As with the California 

program, the credits are available beginning in MY 2010. Therefore, these early alternative 

compliance credits are available under EPA’s program for the 2010 and 2011 model years. 

FFVs are otherwise included in the early credit fleet average based on their emissions on the 

conventional fuel. EPA will also use the California vehicle definitions for the California-based 

pathways as proposed. 

EPA is finalizing early incentives for advanced technology vehicles with the changes described 

in Section 5.7.3. Manufacturers may use the 0 g/mile value for vehicles sold in MY2009-2011 

consistent with the approach being finalized for MY 2012-2016. Any vehicles sold prior to MY 

2012 under these provisions must be counted against the cumulative sales cap of 200,000 (or 

300,000, if applicable) vehicles. 

5.8 Feasibility of the CO2 Standards 

5.8.1. EPA Reference Vehicle Fleet for Evaluating Further CO2 Reductions 

Organization: Environmental Defense Fund 

Comment: 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.72-79] 

Fleet mix assumptions. The reductions to be realized by these proposed standards are highly 

dependent on assumptions about fleet composition in model years 2012 through 2016. We urge 

federal policy makers to find smart ways to ensure the assumptions about fleet mix reflect the 

fleet composition in the real world. 

EPA Response: 

The commenter is correct that predictions of future fleet composition are of critical importance in 

establishing the standards, and EPA's projections are based on the best information and 

methodology of which it is aware. As set out in detail in section II.B of the preamble to the final 

rule, and chapter one of the joint TSD, EPA (and NHTSA) based the projection of total car and 

total light truck sales for MYs 2011-2016 on projections made by the Department of Energy’s 

Energy Information Administration (EIA). EIA publishes a mid-term projection of national 

energy use called the Annual Energy Outlook (AEO), specifically the AEO 2010 Early Release. 

To further account for changes between car and truck designs, EPA purchased (and shared with 

NHTSA) forecasts from two well-known industry analysts, CSM Worldwide (CSM), and J.D. 

Powers. Determining which traditionally-defined trucks will be defined as cars for purposes of 

this final rule using the revised definition established by NHTSA for MYs 2011 and beyond 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

requires more detailed information about each vehicle model. This is described in greater detail 

in Chapter 1 of the joint TSD. The forecasts obtained from CSM provided estimates of car and 

truck sales by segment and by manufacturer, but not by manufacturer for each market segment. 

Therefore, NHTSA and EPA needed other information on which to base these more detailed 

projected market splits. For this task, the agencies used as a starting point each manufacturer’s 

sales by market segment from model year 2008, which is the baseline fleet. Because of the 

larger number of segments in the truck market, the agencies used slightly different 

methodologies for cars and trucks, as described in section II.B.3 of the preamble to the final rule 

and chapter 1 of the joint TSD. 

EPA notes further that the use of publically available information to project reference fleets is a 

far more transparent process than used in previous fuel economy rulemakings, and allows the 

public to fully participate and evaluate the agencies' projections. Most commenter’s agreed. 

5.8.2. Effectiveness and Costs of CO2-reducing Technologies 

Organization: Environmental Defense Fund 

Comment: 

III. THE PROPOSED STANDARDS CAN BE ACHIEVED THROUGH COST EFFECTIVE, 

AVAILABLE TECHNOLOGIES THAT WILL PRESERVE CONSUMER CHOICE AND 

SAVE CONSUMERS MONEY. 

Light-duty vehicle manufacturers can achieve the proposed standards through a variety of cost 

effective and readily-available technologies. EPA's staff produced a report for the National 

Research Council identifying over two dozen technologies in production or impending that can 

be deployed to cut greenhouse gases and improve fuel economy. These include, among others, 

technological innovations in engine manufacture like engine friction reduction and cylinder 

deactivation, transmission advances, hybrid drive train utilization, mitigation of air conditioning 

emissions, aerodynamic improvements, and low-rolling resistance tires. Individually, each one of 

these technologies can reduce CO2 emissions by as much as 15 percent from a baseline vehicle’s 

emissions. EPA’s staff concluded that the synergistic impacts of including multiple GHG 

reduction technologies in a single vehicle are often less than the sum total of each technology’s 

individual impact. [OAR-2009-0472-7285.1, pp. 17-18] 

The attached table [See OAR-2009-0472-7285.1, p. 18-22 for the Summary Table] summarizes 

some of these available technologies. Source: EPA Staff Technical Report: Cost and 

Effectiveness Estimates of Technologies Used to Reduce Light-duty Vehicle Carbon Dioxide 

Emissions, EPA420-R-08-008, March 2008 “EPA technical staff concludes there are a large 

number of technologies which can be applied to cars and trucks that are capable of achieving 

significant reductions in greenhouse gas emissions, and improve vehicle fuel economy, at 

reasonable costs.” ES -1. [OAR-2009-0472-7285.1, p. 18] 

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EPA Response to Comments 

Incremental costs are negligible for many technologies like low-friction lubricants and still 

modest for more comprehensive technologies like hybrid drive trains. Furthermore, EPA predicts 

many technology cost will benefit from the learning curve phenomenon, a decrease in unit cost 

as cumulative production increases. On average, EPA and NHTSA estimate that these new 

technologies will increase the cost of model year 2016 vehicle by less than 1,100 dollars but, as a 

result of fuel savings, the average consumer will save 3,000 dollars over the life of the vehicle. 

Moreover, consumers who finance their new-car purchase with a loan will save $12– $14 per 

month throughout the duration of the loan. These statistics underscore EPA technical staffs’ 

conclusion that “there a large number of technologies which can be applied to cars and trucks 

that are capable of achieving significant reductions in greenhouse gas emissions, and improve 

vehicle fuel economy, at reasonable costs.” [OAR-2009-0472-7285.1, pp. 22-23] 

Manufacturers can also incorporate new, light-weight materials into vehicle design as a means of 

producing more fuel-efficient, safe vehicles. The proposed rule also contains compliance 

flexibilities like fleet averaging and other measures to provide cost savings, broad consumer 

choice and flexibility in meeting compliance obligations. As examined below, compliance 

flexibilities must be rigorous and well-designed to achieve light-duty emissions requirements. 

[OAR-2009-0472-7285.1, p. 23] 

V. THE TIME TESTED HISTORY OF THE NATION’S CLEAN AIR LAWS SHOWS THAT 

EPA CAN DRAMATICALLY AND COST-EFFECTIVELY REDUCE EMISSIONS FROM 

MOTOR VEHICLES TO PROTECT HUMAN HEALTH AND THE ENVIRONMENT. The 

EPA has a long history of successfully securing protective, cost-effective emission reductions 

from the nation’s passenger vehicles, often confronted with claims from the regulated 

community that the mandated reductions were impracticable. As documented in the table below 

[See OAR-2009-0472-7285.1, p. 26 for the table.], EPA achieved substantial nationwide 

reductions in lead, carbon monoxide, and nitrogen oxides while vehicle miles traveled has risen 

substantially. [OAR-2009-0472-7285.1, p. 25] 

Some will invariably make similar claims that reductions in heat-trapping greenhouse gas 

emissions are beyond the nation’s reach. But the time tested history of Clean Air Act regulation 

and American innovation suggests that these claims are likewise misplaced. [OAR-2009-0472­

7285.1, p. 25] 

EPA Response: 

EPA appreciates these comments, which generally affirm our estimates made in support of the 

NPRM. EPA has continued to evaluate both the cost and effectiveness of the technologies 

available to reduce GHG emissions and has updated several of these estimates. The reader is 

referred to Chapter 3 of the Joint TSD for these updated estimates. 

5.8.3. Technology "Packages" and their Cost and Effectiveness 

Organization: Shaw, Donald F. 

Comment: 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

The auto industry does not presently have the technology to achieve these fuel standards with 

vehicles that meet the needs of the American public. Why punish the citizens with such 

requirements before the technology is ready especially considering the small claimed benefits. 

Let’s give the techno logy more time to develop. Large families will need to drive two cars to get 

to participate in family activities including vacations. Where is the benefit? [OAR-2009-0472­

7270.1, p. 1] 

EPA Response: 

The technologies which NHTSA and EPA project are available for manufacturers to apply in the 

MY 2012-16 timeframe are described in detail in Chapter 3 of the Joint TSD. Essentially every 

technology included in our projections of technical feasibility are already being used 

commercially somewhere in the world on light-duty vehicles. As explained in section III.D of 

the preamble to the final rule, the expanded use of these technologies is primarily a function of 

lead time needed to develop vehicle designs which incorporate these technologies. It is also a 

function of manufacturers’ ability to modify or build production facilities to produce the 

components required by these technologies and the cost of doing so. 

EPA and NHTSA have developed their projections of the cost and effectiveness of these 

technologies so that vehicle utility is not affected. This means that the agencies accounted for 

the costs of preserving vehicle utility in their cost estimates. In addition, the baseline vehicle 

fleet which EPA and NHTSA use to project compliance consists of 2008 model year vehicles. 

This fleet reflects the wide variety of vehicles currently preferred by U.S. car purchasers. This 

includes vehicles with sufficient passenger capacity for large families. NHTSA and EPA 

presume that these vehicles will continue to be preferred by many purchasers in the future. In 

fact, both the GHG and fuel economy standards account for the inherently higher fuel 

consumption of larger vehicles by basing the standards on vehicle size (‘footprint’, the product 

of vehicles’ track width and wheel base). Therefore, EPA disagrees with Mr. Shaw that the 

proposed and final GHG and fuel economy standards are not feasible for a wide range of vehicle 

types and will limit the types of vehicles which will be produced by manufacturers and made 

available to customers 

5.8.4. Manufacturer's Application of Technology 

Organization: American Petroleum Institute 

Comment: 

Fuel Specification Changes: The proposed rule and Draft Technical Support Document outline 

several options available to automakers in achieving fuel economy improvements. One of the 

options is Gasoline Direct Injection (GDI) with lean burn technology. EPA and NHTSA state 

that sulfur specification below 15 parts per million (ppm) is a key technical requirement to 

enable lean burn GDI. The Alliance of Automobile Manufacturers is currently advocating a 

maximum allowable sulfur concentration of 10 parts per million to enable Lean Burn GDI. 

However, EPA and NHTSA analyses did not consider lean burn GDI technology for the 2012­

2016 timeframe of this rulemaking because of the cost and short compliance timeframe. 

5-283 
EPA Response to Comments 

Likewise, EPA should ensure that fuel specification changes should not be considered in this 

rulemaking without adequate consideration for the associated impacts on the refining industry. 

Since lean burn GDI technology is not necessary or even expected to be developed in order to 

comply with this rulemaking, a sulfur specification change is unnecessary. [OAR-2009-0472­

7143.1, p.10] 

EPA Response: 

Consistent with the proposal, EPA is not considering the use of lean-burn gasoline direct 

injection technology in projecting means by which manufacturers would comply with the final 

GHG standards. Therefore, there is no associated need for ultra low sulfur gasoline to enable 

compliance in the MY 2012-2016 timeframe. However, EPA may consider the benefit of this 

engine technology when evaluating GHG standards beyond the 2016 model year. If that is the 

case, EPA will also consider the feasibility and cost of gasoline sulfur reduction to enable leanburn technology. 

Organization: Mr. Richter - Environmental Capital Partners 

Comment: 

The first, and most importantly, is the competitiveness of our auto industry relies on it, it relies 

on innovation. In the global economy, only those companies that continue to improve their 

technologies maintain market share, and these examples are Apple and Microsoft in the IT 

sector. The money and effort spent by the U.S. auto industry to maintain low mileage standards 

has torpedoed our own car industry and left us less competitive and innovative at a time of rising 

oil prices, of course, and increasing demand for more efficient, less polluting cars. As a result, 

today's average new vehicle sold in the U.S. has virtually the same fuel economy as a new 

vehicle sold 20 years ago. [Comment submitted as testimony at the New York public hearing 

[EPA-HQ-OAR-2009-0472-4621, pp.161-162]] 

EPA Response: 

EPA appreciates the implication of Mr. Richter's comment that the proposed GHG standards will 

help the U.S. auto industry innovate in the area of fuel efficiency and GHG emission control and 

help maintain its competitiveness both in the U.S. and globally. EPA did not attempt to 

monetize the value of this benefit. Such benefits are difficult to quantify, but directionally 

support the need for this final rule. 

Organization: Ford Motor Company 

Comment: 

Transparency 

Ford is generally supportive of the approach that the agencies are proposing for using third-party 

sources to forecast future industry sales volumes across the different vehicle segments. We 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

utilize some of the same sources (e.g. J.D. Power). However, predicting various technology 

penetration rates, benefits, and overall costs is more complex and is predominately a function of 

manufacturers' confidential business and product plans. To the extent that the agencies will use 

other sources for this type of information, Ford is concerned about how robust that information 

will be in determining the stringency and feasibility of the standards. As discussed earlier, the 

methodology used to establish the truck piecewise linear lower limit is an example of this 

concern. 

Ford is applying new technologies and making considerable investments in future innovations. 

Our confidential submission in response to the Request for Product Plan Information and other 

agency inquiries reflects these actions and quantifies their impact on our ability to improve fuel 

economy and reduce GHG emissions. Inherent in these plans are risks including customer 

acceptance, timing, technology interaction, attribute trade-offs and competing resource priorities. 

Ford recommends that the EPA only release current engine, transmission and fuel economy 

information, in a manner consistent with the practice for the current (2009 MY) EPA Fuel 

Economy Guide. There should be no disclosure to the public of any confidential business 

information or trade secrets, including information relating to cost and financial expenditures, 

warranty, model-specific product plan projections (including vehicle and volumes), powertrain 

and vehicle hardware detail, and associated fuel economy. Disclosures of this kind would result 

in significant competitive damage and would discourage innovation and competition among 

manufacturers generally. The Freedom of Information Act, and EPA's own regulations, provide 

for the protection of confidential business information from public disclosure. See 5 U.S.C. § 

552(b)(4) and 40 CFR Part 2, Subpart B. See also Section 208(c) of the CAA related to the 

protection of trade secrets. The proposed rule here would not, and should not seek to, alter any of 

these protections for confidential business information or trade secrets. Accordingly, any 

disclosures in the Compliance Report or the Fuel Economy Trends report should not include 

proprietary information. Moreover, EPA should follow the procedures outlined in 40 CFR Part 2, 

Subpart B, to resolve any issues regarding the proposed disclosure of information for which a 

manufacturer has asserted a claim of confidentiality. [OAR-2009-0472-7082.1, pp. 25-26] 

EPA Response: 

EPA appreciates these comments and assures Ford and all agency stakeholders that confidential 

business information will always be treated as such, and any potential disclosures of information 

will be handled according to the Code of Federal Regulations. Importantly, EPA has not relied 

on such future product planning in setting the GHG standards. Instead, EPA has used publicly 

available information to build a baseline and reference case fleet, and has then relied on the 

OMEGA model to apply technology packages using EPA (and NHTSA) generated cost and 

effectiveness information for individual technologies. In the end, the fleet makeup is generated 

by the OMEGA model and not by using manufacturer product plans. For that reason, 

manufacturers need not worry that the technology penetrations predicted by the OMEGA model 

reflect product plan information provided confidentially to EPA. 

5.8.5. EPA Projections for How Manufacturers Would Decide Between Options to Improve 

CO2 Performance to Meet a Fleet Average Standard 

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EPA Response to Comments 

Organization: International Council on Clean Transportation 

Comment: 

ICCT agrees with the concept of manufacturer learning and supports the use of learning curves 

to adjust costs. This empirical observation was described for the first time by aircraft pioneer 

Wright in 1927 and has been found to be true for many technologies and industry sectors in 

general. Therefore, it is reasonable to expect direct costs for fuel economy measures to decrease 

as market introduction of the technologies applied proceeds, as suggested by both agencies. 

Determination of appropriate learning curves and how they should be adjusted over time and 

production volumes is not easy. However, the adjustments have a major impact on costs 

assessments. ICCT believes this area should be developed further for future rulemakings. 

Following are some specific suggestions for areas of improvement. 

According to learning curve theory, the observed decrease of production costs is ascribed to 

three effects: (1) “Learning by searching”: Optimization of product properties caused by 

scientific research (e.g. reducing the amount of a catalyst needed for an exhaust after-treatment 

device). (2) “Learning by doing”: Optimization of production processes caused by experience 

gained during ongoing production (e.g. reduction of mounting times for an existing assembly 

line manufacturing process). (3) “Economies of scale”: Reduction of production costs caused by 

advantages from transition from prototype manufacturing of small quantities to mass production 

(e.g. lower purchase prices for pre-products and raw materials due to increased market power). 

Except for “learning by searching” the cost reducing effects are caused by increased production 

volumes rather than time passing. For most of the technologies assessed in the proposal it is 

reasonable to assume that most of the time-dependent research would have been completed by 

2012, which is the first year of learning curves are applied in the proposal. Given generally 

accepted elements of the concept of learning curves, a production volume-based assessment of 

future costs is more appropriate than a time-based approach. 

The learning curve rate describes the rate of cost reductions for each doubling of production 

volume. For example, a volume-based learning curve rate of 10% would mean that initial costs 

would be reduced by 10% as cumulative production volume doubles. An important feature of the 

concept is that doubling of cumulative production volume happens at a relatively fast rate during 

early implementation of a new technology but more slowly later on. Consequently, cost 

reduction slows down as application of the technology becomes more widespread. 

The agencies handle these differences by classifying technologies into groups for which none, 

volume or time based learning curve effects are assumed (Table 3-4 on page 3-10 of the TSD). 

ICCT agrees it is appropriate to apply a lower rate of learning to some of the technologies 

assessed. However, the agencies applied a flat rate of 20% for all technologies to which learning 

was applied, and did not apply any volume based learning to other technologies. A better 

approach would be to vary the learning curve rate while retaining a volume-based approach for 

all technologies. A differentiation of learning curve factors by type of technology would likely 

improve the accuracy of the proposal. 

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As a technology becomes more mature and production volumes grow, the cost reduction process 

tends to slow down. The learning curve concept includes this effect, as the doubling of 

cumulative production volumes occurs at a faster rate during implementation process and at a 

slower rate later on. The agencies end the learning curve process and assume a 3% time-based 

decrease of production costs after completion of two 20% volume-based (NHTSA) or time based 

(EPA) learning curve steps. While this recognizes that the learning process slows down, the 

change is abrupt and somewhat arbitrary. ICCT believes it would be advantageous to use a 

model that is able to dynamically take into account cumulative production volume over time. 

This would apply a continuous learning curve rate over the entire lifetime for each technology, 

without having to assess threshold values for changing learning curve rates and floor cost values. 

NHTSA assumes production costs to decrease by 20% as soon as a cumulative production 

volume of 300,000 units has been reached. This implies that the technology incremental cost 

estimates given in tables 3-20 to 3-22 of the draft TSD should be interpreted as costs for a 

cumulative production volume of 150,000 units. It would be helpful to clarify the correctness of 

this interpretation, in order to be able to compare the costs with other technology cost data. 

ICCT does not agree that volume-based learning is over for the ‘power-split hybrid electric 

vehicle’ and only time-based learning curve is to be applied. While power-split hybrids have 

been on the market long enough to achieve high production volumes, the production ramp up has 

been very slow and the initial costs were very high. In addition, virtually all power-split hybrid 

vehicles have been equipped with NiMH batteries. Future vehicles will make use of Li-Ion 

battery technology, bringing about changes to the entire vehicle technology design. 

[OAR-2009-0472-7156.1, pp.17-20] 

EPA Response: 

EPA agrees that varying the learning curve rate by type of technology would likely improve the 

accuracy of the cost estimates. However, EPA currently does not have sufficient information 

upon which to base such variation. The Agency welcomes information from ICCT or other 

sources that could shed light on how learning curve factors should be varied by technology type. 

Short of such information, EPA believes that the 20 percent factor used provides the best and 

appropriately conservative estimate of learning rates in the automotive sector. 

EPA also agrees with ICCT that using a model that is able to dynamically take into account 

cumulative production volume over time would improve the cost estimates on a year-over-year 

basis, although EPA does not believe it would have any meaningful impact on the outcome of 

the analysis. That is, EPA does not believe it would provide any meaningful differences in the 

level of standard that could be supported or the overall cost of the Agency’s rules. By 

comparison, NHTSA does take into account cumulative production volume over time although it 

still relies on threshold volume estimates made using good engineering judgment to determine 

where learning effects occur. In both cases – the EPA approach and the NHTSA approach – 

EPA believes that the cost estimates for 2016 MY vehicles are as good as can be predicted today. 

That is, EPA believes that the appropriate level of learning has been applied to the 2016 cost 

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EPA Response to Comments 

estimates regardless of when the learning steps actually occured – 100,000 units; 500,00 units; 

year 2013; year 2015 – is not as important as having arrived at the best estimate for 2016. 

As regards Tables 3-20 to 3-22 of the draft joint TSD, the costs presented there were the draft 

cost estimates used by NHTSA applicable in the 2012 MY. This should have been made more 

clear in the table headings. 

As regards the comment on volume-based learning and power-split hybrids, EPA agrees with 

ICCT on this point. In fact, EPA actually applied volume-based learning in the proposal and 

have clarified that in chapter 3 of the final joint TSD (see Joint TSD Table 3-4). 

5.9. Reserved 

5.10. EPA Certification, Compliance, and Enforcement 

5.10.1. Compliance with Fleet-Average CO2 Standards 

Organization: General Motors 

Ford Motor Company 

Ferrari S.p.a 

Association of International Automobile Manufacturers (AIAM) 

Chrysler Group LLC (Chrysler) 

Environmental Defense Fund 

Alliance of Automobile Manufacturers (Alliance) 

Toyota Motor North America 

BMW of North America, LLC (BMW) 

Public Citizen and Safe Climate Campaign 

Union of Concerned Scientists 

Natural Resources Defense Council 

Sierra Club 

University of California, Santa Barbara, Bren Working Group on Vehicle Fuel 

Economy 

People's Republic of China 

New York State Department of Environmental Conservation 

Automotive Aftermarket Industry Association (AAIA) 

Chew, Yuli 

Comment: 

General Motors: 

Among the highlights of the proposal is the recognition of the need for mechanisms to provide 

for compliance flexibility in the face of great uncertainty over future technology, developments 

and costs, customer acceptance of these technologies, and the price of fuels that consumers may 

see in the market place. All of these factors make it critical that automakers have some ability to 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

cope with changes or unexpected outcomes, and we believe the proposed rule provides such 

flexibility. (OAR-2009-0472-6185, p.11) 

One area of difference between the NHTSA and EPA programs is the treatment of 

emergency/law enforcement vehicles within the CAFE/GHG programs. The CAFE law provides 

a manufacturer with the opportunity to exclude emergency vehicles from its CAFE fleet by 

providing written notice to NHTSA and EPA (49 USC 32902(e)). The EPA GHG regulatory 

program has not included such an exclusion opportunity for emergency/law enforcement 

vehicles. [OAR-2009-0472-6953.1, p.31] 

This exclusion is very sensible and practical because these special purpose vehicles are specially 

outfitted in ways that adversely impact vehicle fuel economy/CO2 emissions so they can 

effectively serve as the front line for law enforcement agencies throughout the United States. As 

such, they are engineered and equipped for extremely demanding performance in real-world 

emergencies -- situations rarely involved in normal civilian use. [OAR-2009-0472-6953.1, p.31] 

EPA should provide a manufacturer with the same opportunity to exclude emergency vehicles 

from the GHG standards it adopts in this rulemaking. This is first of all important to further 

maximizing the consistency between the EPA and NHTSA regulations. Without this consistency, 

a manufacturer may find itself challenged to continue providing the performance needs of the 

federal, state and local governmental purchasers of emergency vehicles. If production of these 

vehicles becomes relevant in the overall compliance of a company with the EPA vehicle GHG 

program, a manufacturer must decide whether to degrade the performance of the vehicles or 

restrict their sales of this type of vehicle. Both are unnecessary and unfortunate outcomes for the 

constituencies that need these emergency vehicles. [OAR-2009-0472-6953.1, p.31] 

GM recommends that EPA revise its rule to provide this important opportunity by (1) adding a 

definition of “emergency vehicles” to 86.1803-01 that mirrors or cross-references 49 USC 

32902(e); and (2) amending 86.1818-12 to provide that for any vehicle for which a manufacturer 

provides notice to NHTSA and EPA of its exclusion from CAFE, the vehicle is also excluded 

from EPA’s greenhouse gas standards. [OAR-2009-0472-6953.1, p.31] 

Ford Motor Company: 

Greenhouse Gas Emissions Testing and Data Generation Protocols 

Ford strongly supports the proposal to use the current CAFE testing protocol to measure and 

report CO2 values. This enables the common use of vehicles, testing resources, databases and 

submittal/reporting to accomplish both GHG and CAFE requirements. Ford agrees with EPA's 

proposal to use common data substitution and analytically derived fuel economy (ADFE) 

provisions. 

Consistent Fleets for the CAFE and GHG programs 

One area of difference between the NHTSA and EPA programs is the fleets within the 

CAFE/GHG programs. The fleets differ by the treatment of emergency/law enforcement vehicles 

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and by the geographic areas included in CAFE and emissions programs. Both of these 

differences go against the agencies' stated intentions of harmonization, transparency, and parallel 

calculations and reporting. The following sections suggest small regulatory adjustments that 

could bring the fleets into alignment. 

1. Emergency / Law Enforcement Vehicles 

The CAFE law provides a manufacturer with the opportunity to exclude emergency vehicles 

from its CAFE fleet by providing written notice to NHTSA and EPA (49 USC 32902(e)). EPA's 

proposed GHG regulatory program should include a similar provision excluding emergency 

vehicles from the GHG fleet averaging requirement. 

This exclusion is sensible and practical because special purpose vehicles such as the Crown 

Victoria Police Interceptor are specially outfitted in ways that give law enforcement officials the 

performance and features they need in a vehicle that serves a critical role in their police work. 

The vehicles are engineered and equipped to help the police respond to real-world emergencies -- 

situations that demand a lot of the vehicle, and that are rarely encountered in normal civilian use. 

On the whole, the addition of these features tends to reduce the fuel economy and increase the 

GHG emissions relative to the base vehicle. Below [See Table V at OAR-2009-0472-7082.1, p. 

28] are some examples of features in Ford's law enforcement vehicles that negatively affect fuel 

economy. 

EPA should provide a manufacturer with an opportunity to exclude emergency vehicles from the 

GHG standards it adopts in this rulemaking. This is important to maintaining consistency 

between the EPA and NHTSA regulations. Without this consistency, a manufacturer may find 

itself challenged to continue providing the performance needs of the federal, state and local 

governmental purchasers of emergency vehicles. If these vehicles cannot be excluded, and the 

production of these vehicles becomes a key variable in the ability of a manufacturer to comply 

with within the GHG program, that manufacturer may be forced to choose between 1) deciding 

whether to degrade the performance of the emergency vehicles, 2) deciding to restrict the sales of 

its emergency vehicles, potentially even exiting the market altogether, or 3) facing noncompliance with the federal GHG standards. Any of these outcomes would be both unfortunate 

and unnecessary. It is clear that, like the CAFE program, the GHG program should protect the 

law enforcement constituencies that need these emergency vehicles and depend on their 

performance. 

Section 202(a) of the CAA allows EPA to prescribe standards “applicable to the emission of any 

air pollutant from any class or classes of new motor vehicles... “ The language “class or classes” 

indicates that EPA may apply its standards to particular types or categories of vehicles, and 

likewise make exclude particular types or categories of vehicles when there is reason to do so. 

This language gives EPA the authority to incorporate regulatory provisions excluding emergency 

vehicles from the fleet average requirement. 

Ford recommends that EPA revise its rule to provide this important opportunity by (1) adding a 

definition of 'emergency vehicles' to 86.1803-01 that mirrors or cross-references 49 USC 

32902(e); and (2) amending 86.1818-12 to provide that for any vehicle for which a manufacturer 

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provides notice to NHTSA and EPA of its exclusion from CAFE, the vehicle is also excluded 

from EPA's greenhouse gas standards. [OAR-2009-0472-7082.1, pp. 28-29] 

2. Geographic Location of GHG Fleet Vehicles 

The CAFE law defines the vehicles that are to be included in EPCA. Effectively, this means the 

50 states, the District of Columbia and Puerto Rico. Under Section 302(d) of the CAA, the term 

'State' is defined to include the District of Columbia, Puerto Rico, the Virgin Islands, Guam, 

American Samoa, and the Commonwealth of Northern Mariana Islands. As such, manufacturers 

are required to send U.S.-certified vehicles to these districts and territories as well as the 50 

states. 

In Ford's case, the additional territories under the CAA definition amounts to a difference of only 

about 1,000 vehicles in a model year. While this is a relatively small volume in comparison to 

Ford's overall U.S. sales, the addition of these vehicles to the GHG fleet average would create an 

administrative burden for Ford. These 'additional' vehicles are not easily identified on a model 

type, base level, configuration, or subconfiguration level. Furthermore, maintaining both a 

'CAFE fleet' and a 'GHG fleet' is likely to cause confusion, and would add to the already difficult 

situation of credit tracking. The administrative burden in adding these vehicles to the fleet is 

greater than any environmental benefit one would hope to obtain. Moreover, having a difference 

in the fleet definitions would conflict with EPA's and NHTSA's intention of promoting 

consistency and allowing manufacturers to submit one data set in satisfaction of both CAFE and 

GHG requirements. 

Since the CAFE fleet is defined by EPCA, it does not appear that NHTSA has the authority to 

broaden the list of territories to which the EPCA fleet definition applies. On the other hand, we 

believe that EPA has the discretion to align its GHG fleet with the CAFE fleet for administrative 

purposes. It is clear that all of the territories listed under the CAA must receive vehicles certified 

to U.S. emissions standards, and we are not suggesting otherwise. However, the vehicles 

delivered to such territories do not have to be counted under EPA regulations designed to 

determine fleet average GHG emissions. Ford therefore recommends that EPA amend the 

definitions in 86.1803-01 to clarify that, for purposes of emissions compliance reporting and 

fleet averaging only, the fleet is composed of vehicles for the 50 states, the District of Columbia 

and Puerto Rico. Alignment in this way will not cause any adverse emissions either overall or for 

the territories not mentioned in EPCA. Those territories will receive the same vehicles they 

would receive otherwise. By making the discretionary decision to exclude this small volume of 

vehicles from the fleet average determination, EPA will help align the fleets that manufacturers 

must manage and that the agencies will evaluate. [OAR-2009-0472-7082.1, pp. 29-30] 

Ferrari S.p.a: 

We believe that the Tier 2 test group can adequately represent CO2 emissions for certification 

purposes. We agree with EPA that is proposing to require a single Emission Data Vehicle that 

would represent the test group for both Tier 2 and CO2 certification. The manufacturer would be 

allowed to initially apply the Emission Data Vehicle’s CO2 emissions value to all models in the 

test group, even if other models in the test group are expected to have higher CO2 emissions. 

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EPA Response to Comments 

However, as a condition of the certificate, this surrogate CO2 emissions value would generally be 

replaced with actual, model-level CO2 values based on results from CAFE testing that occurs 

later in the model year. This model level data would become the official certification test results 

(as per the conditioned certificate) and would be used to determine compliance with the fleet 

average. This approach gives more flexibility to vehicle manufacturers to plan fuel economy 

tests for the various vehicle models in the same test group. [OAR-2009-0472-7214.1, p.4] 

Association of International Automobile Manufacturers (AIAM): 

EPA proposes to release to the public GHG compliance information. See preamble page 49559. 

Any such release should not include proprietary confidential business information that was 

provided by the manufacturer to EPA. For example, public dissemination of information 

regarding manufacturer plans to earn future credits could release information about future 

product plans that would otherwise be confidential. EPA regulations regarding exemptions from 

the release of agency information to the public are based on the Freedom of Information Act, 5 

USC 552(b). Those regulations exempt from public release “trade secrets and commercial or 

financial information obtained from a person and privileged or confidential.” See 40 CFR Part 2, 

section 2.105(a)(4). Future credit plans should fall in this category. AIAM recommends that 

EPA’s final rule clarify how confidential business information will be protected. [OAR-2009­

0472-7123.1, p.17] 

Chrysler Group LLC (Chrysler): 

NHTSA's CAFE program allows manufacturer to exclude emergency vehicles from its CAFE 

fleet by providing written notice to NHTSA and EPA (49 USC 32902(e)). The EPA GHG 

regulatory program has not included this exclusion. [NHTSA-2009-0059-0124, p.36] 

This exclusion is practical because these special purpose vehicles are outfitted in ways that 

adversely impact vehicle fuel economy/greenhouse gas emissions so they can effectively 

perform their duties throughout the United States. [NHTSA-2009-0059-0124, p.36] 

Recommendation: 

Chrysler recommends that EPA revise its rule by adding a definition of 'emergency vehicles' to 

86.1803-01 that mirrors or cross-references 49 USC 32902(e); and amending 86.1818-12 to 

provide that for any vehicle for which a manufacturer provides notice to NHTSA and EPA of its 

exclusion from CAFE, the vehicle would also be excluded from EPA's greenhouse gas standards. 

[NHTSA-2009-0059-0124, p.36] 

Environmental Defense Fund: 

EDF recognizes the complex, calibrated policy-making involved in designing a program to 

achieve the outcomes in greenhouse gas reductions and fuel efficiency improvements provided 

for under the proposal while providing the flexibility for a smooth, cost-effective transition. In 

finalizing this proposal, we ask that the agencies examine the collective implications of 

multilayered flexibilities and the potential to erode the program’s performance. While the 

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comments below examine these issues in more detail, we respectfully offer two overarching 

recommendations. [OAR-2009-0472-7285.1, p. 2] 

Transparency and Accountability through Annual Compliance Reports. The Obama 

Administration and EPA Administrator Lisa Jackson have provided vital leadership in 

reclaiming transparency and accountability in government policy-making. The dual public policy 

import and complexity of this program warrant bringing to bear the rigorous transparency that is 

the hallmark of government accountability. Pursuant to 5 U.S.C. §553(e), EDF formally and 

respectfully petitions the U.S. Environmental Protection Agency and the U.S. Department of 

Transportation to finalize as part of this proposed rulemaking a commitment to provide an annual 

public compliance report examining the program’s performance. The report should be publicly 

announced and accessible March of each year following the completion of the preceding 

calendar year. The compliance report should include any recommended adjustments to the 

program, enforcement actions, or prospective policy action to ensure the policy objectives are 

achieved. [OAR-2009-0472-7285.1, p. 2] 

Enhanced Resources for Program Accountability. Under the Administrations of Presidents 

William Clinton, George W. Bush and Barack Obama, the U.S. Environmental Protection 

Agency has provided leadership in crafting policies to reduce a suite of airborne contaminants 

from the transportation sector. These initiatives, addressing a number of major source categories 

and a variety of pollutants, provide for considerable human health and environmental benefits. 

We respectfully ask that the Agency seek expansive compliance and enforcement resources to 

ensure that these initiatives are durable in achieving the emission reductions that will provide 

healthier air and a safer environment for millions of Americans. [OAR-2009-0472-7285.1, p. 2] 

Alliance of Automobile Manufacturers (Alliance): 

Fleet Average CO2 Reporting Requirements (Proposed regulations in 40 C.F.R. 600.514-12) 

EPA is proposing that manufacturers submit pre-model year and supplementary fleet-average 

CO2 reports. [OAR-2009-0472-6952.1, p.51] 

Confidential Business Information versus Transparency in Reporting 

In the Joint Notice, U.S. EPA requests comment of potential changes in its annual Compliance 

and Trends reports and related publications in light of the GHG standards, as follows: 

EPA periodically provides mobile source emissions and fuel economy information to the public, 

for example through the annual Compliance Report and Fuel Economy Trends Report. EPA 

plans to expand these reports to include GHG performance and compliance trends information, 

such as annual status of credit balances or debits, use of various credit programs, attained versus 

projected fleet average emission levels, and final compliance status for a model year after credit 

reconciliation occurs. We seek comment on all aspects of public dissemination of GHG 

compliance information. 74 Fed. Reg. at 49,559 (footnotes omitted). [OAR-2009-0472-6952.1, 

p.67] 

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EPA Response to Comments 

The Joint Notice does not illuminate how U.S. EPA intends on expanding the annual Compliance 

and Fuel Economy Trends reports. Nor does it indicate whether U.S. EPA plans to expand any 

publications other than these reports. However, it is important to observe that much of the new 

information required in the proposed GHG regulations, like much of the certification-related 

information reported to U.S. EPA by individual manufacturers under other regulations currently 

in force, is confidential and competitively sensitive -- a fact recognized in one of the annual 

reports cited in the Joint Notice. Moreover, the Joint Notice proposes no changes in U.S. EPA’s 

regulations governing the treatment of confidential business information in Part 2 of the 

Agency’s regulations. See 40 C.F.R. §§ 2.201 et seq. [OAR-2009-0472-6952.1, p.67] 

Therefore, the only reasonable interpretation of U.S. EPA’s proposal is that the Agency’s 

“expansion” of these reports is limited to considering (i) the release of additional aggregated 

data, rather than manufacturer-specific data or other information whose release would 

compromise a manufacturer’s competitive position, (ii) certification data, and (iii) past model 

year information on GHG technologies that would be apparent to the public from inspection of a 

given vehicle. The Alliance members do not oppose the publication of aggregated, industry-wide 

data that, as has been the case historically, protects the confidential status of individual 

manufacturer’s information submissions to U.S. EPA. The Alliance also does not oppose release 

of GHG emissions certification data nor the publication of technological information otherwise 

available to the public by alternate sources. [OAR-2009-0472-6952.1, p.67] 

Two statutes structure and limit U.S. EPA’s authority to expand the coverage and scope of its 

annual reports. Section 208(c) of the Clean Air Act requires U.S. EPA to avoid disclosures not 

consistent with the Trade Secrets Act, codified at 18 U.S.C. § 1905. See 42 U.S.C. § 7542(c) 

(requiring U.S. EPA to comply with “the purposes of §1905 of Title 18.”). Section 1905 does not 

merely and narrowly protect 'trade secrets,' etc., but instead, any 'information which concerns or 

relates to the trade secrets.' 18 U.S.C. § 1905; see Wright et al., 26 Fed. Prac. & Proc. Evid. § 

5644 (Trade Secrets Act is a 'good example' of an 'expansive' federal statute 'that include[s] 

much more than what is generally understood by the phrase 'trade secret.''). The clause 'concerns 

or relates to' in §1905 establishes that Congress intended a broad interpretation be imparted to 

§1905 standing alone, in addition to Clean Air Act section 208(c)’s expansive reference to the 

'purposes of section 1905.' U.S. EPA in the Joint Notice has suggested no basis to depart from its 

longstanding practice of disclosing solely information that would not compromise the 

competitive position of any manufacturer. Cf. Qwest Communications Intern. Inc. v. FCC, 229 

F.3d 1172 (D.C. Cir. 2000) (where an agency departs from established precedent concerning 

disclosures without a reasoned explanation, its decision will be vacated as arbitrary and 

capricious); accord MCI Worldcom, Inc. v. General Services Admin., 163 F. Supp. 2d 28 

(D.D.C. 2001), citing Pontchartrain Broadcasting Co., Inc. v. FCC., 15 F.3d 183, 185 (D.C. Cir. 

1994), and Graphic Communications Intern. Union, Local 554 v. Salem-Gravure Div. of World 

Color Press, Inc., 843 F.2d 1490, 1493 (D.C. Cir. 1988). [OAR-2009-0472-6952.1, p.68] 

In addition, U.S. EPA must respect the limits on its disclosure authority under the Freedom of 

Information Act, and in particular Exemption 4 therein that protects confidential business 

information of a competitively sensitive nature from public release. See 5 U.S.C. 552(b)(4); and 

see generally Public Citizen Health Research Group v. FDA, 704 F.2d 1280, 1290-1291 

(D.C.Cir. 1983). Exemption 4 bars the release of company-specific sales and market share 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

information upon a showing that the disclosure of such information would impose competitive 

harm. See, e.g., Sharkey v. FDA, 250 Fed. Appx. 284, 287-292 (11th Cir. 2007: Continental Oil 

Co. v. Federal Power Com’n, 519 F.2d 31, 35-36 (Fifth Cir. 1975). The settled case law under 

Exemption 4 thus requires U.S. EPA to maintain the types of limits on disclosure of information 

in annual reports that it has traditionally maintained. Provided U.S. EPA’s expanded reports 

respect those limits, and as such are expanded only insofar as the Agency’s regulatory program 

will now cover GHG emissions in addition to other regulated emissions, the Alliance and its 

members do not object to the apparent intent of this provision of the Joint Notice. [OAR-2009­

0472-6952.1, p.68] 

Toyota Motor North America: 

EPA proposes to determine compliance with the fleet average CO2 standards when the model 

year closes out, as is currently the protocol under EPA's Tier 2 program as well as under the 

current CAFE program. The compliance determination would be based on actual production 

figures for each model year and on model level emissions data collected through testing over the 

course of the model year. EPA would then require manufacturers to provide this information to 

EPA via an end-of-year report. Final determination of compliance with fleet average CO2 

standards may not occur until several years after the close of the model year due to flexibilities 

of carry forward and carry back credits and the remediation of deficits. Any failure to meet the 

fleet average standard after credit opportunities have been exhausted would result in penalties, as 

prescribed under the CAA. [OAR-2009-0472-7291, pp.27-28] 

Setting aside the issue of penalties for noncompliance with the proposed fleet average standard 

(discussed later in this Attachment), Toyota supports the concept of a fleet-wide average 

compliance calculation determined at the end of the model year. Such an approach is consistent 

with the approach used in the NHTSA CAFE program and would directionally support 

harmonization between the programs. [OAR-2009-0472-7291, p.28] 

BMW of North America, LLC (BMW): 

BMW believes the flexible compliance options provided in this proposed rule are a prerequisite 

and appropriate for auto manufacturers to achieve these aggressive technology forcing standards. 

This is especially true for manufacturers like BMW offering a 'feature-dense' product portfolio 

but having a low share of light trucks in their fleets. Such manufacturers face more stringent fleet 

standards requiring additional efforts to comply. Therefore, the proposed compliance options 

provide the needed lead time for the development and introduction of fuel saving technologies 

into their vehicle fleets. [OAR-2009-0472-7145.1, p.2] 

Public Citizen and Safe Climate Campaign: 

The agencies should improve compliance transparency by providing end-of-year compliance 

data for each model year. Manufacturers who are out of compliance but intend to return to 

compliance in a future model year should be identified in this report. Knowing where each 

manufacturer stands at the end of each model year will assist the public and the agencies in 

establishing the technologically feasible and economically practicable level of standards for 

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EPA Response to Comments 

subsequent model years. This will also help agencies and the public evaluate whether the 

standards that have been promulgated years in advance have kept pace with the advancement and 

adoption of technology. Knowing whether automakers have fallen short or exceeded standards 

will help establish the technologically feasible level of standards for model years after 2017. 

[OAR-2009-0472-7050.1, p.4] 

Union of Concerned Scientists: 

We believe the agencies could further improve transparency by having a clear public accounting 

of credits and program compliance. Over the years, it has been exceedingly difficult to 

independently verify whether manufacturers are complaint with their CAFE obligations, and we 

have concerns that the same will hold true with manufacturers’ vehicle greenhouse gas 

obligations. Given the numerous compliance flexibility mechanisms being proposed by the 

agency – as well as significant opportunity for trading, transferring, banking, and borrowing of 

credits – we feel it is critical that manufacturers’ compliance ledgers be documented, publicly 

available, and sufficiently granular to assess by which measures companies are complying with 

the regulations. [OAR-2009-0472-7181.1, p.12] 

For example, for each model year, this would include, but not be limited to, each manufacturer’s: 

actual car average greenhouse gas emissions performance; actual light truck average greenhouse 

gas emissions performance; amount of credits (on at least a fleet average basis) accrued or used 

through advanced technology vehicle credits, early credits, A/C credits, off-cycle technology 

credits, flex fuel vehicle credits, and use of temporary lead-time allowance alternative standards; 

amount of total banks/debits accrued in each year; and a running balance of banks/debits. We 

[OAR-2009-0472-7181.1, p.12] urge the agency to undertake an effort to provide clear public 

accounting of credits and program compliance. [OAR-2009-0472-7181.1, p.13] 

Natural Resources Defense Council: 

Credit Transactions and Automakers’ Credit or Debit Status Should be Transparently Reported 

Annually to Allow for Public Evaluation of Program Effectiveness 

Effective public support for the National Program is dependent on transparency on that the 

program is working effectively. To enable the public to evaluate the effectiveness of the 

program, EPA should publish an annual public report that includes at minimum the following 

quantitative information on credits (in megagrams or metric tons) for each manufacturer’s car 

and light truck fleets: 

-the amount of cumulative credits or deficits; 

-the amount of credit transfers made by a manufacturer between its car and light truck fleets (if 

any); 

-the amount of credits traded between manufacturers including which manufacturers were 

involved and the car/truck credit origination and destination; 

-the amount of credits generated, for each manufacturer’s car and truck fleet, from the additional 

credit opportunities including: air conditioning related credits, Flex Fuel Vehicle and Alternative 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Fuel Vehicle credits, Advanced Technology Vehicle Credits for electric vehicles, plug-in 

hybrids, and fuel cells, off-cycle technology credits, early credit options 

For each of the five additional credit opportunities above, EPA should specify the basis for 

calculating the credits and indicate how many credits were awarded for each mechanism. For 

example, EPA should indicate how many plug-in hybrid electric vehicles earned advanced 

technology multiplier credits for a manufacturer’s car fleet and how EPA calculated the credit 

per vehicle type. For off-cycle technology credits, EPA should specify what technologies earned 

the credit. For each manufacturer using the early credit pathways, EPA should describe for which 

pathway the credits were awarded. [OAR-2009-0472-7141.1, pp. 10-11] 

Sierra Club: 

Strengthen transparency measures regarding the status and impacts of credit accrual and use. 

We strongly support the proposal to make all information regarding credits, including status of 

credit balances and attained versus projected fleet average emission levels, publicly available. 

The proposal allows credits to be traded over a 9 year time frame; we strongly urge EPA to limit 

this timeframe and to publish data regarding credit balances and use on an annual basis, 

including sales of credits between companies. [OAR-2009-0472-7278.1, p.17] 

University of California, Santa Barbara, Bren Working Group on Vehicle Fuel Economy: 

Finally, we strongly encourage all test results to be made publicly available and easily accessible 

for both research and consumer awareness purposes. [OAR-2009-0472-7188.1, p. 10] 

[University of California, Santa Barbara, Bren Working Group on Vehicle Fuel Economy also 

submitted these comments as testimony at the Los Angeles public hearing. See docket number 

OAR-2009-0472-7283, pp.119-121] 

People's Republic of China: 

We suggest the United States regularly publishing the monitoring information about the 

greenhouse gas emissions and corporate average fuel economy of domestic and import 

vehicles. [OAR-2009-0472-11269, p.3] 

New York State Department of Environmental Conservation: 

Compliance and Enforcement (Preamble Section III.E) 

We agree with EPA that an effective compliance program is essential to achieving the benefits of 

the standards. We are particularly pleased to see that EPA has not adopted the 'pay-to-pollute'
 

philosophy of the CAFE program, where comparatively minor fines substitute for compliance. 

[OAR-2009-0472-7454, p.4] 

EPA proposes to determine compliance after the model year ends, in a manner similar to the Tier 

2 light duty vehicle emissions program. Manufacturers would produce a preliminary compliance 

plan including planned production, expected emissions values, and expected credit activity, etc, 

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EPA Response to Comments 

with limited emissions testing data. Certificates of Conformity would be conditioned on ultimate 

satisfaction of the greenhouse gas average standard requirements. Complete CO2 test values 

would be submitted over the course of the model year, as is currently done with CAFE. Since 

deficits can be carried for three subsequent years, final compliance determination may not occur 

for several years. We Agree with EPA that this approach best accommodates credit banking and 

trading, and provides the most efficient use of manufacturer certification testing resources. 

[OAR-2009-0472-7454, p.4] 

Yuli Chew, (private citizen) 

I am very concerned that importers will be continuing to import large quantities of heavy duty 

trucks that will not meet the GHG fleet average on it own is they are included as part of a larger 

family. For example, GM might have been able to sell small quantities of Hummer H2 and yet 

meet the CAFÉ standard. At this moment, Hummer Brand has been sold to Sichuan Tengzhong 

of China. With attribute-based system, the impact of penalties is diluted. The importers may 

continue to import substantial quantities of these GHG unfriendly vehicles as just minor 

increased cost basis and do not participate in efforts to reduce GHG. I suggest that if the 

quantities of the importers exceed 4,500 vehicles per year, they should follow the same rule as 

for local large manufacturers or actions be curtailed. [OAR-2009-0472-7042.1, p.2] 

I support a web-based transparent database reporting system to EPA assess validity of credits, 

especially those obtained from third-party credit brokers. [OAR-2009-0472-7042.1, p.3] 

EPA Response: 

In general, there was widespread support for the use of current CAFE testing protocol to measure 

and report CO2 values, to provide a preliminary compliance plan to EPA, and to calculate a fleetwide average greenhouse gas emission compliance level for each manufacturer at the end of the 

model year. 

Transparency 

EPA received considerable comment about the need for transparency in its implementation of the 

greenhouse gas program and specifically about the need for public access to information about 

Agency compliance determinations. Many comments emphasized the importance of making 

greenhouse gas compliance information publicly available to ensure such transparency. EPA also 

received comment from industry about the need to protect confidential business information. 

Both transparency and protection of confidential information are longstanding EPA practices, 

and both will remain priorities in EPA’s implementation of the greenhouse gas program. EPA 

periodically provides mobile source emissions and fuel economy information to the public, for 

example through the annual Compliance Report19 and Fuel Economy Trends Report.20 As 

proposed, EPA plans to expand these reports to include GHG performance and compliance 

19 2007 Progress Report Vehicle and Engine Compliance Activities; EPA-420-R-08-011; October 2008. This 

document is available electronically at http://www.epa.gov/otaq/about/420r08011.pdf 20 Light-Duty Automotive Technology and Fuel-Economy Trends: 1975 Through 2008; EPA-420-S-08-003; 

September 2008. This document is available electronically at http://www.epa.gov/otaq/fetrends.htm 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

trends information, such as annual status of credit balances or debits, use of various credit 

programs, attained fleet average emission levels compared with standards, and final compliance 

status for a model year after credit reconciliation occurs. EPA intends to regularly disseminate 

non-confidential, model-level and fleet information for each manufacturer after the close of the 

model year. EPA will reassess data release needs and opportunities once the program is 

underway. 

Other sources of public information that EPA may expand to include GHG compliance 

information include: 

 Green Vehicle Guide - typically published in May, July, September, October and every 

three months until the end of the model year; (see www.epa.gov/greenvehicles); 

 Certification test data summary – contains certification test data21 - typically published in 

October; (see www.epa.gov/otaq/crttst.htm); 

 Fuel economy test car list– contains city and highway test data22 – typically published in 

October; (see www.epa.gov/otaq/tcldata.htm); and 

 EPA Document Index System (DIS) - updated quarterly – contains applications for 

certification, copies of certificates, etc; (see http://iaspub.epa.gov/otaqpub/) 

In addition, EPA and DOE publish the Fuel Economy Guide information on the web at 

www.fueleconomy.gov which contains a summary of all the Fuel Economy Labels (window 

stickers) on new cars and trucks. The FE Labels contain model type city, highway and combined 

fuel economy values (weighted 55% city and 45% highway) which have been adjusted to reflect 

real world conditions. Unadjusted city, highway and combined mpg values for each model type 

are also available at this site. Currently, the FE Guide is published in May, July, September, 

October, and then every 2-3 months until the end of the model year. 

EPA will work with interested parties to release an appropriately detailed level of greenhouse gas 

compliance information and test data that satisfies the need for public review without 

compromising the CBI needs of industry. We do not intend to publish prospective manufacturer 

compliance plans, or future projected production volumes. Initially EPA intends to release actual 

end-of-year production volumes and GHG emissions information at the model type level. We 

anticipate publishing manufacturer and model type GHG information including: 

 manufacturer’s annual compliance level (credit/debit status for each applicable passenger 

car or truck category); 

 the number and type of credits and debits accumulated each year; 

 the number and type of early credits earned and reported with manufacturer’s 2011 model 

year report; 

 credit transfers for a manufacturer between car and truck categories; and 

 credit trades between manufacturers. 

21 Currently does not contain CO2 data. 22 Currently contains total HC, CO and CO2 emission data (but not CH4 or N2O data).
 

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Concerns That Manufacturers Will Shift Light Truck Product into Heavy-Duty Truck 

Products 

Comments from Mr. Yuli Chew expressed concern that automobile manufacturers would shift 

light truck product into heavy-duty truck product (which are unregulated for CAFE and GHG 

emissions). 

On October 20, 1999, the International Center for Technology Assessment (ICTA) and 18 other 

environmental and renewable energy industry organizations filed with EPA a “Petition for 

Rulemaking and Collateral Relief Seeking the Regulation of Greenhouse Gas Emissions from 

New Motor Vehicles under Section 202 of the Clean Air Act.” As discussed in the proposal (74 

FR 49507, September 28, 2009), on April 2, 2007, the U.S. Supreme Court held in 

Massachusetts v. EPA that greenhouse gases were within the definition of air pollutant under the 

Clean Air Act and remanded the case to the U.S. Court of Appeals for the District of Columbia 

Circuit for further action. Heavy-duty vehicles are among the vehicle classes addressed by the 

petition and it is likely that EPA will respond to the petition as part of a future rulemaking. 

Excluding Emergency and Law Enforcement Vehicles 

Currently, emergency and law enforcement vehicles are excluded from CAFE requirements, ref. 

49 USC 32902(e). Comments from Chrysler, Ford Motor Company and General Motors 

recommend that EPA provide the manufacturer “with the same opportunity to exclude 

emergency vehicles from the GHG standards” (as provided by CAFE requirements). Both 

manufacturers recommend such changes for consistency with CAFE requirements and to prevent 

problems supplying emergency vehicles and law enforcement vehicles (including vehicles with 

special performance needs) to federal, state and local governments. 

These manufacturers believe this provision is necessary because law enforcement vehicles (e.g., 

police cars) must be designed with special performance and features necessary for police work -- 

but which tend to raise GHG emissions and reduce fuel economy relative to the base vehicle. 

These commenters provided several examples of features unique to these special purpose 

vehicles that negatively impact GHG emissions, such as heavy-duty suspensions, unique engine 

and transmission calibrations, and heavy-duty components (e.g., batteries, stabilizer bars, engine 

cooling). These manufacturers believe consistency in addressing these vehicles between the EPA 

and NHTSA programs is critical, as a manufacturer may be challenged to continue providing the 

performance needs of the federal, state, and local government purchasers of emergency vehicles. 

EPA is not finalizing such an emergency vehicle provision in this rule, since we believe that it is 

feasible for manufacturers to apply the same types of technologies to the base emergency vehicle 

as they would to other vehicles in their fleet, and given the relatively small impact the limited 

number of emergency and law enforcement vehicles would have on a manufacturer’s overall 

fleet average. However, EPA also recognizes that, because of the unique “performance 

upgrading” needed to convert a base vehicle into one that meets the performance demands of the 

law enforcement community – which tend to increase GHGs relative to the base vehicles - there 

could be situations where a manufacturer is more challenged in meeting the GHG standards than 

the CAFE standards, simply due to inclusion of these higher-emitting vehicles in the GHG 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

program fleet. Although EPA does not believe that the limited information in front of it at this 

time supports finalizing such an exclusion for emergency vehicles today, we do believe it is 

important to continue to assess this issue in the future. EPA plans to continue to assess the 

characteristics of these emergency vehicles and to continue to assess whether special provisions 

for addressing them are warranted, as requested by the manufacturers. EPA plans to undertake 

this evaluation as part of a follow-up rulemaking in the next 18 months (this rulemaking is 

discussed in the context of small volume manufacturers in Preamble Section III.B.6.). 

Follow-Up Reports Documenting the Effectiveness of the Program 

Comments from the Environmental Defense Fund recommended that EPA and NHTSA provide 

an annual public compliance report examining the program’s effectiveness, including any 

recommended adjustments to the program, enforcement actions or prospective policy action to 

ensure the policy objectives are achieved. 

As discussed in the Transparency section above, EPA periodically provides mobile source 

emissions and fuel economy information to the public, for example through the annual 

Compliance Report and the Fuel Economy Trends Report. EPA plans to expand these reports to 

include GHG performance and compliance trends information, such as annual status of credit 

balances or debits, use of various credit programs, attained fleet average emission levels 

compared with standards, and final compliance status for a model year after credit reconciliation 

occurs. 

Geographical Location of Greenhouse Gas Fleet Vehicles 

One manufacturer commented that the CAFE sales area location defined by Department of 

Transportation regulations is different than the EPA sales area location defined by the CAA. 

DOT regulations require CAFE compliance23 in the 50 states, the District of Columbia, and 

Puerto Rico. However, current EPA emission certification regulations require emission 

compliance24 in the 50 states, the District of Columbia, the Puerto Rico, the Virgin Islands, 

Guam, American Samoa and the Commonwealth of the Northern Mariana Islands. 

The commenter stated that EPA has the discretion under the CAA to align the sales area location 

of production vehicles for the greenhouse gas fleet with the sales area location for the CAFE 

fleet and recommended that EPA amend the definitions in 40 CFR 86.1803 accordingly. Such an 

23 DOT regulations at 49 CFR 525.4(a)(5) read “The term customs territory of the United States is used as defined in 

19 U.S.C. 1202.” Section 19 U.S.C. 1202 has been replaced by the Harmonized Tariff Schedule of the United 

States. The Harmonized Tariff Schedule reads in part that "The term 'customs territory of the United 

States'...includes only the States, the District of Columbia, and Puerto Rico." 24 Section 216 of the Clean Air Act defines the term commerce to mean “(A) commerce between any place in any 

State and any place outside thereof; and (B) commerce wholly within the District of Columbia.” 

Section 302(d) of the Clean Air Act reads “The term ``State'' means a State, the District of Columbia, the 

Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa and includes the Commonwealth of 

the Northern Mariana Islands.” In addition, 40 CFR 85.1502 (14) regarding the importation of motor vehicles and 

motor vehicle engines defines the United States to include “the States, the District of Columbia, the Commonwealth 

of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, and the U.S. Virgin 

Islands.” 

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EPA Response to Comments 

approach would exclude from greenhouse gas requirements production vehicles that are 

introduced into commerce in the Virgin Islands, Guam, American Samoa, and the 

Commonwealth of the Northern Mariana. 

EPA believes that the approach suggested in the comments would introduce an undesirable level 

of complexity into the certification process and result in confusion due to vehicles intended for 

commerce in separate geographical locations being covered under a single certificate. In 

addition, the vehicles sold into these additional areas will have the same options for technology 

upgrade as vehicles sold in the areas coved by the CAFE program, and there is no technological 

basis to treat them differently. For these reasons, EPA will retain the proposed greenhouse gas 

production vehicle sales area location. 

5.10.2. Vehicle Certification 

Organization: Ford Motor Company 

Mercedes-Benz (Daimler AG) 

Association of International Automobile Manufacturers (AIAM) 

Alliance of Automobile Manufacturers (Alliance) 

Toyota Motor North America 

National Association of Clean Air Agencies (NACAA) 

Sierra Club 

Motor and Equipment Manufacturers Association 

Honeywell Transportation Systems 

Cummins Inc. 

New York State Department of Environmental Conservation 

U.S. Coalition for Advanced Diesel Cars 

Hyde, James
 

Comment: 

Ford Motor Company 

Ford supports use of the 3% confirmatory retest criteria for the GHG program. This is consistent 

with current fuel economy label and CAFE retest criteria. There is not any technical justification 

for different values. In addition, Ford supports an engineering evaluation in lieu of testing at 

altitude. Any deviation in emissions control practices could be described in the auxiliary 

emission control device descriptions submitted by manufacturers at certification. [OAR-2009­

0472-7082.1, p. 10] 

Test Cycle Requirements 

Five-cycle testing is not appropriate for the GHG program. It is not consistent with the program 

goal of GHG compliance at the fleet level while mirroring the current CAFE program protocol 

that utilizes the FTP (city) and Highway tests (HFET). It would also increase the manufacturer 

burden, complexity, and prototype requirements without corresponding benefits. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

In addition, Ford supports the current FTP 55/45 city/highway weighting split. Although a lot has 

changed since the 55/45 city/highway split was developed over 20 years ago, it should not be 

assumed that drivers commuting on the road today would get from point A to point B at a higher 

average speed. One must also consider that more time is spent on the road today during the trip 

(Le. congestion impact). The current 55/45 aligns more closely with the average consumers drive 

patterns, taking into account modern-day congestion. [OAR-2009-0472-7082.1, p.10] 

Carbon-Related Exhaust Emissions Data 

Ford does not support the agencies' request to provide fleet-average carbon-related exhaust 

emissions data (e.g. CWF* +1,571 *CO+C02). We understand that depending on the type of fuel 

other constituents would also require reporting; however, Ford sees no value in providing the 

agency fleet-average carbon related emissions values. Both carbon monoxide (CO) and nonmethane hydrocarbon are currently regulated constituents, and with this rule CO2 will also be 

regulated. Additional reporting requirements should not be adopted. [OAR-2009-0472-7082.1, p. 

11] 

Submittal of Compliance Plans 

Ford recommends that EPA approve the proposed CO2 compliance plan that it is requiring 

manufacturers submit before the model year and before the certification of any test group. EPA's 

vision of the compliance plan, as described in the NPRM, is as follows: 

EPA is proposing that manufacturers submit a compliance plan to EPA prior to the beginning of 

the model year and prior to the certification of any test group. This plan would include the 

manufacturer's estimate of its footprint-based standard (Section III.B)... 74 FR at 49560. 

EPA seeks comment on the proposal to require manufacturers to submit compliance plans, and 

also on the criteria the agency should use to evaluate the sufficiency of such plans. 

In general, Ford has no objection to a requirement for manufacturers to submit a plan to EPA 

showing how the manufacturer intends to comply with fleet average GHG standards. One plan 

covering both the car and truck fleets should suffice. As we envision it, the plan would be 

submitted at the cert preview stage and would include: projected volumes for the car and truck 

fleet in aggregate and projected GHG fleet averages for the model year; projected fleet average 

air conditioning credits, information showing how the manufacturer plans to avail itself of any 

other flexible mechanisms; the manufacturer's plan for addressing any deficits that may have 

been accrued in past model years; and the manufacturer's overall projected credit/debit status at 

the end of the model year in question. The more specific model type information would not be 

provided at the certification preview meeting, but instead when available at the end of model 

year timing. 

The fact that the manufacturer has submitted a compliance plan for EPA's review should not 

simply be forgotten once the model year is underway. Compliance with fleet average GHG 

standards depends not only on what the manufacturer does (producing X volume of vehicles with 

Y fuel economy), but it also depends how on consumers react to those vehicles, which in turn 

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EPA Response to Comments 

depends fluctuations in fuel prices, and a host of other economic, demographic, and cultural 

trends that may affect consumer behavior. To the extent that manufacturers have difficulty 

achieving compliance with fleet average GHG standards, there is a good chance that such 

problems may be based on marked increases or decreases in fuel prices, economic instability, 

market shifts, Acts of God (e.g., weather events that force a plant to shut down for some period 

of time), strikes, or other developments outside a manufacturer's control. In the event of eventual 

noncompliance, the compliance plan submitted by the manufacturer should be considered in any 

potential enforcement action. If a manufacturer followed its plan but failed to achieve 

compliance due to changed external circumstances, the imposition of penalties may not be 

appropriate. [OAR-2009-0472-7082.1, pp. 12-13] 

Reporting Requirements 

EPA reporting requirements in Part 600.512-12 (Model Year Report) 

Ford recommends that Part 600.512-12 include a statement that 'submission of data to the agency 

that is provided in sufficient detail such that the relevant fleet averages can be confirmed fulfills 

that portion of this regulation'. This will provide manufacturers with flexibility to work with 

agency staff to provide the required data in the most efficient manner. In the proposed regulation, 

EPA is very specific about what data is required to be submitted. Ford generally agrees with the 

regulation, except for the carbon-related exhaust emissions data as discussed earlier. Ford 

supports the agency's efforts to collect data in sufficient detail so as to confirm a manufacturer's 

calculations. However, much of the data required in 600.512-12 for the model year report is 

actually required to be submitted during the certification and fuel economy labeling processes. In 

fact, EPA staff has been working collaboratively with industry for a few years to use a new EPA 

VERIFY database. In designing VERIFY, EPA staff recognized that much of the final fuel 

economy data has previously been submitted. Consequently, data files sent to VERIFY actually 

reference 'index' or use identification numbers instead of resubmitting the same data time and 

time again. 

Ford also recognizes that some of the data required in 600.512-12 is not included in submissions 

for other processes, such as the listing of both domestically and non-domestically produced car 

lines and corporate officer attestation. For this, manufacturers should have the option to submit a 

separate report for the model year that would contain just the additional information.[OAR-2009­

0472-7082.1, pp. 13-14] 

EPA reporting requirements in Part 600.514-12 

Ford recommends that EPA include a statement in Parts 600.512-12,600.514-12 and 537.7 that 

'submission of data to either agency that is provided in sufficient detail such that the relevant 

fleet averages can be confirmed fulfills the portion of this regulation.' Merely copying the CAFE 

pre-model year reporting requirements doesn't address long-standing issues with that reporting 

nor does it minimize a manufacturer's burden. 

Part 600.514-12 includes requirements for duplicitous and outdated information such as interior 

volume index, which is already supplied by manufacturers as part of the carline submission at 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

certification and is used for fuel economy labeling classification, and also SAE net rated power 

in kilowatts and the number of carburetor barrels. In 2005, the Alliance commented upon this in 

comments for the rulemaking for the Average Fuel Economy Standards of Light Trucks, Model 

Years 2008-2011. The response from NHTSA was 'The NPRM did not propose to revise the data 

reporting requirements aside from requiring the footprint related data and elimination of data 

currently required to be reported is outside the scope of this rulemaking. Moreover, consideration 

of such revisions would require coordination with the EPA to ensure consistency between the 

two agencies' regulatory programs, given the joint responsibilities under the Energy Policy and 

Conservation Act (EPCA). However, the agency will work to evaluate the necessity of the data 

currently required to be reported and will consider potential revisions in future rulemakings.' 74 

FR at 17654. For the final rule, the agencies should work together to streamline the reporting 

process and eliminate duplicative requirements. [OAR-2009-0472-7082.1, p. 14] 

Mercedes-Benz (Daimler AG): 

EPA requests comment with regard to whether the 3% value currently used during CAFE 

confirmatory testing is also appropriate for use in the CO2 program to determine whether a retest is required. See 74 Fed. Reg. 49454, 49562 (Sept. 28, 2009). DAG agrees that the traditional 

3% CAFE variance factor is appropriate for determining whether a re-test is necessary. However, 

DAG believes it is critical for the confirmatory calculation procedure used for CAFE to be 

modified in the case of CO2 compliance determinations. 

Confirmatory testing that is within 3% of the manufacturer’s original test results are within the 

parameters of normal testing variation and do not represent a disparity under 40 CFR Part 

600.008-08 and 40 CFR Part 86.1835-01. The 3% factor is not the critical issue for CO2 

compliance. The critical issue is how EPA treats confirmatory test values that are also within the 

3% variance factor. 

Under the current CAFE testing regime, which EPA proposes to continue for CO2, if a 

confirmatory test result is below the recognized 3% variance factor, the confirmatory test result 

is used as the compliance value. See 40 CFR Part 86.1835-01(iii). See also Dear Manufacturer 

Letter, VPCD-99-06 ( LDV, LDT, SVM) April 22, 1999. Thus, under CAFE certification, if a 

confirmatory test value is within the recognized standard variation, EPA replaces the 

manufacturer’s value. This represents the potential that each test configuration could have its 

manufacturer’s CO2 value reduced by up to 2.9% through the confirmatory test process. Such a 

variation is not large for any one model but can be significant if multiplied across a fleet of 

vehicles. In addition, such a variation is not as critical under a CAFE compliance program where 

the worst case scenario is a potential penalty payment. Under the CAA, however, EPA has noted 

that even small variations above the fleet standard can have significant consequences since the 

penalty option is not available. 

In view of the need for manufacturers to be secure and precise in their CO2 compliance planning, 

DAG recommends that these sections be amended to allow the manufacturer to continue to use 

the manufacturer’s original test result that demonstrates a less then 3% variation in confirmatory 

testing, rather than the results of the confirmatory testing, as the official GHG and fuel economy 

test results. This would be similar to the system in Europe where the manufacturer’s original test 

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EPA Response to Comments 

result is deemed the official result if the confirmatory test is within 4% of the original testing. 

This system recognizes that testing discrepancies within the 3% are within normal testing 

variation and is consistent with not requiring yet further re-testing. This is true regardless of the 

number of confirmatory tests conducted. 

This change is essential to allow manufacturers the appropriate certainty for planning purposes. 

Using the results of the confirmatory tests unduly endangers planning certainty because 

unanticipated discrepancies might reduce a projected compliance margin. As a result of the more 

draconian GHG enforcement program, manufacturers require more certainty that their original 

testing will match their final GHG results as long as those values remain within the normal 

testing variation parameter of 3%. [OAR-2009-0472-7193.2, pp.18-21] 

Association of International Automobile Manufacturers (AIAM): 

It is also not clear what the significance of a failure to meet the in-use standard would be. We 

presume that there would be enforcement consequences only if the fleet average standard is not 

met, so only a widespread deterioration problem would affect fleet average compliance. There 

should be no enforcement consequences directed at a single model, without evidence of fleet 

average noncompliance. In any case, EPA should clarify in the final rule what procedure it 

would follow in enforcing a noncompliance with in-use standards, and what would constitute 

such a noncompliance. [OAR-2009-0472-7123.1, p.7] 

EPA proposes to require manufacturers to submit a pre-model year compliance plan and conduct 

a pre-model year conference with Agency staff. See preamble at 49560. The EPA plan would be 

similar to the CAFE pre-model year report but would also contain information on anticipated 

credits. The preamble does not identify a clear purpose for the review of the plans, criteria for 

evaluating the plans, or consequences if EPA finds the plans to be unacceptable. [OAR-2009­

0472-7123.1, p.16] 

Alliance of Automobile Manufacturers (Alliance): 

CREE 

• CO is already a regulated constituent; therefore, there is no need to include it as an additional 

requirement in CREE. 

• EPA is proposing that CH4 be a regulated constituent. Since NMHC is already a regulated 

constituent, there would be no need for HC to be included in CREE. 

• The CREE equations in several sections of 40 C.F.R. 600-113-08 [i.e., (h)(2), (i)(2), (j)(2), 

(k)(2) &(l)(2)], appear to put constituents in a CO2-equivalent value. The HC components, 

however, do not follow this convention and instead use carbon weight fraction (CWF). Also, it is 

unclear how the CH4 factor of 10.916 in (k)(2) was determined. [OAR-2009-0472-6952.1, p.43] 

• The “double jeopardy” issue associated with including previously regulated constituents into 

the CREE calculation will be avoided. [OAR-2009-0472-6952.1, p.44] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Given the above issues and the fact that CH4, N2O and all the non-CO2 CREE constituents are 

marginal contributors to GHG, the Alliance proposes a simplification: regulate only CO2 

emissions with the addition of a factor to account for the contribution of CH4 and N2O. This 

would mean that anywhere the currently proposed regulation requires the use of CREE, CREE 

would be replaced with the measured CO2 value plus an added factor to account for N2O and 

CH4. [OAR-2009-0472-6952.1, p.44] 

In the preamble, EPA proposes that manufacturers submit a compliance plan prior to the 

beginning of the model year and prior to the certification of any test group. This contradicts the 

regulatory language in 600.514-12(a)(2)(i) which states “The pre-model year report required by 

this section for each model year must be submitted during the month of December (e.g., the 

premodel year report for the 2012 model year must be submitted during December, 2011).” 

[OAR-2009-0472-6952.1, p.51] 

EPA also needs to clarify what information is required in the pre-model year and supplementary 

reports. [OAR-2009-0472-6952.1, p.51] 

Recommendation: 

Assuming that EPA wants the GHG pre-model year report before the certification of any test 

group, the report would have to be due in December of the model year minus two years (e.g., 

MY 2012 report would be due in December 2010) and EPA should correct the regulatory 

language accordingly. [OAR-2009-0472-6952.1, p.51] 

Manufacturers use various methods for projecting their fleet average CO2 compliance so details 

such as model type CO2 values may not be available at the time the certification preview 

meeting as suggested in the preamble. Therefore, the Alliance suggests that the only items 

needed for the GHG pre-model year report are the projected total production volume, projected 

fleet average CO2 values, projected fleet average CO2 standards and projected fleet average 

CO2 credit status. The additional detail could be made available in the same timeframe as the 

pre-model year CAFE reports that are required by NHTSA. [OAR-2009-0472-6952.1, p.51] 

There is no need for EPA to spell out the detail regarding what would be required in a 

“supplementary” report. The regulation should simply be that the supplementary report should 

contain sufficient detail to allow proper analysis of the situation. The Alliance supports EPA’s 

proposed mobile sources GHG reporting requirements for CO2 measuring and reporting of new 

vehicles in accordance with the current emissions certification procedures. EPA has also 

expressed an interest in collecting additional in-use data as a means for continually updating and 

improving inventory assessments from total mobile source fleet emissions. [OAR-2009-0472­

6952.1, p.51] 

Confirmatory Testing Process (Proposed regulations in 40 C.F.R. 86.1835-01 and 600.008-08) 

EPA has proposed to add a “within 3%” requirement for CO2 when determining whether 

additional confirmatory testing needs to be performed. In addition, EPA has proposed that a 

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EPA Response to Comments 

manufacturer needs to accept the highest CO2 value if they are accepting the lowest FE value 

during the confirmatory test process. [OAR-2009-0472-6952.1, p.52] 

The proposed addition of a 3% CO2 requirement creates an additional pathway that could lead to 

additional manufacturer and EPA confirmatory testing burden. The additional testing could 

potentially delay certification schedules and vehicle launch. The Alliance fails to see how this 

duplicative judgment criterion can be justified in terms of overall GHG benefit. [OAR-2009­

0472-6952.1, p.52] 

Recommendation: 

Because of the close relationship between CO2 and FE, the addition of the CO2 requirements 

only serve to make the decision-making process more complicated without any real benefit. The 

manufacturers propose the removal of the new CO2 criteria and to continue to allow the 

decisions to be made based on the FE criteria. [OAR-2009-0472-6952.1, p.52] 

Running Change Data Requirements (Proposed regulations in 40 C.F.R. 600.507-12) 

EPA has proposed additional criteria for EV, HEV, PHEV, fuel cell and advanced technology 

vehicles. The proposed criteria states that additional data is required if calibration changes are 

made that result in a 4% decrease in FE. [OAR-2009-0472-6952.1, p.52] 

Recommendation: 

The real purpose of the running change data requirements is to provide the method for the 

possible recalculation and updating of fuel economy label values. Therefore, these criteria should 

be deleted from the regulation and readdressed in future advanced technology FE label 

rulemakings. [OAR-2009-0472-6952.1, p.53] 

Toyota Motor North America: 

In addition to CO2, EPA proposes that the emissions measured from each test vehicle shall 

include hydrocarbons (HC) and carbon monoxide (CO), for purposes of compliance with the 

fleet average and in-use standards. All three of these measured exhaust constituents are used to 

determine the amount of fuel burned over a given test cycle via the 'carbon balance equation' and 

are an integral part of the current fuel economy test and calculation. To account for the carbonrelated combustion products, HC emissions are adjusted by a coefficient that reflects the carbonweighted fraction (CWT) of the fuel being burned and CO emissions are adjusted by a 

coefficient that Page 4 of 31 reflects the CWF of the CO molecule. EPA proposes that the carbon 

related exhaust emissions of each vehicle be calculated according to the following formula, 

where HC, CO2 and CO2 are in units of grams per mile: 

CREE g/mi = CWF*HC + 1 .571 *CO + CO2 [OAR-2009-0472-7291, pp.7-8] 

Toyota has concerns with EPA's CREE proposal for several reasons. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

-The CREE calculation does not lend itself well to a fleet average standard. A better metric 

would be using COZ to determine compliance with fleet average standards . 

-HC and CO are already regulated constituents, so there is no need to again include these 

emission measurements into another standard, as proposed. 

-The contribution of HC and CO in the CREE formula is approximately 1% of the overall CO2 

equivalent value. [OAR-2009-0472-7291, p.8] 

Thus, there appears to be little technical basis to support the proposed CREE calculation. [OAR2009-0472-7291, p.8] 

EPA proposes to keep the current Tier 2 structure for cars and trucks in the certification 

requirements for CO2. At certification, manufacturers would use the CO2 emission level from 

the Tier 2 Emission Data Vehicle (EDV) as a surrogate to represent all of the models in the test 

group. Following further certification testing would generally be required to demonstrate 

compliance with the fleet average CO2 standard. EPA's issuance of a certificate would be 

conditioned upon the manufacturer's subsequent model level testing and attainment of the actual 

fleet average. EPA proposes to require a single EDV that would represent the test group for both 

Tier 2 and CO2 certification. The manufacturer would be allowed to initially apply the EDV's 

CO2 emissions value to all models in the test group. However, as a condition of the certificate, 

this surrogate CO2 emissions value would generally be replaced with actual, model level CO2 

values based on results from CAFE testing that occurs later in the model year. This model level 

data would become the official certification test results and would be used to determine 

compliance with the fleet average. [OAR-2009-0472-7291, p.28] 

Toyota clearly supports the establishment of a fleet average CO2 standard. However, Toyota has 

concerns with the practical aspect of EPA's proposal. These standards will not be established 

until completion of all model level testing at the end of the model year. Thus, a manufacturer 

could be producing 'noncomplying vehicles' during the model year and would not know it until 

after the model year fleet average calculations were completed. Depending on the interpretation 

of the regulations, a manufacturer could be deemed to have produced uncertified configurations. 

Toyota does not support conditional certificates as EPA proposes. [OAR-2009-0472-7291, p.28] 

3% CO2 Criteria 

As part of the current CAFE and Tier 2 compliance programs, EPA selects a subset of vehicles 

for confirmatory testing with the goal of validating the manufacturers test results. EPA proposes 

that CO2, N2O, and CH4 would be added to the emissions measured as part of the Tier 2 and 

CAFE confirmatory testing. These emission values measured at the EPA laboratory would 

continue to stand as official as is current practice under the existing regulatory programs. [OAR2009-0472-7291, p.29] 

EPA's proposal would follow the current practice of fuel economy testing in that, during EPA's 

confirmatory testing the EPA CO2 value differs from the manufacturers value by more than 3%, 

manufacturers could request a re-test. The results of the re-test would then stand as official 

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EPA Response to Comments 

regardless of manufacturers previous value. In the NPRM, EPA proposes to allow the re-test 

request based on 3% or greater disparity since a manufacturers fleet average emissions level 

would be established on the basis of model level testing only. EPA requests comment on whether 

the 3% value currently used during the CAFE confirmatory testing is appropriate and should be 

retained under the proposed GHG program. [OAR-2009-0472-7291, pp.29-30] 

Toyota believes that EPA's proposed 3% threshold on CO2 is unnecessary. Vehicle fuel 

economy, which is closely correlated to tailpipe CO2, has been reported by the industry since the 

advent of CAFE program in 1975. The current 3% criteria on fuel economy under the CAFE 

confirmatory program has been an effective means for making confirmatory judgments on 

manufacturers fuel economy results. As a result, assigning another 3% criteria on CO2, as EPA 

proposes, seems like an unnecessary certification requirement when the 3% fuel economy 

threshold can accomplish the same confirmatory objective. Additionally, Toyota is concerned 

that introducing an additional 3% criteria for CO2 adds no value to the confirmatory process 

while imposing the risk of causing delays in certification and vehicle start of production. [OAR2009-0472-7291, p.30] 

National Association of Clean Air Agencies (NACAA): 

Fourth, EPA indicates that it will continue to use the same test methods and test fuels to certify 

vehicles affected by this proposal. NACAA recommends, however, that EPA begin using realworld fuels. Similarly, NHTSA should also use real-world fuels for testing purposes. The 

association also recommends that EPA determine GHG emissions from new vehicles based on a 

calculation that incorporates lifecycle costs. [OAR-2009-0472-7071.1, p.3] 

Sierra Club: 

The proposed greenhouse gas and fuel economy standards represent a tremendous step forwards 

in terms of reducing pollution and improving vehicle efficiency. However, the tests used to 

measure fuel economy and vehicle emissions compliance remain mired in the 1970s. EPA is 

proposing to use the two tests that currently determine compliance with CAFE standards, the 

Federal Testing Procedure (FTP), or “city” test, and the Highway Fuel Economy Test (HFET), or 

“highway” test. Rife with arcane assumptions that do not represent real-world driving conditions 

or behaviors, these two tests result in fuel economy values that are significantly higher than those 

achieved in real-world driving – the new greenhouse gas standards correspond to CAFÉ values 

and will similarly differ from real world emissions. [OAR-2009-0472-7278.1, p.17] 

Designed when the national speed limit was 55 miles per hour, drivers are assumed to average 48 

miles per hour and reach a maximum of 60 mph on the highway and to never turn on accessories 

such as air conditioners or heaters. Today, 99 percent of cars are sold with air conditioners and 

the EPA has found that more than 28% of driving occurs at speeds greater than 60 mph. 

Acceleration and deceleration rates used in the [OAR-2009-0472-7278.1, p.17] tests also do not 

represent real-world behavior. Dynamometers available in 1974 could not simulate real-world 

acceleration rates; therefore, the city and highway tests prescribed acceleration rates of 3.3 and 

3.2, respectively. Today the same acceleration rates are being used to measure fuel economy, 

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even though on-road driving studies have found maximum acceleration rates of roughly 11-12 

mph/second. [OAR-2009-0472-7278.1, p.18] 

It is clear that new testing procedures are needed. We are encouraged by language in the 

proposed rule that “both agencies recognize that these test procedures are not fully representative 

of real world driving conditions,” and that “both EPA and NHTSA are interested in developing 

programs that employ test procedures that are more representative of real world driving 

conditions, to the extent authorized under their respective statutes.” We recognize that NHTSA is 

somewhat constrained by EPCA in its ability to develop new test procedures for cars, but has 

more latitude when testing light trucks. Similarly, we recognize that EPA has wide authority 

under the Clean Air Act to design new, more accurate testing procedures. Going forward, we 

strongly support the development of test procedures that reflect real-world driving conditions and 

behaviors and for MY 2017 and beyond and that standards be set at these real world levels so 

that labels and program compliance are using the same values. [OAR-2009-0472-7278.1, p.18] 

Motor and Equipment Manufacturers Association: 

Test Cycle Split for Driving Condition Calculations Must Be Revised to Reflect Real World 

MEMA supports regulations aimed at improving real-world fuel economy and reducing 

emissions and we applaud the NHTSA and the EPA for their effort to harmonize these 

regulations. Today, in the 21st century, as growth in America has expanded far beyond our 

metropolitan centers, more and more driving miles are accrued on the highway. The driving 

profile of Americans has changed; hence the conclusion of a 2006 EPA study that found today's 

average driver accumulates about 57 percent of their miles on the highway. Yet the proposed rule 

relies on a 1970s-era driving calculation (a split of 55 percent city and 45 percent highway) that 

places more emphasis on city driving, thus promoting the development of technologies geared 

toward city driving. [OAR-2009-0472-7121.1, p.3] 

The calculations in the rule, as proposed, will discourage the American auto industry from 

producing solutions that meet consumer demand for efficiency in highway driving. The industry 

will make cost-benefit decisions on technologies to maximize the fuel economy numbers with a 

55-city/45-highway split and will make long-term technology and capital decisions without an 

assurance that those decisions will produce real-world results for the consumer and the country. 

The industry should not be put in a position to wait until 2017 when the EPA proposes to update 

its driving data (as discussed in the NPRM); having to wait gives rise to uncertainty, which, in 

the automotive industry, holds up decision-making and product planning. In an industry that 

relies heavily on long-term planning, design, and production cycles, this is not acceptable. The 

2006 data provides much more current and accurate data on the driving profile, which will 

significantly reduce uncertainty. This rulemaking is the opportunity to make the change. The 

industry should be provided with firm direction now so that solutions chosen at present will not 

only be more realistic and meet today's consumer demands, but also will provide more industry 

certainty through 2017 and beyond. [OAR-2009-0472-7121.1, p.4] 

In order to improve and achieve the goals of the National Program to represent driving 

conditions in the real world, NHTSA and EPA must consider revising the test result calculations 

to more accurately reflect the nation's driving behavior as illustrated in the 2006 study. MEMA 

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believes that America needs a broad portfolio of technologies that maximize our ability to 

achieve fuel efficiency and reduce emissions. A rule that ignores today's real world driving 

habits will limit choice while forcing consumers to base automotive purchases on outdated fuel 

efficiency information. Therefore, MEMA urges NHTSA and EPA to change the calculations in 

the final rule to reflect a 43 percent city/57 percent highway split. MEMA believes that realworld benefits can only be achieved with real-world measures. This simple approach - a minor 

change with big consequences - could have profound effects on deployment of research funds 

and capital investment, on the choices of vehicle technologies, and on the real-world results for 

the consumer, emissions reduction, and fuel efficiency. [OAR-2009-0472-7121.1, p.4] 

Honeywell Transportation Systems: 

Consistent with Honeywell's support for meeting EPA and NHTSA's fuel economy and GHG 

goals, we believe that the calculation procedures should be revised to reflect accurately actual inuse driving style. With respect to the proposed calculation of GHG emissions and CAFE, the city 

to highway weighting must be adjusted to more accurately match the national vehicle mile 

traveled ratio based on data that best reflect actual driving conditions. Using a more accurate 

ratio will promote the technologies that maximize efficiency for the lowest cost. [OAR-2009­

0472-7165.1, p.7] 

It is our understanding that EPA is aware of this discrepancy in test cycles as exemplified by the 

changes implemented for vehicle fuel economy labeling. Adjusting the weighting of test cycles 

will result in more robust control of CO2 emissions and petroleum consumption. This does not 

require new testing; rather EPA should adjust the VMT ratio based on a more realistic driving 

mix for calculating CAFE and carbon dioxide emissions. [OAR-2009-0472-7165.1, p.7] 

Cummins Inc.: 

The FTP and HFET 2-cycle test were established by EPA over 30 years ago to measure 

emissions and to calculate fuel economy for CAFE purposes. The two cycles are weighted 55% 

for city driving and 45% for highway driving. EPA previously determined that not only does the 

2-cycle test not reflect real-world driving patterns, but also the 55/45 weighting does not reflect 

the typical driving experience. In 2006, EPA established a 5-cycle procedure to more accurately 

reflect what consumers achieve in the real world and used that to calculate fuel economy values 

for labeling purposes. Using the 5-cycle test, vehicle sticker miles-per-gallon (mpg) values for 

both city and highway generally decreased between 8% and 30%. However, EPA is still using 

the outdated 2-cycle test procedure. [OAR-2009-0472-7205.1, p.2] 

In a rulemaking where EPA established the 5-cycle test procedure for fuel economy labeling, the 

Agency concluded that the national light-duty fleet’s breakdown for vehicle miles traveled 

(VMT) is 43% city and 57% highway driving. EPA used this 43/57 cycle weighting to determine 

the city, highway and combined fleet fuel efficiency in its “Light- Duty Automotive and Fuel 

Economy Trends” annual reports which provide the Agency’s estimate of the fuel consumption 

and CO2 emissions for a fleet over its useful life. However, EPA still continues to use the old 

55/45 city/highway weighting for CAFE and now the proposed GHG standard program. We urge 

EPA and NHTSA to revisit this issue and revise the weighting factors to better reflect real-world 

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driving patterns such that the new GHG and CAFE standards drive vehicle designs which 

maximize the societal benefits. [OAR-2009-0472-7205.1, p.3] 

New York State Department of Environmental Conservation: 

Certification Test Fuel 

New York has historically commented in applicable rulemakings that in-use fuels should be used 

for certification. The same holds true for this proposal. We believe that there [OAR-2009-0472­

7454, p.3] exists some opportunity for manufacturers to reduce the effective stringency of the 

greenhouse gas standards by adjusting the composition of certification fuels within the overly 

broad ranges allowed by EPA. In particular, aromatics have approximately twenty percent 

greater CO2 emissions per unit of combustion energy than paraffins. Low aromatic content 

formulations that could not be produced across the gasoline or diesel fuel pool could easily be 

produced in certification fuel volumes. It appears that for gasoline a reduction in CO2 emissions 

of six to seven percent could be gained, with no corresponding emissions reduction in the field. 

Certification gasoline and diesel fuel specifications should be amended to require minimum 

aromatics content consistent with the norm for commercial gasoline and diesel fuel. [OAR-2009­

0472-7454, p.4] 

U.S. Coalition for Advanced Diesel Cars: 

According to a 2006 EPA study, today's average driver accumulates approximately 57% of their 

miles on the highway. Yet the proposed rule relies on a 1970's-era driving calculation that places 

more emphasis on city driving, thus promoting the development of technologies geared toward 

'stop and go' driving. The Coalition believes that America needs a broad portfolio of technologies 

that maximize our ability to achieve fuel efficiency and reduce GHG emissions. A rule that 

ignores today's driving habits will limit choice because it will discourage automakers from 

developing solutions that reflect the reality of modem consumer driving habits and needs. [OAR2009-0472-7496, p.3] 

The Coalition recommends a change to the proposed rule to reflect a 43% city/57% highway 

cycle weighting when calculating a vehicle's fuel economy and CO2 emissions. This simple 

update does not require any changes to the test procedures which we feel should not be changed 

in this ruling. This calculation change more accurately represents today's driving behavior based 

on the EPA's own assessments and data. The rule should capture a technology neutral approach 

that empowers consumers to choose a solution that is right for them. No specific vehicle 

technology will meet all of America's driving needs. All options must be available in order to 

achieve our administrative, legislative and societal objectives of improving fuel economy, 

reducing GHG emissions and advancing energy independence. [OAR-2009-0472-7496, p.3] 

The Coalition maintains that Congress has made its intentions abundantly clear: EPA must 

provide the automotive industry with reality-based calculation procedures on which to compare 

the effectiveness of technology choices to regulated parties under rapidly changing limits. 

Specifically, the Coalition urges EPA and NHTSA to reconsider the following aspects of the 

proposed rule: [OAR-2009-0472-7496, p.3] 

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EPA Response to Comments 

Use accurate data 

EPA should not employ test cycle weighting factors that do not reflect current, real-world 

driving patterns where American fuel is consumed and GHG emissions are created. EPA should 

apply the findings of its exhaustive 2006 study of current American driving patterns that prove 

average consumers accumulate 43 percent of all miles at speeds akin to city driving and 57 

percent at speeds akin to highway driving (43/57) This real-world definition of driving patterns is 

markedly different than historic, 1976-cycle weightings used for compliance under Corporate 

Average Fuel Economy (CAFE) regulations (55% city and 45% highway) that EPA and NHTSA 

propose to retain under the new GHG regulations. EPA should not launch 21st century 

regulations with a compliance mechanism driving technology selection and vehicle calibration 

that is rooted in a 1970s mileage mix that the agency has already declared obsolete in earlier 

rulemaking.[OAR-2009-0472-7496, p.3] 

Be consistent 

EPA employs the 43 percent city/57 percent highway cycle weighting for purposes of measuring 

the private and public results to be generated by the new rules in real-world driving, while 

proposing to retain the obsolete 55/45 cycle weighting for purposes of measuring the GHG 

saving potential of vehicles produced under the new rules. We urge EPA to universally use the 

most accurate calculation procedures for purposes of measuring both vehicle compliance and 

regulatory benefits. [OAR-2009-0472-7496, p.4] 

Consider the consumer 

By recognizing the adverse consequences of an outdated drivecycle weighting, we urge the 

Administration to promote broad consumer choice, not limit it. [OAR-2009-0472-7496, p.4] 

The Coalition applauds EPA and NHTSA for maintaining the 'diesel equivalency factor' of 1.0 

under the new rules. This long-established factor appropriately treats one gallon of diesel fuel to 

be equivalent to one gallon of pure gasoline in the calculation the agency utilizes to convert the 

results of its gram-per-mile tailpipe tests into mpg equivalents. These mpg equivalents are 

utilized by NHTSA in administering the CAFE program and by EPA for label fuel economy 

reporting to the American public. By withdrawing discussion of a change in the diesel 

equivalency factor - that would treat a diesel vehicle as if it were running on gasoline - the EPA 

has recognized that fuels have different characteristics as they generate motive power and are 

consumed in the American economy, including biofuels like E85 and B20. [OAR-2009-0472­

7496, p.11] 

The coalition urges the EPA to align its vehicle certification test procedures with fuels that are 

commercially available to the American public. Vehicles should be certified with fuels that 

American consumers can actually buy in the real world. [OAR-2009-0472-7496, p.12] 

Mr. James Hyde (private citizen): 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Certification Gasoline: Current certification gasoline specifications do not address fuel properties 

which impact the measured C02 emissions and fuel economy of vehicles. There are no 

specifications for the energy content of the fuel or for the carbon:hydrogen ratio. The loose 

specifications of aromatics at 0-35 vol% and olefins at 0-10 vol% leave much room for 

variations in both C02 emissions and fuel economy. The components of gasoline vary 

substantially in energy content and carbon weight fraction. Therefore, the measured emissions 

and fuel economy can vary (or be varied) depending on choices about the composition of the 

gasoline. [OAR-2009-0472-7258.1, pp. 1-2] 

Fortunately, there are no methods for simultaneously increasing fuel economy and reducing C02 

emissions by gasoline compositional changes. To the extent, however, that the C02 regulation 

and the CAFE regulation impact individual vehicle manufacturers, some gasoline compositional 

changes could enhance meeting one of the standards. [OAR-2009-0472-7258.1, p. 2] 

C02 emissions depend only on the carbon content of the fuel, while fuel economy is impacted by 

all elements in the fuel which are capable of combining with oxygen and giving off heat. 

Principal among these is hydrogen. For most hydrocarbons found in gasoline, hydrogen 

constitutes from 7 to 17 weight % of the compound. Benzene is particularly hydrogen poor and 

therefore carbon rich. The properties of some typical gasoline components are shown in Table 

1. [OAR-2009-0472-7258.1, p.2] [See OAR-2009-0472-7258.1, p. 2 for Table 1] 

As can be seen in Table 1, toluene produces considerably more CO2 per unit of heat than do 

most other gasoline components. In fact, all aromatics will cause higher C02 emissions per 

gallon of gasoline than does whole gasoline. [OAR-2009-0472-7258.1, p.2] 

The figure below (which uses actual data from EPA report No. EPA-450/4-80-036) shows the 

impact of aromatics content on g C02/gallon for commercial fuels. [OAR-2009-0472-7258.1, 

p.2] [See OAR-2009-0472-7258.1, p. 3 for the figure] 

A manufacturer with sufficient CAFE credits (or willing to pay the monetary penalties), but 

having trouble meeting the CO2 standards could decrease the aromatics content of the gasoline 

used for certification to decrease C02 emissions. Current regulations do not address this 

issue. [OAR-2009-0472-7258.1, p.3] 

Fuel Property Corrections to Fuel Economy Calculations: In 1984 General Motors petitioned 

EPA to have its CAFE numbers adjusted because the properties of the gasoline used to make the 

measurements had changed from that in 1975 when the program began. EPA chose to use an 

equation that 'would compensate for fuel property changes and yield a calculated fuel economy 

value equal to that which the current equation [then 40CFR600.113-78] would yield if 1975 test 

fuel had been used.' [50FR27188, July 1, 1985] The new equation [40CFR600.113-87] uses the 

carbon weight fraction (CWF), specific gravity (sg) and net heating value (NHV) of the actual 

gasoline and corrects the mpg to values for these parameters which were assumed to be current 

in 1975. The assumptions used here have not been verified for current technology vehicles or 

fuels. [OAR-2009-0472-7258.1, p. 3] 

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EPA Response to Comments 

Substantially Similar: With the addition of C02 as a certification emission EPA must consider a 

reinterpretation of the substantially similar interpretation for gasoline. Gasoline properties which 

impact C02 emissions will be an additional criterion for determining if a commercial gasoline is 

substantially similar to certification gasoline. This leads to the issue that certification gasoline 

does not contain any oxygenates, while commercial gasoline is essentially required to contain an 

elevated level of oxygenates. On a C02 per unit energy basis, ethanol is about 4% higher than 

certification gasoline. Blends of 10 vol% ethanol with certification gasoline would then produce 

about 0.4% more C02/mi (assuming that mileage is directly related to fuel energy content). 

[OAR-2009-0472-7258.1, p. 4] 

The Basic Relationship Between CO2 Emissions and Fuel Economy: A basic premise of the 

combined GHG/CAFE rulemaking is that there is a definite and predictable relationship between 

CO2 emissions and fuel economy. In general this relationship exists when the CO2 emissions 

and fuel economy are measured with the same vehicle, fuel and test cycle/conditions. For 

certification gasoline EPA has essentially defined this relationship as 8887 grams CO2 equals 1 

gallon. [OAR-2009-0472-7258.1, p. 5] 

EPA, however, allows manufacturers to calculate fuel economy instead of measuring it. This is 

the procedure called 'analytically derived fuel economy' or ADFE. In the ADFE process, a 

manufacturer used fuel economy related properties of an untested vehicle to calculate what its 

fuel economy would be expected to be based on the fuel economy of a similar vehicle. There is, 

however, no procedure to calculate the expected CO2 emissions of the untested vehicle. In the 

past EPA has allowed the C02 emissions of the tested vehicle to be entered into its database. This 

practice distorts the C02 to mpg relationship and does not provide a correct value for CO2 

emissions. Additionally, since the use of ADFE is highly variable among manufacturers, its 

impact is not uniform. The current rulemaking do not appear to address this concern. [OAR2009-0472-7258.1, p. 6] 

The magnitude of this effect is shown in the figure below which shows the percentage deviation 

from the nominal value of 8887 for MY2009 and Fuel 61 (the standard EPA certification 

gasoline). [OAR-2009-0472-7258.1] [See OAR-2009-0472-7258.1, p. 6 for the figure] 

The data points outside the central cluster show the combined impacts of ADFE and fuel 

property corrections. The deviations from zero are much too large for the proposed programs. 

[OAR-2009-0472-7258.1, p. 6] 

EPA Response: 

Test Procedures 

See section 5.1.2 for EPA’s response to comments regarding the weighting of city and highway 

fuel economy and greenhouse gas emission test results.25 See Section III.B.1 of the preamble to 

25 Comments from the Alliance did not directly address the city/highway test procedure, but did indirectly support 

the use of the current city and highway test procedures. For example, Alliance comments indicated that “The 

Alliance supports the joint rulemaking, including the proposed coordinated framework and structure. Further, the 

Alliance supports the proposal that both NHTSA and EPA use an attribute-based approach.” AIAM comments 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

the final rule for more detailed information on CO2 test procedures, Section III.C.1 on Air 

Conditioning Emissions, and Section III.B.7 for N2O and CH4 test procedures. 

EPA will continue to allow certain testing flexibilities that exist under the CAFE program. EPA 

has always permitted manufacturers some ability to reduce their test burden in tradeoff for lower 

fuel economy numbers. Specifically the practice of “data substitution” enables manufacturers to 

apply fuel economy test values from a “worst case” configuration to other configurations in lieu 

of testing them. The substituted values may only be applied to configurations that would be 

expected to have better fuel economy and for which no actual test data exist. EPA will continue 

to accept use of substituted data in the GHG program, but only when the substituted data are also 

used for CAFE purposes. 

EPA's regulations for CAFE fuel economy testing permit the use of analytically derived fuel 

economy data in lieu of actual fuel economy testing in certain situations.26 Analytically derived 

data are generated mathematically using expressions determined by EPA and are allowed on a 

limited basis when a manufacturer has not tested a specific vehicle configuration. This has been 

done as a way to reduce some of the testing burden on manufacturers without sacrificing 

accuracy in fuel economy measurement. EPA has issued guidance that provides details on 

analytically derived data and that specifies the conditions when analytically derived fuel 

economy may be used. EPA will apply the same guidance to the GHG program and will allow 

any analytically derived data used for CAFE to also satisfy the GHG data reporting 

requirements. EPA will revise the terms in the current equations for analytically derived fuel 

economy to specify them in terms of CO2. Analytically derived CO2 data will not be permitted 

for the Emission Data Vehicle representing a test group for pre-production certification, only for 

the determination of the model level test results used to determine actual fleet-average CO2 

levels. 

EPA is also retaining the definitions needed to determine CO2 levels of each model type (such as 

"subconfiguration," "configuration," "base level," etc.) as they are currently defined in EPA's 

fuel economy regulations. 

Note that additional Response to Comments information about test procedures are contained in 

section 5.1.2 of this document. 

Retest Criteria 

Under current practice, if during EPA’s confirmatory fuel economy testing, the EPA fuel 

economy value differs from the manufacturer's value by more than 3%, manufacturers can 

request a re-test. Results of the re-test stand as official, even if they differ from the 

manufacturer value by more than 3%. EPA proposed extending this practice to CO2 results, but 

manufacturers commented that this could lead to duplicative testing and increased test burden. 

EPA agrees that the close relationship between CO2 and fuel economy precludes the need to 

(outlined in section 5.1.2. of this Response to Comments document) indicate that “AIAM does not support 

fundamentally changing the fuel economy/greenhouse test procedures at this time. Our reluctance to support such
 

changes is due to the impact that such changes could have on the effective stringency of the standards.” 26 40 CFR 600.006-08(e)
 

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EPA Response to Comments 

conduct additional confirmatory tests for both fuel economy and CO2 to resolve potential 

discrepancies. Therefore EPA will continue to allow a re-test request based on a 3% or greater 

disparity in manufacturer and EPA confirmatory fuel economy test values, since a manufacturer's 

fleet average emissions level would be established on the basis of model level testing only 

(unlike Tier 2 for which a fixed bin standard structure provides the opportunity for a compliance 

buffer). 

Carbon-Related Exhaust Emissions (CREE) Data 

EPA received comments from the Alliance, Ford and Toyota questioning the appropriateness of 

using CREE emissions instead of simply CO2 emissions or CO2 plus weighted CH4 and 

weighted N2O emissions. Toyota comments, for example, state that “The CREE calculation 

does not lend itself well to a fleet average standard. A better metric would be using CO2 to 

determine compliance with fleet average standards. HC and CO are already regulated 

constituents, so there is no need to again include these emission measurements into another 

standard, as proposed.” 

For the purposes of compliance with the fleet average and in-use standards, the emissions 

measured from each test vehicle will include hydrocarbons (HC) and carbon monoxide (CO), in 

addition to CO2. All three of these exhaust constituents are currently measured and used to 

determine the amount of fuel burned over a given test cycle using a “carbon balance equation” 

defined in the regulations, and thus measurement of these constituents is an integral part of 

current fuel economy testing. As explained in Section III.B of the preamble to the final rule, it is 

important to account for the total carbon content of the fuel. Therefore the carbon-related 

combustion products HC and CO must be included in the calculations along with CO2, and any 

other carbon-containing exhaust components such as aldehyde emissions from alcohol-fueled 

vehicles. CO emissions are adjusted by a coefficient that reflects the carbon weight fraction 

(CWF) of the CO molecule, and HC emissions are adjusted by a coefficient that reflects the 

CWF of the fuel being burned (the molecular weight approach doesn’t work since there are many 

different hydrocarbons compounds being accounted for). Thus, EPA will calculate the carbonrelated exhaust emissions, also known as “CREE,” of each test vehicle according to the 

following formula, where HC, CO, and CO2 are in units of grams per mile: 

carbon-related exhaust emissions (grams/mile) = CWF*HC + 1.571*CO + CO2 

where: CWF = the carbon weight fraction of the test fuel 

 As part of the current CAFE and Tier 2 compliance programs, EPA selects a subset of vehicles 

for confirmatory testing at its National Vehicle and Fuel Emissions Laboratory. The purpose of 

confirmatory testing is to validate the manufacturer’s emissions and/or fuel economy data. 

Under this rule, EPA will add CO2, N2O, and CH4 to the emissions measured in the course of 

Tier 2 and CAFE confirmatory testing. The N2O and methane measurement requirements will 

begin for model year 2015, when requirements for manufacturer measurement to comply with 

the standard also take effect. The emission values measured at the EPA laboratory will continue 

to stand as official, as under existing regulatory programs. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Test Fuel 

The National Association of Clean Air Agencies (NACAA) and the U.S. Coalition for Advanced 

Diesel Cars commented that EPA and NHTSA should use test fuels that are commercially 

available to the American public and can be purchased in the real world. New York State and 

Mr. James Hyde commented that the current test fuel specifications for aromatics (currently 0­

35% by volume) and olefins (currently 0-10% by volume) leave much room for variations in 

both CO2 and fuel economy;” and recommended that EPA should take a fresh look at these and 

other test fuel properties to determine if changes are necessary. 

EPA is also concerned about the representativeness of current test fuel, but considers major 

revisions to test fuel(s) to be outside the scope of this GHG rule. Changes such as those 

suggested in comment would have ramifications for the stringency of EPA emission standards 

(for criteria pollutants and CO2 emissions); fuel economy labeling requirements, CAFE 

requirements and gas guzzler requirements. In addition, for CAFE testing EPA is required by 

statute to “use the same procedures for passenger automobiles the Administrator used for model 

year 1975 (weighted 55 percent urban cycle and 45 percent highway cycle), or procedures that 

give comparable results;” ref. 49 USC 32904(c) and 40 CFR 600.510-08. 

EPA will take these comments under advisement if we initiate any future rules related to test fuel 

specifications used for emissions and fuel economy testing. 

Conditional Certificates 

There was general support among most commenters to harmonize GHG test procedures with 

CAFE test procedures, including the concept of issuing certificates based on the CO2 

certification level of the emission-data vehicle until additional fleet average data can be 

generated to demonstrate compliance with the fleet average CO2 standard. However Toyota 

expressed concerns with the practical aspect of issuing conditional certificates based on 

compliance with the fleet average CO2 standard at the end of the model year. Toyota is 

concerned that a manufacturer “could be producing ‘noncomplying vehicles’ during the model 

year and would not know it until after the model year fleet average calculations were 

completed.” For that reason, Toyota did not support the concept of issuing conditional 

certificates. 

Under Tier 2 and other EPA emission standard programs, vehicle manufacturers certify a group 

of vehicles called a test group. A test group typically includes multiple vehicle car lines and 

model types that share critical emissions-related features.27 The manufacturer generally selects 

and tests one vehicle to represent the entire test group for certification purposes. The test vehicle 

is the one expected to be the worst case for the emission standard at issue. Emission results from 

the test vehicle are used to assign the test group to one of several specified bins of emissions 

27 The specific test group criteria are described in 40 CFR 86.1827-01, car lines and model types have the meaning 

given in 40 CFR 86.1803-01. 

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EPA Response to Comments 

levels, identified in the Tier 2 rule, and this bin level becomes the in-use emissions standard for 

that test group.28 

Since compliance with the Tier 2 fleet average depends on actual test group sales volumes and 

bin levels, it is not possible to determine compliance with the fleet average at the time the 

manufacturer applies for and receives a certificate of conformity for a test group. Instead, EPA 

requires the manufacturer to make a good faith demonstration in the certification application that 

vehicles in the test group will both 1) comply throughout their useful life with the emissions bin 

assigned, and 2) contribute to fleet-wide compliance with the Tier 2 average when the year is 

over. EPA issues a certificate for the vehicles included in the test group based on this 

demonstration, and includes a condition in the certificate that if the manufacturer does not 

comply with the fleet average, then production vehicles from that test group will be treated as not 

covered by the certificate to the extent needed to bring the manufacturer’s fleet average into 

compliance with Tier 2. 

The certification process often occurs several months prior to production and manufacturer 

testing may occur months before the certificate is issued. The certification process for the Tier 2 

program is an efficient way for manufacturers to conduct the needed testing well in advance of 

certification, and to receive the needed certificates in a time frame which allows for the orderly 

production of vehicles. The use of a condition on the certificate has been an effective way to 

ensure compliance with the Tier 2 fleet average. The condition will be applied similarly under 

the greenhouse gas program. 

Thus, EPA believes it is appropriate to, and will finalize the conditional certificate concept as 

proposed for several reasons, as follows: 

 to reduce manufacturers’ test burden; 

 to be consistent with the Tier 2 fleet average NOx compliance requirements (which has 

experienced very few problems); and 

 to harmonize the GHG process as much as possible with the current fuel economy and 

CAFE process, 

Diesel Equivalency Factor 

The U.S. Coalition for Advanced Diesel Cars supported EPA and NHTSA’s proposal to maintain 

the current ‘diesel equivalency factor’ of 1.0 under the new rules, stating that this “long 

established factor appropriately treats on gallon of diesel fuel to be equivalent to one gallon of 

pure gasoline.” 

EPA received no other comments on this issue, and is finalizing as proposed the 1.0 diesel 

equivalency factor for purposes of measuring fuel economy values used in calculating 

manufacturers’ CAFE levels. 

28 Initially in-use standards were different from the bin level determined at certification as the useful life level. The 

current in-use standards, however, are the same as the bin levels. In all cases, the bin level, reflecting useful life 

levels, has been used for determining compliance with the fleet average. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Running Changes 

EPA proposed revisions to paragraph §600.507-12, regarding running change requirements for 

advanced technology vehicles (including electric vehicles, fuel cell vehicles, hybrid electric 

vehicles and plug-in hybrid electric vehicles). The proposed regulation changes would require 

manufacturers in some cases, to re-label and submit additional CAFE/GHG data for running 

changes which are expected to result in less fuel efficient (or optionally result in more fuel 

efficient) vehicle operation as compared to the original fuel economy/GHG emission data. The 

proposed revision to paragraph §600.507-12 is highlighted in the bold text, below: 

§600.507-12 Running change data requirements. 

(a) Except as specified in paragraph (d) of this section, the 

manufacturer shall submit additional running change fuel economy and 

carbon-related exhaust emissions data as specified in paragraph (b) of this 

section for any running change approved or implemented under §§86.079–32, 

86.079–33, or 86.082–34 or 86.1842–01 as applicable, which: 

(1) Creates a new base level or, 

(2) Affects an existing base level by: 

(i) Adding an axle ratio which is at least 10 percent larger (or, 

optionally, 10 percent smaller) than the largest axle ratio tested. 

(ii) Increasing (or, optionally, decreasing) the road-load horsepower 

for a subconfiguration by 10 percent or more for the individual running 

change or, when considered cumulatively, since original certification (for 

each cumulative 10 percent increase using the originally certified road-load 

horsepower as a base). 

(iii) Adding a new subconfiguration by increasing (or, optionally, 

decreasing) the equivalent test weight for any previously tested 

subconfiguration in the base level. 

(iv) Revising the calibration of an electric vehicle, fuel cell electric 

vehicle, hybrid electric vehicle, plug-in hybrid electric vehicle or other 

advanced technology vehicle in such a way that the city or highway fuel 

economy of the vehicle (or the energy consumption of the vehicle, as may 

be applicable) is expected to become less fuel efficient (or optionally, 

more fuel efficient) by 4.0 percent or more as compared to the original 

fuel economy label values for fuel economy and/or energy consumption, 

as applicable. 

Comments submitted by the Alliance recommended that “The real purpose of the running change 

data requirements is to provide the method for the possible recalculation and updating of fuel 

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economy label values. Therefore, these criteria should be deleted from the regulation and 

readdressed in future advanced technology FE label rulemakings.” 

EPA proposed these regulation changes for several reasons. First, EPA doesn’t agree with the 

Alliance comment that “The real purpose of the running change data requirements is to provide 

the method for the possible recalculation and updating of fuel economy label values.” Although 

the provisions of 40 CFR 600.314-08(b) require the manufacturer to recalculate and re-label 

vehicles in cases where the fuel economy decreases by 1.0 mpg or more (and may optionally relabel vehicles in cases where the fuel economy increases by 1.0 mpg or more) the proposed 

running change requirements also apply to CAFE and GHG requirements. Since these 

requirements are applicable to GHG and CAFE testing requirements, EPA believes that it is 

appropriate to include these changes in the current GHG/CAFE rule. 

Second, the provisions of §600.507-12 were last updated in 1984 (49 FR 13832, April 6, 1984). 

At that time, EPA did not consider the fuel economy/GHG ramifications related to today’s 

advanced technology vehicles. 

Third, EPA is concerned that technically, the fuel economy of advanced technology vehicles can 

be influenced by a plethora of design parameters that are outside the normal design parameters of 

conventional vehicles. For example, fuel economy and GHG emissions of conventional 

vehicles are affected by changes in axle ratio, vehicle weight, and vehicle drag (or road-load 

horsepower), as currently addressed in the provisions of §600.507-12. However, the fuel 

economy and GHG emissions of advanced technology vehicles can be influenced by many other 

calibration parameters, including battery regeneration strategy, the percent of useable battery 

(deep cycle) energy used, the percent of electrical (verses engine) operation, the speed ranges 

during electrical operation, optimized internal combustion engine operation (e.g. calibrated to 

operate closest to best brake-specific fuel consumption), etc. These parameters for advanced 

technology vehicles are not addressed in the current provisions of §600.507-12. In some cases, 

the effect of calibration changes for these parameters may have considerably more impact on fuel 

economy/GHG emissions than changes in axle ratio, vehicle weight, and vehicle drag. EPA is 

concerned that without the proposed regulations, running changes could be made to production 

vehicles that may adversely affect the GHG emissions of the vehicle but that would not be 

required to be supported by test data. Such untested running changes could adversely affect and 

bias the fleet average GHG and CAFE calculations. 

Fourth, EPA believes that it is appropriate to require relabeling when running changes to 

advanced technology vehicles result in fuel economy changes. This provides a safeguard to EPA 

that manufacturers won’t take advantage of the labeling/running change process, e.g., by 

developing fuel economy labels on “best case” fuel economy pre-production fuel economy 

calibrations and then make running changes that improve driveability but decrease fuel economy 

in production vehicles. In addition, these regulation changes provide manufacturers with 

increased flexibility to re-label that demonstrate improved fuel economy. Without these 

regulation changes, manufacturers would be prohibited by the provisions of §600.314-08 from 

revising the fuel economy label values of vehicles with improved fuel economy until the next 

model year. Although the Alliance comments did not address this increased flexibility (to 

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optionally re-label vehicles when running changes improve fuel economy) EPA believes that the 

Alliance and other automobile manufacturers would not oppose this option. 

Fifth, the regulation changes are not expected to increase manufacturer burden substantially. For 

example, in the 2010 model year, manufacturers re-labeled 8 out of 1135 total model types (as of 

February 1, 2010) due to running change reasons outlined in §600.314-08 and §600.507-12. Of 

the eight re-labeled vehicles, five resulted in increased fuel economy label values and three 

resulted in decreased in fuel economy label values. Thus, EPA believes that the regulations will 

have a relatively minor effect on manufacturer testing burden. 

In summary, EPA does not believe that there is anything to be gained by delaying these running 

change requirements and re-proposing them in the ongoing fuel economy labeling rule (as 

recommended by the Alliance). Thus, for the reasons outlined above, EPA believes it is 

appropriate to finalize the revisions to 40 CFR 600.507-12 as proposed. 

Content of Pre-Model Year Report 

Several commenters raised concerns about EPA’s proposal for requiring manufacturers to submit 

GHG compliance plans. AIAM stated that EPA did not identify a clear purpose for the review of 

the plans, criteria for evaluating the plans, or consequences if EPA found the plans to be 

unacceptable. AIAM also expressed concern over the appropriateness of requiring 

manufacturers to prepare regulatory compliance plans in advance, since vicissitudes of the 

market and other factors beyond a manufacturer’s direct control may change over the course of 

the year and affect the model year outcome. Finally, AIAM commented that EPA should not 

attempt to take any enforcement action based on an asserted inadequacy of a plan. They felt that 

compliance should be determined only after the end of a model year and the subsequent credit 

earning period. The Alliance commented that there was an inconsistency between the proposed 

preamble language and the regulatory language in 600.514-12(a)(2)(i). The preamble language 

indicated that the compliance report should be submitted prior to the beginning of the model year 

and prior to the certification of any test group, while the regulatory language stated that the premodel year report must be submitted during the month of December. The Alliance pointed out 

that if EPA wanted GHG compliance plan information before the certification of any test groups, 

the regulatory language would need to be corrected. 

EPA understands that a manufacturer’s plan may change over the course of a model year and that 

compliance information manufacturers present prior to the beginning of a new model year may 

not represent their final compliance outcome. Rather, EPA views the compliance plan as a 

manufacturer’s good-faith projection of strategy for achieving compliance with the greenhouse 

gas standard. EPA understands that compliance with the GHG program will be determined at the 

end of the model year after all appropriate credits have been taken into consideration. 

As stated earlier, a requirement to include GHG compliance information in the new model year 

compliance preview meetings is consistent with long standing EPA policy. The information will 

provide EPA with an early overview of the manufacturer’s GHG compliance plan and allow 

EPA to make an early assessment as to possible issues, questions, or concerns with the program 

in order to expedite the certification process and help manufacturers better understand overall 

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compliance provisions of the GHG program. Therefore, EPA is finalizing revisions to 40 CFR 

600.514-12 which will require manufacturers to submit a compliance plan to EPA prior to the 

beginning of the model year and prior to the certification of any test group. The compliance plan 

must, at a minimum, include a manufacturer’s projected footprint profile, projected total and 

model-level production volumes, projected fleet average and model-level CO2 emission values, 

projected fleet average CO2 standards and projected fleet average CO2 credit status. In addition, 

EPA will expect the compliance plan to explain the various credit, transfer and trading options 

that will be used to comply with the standard, including the amount of credit the manufacturer 

intends to generate for air conditioning leakage, air conditioning efficiency, off-cycle 

technology, and various early credit programs. The compliance plan should also indicate how 

and when any deficits will be paid off through accrual of future credits. 

EPA has also corrected the inconsistency between the proposed preamble and regulatory 

language with respect to when the compliance report must be submitted and what level of 

information detail it must contain. EPA is finalizing revisions to 40 CFR 600.514-12 which 

require the compliance plan to be submitted to EPA prior to the beginning of the model year and 

prior to the certification of any test group. 

5.10.3. Useful Life Compliance and In-use Compliance Standard 

Organization: Ford Motor Company 

Honda Motor Company 

Ferrari S.p.a 

Association of International Automobile Manufacturers (AIAM) 

Chrysler Group LLC (Chrysler) 

Alliance of Automobile Manufacturers (Alliance) 

Mitsubishi Motors R & D of America (MRDA) 

Hyundai Motor Company 

Volkswagen Group of America (Volkswagen) 

Toyota Motor North America 

NGVAmerica 

State of New Jersey 

University of California, Santa Barbara, Bren Working Group on Vehicle Fuel 

Economy 

People's Republic of China 

Chew, Yuli 

Comment: 

Ford Motor Company: 

The benefit of expanding the existing criteria pollutant emissions durability requirements to 

include these greenhouse gases is negligible, relative to other potential measures that could have 

a much more significant impact on actual in-use greenhouse gas emissions. Such measures 

would go beyond the vehicle's design. For example, significant additional greenhouse gas 

emissions reductions could be achieved by reducing the carbon intensity of the nation's overall 

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fuel supply (through the introduction of alternative, low-carbon fuels). In addition, further 

reductions could also be achieved through more efficient transportation control measures 

designed to manage increased travel demand. These could include congestion mitigation 

initiatives, eco-driving education and awareness programs, and other incentives to encourage 

consumers to drive more efficiently. [OAR-2009-0472-7082.1, Cover letter p. 2] 

Durability Deterioration Requirements 

The existing durability procedures are designed around the expectation that criteria pollutants 

will increase over time because of decreasing effectiveness of the catalytic converters and other 

key emission control devices. However, the function of a catalyst is to convert criteria pollutants 

to water vapor and CO2. To the extent that catalyst function does degrade, CO2 emissions will 

decrease with reduced control capability. Since there are no after-treatment devices currently 

able to control CO2 emissions, performance degradation of such devices over time is a nonissue. [OAR-2009-0472-7082.1, p. 11] 

Greenhouse Gas Compliance Program 

In-use GHG Measurement and Reporting Requirements 

Ford believes that in-use GHG measurement and reporting requirements would be an 

unnecessary waste of resources for a CO2 program. For criteria pollutants, in-use testing is used 

to identify in-use problems, validate the accuracy of the certification program, verify the 

manufacturers' durability processes, and support emissions modeling efforts. Criteria pollutant 

emissions can increase over the useful life of a vehicle due to a loss in effectiveness of aftertreatment systems; therefore in-use testing is a critical component of a comprehensive 

compliance program for such pollutants. However, as acknowledged by EPA, unlike traditional 

criteria pollutants, vehicle CO2 emission levels depend primarily on fundamental vehicle design 

characteristics and do not change significantly over time (see Section 111.E.4 of the preamble). 

In-use CO2 results will be substantially similar to the results observed during model-level 

certification testing. Therefore in-use GHG requirements would increase testing costs without 

providing additional environmental or public health benefits. For that reason. we propose that inuse GHG measurement and reporting requirements for manufacturers be dropped. 

CO2 emissions are inversely correlated with the fuel economy of the vehicle. To evaluate the inuse CO2 emissions performance of our vehicles, Ford conducted an analysis of City FE results 

from customer vehicles procured and tested in accordance with IUVP requirements. These 

results are presented in Chart 1 above. [See OAR-2009-0472-7082.1, p. 15 for Chart 1] 

The data evaluated consisted of City FE test results from over 850,2001 thru 2006 model year 

(MY) in-use customer vehicles. The results from each vehicle were compared to the most 

applicable City CAFE program value based on its configuration (i.e., equivalent test weight, 

transmission type, chassis type, etc.). The percent difference of the IUVP and CAFE City test 

results were calculated and plotted on the above histogram shown in Chart 1. Over 75% (i.e., 

647/857) of the IUVP vehicles sampled achieved City FE test results equal to or better than their 

associated City CAFE test results. In light of data showing that emissions of the constituent 

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EPA Response to Comments 

typically improve over time, a requirement for an in-use testing program aimed at CO2 would 

force the expenditure of resources for no real purpose. 

Certainly, the CAA does not require in-use testing covering all vehicles and all pollutants. 

Section 206(b) authorizes EPA to conduct such tests, but leaves it to EPA's discretion to decide 

what specific testing is necessary and appropriate. However, it is clear under the Act that the 

purpose of any such testing must be 'to determine whether new motor vehicles...do in fact 

conform with the regulations with respect to which the certificate of conformity was issued... ' In 

other words, any testing that EPA does require should be justifiable on the grounds that it is has a 

reasonable chance of detecting non-conformities in the vehicles as certified by the manufacturer. 

In-use testing for CO2 emissions is not a reasonable way of looking for non-conformities in 

vehicles as certified. First, as noted above, the data shows that for the vast majority of vehicles 

CO2 emissions actually improve in-use. Therefore, there should not be any significant concern 

that CO2 emissions from vehicles as a whole will degrade as the vehicle population ages. 

Second, to the extent that the CO2 emissions of individual vehicles may increase over time, the 

cause of this phenomenon is likely to either be 1) unknown, or 2) attributable to factors outside 

of the manufacturer's control. Such factors could include failure of the customer to maintain the 

vehicle properly, alterations to the vehicle by the customer, or accidents/abuses in the vehicle's 

history. Unlike criteria pollutants, where a failure to meet emissions standards can usually be 

traced to one or two specific possible causes, there are a whole host of potential causes of 

degraded fuel economy and increased GHG emissions. To the extent that a recall was ever 

conducted for failure to meet in-use testing criteria for CO2, it is not clear that there would be 

any 'defect' for a manufacturer to remedy, or any specific action the manufacturer could take to 

fix the issue. For these reasons, Ford recommends that EPA drop its proposed in-use testing 

program for CO2. 

If, in spite of the comments above, EPA does require an in-use compliance program, Ford 

believes that three elements must be put in place to minimize the burden of the program. First, 

Ford supports the idea of an EPA assigned deterioration factor of zero (additive) or one 

(multiplicative) for CO2 useful life compliance but requests that manufacturers also be allowed 

to conduct whole-vehicle mileage accumulation to generate improvement factors for CO2 useful 

life compliance. 

As noted above, historical durability data confirms that CO2 control is stable and on average 

improves slightly with vehicle use or over time. In light of the above data, EPA should allow for 

the use of an improvement factor (i.e., negative deterioration factor) for CO2 useful life 

compliance. For example, the data shown in Table 1 above [See OAR-2009-0472-7082.1, p. 16 

for Table 1] indicates that rather than the deterioration factors suggested by the EPA; 

improvement factors of as much as 2.0% could be warranted. When appropriate, manufacturers 

should be allowed to apply an improvement factor to their CO2 certification test data to reflect 

that CO2 performance improves over time. 

Second, if EPA requires in-use testing, Ford also supports the creation of a separate in-use CO2 

standard with an adjustment factor of at least 10%. To address issues of variability, separate inuse standards must provide manufacturers with an appropriate compliance margin. In-use FE 

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differences of 20% were observed in an evaluation of 2001 through 2006 MY fuel economy (FE) 

data from the IUVP program (see Chart 1). Of the 857 test points evaluated, over 99% of the 

results would comply with in-use standards set with a 10% adjustment factor. 

Third, If EPA requires in-use CO2 testing, the HFET CO2 emissions result measured during 

CAFE testing should be used in combination with the in-use Federal Test Procedure (FTP) CO2 

emissions measured over the FTP cycle. To be consistent with CAFE, EPA proposes to combine 

the CO2 emission results from the FTP and HFET test cycles using the same calculation used to 

determine FE for CAFE purposes. Since the proposed CO2 standard would reflect a composite 

value of FTP and HFET results, EPA asserts that it is necessary to include the HFET emissions 

tests in IUVP to enable EPA to compare an in-use CO2 level with a vehicle's in-use standard. 

However, since CO2 emissions have already been demonstrated to be stable throughout the 

useful life of vehicles, in-use HFET testing provides no benefit and unnecessarily burdens 

manufacturers. 

[OAR-2009-0472-7082.1, pp. 14-17] 

N2O and CH4 

Ford believes that N2O and CH4 reporting requirements are most appropriately handled through 

attestation or an annual unregulated emissions report, rather than integrating it as part of all 

testing and requiring facility upgrades as well as the increased on-going per test costs. EPA 

acknowledges that N2O and CH4 emission levels from modern vehicle designs are extremely 

low and represent only about 1% of total light-duty vehicle GHG emissions (see Section III.3.a). 

It is anticipated that current vehicle designs will meet the proposed N2O and CH4 requirements. 

For that reason, and to avoid the additional cost of upgrading in-use testing facilities to enable 

N2O and CH4 measurement and reporting, we believe in-use N2O and CH4 compliance should 

be handled through an attestation or an annual unregulated emissions report. [OAR-2009-0472­

7082.1, p. 17] 

In-Use Testing GHG Exclusions 

Ford supports EPA's recommendation for the exclusion of CO2 , N2O, and CH4 from the In-Use 

Compliance Program (IUCP) thresholds. The IUCP is recall type testing used to identify in-use 

compliance concerns. For traditional criteria pollutants, IUCP testing provides an opportunity to 

remedy in-use compliance concerns. Unlike traditional criteria pollutants, CO2 performance is a 

function of vehicle design and can not be remedied in the field with the addition of emissions 

control devices. For that reason, CO2 performance should be excluded from IUCP thresholds. 

[OAR-2009-0472-7082.1, p. 17] 

Honda Motor Company: 

EPA proposes setting a compliance factor threshold for IUVP testing. And yet, no enforcement is 

planned for IUVP vehicles exceeding the threshold. In discussions with staff, for example, we 

were unable to determine the practical plan for addressing IUVP cases where the tested vehicle 

exceeds the threshold. How many test cases are required to determine that the threshold for the 

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EPA Response to Comments 

subconfiguration (or vehicle configuration or base model or model type) has been exceeded? If 

the margin for a specific vehicle is 22 grams (e.g. a vehicle with an original value of 220 grams 

and a margin of 10%) and the IUVP test exceeds the original value by 23 grams, is the failure 

equivalent to 1 gram or 23 grams? In light of a threshold and no enforcement plan, Honda 

suggests that the threshold be eliminated, even while requiring the data from the IUVP. After 

sufficient experience with the data, EPA can make a more informed decision regarding 

appropriate thresholds and enforcement actions related to the IUVP. Of course, none of this 

prevents EPA from asking OEMs for additional information cases where IUVP data interests 

EPA. [NHTSA-2009-0059-0095.1, p.7] 

If EPA rejects the aforementioned proposal to eliminate the IUVP threshold, Honda would like 

to address EPA’s proposal for a “10% adjustment factor to provide some margin for production 

and test-to-test variability that could result in differences between initial model-level emission 

results used in calculating the fleet average and any subsequent in-use testing.” Honda notes that 

model-type emissions are the result of a process that accumulates subconfiguration, 

configuration and base-level data into a single model-type profile. There can be considerable 

variation within a single model type, yet EPA’s proposal only allows for variation for production 

and test-to-test. [NHTSA-2009-0059-0095.1, p.7] 

When OEMs submit data to EPA, the model-type profile is constructed from numerous 

subconfigurations, both with and without emissions data (see Attachment 2). Honda proposes 

that where data exists at the subconfiguration level, OEMs in-use testing should be based upon 

10% variability from the subconfiguration data. In the cases where subconfiguration data does 

not exist, EPA needs to allow for additional variability. The current CAFE rules allow for 

considerable variability between Model-Type MPG and subconfigurations. Although Honda 

does not have a specific recommendation, Honda encourages EPA to set appropriate, additional 

variability from the Model-Type emissions profile to the un-tested subconfiguration level. 

[NHTSA-2009-0059-0095.1, pp.7-8] [[See NHTSA-2009-0059-0095.1, p.15 for Attachment 2]] 

Honda also proposes a slight change to the 10% variability proposed by EPA. If variability is 

based strictly as a percentage of the certification level, in absolute terms, the dirtiest cars will 

have the greatest margin, while the cleanest cars will have the least margin. Honda suggests that 

the variability margin be partially based on the certification level of the car and partially based 

on the projected fleet-wide emissions compliance levels (TABLE I.D.2–4). In the example 

shown in Attachment 3, Honda recommends a hybrid approach to setting the in use variability. 

Rather than the 10% of the certified level, Honda proposes using 5% of the projected fleet 

average for the year and 5% of the tested value. The result of this approach is to slightly reduce 

the margin for the dirtiest vehicles and provide a slightly larger margin for the cleaner, more 

challenging vehicles. [NHTSA-2009-0059-0095.1, p.8] [[See NHTSA-2009-0059-0095.1, p.16 

for Attachment 3]] 

Ferrari S.p.a: 

EPA proposes in-use CO2 standards that would apply throughout a vehicle’s useful life, with the 

standard determined by adding a 10 percent adjustment factor to the model-level emission 

results. This proposal is made notwithstanding EPA’s statement that there is no current basis for 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

believing that the emissions of carbon dioxide or fuel economy deteriorate in-use. [OAR-2009­

0472-7214.1, p.4] 

Finally, we note a discrepancy between the fleet-based CO2 standards and a single model or 

version in-use compliance standards. As for methane and nitrous oxide standards, the in-use test 

program proposed by EPA is intended to address a theoretical problem. If EPA is concerned 

about possible deterioration of vehicle characteristics and devices that could affect the in-use 

CO2 emissions (contrary to present data and evaluation by EPA), we suggest a research program 

to demonstrate the need to monitor these emissions for the vehicle useful life. Then, the in-use 

higher standards may be defined. Docket No. EPA-HQ-OAR-2009-0472 and NHTSA-2009­

0059 – NPRM GHG-CAFE MYs 2012-16 – Ferrari Comments. Accordingly, we deem necessary 

not to adopt in-use standards. EPA proposes a zero (additive) or one (multiplicative) 

deterioration factor for carbon dioxide, because it is recognized that vehicle carbon dioxide 

emissions generally do not deteriorate in-use. But EPA also states that such deterioration factor 

could be modified later. This is an important change that should be addressed carefully, because 

it could further increase the stringency of the CO2 standards. Moreover, it will affect the 

harmonization with CAFE regulation. [OAR-2009-0472-7214.1, pp.4-5] 

Association of International Automobile Manufacturers (AIAM): 

EPA also proposes in-use carbon dioxide standards that would apply throughout a vehicle’s 

useful life, with the standard determined by adding a 10 percent adjustment factor to the model 

level emission results. This proposal is made notwithstanding EPA’s statement that there is no 

current basis for believing that the emissions of carbon dioxide or fuel economy deteriorate in 

use. [OAR-2009-0472-7123.1, p.6] 

Data from EPA’s current in-use compliance test program indicate that CO2 emissions from 

current technology vehicles increase very little with age and in some cases may actually improve 

slightly. The stable CO2 levels are expected because unlike criteria pollutants, CO2 emissions in 

current technology vehicles are not controlled by after treatment systems that may fail with age. 

Rather, vehicle CO2 emission levels depend primarily on fundamental vehicle design 

characteristics that do not change over time. Therefore, vehicles designed for a given CO2 

emissions level would be expected to sustain the same emissions profile over their full useful 

life. See preamble at 49562. [OAR-2009-0472-7123.1, p.6] 

Under EPA’s in-use verification program (IUVP), manufacturers would be required to add a 

highway fuel economy test (HFET) for each in-use test vehicle. See preamble at 49563, proposed 

section 86.1845-04. [OAR-2009-0472-7123.1, p.6] 

There is no requirement in the Clean Air Act that mandates in-use testing. Although the Clean 

Air Act provides that emissions standards are to be applicable for the “useful life” of the 

vehicle, no particular level of testing to assure compliance over the useful life is mandated by the 

statute, and EPA has the discretion to craft a compliance testing program that does not include 

in-use testing. See 42 USC 7521(a)(1). [OAR-2009-0472-7123.1, pp.6-7] 

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EPA Response to Comments 

In addition to the lack of any demonstrated need for an in-use test program, there are other 

practical problems as well. The model type emission level that serves as the proposed basis for 

the in-use standard is an average value, not a test result across all the models in a particular test 

group. Not all vehicle configurations or subconfigurations in the test group are tested. If a 

vehicle selected for in-use testing were from a higher emitting configuration due to its basic 

characteristics, the test vehicle would be expected to have higher emissions than the model type 

average. In addition, certification vehicles must represent mean production tolerances, so by 

definition half of production vehicles would be expected to have higher emissions than the 

certification vehicle. EPA’s proposed approach only deals with the test-to-test variability and 

does not address these other problems. [OAR-2009-0472-7123.1, p.7] 

A fundamental complication associated with an in-use standard for carbon dioxide is that, unlike 

the current program for criteria pollutants, there is no opportunity for a manufacturer to “over 

comply” by creating additional compliance headroom to reduce the impact of the previously 

noted problems. Under the current program for criteria pollutants, manufacturers usually certify 

to emissions levels well below applicable standards to provide for the possibility of production 

variability, among other things. 

As with the methane and nitrous oxide standards, the in-use test program proposed by EPA is 

intended to address a theoretical, speculative problem. We do not suggest that it is inappropriate 

for EPA to be concerned about in-use deterioration of carbon dioxide emissions, but requiring 

significant amounts of additional testing by manufacturers at this stage is not justified. A more 

appropriate approach would be a research program to evaluate whether there is a deterioration 

problem, particularly with new technology. This program could be similar to AIAM’s 

recommendation above with respect to methane and nitrous oxide standards. [OAR-2009-0472­

7123.1, p.7] 

If EPA decides to pursue an in-use testing program for compliance purposes, notwithstanding the 

current lack of an indication of an in-use deterioration problem, it should at least adopt a 

different approach. One improvement would be to apply the 10 percent factor to the test result of 

the most similar configuration that was tested for certification, rather than the model type 

average. This would make the in-use standard more representative of the test vehicle. [OAR2009-0472-7123.1, p.7] 

The current EPA regulations governing the in-use vehicle program (IUVP) provide for EPA 

approval of a reduction in test burden, based on a manufacturer’s demonstration of consistent 

compliance with in-use standards. See section 86.1852-01. Despite recent discussions with auto 

manufacturers on reducing IUVP test burden, such reductions have not yet materialized, 

and EPA is now proposing increasing IUVP test burdens by adding the highway test. AIAM 

requests the Agency consider the overall IUVP test burden on manufacturers and continue to 

work with manufacturers to identify ways to reduce overall IUVP test burden while satisfying 

the need for additional testing for greenhouse gas purposes. [OAR-2009-0472-7123.1, pp.7-8] 

EPA proposes a zero (additive) or one (multiplicative) deterioration factor for carbon dioxide, 

because it is recognized that vehicle carbon dioxide emissions generally do not deteriorate in use. 

EPA also raises the possibility of changes in deterioration factors which could be ordered by 

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Agency staff in compliance plan discussions with the manufacturer (see preamble at 49562). A 

change in the deterioration factor would be equivalent to a change in the stringency of the 

standard. A change of this sort would eliminate the harmonization achieved between CAFE and 

greenhouse gas standards. Because of the significant consequences of a change in a deterioration 

factor, such a change should only be implemented after notice and opportunity for comment. 

AIAM agrees with EPA that a change in a deterioration factor would require adequate lead-time 

to enable the manufacturer to comply. See proposed section 86.1823-08(m)(1)(ii). [OAR-2009­

0472-7123.1, p.8] 

In the case of a manufacturer that is in clear compliance jeopardy, a pre-model year compliance 

meeting to discuss future compliance assurance may be appropriate on an ad-hoc basis. 

However, we question the value of preparing regulatory compliance plans in advance as a 

general matter. Such plans are likely to change, since they are subject to the vicissitudes of the 

market. Developing and evaluating these plans will take time and effort, but by the time the plans 

are evaluated by EPA, the manufacturer’s compliance strategy may well have changed. [OAR2009-0472-7123.1, p.16] 

The Agency should not attempt to take any enforcement action based on an asserted inadequacy 

of a plan. Compliance should be determined only after the end of a model year and the 

subsequent credit earning period. This characterization of the pre-model year plan should be in 

the final rule. [OAR-2009-0472-7123.1, p.16] 

Chrysler Group LLC (Chrysler): 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

OAR-2009-0472-6185, p. 49]] 

In addition, the proposed rule would apply in-use testing requirements to these standards. We 

would propose that EPA gather data on specific test plans and we're willing to work with EPA on 

those matters. 

Alliance of Automobile Manufacturers (Alliance): 

In addition to CO2, CREE includes the following constituents depending on the type of fuel that 

is used; total hydrocarbons (HC), carbon monoxide (CO), methane (CH4), nonmethane 

hydrocarbons (NMHC), methanol (CH3OH), formaldehyde (HCHO), ethanol (C2H5OH) and 

acetaldehyde (C2H4O). The proposed regulations require that deteriorated values are used in the 

calculation of CREE. While some of these constituents currently have useful life standards and 

already have DFs, some do not. Therefore, manufacturers may be required to rerun all forms of 

durability vehicle testing in order to establish DFs for these constituents. 

Model Type CREE Standard (Proposed regulations in 40 C.F.R. 86.1865-12) 

EPA has proposed that there be a model type CREE standard set equal to the model type CREE 

value that is obtained during the fleet-average CREE calculation. [OAR-2009-0472-6952.1, 

p.48] 

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EPA Response to Comments 

The establishment of a model type CREE standard has some inherent flaws. First, the model-type 

CREE value is an average of test data. Since it is an average, some of the official data that went 

into the calculation of the standard will automatically fail the standard. Second, these standards 

will not be established until all testing is completed after the end of a model year. This means a 

manufacturer could be producing “failing” data during the model year and would not know this 

until after the model year fleet average calculations have been completed. Depending on the 

interpretation of the regulations, a manufacturer could be deemed to have produced uncertified 

configurations. [OAR-2009-0472-6952.1, p.48] 

Recommendation: 

Fleet-average CO2 standards are sufficient for manufacturers to prove compliance to the GHG 

emission regulations and there is no need for model type CREE standards. Additionally, as noted 

above, CREE is not as useful a metric as is CO2, which should be the only measured GHG 

emission value. [OAR-2009-0472-6952.1, p.48] 

In-Use Requirements (Proposed regulations in 40 C.F.R. 86.1818-12, 86.1845-04 and 86.1846­

01) 

EPA has proposed that the model type CREE standard be multiplied by 1.1 to establish an in-use 

model type CREE standard. In addition, since the proposed model type CREE standard is a 

combination of FTP and HFET tests, in-use highway testing would also be required to be able to 

compare in-use data to the model type CREE standard. [OAR-2009-0472-6952.1, p.49] 

Recommendation: 

It is premature to establish in-use CO2 standards. Unless and until one CO2 standard can be 

established for a particular category of vehicles, the concept of an in-use CO2 standard will be an 

unachievable goal. The concept of establishing fleet-average CO2 standards by footprint and 

allowing vehicles with a particular footprint to exceed the footprint standard as long as they are 

offset by other vehicles that achieve better than their footprint standard is in essence an 

admission that the establishment of a CO2 “emission standard” for a particular category of 

vehicles is a difficult if not impossible task. [OAR-2009-0472-6952.1, p.49] 

The establishment of fleet-average CO2 emission standards and the associated procedures for 

demonstrating certification compliance to those standards is a sufficient method for establishing 

in-use compliance to the CO2 emission standard. Additional in-use testing will provide little 

benefit and does not warrant the additional cost and burden. There is no need for additional inuse testing (either by manufacturers or by EPA) at this time. [OAR-2009-0472-6952.1, p.49] 

The need for in-use data to capture any possible deterioration in CO2 levels from advanced 

technology vehicles (hybrids, PHEVs) is not technically supportable at this time. EPA can better 

achieve its goal of increased knowledge about deterioration of CO2 on advanced technology 

vehicles through a focused research program to study a relatively small sample of vehicles rather 

than through comprehensive reporting for all vehicles. [OAR-2009-0472-6952.1, p.49] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Finally, even though EPA is not going to require in-use compliance programs based on N2O and 

CH4 results, the concept of N2O and CH4 standards with no certification margin is inconsistent 

for IUVP since IUVP serves as a surveillance program and not a certification program. (Note 

that this issue could be avoided if EPA accepts the recommendation to drop the N2O and CH4 

standards as stated previously.) [OAR-2009-0472-6952.1, p.49] 

The Alliance views in-use reporting as unnecessary because CO2 emissions do not significantly 

change over a vehicle's lifetime. CO2 emissions are unlike traditional criteria pollutants, which 

may have a propensity to increase over time, because CO2 is not controlled through specific 

emission control devices or after-treatment systems which may be susceptible to degradation 

over time. This phenomenon is well understood as the automotive industry has provided data to 

EPA during previous GHG discussions and EPA has confirmed that their in-use compliance test 

program data also shows that CO2 emissions has not increased with age. [OAR-2009-0472­

6952.1, p.51] 

In-Use Testing and Remedies 

EPA must also recognize the fundamental differences between compliance with currently 

regulated emissions and GHG emissions in other portions of its proposed enforcement program. 

Congress made a decision in 1975 when it adopted EPCA to create a program to regulate fuel 

economy outside the Clean Air Act, and to assign responsibility for that program to NHTSA, not 

EPA. EPCA did not include an in-use performance requirement for a number of 

reasons, including the fact that the fuel economy performance of vehicles in good repair does not 

deteriorate with age or mileage. In the GHG reporting rulemaking, the Alliance provided test 

data confirming that CO2 emissions remain stable from such vehicles. [OAR-2009-0472-6952.1, 

pp.56-57] 

EPA proposes, however, to treat GHG standards -- which are largely dependent on a 

manufacturer’s application of fuel economy technologies to reduce carbon dioxide emissions -- 

on the same footing as standards for other regulated emissions. It is critical to recognize that 

under the Clean Air Act, EPA’s in-use recall enforcement authority is limited to situations in 

which a nonconformity determination is based on the performance of “properly maintained and 

used” vehicles, and can be remedied by repair. 42 U.S.C. § 7541(c)(1); see Center for Auto 

Safety v. Ruckelshaus, 747 F.2d 1 (D.C. Cir. 1984) (EPA lacks authority to require 

manufacturers to remedy a nonconformity by means other than repair). Vehicles that have been 

properly maintained and used will exhibit the stable to slightly-improved CO2 control levels 

confirmed in the data that the Alliance submitted in the GHG reporting rulemaking. In that 

respect, in-use testing for compliance with the GHG standards is unnecessary and cannot as a 

practical matter support a recall-and-repair order. Such testing is certainly not mandated by the 

Clean Air Act. And, in addition to being impractical and unproductive, the presumptive goal of 

such testing (to obtain a recall, when the test data warrant) would be inconsistent with EPCA -- 

and inconsistency with EPCA must be avoided in all parts of EPA’s program. See 

Massachusetts, supra. [OAR-2009-0472-6952.1, p.57] 

In addition, there are several implementation concerns that need to be considered and which are 

outlined in Section VII as it applies to GHG emissions. [OAR-2009-0472-6952.1, p.57] 

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EPA Response to Comments 

Mitsubishi Motors R & D of America (MRDA): 

There are significant challenges in the increased stringency between the 2011 and 2012 model 

years. The rate of this increase will likely result in excessive costs and burdens as many vehicles 

are quickly reconfigured to comply with these new standards. [OAR-2009-0472-7125.1, p.1] 

Hyundai Motor Company: 

EPA proposes an in-use standard at ten percent above the model-level CO2 certification data. As 

noted in EPA's preamble, there is no headroom built into the CO2 certification levels (74 FR 

49564) so EPA will provide a ten percent margin above the certified vehicle results to allow for 

test-to-test variability and/or production variability. EPA notes that the EPA's fuel economy 

labeling and CAFE confirmatory test results were evaluated for test-to-test variability and EPA's 

current in-use compliance program for age-related CO2 impacts (74 FR 49562, 49564). It is not 

clear to us how these assessments were conducted , because the data is not available in the draft 

Regulatory Impact Analysis. We believe that EPA should include the analysis for the ten percent 

increase for in-use standards in the Regulatory Impact Analysis. 

We also recommend that EPA analyze the any voluntarily submitted-C02 data from FTP testing 

for the In-Use Verification Program (IUVP) and compare that data with CAFE model-level FTP 

test data. This analysis would provide EPA with additional information on the variation between 

certification and in-use FTP test data and validation of the ten percent value. 

However, there is a fundamental issue with using model-level CO2 data for the in-use standards. 

Model-level data is the result of sales-weighted average emission and fuel economy test data for 

multiple vehicle configurations and sub-configurations. As a result, the model-level data cannot 

be directly compared to the CO2 performance of a particular in-use vehicle. EPA should revisit 

the appropriate test data for evaluating in-use vehicle CO2 as compared to the certification 

value. [OAR-2009-0472-7231.1, p.6] 

Volkswagen Group of America (Volkswagen) 

Volkswagen also has concerns regarding in-use test burden, compliance issues and certification 

issues associated with this proposed notice. We believe in-use testing for GHG compliance is not 

necessary for conventional vehicles, where we believe there is ample evidence that CO2 GHG 

emissions do not degrade over time. If EPA remains concerned that there are future vehicles such 

as hybrids that may have CP2 GHG performance that deteriorates over time, Volkswagen 

believes a test program between the industry and the agencies is a more appropriate way to 

understand the potential problems or issues related to situations where a vehicle's GHG 

emissions would increase in-use. Volkswagen pledges support for any program that would study 

in-use GHG emissions. [OAR-2009-0472-7210.1, p.7] 

Toyota Motor North America 

In-Use Standards 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

For each model type, EPA proposed in-use CO2 standards set at a level 10% higher than the 

model-specific levels used in calculating the fleet average. EPA proposes the 10% adjustment 

factor to provide some margin for production and test-to-test variability that could result in 

differences between initial model level emission results used in calculating the fleet average and 

any subsequent in-use testing. The in-use standard would apply for the same useful life period as 

in Tier 2 and, similarly, EPA proposes to allow several options for predicting in-use 

deterioration, including full vehicle testing, bench aging, and the application of a deterioration 

factor based on engineering judgment. [OAR-2009-0472-7291, pp.28-29] 

Toyota is concerned whether certification test data is representative of in-use results. 

Certification data may vary among the vehicles in the test group and variability is inherent 

among correlation with laboratories. This must be taken into consideration when comparing 

certification data and in-use data. For CO2, there would be no margin for development because 

the value established in certification would be directly applied to the in-use standard. The in-use 

test result provided under IUVP will be inconsistent with the certification vehicle because the 

certification vehicle specifications will likely differ from the actual configuration of the IUVP 

selection vehicle. Thus, Toyota believes that it is premature to introduce a CO2 in use standard at 

this time. Toyota suggests that EPA allow time to generate sufficient in-use CO2 data, which 

would occur under the IUVP program, before making judgments on an in-use standard for CO2. 

[OAR-2009-0472-7291, p.29] 

In addition, Toyota is concerned with the lack of data to assess the compliance factor that EPA 

proposes in the regulation. Without adequate data, Toyota is concerned that assigning a 10% 

factor may lead to a margin that would compromise HEV and PHEV technology vehicles. 

Therefore, EPA should not establish an in-use standard or a compliance factor until sufficient inuse data has been collected through the In-Use Verification Program (IUVP) as discussed later in 

these comments. [OAR-2009-0472-7291, p.29] 

Finally, it is not clear what remedial action a manufacturer would take in case of noncompliance 

with the in-use standard . Without a clearly malfunctioning or deteriorated part causing 

noncompliance, the technical options to improve the fuel economy (and thus lower CO2) of an 

in-use vehicle are unclear at best. Further, even in the scenario where an in-use noncompliance is 

found, the overall fleet average standard might still be achieved if other models have better inuse performance when compared to their certification levels. [OAR-2009-0472-7291, p.29] 

Useful Life Testing (IUVP and IUCP) 

EPA regulations under the CAA require a vehicle to comply with emission standards over its 

useful life and require manufacturers to conduct in-use testing as a condition of certification. 

Toyota would like to respond to specific aspects of the In-Use Verification Program (IUVP) and 

the In-Use Compliance Program (IUCP). [OAR-2009-0472-7291, p.30] 

IUVP 

Manufacturers must procure and test private vehicles and report the results to EPA under the 

auspices of the In-Use Verification Program (IUVP). Currently manufacturers test low mileage 

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EPA Response to Comments 

and high mileage vehicles over the FTP and US06 cycles, provide evaporative emissions data, 

and on-board diagnostics information. EPA uses IUVP data to identify in-use problems, validate 

certification process, verify manufacturer's durability programs and support emission modeling 

efforts. EPA proposes that for IUVP testing, a manufacturer will provide emission data for CO2 

and also for N20 and CH4. EPA also proposes that manufacturers perform the highway test cycle 

as part of IUVP. Since the proposed CO2 standard reflects a combined value of FTP and 

highway results, EPA's rationale for inclusion of the highway test is to enable EPA to compare 

an in-use CO2 level with a vehicle's in-use standard. [OAR-2009-0472-7291, p.30] 

Toyota supports EPA's intent to include CO2 as part of the IUVP data as a necessary means to 

validate the certification process. Furthermore, Toyota accepts the additional requirement to 

conduct highway testing under IUVP in order to enable the necessary comparison of a vehicle's 

in use standard to the measured in-use CO2 level. However, Toyota does not agree with the need 

to include N2O as part of the IUVP measurement and reporting criteria. N2O is not a significant 

factor of transportation emissions. N2O is not currently measured and proven N2O emission 

measurement techniques and instrumentation equipment have not been established. To fill the 

need for emission inventory purposes, EPA should consider using default values or other 

analytical techniques that can provide robust GHG data representation in the interim. If EPA 

does move forward with N2O measurement and reporting, validation and lead time for facility 

upgrades must be addressed. [OAR-2009-0472-7291, pp.30-31] 

IUCP 

In-Use Confirmatory Program (IUCP) is a manufacturer conducted recall quality test program 

that is used by EPA for the basis of a recall order. To be subjected to an IUCP audit, a threshold 

of 1.30 times the certification standard and an additional requirement that at least 50% of the test 

vehicles for that test group fail for the same pollutant. Citing a lack of data with which to make a 

determination on appropriate thresholds, EPA proposes to exclude IUVP data for CO2, N2O, and 

CH4 emissions from IUCP thresholds. EPA requests comments on their proposal to exclude 

CO2, N2O, and CH4 from the IUCP threshold. EPA proposes to add CO2, N2O, and CH4 to the 

emissions measurements it collects during surveillance testing. And EPA proposes a separate 

rulemaking to establish IUCP CO2, N2O, and CH4 threshold criteria when more data form 

EPA's internal surveillance program has been obtained. [OAR-2009-0472-7291, p.31] 

Toyota agrees with EPA's proposal to exclude CO2, N2O, and CH4 from the IUCP program 

threshold criteria. However, rather than rely on collecting data from EPA's internal surveillance 

program in order to assess this threshold issue in the future, EPA should consider a joint test 

program with industry as a cost effective means to learn more about these emissions and 

respective measurement techniques. [OAR-2009-0472-7291, p.31] 

NGVAmerica 

We also urge EPA to provide in the final rule that manufacturers of NGVs may continue to use 

existing protocols allowed for aging catalysts with respect to criteria pollutants when 

demonstrating useful life emissions of methane. As proposed, it appears that NGV 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

manufacturers would have to develop new protocols. Further, we submit that any changes that 

EPA may require to catalyst aging protocols for determining CH4 useful life emissions would 

result in a prohibitive cost increase. Therefore, we request that currently used catalyst aging 

protocols be considered acceptable for measuring all useful life tailpipe emissions, including 

CH4 and N2O. [OAR-2009-0472-11310, p. 3] 

State of New Jersey: 

The Department supports the USEPA's position that once sufficient data have been obtained, InUse Confirmatory Program threshold criteria for CO2, N2O, and CH4, and also HFCs, should be 

included through a subsequent rulemaking.[OAR-2009-0472-7109.1, p.9] 

University of California, Santa Barbara, Bren Working Group on Vehicle Fuel Economy: 

We recognize the EPA’s efforts to determine real world fuel economy of vehicles before they 

enter the market. However, we recommend that the EPA further monitor vehicles after they have 

been released off the line to ensure they are continuing to perform within a reasonable margin of 

the CAFE and GHG standards. The Federal Register recognizes that 'testing requirements may 

continue post-certification.' We would like to see this suggestion applied across all vehicle 

categories. It would not be difficult to stipulate procedures for manufacturers to follow to assure 

continued vehicle performance. One possibility is adapting the 'In Use Vehicle Program' 

currently in place to help measure real world vehicle emissions and fuel efficiency. The addition 

of equipment that measures these factors could be added to all, or a select sample, of vehicles. 

Additionally, the technology for measuring in-use fuel economy and vehicle emissions currently 

exists and would be relatively inexpensive to implement. [OAR-2009-0472-7188.1, p. 9] 

Testing conducted after vehicles have been driven under real world conditions provides critical 

feedback. If vehicles are not maintaining consumption levels after initial time of testing, then it is 

possible that implemented technologies may not be continuing to perform as they age. We urge 

the EPA and NHTSA to continue to monitor on-road performance over a vehicles’ lifespan. The 

EPA could conduct this testing, but they may also require manufacturers to provide verification 

that the fuel efficiency and GHG emissions of their fleet of vehicles has not declined beyond an 

acceptable margin over time. If the burden of proof is on the manufacturers, they may have the 

option of performing testing themselves or employing a third party to conduct sufficient 

assessments of the manufacturers’ in-use vehicles. Based on existing data, an expected decrease 

in performance over a given time span should be allowed. However if fleets fail to meet the 

expected performance levels over time, action should be taken by the EPA. For example, if on 

road monitoring determines that the efficiency of a vehicle declines more than 10 percent within 

its first 3 years of use, the manufacturers should be required to pay the same penalty that would 

have been incurred if the original fleet standards had not been met. [OAR-2009-0472-7188.1, p. 

10] 

Continued monitoring of vehicle performance also creates the ability to better determine if 

current testing procedures are accurate and adequate. If there is a trend in vehicles failing to 

reflect EPA estimated fuel economy under real world driving scenarios, this could suggest flaws 

in the testing methodology that should be rectified. The EPA should not only collect, but also 

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EPA Response to Comments 

utilize the database generated by continual testing in order to develop a robust testing model 

based on real world data. For example, vehicle emissions and fuel economy ascertained by the 

above method after one year of on-road use should closely reflect figures determined by the EPA 

at the time of initial testing. [OAR-2009-0472-7188.1, p. 10] 

[University of California, Santa Barbara, Bren Working Group on Vehicle Fuel Economy also 

submitted these comments as testimony at the Los Angeles public hearing. See docket number 

OAR-2009-0472-7283, pp.119-121] 

People's Republic of China: 

In order to reflect the principle of fairness and justice, we suggest that vehicles sampled by the 

United States for test should be affirmed on the vehicle state by the vehicle manufacturer, no 

matter in the pre-production authentication, in-use verification program (IUVP), in-use 

confirmatory test program (IUCP), or other experiment programs demonstrating the conformity 

of the vehicle. [OAR-2009-0472-11269, p.3] 

Yuli Chew (private citizen) 

I support EPA’s position that once sufficient data have been obtained, In-Use Verification 

Program (IUVP) threshold criteria for CO2, N2O, CH4 and even HFC should be included in 

later rulemaking and forms part of the determination of in-use criteria pollutants when they are in 

their first and third year of service. [OAR-2009-0472-7042.1, p.5] 

EPA Response: 

In-Use Standards 

EPA received comments from the Alliance, AIAM, Ferrari, Ford, Honda, Hyundai, Mitsubishi, 

Toyota and Volkswagen. Some comments recommended changes to EPA’s proposed in-use 

standards. Many comments recommended that EPA should not adopt in-use standards and 

should instead conduct an in-use “research” test program. AIAM, for example, recommended 

that “A more appropriate approach would be a research program to evaluate whether there is a 

deterioration problem, particularly with new technology.” 

For Tier 2, the in-use standard and the standard used for fleet average calculation are the same. 

In-use compliance for an individual vehicle is determined by comparing the vehicle’s in-use 

emission results with the emission standard levels or “bin” to which the vehicle is certified rather 

than to the Tier 2 fleet average standard for the manufacturer. This is because as part of a fleet 

average standard, individual vehicles can be certified to various emission standard levels, which 

could be higher or lower than the fleet average standard. Thus, it would be inappropriate to 

compare an individual vehicle to the fleet average, since that vehicle could have been certified to 

an emission level that is different than the fleet average level. 

This will also be true for the CO2 fleet average standard. Therefore, to ensure that an individual 

vehicle complies with the CO2 standards in-use, it is necessary to compare the vehicle’s in-use 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

CO2 emission result with the appropriate model-level certification CO2 level used in determining 

the manufacturer’s fleet average result. 

There is a fundamental difference between the CO2 standards and Tier 2 standards. For Tier 2, 

the standard level used for the fleet average calculation is one of eight different emission levels, 

or “bins,” whereas for the CO2 fleet average standard, the standard level used for the fleet 

average calculation is the model-level certification CO2 result. The Tier 2 fleet average standard 

is calculated using the “bin” emission level or standard, not the actual certification emission level 

of the certification test vehicle. So no matter how low a manufacturer’s actual certification 

emission results are, the fleet average is still calculated based on the “bin” level rather than the 

lower certification result.29 In contrast, the CO2 fleet average standard will be calculated using 

the actual vehicle model-level CO2 values from the certification test vehicles. With a specified 

certification emission standard, such as the Tier 2 “bins,” manufacturers typically attempt to 

over-comply with the standard to give themselves some cushion for potentially higher in-use 

testing results due to emissions performance deterioration and/or variability that could result in 

higher emission levels during subsequent in-use testing. For our CO2 standards, the emission 

level used to calculate the fleet average is the actual certification vehicle test result, thus 

manufacturers cannot over comply since the certification test vehicle result will always be the 

value used in determining the CO2 fleet average. This is the method used for compliance with the 

CAFE fleet average, and EPA is using the same approach here to be consistent with the CAFE 

approach. If the manufacturer attempted to design the vehicle to achieve a lower CO2 value, 

similar to Tier 2 for in-use purposes, the new lower CO2 value would simply become the new 

value used for calculating the fleet average. 

The CO2 fleet average standard is based on the performance of pre-production technology that is 

representative of the point of production, and while there is expected to be limited if any 

deterioration in effectiveness for any vehicle during the useful life, the fleet average standard 

does not take into account the test to test variability or production variability that can affect inuse levels. Therefore, EPA believes that unlike Tier 2, it is necessary to have a different in-use 

standard for CO2 to account for these variabilities. EPA proposed an in-use standard that was 

10% higher than the appropriate model-level certification CO2 level used in determining the 

manufacturer’s fleet average result. 

As described above, manufacturers typically design their vehicles to emit at emission levels 

considerably below the certification standards, for example to account for deterioration in the 

emissions control system, production variability, testing variability, and other factors. This 

intentional difference between the actual emission level and the emission standard is referred to 

as “certification margin,” since it is typically the difference between the certification emission 

level and the emission standard. The certification margin can provide manufacturers with some 

protection from exceeding emission standards in-use, since the in-use standards are typically the 

levels used to calculate the fleet average. For Tier 2, the certification margin is the delta between 

the specific emission standard level, or “bin,” to which the vehicle is certified, and the vehicle’s 

certification emission level. 

29 In a similar fashion, the fleet average for heavy-duty engines is calculated using a Family Emission Level, 

determined by the manufacturer, which is different from the emission level of the test engine. 

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EPA Response to Comments 

Since the level of the fleet average standard does not reflect this kind of variability, EPA believes 

it is appropriate to set an in-use standard that provides a reasonable cushion for in-use variability 

that is not accounted for in the test level used to determine compliance with the fleet average. 

EPA proposed a factor of 10% that would serve this function. The factor would only be 

applicable to CO2 emissions, and would be applied to the model-level test results that would be 

used to establish the model-level in-use standard 

EPA selected a value of 10% for the in-use standard based on a review of EPA’s fuel economy 

labeling and CAFE confirmatory test results for the past several vehicle model years. The EPA 

data indicate that it is common for test variability to range between three to six percent and only 

on rare occasions to exceed 10%. EPA believes that a value of 10% should be sufficient to 

account for testing variability and any production variability that a manufacturer may encounter. 

EPA considered both higher and lower values. The Tier 2 fleet as a whole, for example, has a 

certification margin approaching 50%.30 However, there are some fundamental differences 

between CO2 emissions and other criteria pollutants in the magnitude of the pollutants. Tier 2 

NMOG and NOX emission standards are hundredths of a gram per mile (e.g., 0.07 g/mi NOX & 

0.09 g/mi NMOG), whereas the CO2 standards are four orders of magnitude greater (e.g., 250 

g/mi). Thus EPA does not believe it is appropriate to consider a value on the order of 50 

percent. In addition, little deterioration in GHG emissions control is expected in-use. The 

adjustment factor addresses only one element of what is usually built into a compliance margin. 

The intent of the separate in-use standard, based on a 10% compliance factor adjustment, is to 

provide a reasonable margin such that vehicles are not automatically deemed as exceeding 

standards simply because of normal variability in test results. EPA has some concerns, however, 

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% higher than the actual values they use 

to certify and to calculate the year end fleet average value that determines compliance with the 

fleet average standard. This concern provides an additional rationale for requiring FTP and 

HFET IUVP data for CO2 emissions to ensure that in-use values are not regularly 10% higher 

than the values used in the fleet average calculation. If in the course of reviewing a 

manufacturer’s IUVP data it becomes apparent that a manufacturer’s CO2 results are consistently 

higher than the values used for calculation of the fleet average, EPA will discuss the matter with 

the manufacturer and consider possible resolutions such as changes to ensure that the emissions 

test data more accurately reflect the emissions level of vehicles at the time of production, 

increased EPA confirmatory testing, and other similar measures. 

Commenters generally did not comment on whether 10% was the appropriate level for the 

adjustment factor. Honda did support use of the proposed 10% adjustment factor for the in-use 

standard. But Honda also recommended that the 10% adjustment factor be applied to 

subconfiguration data rather than the model-level data unless there was no subconfiguration data 

available. Honda also expressed some concern over the inequity a 10% value would provide 

between high- and low-emitting vehicles. They suggested that rather than using a straight 10% 

multiplicative adjustment factor applied to the model-level CO2 value for all vehicles, it would 

30 See pages 39-41 of EPA’s Vehicle and Engine Compliance Activities 2007 Progress Report (EPA-420-R-08-011) 

published in October, 2008. This document is available electronically at http://epa.gov/otaq/about/420r08011.pdf 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

be more equitable to take the sum of a 5% multiplicative factor applied to the model-level CO2 

value and a 5% factor applied to the manufacturer’s fleet CO2 target. 

EPA understands that use of a multiplicative adjustment factor would result in a higher absolute 

in-use value for a vehicle that has higher CO2 than for a vehicle with a lower CO2. However, 

this difference is not relevant to the purpose of the adjustment factor, which is to provide some 

cushion for test and production variability. EPA does not believe the difference would be great 

enough to confer the higher-emitting vehicles with an unfair advantage with respect to emissions 

variability. 

Given that the purpose of the in-use standard is to enable a fair comparison between certification 

and in-use emission levels, EPA agrees that it is appropriate to apply the 10% adjustment factor 

to actual emission test results rather than to model-type emission levels which are production 

weighted. Therefore, EPA is finalizing an in-use standard that applies a multiplicative 10% 

adjustment factor to the subconfiguration emissions values, if such are available. If no emissions 

data exist at the subconfiguration level the adjustment will be applied to the model-type value as 

originally proposed. If the in-use emission result for a vehicle exceeds the emissions level, as 

applicable, adjusted as just described by 10%, then the vehicle will have exceeded the in-use 

emission standard. The in-use standard will apply to all in-use compliance testing including 

IUVP, selective enforcement audits, and EPA’s internal test program. 

In-Use Testing Requirements (Including IUVP, IUCP, CH4 and N2O Measurements) 

EPA received comments from the Alliance, AIAM, Chrysler, Ford, the Peoples Republic of 

China, Toyota and the University of California, Santa Barbara regarding manufacturer’s in-use 

testing requirements. Most comments from automobile manufacturers recommended that in-use 

testing was not needed. Ford, for example, commented that “in-use GHG measurement and 

reporting requirements for manufacturers be dropped.” Regarding EPA’s proposed in-use 

requirement to perform highway tests, Ford commented that “in-use HFET testing provides no 

benefit and unnecessarily burdens manufacturers.” Toyota, on the other hand, commented that 

“Toyota supports EPA’s intent to include CO2 as part of the IUVP data as a necessary means to 

validate the certification process. Furthermore, Toyota accepts the additional requirement to 

conduct highway testing under IUVP in order to enable the necessary comparison of a vehicle’s 

in-use standard to the measured in-use CO2 level.” The University of California, Santa Barbara 

commented that “We urge the EPA and NHTSA to continue to monitor on-road performance 

over a vehicles’ lifespan.” 

Sections 202 (a) (1) and 202 (d) of the CAA require a vehicle to comply with emission standards 

over its regulatory useful life and affords EPA broad authority for the implementation of this 

requirement. The response to noncompliance can range from adjusting a manufacturer’s credit 

balance to the voluntary or mandatory recall of noncompliant vehicles. These potential remedies 

provide manufacturers with a strong incentive to design and build complying vehicles. 

Currently, EPA regulations require manufacturers to conduct in-use testing as a condition of 

certification. Specifically, manufacturers must commit to later procure and test privately-owned 

vehicles that have been normally used and maintained. The vehicles are tested to determine the 

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EPA Response to Comments 

in-use levels of criteria pollutants when they are in their first and fourth years of service. This 

testing is referred to as the In-Use Verification Program (IUVP) testing, which was first 

implemented as part of EPA’s CAP 2000 certification program.31 The emissions data collected 

from IUVP serve several purposes. IUVP results provide EPA with annual real-world in-use 

data representing the majority of certified vehicles. EPA uses IUVP data to identify in-use 

problems, validate the accuracy of the certification program, verify the manufacturer’s durability 

processes, and support emission modeling efforts. Manufacturers are required to test low 

mileage and high mileage vehicles over the FTP and US06 test cycles. They are also required to 

provide evaporative emissions, onboard refueling vapory recovery (ORVR) emissions and onboard diagnostics (OBD) data. 

Manufacturers are required to provide data for all regulated criteria pollutants. Some 

manufacturers have voluntarily submitted CO2 data as part of IUVP. EPA proposed that 

manufacturers provide CO2, N2O, and CH4 data as part of the IUVP. EPA also proposed that in 

order to adequately analyze and assess in-use CO2 results, which are based on the combination of 

FTP and highway cycle test results, the highway fuel economy test would also need to be part of 

IUVP. The University of California, Santa Barbara expressed support for including N2O and 

CH4 emissions as part of the IUVP. Manufacturer comments were almost unanimously opposed 

to including any GHG standards as part of the IUVP. Specifically, industry commented that CO2 

emissions do not deteriorate over time and in some cases actually improve. Ford provided data 

for several 2004 through 2007 model year vehicles that indicate CO2 emissions actually 

improved an average of 1.42% when vehicles were tested over 5,000 miles. Since CO2 emissions 

do not deteriorate over time, manufacturers commented that including CO2 emissions and the 

highway test cycle as part of the IUVP would provide no benefit and would unnecessarily burden 

manufacturers. Manufacturers also commented that N2O and CH4 emissions are very low and by 

EPA’s own account only represent about 1% of total light-duty vehicle GHG emissions. They 

also expressed concern over the cost and burden of measuring N2O for IUVP, since many 

manufacturers use contractor laboratories to assist in their IUVP testing and many of these 

facilities do not have the necessary equipment to measure N2O. They stated that since it was 

unnecessary to include CO2 emissions as part of IUVP and since N2O and CH4 were such small 

contributors to GHG emissions, it did not make sense to include N2O and CH4 as part of the 

IUVP either. They felt that N2O and CH4 could be more appropriately handled through 

attestation or an annual unregulated emissions report. 

As discussed above, although EPA shares the view expressed in manufacturer comments that 

historical data demonstrate little CO2 deterioration, in-use emissions can increase for a number of 

reasons other than deterioration over time. For example, production or design errors can result in 

increased GHG emissions. Components that aren’t built as they were designed or vehicles 

inadvertently assembled improperly or with the wrong parts or with parts improperly designed 

can result in GHG emissions greater than those demonstrated to EPA during the certification 

process and used in calculating the manufacturers fleet average. The “stacking” of component 

design and production tolerances can also result in in-use emissions that are greater than those 

used in calculating a manufacturer’s fleet average. 

31 64 FR 23906, May 4, 1999. 

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EPA believes IUVP testing is also important to monitor in-use versus certification emission 

levels. Because the emphasis of the GHG program is on a manufacturer’s fleet average standard, 

it is difficult for EPA to make an assessment as to whether manufacturer’s vehicles are actually 

producing the GHG levels claimed in their fleet average without some in-use data for 

comparison. For example, EPA has expressed concern that with the in-use standard based on a 

10% adjustment factor, there would be an incentive for manufacturers to develop their fleet 

average utilizing the full range of the 10% in-use standard. The only way for EPA to assess 

whether manufacturers are designing and producing vehicles that meet their respective fleet 

average standards is for EPA to be able to review in-use GHG emissions from the IUVP. 

Finally, EPA does have some concern about potential CO2 emissions deterioration in advanced 

technologies for which we currently have no in-use experience or data. Since the CAFE program 

has never had an in-use requirement and today’s final regulations are the first ever GHG 

standards, there has been no need to focus on GHG emissions in use as there will be with the 

new GHG standards. Many of the advanced technologies that EPA expects manufacturers to use 

to meet the GHG standards have been introduced in production vehicles, but until now not for 

the purpose of controlling greenhouse gas emissions. For example, advanced dual-clutch or 

seven-speed automatic transmissions, and start-stop technologies have not been broadly tested in 

the field for their long-term CO2 performance. In-use GHG performance information for vehicles 

using these technologies is needed for many reasons, including evaluation of whether allowing 

use of assigned deterioration factors for CO2 in lieu of actual deterioration factors will continue 

to be appropriate. 

Therefore, EPA is finalizing the requirement that all manufacturers must provide IUVP emission 

data for CO2. EPA will also require manufacturers to perform the highway test cycle as part of 

IUVP. Since the CO2 standard reflects a combined value of FTP and highway results, it is 

necessary to include the highway emission test in IUVP to enable EPA to compare an in-use CO2 

level with a vehicle’s in-use standard. EPA understands that requiring manufacturers to also 

measure N2O and CH4 will be initially challenging, since many manufacturer facilities do not 

currently have the proper analytical equipment. To be consistent with timing of the N2O and 

CH4 emissions standards for this rule, N2O and CH4 will not be required for IUVP until the 2015 

model year. 

Another component of the CAP 2000 certification program is the In-Use Confirmatory Program 

(IUCP). This is a manufacturer-conducted recall quality in-use test program that can be used as 

the basis for EPA to order an emission recall. In order for vehicles tested in the IUVP to qualify 

for IUCP, there is a threshold of 1.30 times the certification emission standard and an additional 

requirement that at least 50% of the test vehicles for the test group fail for the same pollutant. 

EPA proposed to exclude IUVP data for CO2, N2O, and CH4 emissions from the IUCP 

thresholds EPA felt that there was not sufficient data to determine if the existing IUCP 

thresholds were appropriate or even applicable to those emissions. The University of California, 

Santa Barbara disagreed with EPA’s concerns and recommended that CO2, N2O, and CH4 

emissions all be subject to the IUVP threshold criteria. Manufacturers commented that since 

CO2 performance is a function of vehicle design and cannot be remedied in the field with the 

addition or replacement of emissions control devices like traditional criteria pollutants, it would 

not be appropriate or necessary to include IUCP threshold criteria for GHG emissions. 

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EPA Response to Comments 

EPA continues to believe that the IUCP is an important part of EPA’s in-use compliance 

program and it will continue to be so for traditional criteria pollutants. For GHG emissions, EPA 

believes the IUCP will also be a valuable future tool for achieving compliance, but believes that 

there is insufficient data today to determine whether the current IUCP threshold criteria are 

appropriate for GHG emissions. Once EPA can gather more data from the IUVP program and 

from EPA’s internal surveillance program described below, EPA will reassess the need to 

exclude IUCP thresholds, and if warranted, propose a separate rulemaking establishing IUCP 

threshold criteria which may include CO2, N2O, and CH4 emissions. Therefore, for today’s final 

action, EPA will exclude IUVP data for CO2, N2O, and CH4 emissions from the IUCP 

thresholds. 

Remedies for Noncompliance with In-Use Standards 

EPA received significant comment from industry expressing concern with the in-use standard. 

The comments focused on concerns about manufacturer liability for in-use CO2 performance and 

for the most part did not address the proposed 10% adjustment level or even the need for an 

adjustment to account for variability. Some comments suggested that an in-use standard is not 

necessary because in-use testing is not mandated in the CAA. Others stated that since there is no 

evidence that CO2 emission levels increase over time, there is no need for an in-use standard. 

Finally, there was a general concern that failure to meet the in-use standard would result in recall 

liability and that recall can only be used in cases where it can be demonstrated that a “repair” can 

remedy the nonconformity. 

The concern over recall liability in cases where there is no effective repair remedy has some 

legitimate basis. For example, EPA agrees there would be a concern if a number of vehicles for 

a particular model were to have in-use emissions that exceed the in-use standard, with no 

effective repair available to remedy the noncompliance. However, EPA does not anticipate a 

scenario involving exceedance of the in-use standard that would cause the Agency to pursue a 

mandatory recall unless there is a repairable cause of the exceedance. At the same time, failures 

to emission-related components, systems, software, and calibrations do occur that could result in 

a failure of the in-use CO2 standard. For example, a defective oxygen sensor that could cause a 

vehicle to burn excessive fuel would result in higher CO2 levels that could exceed the in-use 

standard. While it is likely that such a problem would also affect other emissions as well, there 

would still be a demonstratable problem that can be repaired and a recall may be valid. 

Therefore, EPA believes that a CO2 in-use standard is statutorily required and can serve as a 

useful tool for determining compliance with the GHG program. 

Deterioration Factors 

In general, there was widespread support for the proposed use of an assigned DF of 1.0 

multiplicative deterioration factor (or a zero additive deterioration factor) for CO2 emissions. 

Ford supported this concept, but also commented that EPA’s durability process “should allow for 

the use of an improvement factor (i.e. negative deterioration factor) for CO2 useful life 

compliance.” AIAM commented that any possible changes in deterioration factors in the 

compliance plan discussions with the manufacturer would be equivalent to a change in the 

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stringency of the standard” and “should only be implemented after notice and opportunity for 

comment” due to lead-time reasons. 

EPA believes that the useful life period established for criteria pollutants under Tier 2 is also 

appropriate for CO2. Data from EPA’s current in-use compliance test program indicate that CO2 

emissions from current technology vehicles increase very little with age and in some cases may 

actually improve slightly. The stable CO2 levels are expected because unlike criteria pollutants, 

CO2 emissions in current technology vehicles are not controlled by after treatment systems that 

may fail with age. Rather, vehicle CO2 emission levels depend primarily on fundamental vehicle 

design characteristics that do not change over time. Therefore, vehicles designed for a given CO2 

emissions level will be expected to sustain the same emissions profile over their full useful life. 

As noted, sections 202 (a) 91) and 202 (d) of the CAA require emission standards to be 

applicable for the vehicle’s full useful life. Under Tier 2 and other vehicle emission standard 

programs, 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. 

EPA allows manufacturers several options for predicting in-use deterioration, including full 

vehicle testing, bench-aging specific components, and application of a deterioration factor based 

on data and/or engineering judgment. 

In the specific case of CO2, EPA does not currently anticipate notable deterioration and has 

therefore determined that an assigned deterioration factor be applied at the time of certification. 

At this time EPA will use an additive assigned deterioration factor of zero, or a multiplicative 

factor of one. EPA anticipates that the deterioration factor will be updated from time to time, as 

new data regarding emissions deterioration for CO2 are obtained and analyzed. Additionally, 

EPA may consider technology-specific deterioration factors, should data indicate that certain 

CO2 control technologies deteriorate differently than others. 

In response to Ford’s comments, EPA agrees with industry comments that there is little evidence 

to indicate that CO2 emission levels from current-technology vehicles increase over time, 

however EPA also believes that the evidence is inconclusive at this time to indicate that CO2 

emission levels from current technology vehicles decrease over the full useful life of the vehicle. 

Thus, EPA also believes that data are inconclusive with respect to an “improved” deterioration 

effect of CO2 emissions (integrated over the useful life of the vehicle). For this reason, EPA is 

not adopting durability requirements which would allow for an “improvement factor” (i.e. 

negative deterioration factor) or for an option to generate data leading to use of an improvement 

factor for CO2 useful life compliance. Further, EPA is treating CO2 consistently with the 

longstanding treatment of other emissions, in that the regulations require any deterioration factor 

that is determined to be less than 1 to be set equal to 1. EPA will, however, continue to work 

with manufacturers to collect and analyze data that could improve overall understanding of inuse CO2 emissions. 

In response to AIAM’s comments, during compliance plan discussions prior to the beginning of 

the certification process, EPA will explore with each manufacturer any new technologies that 

could warrant use of a different deterioration factor. For any vehicle model determined likely to 

experience increases in CO2 emissions over the vehicle’s useful life, EPA continues to believe 

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EPA Response to Comments 

that manufacturers should not be allowed to use the assigned deterioration factor but rather 

should be required to establish an appropriate deterioration factor. If such an instance were to 

occur, EPA would allow manufacturers to use, for example, the whole-vehicle mileage 

accumulation method currently offered in EPA's regulations.32 

5.10.4. Credit Program Implementation 

Organization: Ford Motor Company 

Chew, Yuli (private citizen) 

Comment: 

Ford Motor Company: 

Ford supports EPA and NHTSA's proposed approach to the GHG/CAFE credit structure. In 

some cases, clarifying language should be added to meet the goals of a harmonized program. 

[OAR-2009-0472-7082.1, p. 2] 

Ford supports the proposed reporting requirements, provided that confidential business 

information is protected under existing laws and regulations. [OAR-2009-0472-7082.1, p. 2] 

Advanced Technology Definitions 

In general, Ford supports the definitions of advanced technology vehicles, but offers the 

following recommendations and clarifications. Ford recommends that the electric vehicle, fuel 

cell and plug-in hybrid definitions be modified as follows: 

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) Recharge energy must be drawn from a source off the vehicle, such as residential electric 

service; and 

(2) The vehicle must be certified to the emission standards of Bin #1 of Table S04-1 in paragraph 

(c)(6) of §86.1811. 

(3) EVs can not have an onboard combustion/generator system as a means of providing electrical 

energy. 

Fuel cell means an electrochemical cell that produces electricity via the non-combustion reaction 

of a consumable fuel, typically hydrogen. 

32 40 CFR 86.1823-08 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Plug-in hybrid electric vehicle (PHEV) means a hybrid electric vehicle that: (1) has the 

capability to charge the battery from an off-vehicle electric source, such that the off-vehicle 

source cannot be connected to the vehicle while the vehicle is in motion. It is possible to produce 

a PHEV with a very small battery, that would provide some increased FE but very limited range, 

and these vehicles should not be forced into a charge-sustaining calculation or test method due to 

a limited range. 

Ford also recommends that the EPA provide the definition and method of determining the 

'equivalent all-electric range'. The standard test for determining the equivalent all electric range 

could be based on the EPA UDDS cycle, under the test conditions specified in SAE J1711, or 

equivalent test method specified by EPA. Ford is willing to work with EPA and industry to 

develop an appropriate test methodology. [OAR-2009-0472-7082.1, pp. 23-24] 

Chew, Yuli (private citizen): 

I believe a credit lifespan of 5 years is appropriate. This Regulation should harmonize with 

CARB’s Regulation of having a useful life of five years to avoid confusion and allows 

Intermediate Volume Manufacturers to orderly place their strategies in the transition. If this is 

proposed, however, I believe that the usefulness of the credits from trucks should be curtailed, 

with 20% reduction annually or more in their ability to balance out the deficit in the cars. [OAR2009-0472-7042.1, p.3] 

EPA Response: 

Advanced Technology Definitions 

EPA proposed specific definitions for the vehicle technologies eligible for these provisions. One 

manufacturer suggested the following changes in their comments: 

 Insert an additional criterion for electric vehicles that specifically states that an electric 

vehicle may not have an onboard combustion engine/generator system. 

 A minor deletion of text from the definition for “Fuel cell.” 

 The deletion of the requirement that a PHEV have an equivalent all-electric range of 

more than 10 miles. 

EPA agrees with the first comment. As written in the proposal, a vehicle with an onboard 

combustion engine that serves as a generator would not have been excluded from the definition 

of electric vehicle. However, EPA believes it should be. Although such a vehicle might be 

propelled by an electric motor directly, if the indirect source of electricity is an onboard 

combustion engine then the vehicle is fundamentally not an electric vehicle. EPA is also 

adopting the commenter’s proposed rephrasing of the definition for “Fuel cell,” which is simpler 

and clearer. Finally, in the context of the advanced technology incentive provisions in this final 

rule, EPA concurs with the commenter that the requirement that a PHEV have an equivalent allelectric range of at least ten miles is unnecessary. In the context of the proposed credit multiplier 

EPA was concerned that some vehicles could install a charging system on a limited battery and 

gain credit beyond what the limited technology would deserve simply by virtue of being defined 

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EPA Response to Comments 

as a PHEV. However, because EPA is not finalizing the proposed multiplier provisions (see 

Section III.C.3) and is instead using as the sole incentive the zero emission tailpipe level as the 

compliance value for a manufacturer’s fleetwide average, this concern is no longer valid. Since 

EPA is not promulgating multipliers, the concern expressed at proposal no longer applies, and 

each PHEV will get a benefit from electricity commensurate with its measured use of grid 

electricity, thus EPA is no longer concerned about the multiplier effect. Thus, EPA is finalizing 

the following definitions in the regulations: 

	 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: 

o	 Recharge energy must be drawn from a source off the vehicle, such as residential 

electric service; 

o	 The vehicle must be certified to the emission standards of Bin #1 of Table S04-1 

in paragraph (c)(6) of §86.1811; and 

o	 The vehicle does not have an onboard combustion engine/generator system as a 

means of providing electrical energy. 

 Fuel cell electric vehicle means a motor vehicle propelled solely by an electric motor 

where energy for the motor is supplied by a fuel cell. 

 Fuel cell means an electrochemical cell that produces electricity via the non-combustion 

reaction of a consumable fuel, typically hydrogen. 

	 Plug-in hybrid vehicle (PHEV) means a hybrid electric vehicle that has the capability to 

charge the battery from an off-vehicle electric source, such that the off-vehicle source 

cannot be connected to the vehicle while the vehicle is in motion. 

5-Year Lifespan of Credits 

Mr. Yuli Chew supported EPA’s proposed 5-year lifespan of credits. We note that the final rule 

adopted the 5-year lifespan for credits as proposed. 

Credit Transfer Process 

Mr. Yuli Chew recommended that credits transferred from the truck compliance program to the 

passenger car program should be devalued by 20% annually or more. There was no technical 

justification provided with the comment. EPA is not aware of a rationale for devaluing truck 

compliance credits and therefore did not consider this suggestion. 

5.10.5. Enforcement 

Organization: Ford Motor Company 

Association of International Automobile Manufacturers (AIAM) 

Alliance of Automobile Manufacturers (Alliance) 

Volvo Car Corporation 

Mitsubishi Motors R & D of America (MRDA) 

Hyundai Motor Company 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Toyota Motor North America 

Natural Resources Defense Council 

California Air Resources Board 

Honeywell Transportation Systems 

National Automobile Dealers Association (NADA) 

Fisker Automotive, Inc. 

People's Republic of China 

Comment: 

Ford Motor Company: 

Compliance Penalties 

The NPRM states that if a manufacturer fails to comply with GHG standards, EPA determines 

how many high-emitter vehicles need to be removed from the fleet to achieve compliance. This 

number of vehicles would be deemed 'nonconforming' and not covered by a certificate. 

Manufacturers would be subject to penalties of up to $37,500 per vehicle and injunctive relief, 

which would presumably include the authority to require recall under CAA 207. 

The CAA gives EPA a variety of powerful enforcement tools, which may be appropriate in cases 

where after treatment systems fail and vehicles with high criteria pollutant emissions need to be 

taken off the road. However, such enforcement authorities are excessive in the case of a GHG 

fleet average, which is comparable to a fuel economy standard. The maximum CAFE penalty 

ever paid has been approximately $30 million. Under the EPA regime, the potential penalty for 

10,000 'nonconforming' vehicles (a relatively small number for a large manufacturer) would be 

$375 million. That plus the threat of injunction/recall provides EPA with excessive leverage in 

an enforcement context, especially when the primary cause of non-compliance may be market 

shifts, economic disruptions, or other factors outside of the manufacturer's control. 

Injunction/recall is unlikely to ever be appropriate, since there is probably no nonconformance 

(or remedy) as to individual vehicles. Rather than employing its enforcement leverage/discretion 

on a case-by-case basis, EPA should establish a separate regulation or policy on GHG 

enforcement that provides for lower maximum penalties and limits injunctive relief to egregious 

violations. In the case of noncompliance with fleet average GHG standards, the policy should 

provide for maximum penalties comparable to those under the CAFE program. The violations 

are comparable, and EPCA indicate Congress's intent as to an appropriate level of penalties for a 

noncompliance of this kind. [OAR-2009-0472-7082.1, p. 24] 

Association of International Automobile Manufacturers (AIAM): 

As recognized in the proposal, recall is not an appropriate enforcement mechanism for fleetaverage regulations. 

Unlike the National Traffic and Motor Vehicle Safety Act, EPCA does not provide for recall and 

remedy in the event of a noncompliance. The presence of recall and remedy provisions in the 

Safety Act and their absence in EPCA is believed to arise from the difference in the application 

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EPA Response to Comments 

of the safety standards and CAFE standards. A safety standard applies to individual vehicles; that 

is, each vehicle must possess the requisite equipment or feature that must provide the requisite 

type and level of performance. If a vehicle does not, it is noncompliant. ... 

In contrast, a CAFE standard applies to a manufacturer’s entire fleet for a model year. It does not 

require that a particular individual vehicle be equipped with any particular equipment or feature 

or meet a particular level of fuel economy. It does require that the manufacturer’s fleet, as a 

whole, comply. ... Thus, under EPCA, there is no such thing as a noncompliant vehicle, only a 

noncompliant fleet. No particular vehicle in a noncompliant fleet is any more, or less, 

noncompliant than any other vehicle in the fleet. See 74 FR at 49464. [OAR-2009-0472-7123.1, 

p.15] 

The same rationale that counsels against adopting recall as an enforcement mechanism for CAFE 

standards would apply with just as much force to corporate average GHG emissions standards. 

To the extent that a manufacturer fails to meet the corporate average GHG emissions standard 

for a given year, it will most likely be because it failed to balance its fleet and sell the proper mix 

of vehicles, and not because of a failure of an emissions control device. Indeed, given the fact 

that the technologies that reduce GHG emissions relate principally to the efficiency with which 

the vehicle converts fuel to energy—such as, for example, hybrid or plug-in engines, advanced 

transmissions, and mass reduction—these technologies are not likely to “fail” in the sense that 

they are not functioning properly to reduce emissions. Rather, a fleet of perfectly functioning 

vehicles may nonetheless fail to meet the GHG emissions standard if the anticipated mix is not 

sold. Under these circumstances, recall would be an entirely inappropriate remedy. The Clean 

Air Act gives EPA the discretion to forego ordering a recall where the failure to meet an 

emission standard is the result of fleet imbalance. Section 207(c)(1) of the Clean Air Act 

provides that where “a substantial number of any class or category of vehicles or engines” fail to 

meet an emissions standard, then the manufacturer is to “submit a plan for remedying the 

nonconformity of the vehicles or engines,” and that plan is to provide that the nonconformity 

“will be remedied at the expense of the manufacturer.” 42 USC § 7541(c). Where the 

nonconformity is the result of a fleet imbalance, then the manufacturer can “remedy” the 

nonconformity in ways that do not include recalling its fleet. [OAR-2009-0472-7123.1, p.16] 

For the above reasons we urge EPA to specify those limited circumstances under which recall 

would be appropriate for noncompliance with its greenhouse gas emissions requirements. [OAR2009-0472-7123.1, p.16] 

Alliance of Automobile Manufacturers (Alliance): 

In-Use Testing: Enforcement of Fleet Average Requirements 

EPA proposes to require in-use testing of a vehicle's CO2 emissions with the emissions 

compared to the model-level certification CO2 level used in calculating the manufacturer's fleet 

average. EPA would apply a 10 percent 'compliance factor adjustment' to the certification CO2 

level to account for production and test variability. Under EPA’s proposal, one response to a 

failure to comply with the fleet average standards after all credits have been applied would be to 

calculate the number of vehicles not meeting the fleet average standards and treat those vehicles 

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as not covered by emissions certifications, in effect deeming the certifications as “void ab initio.” 

See 74 Fed. Reg. at 49,762. The Joint Notice suggests that such an approach to enforcement is 

consistent with EPA’s enforcement regulations for other fleet average requirements that apply to 

non-GHG emissions. Id. at 49573. [OAR-2009-0472-6952.1,p.55] 

Fleet average emissions requirements for GHG emissions are fundamentally different from such 

requirements for other emissions. As NHTSA and the federal courts reviewing fuel economy 

standards have long recognized, a manufacturer’s ability to meet fleet average fuel economy 

levels can be dependent on fuel prices and other economic factors, which are conditions beyond 

the control of vehicle manufacturers. This is one reason why NHTSA must consider “economic 

practicability” in setting CAFE standards. 49 U.S.C. § 32902(f); see e.g. Public Citizen v. 

NHTSA, 848 F.2d 256, 265 (D.C. Cir. 1988); The dependence of EPA’s proposed fleet average 

GHG standards on a manufacturer’s fleet-wide fuel economy makes compliance with the 

proposed EPA standards subject to the same factors beyond a manufacturer’s control. Imposition 

of severe sanctions when a manufacturer does not comply with the GHG fleet average 

requirement would be inconsistent with the CAFE program, which by law imposes a 

comprehensive enforcement program.. The inconsistency would have two dimensions: the CAFE 

law does not make manufacturers liable for penalties if compliance with the fuel economy 

standards was beyond a manufacturer’s control (49 USC 32913) and EPCA prescribes specific 

civil penalties that are not contained in the proposed EPA enforcement rule (49 USC 32912). 

[OAR-2009-0472-6952.1, p.55] 

Similarly, it was long ago settled under the Clean Air Act that “unless the cause of the 

[emissions] nonconformity is within the manufacturer’s control, an imposition of liability would 

be an unwarranted financial burden on the manufacturers, unrelated to the strategy of forcing 

technological progress.” Chrysler Corp. v. EPA, 631 F.2d 865, 888 (D.C. Cir. 1980). When the 

limits on EPA’s enforcement powers recognized in Chrysler were identified in EPA’s “Tier 

One” rulemaking in 1991, EPA was careful to limit the circumstances under which it would use 

a void-ab-initio sanction: 

While the existence of a violation will depend solely on whether the manufacturer achieves the 

applicable [fleet average] phase-in percentage, the Agency reserves the right to exercise 

enforcement discretion in the assessment of civil penalties for that violation. The EPA recognizes 

that a manufacturer, notwithstanding its best efforts, may fail to achieve the required phase-in 

percentage due to circumstances beyond its control .... Thus, in seeking civil penalties for a 

violation, EPA will exercise its enforcement discretion according to the circumstances 

surrounding a violation. In practice, EPA does not intend to bring an enforcement action against 

a manufacturer if both of the following circumstances exist: the shortfall in actual sales from the 

required percentage is less than or equal to ten percent of the required phase-in percentage, and 

there is no indication that the shortfall resulted from bad faith on the part of the manufacturer. 

[OAR-2009-0472-6952.1, p.56] 

56 Fed. Reg. 25,724, 25,729 (June 5, 1991) (emphasis added). The Alliance recommends that if 

EPA decides to proceed with void ab initio enforcement of the fleet average GHG requirement, 

EPA should add the “bad faith” element to the text of the rule, to ensure that the regulation 

reflects the statutory limits on EPA’s enforcement powers. This is necessary not only based on 

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EPA Response to Comments 

the limitations on those powers under the Clean Air Act recognized in Chrysler, but also to 

ensure consistency between the EPA and NHTSA regulatory programs. See Massachusetts, 

supra. [OAR-2009-0472-6952.1, p.56] 

NHTSA and EPA Enforcement and Penalty Assessment for Non-Compliance 

In the Preamble to the NPRM, EPA states it is proposing “a compliance program for the fleet 

average that utilizes CAFE program protocols with respect to testing, a certification procedure 

that operates in conjunction with the existing CAA Tier 2 certification procedures, and 

assessment of compliance with the in-use standards concurrent with existing EPA and 

manufacturer Tier 2 emission compliance testing programs.” In addition, EPA states that, with 

this proposal, the Agency is providing the regulated community with “numerous flexibilities to 

help achieve compliance.” 74 Fed. Reg. at 49,559. EPA requests comment on all aspects of the 

compliance program design, including comments about whether differences between the 

proposed compliance scheme for GHG and the existing compliance scheme for other regulated 

pollutants are appropriate. [OAR-2009-0472-6952.1, p.57] 

The Alliance agrees with EPA’s proposal to determine compliance with the fleet average CO2 

standards when the model year closes out, as is currently the protocol under EPA’s Tier 2 

program as well as under the current CAFE program. We also agree that submitting one data set 

in satisfaction of both CAFE and GHG requirements is preferred and therefore would not impose 

unreasonable burdens on automobile manufacturers beyond what is required under the CAFE 

program. [OAR-2009-0472-6952.1, pp.57-58] 

However, the Alliance has serious concerns about EPA’s approach to the assessment of penalties 

and other relief for non-compliance under the proposed Greenhouse Gas Standards for vehicles 

in Model Years 2012-2016. We recognize that EPA has authority under Section 207(c) of the 

Clean Air Act 12 (CAA) to require manufacturers to recall and repair vehicles if the Agency 

determines there are a substantial number of vehicles that, although properly maintained and 

used, do not conform to emissions standards. EPA also has authority under Section 205 to assess 

civil penalties of up to $37,500 per vehicle for the introduction and sale of uncertified vehicles. 

[OAR-2009-0472-6952.1, p.58] 

Yet, there are critical differences that the EPA has overlooked in its proposal. The CAA recall 

provision was intended to discourage, and provides remedies for, situations in which 

manufacturers produce nonconforming vehicles that emit pollution in excess of established 

standards. In the case of criteria pollutants, this could be due to the installation of defective or 

substandard after-treatment components such as catalysts or NOx traps. In the case of fleet 

average GHG standards, after-treatment components are not an issue. [OAR-2009-0472-6952.1, 

p.58] 

GHG emissions are primarily a function of fuel economy, which in turn is a function of vehicle 

size, vehicle design, and overall fleet mix. Compliance with fleet average GHG standards 

depends on many factors; in particular, whether or not the market responds to products in 

accordance with a manufacturer's expectations. The market, in turn, reacts to a host of forces 

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including economic conditions, fuel prices, style trends, and other factors. [OAR-2009-0472­

6952.1, p.58] 

Both NHTSA and EPA acknowledge that these standards will be a significant challenge for auto 

manufacturers and their suppliers since they will have “...to devote considerable engineering and 

development resources before 2012 laying the critical foundation for the widespread deployment 

of upgraded technology across a high percentage of the 2012– 2016 fleet...,” particularly in the 

current economic climate. 74 Fed. Reg. at 49,466. [OAR-2009-0472-6952.1, p.58] 

As EPA and NHTSA are well aware, the Alliance and its members are firmly committed to 

meeting the GHG and CAFE Standards proposed for MY 2012-16. The Alliance agrees that both 

NHTSA and EPA must assess the feasibility and practicability of their standards as they impact: 

emissions reductions; oil conservation; fuel savings by consumers; the auto industry; and, safety 

concerns. [OAR-2009-0472-6952.1, p.58] 

In its proposal, EPA states that “...penalties under the CAA are typically determined on a 

vehicle-specific basis by determining the number of a manufacturer’s highest emitting vehicles 

that caused the fleet average standard violation.” 74 Fed. Reg. at 49,483. Consistent with such an 

approach, the following scenario would be a real possibility if and when any manufacturer failed 

to meet EPA’s GHG Standards. [OAR-2009-0472-6952.1, pp.58-59] 

Once the manufacturer failed to comply with fleet average GHG standards, EPA would 

determine how many high-emitter vehicles need to be removed from the fleet to achieve 

compliance. This number of vehicles would be deemed 'nonconforming' (subject to recall) AND 

not covered by a certificate (subject to civil penalty). Manufacturers would be subject to both the 

expense of a recall and penalties of up to $37,500 per vehicle and possibly also injunctive relief. 

The potential penalty for 10,000 nonconforming vehicles (a relatively small number for a large 

manufacturer) would be more than $375 million. Yet this penalty scenario might result from 

factors outside of a manufacturer’s control, such as the market disruptions associated with a 

major recession and unforeseen changes in consumer demand and fuel prices. While EPA has 

considerable discretion in the assessment of penalties, it is unclear how or when they would 

choose to use it. Moreover, it is not clear how EPA could order a recall pursuant to CAA Section 

207(c) when there might be no repair remedy to correct nonconformity with a GHG standard. 

[OAR-2009-0472-6952.1, p.59] 

Subjecting manufacturers to liability for recalls and debilitating fines over fleet average GHG 

emissions does not square with the intent of Congress when it created the EPCA civil penalty 

provisions for violations of CAFE. The CAFE penalty for non-compliance is $5.50 for each tenth 

of a mpg that a manufacturer’s average fuel economy falls short of the standard for a given 

model year, multiplied by the total volume of those vehicles in the affected fleet, manufactured 

for that model year. 49 USC §32919(b). While the civil penalties assessed under EPCA certainly 

can be very significant, they are at least an order of magnitude less onerous than the potential 

CAA penalties for a similar noncompliance situation. Moreover, EPCA does not provide for 

vehicle recalls due to noncompliance with fuel economy standards, likely because Congress 

recognized the futility of such a remedy as applied to vehicle fuel economy. [OAR-2009-0472­

6952.1, p.59] 

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EPA Response to Comments 

To ensure that penalty assessment and enforcement authority are properly applied, EPA should 

establish a separate penalty policy that specifically addresses non-compliance with the GHG 

standards being proposed. At a minimum, the policy should provide for lower maximum 

penalties for noncompliance with fleet average GHG standards, in line with the penalties 

assessed under the CAFE program and it should also limit recall relief to egregious violations 

where a vehicle-specific remedy can be identified. [OAR-2009-0472-6952.1, p.59] 

EPA’s proposed methodology for determining the number of vehicles not in compliance is also 

problematic. EPA proposes to determine this value on the basis of the amount of non-offset 

debits and the fleet average greenhouse gas standard for the year in which the deficit failed to be 

offset. As noted in Section III.E.6 of the NPRM, this is a departure from “the Tier 2 approach of 

penalizing vehicles from the year in which the deficit was generated.” The Alliance also notes 

that this is inconsistent with the approach taken by California’s fleet average greenhouse gas 

regulation (13 CCR §1961.1 (b)(3)(A)). [OAR-2009-0472-6952.1, p.59] 

For example, if a manufacturer has a debit situation in the 2012 model year that is not covered by 

carry back credits from either fleet in the 2013, 2014, or 2015 model years, the 2012 model year 

standard should be used to determine the number of nonconforming vehicles. [OAR-2009-0472­

6952.1, p.59] 

Penalizing vehicles produced in the model year in which an earlier model year’s debit failed to 

be offset is not appropriate. The conditional nature of the certificate is for a specific test group in 

a specific model year; any non-conformance with a particular certificate should be assessed 

against that particular model year, not against a future model year’s certificate in which vehicles 

conform to the fleet average greenhouse gas standard. [OAR-2009-0472-6952.1, p.60] 

Assessing penalties against a later model year fleet’s vehicles by deeming them not covered by a 

certificate of conformity also causes issues in the determination of that fleet’s level of 

conformance. Removal of any vehicles from the fleet in the year in which a deficit failed to be 

offset will result in a modification of both that fleet’s standard and average emission level. This 

effect is compounded by EPA’s proposal to “designate as nonconforming those vehicles with the 

highest emission values first.” Due to the attribute-based standard, the removed vehicles are 

likely to be larger vehicles with less stringent standards, but not necessarily those with the 

highest difference between their performance and their individual target standard. In fact, the 

highest emission value vehicles may have emission levels below their target standard. Removal 

of these vehicles will result in a lowering of the fleet standard (fewer large vehicles) and a 

lessening of the fleet’s performance to the standard (fewer vehicles below their individual target 

standard). [OAR-2009-0472-6952.1, p.60] 

For the reasons outlined above, the Alliance recommends that the number of non-conforming 

vehicles be based on the number of debits not offset and the fleet standard from the year in which 

the debit was incurred. The vehicles that are furthest from their specific GHG targets should be 

designated as the ones not in conformance, for purposes of assessing any penalties. [OAR-2009­

0472-6952.1, p.60] 

Volvo Car Corporation: 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

The NPRM states that if a manufacturer fails to comply with GHG standards, EPA determines 

how many high-emitter vehicles need to be removed from the fleet to achieve compliance. This 

number of vehicles would be deemed 'nonconforming' and not covered by a certificate. 

Manufacturers would be subject to penalties of up to $37,500 per vehicle and injunctive relief, 

which would presumably include the authority to require recall under the Clean Air Act (CAA 

207). 

The CAA gives EPA a variety of powerful enforcement tools, which may be appropriate in cases 

where after treatment systems fail vehicles with high criteria pollutant emissions need to be taken 

off the road. However, such enforcement authorities are excessive in the case of a GHG fleet 

average, which is comparable to a fuel economy standard. The maximum CAFE penalty ever 

paid has been approximately $30 million. Under the EPA regime, the potential penalty for 

10,000 nonconforming vehicles (a relatively small number for a large manufacturer) would be 

$375 million. That plus the threat of injunction/recall provides EPA with excessive leverage in 

an enforcement context, especially when the most likely cause of non-compliance would be 

market shifts or economic disruptions. Injunction/recall is unlikely to ever be appropriate, since 

there is probably no nonconformance (or remedy) as to individual vehicles. Rather than 

employing its enforcement leverage/discretion on a case-by-case basis, EPA should establish a 

separate regulation or policy on GHG enforcement that provides for lower maximum penalties 

and limits injunctive relief to egregious violations. In the case of noncompliance with fleet 

average GHG standards, the policy should provide for penalties comparable to those under the 

CAFE program. The violations are comparable, and EPCA indicates Congress's intent as to an 

appropriate level of penalties for a noncompliance of this kind. [OAR-2009-0472-7168.1 p.6] 

Mitsubishi Motors R & D of America (MRDA): 

Mitsubishi Motors is concerned that the extremely strict EPA noncompliance penalties are not 

harmonized with the NHTSA CAFE noncompliance penalties. [OAR-2009-0472-7125.1, p.2] 

Both EPA and NHTSA have noncompliance penalties within their respective standards. 

However, there is a significant difference between the two penalty structures. NHTSA’s 

noncompliance penalty is $5.50 for each tenth of a mpg that a manufacturer’s average fuel 

economy falls short of the standard for a given model year, multiplied by the total volume of 

those vehicles in the affected fleet, manufactured for that model year. EPA’s GHG 

noncompliance penalties are based on vehicles exceeding criteria pollutant standards, which can 

be corrected through the replacement of defective or substandard parts. However, a GHG fleet 

average is highly dependent on vehicle size, weight, and overall fleet mix – none of which can be 

remedied with the replacement of parts. Market fluctuations could easily force a manufacturer 

into noncompliance and subject them to the maximum fine of $37,500 per vehicle, which is 

higher than the market price of most vehicles. These fines could bankrupt a smaller company, 

such as Mitsubishi Motors, for circumstances beyond their control and are not in the spirit of a 

harmonized National Program. [OAR-2009-0472-7125.1, p.4] 

Hyundai Motor Company: 

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EPA Response to Comments 

EPA discusses that potential remedies may be necessary in the event of failure to comply with 

the fleet average. Hyundai would like to suggest two potential options for addressing remedies 

First, it is possible that an in-use failure will be directly tied to the malfunction of a part or 

component. In many cases, we expect that the part malfunction will also have an impact on other 

criteria pollutants, and any remedial action would be based on the emissions impact of the part 

malfunction. Under this scenario, enforcement action should follow the existing processes for 

criteria pollutants. 

Second, EPA proposes to set an in-use standard at ten percent above the model-level CO2 

certification emission level, which would apply to all in-use testing, including the In-Use 

Verification Program, selective enforcement audits and EPA internal testing. EPA notes that 

exceeding the in-use standard will be deemed a failure (74 FR 49483). Hyundai would like to 

suggest that in the event that an in-use failure is confirmed, EPA should provide the 

manufacturer with the option to readjust the fleet average of the failing model year. This 

readjustment would necessitate recalculating compliance with the GHG program from that year 

forward and possibly utilizing and recalculating existing credits. [OAR-2009-0472-7231.1, p.7] 

Toyota Motor North America: 

As proposed, each Certificate of Conformity (certificate) would be conditional upon the 

manufacturer achieving CO2 fleet average standards. Failure to meet the standard, subject to 

application of appropriate credits, would require EPA to make a determination as to which 

vehicles within the test group caused the fleet average standard to be exceeded. Toyota has the 

following concerns: 

-First, the proposal could extend the conditional certificate period well beyond the end of the 

certification model year. In the unlikely event of noncompliance, a manufacturer would be 

subject to penalties and injunctive orders on an individual basis for sale of vehicles that are not 

covered by the certificate (up to $37,500 per vehicle). 

-Second, as NHTSA would also assess CAFE fines for the same noncompliance scenario, a 

manufacturer could face fines and penalties from two agencies concerning essentially the same 

noncompliance. [OAR-2009-0472-7291, p.32] 

In the event that EPA moves forward with penalties, then at a minimum, it should establish a 

penalty policy that articulates requisite procedures and appropriate fines for non-compliance in 

advance of program implementation. Such a transparent process would avoid potential inequities 

that could result if manufacturers are forced to enter into closed-door and confidential penalty 

negotiations with EPA. [OAR-2009-0472-7291, p.33] 

Natural Resources Defense Council: 

Compliance through Voluntary Fees Should Not Be Permitted 

EPA should not permit voluntary payments or fees in lieu of achieving actual GHG reductions to 

satisfy compliance with the GHG standards. Manufacturers found in noncompliance should be 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

subject to enforcement actions that include a combination of vehicle sales restrictions and 

financial penalties that are strong enough to encourage the aggressive pursuit and 

implementation of GHG reduction technologies to meet the standards. EPA should not adopt a 

civil penalty structure for compliance similar to that used for CAFE by NHTSA because it does 

not adequately force technology innovation across the industry. Throughout the existence of the 

CAFE program, several manufacturers have chosen to pay fines as a less expensive alternative to 

implementing the technologies necessary to meet fuel economy standards. As a result, the 

industry average fuel economy is lower than that expected from CAFE standards and oil savings 

are therefore reduced.[OAR-2009-0472-7141.1, p. 20] 

EPA has developed multiple mechanisms to ensure that manufacturers have sufficient lead time 

to deploy the necessary GHG reduction technologies to be in full compliance by MY 2016. EPA 

has proposed to phase out many of the mechanisms because they are meant to only be necessary 

for an industry transition to GHG standards structured under requirements of the CAA. We 

believe these mechanisms are more than adequate for attaining compliance. The key mechanisms 

include the Temporary Lead-time Allowance Alternative Standard, trading of credits coupled 

with a generous early credit proposal, inclusion of FFV credits for MY 2012-2015, transferring 

credits between car and truck fleets, and 3-year carry forward of deficits. EPA specifically 

included these mechanisms so that all manufacturers would have a pathway to comply without 

fees by the 2016 model year. Allowing a voluntary fee structure would certainly stall the 

deployment of pollution-reduction technologies. [OAR-2009-0472-7141.1, p. 20] 

California Air Resources Board: 

We disagree with the Alliance comment (in Document ID EPA-HQ-OAR- 2009-0472-6952.1) 

concerning penalties proposed by EPA under its Clean Air Act authority and believe EPA took a 

reasonable and proper approach. By moving ahead at a technology application level toward the 

2020 MY more ambitious than what a straight-line projection under ESIA/EPCA would require, 

EPA is arguably fulfilling its duty to address the separate public health and welfare goals not 

present in EISA/EPCA but required by the Clean Air Act, as discussed in Massachusetts et. al. v. 

EPA, Central Valley, and Green Mountain. However, to ensure that those greater greenhouse 

gas emission reductions come to fruition, EPA rightly eschewed simply aligning its penalty and 

enforcement policies with those under the current CAFE structure. [OAR-2009-0472­

7189.1, pp.13-4] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. See 

docket number OAR-2009-0472-7283, pp. 21-27] 

Honeywell Transportation Systems: 

The Clean Air Act authorizes EPA and NHTSA to collect fines and other penalties for failure to 

comply with the fleet average GHG and fuel economy standards. Honeywell believes that any 

fines imposed and collected under the CAFE & GHG standards should be appropriated to the 

development of vehicle technologies that continue to improve fuel economy in the future. The 

direct application of the penalties collected will support the underlying legislative policy and 

drive innovation. [OAR-2009-0472-7165.1, p.6] 

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EPA Response to Comments 

National Automobile Dealers Association (NADA): 

The National Program should incorporate NHTSA’s traditional CAFE enforcement tools, 

including its civil penalty policy, it makes no sense to apply EPA’s traditional vehicle-based 

compliance tools to a fleet average program of this sort. Noncompliance scenarios such as those 

resulting from a sudden drops in fuel prices are no place for EPA’s recall, de-certification (void 

ab initio),/ and severe per vehicle penalty tools. An attempt to shoehorn EPA’s mobile source 

enforcement strategies into the National Program would only serve to prove NADA’s contention 

that the best National Program would be one where EPA effectively adopted NHTSA’s CAFE 

standards by reference, without attempting to establish duplicative tailpipe GHG standards. 

[OAR-2009-0472-7182.1, p.9] 

Fisker Automotive, Inc.: 

Fisker Automotive recommends higher penalties overall. We recommend a $10 penalty per 

annual gallon of gasoline consumed beyond the baseline. For a 15 year life, that represents a 

$0.67 penalty per excess gallon consumed. [OAR-2009-0472-8732.1, p.4] 

The regulation currently reads, 

“The penalty, as adjusted for inflation by law, is $5.50 for each tenth of a mpg that a 

manufacturer’s average fuel economy falls short of the standard for a given model year 

multiplied by the total volume of those vehicles in the affected fleet (i.e., import or domestic 

passenger car, or light truck), manufactured for that model year.' [OAR-2009-0472-8732.1, pp.4­

5] 

Per this initial proposed regulation, the most consuming new vehicle sold today (a supercar) 

would only have a penalty of about $1,100. For the regulation to support real progress, penalties 

must be much larger—on the order of the costs to improve fuel economy (through electrification, 

light-weighting, etc.). [OAR-2009-0472-8732.1, p.5] 

This penalty model represents the maximum penalty an automaker can incur for failure to meet 

fleet fuel economy requirements. Unless individual automakers and the US light duty vehicle 

fleet as a whole both consistently fail to meet fuel economy targets, no automaker will need to 

pay these maximum penalties. Automakers will submit carry back plans if they miss the mark, 

allowing “the following three model years to earn enough credits to make up for the deficit.” 

Furthermore, automakers will practice the averaging, banking, and trading methods allowed to 

reduce their overall costs. As the US LDV fleet as a whole increases its fuel economy, the 

market will allow individual automaker penalties to fall in step—that is, supply of credits will 

increase and demand will decrease. This aligns well with regulatory goals. [OAR-2009-0472­

8732.1, p.5] 

People's Republic of China: 

We note that, it is the responsibility for EPA to protect public health and benefit, which is totally 

independent of the responsibility of NHTSA improving the energy efficiency. Given that the fuel 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

consumption of vehicle is calculated directly from the emission of CO2, as to the behavior that 

violates the emission standard of the greenhouse gas (GHG) and Corporate Average Fuel 

Economy (CAFE) standard at the same time, we think it is unreasonable that EPA and NHTSA 

impose punishment respectively. Such kind of behavior is suggested to be punished only once by 

one authority of the United States. [OAR-2009-0472-11269, p.3] 

EPA Response: 

Fleet Average Penalties 

Manufacturer comments expressed concern about potential enforcement action for violations of 

the greenhouse gas standards, and the circumstances under which EPA would impose penalties. 

Manufacturers also suggested that EPA should adopt a penalty structure similar to the one in 

place under CAFE. The California Air Resources Board (CARB) disagreed with the automobile 

manufacturer comments and expressed their belief that “EPA took a reasonable and proper 

approach.” 

The CAA specifies different civil penalty provisions for noncompliance than EPCA does, 

providing for a range of potential penalties that are based on taking the relevant circumstances 

and factors into consideration, as compared to the specified penalty amount under CAFE. This 

structure has worked well in the past, without predefined penalties under the CAA, and EPA 

expects it will also work well here. Manufacturers raised concern over noncompliance driven by 

short-term market fluctuations, but the ability of manufacturers to generate credits or to rely on 

future credit generation means short term market fluctuations can be addressed without leading 

to noncompliance. In addition, EPA recognizes that it may be appropriate, should a 

manufacturer fail to comply with the NHTSA fuel economy standards as well as the CO2 

standard in a case arising out of the same facts and circumstances, to take into account the civil 

penalties that NHTSA has assessed for violations of the CAFE standards when determining the 

appropriate penalty amount for violations of the CO2 emissions standards. This approach is 

consistent with EPA’s broad discretion to consider “such other matters as justice may require,” 

and will allow EPA to exercise its discretion to prevent injustice and ensure that penalties for 

violations of the CO2 rule are assessed in a fair and reasonable manner. 

The statutory penalty factor that allows EPA to consider “such other matters as justice may 

require” vests EPA with broad discretion to reduce the penalty when other adjustment factors 

prove insufficient or inappropriate to achieve justice.33. The underlying principle of this penalty 

factor is to operate as a safety mechanism when necessary to prevent injustice.34 

In other environmental statutes, Congress has specifically required EPA to consider penalties 

assessed by other government agencies where violations arise from the same set of facts. For 

instance, section 311(b)(8) of the Clean Water Act, 33 U.S.C. 1321(b)(8) authorizes EPA to 

consider any other penalty for the same incident when determining the appropriate Clean Water 

Act penalty. Likewise, section 113(e) of the CAA authorizes EPA to consider "payment by the 

33 In re Spang & Co., 6 E.A.D. 226, 249 (EAB 1995) 34 B.J. Carney Industries, 7 E.A.D. 171, 232, n. 82 (EAB 1997). 

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EPA Response to Comments 

violator of penalties previously assessed for the same violation" when assessing penalties for 

certain violations of Title I of the Act. 

Method of Determining Non-Complying Vehicles 

EPA received comments from the Alliance, regarding the method of determining non-complying 

vehicles. The Alliance indicated that “EPA’s proposed methodology for determining the number 

of vehicles not in compliance is also problematic” and “inconsistent with the approach taken by 

California’s fleet average greenhouse gas regulation.” 

EPA proposed that manufacturers will report to EPA their fleet average and fleet average 

standard for a given model year (reporting separately for each of the car and truck averaging 

sets), the credits or deficits generated in the current year, the balance of credit balances or 

deficits (taking into account banked credits, deficit carry-forward, etc., and whether they were in 

compliance with the fleet average standard under the terms of the regulations. EPA will review 

the annual reports, figures, and calculations submitted by the manufacturer to determine any 

nonconformance. 

Each certificate, required prior to introduction into commerce, will be conditioned upon the 

manufacturer attaining the CO2 fleet average standard. If a manufacturer fails to meet this 

condition and has not generated or purchased enough credits to cover the fleet average 

exceedance following the three year deficit carry-forward, then EPA will review the 

manufacturer's production for the model year in which the deficit originated and designate which 

vehicles caused the fleet average standard to be exceeded. 

EPA proposed that the vehicles that would be identified as nonconforming would come from the 

most recent model year, and some comments pointed out that this was inconsistent with how the 

NLEV and Tier 2 programs were structured. EPA agrees with these comments and is finalizing 

an enforcement structure that is essentially identical to that for existing programs. EPA would 

designate as nonconforming those vehicles with the highest emission values first, continuing 

until a number of vehicles equal to the calculated number of non-complying vehicles as 

determined above is reached. Those vehicles would be considered to be not covered by the 

certificates of conformity covering those model types. In a test group where only a portion of 

vehicles would be deemed nonconforming, EPA would determine the actual nonconforming 

vehicles by counting backwards from the last vehicle produced in that model type. A 

manufacturer would be subject to penalties and injunctive orders on an individual vehicle basis 

for sale of vehicles not covered by a certificate. This is the same general mechanism used for the 

National LEV and Tier 2 corporate average standards. 

EPA does not agree that it is more appropriate, as Ford suggests, to designate the vehicles not in 

conformance as those that are furthest from their specific GHG target values. The methodology 

EPA proposed has a very specific purpose: to penalize a sufficient number of vehicles such that 

the GHG deficit is “offset” by vehicles subject to enforcement action. For example, if the deficit 

subject to enforcement action is 10,000 grams/mile of CO2 in model year 2016, and the 

manufacturer’s fleet average standard in that year was 250 grams/mile, the number of vehicles to 

be penalized would be 10,000 ÷ 250, or 40 vehicles. Since the highest emitters from that model 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

year will, by definition, be above the average of 250 grams/mile, then penalizing those will 

guarantee that at least 10,000 grams/mile will be addressed by the penalty. (E.g., if those highest 

emitters emit 300 grams/mile, then penalizing 40 of them will “offset” 40 × 300, or 12,000 

grams/mile.) Using Ford’s suggested method will not guarantee that the appropriate excess 

emissions will be addressed by the penalty. For example, it is possible that those vehicles that 

are farthest from their target values are still relatively low-emission vehicles. If EPA chose to 

use Ford’s methodology, then it’s possible that vehicles that emit 240 grams/mile could be the 

farthest from their target value and thus selected to be penalized, but if EPA penalized 40 of 

those vehicles only 9600 grams/mile (40 × 240) of the deficit would be offset. This would be a 

failure of the fundamental intent of the methodology to remove certificates such that the deficit is 

fully accounted for, and thus EPA rejects Ford’s suggestion. 

Recall 

The Association of International Automobile Manufacturers (AIAM) recommended that EPA 

should not adopt recall as an enforcement mechanism for failure to meet both the in-use (model 

type) GHG emission standard and the corporate average GHG emission standard. Regarding 

noncompliance with the corporate average GHG standard, AIAM believes that the Clean Air Act 

gives EPA the discretion to forgo ordering a recall where the failure to meet an emission 

standard is the result of fleet imbalance and remedy the nonconformity in ways that do not 

include recalling its fleet. Fleet imbalance could occur due to factors which may be outside of a 

manufacturer’s control, e.g. where the manufacturer sells more vehicles with CO2 levels above 

the footprint target than they sell vehicles with CO2 levels below the footprint target for the 

respective models). AIAM, thus urged “EPA to specify those limited circumstances under which 

recall would be appropriate for noncompliance with its greenhouse gas emissions requirements.” 

Hyundai Motor Company commented that if an in-use failure can be directly tied to the 

malfunction of a part or component, that enforcement action should follow the existing processes 

for criteria pollutants (e.g. the recall process). Hyundai also suggested that “in the event that an 

in-use failure is confirmed, EPA should provide the manufacturer with the option to readjust the 

fleet average of the failing model year” (i.e. to adjust the credit or debit balance accordingly to 

account for the failing in-use vehicles). 

EPA agrees with AIAM that recall is not a good mechanism for dealing with noncompliance of 

the corporate average standard. However, recall can be an effective tool for enforcement of the 

in-use standards. There are a number of problems that can occur to a specific vehicle model that 

could cause noncompliance with the appropriate in-use standard and that could be repaired, such 

as a defect in a part or component, a misbuild, or an improperly functioning new technology. 

Since these types of problems are within a manufacturer’s control, unlike a fleet imbalance due 

to unanticipated sales fluctuations, a recall would be an appropriate and effective mechanism for 

addressing noncompliance with the in-use standard. EPA agrees with Hyundai’s comment that if 

an in-use failure can be directly tied to the malfunction of a part or component, the appropriate 

enforcement action should be a recall following the recall process for criteria pollutants. EPA 

would also argue that recall would be an appropriate enforcement tool for misbuild situations 

where an incorrect part, component. Software, or calibration was installed in a vehicle resulting 

in a failure of the in-use standard. 

5-361 
EPA Response to Comments 

Finally, EPA disagrees with Hyundai’s suggestion that manufacturers be given the option to 

readjust their fleet average to account for failing the vehicle model in lieu of a recall action. This 

would be inconsistent with EPA’s other rules. For example, in the Tier 2 program, if a 

manufacturer had a test group that were to fail the Bin 5 emission standard, it would be required 

to recall the vehicles and fix the problem that caused the noncompliance. They would not be 

allowed to retroactively reassign the vehicle to a higher bin and recalculate their fleet average 

(which is fundamentally what Hyundai is suggesting). The purpose of a recall is to fix a problem 

with a vehicle that causes an emission noncompliance. This means a defective part or an 

incorrect part or calibration, not a fleet imbalance due to unanticipated sales fluctuations. 

Allowing a vehicle model that exceeded the in-use standard as a result of a fixable problem to 

continue to operate in the field would contradict the purpose of the in-use standard. Therefore, 

the suggestion of readjusting the fleet average in lieu of recall is not an appropriate option and 

was not considered by EPA. 

5.10.6 Prohibited Acts in the CAA 

Organization: No comments received 

5.10.7. Other Certification Issues 

Organization: Ford Motor Company 

Honda Motor Company 

Ferrari S.p.a 

Association of International Automobile Manufacturers (AIAM) 

Alliance of Automobile Manufacturers (Alliance) 

NGVAmerica 

State of New Jersey 

Automotive Aftermarket Industry Association (AAIA); et.al 

New York State Department of Environmental Conservation 

Comment: 

Ford Motor Company: 

In addition, Ford agrees that additional GHG on-board diagnostic (OBD) monitoring is not 

appropriate at this time. OBD was envisioned as a means of monitoring devices affecting criteria 

pollutants that are principally controlled through engine controls and after-treatment devices. 

CO2 performance, on the other hand, is influenced by a wide variety of parameters. Malfunctions 

that impact engine efficiency, such as virtually all faults that affect fuel system control, EGR 

control, variable valve timing control, engine cooling system operation, cylinder misfire, etc. are 

already monitored by OBD. [OAR-2009-0472-7082.1, p. 17] 

Honda Motor Company: 

In an existing regulation EPA requires PHEVs to be equipped with a “useful life indicator for the 

battery” when the range deteriorates to less than 75 percent of its initial range. On the other hand, 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

in the NPRM, EPA states: “EPA does not plan to require CO2 emissions as one of the applicable 

standards required for the OBD monitoring threshold.” We agree that more research should be 

done regarding the need and feasibility of OBD monitoring, yet the PHEV useful life indicator 

seems to be a kind of OBD monitoring. As such, Honda believes that EPA should take this 

opportunity to clarify its intent with respect to the PHEV useful life indicator. [NHTSA-2009­

0059-0095.1, p.10-11] 

Ferrari S.p.a: 

We support the proposal that at this time EPA does not require CO2 emissions as one of the 

applicable standards required for the OBD monitoring threshold. It is necessary to gain 

knowledge regarding the deterioration, if any, of the systems and devices that affect the fuel 

economy and the CO2 emissions to define, if strictly necessary, specific requirements for the 

OBD system, working closely with CARB. No additional and unnecessary burdens should be 

adopted for the on-board diagnostic system. [OAR-2009-0472-7214.1 p.5] 

We agree with EPA that is proposing to retain its current high altitude regulations so 

manufacturers would not normally be required to submit vehicle CO2 test data for high altitude. 

Instead, they would submit an engineering evaluation indicating that common calibration 

approaches will be utilized at high altitude, and therefore the compliance is assured also in these 

conditions. [OAR-2009-0472-7214.1 p.5] 

Association of International Automobile Manufacturers (AIAM): 

It would be premature for EPA to adopt a requirement for monitoring carbon dioxide emissions 

at this time. As EPA observes, it is not clear yet whether such monitoring is feasible. See 

preamble at 49574. [OAR-2009-0472-7123.1, p.11] 

Alliance of Automobile Manufacturers (Alliance): 

OBD for CO2, N2O and CH4 (Proposed regulations in 40 C.F.R. 86.1806-05) 

EPA has proposed to eliminate CO2 as a consideration for OBD monitoring. [OAR-2009-0472­

6952.1, p.52] 

Recommendation: 

We agree with EPA’s decision to eliminate CO2 as a consideration for OBD monitoring. We 

encourage EPA to consider eliminating CH4 and N2O from OBD monitoring as well. Adding 

testing for CH4 and N2O would significantly increase the OBD development burden, without 

significant benefit, since any malfunctions that increase CH4 and N2O emissions will more than 

likely be caught by current OBD systems. (This issue could also be resolved by EPA deciding to 

eliminate the CH4 and N2O standards as mentioned above in issue 1 Emission Standards.) [OAR2009-0472-6952.1, p.52] 

NGVAmerica: 

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EPA Response to Comments 

According to EPA’s proposal, the new regulations, including the proposed methane cap, would 

not cover small businesses that produce aftermarket alternative fuel systems. However, the 

regulations would cover large businesses that produce aftermarket systems. We believe that all 

aftermarket conversion system manufacturers should be exempt. As currently proposed, the 

regulations could actually discourage some large businesses from continuing to offer aftermarket 

conversion systems with the result that only small businesses will continue to do so. [OAR-2009­

0472-11310, p. 3] 

State of New Jersey: 

The USEPA indicates in the proposal that it plans to evaluate on-board diagnostic (OBD) 

monitoring technology with regard to monitoring greenhouse gas related emissions systems and 

components, and use that evaluation to make a determination as to whether or not to include 

greenhouse gas related emissions components as part of the OBD requirements in a future 

regulatory action. The Department supports the inclusion of greenhouse gas emissions-related 

components as part of the OBD requirements. [OAR-2009-0472-7109.1, p.10] 

Automotive Aftermarket Industry Association (AAIA): 

We are also particularly concerned that since the Agency is proposing not to expand the systems 

monitored by the OBD computer, it will be uncertain to the car companies and the repair 

industry whether information needed to repair and maintain the technologies needed to meet this 

proposal will be shared with the independent aftermarket. If past history is any indication, the 

vehicle manufacturers, for competitive and other reasons, will be very reluctant to share this 

information absent government guidelines. [OAR-2009-0472-7057.1, p.3] 

We are concerned that the current service information rule may be limited to parts and systems 

covered by the OBD system. If EPA does not require monitoring of these additional systems 

which affect greenhouse gas emissions by the OBD system, this rule might be the only 

proceeding that will consider access to service information for these systems. Therefore, the 

aftermarket strongly urges that the Agency include in this rulemaking provisions so that 

“emissions-related information” which may be accessed for service and repair would include 

information for systems on vehicles that impact global warming emissions whether or not they 

are monitored by the OBD computer. [OAR-2009-0472-7057.1, pp.3-4] 

New York State Department of Environmental Conservation: 

On Board Diagnostics 

We support EPA's decision to not require OBD systems to monitor for CO2 emissions. As EPA 

notes, there should be relatively little deterioration. Additionally, failures that would lead to 

major CO2 emission increases would most likely be accompanied by operating problems that 

would require repair. Increased fuel costs would also encourage repair. Conditions which trigger 

the Malfunction Indicator Lamp (MIL) too easily could reduce the influence of the MIL light on 

consumer behavior, eroding the real emissions reductions currently attained when repairs are 

made based on OBD warnings. [OAR-2009-0472-7454, p.4] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Automotive Aftermarket Industry Association (AAIA) 

While not mentioned in this proposal, vehicle maintenance is extremely important to improving 

fuel economy and reducing greenhouse gas emissions for the nation’s vehicle fleet. This 

importance is supported by information available on the Department of Energy website, 

www.fueleconomy.gov. [OAR-2009-0472-7057.1, p.1] 

According to the DOE website: 

Fixing a car that is noticeably out of tune or has failed an emissions test can improve its gas 

mileage by an average of 4 percent, though results vary based on the kind of repair and how well 

it is done. Fixing a serious maintenance problem, such as a faulty oxygen sensor, can improve 

your mileage by as much as 40 percent. [OAR-2009-0472-7057.1, p.1] 

The site further states that keeping tires inflated to proper pressure can improve gas mileage by 

around 3.3 percent and using the proper oil for a vehicle can provide a fuel economy benefit of 

1-2 percent. [OAR-2009-0472-7057.1, p.1] 

Based on these numbers, we estimate (see attachment) that if all car owners regularly took the 

above actions to maintain their vehicle, the nation would save 12 billion gallons of gasoline per 

year. The reductions in petroleum use would translate into a savings to car owners at the pump of 

$30 billion per year and a reduction of 116 million tons of CO2 equivalent every year. [OAR2009-0472-7057.1, p.2] 

The estimate for potential greenhouse gas emission reductions from proper maintenance 

compares favorably with EPA estimates that this proposal will result in approximately 950 

million metric tons of ton of carbon dioxide equivalent emissions reductions over the life time of 

vehicles sold in model years 2012 through 2016. In fact, absent good maintenance, it is very 

unlikely that EPA will realize the global warming emissions reduction goals of this proposal. 

[OAR-2009-0472-7057.1, p.2] 

Please be assured that the independent vehicle repair industry is committed to working with EPA 

and the Department of Transportation to ensure that car owners have access to the repair services 

necessary to ensure that their vehicles operate at their peak efficiency, thus reducing global 

warming emissions and depletion of our energy resources. However, unless action is taken by 

EPA as part of this rulemaking, the aftermarket is concerned that our industry will not have 

access to the information, tools and software needed to work on the technology that will be 

utilized by the manufacturers to meet the standards developed in this proposal. [OAR-2009­

0472-7057.1, p.2] 

There is little doubt that the changes to vehicle technology that will be required by the September 

28, 2009 proposed rule will be extensive. While it is impossible to predict the extent of 

technology changes that will occur as a direct result of this rule, it is likely that air conditioning 

systems, braking, lubricants, turbochargers, and fuel injection systems will all be affected. These 

changes will mean that the information needed to ensure that these systems are maintained 

properly also will need to be available to technicians that will maintain them. Of course, many of 

5-365 
 

 

EPA Response to Comments 

the systems that impact fuel economy such as the oxygen sensor and catalytic converter are 

already covered by EPA’s service information availability rules. However, many changes such as 

those impacting braking and air conditioning likely are not covered. [OAR-2009-0472-7057.1, 

p.3] 

In addition, tire pressure sensors while required by the National Highway Traffic Administration 

(NHTSA) for safety reasons, also play an important role in ensuring that vehicles are operating at 

peak fuel efficiently. As our comments indicated at the outset, an improperly inflated tire can 

mean a fuel efficiency loss of 3.3 percent. Yet, there is no requirement for car companies to 

make available to the independent service industry any information necessary to ensure that the 

tire pressure sensor is working properly after a tire is changed or repaired. [OAR-2009-0472­

7057.1, p.3] 

If the Agency is planning to revise the definition of emissions to include greenhouse gas 

emissions, we believe that EPA is also obligated to ensure that the service information rule 

covers all vehicle systems that impact emissions of greenhouse gases. In developing this rule, 

EPA must look not only at new technologies that will be utilized on internal combustion engines, 

but also at hybrid systems where items such as regenerative braking might not have been 

included under the current service information rule, but are essential to ensuring that the hybrid 

vehicles operate properly. [OAR-2009-0472-7057.1, p.3] 

EPA Response: 

Onboard Diagnostic (OBD) Requirements 

The light-duty on-board diagnostics (OBD) regulations require manufacturers to detect and 

identify malfunctions in all monitored emission-related powertrain systems or components.35 

Specifically, the OBD system is required to monitor catalysts, oxygen sensors, engine misfire, 

evaporative system leaks, and any other emission control systems directly intended to control 

emissions, such as exhaust gas recirculation (EGR), secondary air, and fuel control systems. The 

monitoring threshold for all of these systems or components is 1.5 times the applicable standards, 

which typically include NMHC, CO, NOX, and PM. EPA did not propose that CO2 emissions 

would become one of the applicable standards required to be monitored by the OBD system. 

EPA did not propose CO2 become an applicable standard for OBD because it was confident that 

many of the emission-related systems and components currently monitored would effectively 

catch any malfunctions related to CO2 emissions. For example, malfunctions resulting from 

engine misfire, oxygen sensors, the EGR system, the secondary air system, and the fuel control 

system would all have an impact on CO2 emissions. Thus, repairs made to any of these systems 

or components should also result in an improvement in CO2 emissions. In addition, EPA did not 

have data on the feasibility or effectiveness of monitoring various emission systems and 

components for CO2 emissions and did not believe that it would be prudent to include CO2 

emissions without such information. 

EPA did not address whether N2O or CH4 emissions should become applicable standards for 

OBD monitoring in the proposal. Several manufacturers felt that EPA’s silence on this issue 

35 40 CFR 86.1806-04 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

implied that EPA was proposing that N2O and CH4 emissions become applicable OBD standards. 

They commented that EPA should not include them as part of OBD. They felt that adding N2O 

and CH4 would significantly increase OBD development burden, without significant benefit, 

since any malfunctions that increase N2O and CH4 would likely be caught by current OBD 

system designs. EPA agrees with the manufacturer’s comments on including N2O and CH4 as 

applicable standards. Therefore, at this time, EPA is not requiring CO2, N2O, and CH4 emissions 

as one of the applicable standards required for the OBD monitoring threshold. EPA plans to 

evaluate OBD monitoring technology, with regard to monitoring these GHG emissions-related 

systems and components, and may choose to propose to include CO2, N2O, and CH4 emissions as 

part of the OBD requirements in a future regulatory action. 

Plug-in Hybrid Useful Life Indicator for the Battery 

Honda commented that existing EPA regulations (40 CFR 86.1806-05(b)(8)(ii)) “require plug-in 

hybrid vehicles (PHEVs) to be equipped with a “useful life indicator for the battery” when the 

range deteriorates to less than 75 percent of its initial range. On the other hand, in the NPRM, 

EPA states: “EPA does not plan to require CO2 emissions as one of the applicable standards 

required for the OBD monitoring threshold.” Honda recommended that “EPA should take this 

opportunity to clarify its intent with respect to the PHEV useful life indicator.” 

EPA believes that it is too early in the development of PHEVs to address this issue at this time. 

We agree to work with the Industry and interested stakeholders (including the California Air 

Resources Board) to assess the need for this requirement. Should the need for such a device 

change, regulation changes may be warranted. 

Service Information Availability 

The GHG rule does not change EPA’s service information regulations requiring manufacturers to 

make available any and all emissions-related information. EPA will continue to monitor the 

emissions-related service information that manufacturers make available to meet existing 

regulations. As part of EPA’s continuing monitoring, the agency would consider whether any 

additional service information requirements are necessary as an indirect consequence of the 

promulgation of GHG standards 

5.10.8. Miscellaneous Revisions to Existing Regulations 

Organization: Alliance of Automobile Manufacturers (Alliance) 

Comment: 

Alliance of Automobile Manufacturers (Alliance): 

Fuel Economy (FE) Data (Proposed regulations in 40 C.F.R. 600.113-08) 

EPA has proposed to calculate FE based on deteriorated emission data. This proposal creates 

several issues: 

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EPA Response to Comments 

• This is a fundamental change to the way FE has been calculated. All prior FE calculations and 

standards (gas guzzler, CAFE) have been based on emission data that has not been deteriorated. 

• FE calculations include the following constituents depending on the type of fuel that is used; 

total hydrocarbons (HC), carbon monoxide (CO), methane (CH4), non-methane hydrocarbons 

(NMHC), methanol (CH3OH), formaldehyde (HCHO), ethanol (C2H5OH) and acetaldehyde 

(C2H4O). While some of these constituents currently have useful life standards and already have 

deterioration factors, some do not. Therefore, manufacturers may be required to rerun all forms 

of durability vehicle testing in order to establish DFs for these additional constituents. 

• The use of deteriorated emission data contradicts the requirement to downward adjust FE 

values for test vehicles whose system miles have exceeded 6200 miles. 

• This change will require significant changes to existing computer programs that were designed 

to calculate FE via the traditional method. [OAR-2009-0472-6952.1, pp.49-50] 

Recommendation: 

Because the current emission durability programs were designed to predict traditional emission 

deterioration and not the effects that vehicle aging may have on FE, the use of deteriorated 

emission data in the FE calculation can lead to false and/or inconsistent results based on the 

manufacturer’s choice of durability program. Requiring the use of deteriorated data will penalize 

those manufacturers who choose to utilize a durability program that develops DFs versus “aged 

component” testing. When testing with aged components, the only components that are being 

aged are those that affect the current criteria pollutants. The dynamometer load on the vehicle 

does not change whether the vehicle is being tested with 4K or 120K aged components; 

therefore, the amount of fuel consumed during the test, theoretically, will not change. Because 

the same amount of fuel is being consumed, the increase in HC and CO emissions due to the use 

of deteriorated emission components is offset by a reduction in the emissions of CO2. So, with 

aged component testing the FE result will be the same as the result that is achieved on a low 

mileage test. On the other hand, if a manufacturer utilizes DFs, the HC and CO values will be 

deteriorated without a corresponding decrease in CO2, thereby penalizing the FE result. [OAR2009-0472-6952.1, p.50] 

Furthermore, EPA is on record stating that there is no reason to believe that CO2 emissions will 

show an increase as the vehicle ages as would be expected with criteria pollutants. Therefore, 

requiring manufacturers to measure and report in-use CO2 emissions that can be predicted from 

measurements made at vehicle certification would add unnecessary burden that offered little or 

no additional value. [OAR-2009-0472-6952.1, p.50] 

In order to avoid these issues, the Alliance recommends that EPA remove the requirement to use 

deteriorated emission data in the carbon balance equations and retain the current method for 

calculating FE. [OAR-2009-0472-6952.1, p.50] 

EPA Response: 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Use of Deterioration Factors in Fuel Economy Calculations 

EPA proposed to calculate CREE emissions based on deteriorated emissions data for the 

manufacturer’s end-of-year CREE emission level and also to determine the in-use CREE 

emission standard which is applicable to each manufacturer’s specific models. EPA did not 

intend to propose to calculate fuel economy based on deteriorated emissions data, however EPA 

proposed regulations (74 FR 49772, September 28, 2009) suggested otherwise, as follows: 

(g) Calculate separate FTP, highway, US06, SC03 and Cold 

temperature FTP fuel economy from the grams/mile values for total HC, CO, 

CO2 and, where applicable, CH3OH, C2H5OH, C2H4O, HCHO, NMHC and 

CH4, and the test fuel's specific gravity, carbon weight fraction, net heating 

value, and additionally for natural gas, the test fuel's composition. 

(1) If the emission values (obtained per paragraph (a) through (e) of 

this section, as applicable) were obtained from testing with aged exhaust 

emission control components as allowed under 86.1823-01, then these test 

values shall be used in the calculations of this section. 

(2) If the emission values (obtained per paragraph (a) through (e) of 

this section, as applicable) were not obtained from testing with aged exhaust 

emission control components as allowed under 86.1823-01, then these test 

values shall be adjusted by the appropriate deterioration factor determined 

according to 86.1823-01 before being used in the calculations of this section. 

[Emphasis added] 

The Alliance recommended that “EPA remove the requirement to use deteriorated emission data 

in the carbon balance equations and retain the current method for calculating FE.” 

EPA has corrected this oversight in the final rule. 

5.10.9. Warranty, Defect Reporting, and Other Emission-related Components Provisions 

Organization: Alliance of Automobile Manufacturers (Alliance) 

Toyota Motor North America 

State of New Jersey 

Hyde, James (citizen) 

Comment: 

Alliance of Automobile Manufacturers: 

Warranty Requirements 

Emission warranty requirements are not appropriate for mobile air conditioners under the 

proposed rule, since in-use performance of the MAC system at levels comparable to a new 

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EPA Response to Comments 

vehicle is not needed to achieve the emission levels targeted by EPA. [OAR-2009-0472-6952.1, 

p.28] 

Warranty requirements were established for tailpipe pollutants, such as CO and NOx, because 

emissions of those pollutants would rise significantly if the pollution control devices, such as 

catalytic converters, fail. This would typically not be the case for MAC components. First, 

consider the case of indirect emissions from fuel consumed to power the MAC. In the vast 

majority of MAC failure modes, the system stops cooling and ceases operation -- either because 

the critical moving parts stop moving or because the system is switched off -- thereby actually 

reducing the indirect CO2 emissions. [OAR-2009-0472-6952.1, p.28] 

Emission warranties should not be required in relation to the indirect MAC emissions. The most 

significant item in EPA’s proposed warranty coverage, the compressor, can cost over $1,000 to 

replace. It seems paradoxical and disproportionate to impose such high costs in an emissions 

recall scenario to replace this component, and thereby actually increase indirect emissions. 

Although manufacturer warranties may typically already be longer than the two-year period 

proposed by EPA in this NPRM, in principle there is no sound basis for emission warranty 

coverage to safeguard indirect emission levels, since indirect emissions go down when the 

system fails. Finally, it is worth noting that proper functioning of these parts is not actually 

required to achieve the emissions levels set by EPA. [OAR-2009-0472-6952.1, p.28] 

Regarding direct emissions of refrigerant, there is only a negligible environmental impact if 

refrigerants below a GWP of 150 are released from the system, even if the entire charge, 

typically between 1-2 pounds, is released. Therefore, emission warranty coverage of joints, 

hoses, seals, etc. is certainly not needed to protect the environmental gains from application of 

low-GWP refrigerants. While the ultimate costs of the new low-GWP refrigerants are not known 

with certainty, they are expected to be at a level that would severely discourage motorists from 

repeatedly recharging a system with significant unrepaired leaks (e.g., any cost of over $30 per 

pound). Therefore, there is no emission-based reason to mandate warranty coverage to prevent 

leaks on low-GWP systems, and the potential costs of an emission recall would be 

disproportionate to any environmental impact of leakage of these refrigerants. [OAR-2009-0472­

6952.1, p.28] 

Any emission warranty requirements should specifically exclude emission warranty coverage for 

systems using a refrigerant with a GWP below 150. This is consistent with EPA’s position that 

no emissions warranty is required for zero emissions vehicles. [OAR-2009-0472-6952.1, p.28] 

The sole remaining MAC environmental impact would be from refrigerant leakage in the current 

R-134a systems. Given the prospect for fairly rapid adoption of the low-GWP refrigerants in new 

vehicles during the time frame of this regulation, this would appear to be a very small basis on 

which to create an entirely new area of emissions warranty coverage and all the associated 

elements of an in-use program for air conditioners. EPA should not create a program of warranty 

coverage for MAC components in pursuit of such a small and temporary emissions impact. 

[OAR-2009-0472-6952.1, p.28] 

Toyota: 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Air Conditioning systems and related components have not previously been covered under the 

CAA emission warranty provisions. In recognition that the proposed A/C related CO2 emission 

standards are dependent upon the proper functioning of components on the A/C system, EPA 

proposes that the components of these systems be included under the CAA emission warranty 

provisions, with a warranty of 2 years / 24,000 miles. [OAR-2009-0472-7291, p.31] 

Overall, Toyota believes that emission warranty requirements are not appropriate for mobile air 

conditioners under the proposed rule. Emission warranty requirements were established for 

tailpipe pollutants because emissions of those pollutants would rise significantly if the pollution 

control devices, such as catalytic converters would fail. This is not the case for MAC systems 

since in-use performance of the MAC system at levels comparable to that of a new vehicle is not 

needed to achieve the emission levels targeted by EPA. Additionally, Emission warranty for A/C 

systems is unnecessary because manufacturer warranties typically already are longer than the 

two-year period proposed by EPA in this NPRM. [OAR-2009-0472-7291, p.31] 

With regards to direct emissions resulting from system leakage, there is only a negligible 

environmental impact if refrigerants below a GWP of 150 are released from the system. 

Therefore, emission warranty coverage of joints, hoses, seals, etc. would be unnecessary to 

protect the environmental gains from application of low-GWP refrigerants. Consequently, there 

would be no emission-based reason to mandate warranty coverage to prevent leaks on low-GWP 

systems, and the potential costs of an emission recall would be disproportionate. [OAR-2009­

0472-7291, p.32] 

State of New Jersey: 

The Department supports the USEPA proposal to include components on the motor vehicle air 

conditioning system, such as rings, fittings, compressors, and hoses, under the Clean Air Act's 

section 207(a) emission warranty provisions. [OAR-2009-0472-7109.1, p.9] 

Mr. James Hyde (citizen): 

Warrantee Issues: CAA §207 addressed 'compliance of vehicles and engines in actual use'; and 

includes warranty provisions. Section 207(a) includes warrantee protection for vehicle owners 

against defects in 'parts, devices, or components designed for emission control. Section 207 (b) 

includes warrantee protection for vehicle owners against 'any penalty or other sanction' resulting 

from failing a emissions test due to a §207(a) warranted item. In the Preamble [po 243] EP A 

states that it is proposing to 'a number of components of the AlC system, such as rings, fittings, 

compressors, and hoses' be included under §207(a). Language to effect this, however, does not 

appear in the proposed regulatory changes. EPA also requests 'comment as to whether any other 

parts or components should be designates as 'emission related parts' subject to warranty and 

defect reporting provisions under this proposal.' [Preamble p. 244] [OAR-2009-0472-7258.1, pp. 

3-4] 

EPA Response: 

Background Information 

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EPA Response to Comments 

As outlined in the proposal, Section 207(a)(1) of the Clean Air Act (CAA) requires 

manufacturers to provide a design/defect warranty that warrants a vehicle is designed to comply 

with emission standards at the time of sale and will be free from defects that may cause 

noncompliance over the specified warranty period which is 2 years/24,000 miles (whichever is 

first) or, for major emission control components, 8 years/ 80,000 miles. The warranty covers 

parts of the emissions control system. The proposal explained that under the greenhouse gas rule, 

this coverage would include compliance with the proposed CO2, CH4, and N2O standards. The 

proposal did not discuss the CAA Section 207(b) performance warranty. 

EPA proposed to include air conditioning system components under the CAA section 207(a) 

emission warranty in cases where manufacturers use air conditioning leakage and efficiency 

credits to comply with the proposed fleet average CO2 standards. The warranty period of 2 years/ 

24,000 miles would apply. EPA requested comments as to whether any other parts or 

components should be designated as ‘‘emission related parts’’ and thus subject to warranty and 

defect reporting provisions under this proposal. 

The Alliance of Automobile Manufacturers (Alliance), Toyota and the State of New Jersey 

provided comments. The State of New Jersey supported EPA’s proposal to include motor 

vehicle air conditioning system components under the emission warranty provisions. Both the 

Alliance and Toyota commented that emission warranty requirements are not appropriate for 

mobile air conditioners because 1) in-use performance of the air conditioning system at levels 

comparable to a new vehicle is not needed to achieve the emission levels targeted by EPA and 2) 

manufacturer general warranties already cover air conditioning systems and are typically longer 

than the two-year/24,000 mile proposed emissions warranty period. 

Regarding direct emissions (refrigerant leakage), the Alliance and Toyota commented that 

warranty requirements are unnecessary for refrigerants with a global warming potential (GWP) 

below 150 because the environmental impact is negligible even if refrigerants are released from 

the system. Regarding indirect emissions (fuel consumed to power the air conditioning system), 

the Alliance commented that EPA should not require warranty coverage of the air conditioning 

system because in the vast majority of air conditioning failure modes, the system stops cooling 

and ceases operation -- either because the critical moving parts stop moving or because the 

system is switched off -- thereby actually reducing the indirect CO2 emissions. 

EPA received no comments regarding 1) other parts or components which should be designated 

as ‘‘emission related parts’’ subject to warranty requirements, 2) defect reporting requirements, 

or 3) other requirements associated with warranty and defect reporting requirements (e.g., 

voluntary emission-related recall reporting requirements, performance warranty requirements, 

voluntary aftermarket parts certification requirements or tampering requirements. 

Defect Warranty 

The defect warranty requirements are provided in Section 207 of the Act. There are currently no 

defect warranty regulations. Congress provided under Section 207(a) of the CAA that emissionrelated components shall be covered under the 207(a) defect warranty for the warranty period 

outlined in section 207(i) of the CAA. For example, section 207(a) reads in part: 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

“....the manufacturer of each new motor vehicle and new motor vehicle engine shall 

warrant to the ultimate purchaser and each subsequent purchaser that such vehicle or 

engine is (A) designed, built and equipped so as to conform at the time of sale with 

applicable regulations under section 202, and (B) free from defects in materials and 

workmanship which cause such vehicle or engine to fail to conform with applicable 

regulations for its useful life (as determined under sec. 202(d)). In the case of vehicles 

and engines manufactured in the model year 1995 and thereafter such warranty shall 

require that the vehicle or engine is free from any such defects for the warranty period 

provided under subsection (i)." 

Section 207(i) reads in part: 

"(i) Warranty Period.--- 

(1) In General.—For purposes of subsection (a)(1) and subsection (b), the 

warranty period, effective with respect to new light-duty trucks and new lightduty vehicles and engines, manufactured in model year 1995 and thereafter, 

shall be the first 2 years or 24,000 miles of use (whichever first occurs), except 

as provided in paragraph (2). For the purposes of subsection (a)(1) and 

subsection (b), for other vehicles and engines the warranty period shall be the 

period established by the Administrator by regulation (promulgated prior to the 

enactment of the Clean Air Act Amendments of 1990) for such purposes 

unless the Administrator subsequently modifies such regulation. 

(2) In the case of a specified major emission control component, the warranty 

period for new light-duty trucks and new light-duty vehicles manufactured in 

the model year 1995 and thereafter for purposes of subsection (a)(1) and 

subsection (b) shall be 8 years or 80,000 miles of use (whichever first occurs). 

As used in this paragraph, the term 'specified major emission control 

component' means 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, adjusted for inflation or deflation as 

calculated by the Administrator at the time of such determination....." 

Thus, the CAA provides the basis of the warranty requirements contained in today’s final rule, 

which will cover “emission related parts” necessary to provide compliance with CO2, CH4, and 

N2O standards. Emission related parts would include those parts, systems, components and 

software installed for the specific purpose of controlling emissions or those components, 

systems, or elements of design which must function properly to assure continued vehicle 

emission compliance, including compliance with CO2, CH4, and N2O standards; (similar to the 

5-373 
EPA Response to Comments 

current definition of “emission related parts” provided in 40 CFR 85.2102(14) for performance 

warranty requirements). For example, today’s action will extend defect warranty requirements to 

emission-related components on advanced technology vehicles such as cylinder deactivation 

components or batteries used in hybrid-electric vehicles. 

Under today’s rule, EPA will extend the defect warranty requirement to emission-related 

components necessary to meet CO2, CH4, and N2O standards, including emission-related 

components which are used to obtain optional credits for 1) certification of advanced technology 

vehicles, 2) credits for reduction of air conditioning refrigerant leakage, 3) credits for improving 

air conditioning system efficiency, 4) credits for off-cycle CO2 reducing technologies, and 5) 

optional early credits for 2009-2011 model year vehicles outlined in the provisions of 40 CFR 

86.1867-12 (which are required to be reported to EPA after the 2011 model year). 

Regarding the comments received by the Alliance and Toyota, that warranty coverage is not 

needed for air conditioning components, EPA believes that the Clean Air Act requires warranty 

coverage on components used to demonstrate compliance with the emission standards, including 

components used in the optional credit programs for reduction of air conditioning refrigerant 

leakage and air conditioning efficiency improvements. EPA does not have the discretion to 

forgo warranty requirements by regulation in today’s final rule. Thus, the Agency is adopting 

defect warranty requirements for air conditioning components as proposed. At the same time, if a 

defect in materials or workmanship does not cause an increase in emissions, then there would not 

appear to be a breach of the warranty. 

Effective date of warranty for components used to obtain Early Credits 

Regarding the defect warranty for emission-related components used to obtain optional early 

credits for 2009-2011 vehicles, the defect warranty should provide coverage for these 

components at the time the early credits report is submitted to EPA (e.g., no later than 90 days 

after the end of the 2011 model year). For example, the defect warranty for early credit 

components does not have to apply retroactively (before the manufacturer declares the credits to 

EPA). The Agency believes this approach is reasonable, because 1) manufacturer’s early credit 

plans may not be finalized until after vehicles have been produced; 2) manufacturers will be 

provided satisfactory lead time to provide warranty requirements to customers; and 3) the 

manufacturer’s basic (bumper-to-bumper) warranty for air conditioning and other early credit 

components are typically longer than the two-year/24,000 mile proposed warranty period which 

will be applicable to most early credit components. ). 

Performance Warranty 

EPA did not propose any changes to the current performance warranty requirements, because the 

performance warranty preconditions outlined in section 207(b) of the CAA have not been 

satisfied. For example, section 207(b) of the CAA comes into play if EPA issues performance 

warranty short test regulations and determines that there are inspection facilities available in the 

field to determine when vehicles do not comply with greenhouse gas emission standards. Once 

EPA issues performance warranty short test regulations, then the CAA performance warranty 

provisions require the manufacturer to pay for emission-related repairs if a vehicle is properly 

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maintained and used, and fails the short test and is required to repair the vehicle. Currently the 

provisions of 85.2207 and 85.2222 provide performance warranty short test (commonly called an 

inspection and maintenance or I/M test). The provisions of 85.2207 and 85.2222 provide an I/M 

test procedure and failure criteria based on an inspection of the onboard diagnostic (OBD) 

system of the vehicle. The OBD inspection procedure in 85.2222 is currently used in most areas 

of the country where I/M tests are required. For example, a vehicle fails the OBD test procedure 

outlined in 85.2222 if the vehicle’s MIL is commanded to be “on” during the I/M test procedure. 

Although most areas of the country which require I/M testing use the OBD test procedures 

outlined in 40 CFR 85.2207 and 85.2222, the NPRM did not propose that the OBD system 

would be required to monitor CO2, CH4 or N2O emission performance, ref. 74 FR 49574 and 74 

FR 49755. Therefore, the performance warranty preconditions in section 201(b) of the CAA are 

not currently in effect for greenhouse gas CO2 emissions. The performance warranty continues 

to apply for criteria pollutants but does not apply for greenhouse emissions. 

Defect Reporting and Voluntary Emission-related Recall Reporting Requirements 

EPA did not propose any changes to the current defect reporting and voluntary emission-related 

recall reporting requirements outlined in the provisions of 40 CFR 85.1901-1909. Although 

EPA requested comments, we did not receive any comments on defect reporting and voluntary 

emission-related recall reporting requirements. Current regulations require manufacturers to 

submit a defect report to EPA whenever an emission-related defect exists in 25 or more in-use 

vehicles or engines of the same model year. The defect report is required to be submitted to EPA 

within 15 working days of the time the manufacturer become aware of that a defect affects 25 or 

more vehicles. Current regulations require manufacturers to submit to EPA voluntary emissionrelated recall reports within 15 working days of the date when owner notification begins. 

Similar to the design/defect warranty requirements outlined above, the Agency believes that as 

proposed, defect reporting and voluntary emission-related recall reporting requirements would 

apply to emission-related components necessary to meet CO2, CH4, and N2O standards for the 

useful life of the vehicle, including emission-related components which are used to obtain 

optional credits for 1) certification of advanced technology vehicles, 2) credits for reduction of 

air conditioning refrigerant leakage, 3) credits for improving air conditioning system efficiency, 

and 4) credits for off-cycle CO2 reducing technologies, and 5) optional early credits for 2009­

2011 model year vehicles outlined in the provisions of 40 CFR 86.1867-12 (which are required 

to be reported to EPA after the 2011 model year). For early credit components, defect reporting 

requirements and voluntary emission-related recall reporting requirements become effective at 

the time the early credits report is submitted to EPA (e.g., no later than 90 days after the end of 

the 2011 model year). 

The final rule includes a minor clarification to the provisions of 40 CFR 85.1902 (b) and (d) to 

clarify that beginning with the 2012 model year, manufacturers are required to report emissionrelated defects and voluntary emission recalls to EPA, including emission-related defects and 

voluntary emission recalls related to greenhouse gas emissions (CH4, N2O and CO2). 

5.10.10. Light Vehicles and Fuel Economy Labeling 

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Organization: General Motors 

Ford Motor Company 

Honda Motor Company 

Association of International Automobile Manufacturers (AIAM) 

Alliance of Automobile Manufacturers (Alliance) 

Toyota Motor North America 

Natural Resources Defense Council 

International Council on Clean Transportation 

National Automobile Dealers Association (NADA) 

State of New Jersey 

New York State Department of Environmental Conservation 

Automotive Aftermarket Industry Association (AAIA); et.al 

Fisker Automotive, Inc. 

Chew, Yuli 

Comments: 

General Motors: 

GM supports the use of individual fleet utility factors (per SAE J1711 draft procedures) for 

calculating the fuel economy label for advanced technology vehicles. In addition, GM supports 

inclusion of metric(s) on the Monroney label that are easily understandable and meaningful to 

the average consumer. In this regard, GM recently shared consumer clinic research with EPA 

staff that included the feedback on such consumption metrics as “gallons/100 miles” and “$/100 

miles”. The use of accurate metrics is imperative -- thus a metric like “mpge” where electricity is 

converted into an equivalent amount of gasoline, could lead to false expectations. We look 

forward to further discussion and plan detailed comments through the separate labeling 

rulemaking when it is proposed in the near future. [OAR-2009-0472-6953.1, p.30] 

Ford Motor Company: 

Advanced Technology Fuel Economy Labeling 

Ford supports the development of new, fair, and consistent fuel economy labels for advanced 

technology vehicles, particularly for plug-in hybrids and electric vehicles. NHTSA requested 

comments on appropriate metrics for presenting fuel economy-related information on labels and 

whether a CO2e grams per mile metric should be considered to facilitate comparisons between 

conventional vehicles and alternative fuel vehicles. The fundamental purpose of these labels is to 

provide consumers a mechanism to compare the efficiency of vehicles and powertrains on a 

consistent basis that is understandable. There are many open issues to resolve in the process of 

developing a consumer-accepted label. Fuel consumption versus fuel economy has been studied 

through consumer focus groups at Ford and current indications are consumers are not ready or 

willing to consider fuel consumption as a metric at this time. However, the focus group results 

indicate that there is a significant value to providing energy information (both petroleum fuel and 

electrical energy) as separate metrics over standard operating conditions (energy consumed over 

a fixed distance, e.g., energy per mile, energy per 100 miles) because such metrics are linear. 

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Total cost to the consumer for both electrical and fuel energy on an annual basis, with standard 

mileage assumptions, and energy costs is also appropriate. For electric vehicles and plug-in 

hybrids, we support inclusion of the time and amount of kilowatt hours needed to recharge the 

battery system to a full state, based on standard household circuit systems (11 Ov/15amp). 

Options should be provided to include shorter charging times if the vehicle provides the 

capability. 

Ford does not believe that EPA and NHTSA are constrained in providing customers the most 

informative labels because 'mpg information is currently required by law,' 49 USC § 32908(b)(1) 

mandates that 'a manufacturer of automobiles shall attach a label. .. containing ... '(A) the fuel 

economy of the automobile.' According to 49 USC § 32901, 'fuel economy' means the average 

number of miles traveled by an automobile for each gallon of gasoline (or equivalent amount of 

other fuel used, as determined by the Administrator under section 32904 (c) of this title' 

(emphasis added). 'Fuel' is defined in that same section as 'gasoline,' 'diesel oil,' or 'other liquid 

or gaseous fuel.' The definition of 'fuel' does not include electricity. 'Electricity' is, however, 

otherwise specifically included as one of the energy sources listed in the definition of an 

'alternative fuel.' 49 U.S.C. § 32901 (a)(1 )(J). 

Therefore, a manufacturer must provide a label containing the fuel economy value for the 

vehicle, expressed as miles driven per gallon of 'fuel,' meaning per gallon of gasoline or an 

equivalent amount of diesel or other liquid or gaseous fuel. 49 U.S.C. 32901 (a)(1 0). Since 

electricity is not a 'fuel' but rather an alternative fuel, no energy efficiency rating is required for 

electricity under § 32908(b)(1)(A). Further, special energy efficiency labeling and information 

requirements apply for 'dedicated automobiles' and 'dual fuel automobiles' under § 32908(b)(3); 

however, even in these cases there is no mandate for an equivalent petroleum-based fuel 

economy (MPGe) metric. Hence, no specific statutory labeling requirement is driving the need 

for a MPGe value. 

At the same time, the Administrator has authority to 'require or authorize' labeling of 'other 

information' 'related to the information required by clauses [32908(b)(1 )](A)-(D) of this 

paragraph.' 49 U.S.C. § 32908(b)(1 )(F). Therefore, EPA could implement either an electric 

consumption or electric economy metric. 

Thus, Ford does not support the use of MPGe to describe the energy use of an electrically 

powered automobile or a plug-in hybrid electric vehicle and disagrees that EPCA, mandates a 

gasoline-equivalent MPGe fuel economy label value. In real-world application, MPGe does not 

translate into a metric that is understood by most consumers and therefore may be misleading by 

FTC standards and counterproductive to the acceptance of EV and PHEV technology. 

If EPA nevertheless decides to pursue labeling that includes MPGe values, we suggest that EPA 

develop a plan to eventually sunset the MPGe value altogether. An example of an effective 

approach can be found in the 2007-2008 transition from 2-cycle to 5-cycle fuel economy values 

wherein labels contained both new and old values during a transition period, giving greater 

prominence to the new value. In this situation, we recommend that MPGe be shown in smaller 

print, as a reference point for the new metrics. Then, as the new metrics become accepted EPA 

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should plan to remove MPGe altogether. We expect that this transition of consumer acceptance 

will be quick given the limitations of MPGe to describe the performance of electric vehicles. 

PHEVs present significant fuel economy labeling challenges because of their bimodal fuel 

economy nature. In other words, consumers are likely to experience very different fuel and 

electrical economy depending on how far they drive their vehicle before recharging and under 

given driving conditions. In addition, PHEV fuel consumption will likely change significantly 

once the electrical battery system has been depleted. Thus, at a minimum the electrical economy 

and the fuel economy of the vehicle should be included under its optimal driving state, typically 

referred to in standardized tests as charge depleting mode; and when the battery system has been 

depleted, typically referred in standardized tests as charge sustaining mode. PHEV label formats 

will be more complex by nature. This complexity can be described in three basic categories and 

labels can be modularly formatted to address three types: electric only, hybrid electric-fuel, and 

fuel only. 

EVs will also present challenges because of their range and efficiency sensitivity to driving 

styles and climate conditions. Current range testing procedures used by CARB and EPA are in 

need of revision because they are conducted until the vehicle cannot operate properly, Le., until 

the vehicle can no longer maintain the driving schedule. Such an extreme end condition is not 

representative of actual vehicle usage because customers will not typically drive until '0' energy 

remains in the battery system nor until the vehicle can no longer function properly. More 

typically, vehicles will be driven to a fraction of the full range and recharged, and therefore a 

more reasonable and representative process is in order. Ford is willing to work with the agencies 

and industry to update and harmonize these procedures. 

In the context of standardized testing, the effects of cold temperature (20F) and heater use are 

currently being studied by industry as a primary sensitivity factor in an electric vehicles energy 

efficiency performance, followed by NC load. A hot test temperature (95F) is not expected to 

have significant effect on battery system and vehicle performance. 

In the coming years of EV use, consumer information and performance data needs to be 

captured, perhaps from early manufacturer and government fleet use, to help in determining 

appropriate label content for these vehicles. Work is underway within SAE to study these 

sensitivities and develop standard vehicle testing practices. Ford supports this work and 

encourages the EPA and other agencies to participate in studies as well help harmonize the 

potential requirements. 

In addition, prior to the final label proposals, we recommend EPA work jointly with PHEV and 

EV manufacturers to test draft label concepts through focus groups and verify consumer 

preferences. 

Utility Factors 

For CAFE purposes, Ford supports a standardized fleet utility factor, one based on SAE J2841. 

EPA requested comment on how the utility factor is calculated and which data should be used to 

establish it. The fleet utility factor approach is reasonable when applied to a CAFE requirement, 

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since it represents a fleet-average driving approach. However, individual customers will see large 

variations in the performance of their vehicle's efficiency based on how much time they are in 

either charge-depleting or charge-sustaining mode. This could lead to customer dissatisfaction 

with a utility-factor derived label, as customers have no way of applying it to their own personal 

driving patterns. Due to these reasons, it is important to highlight the bimodal nature of PHEVs 

by showing charge-depleting information separate from charge sustaining on the label and not to 

focus on one type of average label value at this time. 

For CAFE purposes, Ford supports a standardized utility factor, one based on SAE J2841. The 

agreed-upon utility factor should be limited in with respect to update frequency in order to 

provide adequate stability and lead time to facilitate cycle planning for manufacturers. For 

example, utility factors should be published by the EPA for applicable model years at least 1 to 2 

model years in advance. Any further updates to the utility factor curves should be made only in 

future model years, not retro-active to current or previous model years. Since the fleet utility 

factor represents a national driving distribution, it should be relatively slow to change (barring 

any significant technology, energy, or infrastructure cost). Frequent updates to the utility factor 

will not be necessary. [OAR-2009-0472-7082.1, pp. 20-23] 

Honda Motor Company: 

Generally, Honda proposes that EPA and NHTSA apply the same procedures and logic as SAE 

standards and CARB regulations to avoid discrepancies. Also, Honda understands that EPA and 

NHTSA need to define some areas where SAE and ARB are silent – primarily Label issues, 

CAFE issues and GHG issues. [NHTSA-2009-0059-0095.1, p.12] 

Utility Factor Weighting Methods 

Honda proposes that Fleet Utility Factors in existing SAE J2841 should be used to combine 

Charge-Depleting and Charge-Sustaining modes for GHG and CAFE purposes. On the other 

hand, Honda also proposes that Individual Utility Factor in the upcoming SAE J2841 revision 

should be used to combine Charge-Depleting and Charge-Sustaining modes for Fuel Economy 

Labeling purposes. [NHTSA-2009-0059-0095.1, p.12] 

The PHEV FEMPG Formula Clarification 

The PHEV FEMPG formula in the preamble needs to be revised to more accurately describe the 

fuel economy from Charge Depleting and Charge Sustaining modes. We propose substituting 

FECDi for FEi. Similarly, it is also clear that FEgasoline denotes the fuel economy during the Charge 

Sustaining mode, and hence FECS will clearly describe this to prevent potential confusion on 

gasoline consumption between Charge Depleting (in a blended PHEV) and Charge Sustaining 

modes. We propose substituting FECS for FEgasoline. [NHTSA-2009-0059-0095.1, p.13] 

Association of International Automobile Manufacturers (AIAM) 

The proposed regulations seek comment on the potential use of metrics other than miles per 

gallon in consumer information regarding fuel efficiency. See preamble at 49576. Consumers 

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perceive in-use fuel economy performance, measured in “miles per gallon,” to vary greatly for 

higher efficiency vehicles, although the actual variation in fuel consumption is not as significant. 

This perception issue can result in customer dissatisfaction. In addition, consumers need 

more significant and appropriate information for new technologies, such as plug-in hybrid 

(PHEV) and battery electric vehicles. In particular, PHEV fuel economy performance varies 

greatly depending on how the vehicle is used, potentially leading to customer misunderstanding. 

Therefore, a new consumer information label concept should be developed. AIAM would be 

pleased to work with EPA and NHTSA to develop consumer information requirements that 

include all appropriate information, are consumer friendly, and address greenhouse gas 

emissions as well as fuel efficiency matters. [OAR-2009-0472-7123.1, pp.18-19] 

Alliance of Automobile Manufacturers (Alliance): 

Fuel Economy Labeling of Advanced Technology Vehicles 

Based on manufacturers’ announcements, advanced technology vehicles such as plug-in electric 

hybrid vehicles and electric vehicles will be on the market very soon. Public acceptance and 

understanding is key to the success of these new technologies. It is imperative that manufacturers 

and EPA work together to appropriately promote the benefits that these vehicles can provide. To 

that end, the Alliance fully supports the agencies goals that for these advanced technology 

vehicles the “labels reflect sound science, treat technologies equitably and provide appropriate 

information to consumers.” [OAR-2009-0472-6952.1, p.53] 

To this end, the Alliance and its member companies have been working for over a year with EPA 

and the Society of Automotive Engineers to develop test procedures, calculation methodologies, 

metrics and formats. We are committed to continuing to work with the agency to produce the 

necessary frameworks for these various vehicles. [OAR-2009-0472-6952.1, p.53] 

In this GHG/CAFE proposal, EPA seeks comments on issues surrounding consumer vehicle 

labeling in general, and labeling of advanced technology vehicles in particular. EPA further 

states that it will “initiate a separate rulemaking to explore in detail the information displayed on 

the fuel economy label and the methodology for deriving that information.” [OAR-2009-0472­

6952.1, p.53] 

The Alliance supports the use of utility factors in creating the approach for calculating the label 

for these advanced technology vehicles (specifically individual fleet utility factors for the label 

per the recent SAE J1711 draft procedures). Further, the Alliance supports a metric on the 

Monroney label that is simple and understandable to the consumer. An esoteric metric that 

consumers have very little frame of reference for understanding will only slow – and may even 

harm -- the acceptance of advanced technologies. [OAR-2009-0472-6952.1, p.54] 

Recommendation: 

Unfortunately, this separate label rulemaking will not be complete before many products are 

ready for the market place. Important in this interim period will be the case-by-case approach 

that EPA will need to undertake to determine the label values for various vehicles. In this 

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process, EPA must be cognizant of maintaining a level playing field for all advanced 

technologies as well as providing consumers a way to compare to current conventional vehicles. 

[OAR-2009-0472-6952.1, p.54] 

Toyota Motor North America: 

Although EPA intends to initiate a separate rulemaking to explore in detail the information 

displayed on the fuel economy label of advanced technology vehicles, and the methodology to be 

used for deriving the information, EPA requests comment on these issues as part of the subject 

proposal. [OAR-2009-0472-7291, p.33] 

With the increasing numbers of advanced technology vehicles beginning to be sold, Toyota 

supports EPA's continued efforts to address potential issues associated with these technologies, 

including how best to provide relevant consumer information about their environmental impact, 

energy consumption, and cost. Toyota believes that providing accurate information is necessary 

to promote customer acceptance and satisfaction of these advanced technology vehicles. Toyota 

is concerned that unrealistic or difficult to understand ratings could set up unrealistic 

expectations that could sour the market introduction of these advanced technology vehicles. 

[OAR-2009-0472-7291, pp.33-34] 

One way to encourage consumers to take a more proactive approach to reducing greenhouse 

gases and oil consumption is to provide clear information about consumption, rather than 

efficiency, as part of EPA's new labeling rule initiative. For liquid fueled vehicles, the fuel 

consumption metric would communicate to the consumer a direct measure of the amount of 

fuel/energy used and thus directly relates to costs that consumers incur when filling up. Toyota 

recognizes EPA's previous reluctance to change to a more accurate fuel consumption metric 

because of the consumer's unfamiliarity with such a metric. However, the current MPG measure 

continues to be misleading and a fuel consumption metric could be more meaningful to 

consumers, once the consumers have been familiarized with the different metric. To help educate 

the consumer, Toyota proposes that EPA consider using both for the short term either on the 

website or in the fuel economy guide. [OAR-2009-0472-7291, p.34] 

Another approach would provide more detailed information on the label specific to operation on 

gasoline and to operation on electricity. As an example, a hybrid vehicle label would contain 

gasoline consumption, the plug-in hybrid vehicle label would contain both gasoline consumption 

and energy consumption (miles per kilowatt-hour), and the electric vehicle would only show 

electricity consumption. To avoid confusion to the customer, the electric and fuel consumption 

values could be displayed separately. [OAR-2009-0472-7291, p.34] 

Toyota supports the concept of using a utility factor approach as an appropriate methodology to 

predict/account for the total distance driven in each of the two PHEV modes (i .e. charge 

depleting and charge sustaining) and calculate fuel economy, including the use of 'fleet' utility 

factors as currently specified in the most recent SAE J2841 procedure/document . We plan to 

continue working with EPA and the Society of Automotive Engineers on these test procedures, 

calculation methodologies, metrics and format issues as one possible approach. [OAR-2009­

0472-7291, p.34] 

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EPA Response to Comments 

Toyota is currently evaluating all these options. Regardless of the approach ultimately taken by 

EPA, the label should balance the need for information specific to a given technology with the 

need for information that can be compared against other vehicles in the marketplace, and at the 

same time can be understood by consumers. [OAR-2009-0472-7291, p.34] 

Natural Resources Defense Council: 

Vehicle Labels Should Emphasize GHG Emissions Performance, Fuel Consumption and 

Operational Costs to Enable Easy Comparisons across Vehicle Classes and Technologies: EPA 

should update, through a public process, the environmental performance and fuel economy labels 

on new vehicles. Changes to the labels and associated calculation methodologies should also be 

reflected in other public education and consumer purchase guides such as the EPA Green 

Vehicle Guide (www.epa.gov/greenvehicles) and the EPA/DOE Fuel Economy Guide 

(www.fueleconomy.gov). In the NPRM, EPA states that it “plans to seek comment and engage in 

extensive public debate about fuel consumption and other appropriate consumer information 

metrics as part of a new labeling rule initiative.” NRDC supports such an initiative and urges 

EPA to act expeditiously to complete the process in advance of MY 2012. [OAR-2009-0472­

7141.1, p. 21] 

The scope of today’s new vehicle labels should be expanded to include GHG emissions. 

Consumer awareness of global warming pollution and its implications for climate change have 

grown dramatically in recent years and the GHG emissions should be displayed prominently on 

the vehicle in terms of GHG emissions per mile of real-world driving. Since EPA plans to 

continue to use the 2-cycle FTP for vehicle compliance measurements for MY 2012-2016, the 

EPA label value should be the compliance value adjusted to reflect typical driving conditions 

(so-called “5-cycle test”), as is currently done for fuel economy labeling. [OAR-2009-0472­

7141.1, p. 21] [See OAR-2009-0472-7141.1, pp. 21-23 for further discussion of this issue.] 

In sum, NRDC believes a trio of metrics including GHG emissions (in gCO2 per mile), fuel 

consumption (in gallons or kWh per 100 miles) and costs (in $ per mile or $ per year) should be 

displayed with prominence on new vehicle labels. [OAR-2009-0472-7141.1, p. 23] 

International Council on Clean Transportation: 

The agencies asked for comments on how to present efficiency information for electric vehicles. 

The current metric, miles per gallon (mpg), does not apply to electricity use for battery-electric 

vehicles and plug-in vehicles. Thus, the electricity use must be converted into an equivalent 

number of gallons or a different metric must be used. 

ICCT believes this is an opportunity to start supplementing the use of mpg with a better metric. 

Not only does mpg not work for electricity consumption, but it is also not appropriate for 

conventional vehicles as it is a non-linear metric. The linear metric is gallons per mile. MPG is 

the inverse and distorts the relationship between the rating and the amount of fuel used. The 

higher the mpg rating, the greater the distortion. 

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Any linear metric would work better, such as gallons per 100 miles, liters per 100 km, BTU (or 

kWh) per mile, grams CO2 per mile, or $ per mile. The latter three suggestions would also solve 

the problem with comparing electricity use to gasoline use. Grams CO2 per mile has the 

additional benefit of treating vehicles and fuels together on a consistent basis. 

Canada’s experience could provide a valuable guide in how to change the labeling system. 

Canada added liters per 100 km to their fuel consumption guide, in addition to mpg, many years 

ago. Such a dual labeling system would be an excellent way to supplement the use of mpg with a 

better metric and would allow electric vehicles to be compared using the alternative metric. 

[OAR-2009-0472-7156.1, p.14] 

[ICCT also submitted these comments as testimony at the Detroit public hearing, See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 62-63.] 

National Automobile Dealers Association (NADA): 

Dealers have significant point-of-sale purchasing decision expertise and NADA often has 

provided suggestions on appropriate strategies and language for fuel economy and other vehicle 

labels. The National Program should clarify that prospective changes to the existing, Monroney 

based fuel economy label will be made pursuant to a separate well thought out rulemaking. Note 

that the motoring public only recently became accustomed to extensive changes to the fuel 

economy label and its values, and to extensive changes to NHTSA’s safety label. With NHTSA 

soon to begin implementing further changes to its safety label, prospective changes to the fuel 

economy label should be carefully coordinated so as to avoid undue confusion for consumers. 

[OAR-2009-0472-7182.1, p. 8] 

State of New Jersey: 

The Department supports the Agencies' efforts to supply additional information to the consumer 

regarding environmental impacts, energy consumption, cost, range per charge, time to charge, 

etc. so that consumer can make informed decision before purchasing a vehicle. The label should 

include a numerical rating and graph-type comparison for each vehicle's environmental impact in 

relation to other vehicles in the same class and include ratings for both criteria pollutants. [OAR2009-0472-7109.1, p.9] 

Automotive Aftermarket Industry Association (AAIA); et.al: 

The aftermarket also strongly urges the agency to include a public education component not only 

for car owners to make good choices on vehicles, but also to provide information so that once 

they own these vehicles that they can maintain them. The aftermarket groups listed below would 

be more than willing to work with the agency to develop such an education program. In fact, 

much of this information is already on our Be Car Care Aware site www.carcare.org which is 

widely accessed by car owners. [OAR-2009-0472-7057.1, p.4] 

New York State Department of Environmental Conservation: 

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EPA Response to Comments 

CAFE and Greenhouse Gas Emission Labels 

Much of what is currently included on a vehicle's fuel economy label is mandated by statute. We 

believe that replacing 'miles per gallon' with a metric similar to Europe's liters per 100 kilometers 

(or gallons per 100 miles) would be desirable in the long run; but it may require statutory 

changes. [OAR-2009-0472-7454, p.6] 

Specifically for greenhouse gas emissions labeling, we recommend that the following should be 

supplied in grams per mile: 

- The standard the vehicle -is certified to (for example is an all-wheel-drive sedan a passenger car 

or light truck?), 

- The footprint based target emissions rate for the vehicle, 

- The actual measured emissions rate for the vehicle, 

- The greenhouse gas emission rates used in manufacturers' compliance reporting, 

- Any credits (air conditioning, alternative fuel, FFV, etc) applicable to the vehicle. [OAR-2009­

0472-7454, p.6] 

The CAFE rating, in miles per gallon, used in. manufacturers' compliance reporting should also 

be presented on the label. [OAR-2009-0472-7454, p.6] 

Fisker Automotive, Inc.: 

Fisker Automotive recommends a technology-neutral fuel economy label, as shown below. We 

also propose an interim label solution for ease of transition. See the attached presentation, Fuel 

Economy Labeling, 2011 & Beyond for more. [OAR-2009-0472-8732.1, p.6] [[See Docket 

Number OAR-2009-0472-8732.1, pp.8-41 for the attached presentation]] 

Yuli Chew (private citizen): 

I support EPA’s efforts to supply additional information to the consumer about their 

environmental impact, energy consumption, cost, range per charge, time to charge, etc. so that 

consumer can make informed decision before purchasing a vehicle. Hopefully, this can build on 

CARB’s Environmental Performance Label Regulation. [OAR-2009-0472-7042.1, p.5] 

EPA Response: 

EPA received considerable public input in response to the request for comment in the proposal. 

Since the greenhouse gas rule was proposed in September, 2009, EPA has initiated a separate 

rulemaking to explore in detail the information displayed on the fuel economy label and the 

methodology for deriving that information. The purpose of the vehicle labeling rulemaking is to 

ensure that American consumers continue to have the most accurate, meaningful, and useful 

information available to them when purchasing new vehicles, and that the information is 

presented to them in clear and understandable terms. 

EPA will consider all vehicle labeling comments received in response to the greenhouse gas 

proposal in its development of the new labeling rule in coming months. We encourage the 

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interested public to stay engaged and continue to provide input on this issue in the context of the 

vehicle labeling rulemaking. 

5.11. EPA Estimates of GHG Emissions Reductions and Their Associated Effects 

5.11.1 Impact on GHG Emissions 

No substantive comments were received concerning the methodology used for calculating the 

greenhouse gas impacts of the program. 

5.11.2 Climate Change Impacts from GHG Emissions 

Organization: Environment New Jersey 

Comment: 

A commenter indicates light-duty vehicles account for about 40 percent of all U.S. oil 

consumption and when taken with the impacts of global warming which Steve Flint of the 

Mobile Sources and Fuels Committee of the National Association of Clean Air Agencies 

(NACAA)] mentioned, and the groundbreaking study from the IPCC in 2007, it's important to 

emphasize that not only is the science on effects of climate change becoming more dire, but 

implications for this country over the course of the next few decades and ultimately leading into 

the later part of the next century if we do not take action, or if we remain on the status quo. 

[EPA-HQ-OAR-2009-0472-4621, p.71] 

The commenter indicates there is a lot of reason to be optimistic because of the solutions that are 

happening right now in this country. The commenter indicates the actions in the U.S. Congress 

with the U.S. House and now the U.S. Senate on the American Clean Energy and Security Act 

really are moving us forward, talking about clean energy solutions, finally putting a cap on 

global warming pollution, that is where the rest of the world has been moving to, it is where 

America must move to. [EPA-HQ-OAR-2009-0472-4621, p.74] 

EPA Response: 

EPA agrees with the commenter’s assertion that this action is an important step towards curbing 

steady growth of GHG emissions from cars and light trucks. In the absence of control, GHG 

emissions worldwide and in the U.S. are projected to continue to grow. As provided in Section 

III.F.1 of the preamble to the final rule, U.S. GHGs are estimated to make up roughly 17 percent 

of total worldwide emissions in 2010, and the contribution of direct emissions from cars and 

light-trucks to this U.S. share is growing over time, reaching an estimated 19 percent of U.S. 

emissions by 2030 in the absence of control. This steady rise in GHG emissions is associated 

with numerous adverse impacts on human health, food and agriculture, air quality, and water and 

forestry resources. 

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EPA Response to Comments 

Policy options for reducing GHGs (e.g., cap and trade) are not within the scope of this 

rulemaking nor does EPA propose any reduction strategies other than those associated with this 

rule pursuant to Section 202(a) of the Clean Air Act. 

Organization: New York State Department of Environmental Conservation 

Comment: 

A commenter indicates that New York State hospitalization and mortality rates due to respiratory 

illnesses currently exceed the national average and this will only get worse as the planet 

continues to warm. The comment further notes New York’s agricultural industry is likely to be 

affected by shorter growing systems for cold weather crops and eventually a different crop mix 

and thus affect New York's tourism and maple syrup industries. The commenter notes global 

warming also poses a significant threat to critical water sources in New York and the 

combination of higher temperatures and more erratic landfill will lower water levels and will 

adversely affect drinking water supplies, power generation, commerce, and recreational 

activities. New York State hospitalization and mortality rates due to respiratory illnesses 

currently exceed the national average and this will only get worse as the planet continues to 

warm. [These comments were submitted as testimony at the New York public hearing. EPA-HQOAR-2009-0472-4621, pp. 12-13] 

EPA Response: 

EPA finds the comments provided on impacts to human health and public welfare are generally 

consistent with those provided in preamble Section III.F.2, Climate Change Impacts from GHGs, 

to this final rule. Section III.F.2 discusses the projected impacts associated with climate change 

and warming temperatures as synthesized from the major scientific assessment reports. As 

indicated in Section III.F.2, “Increases in regional ozone pollution relative to ozone levels 

without climate change are expected due to higher temperatures and weaker circulation in the 

United States and other world cities relative to air quality levels without climate change. Climate 

change is expected to increase regional ozone pollution, with associated risks in respiratory 

illnesses and premature death. In addition to human health effects, tropospheric ozone has 

significant adverse effects on crop yields, pasture and forest growth, and species composition. 

The directional effect of climate change on ambient particulate matter levels remains uncertain.” 

Please see preamble Section III.F.2 of the rule for a synthesis of key findings regarding observed 

and projected changes in GHG emissions and associated climate change impacts. The key 

findings synthesized in Section III.F.2 are primarily drawn from the major scientific assessment 

reports of the Intergovernmental Panel on Climate Change (IPCC), the U.S. Climate Change 

Science Program (CCSP), the U.S. Global Change Research Program (USGCRP), and the 

National Research Council (NRC). 

Organization: State of New Jersey 

Comment: 

A commenter indicates that as we are well aware, there is broad scientific consensus that humancaused greenhouse gas emissions are impacting the earth's climate, and that increasing 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

atmospheric concentrations of greenhouse gases will result in a very significant adverse global, 

regional and local environmental impacts. The commenter notes the northeastern states are 

particularly vulnerable to the impacts of climate change with potentially devastating ecological, 

economic and public health impacts to New Jersey. The commenter states “Not only does 

climate change threaten New Jersey's shoreline and ecology, but the socioeconomic impacts of 

climate change stand to be profound and costly.” The commenter asserts that because of New 

Jersey's unique diverse terrain, nearly all of the impacts of climate change, such as rising 

temperature in our urban areas, sea level rise jeopardizing our coastal ecosystems and threats to 

our unique agricultural industries will be experienced throughout the state. The commenter 

asserts it is critical that the world, the nation, the region and New Jersey take immediate and 

aggressive action to stabilize and then reduce atmospheric greenhouse gas concentrations in 

order to avoid the most catastrophic impacts of climate change. The commenter states, “The 

successful reduction of ozone depleting substances throughout the nation and the world 

demonstrates that it can be done.” [These comments were submitted as testimony at the New 

York public hearing. See docket number EPA-HQ-OAR-2009-0472-4621] 

EPA Response: 

EPA agrees with the commenter’s assertion that there is broad scientific consensus that humancaused GHG emissions are impacting the Earth’s climate. In addition, EPA notes the comments 

regarding climate change impacts to the Northeast are generally consistent with those provided 

in Section III.F.2 of the preamble to this final rule. Section III.F.2 provides a summary of 

observed and projected changes in GHG emissions and associated climate change impacts based 

on the key findings of Technical Support Document (TSD)36 for EPA’s Endangerment and 

Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) the Clean Air Act.37 

The key findings synthesized here and the information throughout the TSD source document are 

primarily drawn from the broad scientific community in the form of assessment reports of the 

Intergovernmental Panel on Climate Change (IPCC), the U.S. Climate Change Science Program 

(CCSP), the U.S. Global Change Research Program (USGCRP), and the National Research 

Council (NRC). 

In particular, the USGCRP provides present and future impacts of climate change on the 

different regions of the United States in a recent national assessment report entitled Global 

Climate Change Impacts in the United States.

38 This report is a key source document for the 

TSD associated with EPA’s Endangerment and Cause or Contribute Findings for Greenhouse 

Gases Under Section 202(a) of the Clean Air Act and is referenced in Section III.F.2 of the 

preamble to this rule. In regard to the Northeast Karl et al (2009) reports: “The densely 

populated coasts of the Northeast are particularly vulnerable to sea level rise, which is projected 

to rise more than the global average and increase the frequency and severity of damaging storm 

surges, coastal flooding, and related impacts like erosion, property damage, and loss of wetlands. 

36 “Technical Support Document for Endangerment and Cause or Contribute Findings for Greenhouse Gases Under
 

Section 202(a) of the Clean Air Act” Docket: EPA-HQ-OAR-2009-0472-11292
 37 See 74 FR 66496 (Dec. 15, 2009)
 38 Karl, T., J. Melillo, and T. Peterson (Eds.) (2009) Global Climate Change Impacts in the United States. 

Cambridge University Press, Cambridge, United Kingdom. 

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EPA Response to Comments 

New York State alone has more than $2.3 trillion in insured coastal property, but some major 

insurance companies are beginning to withdraw coverage in coastal areas of the Northeast, 

including New York City. A coastal flood in New York City currently considered a once-in-acentury event (also known as a 100-year flood) is projected to occur every 10 to 22 years on 

average by late this century, depending on a higher or lower emissions scenario.” EPA 

acknowledges that the Northeast has diverse terrain and climatic conditions and thus the 

projected effects from climate change are likely to be varied. As noted in Section III.F.2, climate 

change impacts will vary in nature and magnitude across different regions of the United States. 

5.11.3. Changes in Global Mean Temperature and Sea-level Rise Associated with the GHG 

Emissions Reductions 

Organization: Institute for Energy Research 

Comment: 

A commenter indicates it is quite possible that EPA‘s estimate of the reduction in temperature 

and sea level rise is an overestimate. The estimate is predicated on a climate sensitivity in the 

range of 2°C to 4.5°C in accord with the Intergovernmental Panel on Climate Change‘s (IPCC) 

Fourth Assessment Report (AR4) 2007. However, actual temperature trends after the release of 

that report and more recent science provide some reasons to believe that a climate sensitivity of 

2°C to 4.5°C may be overly sensitive. [OAR-2009-0472-7225.1, p.6] 

EPA Response: 

EPA acknowledges the large uncertainty range associated with equilibrium climate sensitivity. 

EPA notes that support of the current consensus range or likely range (2-4.5°C) comes from 

many different lines of evidence, the ranges of which are consistent within the uncertainties, 

relatively robust towards methodological assumptions and similar for different types and 

generations of models39. In addition, the IPCC40,41 indicates the levels of understanding and 

confidence in quantitative estimates of equilibrium climate sensitivity have increased 

substantially and there is increased confidence of key processes that are important to climate 

sensitivity due to improved comparisons of models to one another and to observations. Thus, 

39 Knutti, R. and G. Hegerl (2008). "The equilibrium sensitivity of the Earth's temperature to radiation changes." 

Nature Geoscience 1: 735-743. 

40 Solomon, S., D. Qin, M. Manning, R.B. Alley, T. Berntsen, N.L. Bindoff, Z. Chen, A. Chidthaisong, J.M. 

Gregory, G.C. Hegerl, M. Heimann, B. Hewitson, B.J. Hoskins, F. Joos, J. Jouzel, V. Kattsov, U. Lohmann, T. 

Matsuno, M. Molina, N. Nicholls, J. Overpeck, G. Raga, V. Ramaswamy, J. Ren, M. Rusticucci, R. Somerville, T.F. 

Stocker, P. Whetton, R.A. Wood and D. Wratt (2007) Technical Summary. In: Climate Change 2007: The Physical 

Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on 

Climate Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M. Tignor, and H.L. Miller 

(eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. 

41 Meehl, G.A. et al. (2007) Global Climate Projections. In: Climate Change 2007: The Physical Science Basis. 

Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate 

Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M. Tignor and H.L. Miller (eds.)]. 

Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

EPA concludes that the use of the climate sensitivity range for the climate analysis for this rule is 

appropriate and supported by the scientific literature from the major assessment reports. 

In order to capture some of the uncertainty in the climate system, the changes in projected 

temperatures and sea level for this rule were estimated across the most current IPCC range of 

climate sensitivities, 1.5°C to 6.0°C. For each climate indicator analyzed the direction of change 

was the same across the range of climate sensitivities. EPA disagrees with the commenter that 

recent temperature trends after IPCC’s AR4 2007 report provide adequate reason to believe that 

the climate sensitivity range of 2°C to 4.5°C is overly sensitive. Three years of additional 

temperature data are not likely to be sufficient to materially change estimates of climate 

sensitivity based on the instrumental record and has no impact on estimates of climate sensitivity 

based on paleoclimate analysis or other methods. Further, we note the commenter does not 

provide any references or material from the recent scientific literature to support this claim. 

Organization: Shaw, Donald F. 

Comment: 

A commenter asserts that the claimed benefit (reduction) of 0.007 to 0.016 degrees Celsius (°C) 

in global mean temperature over 90 years is minuscule when compared to the inaccuracies of 

temperature measurement and uncertainties involved in climate science. The commenter 

continues to indicate that such small temperature numbers are immeasurable and meaningless as 

none of the equipment used to measure the temperatures can attain accuracy even within an order 

of magnitude of the claimed benefit. The commenter further notes the temperature records 

derived from thermometers and tree rings used by those who support global warming claims are 

nowhere near that accurate. In addition, the commenter asserts this same issue applies for the 

proposed reduction in sea level rise which is 0.06–0.15 centimeters (less than 1/16th of an 

inch). [OAR-2009-0472-7270.1, p. 1] 

EPA Response: 

EPA notes the projected reductions in global mean temperature and sea level from the rule are 

based on climate modeling analysis using a global emission reference scenario (no climate 

policy) and emissions reductions scenario which were subtracted from the reference scenario for 

the years 2000-2100 based on implementation of the rule as provided in Section III.F.1. This 

approach attempts to evaluate the impact of the rule’s emissions reductions in the context of 

global GHG emissions. The results of the analysis should not be interpreted as detectable 

changes such as from the instrumental or observational records but discernible as quantifiable 

estimates calculated from the two emissions scenarios across a range of climate sensitivities. 

The observational record for global mean temperature (and sea level rise) is likely not sensitive 

enough to detect the direct response from any single mitigation action -- particularly a subset of 

emissions from a source category -- for several reasons (e.g., the inertia in the climate system 

due to the exchange of heat and energy between the atmosphere and the ocean, longevity (several 

decades) of perturbation from GHG emissions, global nature of the emissions problem where no 

single source dominates). Further, the instrumental record is not designed to detect such isolated 

signals. Although the commenter is correct that these relatively small changes in climate 

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EPA Response to Comments 

variables would not be measurable with instrumentation or with observational evidence (e.g., 

tree-ring data), it does not preclude them from being valid in terms of demonstrating the 

directional changes resulting from the reduction in GHG emissions, 

Organization: Institute for Energy Research 

Shaw, Donald F. 

Spurgeon, C. M. 

Devon Energy Corporation 

Wood, John S. 

Stanton, Neil 

Mass Comment Campaign 

Comment: 

A commenter indicates the proposed rule to regulate greenhouse gas emissions from light-duty 

vehicles, as well as EPA‘s proposed Endangerment and Cause or Contribute Findings for 

Greenhouse Gases Under Section 202(a) of the Clean Air Act, and Massachusetts v. EPA, 549 

U.S. 497, 525 (2007) are all predicated on the assumption that regulating greenhouse gas 

emissions from light-duty vehicles will reduce the impacts of climate change. The commenter 

asserts that according to this proposed rule the climatic benefits from reducing greenhouse gas 

emissions from light-duty vehicles are very small and therefore will not affect climate change in 

any meaningful way. 

Another commenter indicates that considering the minuscule benefit over a 90 year period, the 

benefit of prematurely invoking the miles per gallon (mpg) standards is even less significant. 

The commenter asks, “What is the net loss over 90 years if the regulation is postponed 10 years 

past the 2016 date?” The commenter asserts that it is clear that the objective is not science but 

giving an appearance of doing something. The commenter further indicates that these minuscule 

benefits will be offset many times by the massive increase in CO2 emissions by China and India 

and unilateral action is futile. 

Another commenter indicates that EPA is proposing to increase the price of automobiles by 

$1,100 per car (74 Fed. Reg. 49460) in exchange for a projected global temperature decrease of 

16 thousandths of a degree Celsius in 90 years. The commenter continues to indicate that 

according to EPA, sea level is projected to change by at most 1.5 millimeters. The commenter 

asserts these tiny amounts are so inconsequential that they will not affect global climate at all nor 

will they affect “public health and welfare.” 

EPA Response: 

Climate change is a global phenomenon and EPA recognizes that this one national action alone 

will not prevent it. Importantly, EPA quantitatively analyzes the potential climate benefits of 

this rule which has the potential to substantially reduce GHGs emissions from the transportation 

sector, specifically light duty vehicles. The changes in climate effects that the rule is projected to 

produce – average of 2.9 ppm of CO2, a few hundredths of a degree Celsius difference in global 

mean temperature, and 1 to 2 millimeters of sea-level rise, a small increase in ocean pH – are 

small. However, EPA notes this would be true for any given GHG mitigation action when taken 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

alone. Although the magnitude of the avoided climate change projected here is small, it shows a 

clear directional signal across all climate sensitivities evaluated. The benefits of GHG emissions 

reductions can be characterized both qualitatively and quantitatively, some of which can be 

monetized (see Chapter 7.5 of the final RIA). 

EPA disagrees with the commenter’s assertion that there is little consequence of waiting 10 years 

after 2016 to enact regulations given the small magnitude of climate benefits estimated for the 

rule. EPA notes a common misunderstanding is that the risks from climate change can be 

quickly addressed by emission reductions and thereby counter negative effects within a few 

years or decades. However, because of the longevity of atmospheric GHG gases warming 

effects persist over long timescales and continued and future emissions would imply further 

long-term climate-related effects on the planet42. As a substantial portion of CO2 emitted into the 

atmosphere is not removed by natural processes for millennia, each unit of CO2 not emitted into 

the atmosphere avoids essentially permanent climate change on centennial time scales. The 

value of EPA’s analysis is not intended to diminish the effectiveness of the rule’s effect on 

global climate conditions but to estimate the benefits of this particular action in reducing GHG 

emissions and global warming impacts by quantifying these potential reductions using the best 

available science. 

EPA does not agree with the view that since other countries (e.g., China and India) have higher 

growth rates of greenhouse gas emissions that the EPA should not act now. Further, EPA does 

not agree with the commenter that reducing greenhouse gases in the U.S. will have no effect on 

global GHG emissions. As indicated in Section III.F of the rule, the U.S. transportation sector is 

the second largest contributor to this nation’s greenhouse gas emissions behind only the 

electricity sector. Transportation sources under Section 202(a)43 of the Clean Air Act (passenger 

cars, light duty trucks, other trucks and buses, motorcycles, and passenger cooling) represent 

23% of total U.S. GHG emissions in 2007 and 4.3% of total global GHG emissions. Moreover, 

section 202(a) GHG emissions are a significantly larger share of global transport GHG emissions 

(28.0%) than the corresponding share of all U.S. GHG emissions to the global total (18.4%), 

reflecting the relative size of the transport sector in the United States compared to the global 

average. As the Supreme Court noted, ‘‘[j]udged by any standard, U.S. motor-vehicle emissions 

make a meaningful contribution to greenhouse gas concentrations and hence, * * * to global 

warming.’’ Massachusetts v. EPA, 549 U.S. 497, 525 (2007). 

EPA’s rule takes many factors into consideration, and is not premised on the view that the 

reductions from this rule will themselves have significant impacts on the global climate. As 

discussed above, no one action will have that effect. The factors EPA takes into account include 

its legal obligation to set emissions standards applicable to vehicular GHG emissions, given the 

endangerment and cause or contribute findings made by EPA, its analysis of available 

technology, the cost of the technology, the fuel savings that will result from the standard, the 

42 Solomon, S., G.-K. Plattner, et al. (2009). "Irreversible climate change due to carbon dioxide emissions." 

Proceedings of the National Academy of Sciences 106: 1704-1709. 

43 Source categories under Section 202(a) of the Clean Air Act are a subset of source categories considered in the 

transportation sector and do not include emissions from non-highway sources such as boats, rail, aircraft, 

agricultural equipment, construction/mining equipment, and other off-road equipment. 

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EPA Response to Comments 

greenhouse gas reductions, implications for vehicle safety, consideration of the rule’s costs in 

relation to benefits, and other impacts. EPA has considered a wide variety of factors in 

determining that its GHG emissions standards are a reasonable exercise of its authority under 

section 202(a) (1). The impact of these reductions on climate change is but one of the factors 

EPA considered. 

Organization: Eadie, R. Frank 

Comment: 

A commenter indicates there are new scientific procedures that actually allow scientists to track 

both the CO2 levels and climate indicators such as sea levels going back millions of years instead 

of hundreds of thousands of years. The commenter indicates that it is known that sea level is 

rising and will likely accelerate based on projections. New studies that have been done with the 

models indicate that the standards that IPCC used in their projections in 2006 are actually 

beyond the level of the worst case scenario that the IPCC had projected. The commenter 

indicates that instead of 2 °C change between now and the end of the century it may be 4 °C 

change by the end of the century. The commenter indicates that all the scientists agree that a 

warming of four degrees centigrade is simply unacceptable and civilization as we know it will 

not exist under those conditions. [EPA-HQ-OAR-2009-0472-4621, p.172-175] 

EPA Response: 

EPA acknowledges that the risks and impacts of climate change are occurring now and will 

continue to increase over this century and that sea level is projected to rise when compared to the 

previous century. As summarized in the Technical Support Document44 of EPA's Endangerment 

and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air 

Act,45 the IPCC reports that by the end of the century (2090-2099), sea level is projected to rise 

by 18 and 59 cm relative to the base period (1980-1999). The IPCC projections contain the 

lowest and highest projections of the 5 to 95% ranges for all Special Report on Emission 

Scenarios (SRES) reference emission scenarios and include neither uncertainty in carbon cycle 

feedbacks nor rapid dynamical changes in ice sheet flow. The projections represent a ‘likely 

range’ which inherently allows for the possibility that the actual rise may be higher or lower. 

Recent observations and studies from the scientific assessment literature suggest that sea level 

rise is likely to be near or above the high end of the IPCC estimates. For example, according to 

the Climate Change Science Programs46 studies have suggested that a global sea level rise of 1 m 

(and up to 1.4 m) is plausible within this century if increased melting of ice sheets in Greenland 

44 “Technical Support Document for Endangerment and Cause or Contribute Findings for Greenhouse Gases Under
 

Section 202(a) of the Clean Air Act” Docket: EPA-HQ-OAR-2009-0472-11292 

45 See 74 FR 66496 (Dec. 15, 2009)
 46 CCSP (2009) Coastal Sensitivity to Sea-Level Rise: A Focus on the Mid-Atlantic Region. A Report by the U.S.
 

Climate Change Science Program and the Subcommittee on Global Change Research. [James G. Titus 

(Coordinating Lead Author), K. Eric Anderson, Donald R. Cahoon, Dean B. Gesch, Stephen K. Gill, Benjamin T. 

Gutierrez, E. Robert Thieler, and S. Jeffress Williams (Lead Authors)], U.S. Environmental Protection Agency, 

Washington DC, USA, 320 pp. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

and Antarctica is added to the factors included in the IPCC estimates. The IPCC47 notes 

“dynamic processes related to ice flow not included in current models but suggested by recent 

observations could increase the vulnerability of the ice sheets to warming, increasing future sea 

level rise.” In addition, the Climate Change Science Program (CCSP)48, finds that the Greenland 

and West Antarctic ice sheets show acceleration of flow and thinning, and that inclusion of these 

processes in models will likely lead to sea level projections for the end of the 21st century that 

substantially exceed the projections presented in the IPCC Fourth Assessment Report (2007). 

Importantly, EPA notes that the underlying scientific literature does not include predictions of 

conditions where civilization cannot exist but rather, will likely face challenges from climate 

change and sea level rise. In addition, these are global projections and climate change impacts 

will vary in nature and magnitude across different regions of the United States. 

Organization: Environment New Jersey 

New York State Department of Environmental Conservation 

Comment: 

Environment New Jersey 

A commenter indicates that predictions of a two to four foot sea level rise in New Jersey are 

incredibly dire. The commenter notes that in New Jersey the Meadowlands, which include such 

landmarks as New Jersey Turnpike, the Newark Airport and Giants Stadium, all are within 

floodplain mapping zones for storm surges. The commenter further notes that several New York 

financial firms in Hudson County are on the line of the submerging and storm surge lines. The 

commenter indicates that the 27 miles of coast of New Jersey is the lion's share of our tourism 

industry, a $38 billion industry for the state, as well as home to casinos and Atlantic City. The 

commenter indicates that most of New Jersey’s shore would suffer from storm surge on an 

unprecedented level and the estimates on real estate damage and loss are astronomical. [These 

comments were submitted as testimony at the New York public hearing. See docket number 

EPA-HQ-OAR-2009-0472-4621, p.73] 

New York State Department of Environmental Conservation 

Another commenter indicates that sea level rise along New York State’s coastal areas will erode 

beaches, damage sensitive ecosystems and cause billions of dollars in flood damage to vital 

infrastructure. [These comments were submitted as testimony at the New York public hearing. 

See docket number EPA-HQ-OAR-2009-0472-4621, p. 12] 

47 Meehl, G.A. et al. (2007) Global Climate Projections. In: Climate Change 2007: The Physical Science Basis. 

Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate 

Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M. Tignor and H.L. Miller (eds.)]. 

Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. 

48 Clark, P.U., A.J. Weaver, E. Brook, E.R. Cook, T.L. Delworth, and K. Steffen (2008) Executive Summary. In: 

Abrupt Climate Change. A Report by the U.S. Climate Change Science Program and the Subcommittee on Global 

Change Research. U.S. Geological Survey, Reston, VA, pp. 7–18. 

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EPA Response to Comments 

EPA Response: 

EPA acknowledges the commenters’ concerns regarding sea-level rise for the States of New 

Jersey and New York and note they are generally consistent with the overview of climate change 

impacts provided in this rule (preamble Section III.F.2). Section III.F of the preamble to the 

vehicle rule summarizes climate change science and impacts from the major scientific 

assessment reports (e.g., IPCC, USGCRP, NRC) on climate science. As indicated in Section 

III.F.2, sea level rise is one of the potential regional impacts to affect the Northeast. Sea level 

rise is expected to increase storm surge height and strength, flooding, erosion, and wetland loss 

along the coasts, particularly in the Northeast, Southeast, and islands. Further, Section III.F.2 

notes that “Coastal communities and habitats will be increasingly stressed by climate change 

impacts interacting with development and pollution. Sea level is rising along much of the U.S. 

coast, and the rate of change will very likely increase in the future, exacerbating the impacts of 

progressive inundation, storm-surge flooding, and shoreline erosion. Storm impacts are likely to 

be more severe, especially along the Gulf and Atlantic coasts.” EPA notes however, that 

localized climate change impact assessments for the specific areas of New York and New Jersey 

are not estimated as part of this national vehicle rule. 

Organization: State of New Jersey 

Comment: 

A commenter indicates the EPA relied on the MAGICC model to determine the overall impact of 

its rule on climate change. These modeling results showed small, but quantifiable, reductions in 

the global atmospheric CO2 concentration, as well as a reduction in projected global mean 

surface temperature and sea level rise, from implementation of the proposal, across all climate 

sensitivities. The commenter agrees with the proposal's assessment of the emission reduction 

benefits of the proposal and its impacts on climate change and encourages the Agencies to move 

forward with the joint rule. [OAR-2009-0472-7109.1, p.10] 

EPA Response: 

Similar to the commenter’s assertion, based on EPA’s modeling approach, EPA notes the 

emission reductions resulting from this rule directionally represent a reduction in the adverse 

risks associated with climate change.. This modeling approach attempts to evaluate the impact 

of the rule’s emissions reductions in the context of global GHG emissions. EPA’s analysis 

estimates the benefits of this particular action in reducing GHG emissions and global warming 

impacts by quantifying these potential reductions using the best available science. 

As mentioned previously, EPA’s rule takes a wide variety of factors into consideration in 

determining that its GHG emissions standards are a reasonable exercise of authority under 

section 202(a). 

Organization: Adcock, James 

Comment: 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

The impact on climate change must be analyzed as part of an assumed national and international 

program to reduce GHG. To attempt to analyze CAFE in isolation is to assume the failure in 

human efforts to control global warming. When you assume a priori the failure in such efforts to 

control global warming, then the impacts of CAFE towards global warming can indeed be 

assumed trivial and be discounted away. Again, a priori, in methods of accounting and analysis, 

NHTSA is assuming the failure of world-wide efforts to control GHG. Such an assumption is 

inconsistent with the positions of the current President. 

EPA Response: 

We agree that addressing climate change will require global action, and will rely on both 

international and domestic programs. However, for the purpose of this rulemaking, it is 

necessary to quantify the impacts and understand the benefits of this particular action -- which is 

a part of the greater whole in responding to this challenge. 

5.12. EPA Estimated Impact on Non-GHG Emissions and Their Associated Effect 

Organization: Missouri Department of Natural Resources, Air Pollution Control Program 

Comment: 

The commenter [EPA-HQ-OAR-2009-0472-7480, p.1] is concerned that the vehicle standards in 

the proposed rule may lead to increases in criteria pollutant and air toxic emissions from mobile 

sources. In addition to providing comments on the proposed rule, the commenter also included a 

variety of comments that pertain to NHTSA’s DEIS (“Criteria Pollutant Emissions” pp. 2-3, 

“Toxics Pollutant Emissions” pp. 3-4, “Localized Calculation of Emissions Reductions” pp. 4-5, 

and “Summary of Comments” p. 5 ). The commenter [OAR-2009-0472-7480, pp. 4-5] expresses 

concern that the results of NHTSA’s DEIS project that some urban areas may have an increased 

level of criteria and toxic emissions resulting from the rebound effect. These results for 

nonattainment and maintenance areas are of particular concern because of the air quality status of 

the two largest urban areas in Missouri. St. Louis is currently designated as nonattainment for 

ozone and PM. Kansas City is designated as a maintenance area for ozone. 

NHTSA and EPA only examined the emission reductions of benzene, 1,3-butadiene, 

formaldehyde, acetaldehyde, and acrolein, but should also have included other air toxics such as 

ethylbenzene, toluene, and the xylene isomers. It appears NHTSA and EPA's examination was 

incomplete, thus, raising questions on the results of the examination presented in this Federal 

Register notice. To address these concerns, the agencies should examine the emission reductions 

of all of the air toxics associated with the extraction, production, distribution, as well as the 

combustion, of fuel. In Table III.G-2 Annual Air Toxic Emission Impacts of Program (shorttons) on page 49593, NHTSA and EPA presented their estimation of the influence of the actions 

of their proposed National Program on the emissions of the aforementioned air toxics. According 

to the data in 2030 the proposed National Program would increase the emissions of 1,3­

butadiene, acetaldehyde, and acrolein, and would decrease the emissions of benzene and 

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EPA Response to Comments 

formaldehyde. The increased emissions equaled 100 short tons and the decreased emissions 

equaled 93 short tons for a net increase of 7 short tons of air toxic emissions. These increased 

emissions were due to downstream impacts reflecting the effects of the previously mentioned 

VMT rebound effect rather than upstream impacts reflecting the extraction, production, and 

distribution of motor gasoline. The data presented in Table III.G-2 therefore showed that the 

proposed actions of the National Program would increase the emissions of the aforementioned 

air toxics due to the increased total amount of gasoline undergoing combustion. 

Yet the two agencies seemed to ignore the data presented in Table III.G-2. The agencies state on 

page 49709 that, 'For most of these pollutants, the reduction in upstream emissions resulting 

from lower fuel production and distribution will outweigh the increase in emissions from vehicle 

use, resulting in a net decline in their total emissions.' The data presented in Table III.G-2 

contradicts this statement and neither agency presented data anywhere else in this notice that 

supported this statement. To correct this contradiction, NHTSA and EPA should present 

evidence that demonstrates the actions of the proposed National Program will not increase air 

toxics emissions from mobile sources. [OAR-2009-0472-7480, pp.2-3] 

EPA Response: 

EPA understands the commenter’s concern that the GHG vehicle standards may lead to 

increased emissions of some pollutants from mobile sources. However, emissions changes alone 

are not a good indication of local or regional air quality impacts. The atmospheric chemistry 

related to ambient concentrations of PM2.5, ozone and air toxics is very complex, and making 

predictions based solely on emissions changes is extremely difficult. Full-scale photochemical 

modeling is necessary to provide the needed spatial and temporal detail to more completely and 

accurately estimate the changes in ambient levels of these pollutants. The length of time needed 

to prepare the necessary emissions inventories, in addition to the processing time associated with 

the modeling itself, precluded EPA from conducting a full-scale photochemical air quality 

modeling analysis in time for the NPRM. For the final rule, however, EPA performed a 

national-scale air quality modeling analysis to analyze the impacts of the standards on PM2.5, 

ozone, and selected air toxics (i.e., benzene, formaldehyde, acetaldehyde, acrolein and 1,3­

butadiene). 

As discussed in Section 7.2 of the RIA, EPA’s air quality modeling projects that final standards 

have relatively little impact on ambient concentrations of modeled PM2.5, ozone, and air toxics. 

For annual and 24-hour PM2.5, our air quality modeling projects design value changes of ±0.05 

μg/m3

 for all Missouri counties, with the exception of one county near St. Louis which is 

projected to see decreases in annual and 24-hour PM2.5 design values between -0.05 and -0.15 

μg/m3 (Section 7.2.2.1 of the RIA). Ozone design value changes as a result of the GHG 

standards finalized in this rule are ±0.1 ppb for all counties in Missouri. EPA notes that the 

commenter’s concerns pertaining to NHTSA’s DEIS are addressed in NHTSA’s DEIS Comment 

Response document, available in NHTSA’s docket for this rulemaking: NHTSA-2009-0059. 

Although a large number of compounds which are considered air toxics could be impacted by the 

GHG vehicle standards, EPA focused on those which were identified as national and regionalscale cancer and noncancer risk drivers in past NATA assessments and were also likely to be 

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significantly impacted by the standards. These compounds include benzene, 1,3-butadiene, 

formaldehyde, acetaldehyde, and acrolein. In addition to developing emission inventories for 

these explicit model species in our photochemical model, EPA also developed inventories for a 

large number of precursor compounds, including aromatics such as ethylbenzene, toluene, and 

xylene isomers, through application of speciation profiles in SMOKE (see also Section 7.2.1.2 of 

the RIA). Thus, EPA does account for changes in the both upstream and downstream emissions 

of numerous air toxics beyond the five species for which we present air quality modeling results. 

In addition, EPA is projecting overall decreases in most criteria and air toxic pollutant emissions 

due to the GHG standards (see Tables III.G-1 and III.G-2 in the preamble to the final rule). In 

most cases the net impacts are less than 1% of the projected 2030 inventory. As seen in the 

tables, EPA projects that the net impact of the program is a slight decrease in the majority of 

modeled emissions, and a slight increase in the remainder. The calculation of these impacts is 

documented in RIA Chapter 5 (substantially similar to the analysis presented in the record to the 

proposed rule). As discussed above, changes in emission inventories alone are not a good 

indication of local or regional air quality impacts. Overall, EPA’s photochemical air quality 

modeling indicates that the final standards have relatively little impact on national average 

ambient concentrations of the modeled air toxics. Regional increases in formaldehyde, 1,3­

butadiene, acrolein, and ethanol are not due to the standards finalized in this rule, but are related 

to our assumptions about the volume of ethanol that will be blended into gasoline. The ethanol 

volumes will be occurring as a result of the recent Renewable Fuel Standards (RFS2) rule and 

were accounted for by EPA in assessing the impacts of that rule.49 For additional detail on air 

toxics results, please see Section 7.2.2.3 of the RIA. 

Organization: Texas Commission on Environmental Quality 

Comment: 

The commenter [EPA-HQ-OAR-2009-0472-7180] argues that the rule proposal states that the 

new GHG emission standards will increase vehicle efficiency and, thereby, lower fuel 

consumption. However, the proposal acknowledges that the new GHG emission standards will 

also likely increase light-duty vehicle use as a result of the 'rebound effect' associated with higher 

fuel economy, resulting in increased criteria pollutant emissions. The 'rebound effect' is defined 

in the proposal as 'the tendency of drivers to drive their vehicles more as the cost of doing so 

goes down, as when fuel economy improves.' The proposal claims that the anticipated increase in 

criteria pollutants associated with the rebound effect would be offset by reduced emissions from 

reductions in domestic fuel refining and distribution brought about by lowering fuel 

consumption. [OAR-2009-0472-7180.1, p.2] 

The commenter [EPA-HQ-OAR-2009-0472-7180, p. 2] is concerned that new GHG emissions 

standards for light-duty vehicles would result in increases in criteria pollutant emissions that are 

of critical importance for compliance with the NAAQS for ozone, primarily emissions of VOC 

and NOx. Specifically, the commenter is concerned that “in areas with little or no fuel refining 

49 EPA 2010, Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis. EPA-420-R-10-006. 

February 2010. Docket EPA-HQ-OAR-2009-0472-11332 

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industry, such as the Dallas-Fort Worth ozone nonattainment area, the rebound effect would 

result in an increase in criteria pollutant emissions.” The commenter is also expressed concern 

about the “anticipated increases in acetaldehyde and 1,3-butadiene.” 

The TCEQ has implemented a number of regulatory air quality control strategies in its ozone 

nonattainment areas to reduce VOC and NOx emissions and is concerned that the adoption of the 

proposed rules for new GHG emissions standards for light-duty vehicles will have a negative 

impact on the efforts Texas has made to meet its current and future air quality goals, especially 

as EPA looks to tighten the ozone standard again. Additionally, the EPA is encouraged to align 

the mobile source control strategies with ozone reduction needs. Texas has made great strides in 

reducing ozone and ozone precursors from federally preempted mobile sources by incentivizing 

mobile fleet turnover through our Texas Emissions Reduction Plan and the Drive a Clean 

Machine program, and placing stringent controls on stationary sources. Because mobile source 

emissions now comprise the majority of NOx emissions in Texas metropolitan areas, EPA should 

not let its GHG rulemaking initiatives interfere with the ability of states to attain and maintain 

increasingly stringent National Ambient Air Quality Standards. Unlike GHG emissions, 

increases in criteria pollutant emissions may have direct health impacts on the citizens of Texas. 

[OAR-2009-0472-7180.1, p.2] 

EPA Response: 

The non-GHG inventories and associated air quality modeling presented by EPA include the 

impacts of both the upstream and downstream emission consequences of the rule, including the 

impact of a rebound effect. This is described more fully in RIA Chapters 5 and 7. 

EPA understands the commenter’s concern about increases in criteria pollutant emissions that are 

important to attainment of the ozone NAAQS. EPA does not believe this rule will interfere with 

attainment of the ozone NAAQS. As discussed in Section 7.2 of the RIA, EPA’s photochemical 

air quality modeling projects that the final standards have relatively little impact on ambient 

concentrations of ozone. Ozone design value changes as a result of the GHG standards finalized 

in this rule are ±0.1 ppb for all Texas counties, with the exception of four counties in the greater 

Houston area which see ozone design value decreases between -0.1 and -0.2 ppb due to projected 

upstream emissions decreases in NOX and VOCs from reduced gasoline production. For annual 

and 24-hour PM2.5, our air quality modeling projects design value changes of ±0.05 μg/m3

 for the 

majority of the counties in Texas. Some Houston-area counties are projected to see decreases in 

annual and 24-hour PM2.5 design values between -0.05 and -0.25 μg/m3 (Section 7.2.2.2 of the 

RIA). 

Our modeling analysis of air toxics, described in Section 7.2.2.3 of the RIA, projects that 

ambient concentrations of acetaldehyde and 1,3-butadiene will decrease in Texas. EPA notes 

that we will be analyzing air quality impacts of increased renewable fuel use as required by the 

“anti-backsliding” provisions of Clean Air Act section 211(v), which also requires EPA to 

promulgate mitigation measures as appropriate, following that study. 

Organization: South Coast Air Quality Management District 

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Comment: 

The proposed emission standards and companion fuel economy standards will result in a 

significant reduction in greenhouse gas emissions as well as provide crucially important cobenefits in reducing criteria emissions in support of attainment of federal and state air quality 

standards for ozone and fine particulates. [Comments are from LA Testimony, OAR-2009-0472­

7283, pp.59-67] 

EPA Response: 

As discussed in the RIA Chapter 7.2, EPA’s air quality modeling projects relatively little impact 

on ambient concentrations of criteria pollutants and toxics, but there are net benefits associated 

with reductions in PM2.5. 

Organization: New York State Department of Environmental Conservation 

Comment: 

EPA's analysis projects criteria pollutant emission reductions as a result of implementation of 

these standards. In particular, emissions reductions are expected from fuel production and 

distribution industries. These reductions are background information, and provide some 

assurance that criteria pollutant emissions increases are unlikely. These reductions, and their 

geographic distribution, are not sufficiently certain to justify viewing them as offsets for 

emissions increases from other programs such as the Renewable Fuel Standard. [OAR-2009­

0472-7454, p.5] 

EPA Response: 

EPA does not view any emissions reductions from this rule as “providing offsets” for emissions 

increases from other rules. EPA has an obligation under the “anti-backsliding” provisions of 

Clean Air Act section 211(v) to analyze the air quality impacts of increased renewable fuel use 

and promulgate mitigation measures as appropriate. 

Organization: Yuli Chew, Private Citizen 

Comment: 

For the rebound effect, in the CARB’s Regulations to Control Greenhouse Gas Emissions from 

Motor Vehicles, Final Statements of Reasons, August 4, 2006, ARB staff estimates that the 

rebound and fleet turnover impacts are essentially offset by the benefits from reduced fuel cycle 

emissions. [OAR-2009-0472-7042.1, p.5] 

I also believe that the rebound and fleet turnover impacts are essentially offset by the benefits 

from reduced fuel cycle emissions.[OAR-2009-0472-7042.1, p.6] 

EPA Response: 

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EPA Response to Comments 

The commenter states that the reduction in upstream emissions decreases is roughly equivalent to 

the rebound emissions, and references a California Air Resources Board report 

(http://www.arb.ca.gov/regact/grnhsgas/fsor.pdf). As shown in Preamble Section III.G, for 

volatile organic compounds (VOC), nitrogen oxides (NOx), and particulate matter (PM2.5), 

upstream reductions are slightly larger than the emissions increases attributed to the rebound 

effect when a 10% rebound effect estimate is used. There are both upstream and downstream 

decreases of SOx emissions. EPA provides a full discussion of the impacts of rebound and 

upstream emissions in Section III.G of the preamble to the final rule and in Chapter 5 of the RIA. 

5.12.1 Upstream Impacts of Program 

Relevant comments have been included in Section 5.12. 

5.12.2 Downstream Impacts of Program 

Relevant comments have been included in Section 5.12. 

5.12.3. Health Effects of Non-GHG Pollutants 

Organization:American Lung Association of California 

Physicians for Social Responsibility, Los Angeles 

California State Senate 

Environment New Jersey 

South Coast Air Quality Management District 

Comment: 

American Lung Association of California 

California’s unique air quality problems demand the strongest possible action to fight global 

warming. Our state is home to some of the worst air quality in the nation, largely due to motor 

vehicles, and this air pollution crisis has created a public health crisis. The American Lung 

Association’s 2009 national State of the Air report continued to demonstrate that California 

dominates the lists of worst polluted cities in the country. The report found that California has 6 

out of the top 10 worst ozone polluted cities in the country and again listed the Los Angeles 

region as home to the worst ozone pollution in America. 

Higher levels of death and illness from pollution exposures is experienced by vulnerable 

individuals, including those with asthma or other respiratory and cardiac illnesses, the elderly, 

infants, children, teenagers, low income communities, communities of color, and people living 

near pollution hot spots including heavily travelled roads. There are millions of individuals that 

are particularly vulnerable to pollution in our region. 

Just as the transportation sector is the primary source of criteria pollution in California, it is also 

the primary source of greenhouse gases, and global warming is expected to worsen ozone 

pollution and its health effects. California and the rest of the country depend on this proposed 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

regulation as a key step to reduce this major source of global warming emissions. Without strong 

action, rising temperatures from global warming will likely lead to even more illness and 

suffering from increases in air pollution and pollen production, longer and more intense heat 

waves, and devastating wildfires and related smoke exposure. Recent research conducted by UC 

Berkeley estimates that the public health costs to California from global warming will add an 

additional cost of $3 billion to $24 billion annually depending on our success in reducing 

greenhouse gases. Scientists predict that here in Los Angeles, global warming will cause the 

number of heat wave days to rise dramatically, which could lead to a 75-85% increase in the 

number of days with unhealthy air quality. 

[OAR-2009-0472-7216.1, Docket Number OAR-2009-0472-7216/7216.1 These comments are 

from testimony presented at the LA public hearing.] 

Physicians for Social Responsibility, Los Angeles 

Also when we focus on the health impacts of these tailpipe emissions and air pollution, for many 

years we have spoken, and rightly so, on the issues of asthma and respiratory disease. We must 

remember that air pollution poses a significant threat to the health of women who live in hightraffic areas. 

Over the last decade, a large number of studies have investigated the possible adverse effects of 

ambient air pollution on birth outcomes. A number of key studies have been done in Los 

Angeles. The work of Dr. Beate Ritz, the doctor who worked with Dr. Tracy Woodruff, have 

shown that -- and both published in Environmental Health Perspectives -- have shown that there 

is a significant implication of air pollution in adverse birth outcomes, low birth weight, changes 

to the health of damaged heart valve development. 

 [These comments are from LA Testimony, OAR-2009-0472-7283, pages 79-85] 

California State Senate 

There is a compelling link between global warming and air pollution. Warmer temperatures 

increase our ozone and smog forming pollutants. We have alarming and growing respiratory 

illness, asthma and cancer rates occurring among our youth and the elderly. Several intense heat 

waves over weeks at a time have caused illness and deaths. Lower income neighborhoods that 

often lack air conditioning are particularly at risk during heat episodes. Agricultural losses, 

increases in vector borne diseases, and a dramatic increase in loss of property and air pollution 

from costly wildfires have become the new normal. 

California is not the only state that is impacted by air pollution. From Denver, to Chicago, to 

Albuquerque New Mexico, air pollution is a serious health problem. Two years ago, I testified in 

Santa Fe, New Mexico as they were having a hearing on adopting California’s Clean Car 

standards. Several doctors and pediatricians, on their own initiative, came to support the policy 

because of their concerns of their patients’ health. For many, they said it was the first time they 

had ever testified at a government hearing. 

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EPA Response to Comments 

 [OAR-2009-0472-7275.1, also EPA-HQ-OAR-2009-0472-7283, pp. 13-20] 

Environment New Jersey 

Something that's clear to residents, especially from north Jersey, is the impacts of light-duty 

vehicles, cars and trucks, on our air pollution. In New Jersey, the majority of our counties still 

remain out of compliance with U.S. EPA health standards, to the extent that the asthma levels are 

certainly higher in New Jersey than other areas. They're especially high in urban areas that are 

closest to some of the largest highways in the state. These are again the externalities that were 

touched upon in the National Academy of Sciences report and these literally mean thousands of 

asthma attacks per year as well as increased levels of cancer and heart disease. [EPA-HQ-OAR2009-0472-4621, pp. 77-78] 

South Coast Air Quality Management District 

[The following comments are from LA public hearing testimony OAR-2009-0472-7283, pp. 59­

67.] 

Over 25 percent of the nation's exposure to the eight-hour ozone standard occurs here in the 

South Coast Air Basin, while over 50 percent of the nation's 24-hour PM2.5 standard exposure 

occurs here. 

There are over ten million registered light-duty vehicles in the South Coast Air Basin.

 Reductions in fuel use associated with the standards proposed will therefore have a direct and 

tangible benefit in terms of public health and welfare in our region. 

The Air Resources Board has shown its sensitivity in addressing this issue while carefully 

balancing social and industry needs to minimize cost and maximize consumer choice while 

maximizing overall benefits. 

Central to this determination is the imperative to improve public health. We are especially 

pleased, therefore, that the ARB's program is fashioned around the value that there can be no 

tradeoff between greenhouse gas emissions and criteria emissions. 

EPA Response: 

EPA agrees that there is a link between climate change and air pollution. For instance, as 

summarized in the Technical Support Document of EPA's Endangerment and Cause or 

Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act, according 

to the Intergovernmental Panel on Climate Change, climate change is expected to lead to 

increases in regional ozone pollution in the United States.50,51 

50 “Technical Support Document for Endangerment and Cause or Contribute Findings for Greenhouse Gases Under 

Section 202(a) of the Clean Air Act” Docket: EPA-HQ-OAR-2009-0472-11292 

51 See 74 FR 66496 (Dec. 15, 2009)-8 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

In addition, emissions from light-duty vehicles contribute to ambient air pollution that poses 

significant health concerns. Section 7.1 of the RIA for this rule details the health effects 

associated with PM2.5, ozone, CO, NOx, SOx and several air toxics. EPA agrees that air pollution 

in high-traffic areas is a significant issue; Section 7.1.1.6 of the RIA discusses exposure and 

health effects associated with traffic specifically. In addition, see Section III.G and III.H of the 

preamble to the final rule and Chapter 7 of the RIA for a discussion of the air quality and 

monetized health benefits of this rule. 

5.12.4 Environmental Effects of Non-GHG Pollutants 

No comments were received on the environmental effects of non-GHG pollutants. The Center 

for Biological Diversity's comments on the Endangered Species Act are addressed in Section 4.7 

of this document. 

5.12.5. Air Quality Impacts of Non-GHG Pollutants 

Relevant comments have been included in Section 5.12. 

5.13 EPA Estimated Cost, Economic, and Other Impacts 

5.13.1 Conceptual Framework for Evaluating Consumer Impacts 

“Energy Paradox” 

Organization: American Council for an Energy Efficient Economy 

Consumer Federation of America 

International Council on Clean Transportation 

University of Michigan Transportation Research Institute (UMTRI) 

Consumer Federation of America 

Union of Concerned Scientists 

James Adcock 

New York University School of Law, Institute for Policy Integrity (IPI) 

Comment: 

American Council for an Energy Efficient Economy 

In terms of consumer welfare, from this perspective, the discussion of consumer welfare impacts 

of the proposed rule is troubling. The agencies' finding that raising fuel economy will increase 

consumer welfare despite the modest share of vehicles purchased today that are highly efficient 

is not a conundrum, but rather a manifestation of extensively studied failures in the market for 

energy for energy efficiency. The vehicles that will enable manufacturers to meet the new 

standards by and large are not available today. The standards have been designed to allow 

vehicles in each market segment to attain the required fuel economy and emissions levels 

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EPA Response to Comments 

without changes to other vehicle properties. [These comments were submitted as testimony at the 

New York public hearing. See docket number EPA-HQ-OAR-2009-0472-4621, pp. 146-147.] 

Consumer Federation of America 

The very large potential efficiency gains estimated by the engineering/economic analysis 

conducted by NHTSA/EPA, which can be most easily summarized by nothing that, even at the 

highest and most expensive level, the cost of saved energy is about one-third of the price to 

consume energy, are at the core of a decades long debate over fuel economy standards. In a 

capitalist economy, when problems are serious, like rising energy prices and imports, and a 

solution is inexpensive and potentially widely available, one would expect people to seize it. The 

existence of the “efficiency gap” immediately raises the question: “Why don’t people buy more 

of it?' 

The efficiency gap is not new, nor is it confined to the transportation sector. A similar efficiency 

gap is found in building sector energy consumption. As Exhibit I-1 shows, the magnitude of the 

problem is similar across sectors. In the past few months, four major national research 

institutions have released reports that document the huge potential for investments in energy 

efficiency to lower consumers’ bills and greenhouse gas emissions, creating a win-win for 

consumers and the environment. The National Research Council of the National Academy of 

Sciences has estimated the potential reduction in electricity, natural gas and gasoline at 

approximately 30 percent, similar to the estimates of NHTSA/EPA. McKinsey and Company and 

the American Council for Energy Efficient Economy have reached a similar conclusion on 

electricity and natural gas. Across these three sectors, saving energy costs about one third of the 

price of consuming it. See [OAR-2009-0472-7272.1, pp.15-22] for extensive analysis 

[The following comments were submitted as testimony at the Detroit public hearing. See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 108-111] 

Our research shows that the market failure is on the supply side as well as the demand side. 

Survey research shows there is a huge mismatch between consumer demand and the vehicles 

offered in the marketplace for efficiency. Analysis shows that consumers began shifting their 

consumption patterns five years ago, but the automakers were unwilling or unable to respond, 

and they were left with a growing number of vehicles that they could not sell. 

But the most ironic fact is the following: The behavioral economics literature that the agencies 

cited in their notice conclude that consumers are deficient in motivation, perception, and 

calculation, and that that is a basis on which to conclude there is a market failure. But at the 

same time those models incorrectly assume that producers are perfect, have perfect information, 

perfect foresight, and perfect analytic capability. 

It turns out, as the headline of the Detroit Free Press says today, 'Producers are people, too.' 

They suffer the same deficiencies of motivation, perception, and calculation, and it turns out they 

also have perverse incentives to exploit information asymmetries and abuse market power to 

increase profit. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

So these two sets of far-from-perfect actors come together in a set of market institutions that 

compound and magnify their deficiencies. The result is a 30-percent market failure, one of the 

grossest inefficiencies in our whole economy. We consume 30 percent more energy than we 

should if we're behaving efficiently. That shortfall costs consumers, reduces consumer welfare, 

and fuel economy standards are the way to address it. 

So EPA and NHTSA have an opportunity in the current rulemaking to establish a platform on 

which a dynamic, innovative automobile sector can be built in America, one which meets the 

needs for transportation in our continental economy in a manner that saves consumers money, 

enhances national security through reduced oil imports, and ensures the transportation sector 

makes its fair contribution to meeting the challenge of global warming. 

To build that platform it is critically important to recognize the vital role that fuel economy 

standards play in correcting market failures and set standards at a level that captures the full 

measure of the value of the increased efficiency. In so doing, they will create an environment in 

which a new automobile industry can thrive. We look forward to working with the agency to 

build that platform. 

International Council on Clean Transportation 

The impact of the proposed standards on consumer welfare is the subject of much debate in the 

proposal, reflecting the lack of clarity and understanding of this issue in general. The debate 

revolves around the so-called Energy Paradox. Assuming full information and perfect foresight, 

standard economic theory says that consumers will make optimal tradeoffs between the purchase 

price and subsequent operating costs. In short, the problem is that consumers appear not to 

purchase products that are in their economic self-interest. 

Both agencies chose to exclude estimates of consumer welfare loss due to changes in vehicle 

choice. Although this was done primarily because of methodological concerns, ICCT supports 

this decision and does not believe there is significant consumer welfare loss in this case. 

Consumers do undervalue fuel savings because of uncertainty and loss-aversion and generally 

understand that standards do not reduce their welfare, as explained below. 

There is substantial circumstantial evidence that most consumers in the U.S. place a low value on 

fuel economy. For example, Turrentine and Kurani, 1 conducted an in depth survey of the carbuying histories of 57 California households. None of these 57 households made any kind of 

quantitative assessment of the value of fuel savings and only 9 stated they compared the fuel 

economy of vehicles in making their choice. The selected consumers were largely unaware of 

their annual fuel cost, in contrast to general knowledge of the daily price fluctuations of a gallon 

of gasoline. Turrentine and Kurani concluded that: “When consumers buy a vehicle, they have 

neither the tools nor the motivation nor the basic building blocks of knowledge to make a 

calculated decision about fuel costs.” 

Turrentine and Kurani’s findings were not based upon a representative sample, but they are 

generally supported by the results of a 2007 national random survey of 1,030 households 

(Opinion Research, 2007). When asked about their last vehicle purchase, 39 percent of 

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EPA Response to Comments 

respondents indicated they did not consider fuel economy at all and, of those who did, only 14 

percent mentioned taking fuel costs or gasoline prices into consideration. 

The question that has been debated for decades is simply – why? This is an extremely important 

question, as most of the calculation of consumer welfare is based on the answer. If consumers are 

already receiving their optimum level of fuel economy, then efficiency standards will decrease 

their welfare. However, if there are valid reasons why consumers are not making optimal 

tradeoffs at the time of vehicle purchase, or if the entire question is not being framed properly, 

then efficiency standards could increase consumer welfare. 

NHTSA, EPA, and the U.S. Office of Management and Budget (OMB) all recognize the 

importance of the Energy Paradox, but state that it is not currently possible to fully account for 

all effects on consumer welfare. While they all estimate the benefits of the GHG rule would 

outweigh eventual losses of associated private welfare, they suggest further analyzing the subject 

of consumer welfare for future rule making: 

EPA said they are not able to estimate the consumer welfare loss that may accompany the actual 

fuel savings from the proposal and asked for comments “on how to assess these difficult 

questions in the future”. NHTSA invites comments “on the state of the art of consumer vehicle 

choice modeling, as well as on the prospects for these models to yield reliable estimates of 

changes in consumer welfare from requiring higher fuel economy.” OMB provided a 17 page 

document containing suggested revisions for sections III.H and IV.G of the preamble. While 

their suggestions were not incorporated into the text in the proposed rule, their document 

indicates OMB’s concern about consumer welfare and their desire to settle the long-standing 

issues. Compared to the language in the preamble, the OMB language is more precise and clear 

and the text is more structured. For example, they would have rewritten EPA’s request for 

comments to say, “EPA is not in a position to produce empirical estimates of the magnitude of 

these losses. We lay out a framework for how EPA will make progress on this issue for future 

rulemakings.” 

NHTSA and EPA accurately discussed the uncertainty-loss aversion theory in the proposal. 

However, it was presented as one of an array of possible explanations. Not only is uncertaintyloss aversion sufficient to explain consumer behavior by itself, but the other forms of market 

failure can also be viewed simply as factors increasing the uncertainty of the future fuel cost 

savings. 

Does this mean that customers only value 3 years of fuel savings and that their consumer welfare 

will decrease if standards force them to save money on fuel from technologies that achieve a 

fuel-savings based payback in more than 3 years? Not necessarily. There are two important 

issues that affect the conclusion: (1) Standards change the status quo by removing the option to 

buy a vehicle without the additional efficiency technology – it is not presented to the customer at 

all. (2) Standards require everyone to purchase higher levels of efficiency technology, not just 

individual customers, leading to indirect consumer welfare benefits. 

The concept of consumer welfare under standard economic theory is based upon individual 

choices. However, efficiency standards affect everyone, not just individual customers. This 

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changes the calculation of consumer welfare. The individual’s welfare is now the sum of the 

direct impact on the individual and the indirect benefit to the individual of forcing other 

customers to buy more efficient vehicles. 

There is also a potential issue with the consumer welfare of second and subsequent owners. In 

reality, the original purchaser likely does not assess the full useful life fuel savings, including 

uncertainty, when making purchase decisions. Rather, the original purchaser likely assesses the 

fuel savings for his/her ownership period plus the additional amount the second owner will pay 

for the higher fuel economy, both including uncertainty. Because of uncertainty, the original 

owner severely discounts what the second owner would be willing to pay for the higher fuel 

economy. If this discounted value is smaller than the value the subsequent owner would place on 

the fuel savings, including uncertainty, this creates a loss of welfare for the second owner. 

University of Michigan Transportation Research Institute (UMTRI) 

This section responds to interagency comments received prior to the publishing of the NPRM in 

the Federal Register. These interagency comments are contained in Document ID: EPA-HQOAR-2009-0472-0317.2: “Corporate Average Fuel Economy/Green House Gas (CAFE/GHG) 

Notice of Proposed Rule Making (NPRM) Summary of Interagency Comments under E. 0. 

(Executive Order) 12866”. The interagency comments are in the form of a suggested rewrite of 

Section III.H of the “Proposed Rulemaking to Establish Light-Duty Vehicle Greenhouse Gas 

Emission Standards and Corporate Average Fuel Economy Standards”. [OAR-2009-0472­

3651.1, p.5] 

The key paragraph contains the conceptual rationale for the suggested approach. 

“The changes in welfare, holding constant vehicle purchases, turn on assumptions about 

consumers’ private discount rate. Assuming perfectly competitive markets and perfect consumer 

foresight, standard economic theory suggests that in the absence of regulation, consumers 

currently make optimal trade-offs between the cost of purchasing a new vehicle and its 

subsequent operating costs (i.e., fuel expenditures, time spent refueling, and the benefits of 

additional driving). The assumption of perfect consumer foresight has of course run into serious 

theoretical and empirical objections in recent years, especially from behavioral economics. But it 

is important to see that on the stated assumption, no net private benefits accrue from the rule, 

since the regulation will change the purchase price of new cars and the stream of operating costs. 

The essence of this view is that in the absence of the regulation, consumers fully understand their 

current and future financial positions and optimally balance the trade-off between upfront costs 

and future operating costs. For this reason, CAFE or any other regulation that alters this trade-off 

must harm their private well being. This intuition behind this conclusion is best captured by the 

recognition that automobile companies currently sell vehicles that already comply with the 

standards set forth in this rule -- yet many consumers choose not to purchase these 

vehicles.” [OAR-2009-0472-3651.1, p.6] 

In evaluating proposed regulations, the benefits and costs of the regulation must be measured 

against a baseline. The above paragraph suggests that the baseline should be “perfectly 

competitive markets and perfect consumer foresight”. However, according to the OMB’s 

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EPA Response to Comments 

guidelines for economic analysis of regulations, the baseline should be the “best assessment of 

the way the world would look absent the proposed regulation”. Perfectly competitive markets 

and perfect consumer foresight do not describe the way the world looks today and are highly 

unlikely to describe the way the world would look in the future—with or without the proposed 

GHG emission standards. [OAR-2009-0472-3651.1, p.6] 

Market failure can arise from externalities, market power, and inadequate or asymmetric 

information. The “market” for clean, fuel-efficient motor vehicles has all the necessary 

conditions for market failure. The most significant are inadequate information about the future 

and limitations in human rationality. Neither consumers nor automakers possess perfect foresight 

and rationality in making decisions. Calculations of welfare loss based on subjective consumer 

valuation are always problematic—they are difficult to estimate and difficult to justify. Using the 

perfect market populated by perfect producers and perfect consumers as the baseline against 

which gains and losses are assessed assumes that the status quo is the perfect market. [OAR2009-0472-3651.1, p.6] 

The OMB guidelines have it right—the baseline should be the way the real world would look 

absent the regulation. Adopting the approach in the suggested rewrite of section III.H would get 

it wrong. [OAR-2009-0472-3651.1, p.6] 

In standard economic theory, a perfectly competitive market populated by consumers and firms 

with perfect foresight is, by definition, a world in which private welfare is maximized. Thus, any 

regulated change of product attributes or mix of products reduces private welfare. Setting the 

baseline as the perfectly competitive market populated by consumers and firms with perfect 

foresight, and then “concluding” that GHG emission regulations result in private welfare loss is 

an example of a rhetorical tautology. The conclusion is already present in the assumption. [OAR2009-0472-3651.1, p.7] 

The last sentence in the quoted paragraph reads, “This intuition behind this conclusion is best 

captured by the recognition that automobile companies currently sell vehicles that already 

comply with the standards set forth in this rule -- yet many consumers choose not to purchase 

these vehicles.” The statement is misleading. Targets are set vehicle-by-vehicle based on 

footprint, however the standard must be met by each company. Thus, it is wrong to say that some 

vehicles already comply with the standards. [OAR-2009-0472-3651.1, p.7] 

Let’s assume that what was meant by the statement is that automobile companies currently sell 

some vehicles that are very fuel-efficient and clean, and that some consumers choose not to 

purchase these clean fuel-efficient vehicles. This is a true statement. However, the observed 

diversity in consumer purchases does not imply that CAFE necessarily harms private well-being. 

Since that conclusion is tautologically true if one assumes a perfectly competitive market with 

consumers and producers with perfect foresight, the observed diversity in consumer purchases is 

irrelevant. [OAR-2009-0472-3651.1, p.7] 

[UMTRI also submitted these comments as testimony at the Detroit public hearing, See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 40-42.] 

5-408
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

Consumer Federation of America 

[Following is from [OAR-2009-0472-7272.1, p.42] 

As discussed in Section II, the Notice barely scratches the surface of the debate over the 

“efficiency gap” and the policies to deal with it. The terminology applied to describe the failure 

of energy markets to achieve the level of energy efficiency one would expect from a theoretically 

efficient market has proliferated as concern over this problem has grown. The existence of this 

“efficiency gap” is explained with terms like barriers, obstacles, challenges, imperfections, and 

failures. These terms are often applied differently by different authors. When all is said and done, 

however, there is substantial consensus on the challenges energy efficiency faces. 

To establish a framework for explaining the existence and magnitude of the market failure, as 

well as why fuel economy standards are an effective solution to the problem, this section reviews 

several literatures. 

First, we review the discussion of the issue in the Notice of Proposed Rulemaking and its 

supporting documents. The agencies have invited comment on this issue. 

Second, we briefly establish the basis for market failure analysis in the general economic 

literature. We start from traditional economic discussions and then move to more recent 

challenges to the traditional model in transaction cost and behavioral economics. 

Third, we review the general “efficiency gap” literature. This literature was cited in the Notice 

and supporting documents. 

Fourth, we review the “efficiency gap” literature as it relates directly to fuel economy and the 

importance of supply-side causes of market failure. This literature was also cited in the Notice 

and supporting documents. 

Union of Concerned Scientists 

Consumers also have not had perfect substitutes available in the market. The assertion that “fuel 

efficient cars are currently offered for sale, and consumers’ purchasing decisions may suggest a 

preference for lower fuel economy than the proposed rule mandates” indicates a lack of 

knowledge about the actual vehicle offerings. For example, in minivans available for Model 

Year 2010, consumer fuel economy choices range from 18-20 mpg. To achieve higher fuel 

economy a consumer has one choice, a 23 mpg model that is smaller and less powerful than the 

others on the market. While a consumer choosing the 20 mpg model instead of the 23 mpg model 

does indicate that they place more value on the available size and performance than on the 

benefit of a 3 mpg increase, it does not imply that they would experience a welfare loss if they 

were given a 23 mpg vehicle with the same size and performance as the 20 mpg model. With the 

technology available to automakers, consumers will be able to purchase 2016 models with the 

same size and performance, and likely even better safety, than they have today while also saving 

money on fuel. [OAR-2009-0472-7181.1, pp.15-16] 

5-409 
EPA Response to Comments 

Finally, the argument that consumers have an intuition that allows them to act as if they were 

operating in a perfect market is belied by the shifts in sales away from large SUVs that occurred 

as gas prices shot up in 2007 and 2008. Consumers, and manufacturers, were clearly unprepared 

for these changes and lacked the foresight and substitutes to maintain their welfare. If this 

intuition exists, it must be based on some unknown ability, as recent work by Kurani and 

Turentine indicates that consumers “do not have the basic building blocks of knowledge to make 

an economically rational decision.” [OAR-2009-0472-7181.1, p.16] 

James Adcock 

The "Energy Paradox" Explained: Traditionally more expensive vehicles consume more fuel 

which corresponds to a generally marketing pattern of "conspicuous consumption" by more 

wealthy consumers - where consumers display their personal wealth and power through their 

display of overall consumption. High MPG vehicles such as a Prius turn this standard marketing 

paradigm on its head: now the wealthier consumer is paying to display their NON-consumption. 

Hollywood for example "Living with Ed" has been trying to sell the "less is cool" message for 

many years now. But then small high-MPG vehicles like the Prius conflict with the general 

marketing message of a Mfg which is "More is Better." This problem with mixed marketing 

messages coming from a Mfg was best represented by GMC having to decide whether to 

produce the EV 1 or the Hummer - GMC couldn't do both because of the oxymoron corporate 

marketing message involved. Likewise Toyota today falls under consumer pressure to stop 

manufacturing large trucks and become a "Purely Green" company. 

We believe NHTSA continues to misunderstand the oil shock 1973 : It was high gas prices, NOT 

CAFE which lead consumers to downsize their choice of vehicles . Higher CAFE standards 

allow the consumer to be able to afford to buy a larger more safe vehicle than in the absence of 

CAFE. Consumer preference in vehicles HAS changed as indicated by Mfgs advertising MPG 

NOT HP in their TV ads . That offered MPG is not what consumers desire can be implied by the 

universal Mfg practice of touting HWY MPG NOT "Combined" MPG in their TV ads. The 

NHTSA discussion of consumer implied discounting rates cannot explain the success of the 

Prius . NHTSA needs to be able to explain this "anomaly" and also be able to explain the 

extremely high consumer satisfaction indices associated with Prius purchases. Recent refusals of 

consumers to buy large low MPG trucks would imply that it is NHTSA and the Mfgs who are 

not valuing MPG correctly - not consumers! NHTSA complains that consumers do not correctly 

value gas savings while allowing Mfgs to widely misrepresent the fuel efficiency of their 

vehicles, for example by broadcasting televisions ads which display HWY MPG as-if it were 

Combined MPG. The fact that Mfgs feel the need to misrepresent the MPG they are achieving 

demonstrates that consumers want higher fuel economy than Mfgs are providing. In the face of 

this CAFE can be seen as fulfilling an important consumer protection role against the misleading 

Mfgs Advertising. 

"If . . . consumers have reliable information to estimate . . . future fuel savings." But consumers 

DO NOT have such "reliable information!" What consumers get is Mfg unreliable information in 

the way of TV ads that tout unrealistically high MPG while the unreadable fine print on the 

bottom of the screen says we are quoting HWY MPG not the more realistic COMBINED MPG." 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

So consumers believe they are buying higher MPG than they are actually getting because Mfgs 

are misrepresenting MPG in TV ads. 

"Compromising Performance" is only a compromise to the extent that consumers WANT their 

"performance" measured on a "0 to 60" basis. To the extent consumers want their "performance" 

measured on an "MPG" basis then downsizing engines cost the Mfgs "Less than Nothing" - thus 

NHTSA standards based on an assumed "no change in performance" [meaning no change in "0 

to 60"] are in fact being set too low - because at least some consumers measure "performance" 

on an MPG basis, not on a "0 to 60" basis. 

New York University School of Law, Institute for Policy Integrity (IPI) 

All other things equal, fully informed and perfectly rational consumers should be indifferent 

between a $1 increase in vehicle purchase price and a $1 savings in net present value of fuel 

costs. Yet a growing body of evidence suggests that consumers under-weigh costs that are less 

salient or accrue in the future, such as shipping and handles charges, management fees, sales tax, 

electricity, and fuel. One very recent study using a novel design and conservative assumptions 

found a significant average undervaluation of vehicle operating costs: consumers were willing to 

pay only 25 cents extra to reduce the net present value of expected gas costs by $1. [OAR-2009­

0472-7232.3, p. 5] 

This discrepancy—called the Energy Efficiency Paradox—can be depicted graphically [See 

OAR-2009-0472-7232.3, p. 5 for the graph.]. At a car’s market price, some consumers will not 

buy, and others would actually be willing to pay more. [OAR-2009-0472-7232.3, p. 5] 

The area between the demand curve and the market price—the “consumer surplus”—defines the 

value consumers attach to a good above its market price. Consumers will buy a car up the point 

where the purchase price plus the perceived operating costs equals their willingness to pay. 

However, if actual operating costs are much higher than perceived operating costs, consumers 

will buy more of this particular car model than they rationally should. Moreover, economic 

studies that look only at consumers’ choices would overestimate consumer surplus and would 

therefore overestimate the lost consumer welfare from restricting the consumers’ ability to select 

that particular model. [OAR-2009-0472-7232.3, p. 6] 

Explanations for the Energy Efficiency Paradox will inform the appropriate regulatory response. 

NHTSA raises the possibility that no paradox exists: rather, consumers might be making a 

rational choice given uncertainty about future fuel prices and their vehicle’s expected lifetime 

and usage. Consumers might compare the known, irreversible, upfront purchase price against an 

unknowable future stream of fuel savings, and choose to minimize the former. Regulations 

restricting such a choice would reduce consumer welfare. The current empirical evidence for 

such an explanation seems mixed at best: NHTSA should consider whether the evidence is 

sufficient to warrant adjusting its estimate of the Energy Efficiency Paradox, but overall support 

does not seem to justify a conclusion that no paradox exists. [OAR-2009-0472-7232.3, p. 6] 

Another possible explanation is that consumers lack the necessary information to make a rational 

choice, do not fully appreciate the information presented, or are unable to translate information 

on fuel efficiency into expected fuel savings. This almost certainly is part of the problem, and the 

5-411 
EPA Response to Comments 

agencies should continue efforts in the proposed rulemaking to improve the labeling and 

information available to consumers, especially in light of recent research demonstrating how 

mere differences in the presentation of numbers can alter consumer valuations. [OAR-2009­

0472-7232.3, p. 6] 

But even if consumers had full information, the Energy Efficiency Paradox might persist if 

consumers apply a high discount rate to operating costs or are especially averse to short�term 

loss. In such a case, there is a legitimate role for government regulation to encourage consumers 

to consider the long-term costs of car ownership. And, as explored more fully in the next section, 

government regulation may be necessary to correct market failures that lead consumers to make 

sub-optimal choices about fuel efficiency. [OAR-2009-0472-7232.3, p. 6] 

EPA Response: 

For this rule, EPA projects significant private gains to consumers in three major areas: (1) 

reductions in spending on fuel, (2) time saved due to less refueling, and (3) welfare gains from 

additional driving that results from the rebound effect. In combination, these private savings, 

mostly from fuel savings, appear to outweigh by a large margin the costs of the program, even 

without accounting for externalities. 

Admittedly, these findings pose an economic conundrum. On the one hand, consumers are 

expected to gain significantly from the rules, as the increased cost of fuel efficient cars appears 

to be far smaller than the fuel savings. Yet these technologies are readily available; financially 

savvy consumers could have sought vehicles with improved fuel efficiency, and auto makers 

seeking those customers could have offered them. Assuming full information, perfect foresight, 

perfect competition, and financially rational consumers and producers, standard economic theory 

suggests that normal market operations would have provided the private net gains to consumers, 

and the only benefits of the rule would be due to external benefits. Assuming those conditions, if 

our analysis projects that there are net private benefits that consumers have not realized in this 

perfectly functioning market, then increased fuel economy should be accompanied by a 

corresponding loss in consumer welfare. This calculation assumes that consumers accurately 

predict and act on all the benefits they will get from a new vehicle, and that producers market 

products providing those benefits. The existence of large private net benefits from this rule, 

then, suggests either that the assumptions noted above do not hold, or that EPA’s analysis has 

missed some factor(s) tied to improved fuel economy that reduce(s) consumer welfare. With 

respect to the latter, EPA believes the costs of the technologies developed for this rule take into 

account the cost needed to ensure that all vehicle qualities (including performance, reliability, 

and size) stay constant, except for fuel economy and vehicle price. As a result, there would need 

to be some other changed qualities that would reduce the benefits consumers receive from their 

vehicles. Changing circumstances (e.g., increased demand for horsepower in response to a drop 

in fuel prices), and any changes in vehicle attributes that manufacturers elect to make may result 

in additional private impacts to vehicle buyers from requiring increased fuel economy. 

5-412
 
 

 

 

 

EPA Vehicle Program, Feasibility, and Estimated Impacts 

The central conundrum has been referred to as the Energy Paradox in this setting (and in several 

others).52 In short, the problem is that consumers appear not to purchase products that are in 

their economic self-interest. There are strong theoretical reasons why this might be so.53 

Consumers might be myopic and hence undervalue the long-term; they might lack information or 

a full appreciation of information even when it is presented; they might be especially averse to 

the short-term losses associated with the higher prices of energy efficient products (the 

behavioral phenomenon of “loss aversion”); even if consumers have relevant knowledge, the 

benefits of energy efficient vehicles might not be sufficiently salient to them at the time of 

purchase; or, in the case of vehicle fuel efficiency, consumers may have relatively few choices to 

purchase vehicles with greater fuel economy once other characteristics, such as vehicle class, are 

chosen. A great deal of work in behavioral economics identifies factors of this sort, which help 

account for the Energy Paradox.54 This point holds in the context of fuel savings (the main focus 

here), but it applies equally to the other private benefits, including reductions in refueling time 

and additional driving.55 

Considerable research suggests that the Energy Paradox is real and significant due in part to 

consumers’ inability to value future fuel savings appropriately. For example, Sanstad and 

Howarth (1994) argue that consumers optimize behavior without full information by resorting to 

imprecise but convenient rules of thumb. Consumers face difficulty in predicting the fuel 

savings that they are likely to get from a vehicle, for a number of reasons. For instance, the 

calculation of fuel savings is complex, and consumers may not make it correctly.56 Larrick and 

Soll (2008) find evidence that consumers do not understand how to translate changes in milesper-gallon into fuel savings (a concern that EPA is continuing to attempt to address).57 In 

addition, future fuel price (a major component of fuel savings) is highly uncertain. Consumer 

fuel savings also vary across individuals, who travel different amounts and have different driving 

styles. Studies regularly show that fuel economy plays a role in consumers’ vehicle purchases, 

but modeling that role may still be in development.58 

52 Jaffe, A. B., and Stavins, R. N. (1994). The Energy Paradox and the Diffusion of Conservation Technology. 

Resource and Energy Economics, 16(2), 91-122. Docket EPA-HQ-OAR-2009-0472-11415. 

53 For an overview, see id.
 54 Jaffe, A. B., and Stavins, R. N. (1994). The Energy Paradox and the Diffusion of Conservation Technology. 

Resource and Energy Economics, 16(2), 91-122. Docket EPA-HQ-OAR-2009-0472-11415.

55 For example, it might be maintained that, at the time of purchase, consumers take full account of the time spent 

refueling potentially saved by fuel-efficient cars, but it might also be questioned whether they have adequate
 

information to do so, or whether that factor is sufficiently salient to play the proper role in purchasing decisions.

56 Turrentine, T. and K. Kurani (2007). “Car Buyers and Fuel Economy?” Energy Policy 35: 1213-1223 (Docket
 

EPA-HQ-OAR-2009-0472); Larrick, R. P., and J.B. Soll (2008). “The MPG illusion.” Science 320: 1593-1594
 

(Docket EPA-HQ-OAR-2009-0472-0041).

57 Sanstad, A., and R. Howarth (1994). “’Normal’ Markets, Market Imperfections, and Energy Efficiency.” Energy
 

Policy 22(10): 811-818 (Docket EPA-HQ-OAR-2009-0472-11415); Larrick, R. P., and J.B. Soll (2008). “The MPG 

illusion.” Science 320: 1593-1594 (Docket EPA-HQ-OAR-2009-0472-0043).
 58 Busse, Meghan R., Christopher R. Knittel, and Florian Zettelmeyer (2009). “Pain at the Pump: How Gasoline 

Prices Affect Automobile Purchasing in New and Used Markets,” Working paper (accessed 6/30/09), available at
 

http://www.econ.ucdavis.edu/faculty/knittel/papers/gaspaper_latest.pdf (Docket EPA-HQ-OAR-2009-0472-0044). 

5-413 
EPA Response to Comments 

If there is a difference between fuel savings and consumers’ willingness to pay for fuel savings, 

the next question is, which is the appropriate measure of consumer benefit? Fuel savings 

measure the actual monetary value that consumers will receive after purchasing a vehicle; the 

willingness to pay for fuel economy measures the value that, before a purchase, consumers place 

on additional fuel economy. As noted, there are a number of reasons that consumers may 

incorrectly estimate the benefits that they get from improved fuel economy, including risk or loss 

aversion, and poor ability to estimate savings. In addition, fuel economy may not be as salient as 

other vehicle characteristics when a consumer is considering vehicles. If these arguments are 

valid, then there will be significant gains to consumers of the government mandating additional 

fuel economy. The RIA, Chapter 8.1.2, includes further discussion of these phenomena. 

EPA disagrees with the IPI’s characterization of the Energy Efficiency Paradox. In the paradox, 

as discussed in EPA Preamble III.H.1 and RIA 8.1.2, consumers buy less fuel economy than the 

cost-effective level. As a result, there are consumer benefits that are left unrealized. Some 

economic models of the fuel economy market assume away the paradox, by adjusting the models 

to incorporate additional, undefined costs that lead to marginal benefits equaling marginal costs. 

In those models, any required increase in fuel economy must make consumers worse off, because 

they are already buying the cost-effective amount. If, however, the savings from improved fuel 

economy exceed the costs of the technology to provide it, then consumers can gain from fuel 

economy standards. 

That said, EPA agrees that consumers may not make fuel economy decisions in ways that 

minimize their costs, and that “there is a legitimate role for government regulation” in this 

context. 

Discount Rate for Fuel Savings 

Organization: Natural Resources Defense Council 

Comment: 

Fuel Savings Should Be Valued Using a 3 Percent Discount Rate 

When evaluating the private benefits of fuel savings to consumers, we support the EPA and 

NHTSA use of a 3 percent discount rate as a reasonable approach since it is consistent with 

OMB guidance and current DOE practice when evaluating benefits of energy savings from 

residential appliance standards. While we appreciate the richness of the agencies’ discussions 

regarding the “energy paradox”, the existence of high implicit or revealed consumer discount 

rates simply points to the need for strong standards to ensure consumers have access to 

investments in highly cost-effective fuel savings technologies. The appropriateness of 

government standards to help overcome market barriers to energy efficiency investments and 

necessary to meet national energy savings and environmental goals has been well established 

with decades of state and federal efficiency standards for appliances, buildings and vehicles. 

[OAR-2009-0472-7141.1, p. 23] 

5-414
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

The use of a 3 percent to evaluate the consumer welfare benefits of fuel savings is fully 

consistent with guidance from OMB (Circular A-4) for evaluating net benefits in a regulatory 

analysis. The 3-percent rate is the average real rate of return on long-term government debt over 

the last 30 years. OMB Circular A-4 also permits the use of a 7 percent discount rate which is an 

estimate of the average before-tax rate of return to private capital in the U.S. economy. NRDC 

believes the lower end of the range is the most appropriate to use and has consistently argued for 

a discount rate of 3 percent or even lower when valuing the benefits of fuel savings. [OAR-2009­

0472-7141.1, p. 24] 

The use of the 3 and 7 percent discount rates is also the standard DOE practice for evaluating the 

electricity cost savings for residential appliances. The most recent example is the final rule 

adopted April 8, 2009 for dishwashers, dehumidifiers, microwave ovens, electric and gas kitchen 

ranges and ovens. In this final rule, DOE estimated the benefits and costs of the standards in the 

following manner: 

The benefits and costs of today’s final rule to the Nation can also be expressed in terms of 

annualized [2006$] values over the forecast period (2012 through 2042). Using a 7-percent 

discount rate for the annualized cost analysis, the cost of the standards established in today’s 

final rule is $17 million per year in increased product and installation costs, while the annualized 

benefits are $37 million per year in reduced product operating costs. Using a 3-percent discount 

rate, the cost of the standards established in today’s final rule is $28 million per year and the 

benefits are $85 million per year. [OAR-2009-0472-7141.1, p. 24] 

The use of an “implicit” or “revealed” consumer discount rate is entirely inappropriate when 

evaluating policies that specifically address the very market barriers that create the high implicit 

discount rates. NRDC strongly disagrees with interagency comment number 34 that recommends 

evaluating consumer discount rates of 20 percent, 35 percent, and 50 percent. Such discount rates 

are inappropriate and inconsistent with previous rulemakings on consumer energy efficiency 

appliance standards by DOE and fuel economy standards by NHTSA. The 20 percent and higher 

discount rates represent an ‘implicit’ consumer discount rate that is a result of a number of 

market barriers to fuel efficiency, exactly which the proposed GHG and CAFE standards are 

well suited to overcoming. [OAR-2009-0472-7141.1, p. 24] 

EPA Response: 

EPA has used the standard 3% and 7% discount rates for its calculation of the benefits from fuel 

savings in Preamble Section III.H.4. EPA believes that whether consumers use high discount 

rates when they are buying a vehicle is a separate issue from the fuel savings that they will 

receive, and the discount rates associated with the money from the fuel savings. 

Discount Rate Applied to Future Benefits 

Organization: New York State Department of Transportation (NYSDOT) 

Comment: 

5-415 
EPA Response to Comments 

It is not clear if the same discount rate that is applied to future benefits is applied to future costs 

in the proposal. For example, several tables (e.g. Tables IV.G.4-10 through IV.G.4-14) present 

various cost and benefit values. The titles of these tables imply that a discount rate is applied 

equally to costs and benefits. However, the NPRM defines the discount rate as follows: 

'The Reference Case uses a discount rate of 3 percent to discount future benefits.' Although the 

sensitivity analyses in the DEIS and NPRM indicate that the only economic factors of 

importance are industry compliance costs, the cost of fuel, and the magnitude of the rebound 

effect, the DEIS and NPRM should more clearly define how discount rates are applied to both 

costs and benefits. As noted in our comments to NHTSA dated September 8, 2008, discount rates 

should be applied to both benefits and costs. [OAR-2009-0472-7531.1, pp.2-3] 

EPA Response: 

For the final rule, EPA and NHTSA have used both a 3 percent and 7 percent discount rate to 

estimate the present value of costs, benefits and net benefits associated with the final rule. We 

have made it clear, both in the text and in the tables, which results are associated with a 3 percent 

discount rate and which are associated with a 7 percent discount rate. 

Role of Benefit-Cost Analysis 

Organization: University of Michigan Transportation Research Institute (UMTRI) 

New York State Department of Transportation (NYSDOT) 

Comment: 

University of Michigan Transportation Research Institute (UMTRI) 

Assuming perfectly competitive markets populated by consumers and producers with perfect 

foresight does allow economists to produce estimates of intangible, subjective costs and benefits 

that appear to be precise. Given the unrealistic assumptions required, the estimates are 

questionable. EPA should avoid treating estimates of intangible, subjective gains and losses as if 

they were tangible and objective. [OAR-2009-0472-3651.1, p.7] 

Neoclassical welfare economic analysis is what is recommended in EPA-HQ-OAR-2009- 0472­

0317.2: “Corporate Average Fuel Economy/Green House Gas (CAFE/GHG) Notice of Proposed 

Rule Making (NPRM) Summary of Interagency Comments under E. 0. (Executive Order) 

12866”. The foundations of neoclassical welfare economics consist of (1) the theory of the 

consumer as a rational utility maximizing agent, (2) the theory of the firm as a profit maximizing 

agent, (3) perfect foresight by both sets of agents, and (4) a perfectly competitive market. In 

recent years, empirical and conceptual contributions in consumer behavior and the theory of the 

firm have undermined these foundations. If the foundations give way, then the apparatus of 

neoclassical welfare economic analysis collapses. Benefit cost analysis (BCA) is then a dubious 

tool for policy judgments. [OAR-2009-0472-3651.1, p.7] 

5-416
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

What should EPA and NHTSA use to replace benefit cost analysis (BCA)? An alternative tool 

derived from ecological economics is multi-criteria decision aide (MCDA). This approach to 

policy analysis takes a wide variety of relevant information into account, and is consistent with 

the multiple criteria that Congress has directed that EPA and NHTSA address in their 

rulemaking. The merits of MDCA compared to BCA are detailed in a 2005 paper by Gowdy and 

Erickson. [OAR-2009-0472-3651.1, pp.7-8] [[See Docket Number OAR-2009-0472-3651.1, p.8 

for a table that outlines their comparison.]] 

[[UMTRI also submitted these comments as testimony at the Detroit public hearing, See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 40-42.] 

New York State Department of Transportation (NYSDOT) 

The proposal does not appear to give due consideration to the economic benefits of improved 

fuel economy at the consumer level. It is not reasonable to assume that the only effect of fuelcosts savings will be a rebound effect. The only economic benefit that appears to be considered 

in the impact analysis is a $0.17/gallon benefit from reducing oil imports. Unfortunately, this 

anticipated benefit is difficult to comprehend since the DEIS indicates that fuel consumption will 

increase significantly in the future whether or not the proposed CAFE standards are 

implemented. [OAR-2009-0472-7531.1, p.3] 

EPA Response: 

EPA disagrees that benefit-cost analysis is “a dubious tool” in this framework. Benefit-cost 

analysis can be (and has been) used in situations where not all of the assumptions listed above 

hold: for instance, it can be used to measure the effects of imperfect competition. EPA’s 

assessment of the benefits and costs is in Preamble Section III.H. Because we believe that 

benefit-cost analysis is an appropriate evaluation tool, we have chosen not to use multi-criteria 

decision aid for this rule. 

EPA considers a wide range of economic impacts associated with the final rule. For reference, 

Chapter 8.4 of EPA’s RIA and Section III.H.10 of the preamble present a summary of costs, 

benefits, and net benefits of the rule. The net benefits of EPA’s final program consist of the 

effects of the program on: 

 the vehicle program costs (costs of complying with the vehicle CO2 standards, taking into 

account FFV credits through 2015, the temporary lead-time alternative allowance 

standard program (TLAASP), full car/truck trading, and the A/C credit program, and 

other flexibilities built into the final program), 

 fuel savings associated with reduced fuel usage resulting from the program, 

 greenhouse gas emissions, 

 noise, congestion, accidents, 

 other pollutants, 

 energy security impacts, 

 reduced refueling events, and 

 increased driving due to the “rebound” effect. 

5-417 
EPA Response to Comments 

Imperfect Competition 

Organization: James Adcock 

In general consumers with differing projections of the "true" future cost of SCC and fuel prices 

will make differing estimates of the utility of the purchase of a particular vehicle. Analysis that 

assumes one particular "US-wide" value of SCC or fuel costs will thus reach erroneous 

conclusions about vehicles Mfgs should be offering consumers – consumers hold a wide variety 

of beliefs on these subjects and thus Mfgs should, if "free market" forces are at work [which they 

aren't, due to huge barriers to entry into the Auto Industry -- due in part to NHTSA regulations] 

provide a wide variety of fuel efficiency vehicles to consumers. But the market doesn't actually 

work that way. For example Toyotas' great success with the Prius makes it LESS likely not more 

that other Mfgs will attempt to compete in that segment of the market. 

NHTSA assumes that citizen do not understand the cost benefits of higher fuel efficiency but 

ignores the fact that the vehicle market is not a "perfect market" and Mfgs may not be offering 

the fuel efficiency vehicles that consumers want. Further, NHTSA regulations and "Grey 

Market" import restrictions work to make the market even less perfect, since many high fuel 

efficiency vehicles available overseas are not available to the US citizen. 

Contrary to NHTSA statements the US does not in practice represent a "competitive free market" 

environment compared to the EC market say Great Britain where the consumer has several times 

as many model choices to choose from. On a stringency adjusted basis EU and Japan fuel 

economy standards still remains approx . 2X as strict as the US . NHTSA needs to clearly 

explain why the US is not competitive in being able to offer similar environmental benefits here . 

"Consumer perfect knowledge leads to informed choice" - this cannot happen if the Mfgs do not 

in fact provide the option of cars with MPG equal to what consumers want. Consumers cannot 

buy the car they want in part because NHTSA "Grey Market Laws" prevent importation of most 

high fuel efficient vehicles built worldwide. In a "perfect market" such barriers do not exist, 

rather the choice is left to the consumer . Further, the US Auto Market has huge barriers to entry 

for new competitors due in part to the differences between world EC regulations vs . US specific 

DOT regulations, and the huge cost of crash testing. 

EPA Response: 

As discussed in RIA Section 8.1, it is possible that market imperfections on the part of the auto 

makers may contribute to the existence of the “energy gap.” 

Policies influencing consumer purchasing attitudes 

Organization: 

Michael T. Schade 

James Adcock 

Comment: 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Michael T. Schade 

The Energy Paradox presented and discussed several times in the rule is likely among the most 

important issues in achieving the national fuel consumption and CO2 emission reduction targets. 

Especially of concern to me is how to encourage a greater public desire for more highly fuel 

efficient and lower CO2 emitting vehicles. I’m not talking about someone buying a more fuel 

efficient SUV that will be enabled by this rule but encouraging them to consider trading down to 

a model that is smaller and even more fuel efficient. Several episodes of oil shortages and oil 

driven price swings during the 1970’s and the price spike 2 years ago demonstrate the transitory 

nature of purchase decision that place a high value on fuel efficiency. The European experience 

of continually very high fuel taxes forcing high motor fuel prices and leading to a high priority 

given to fuel economy in vehicle purchase decisions is demonstrated every day in the nature of 

the European vehicle fleet composition. Sales estimate premises are now much more transparent 

than using confidential manufacturer input. But their accuracy is still vulnerable to major 

dislocations due to customer buying preferences that may abruptly (either on a temporary basis 

or more permanently) change with fuel price spikes and troughs. This may be the weakest link 

in the whole current approach in reducing motor fuel consumption by forcing incremental 

vehicle improvements. The absolute minimum backstop concept partially deals with this risk but 

only for the domestic automobile fleet and not for imported cars nor for trucks in total. My only 

recommendation is a predictable and well understood ramping up of motor fuel taxes to a level 

that will change consumer behavior and create pull through demand for much more efficient 

vehicles. Preferably, these tax increases would be offset by equivalent tax cuts in other areas. 

But I understand that much higher gasoline/diesel federal taxes are not now politically 

achievable so I’d recommend including in this rule a transparent and honest discussion of the 

risk of not adopting policy targeted towards influencing desired consumer purchasing 

attitudes. [OAR-2009-0472-7261.1, pp.3-4] 

James Adcock: 

Lowering the size and weight of vehicles doesn't cause the consumer to buy these smaller 

vehicles . Rather, the consumer buys smaller vehicles to optimize the total cost of ownership to 

their financial situation given higher gas prices . We do not believe either tiny vehicles such as 

Smart or giant vehicles such as Escalade are in the broader public interest of safety nor 

reasonable fuel economy tradeoffs . CAFE and crash test standards should be developed in a way 

that makes clear that such extreme size "outliers" are not good consumer choices. 

We believe it can be a rational choice on the part of the consumer in terms of morality to risk 

personal safety by buying a smaller car which is less destructive to the planet and the human 

race, even while climate change deniers – aggressive drivers - buy aggressive design "Monster 

Trucks." 

We believe it is morally unacceptable in modern society, that a consumer be allowed to buy, and 

a Mfg be allowed to make, a vehicle KNOWN to have low MPG AND which represents a high 

fatality risk to the occupants of other vehicles – aka "Aggressive Design ." That NHTSA 

5-419 
EPA Response to Comments 

continues to allow this represents a failure to rationally regulate the market for either safety or 

for fuel economy. 

EPA Response: 

Consumers have different tastes, and choose different combinations of vehicle characteristics. 

EPA seeks to reduce GHG emissions vehicles while maintaining the quality and variety of 

vehicles. Consumers have many factors in mind when they choose the vehicles that they buy; 

switching to a smaller and even more fuel efficient vehicle may not be possible for everyone. 

EPA agrees that vehicle sales estimates are not precise due to factors such as those that the 

commenter mentions. A gasoline/diesel fuel tax is outside the scope of this rule. 

EPA’s analysis of this rule includes discussion of its impacts in a number of areas, including 

among others consumer welfare, energy security, climate, other air pollutants, accidents, noise, 

congestion. Because the baseline is our estimate of the world without the rule, then the effects of 

not adopting this policy are the negative of the effects of the rule, reported in the rulemaking 

documents. 

5.13.2. Costs Associated with the Vehicle Program 

Organization: California Air Resources Board 

Comment: 

We agree with NHTSA that the incremental increases in average new vehicle costs can be 

mostly or wholly passed through to consumers, and for this reason also agree with EPA’s related 

assumption that cost increases of this magnitude will not create a fleet turnover issue. Due to the 

concurrent improvements in fuel efficiency (and lower emissions), the higher vehicle purchase 

price can be offset by the fuel savings within the typical ownership period of the first owner. 

Reduced operating costs could make these new vehicles more attractive to consumers who 

expect fuel prices to remain high or continue to rise. For this reason and based on previous 

CARB analyses for the Pavley GHG rulemaking, we do not believe that the increased vehicle 

prices will significantly deter consumers from making new vehicle purchases. In fact, our 

analysis showed that in early years, new sales would increase slightly as a result of the 

regulation. Thus, like EPA and NHTSA we believe delayed scrappage or fleet turnover issues 

should not be a serious concern at the cost levels currently anticipated. [OAR-2009-0472-7189.1, 

p.9] 

[CARB also submitted these comments as testimony at the Los Angeles public hearing. See 

docket number OAR-2009-0472-7283, pp. 21-27] 

EPA Response: 

We agree with the comment submitted by CARB that the new GHG standards should not create 

a fleet turnover or delayed scrappage issue. We also agree that the increased cost of compliant 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

vehicles can and will be quickly offset by the savings from reduced fuel consumption. We 

present our "impact on vehicle sales" discussion and our "payback analysis" in section III.H of 

the preamble and in Chapter 8 of the RIA. 

Organization: University of Michigan Transportation Research Institute (UMTRI) 

Comment: 

Section III.H.2 of the “Proposed Rulemaking to Establish Light-Duty Vehicle Greenhouse Gas 

Emission Standards and Corporate Average Fuel Economy Standards” is concerned with “Costs 

Associated with the Vehicle Program.” My comments are in support of the indirect cost 

multipliers (ICM) used by EPA to account for indirect costs. As a subcontractor to RTI, I 

assisted EPA in developing the methodology used to estimate indirect cost multipliers and retail 

price equivalent multipliers (RPE). [OAR-2009-0472-3651.1, p.4] 

The costs to automakers of complying with the proposed regulations should be defined to include 

only those costs that change due to the regulations. When compliance necessitates adding 

equipment to the vehicle, the compliance costs include direct manufacturing costs associated 

with new technology (materials and direct production labor) plus the change in those indirect 

cost items that are affected (e.g., engineering development cost). [OAR-2009-0472-3651.1, p.4] 

In most cases, direct costs can be estimated without difficulty or controversy. However, indirect 

costs are more difficult to estimate and have been the subject of considerable controversy. The 

methodology guides EPA analysts in identifying indirect costs that are likely to be affected by 

regulations. The methodology is supported by estimates of RPE and ICM for several automakers 

that we derived from recent annual financial reports and other public data. [OAR-2009-0472­

3651.1, p.4] 

The EPA uses a range of indirect cost multipliers (ICM), depending on the timing of the 

application of the regulation and the complexity of the technology that is anticipated to be 

necessary. The multipliers range from 1.11 to 1.64 in the short term and from 1.07 to 1.39 in the 

long term. In the ICM, the numerator is direct plus indirect cost and the denominator is direct 

cost. The ICM covers direct and indirect costs only; no provision for profits is made. However, 

the RPE adds profit to the numerator, so the RPE is greater than the ICM. It has been argued that 

regulatory agencies should use an RPE that is greater than 2.0, which would imply an ICM of 

1.90 or higher (assuming a 5 percent profit computed on sales—2.00 X .05 = .10; 2.00 - .10 = 

1.90). [OAR-2009-0472-3651.1, p.4] 

How reasonable is an RPE of 2.00 or higher? To answer this question, consider GMs financial 

results for 2004-08, shown in Table 1. [OAR-2009-0472-3651.1, p.4] 

GM is an easy case to study, because it provides information in its annual reports on contribution 

costs in addition to the standard GAAP information on cost of sales. Contribution costs are closer 

to direct costs than are cost of sales. [OAR-2009-0472-3651.1, p.4] 

5-421 
EPA Response to Comments 

In its annual reports, GM says it considers contribution cost to be costs that vary directly with 

production. They consist of material cost, freight, and policy and warranty expenses. There are 

two differences between GM’s contribution costs and the EPA’s definition of direct costs. GM 

explicitly excludes direct production labor from contribution costs, whereas the EPA’s definition 

of direct costs includes direct production labor. GM includes freight and warranty in contribution 

costs, which the EPA treats as indirect costs. GM does not report its direct production labor 

costs, but we estimate them to be about $9 per year. GM reported warranty and freight costs of 

$9.7 billion in 2007. Thus, these two expense categories roughly offset each other, meaning that, 

for GM, direct costs are roughly the same as contribution costs. [OAR-2009-0472-3651.1, pp.4­

5] 

Since GM had losses in each of these years, we also computed hypothetical RPE multipliers that 

would result if GM had the same cost structure but earned a 5 percent profit. These hypothetical 

RPE multipliers are 1.50 to 1.58. In either the actual or the hypothetical case, the RPE multipliers 

are substantially lower than 2.00. [OAR-2009-0472-3651.1, p.5] 

The indirect cost multipliers that EPA uses in the preliminary rule give sensible and fact-based 

guidance on how indirect costs ought to be estimated. [OAR-2009-0472-3651.1, p.5] 

[[UMTRI also submitted these comments as testimony at the Detroit public hearing, See docket 

number EPA-HQ-OAR-2009-0472-6185, pp. 37-40.] 

EPA Response: 

The Agency appreciates these comments and agrees with them. 

Organization: Chew, Yuli 

Comment: 

I support the assumption of 4% for the cost and effectiveness estimates for the diesel engine and 

after treatment system; however, I think a higher improvement rate may be attainable 

considering the fact that the proportion of diesel will jump to 4% and 10% of the cars and trucks 

respectively. In Model Year 2011, diesel technologies for truck technology classes were allowed 

to be applied at a 4 percent combined (for DSLT and DSLC) phase-in cap for MY 2011 to 

account for the higher application rates observed in the submitted product plans and diesel’s 

favorable characteristics in truck applications. [OAR-2009-0472-7042.1, p.2] 

As to whether EPA should use a 4% or 6% per year increase in standards, I feel that a 6.0% is 

closer to what is specified in the CARB Regulation. This will helps to achieve a fleet average of 

36.9 mpg or 241 g/mi of CO2 equivalent in 2016. This is more closely related to CARB’s target 

of achieving 43.4 mpg for cars and 26.8 mpg for trucks, or 205 g/mi for cars and 332 g/mi of 

trucks in 2016. [OAR-2009-0472-7042.1, p.2] 

EPA Response: 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

EPA believes that diesel technology has a role in the future light-duty fleet. Although the 

modeling we have done using the OMEGA model has not shown a move from gasoline 

technology to diesel technology, that does not mean that EPA is prohibiting such an outcome. 

The rule allows manufacturers to comply with their respective fleet average standards using any 

technology they choose to utilize. EPA continues to believe that the cost estimates and 

effectiveness estimates used in the proposal are appropriate for the final rule. 

Regarding the 4% or 6% per year increases in standards, the commenter states a belief that the 

6% per year alternative would be more representative of the CARB regulation (i.e., Pavley I 

levels). As EPA’s analysis shows (see Chapter 3 of the RIA), the national GHG standard results 

in vehicle sales in California of federally compliant vehicles that have fleet average GHG 

emissions equal to the fleet average that would be achieved under the California program In 

their comments on the proposal, the California Air Resources Board agreed that the standards 

presented in this rulemaking align with California’s Pavley greenhouse gas emissions standards, 

and ultimately arrive at the same stringency as California’s standards in MY 2016. 

Organization: Chew, Yuli; State of New Jersey 

Comment: 

For the cost estimates for the various hybrid systems, NHTSA use a figure of $320 per KW-hr 

for 2012 -2016 as compared to $600 per Kw-hr for 2011 Model Year. I feel that a lower figure of 

about $260 per KW-hr should be more reasonable. See page 47 of Report of the ARB 

Independent Expert Panel 2007 prepared for State of California Air Resources Board. 

http://www.arb.ca.gov/msprog/zevprog/zevreview/zev_panel_report.pdf Similar to the price of 

solar panels, the price dropped drastically if they are mass produced. [OAR-2009-0472-7042.1, 

p.2; OAR-2009-0472-7109.1, p.9] 

EPA Response: 

We disagree that a $260 per kW-hr is a more appropriate cost than the $320 figure used given the 

timeframe of analysis. Our $320 figure is based on current (2012 timeframe) best estimates of 

around $500 per kW-hr and application of manufacturer learning to arrive at an estimated $320 

figure in the 2015/2016 timeframe. Note that the Report of the ARB Independent Expert Panel 

2007 showed $/kW-hr ranges of $340-420/kW-hr for an annual production of 20,000 batteries 

per year to $240-280/kW-hr for 100,000 batteries per year. No timeframe is provided for these 

ranges. It is not known currently what level of electric vehicle sales (and, hence, what level of 

battery production) will occur within the regulatory timeframe. The agencies do know that the 

new standards will not force introduction of electric vehicles. Hence, the $500/kW-hr in 2012 

and $320/kW-hr in 2015 estimates used are not inconsistent with the estimates of the ARB 

Expert Panel. Therefore, we continue to believe that the estimates we used in the proposal are 

acceptable for the final rule, especially in light of the very low penetration of technologies 

dependent on electrification of motive power (i.e., hybrids, electric vehicles, plug-ins). 

Organization: Devon Energy Corporation; Donald F. Shaw; C. M. Spurgeon; Neil Stanton 

5-423 
EPA Response to Comments 

Comment: 

The proposed regulations will harm our economy. A few years ago, the National Highway Safety 

Administration (NHTSA) estimated that increasing fuel economy standards to 35 miles per 

gallon by 2020 would cost the car companies $114 billion. (See Detroit News, “Fuel Plan Would 

Cost Big Three” (March 1, 2007). Inexplicably, today NHTSA claims that achieving the 35 

miles per gallon fleetwide standard by 2016, four years earlier, would cost only $60 billion. (75 

Fed. Reg. 49479). This change from NHTSA is not credible. The cost of technology-forcing 

regulations do not decrease by half as a result of companies only having half the time to comply 

with the regulations. [OAR-2009-0472-10450, p.1; OAR-2009-0472-7270.1, p. 3; OAR-2009­

0472-7270.1, p. 3; OAR-2009-0472-10169, p.2] 

EPA and NHTSA’s plan will increase costs for car companies and further reduce auto company 

jobs. Higher priced cars and trucks will make life more difficult for American families who need 

affordable transportation options. [OAR-2009-0472-10450, p.1; OAR-2009-0472-7270.1, p. 3; 

OAR-2009-0472-7270.1, p. 3; OAR-2009-0472-10169, p.2] 

EPA Response: 

We disagree that the regulations will harm our economy. In fact, we believe that the new 

standards will help our economy by saving consumers and businesses money currently spent on 

fuel which can then be spent on other items or invested in ways that boost our economy. The 

standards will also benefit the economy by increasing our energy security and reducing our 

reliance on foreign oil. As for cost estimates and the changes between the 2011 rule and this 

rule, it is difficult to address this comment given that the commenter does not question specific 

cost estimates. That being said, it is important to note the difficulty associated with cost 

estimation and the ongoing effort made by both EPA and NHTSA to use the best available cost 

information at any given time. Since publication of the 2011 final rule, both agencies have 

sought to continually improve cost estimates – more thorough consideration given to future 

product planning when adding technology in intermediate years, better cost estimation through 

FEV tear down studies like those conducted by FEV under EPA contract, application of learning 

curve effects to more closely estimate cost reductions over time -- which have resulted in many 

cost estimates being lowered. NHTSA and EPA would be remiss not to revise cost estimates in 

light of newer, better information, whether that information increases or decreases those 

estimates. Note also that the auto makers did not challenge the newer cost estimates to any 

significant degree. 

Regarding reducing auto company jobs and making life more difficult for American families, 

again both agencies disagree. Instead, we believe that the new standards provide American 

families with more affordable transportation options since the fuel savings associated with the 

new standards quickly offset increased new vehicle costs (within the first month for a vehicle 

purchased via a typical 5 year loan – see sections III.H.5 and IV of the preamble for more detail). 

These savings are expected to increase vehicle sales relative to sales without the new standards 

(again see sections III.H.5 and IV of the preamble for more detail) which, in turn, would be 

expected to increase rather than decrease auto maker jobs. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Organization: Dillard, Joyce 

Comment: 

In the end, the greenhouse gas emission changes are about a financial system. It affects the daily 

lives of citizens and impacts their income and economic capabilities. [OAR-2009-0472-7226.1, 

p. 2] 

In Los Angeles, California we have Port of Los Angeles truck drivers feeling the pinch of the 

new monopoly over the greenhouse gas reductions. The free market has been diminished for 

more bureaucracy and finite control without the proper regulatory process. [OAR-2009-0472­

7226.1, p. 2] 

EPA Response: 

EPA agrees that the daily lives of citizens are impacted by greenhouse gas emissions, and that 

the joint rulemaking for a national program to control greenhouse gases and fuel economy from 

light-duty vehicles will impact citizens. A closer look at the comments submitted by the 

commenter suggests that the commenter appears to be commenting on two topics: public 

availability of information on greenhouse gas impacts (“What is needed is a Clearinghouse for 

the Depository of Scientific and Factual Data as a springboard for industry, individuals, students, 

parents and children to buy into their future. Access to correct information is a key factor for 

future results to any environmental issue. Peer-reviewed information is necessary.” (see page 1)); 

and cap and trade proposals (“In California, the State Legislature has passed AB 32 California 

Global Warming Solutions Act of 2006 for the reduction of greenhouse gases and the 

implementation of Cap and Trade, a tax. The State of California Natural Resources Agency is 

processing the CEQA Rulemaking for SB 97 Greenhouse Gas Emissions, a related bill, which 

will implement the CEQA California Environmental Quality Act for this process. The Cap and 

Trade tax is under the purview of a regional entity-Western Climate Initiative WCI, an unelected 

body, in a non-transparent process. We have no benefit of financial forecasting, at this point, and 

no basis for financial responsibility.” (see page 1)). 

As regards the former issue, the agencies have made every effort to be as transparent as possible 

in developing the standards being put into place. That information is, primarily, supportive of 

the standards being set rather than being scientific information surrounding the impact of 

greenhouse gases on climate change. The agencies have been tasked with creating a national 

program to address greenhouse gas emissions and fuel eonomy, not to determine the impact of 

greenhouse gases on climate change. 

As regards the latter comment -- regarding cap and trade proposals -- the issue is not germaine to 

the joint rulemakings as cap and trade is not part of either EPA's or NHTSA's programs. 

Organization: Brooks, Dawn 

Comment: 

5-425 
EPA Response to Comments 

I am concerned the costs of the new technology required to produce lower emissions are 

inaccurate and will be passed onto me, the consumer. According to the report, Proposed 

Rulemaking to Establish Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate 

Average Fuel Economy Standards (2009), the average incremental cost of the program is 

$1,409.00, and is even higher for light trucks at $1,641.00 (p.253). The increased cost is a result 

of the new emission standards forcing “manufacturers to apply considerable additional 

technology” (Proposed Rulemaking To Establish Light-Duty Vehicle Greenhouse Gas Emission 

Standards and Corporate Average Fuel Economy Standards, 2009, p. 253). This plan merely 

guesses on how manufactures are going to implement the proposed policy as the report also 

states, “NHTSA cannot predict how manufacturers will respond to the proposed standards” 

(Proposed Rulemaking To Establish Light-Duty Vehicle Greenhouse Gas Emission Standards 

and Corporate Average Fuel Economy Standards, 2009, p. 253). If the agencies involved do not 

understand what procedures and technology the automobile manufacturers will use to implement 

the requirements of the program, how can the agencies assess an accurate dollar amount for 

incremental costs? 

Furthermore, the projected costs do not include higher sales taxes, insurance increases, and other 

incidental fees resulting from more expensive vehicles. Maintenance costs will increase adding 

even more burdens to the consumer as the technology will be more complicated and time 

consuming for mechanics to repair. Consequently, incremental projected increased costs do not 

simply include the new technology added by the automobile manufacturers as stated in the 

report. 

The costs of this program, along with the associated costs added to a higher priced, more 

environmentally friendly vehicle will substantially increase consumer expenses for 

transportation. 

I respectfully request the agency take a more thorough look at projected costs of this proposed 

program. I understand the benefits; now make me understand the true costs. Do not pass 

proposed rule EPA-HQ-OAR-2009-0472 until the automobile manufacturers present their added 

costs to the redesigned vehicles to fulfill the 2016 lower emissions and increased fuel efficiency 

standards. Manufacturer figures will give the agency a more comprehensive understanding of 

costs to the consumer as a result of these new regulations. [EPA-HQ-OAR-2009-0472-3851, pp 

1-2] 

EPA Response: 

EPA cannot predict what level of costs will be passed on to consumers through increased vehicle 

prices. EPA does not doubt that some and perhaps all of the costs will in fact be passed on. 

However, EPA doubts that price increases will occur equally on all vehicles as auto makers will 

determine which vehicles can best absorb increased prices and which cannot. Importantly, the 

costs mentioned by the commenter are not the actual cost estimates associated with the proposal. 

Those mentioned are from sensitivity analyses conducted by NHTSA looking at the costs 

associated with a 5%/year increase in fuel economy. The proposal actually called for a 4%/year 

increase in fuel economy and, therefore, estimated lower costs ($1,020 and $1,127 for trucks and 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

cars, respectively) than the 5%/year increase. Further, the estimates for the final rule are lower 

than those for the proposal. 

Regarding the agencies’ abilities to estimate costs given a “lack of understanding” over what 

auto manufacturers will use to comply with the regulations, EPA disagrees with this comment. 

In fact, the agency understands very well the technologies at manufacturer’s disposal to meet the 

regulations. However, there are so many different technologies that can be used ranging from 

engine friction reductions to improved valve train designs to turbocharging with engine 

downsizing to more efficient fuel systems to new transmissions to hybridization, etc., that it is 

impossible to know for sure what will be done short of mandating what will be done. Neither 

EPA nor NHTSA wish to mandate a solution to improving fuel efficiency. Instead, auto 

manufacturers will consider all the options and how best to satisfy their customers in making 

their own determination. That said, both agencies have made use of rigorous engineering 

analysis to estimate future technology mixes in making our best estimates of future technology 

costs. 

Regarding higher sales taxes and insurance costs on new vehicles, the comment is accurate that 

such costs have not been considered in the formal cost estimates (they have been considered in 

our estimates of consumer payback). We have included costs associated with higher warranty 

expenditures through our indirect cost multipliers but have not included costs associated with 

increased maintenance. Importantly, we do not know that net maintenance costs for consumers 

will increase or decrease. With respect to the A/C program, we believe that maintenance costs 

will decrease since leakage should be largely eliminated. 

Regarding the rule resulting in increased expenses for transportation, again EPA disagrees. 

Please refer to our payback analysis which shows that fuel savings will outweigh up front costs 

within three years for people purchasing new vehicles with cash. For those purchasing new 

vehicles with a typical five-year car note, the fuel savings will outweigh increased costs in the 

first month of ownership. 

Regarding the request that EPA wait until auto manufacturers have presented their cost 

estimates, the Agency has given the auto makers an opportunity to respond to its cost estimates 

and, while some auto makers submitted comments on some aspects of the cost estimates, the 

auto makers have not challenged them in any meaningful way. Therefore, EPA believes that the 

cost estimates for the final rule are the best available estimates at this time. 

Organization: American Council for an Energy Efficient Economy 

Comment: 

The agencies also worry that their technology cost estimates may be too low (TSD 4-2). 

Accuracy of cost estimates is a legitimate concern in a wide array of rulemakings but is best 

handled through a sensitivity analysis. It should not be used to impugn the validity of the 

proposed standards. 

EPA Response: 

5-427 
EPA Response to Comments 

As noted in the previous response, EPA has given the auto makers an opportunity to respond to 

its cost estimates and, while some auto makers submitted comments on some aspects of the cost 

estimates, the auto makers have not challenged them in any meaningful way. Therefore, EPA 

believes that the cost estimates for the final rule are the best available estimates at this time. 

5.13.4. Reduction in Fuel Consumption and its Impacts 

Organization: Competitive Enterprise Institute 

Comment: 

II. The proposed standards will increase the risk of death and injury related to auto accidents. 

GHG standards are fuel economy standards. The proposed GHG standard is just a fuel economy 

standard by another name. EPA comes very close to acknowledging as much, explaining that the 

rule aims to reduce emissions by increasing fuel economy: [[commenter quotes EPA on OAR2009-0472-7281.1 p.3]] The only difference between EPA’s proposed rule and a 100% “pure” 

fuel economy standard is that the rule seeks to reduce leakage of air conditioning-refrigerant 

GHGs. However, the rule also seeks to reduce “the consumption of fuel to provide power to the 

A/C system.” So even with respect to vehicular air conditioning systems, EPA’s proposal targets 

fuel economy. As the rule states, 95% of all GHGs emitted by light duty vehicle are CO2 

emissions, and “the only way at present to reduce tailpipe emissions of CO2 is by reducing fuel 

consumption. [OAR-2009-0472-7281.1, p.2] 

EPA Response: 

We disagree that the standards will increase the risk of death and injury related to auto 

accidents. Please refer to the preamble section II.G and EPA’s RIA section 7.6 for more detail 

on this issue. 

There are two aspects to the A/C program: reduced refrigerant loss through improved system 

design (direct GHG reductions); and reduced power consumption to operate the A/C system 

(indirect GHG reductions). The latter of these results in reduced CO2 emissions since less fuel is 

consumed to power the A/C system. The former -- reduced refrigerant loss – results in 

reductions in far more potent greenhouse gases. EPA does not disagree that the new GHG 

tailpipe standards are, in effect, new fuel economy standards given that the only way at present to 

reduce tailpipe emissions of CO2 is by reducing fuel consumption. That does not alter the fact 

the greenhouse gases are pollutants under the CAA, and that, having made the findings that 

emissions of these pollutants may endanger public health and welfare and that emissions of these 

pollutants from new motor vehicles causes or contributes to that endangerment, EPA has a 

mandatory legal duty to promulgate emission standards for those vehicles under section 202 

(a)(1). State of Massachusetts v. EPA, 549 U.S. at 533. For the same reason, it is legally 

irrelevant that CAFE standards directly regulate vehicular fuel economy. Id. at 531-32. The 

agencies have chosen to discharge their respective responsibilities in this joint rulemaking so that 

a National Program can be established to the benefit of all stakeholders. See id. at 532 (“But that 

DOT sets mileage standards in no way licenses EPA to shirk its environmental responsibilities 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

... The two obligations may overlap, but there is no reason to think the two agencies cannot both 

administer their obligations and yet avoid inconsistency”). 

Organization: Consumer Federation of America 

Comment: 

[[These comments were submitted as testimony at the Detroit public hearing. See docket number 

OAR-2009-0472-6185, pp. 106-107.]] 

In particular, EPA and NHTSA should balance the three goals in the underlying statutes of 

technical feasibility, economic practicability, and the need to conserve energy, and the statutes 

really are in agreement here, by setting the standard at the mid point of the range between 

maximum economic benefit and maximum practicable environmental benefit. 

In addition, they should recognize the higher resale value of more fuel efficient vehicles. They 

should properly value fuel savings by removing the rebound effect from the consumer private 

welfare analysis and setting it at a lower level in the societal analysis. Rebound has no business 

in the private valuation. 

They should recognize consumer willingness to change their demand for vehicle attributes. The 

American consumer has shown they are willing to change. 

They should assign significant national security value to reducing oil consumption. 

EPA Response: 

Our rulemaking recognizes consumer willingness to change their demand for vehicle attributes. 

Should enough consumers demand any given attribute, then presumably a manufacturer(s) will 

step forward to provide it. The rules, however, do not mandate vehicle attributes from the 

supply-side. Manufacturers may achieve their respective standards by any means they choose. 

We have made every effort to ensure that consumers will continue to find the attributes they 

currently demand within the future fleet all while consuming less fuel. EPA did this by building 

technology packages for each vehicle type (refer to Chapter 1 of EPA’s RIA) that maintained in 

the judgment of staff engineers the key performance characteristic (zero to 60 mph acceleration). 

Each subsequent package generally costs more, provides greater fuel efficiency, and maintains 

performance relative to the package before it and, hence, the baseline or current vehicle. Should 

consumers demand more from manufacturers -- that is, vehicles that consume even less fuel at 

the expense of some vehicle attributes -- then some manufacturers may well deliver those 

vehicles. This would be a demand-side driven outcome. 

We have assigned considerable national security value to reducing oil consumption. Please refer 

to our analysis as presented in section III.H of the preamble and Chapter 8 of the RIA. 

Lastly, EPA disagrees with the comment that rebound mileage should be set lower or even 

removed from the fuel savings analysis. Many historical studies have shown a correlation 

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between changes in total VMT and changes in fuel economy, even when other factors such as 

gasoline prices are taken into account. As we described in section II of the joint preamble and 

Chapter 4 of the joint TSD, recent literature suggests that the rebound effect is 10% or lower, 

whereas the larger body of historical studies suggests a higher rebound effect. Therefore, we 

believe a rebound effect of 10% is appropriate for this rulemaking. 

Organization: National Automobile Dealers Association (NADA) 

Comment: 

In the National Program proposal, NHTSA may have inappropriately shifted from its historically 

justified 15-30 percent rebound effect range to a proposed 10 percent. While some justification 

may be found to support moving toward the lower end of the historical range, 10 percent does 

not appear to be adequately justified. [OAR-2009-0472-7182.1, p.11] 

EPA Response: 

EPA and NHTSA disagree with the commenter that we did not justify our rationale for shifting 

our quantified estimate of a rebound effect to 10 percent. As described in detail in the Joint TSD 

Chapter 4, a summary of the existing literature indicates that a majority of the studies estimated 

that the historical value for the rebound effect is between 10 and 30 percent. Furthermore, newer 

research using more recent data suggest that the rebound effect is declining over time and will 

continue to decline in the future, particularly when future projections of income, gasoline prices, 

and urbanization are taken into account. Based on this body of evidence, we believe there is 

adequate justification to support reducing the rebound effect to 10 percent for this rulemaking. 

Organization: National Automobile Dealers Association (NADA) 

Comment: 

The National Program proposal is being developed during one of the most significant economic 

turndowns in the history of the auto industry. Manufacturers and dealers alike are continuing to 

experience dire and volatile economic impacts. Where just two years ago new vehicles were 

being sold in the U.S. at an annualized rate of over 16 million units, today that rate has fallen to 

an estimated 10.2 million. In that same short time frame, thousands of new car dealers have gone 

out of business and overall dealership employment has dropped by some 100,000 and 200,000. 

Two large domestic automakers and their dealers owe their very existence to massive federal 

government intervention. New competition is expected soon from China, from India, and even 

from new domestic startups. Competition is good and dealers look forward to selling those 

vehicles. However, NHTSA and EPA must recognize and fully account for these economic and 

competitive realities when finalizing the National Program to ensure that, to the greatest extent 

possible, dealership employment and viability is protected. [OAR-2009-0472-7182.1, p.4] 

Regarding vehicle affordability, the critical importance of fuel price and availability cannot be 

overstated. New vehicle purchasers typically aren’t early adaptors of high priced new 

technologies, nor are they so well off as to ignore fuel efficiency even when fuel prices are high. 

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Instead, the vast majority of new vehicle purchasers are payment buyers with multi-year loans 

who only become keenly interested in fuel economy when fuel prices skyrocket. Clearly, it is 

very difficult to forecast fuel prices in a free market. By relying on conservative fuel price 

forecast assumptions, the National Program will at worse achieve better fuel economy and GHG 

benefits should prices prove to be higher than forecast. On the other hand, should fuel prices 

prove to be lower than forecast, the result could be a scenario of high priced new vehicles sitting 

unwanted and unaffordable on dealers lots, with unacceptable negative consequences. [OAR2009-0472-7182.1, p.4] 

[National Automobile Dealers Association also submitted these comments as testimony at the 

New York public hearing, See docket number EPA-HQ-OAR-2009-0472-4621, pp. 85-88.] 

EPA Response: 

The agencies reasonably believe that the new standards will result in increased vehicle sales (see 

sections III.H.5 and IV.G.7 of the preamble, and chapter 8 of EPA’s RIA for more detail) and, as 

such, should ensure that dealership employment will not decrease as a result of this rule. 

Further, our analyses are based on the best available predictions of future fuel prices (AEO 2010 

Early Release) which range from $2.61/gallon in 2012 to $3.07/gallon in 2016 (expressed in 

2007 dollars and including taxes). While such prices are not low by traditional U.S. standards, 

they are by no means high. 

5.13.5 Impacts on U.S. Vehicle Sales and Payback Period 

Organization: 

BMW of North America, LLC (BMW) 

State of New Jersey 

Mr. Richter - Environmental Capital Partners 

Shaw, Donald F. 

Chew, Yuli 

US Steel Corporation 

University of Pennsylvania, Environmental Law Project 

National Automobile Dealers Association 

Comment: 

BMW of North America, LLC (BMW) 

Now, as EPA and NHTSA have noted in the proposal, it's important that consumers retain a full 

range of vehicle choices and you've designed the calculation methods to preserve vehicle [These 

comments were submitted as testimony at the New York public hearing. See docket number 

EPA-HQ-OAR-2009-0472-4621, pp. 132.] choice, which is very good. For auto manufacturers 

to meet the aggressive greenhouse gas and CAFE standards proposed in this rulemaking, 

compliance flexibility and accommodation for different size vehicles must be provided. [These 

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EPA Response to Comments 

comments were submitted as testimony at the New York public hearing. See docket number 

EPA-HQ-OAR-2009-0472-4621, p. 133.] 

State of New Jersey 

The Agencies requested commenter input on a number of related topics regarding how the 

proposal balances the needs of consumers with the need to reduce greenhouse gas emissions 

from one of the nation's most significant greenhouse gas emission sources. The Department feels 

that USEPA and NHTSA have crafted the proposal in a way that will ensure that consumers will 

continue to have the variety and choice in vehicle models they have come to expect. The 

standards provide manufacturers with significant flexibility in meeting the proposed greenhouse 

gas reductions, and New Jersey is confident that the technologies to reduce vehicle greenhouse 

gas emissions exist in the market today. The phase-in of the standards between 2012 and 2016 

allows manufacturers seven years to incorporate these technologies into greater numbers of 

vehicles. [OAR-2009-0472-7109.1, pp.5-6] 

Mr. Richter - Environmental Capital Partners 

And I think as I mentioned as a member of an investment firm that specifically targets the 

environmental [EPA-HQ-OAR-2009-0472-4621, p.160] I mean, we feel like this will be the 

dominant asset in the years to come. I really want to underscore the economic argument as has 

been used in the past against increasing mileage standards and it may be the single most 

important reason for increasing CAFE standards, and I would say there are two real reasons for 

this. [EPA-HQ-OAR-2009-0472-4621, p.161] 

Al Gore famously pointed out that our fleet would be unable to be sold in China. I think it's 

pretty clear that we need to learn from the past and not make that mistake again. You know, I'm 

not going to sit here and predict what kind of cars will be sold in the future, but I think all of us 

in the room will be pretty certain on which ones won't be sold, and that's the ones that are relying 

on decades old technology, we will be moving forward, and high standards that we can put in 

with the CAFE standards will increase competitiveness and this is particularly true as it relates to 

resource efficiency. This resource efficiency pushes innovation, innovation creates economic 

opportunity here at home. Last week, GM announced [EPA-HQ-OAR-2009-0472-4621, p.162] 

plans to invest $230 million in four Michigan plants to build the Cruze and the Volt, restoring 

500 jobs. I mean, there are so many cascading effects that come from investing in innovation. 

[EPA-HQ-OAR-2009-0472-4621, p.163] 

Shaw, Donald F. 

The imposition of these standards will impose severe financial hardships on the already 

economically challenged Auto industry, resulting in the massive loss of jobs and disruption to 

the entire economy. People will not buy the new impractical cars, but will keep their “useful” 

autos until they die. [OAR-2009-0472-7270.1, p. 1] 

Our economy is already fragile, why risk further deterioration? How much additional 

government subsidy dollars are required to aid the auto industry? [OAR-2009-0472-7270.1, p. 1] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

Chew, Yuli 

As to the economic costs, I believe that that buyer will be more concerned with the full life-cycle 

costs, personally value savings as the most important issue. This is in line with the CARB’s 

Regulations to Control Greenhouse Gas Emissions from Motor Vehicles, Final Statements of 

Reasons, August 4, 2006, it stated that “cost effective” is defined as “Economical to an owner or 

operator of a vehicle, taking into account the full life-cycle costs of a vehicle. [OAR-2009-0472­

7042.1, p.6] 

US Steel Corporation 

In any case, the application of these aggressive fuel economy standards will require vehicle 

manufacturers to apply new technology, including advanced materials (including aluminum, 

magnesium, composites, and advanced high-strength steels) to vehicles, the sum total of which 

will raise vehicle prices and slow down sales accordingly with negative consequences to the 

general economy. [OAR-2009-0472-7197.1, pp.6-7] 

University of Pennsylvania, Environmental Law Project 

3. Expected Costs of Implementation of the Proposed Rule 

As previously mentioned, some groups worry about the economic costs of rule implementation. 

They argue that the proposed rule could add too much to the price of new cars. This will lead, 

they say, to people sticking with their older, gas-guzzling cars instead of buying new ones, 

thereby undermining the primary goal of the rule of lowering vehicle emissions [OAR-2009­

0472-7286.1, pp. 20-21]. 

However, most stakeholders, including the auto industry and Auto Dealers Association support 

the rule and agree that this standard can be met without undue costs. They also point to the 

benefits of a predictable national standard that will help to lessen uncertainty for the auto 

industry when they develop new models, and lower compliance costs by avoiding a patchwork of 

rules between the states. Furthermore, it will allow them time to build improvements into new 

models during the normal production and design process, which will minimize the additional 

costs imposed. [OAR-2009-0472-7286.1, p. 21] 

National Automobile Dealers Association 

Regarding vehicle affordability, the critical importance of fuel price and availability cannot be 

overstated. New vehicle purchasers typically aren’t early adaptors of high priced new 

technologies, nor are they so well off as to ignore fuel efficiency even when fuel prices are high. 

Instead, the vast majority of new vehicle purchasers are payment buyers with multi-year loans 

who only become keenly interested in fuel economy when fuel prices skyrocket. Clearly, it is 

very difficult to forecast fuel prices in a free market. By relying on conservative fuel price 

forecast assumptions, the National Program will at worse achieve better fuel economy and GHG 

benefits should prices prove to be higher than forecast. On the other hand, should fuel prices 

prove to be lower than forecast, the result could be a scenario of high priced new vehicles sitting 

unwanted and unaffordable on dealers lots, with unacceptable negative consequences. 

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EPA Response to Comments 

EPA Response: 

EPA and NHTSA have included a number of flexibilities in the rule to reduce the costs of 

implementation and to increase the options that auto makers have for achieving the standards. 

We have also considered the lead times for auto makers to comply with the standards. The 

technologies analyzed in this rule are, generally, already available. EPA expects that auto 

companies will continue to pursue new technologies. EPA’s Preamble Section III.H.5 and RIA 

Section 8.1.3 estimate a payback period of under 3 years for the fuel-saving technologies to 

comply with the standards. If consumers consider at least 3 years of fuel savings when buying 

vehicles, then the new vehicles should be more attractive to them than existing vehicles, and 

sales might increase, as estimated in the analyses found in these sections. 

EPA’s benefits analysis incorporates the life-cycle costs and fuel savings, to reflect the effects of 

the vehicles over the years. Because (as discussed in Response to Comments Section 4.5.1) the 

evidence is uncertain on the role of fuel economy in consumer vehicle purchases, EPA assumes, 

in its vehicle sales impact analysis, that consumers consider five years’ worth of fuel savings 

when buying a vehicle. As also discussed in Response to Comments Section 4.5.1, the role of 

fuel savings in vehicle purchase need not be the same as the actual savings that will occur. 

5.13.6. Non-Greenhouse Gas Health and Environmental Impacts 

Organization:Environmental Defense Fund 

Institute for Policy Integrity at New York University School of Law 

University of Pennsylvania, Environmental Law Project 

South Coast Air Quality Management District 

Comment: 

Environmental Defense Fund 

To maximize the benefits of the final standards, it is essential to fully account for the 

extraordinary and far-reaching protections that result from reducing heat-trapping emissions. 

Accordingly, the full range of environmental, social, and economic impacts of greenhouse gas 

emissions should be taken into account when calculating the societal costs of carbon. Where 

impacts cannot be quantified, federal policy makers should present a transparent qualitative 

analysis along with a recognition that monetized benefits are likely to be underestimates. 

The co-benefits of the proposed standards, such as the health benefits from the reductions in 

smog-forming air pollutants, must also be incorporated into the economic analysis. And the 

analysis must not rely on flawed economic assumptions that diminish the value of 

protecting future generations. 

Indeed, we have a solemn duty to provide a secure future for my generation and those 

that follow. The final rule must reflect this responsibility through appropriate economic 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

assumptions while also relying on ethical considerations beyond the scope of economic 

analysis alone. 

[Comments are from LA Testimony, OAR-2009-0472-7283, pp.72-79] 

Institute for Policy Integrity at New York University School of Law 

Uses of the Social Cost of Carbon: 

Central estimates of the social cost of carbon should not be used in optimization models, and 

should not replace traditional regulatory impact analysis for GHG emissions reductions. While 

incorporating ancillary benefits directly into the SCC is likely to prove difficult, the interagency 

group should provide guidance on the types of ancillary benefits typically associated with GHG 

reductions. [OAR-2009-0472-7246.1, p. 2] [See OAR-2009-0472-7246.1, pp. 39-44 for 

discussion and commenter recommendations related to the uses of the social cost of carbon.] 

Ancillary Benefits: 

There is a significant literature showing the relationship between greenhouse gas reductions and 

a host of ancillary benefits or “co-benefits.” Because rules that control greenhouse gas emissions 

will often end up reducing fossil fuel combustion, emission of a range of conventional pollutants 

associated with fossil fuels can be expected to decline in the face of GHG regulation. Reductions 

in particulate matter, nitrogen oxides, sulfur dioxides, volatile organic compounds, and other 

pollutants can be anticipated to accompany GHG controls. [OAR-2009-0472-7246.1, p. 41] 

For example, measures that increase energy efficiency or encourage clean energy generation will 

also lead to reductions in local air pollutants, with attendant benefits for human health and 

ecosystems. Other ancillary benefits include reduced ocean acidification and increased forest 

preservation. [OAR-2009-0472-7246.1, p. 41] 

The magnitude of such ancillary benefits may be significant. For example, a forthcoming 

working paper estimates that representative federal climate legislation would result in healthrelated co-benefits of $3 to $9 per ton of carbon dioxide avoided (due to reductions in 

conventional air pollutants). Other studies, using different methodologies, have found similarly 

large benefits. Because the ancillary benefits of greenhouse gas reductions could represent an 

important component of total benefits, it is essential for rulemakings that use the interagency 

SCC estimates not to omit significant ancillary benefits. [OAR-2009-0472-7246.1, p. 42] 

One mechanism to take ancillary benefits into account would be to imbed a default estimate of 

ancillary benefits within the SCC. An estimate of $5-$10 for ancillary benefits could be added 

directly to the SCC. Incorporating these ancillary benefits directly into the SCC would ensure 

that they were accounted for in regulatory analysis. [OAR-2009-0472-7246.1, p. 42] 

However, because different rules will have different effects on ancillary pollutants, directly 

incorporating a default ancillary benefit estimate into the SCC is a second-best approach. 

Transportation rules may have different ancillary effects than rules governing power plants. 

Some rules may be directly targeted at reducing a conventional pollutant, so incorporating an 

“ancillary” effect in the SCC could result in double counting. For these reason, simply including 

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EPA Response to Comments 

a default assumption concerning ancillary benefits will skew the analysis in some cases. [OAR2009-0472-7246.1, p. 42] 

If such a default assumption is not included, it is important for the interagency group to clarify 

that GHG reductions are often accompanied by ancillary benefits, and also to provide some 

guidance for agencies to ensure that they identify and take account of relevant ancillary effects. 

Citation to the literature on ancillary benefits associated with GHG reductions, as well as a 

default list of likely ancillary effects of GHG reductions, and perhaps a default value in a 

“typical rule,” could also be provided by the interagency group to give guidance for future 

rulemakings. [OAR-2009-0472-7246.1, p. 42] 

We recommend that the interagency group give explicit direction to agencies on how to account 

for ancillary benefits associated with GHG reductions. [OAR-2009-0472-7246.1, p. 42] 

University of Pennsylvania, Environmental Law Project 

NHTSA has not monetized reductions in toxic air pollutants due to the proposed standards (a 

benefit), nor potential reductions in vehicle performance or utility (a cost) that might result from 

the proposed standards. However, by any metric, NHTSA expects that the benefits of the 

proposed standards will vastly outweigh the costs. [OAR-2009-0472-7286.1, p.16] 

South Coast Air Quality Management District 

The South Coast AQMD is the nation's largest regional air pollution district, and we appreciate 

this opportunity to testify on this joint rulemaking. 

The AQMD staff strongly support the proposed greenhouse gas emission standards and timeline. 

The proposed emission standards and companion fuel economy standards will result in a 

significant reduction in greenhouse gas emissions as well as provide crucially important cobenefits in reducing criteria emissions in support of attainment of federal and state air quality 

standards for ozone and fine particulates. 

Given the strong correlation of rising temperature and increased ozone levels, it is especially 

germane that this hearing is being held in one of the nation's most polluted air basins. 

There are over ten million registered light-duty vehicles in the South Coast Air Basin. 

Reductions in fuel use associated with the standards proposed will therefore have a direct and 

tangible benefit in terms of public health and welfare in our region. 

[Comments are from LA Testimony, OAR-2009-0472-7283, pp.59-60.] 

EPA Response: 

EPA agrees with commenters that it is important to quantify the non-GHG health and 

environmental impacts associated with the proposed standard because a failure to adequately 

consider these ancillary impacts could lead to an incorrect assessment of their net costs and 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

benefits. Moreover, co-pollutant impacts tend to accrue in the near term, while any effects from 

reduced climate change mostly accrue over a time frame of several decades or longer. 

In this final rule, EPA quantified and monetized the health and environmental impacts related to 

both PM and ozone in its regulatory impact analysis (RIA), based on changes in ambient air 

quality as determined by full-scale photochemical modeling. Although this modeling was not 

possible in the timeframe for the proposal, EPA did perform this modeling for the final rule, as 

described below. 

To model the ozone and PM air quality benefits of the final rule, EPA used the Community 

Multiscale Air Quality (CMAQ) model (see Chapter 7.2 of the RIA that accompanies the final 

rule for a description of the CMAQ model). The modeled ambient air quality data served as an 

input to the Environmental Benefits Mapping and Analysis Program (BenMAP). BenMAP is a 

computer program developed by EPA that integrates a number of the modeling elements used in 

previous RIAs (e.g., interpolation functions, population projections, health impact functions, 

valuation functions, analysis and pooling methods) to translate modeled air concentration 

estimates into health effects incidence estimates and monetized benefits estimates. 

 In addition to the non-GHG ancillary health and environmental impacts that EPA quantified for 

analysis of the final Light-Duty Vehicle GHG standard, there are a number of other health and 

human welfare endpoints that EPA was unable to quantify because of current limitations in the 

methods or available data. For example, EPA has not quantified a number of known or 

suspected health effects linked with ozone and PM for which appropriate health impact functions 

are not available or which do not provide easily interpretable outcomes (e.g., changes in heart 

rate variability). In addition, EPA is currently unable to quantify a number of known welfare 

effects, including reduced acid and particulate deposition damage to cultural monuments and 

other materials, and environmental benefits due to reductions of impacts of eutrophication in 

coastal areas. For air toxics, the available tools and methods to assess risk from mobile sources 

at the national scale are not adequate for extrapolation to benefits assessment. In addition to 

inherent limitations in the tools for national-scale modeling of air toxics and exposure, there is a 

lack of epidemiology data for air toxics in the general population. All of the above-mentioned 

health impact omissions contribute to a likely underestimate of the total benefits attributable to 

the final rule. 

 Please refer to Chapter 7.3 of the RIA that accompanies the final rule for more information 

about the quantification and monetization of non-GHG-related benefits. 

EPA notes IPI and EDF’s recommendation for the interagency group to “give explicit direction 

to agencies on how to account for ancillary benefits associated with GHG reductions” (7246.1, 

pg 42). As noted in Section 4.5.4, the SCC TSD reiterates the need to document more 

thoroughly omitted impacts and monitor the literature for emerging research. As the research 

evolves, the Federal government, including EPA, is committed to exploring how modeling can 

be improved so that these aspects are better reflected in the SCC. 

5.13.7. Energy Security Impacts 

437 

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EPA Response to Comments 

Organization: Fraas, Arthur, G. 

Comment: 

The joint DOT and EPA proposed CAFE standard represents an ambitious and challenging 

policy initiative that will reduce the oil consumption and the greenhouse gas emissions of light 

duty cars and trucks for the model years 2012 through 2016. At the same time, this rule will 

increase the initial purchase price of new vehicles and pose a substantial challenge to car and 

truck manufacturers in their efforts to comply with the proposed standards. As a result, the 

proposal raises a number of interesting analytical and policy questions. This comment will focus 

on one of these questions—the quantification of the energy security benefits of the proposed 

rule. [OAR-2009-0472-7523, p. 1] 

Energy security benefits—typically including several disparate categories: national security 

benefits, macroeconomic disruption and adjustment benefits, and the benefits of exercising 

monopsony power to counter the exercise of market power by oil producing countries—have 

served as critical arguments in support of the rationale for government policies designed to 

secure greater energy independence for the United States. Over the last several decades, there has 

been a continuing debate about the nature and magnitude of each of these energy security benefit 

categories and the role that they ought to play in shaping U.S. energy policy. The DOT/EPA 

joint proposal discusses some of these issues and develops an estimate of energy security 

benefits as an integral part of the joint proposed CAFE rule. In particular, DOT and EPA would 

incorporate an estimate of the macroeconomic disruption/adjustment benefits as a part of the 

proposed rule's decision framework, while excluding from the CAFE calculation an estimate of 

the monopsony premium. [OAR-2009-0472-7523, pp. 1-2] 

I support the DOT and EPA proposal to exclude the monopsony premium from the CAFE 

calculation although for a more general reason than that put forward by DOT and EPA—and will 

address the proposed macroeconomic disruption/adjustment benefits incorporated in the 

calculation of the standard in their CAFE proposal. [OAR-2009-0472-7523, p. 2] 

The Monopsony Premium 

DOT and EPA Proposed Approach—As a part of the CAFE NPRM, DOT and EPA have 

proposed to consider only the macroeconomic disruption/adjustment component in developing 

an estimate of energy security benefits associated with a reduction in the consumption of 

petroleum products. This departs from recent practice. In developing estimates of the energy 

security benefit of reducing petroleum consumption in past rules, DOT and EPA have also 

included an estimate of the “monopsony premium.” The monopsony premium represents the 

avoided payments to oil producers in foreign countries associated with a decline in the world 

price of oil resulting from decreases in U.S. oil consumption. [OAR-2009-0472-7523, p. 2] 

DOT and EPA propose to exclude the monopsony premium from the estimate of energy security 

benefits because this proposed rule adopts a global value for the social cost of carbon (SCC). 

DOT and EPA provide their rationale for excluding monopsony benefits as follows (74 

FR 49622): 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

How should the energy security premium be used when some benefits from the proposed rule, 

such as the benefits of reducing greenhouse gas emissions, are calculated at a global level? 

Monopsony benefits represent avoided payments by the U.S. to oil producers in foreign countries 

that result from a decrease in the world price as the U.S. decreases its consumption of imported 

oil. Although there is clearly a benefit to the U .S. when considered from the domestic 

perspective, the decrease in price due to decreased demand in the U .S. also represents a loss of 

income to oil producing countries. Given the redistributive nature of this effect, do the negative 

effects on other countries “net out” the positive impacts to the U.S.? If this is the case, then, the 

monopsony portion of the energy security premium should be excluded from the net benefits 

calculation for the rule. [OAR-2009-0472-7523, p. 2] 

However, DOT and EPA also offer an alternative rationale that would justify including the 

monopsony premium in the estimate of energy security benefits (74 FR 49623): 

“...the global SCC is used in these calculations, not because the global net benefits of the rule are 

being computed (they are not), but rather because in the context of a global public good, the 

global marginal benefit is the correct domestic benefit against which domestic costs are to be 

compared. Similarly, energy security is inherently a domestic benefit. Thus, should the 

two benefits, if they are both viewed from this domestic perspective, be counted in the net 

benefits estimates for this rulemaking and more generally what are the overall implications of 

this approach to justifying regulation? If the monopsony benefits were included in this case, they 

could be significant. [OAR-2009-0472-7523, p. 3] 

DOT and EPA have requested comment on their approach and on the alternative rationale 

presented above for including a monopsony premium in the benefits analysis. [OAR-2009-0472­

7523, p. 3] 

Comment on the Monopsony Premium — There is a more general—and I believe more 

compelling—rationale that justifies the decision not to consider the monopsony premium as a 

part of a benefit-cost analysis of regulatory action than that offered by DOT and EPA. The 

monopsony premium reflects a pecuniary externality—that is, an externality that operates 

through the effect of the regulatory action on prices--rather than a direct resource effect on a 

third party. There is a general consensus among economists that pecuniary externalities should 

not be considered in benefit-cost analyses of governmental actions. Economists point out that the 

pecuniary externality does not affect resource allocation, but government action to address the 

pecuniary externality will further distort resource use. In the specific case of energy security 

benefits, for example, Brown and Huntington, in their September 2009 paper titled “Estimating 

U .S. Oil Security Premiums,” [See OAR-2009-0472-7523, pp. 7-38 for Brown and Huntington 

2009 paper.] exclude the consideration of the monopsony premium “because it is not a security 

concern and because pursuing these gains would distort global resource use rather than offset an 

externality.” Similarly, the October 2009 National Academy of Sciences (NAS) report on the 

Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use finds with 

respect to the monopsony premium “...that no externality in the sense considered in this report 

exists.” (p. 235) As a result, the NAS report does not include the monopsony premium as a part 

of an estimate of the “unpriced consequences” of energy production and use. [OAR-2009-0472­

7523, p. 3] 

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EPA Response to Comments 

The existence of an externality is a crucial test because by addressing true externalities— 

sometimes identified as technical externalities—government regulation can improve the wellbeing of society. This is the context and purpose of a benefit-cost analysis. On the other hand, 

addressing a pecuniary externality only serves to affect the transfer of income without improving 

the allocation of resources and the production possibilities of the economy. [OAR-2009-0472­

7523, p. 3] 

There is a policy argument that because OPEC exercises market power to inflate the world oil 

price (by restricting oil production), it would be appropriate for the United States to exercise its 

monopsony power as a major consumer of oil to reclaim some of the oil revenues realized by oil 

producing countries. However, there are some countervailing reasons that support a decision to 

exclude the consideration of a monopsony premium. First, such a policy further distorts the use 

of oil resources because its effect, like that associated with the exercise of monopoly power, 

would be to reduce consumption below the optimal level. Second, the successful use of 

monopsony power depends on the response of OPEC, other oil producing countries, and oil 

consuming countries. The exercise of market power by the United States is designed purely to 

transfer income from oil producing countries to the United States. Any policy initiative taken for 

this purpose should carefully develop the rationale for the pursuit of such a “beggar thy 

neighbor” policy. In any event, even if the revenue transfers realized by exercising monopsony 

power are used to support a policy decision to restrict the consumption of oil through regulation, 

these transfers are unrelated to a standard externality and ought not be included as a part of the 

benefit-cost analysis of the rule. [OAR-2009-0472-7523, pp. 3-4] 

Oil Disruption Costs 

DOT and EPA Proposed Approach—With respect to disruption costs, DOT and EPA have 

adopted the updated estimates for the macroeconomic disruption/adjustment costs based on a 

March 2008 study titled “The Energy Security Benefits of Reduced Oil Use, 2006-2015.” These 

estimates (in 2007 $) range from $6.70 per barrel ($3 .11- $10.67) in 2015 to $8.12 per barrel 

($3.90 - $13.04) in 2030. [OAR-2009-0472-7523, p. 4] 

Comment on Oil Disruption Costs—The September 2009 Brown and Huntington paper develops 

an alternative, lower estimate of the macroeconomic disruption/adjustment costs. Their estimate 

of the cost of displacing a barrel of domestic oil with a barrel of imported oil ranges from $2.17 

per barrel in 2015 to $2 .37 per barrel in 2030 (in 2007 dollars). The differences in the estimates 

reported by EPA and Brown and Huntington appear to reside in differences in the approach used 

in estimating the change in U .S. oil prices resulting from an oil supply shock. The EPA estimate 

is based on a methodology that allocates a portion of the oil supply shock to the U.S. and then 

calculates the effect on oil prices using estimates of short-run demand and non-OPEC supply 

elasticity. Brown and Huntington use a world oil market model to develop effects of an oil 

supply shock on the world oil price and then use the resulting world oil price to estimate U.S. 

macroeconomic disruption costs. [OAR-2009-0472-7523, p. 4] 

In addition, although the October 2009 NAS report on the hidden costs of energy recognizes that 

“...policies that lead to a reduction in oil consumption in the United States will most assuredly 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

reduce our vulnerability to future oil shocks, ...”, it reaches the conclusion that oil disruption 

costs are not an externality. As a result, the NAS report recommends that further research is 

needed to better understand this possible externality and the report does not include a 

quantitative estimate of the energy disruption costs of imported oil in developing estimates of the 

unpriced externalities associated with energy infrastructure and security. (p. 236) [OAR-2009­

0472-7523, p. 4] 

In light of this advice, I believe that DOT and EPA need to sort out whether to include a 

macroeconomic disruption/adjustment cost component in their evaluation of the benefits and 

costs of the proposed CAFE rule. If DOT and EPA decide to retain some estimate of the 

disruption costs as an estimate of energy security benefits, the agencies need to justify the 

decision and develop a reasoned basis for the magnitude of their estimate taking into 

consideration the recent estimates provided by Brown and Huntington. [OAR-2009-0472-7523, 

p. 4-5] [See OAR-2009-0472-7523, pp. 7-38 for Brown and Huntington 2009 paper.] 

EPA Response: 

EPA appreciates that this commenter felt that that the magnitude of the economic disruption 

portion of the energy security benefit may be too high. This commenter cites a recent paper 

written by Stephen P.A. Brown and Hillard G. Huntington, entitled "Estimating U.S. Oil Security 

Premiums" (September 2009) as the basis for his comment. EPA reviewed this paper and found 

that it conducted a somewhat different analysis than the one conducted by ORNL in support of 

this rule. The Brown and Huntington paper focuses on policies and the energy security 

implications of increasing U.S. demand for oil (or at least holding U.S. oil consumption 

constant), while the ORNL analysis examines the energy security implications of decreasing 

U.S. oil consumption and oil imports. These asymmetrical analyses would be expected to yield 

somewhat different energy security results. 

However, even given the different scenarios considered, the Brown and Huntington estimates are 

roughly similar to the ORNL estimates. For example, for an increase in U.S. consumption that 

leads to an increase in U.S. imports of oil, Brown and Huntington estimate a 2015 disruption 

premium of $4.87 per barrel, with an uncertainty range from $1.03 to $14.10 per barrel. The 

corresponding 2015 estimate for ORNL as the result of a reduction in U.S. oil imports is $6.70 

per barrel, with an uncertainty range of $3.11 to $10.67 per barrel. Given that the two studies 

analyze different scenarios, since the Brown and Huntington disruption premiums are well 

within the uncertainty range of the ORNL study, and given that the ORNL scenario matches the 

specific oil market impacts anticipated from the rule while the Brown and Huntington paper does 

not, EPA has concluded that the ORNL disruption security premium estimates are more 

applicable for analyzing this final rule. 

This commenter also felt that the monopsony effect should be excluded from net benefits 

calculations for the rule since it is a “pecuniary” externality or does not represent an efficiency 

gain. EPA disagrees that all pecuniary externalities should a priori be excluded from net benefits 

calculations. For example, in the case here, the oil market is non-competitive, and if the social 

decision-making unit of interest is the U.S., there is an argument for accounting for the 

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EPA Response to Comments 

monopsony premium to assess the excess transfer of wealth caused by the exercise of cartel 

power outside of the U.S. 

However, for the final rule, EPA continues to take a global perspective with respect to climate 

change by using the global SCC value. Therefore, the EPA did not count monopsony benefits 

since they “net out” with losses to other countries outside the U.S. Since EPA is taking a global 

perspective, EPA did not undertake a distributional analysis for this final rule, since the losses to 

the losers (oil producers that export oil to the U.S.) would equal the gains to the winners (U.S. 

consumers of imported oil). As a result, EPA continues to included only the macroeconomic 

disruption portion of the energy security benefits to monetize the total energy security benefits of 

this rule. 

Organization: New York University School of Law, Institute for Policy Integrity (IPI) 

 Mr. Richter - Environmental Capital Partners 

Comment: 

Energy Security Effects 

The agencies consider how the proposed regulations might generate three possible benefits to 

“energy security” by reducing U.S. consumption of petroleum: (1) lower oil prices worldwide as 

U.S. demand drops; (2) decreased risk to the U.S. economy from a sudden disruption in oil 

supplies; and (3) reduced costs for U.S. energy security policies. The first effect should be 

treated as a distributional consequence, not a standard efficiency benefit. The second effect 

should be valued as a benefit, so long as the agencies disaggregate any wealth transfers that 

occur during price shocks. The agencies were justified in not quantifying the last effect (i.e. 

treating it as having zero value), provided the agencies incorporate the increased protection value 

of the Strategic Petroleum Reserve into their calculation of disruption effects. [OAR-2009-0472­

7232.3, p. 12] 

Demand Effects 

Often referred to as a “monopsony” effect, oil consumers in the United States do, in aggregate, 

exert enough influence on the worldwide demand for oil that a variation in U.S. demand will 

affect prices (although recent evidence suggests the effect might be limited). If the proposed 

regulations reduce U.S. demand, prices will drop, and U.S. consumers will experience some 

additional savings. [OAR-2009-0472-7232.3, p. 12] 

But these perceived savings come at the expense of lost revenue to the oil suppliers. Globally, 

there are no net benefits from the demand effects. The agencies currently choose not to calculate 

any benefits from demand effects because they select a global value for the social cost of carbon, 

and they believe a consistently global perspective on costs and benefits may be required. [OAR2009-0472-7232.3, p. 12] 

However, the agencies seek comment on another possible approach: 

“From one perspective, the global social cost of carbon is used in these calculation, not because 

the global net benefits of the rule are being computed (they are not), but rather because in the 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

context of a global public good [like climate change mitigation], the global marginal benefit is 

the correct domestic benefit against which domestic costs are to be compared. Similarly, energy 

security is inherently a domestic benefit. Thus, should the two benefits, if they are both viewed 

from this domestic perspective, be counted in the net benefits estimates for this rulemaking, and 

more generally what are the overall implications of this approach to justifying 

regulation?” [OAR-2009-0472-7232.3, p. 13] 

The agencies repeatedly note that demand effects could be “significant.” But the issue of how to 

include demand effects is not a choice between a global or a domestic perspective on costs and 

benefits. Rather, the agencies should address the demand effects through a distributional 

analysis. [OAR-2009-0472-7232.3, p. 13] 

As the agencies note, wealth transfers are not typically included as a “benefit.” OMB guidance 

provided in the Circular A4 confirms that cost-benefit analysis focuses on measuring the 

economic efficiency of a regulation, and wealth transfers do not offer any efficiency gains or 

losses. However, efficiency is not necessarily the only relevant policy consideration, and 

therefore such transfers and other distributional effects must be considered as part of a separate 

distributional analysis. [OAR-2009-0472-7232.3, p. 13] 

The agencies should assess how demand effects might generate distributional gains for U.S. oil 

consumers at the expense of foreign (and domestic) oil producers. The agencies could consider 

how income, or other distributional weights, might factor into such an analysis. The agencies 

should also, pursuant to OMB recommendations and the principles of Executive Order 12866, 

incorporate such a study of demand effects into a broader distributional analysis. [OAR-2009­

0472-7232.3, p. 13] 

Note that—given the agencies’ statutory mandates—there is nothing inconsistent about using a 

global social cost of carbon estimate and still giving some preference to policies that generate 

distributional gains for the United States at the expense of foreign companies or 

countries. [OAR-2009-0472-7232.3, p. 13] 

Disruption Effects 

The agencies calculate how reducing U.S. oil consumption will decrease the risk of lost 

economic output during a sudden, unanticipated disruption in oil imports and supplies. However, 

the Joint Technical Support Document suggests part of this calculation might include the higher 

price of imported oil caused by a supply disruption and price shock, which, as the agencies 

acknowledge, is a “wealth transfer.” Such effects are no different analytically than the 

demand/monopsony effects considered above. Thus, any such import effects should be 

disaggregated from the disruption effects, and should instead be considered in the type of 

distributional analysis discussed above. [OAR-2009-0472-7232.3, p. 14] 

Security Policy Effects 

The two main security policy effects of reducing U.S. demand for oil are: a possible impact on 

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EPA Response to Comments 

U.S. military activities in politically instable regions that supply oil; and a possible impact on the 

size or valuation of U.S. Strategic Petroleum Reserve. [OAR-2009-0472-7232.3, p. 14] 

The agencies have chosen not to calculate any budgetary outlays for military expenses as a 

benefit because, given the size of likely oil import reductions and the broad range of policy 

objectives targeted by various U.S. military missions, economic analysis predicts military costs 

are unlikely to change as a result of the proposed regulations. Importantly, this case is distinct 

from the agencies’ decision not to quantify other uncertain costs or benefits (particularly, lost 

consumer welfare), because zero is, according to the best economic analysis, a plausible estimate 

for this hard-to-quantify element. Therefore, fewer policy and legal risks are raised by the choice 

not to quantify. It is also commendable that NHTSA conducted a sensitivity analysis on potential 

military effects. [OAR-2009-0472-7232.3, p. 14] 

By decreasing U.S. demand for oil, the proposed regulations could either decrease the need to 

maintain such a large Strategic Petroleum Reserve, or it could increase the protective value 

offered by the current Strategic Petroleum Reserve. The decision not to quantify any cost savings 

from maintaining a smaller Strategic Petroleum Reserve is justified so long as the agencies have 

incorporated the increased protective value from maintaining the current Strategic Petroleum 

Reserve into the calculation of disruption effects. [OAR-2009-0472-7232.3, p. 14] 

Less obvious, but more really more important, is the connection to our strategic defense. I'm sure 

you've heard this argument, but the less gas we burn, of course, the less foreign oil we import, 

and it's estimated that we export the equivalent of the TARP bail-out, approximately $750 billion 

every year to import foreign carbon. That's money flowing out of our economy and primarily 

into countries that do not have our best interest in mind. The more we rely on other countries for 

strategic resources, the less stability that we have here at home, less foreign oil imported means 

more domestic security. [EPA-HQ-OAR-2009-0472-4621, p.160] 

EPA Response: 

EPA has addressed the monopsony issue in its response to the previous comment. 

In the energy security literature, the macroeconomic disruption component of the energy security 

premium traditionally has included both (1) increased payments for petroleum imports associated 

with a rapid increase in world oil prices, and (2) the GDP losses and adjustment costs that result 

from projected future oil price shocks. This comment from the New York University School of 

Law suggested that the increased payments associated with rapid increases in petroleum prices 

(i.e., price increases in a disrupted market) represent transfers from U.S. oil consumers to 

petroleum suppliers rather than real economic costs, and therefore, should not be counted as a 

benefit. 

The approach recommended by the commentor would represent a significant departure from how 

the macroeconomic disruption costs associated with oil price shocks have been quantified in the 

broader energy security literature, and the EPA believes it should be analyzed in more detail 

before being applied in a regulatory context. In addition, the EPA also believes that there are 

compelling reasons to treat higher oil import costs during oil supply disruptions differently than 

simple wealth transfers that reflect the exercise of market power by petroleum sellers or 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

consumers. According to the OMB definition of a transfer: “Benefit and cost estimates should 

reflect real resource use. Transfer payments are monetary payments from one group to another 

that do not affect total resources available to society...The net reduction in the total surplus 

(consumer plus producer) is a real cost to society, but the transfer from buyers to sellers resulting 

from a higher price is not a real cost since the net reduction automatically accounts for the 

transfer from buyers to sellers.”59 In other words, pure transfers do not lead to changes in the 

allocation or consumption of economic resources, whereas changes in the resource allocation or 

use produce real economic costs or benefits. 

While price increases during oil price disruptions can result in large transfers of wealth, they also 

result in a combination of real resource shortages, costly short-run shifts in energy supply, 

behavioral and demand adjustments by energy users, and other response costs. Unlike pure 

transfers, the root cause of the disruption price increase is a real resource supply reduction due, 

for example, to disaster or war. Regions where supplies are disrupted (i.e., the U.S.) suffer very 

high costs. Businesses’ and households’ emergency responses to supply disruptions and rapid 

price increases are likely to consume some real economic resources, in addition to causing 

financial losses to the U.S. economy that are matched by offsetting gains elsewhere in the global 

economy. 

While households and businesses can reduce their petroleum consumption, invest in fuel 

switching technologies, or use futures markets to insulate themselves in advance against the 

potential costs of rapid increases in oil prices, when deciding how extensively to do so, they are 

unlikely to account for the effect of their petroleum consumption on the magnitude of costs that 

supply interruptions and accompanying price shocks impose on others. As a consequence, the 

U.S. economy as a whole will not make sufficient use of these mechanisms to insulate itself from 

the real costs of rapid increases in energy prices and outlays that usually accompany oil supply 

interruptions.60 Therefore, the ORNL estimate of macroeconomic disruption and adjustment 

costs that the EPA uses to value energy security benefits includes the increased oil import costs 

stemming from oil price shocks that are unanticipated and not internalized by advance actions of 

U.S. consumers of petroleum products. The EPA believes that, as the ORNL analysis argues, the 

uninternalized oil import costs that occur during oil supply interruptions represents a real cost 

associated with U.S. petroleum consumption and imports, and that reducing its value by lowering 

domestic petroleum consumption and imports thus represents a real economic benefit from lower 

fuel consumption. 

EPA appreciates the comments on how to account for the potential military cost associated with 

maintaining a U.S. military presence to help secure stable oil supply from potentially vulnerable 

regions of the world. These comments indicated that EPA should not attempt to monetize U.S. 

59 OMB Circular A-4, September 17, 2003. See 

http://www.whitehouse.gov/omb/assets/omb/circulars/a004/a-4.pdf

60 For a more complete discussion of the reasons why the oil import cost component of the 

macroeconomic disruption and adjustment costs includes some real costs and does not represent 

a pure transfer, see Paul N. Leiby, Estimating the Energy Security Benefits of Reduced U.S. Oil 

Imports: Final Report, ORNL-TM-2007-028, Oak Ridge National Laboratory, March 14, 2008, 

pp. 21-25. 

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EPA Response to Comments 

military costs nor include these costs in the energy security analysis. At this time, EPA agrees 

with these comments. In fact, a recent study conducted by the National Academy of Sciences 

(NAS)61 notes that it is difficult to disentangle military spending to achieve political goals from 

spending to protect petroleum supply routes. Further, it notes that spending to protect petroleum 

supply routes would not likely change, given a moderate reduction in oil flowing from volatile 

regions to the U.S. However, the NAS study also suggests that a very large reduction in oil 

demand could affect military spending. The EPA has adopted the NAS position that a change in 

military spending is unlikely given a moderate reduction in oil demand, and continues to exclude 

a monetary estimate of military costs in our energy security calculations for this rule. However, 

EPA also believes that more examination of this issue may be warranted in the future. 

Organization: Environmental Defense Fund. 

Comment: 

And, finally, there's this looming question about -- and this is discussed again in the preamble 

about one of the other factors that NHTSA has to consider about the need to conserve energy -- 

and I was interested that the preamble quotes from the June 30, 1977 Federal Register to the 

effect that the need to conserve energy encompasses, and this is a quote from the preamble, the 

consumer cost, national balance of payments, environmental and foreign policy implications of 

our needs for large quantities of petroleum, especially imported petroleum. And, by the way, this 

letter that I attached on the social cost of carbon talks about those factors in greater length, but 

then the preamble itself only mentions really three of those four factors, [These comments were 

submitted as testimony at the New York public hearing. See docket number EPA-HQ-OAR2009-0472-4621, p. 125.] which are the impacts of our national debt on the world oil price, the 

risks of disruption and securing imported oil military expenses, which are obviously considerable 

for this country, but it doesn't mention the fourth, which is the impact of our oil consumption in 

the motor vehicle sector on our balance of payments, and I think we have to recognize, you 

know, a year and a half ago when our trade deficit was at $800 billion, our current account 

deficit was almost at $800 billion, oil accounted for almost half of it. Today, because of this 

recession that we're in, the latest figures are that our trade deficit has been halved, down to a 

mere $400 billion, but you multiply the amount of oil that we're now importing, which is down 

from where it was about a year and a half ago, but about 10 million gallons per day total, and a 

good portion of that is in the motor vehicle sector, we are spending [These comments were 

submitted as testimony at the New York public hearing. See docket number EPA-HQ-OAR2009-0472-4621, p. 126.] 250 to 300 billion dollars on importing oil, which is, you know, two 

thirds or more of our current, you know, trade deficit, and there is beginning to be in the 

economic literature a lot of talk about the status of the dollar as a reserve currency, and, you 

know, the status of the dollar in the payments for oil. Oil is denominated in dollars. Well, the fact 

is that if that trade deficit and the amount of money that we're spending on imported oil 

continues, the likelihood that oil is going to continue to be denominated in dollars is going down, 

and that really has to be a factor. It's not a factor that the Energy Information Administration is 

probably going to take into account, but it does seem to me in the social cost of carbon 

something that you do need to take into account. If that happened, there could be radical changes 

61 Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use, NAS, ISBN - 10: 0-309-14636­

4. February 2010. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

in the price of oil. So I think, particularly from NHTSA's [These comments were submitted as 

testimony at the New York public hearing. See docket number EPA-HQ-OAR-2009-0472-4621, 

p. 127.] point of view in setting the standard, you really have to take into account the 

contribution of imported oil to our balance of payments and the implications of all that for the 

sustain ability of the value of the dollar, and, you know, given world trade organization rules, I 

don't see anyway in which this country can discriminate between imported oil and domestically 

produced oil, and, therefore, the only way to reduce the huge contribution that imported oil 

makes to our trade deficit and our current account deficit and what it's doing to our economy, 

which is awful, the only way to deal with it is to cut down very significantly in the use of oil in 

our transportation sector, and what you're doing is a step in the right direction, but I believe that 

this consideration would drive you to be just as aggressive as you possibly can. [These comments 

were submitted as testimony at the New York public hearing. See docket number EPA-HQOAR-2009-0472-4621, p. 128.] 

EPA Response: 

EPA’s energy security analysis estimates the impacts of this rule on U.S. oil imports. Clearly, 

these estimated reductions in U.S. oil imports will have impacts on the U.S. trade balance and 

balance of payments with other countries through time. It is beyond the scope of this analysis to 

estimate how changes in the U.S.’s trade and balance of payments from this rule will influence 

the world financial system. 

5.14. Statutory and Executive Order Reviews 

Organization:Competitive Enterprise Institute 

Institute for Liberty 

National Asphalt Pavement Association 

American Chemistry Council, American Iron and Steel Institute, American Meat 

Institute, Corn Refiners Association, National Oilseed Processors Association 

Peabody Energy Company 

American Petroleum Institute 

Comment: 

Competitive Enterprise Institute 

III. The proposed standards will spawn an economically-chilling regulatory morass. 

EPA Administrator Jackson certifies that the proposed rule “would not have a significant 

economic impact on a substantial number of small entities.” In reality, EPA’s proposed GHG 

standards will subject millions of previously unregulated small entities to the risk of new 

regulation, controls, paperwork, penalties, and litigation. Moreover, the endangerment finding on 

which the proposed rule is predicated will also expose the economy as a whole to the risk of 

unprecedentedly severe constraints under the NAAQS program. [OAR-2009-0472-7281.1, p.10] 

Institute for Liberty 

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EPA Response to Comments 

The disproportionate impact of federal environmental regulations on the small business sector 

led President Clinton to support the 1996 Small Business Regulatory Enforcement Fairness Act 

(SBREFA). Among other things, SBREFA amended the Regulatory Flexibility Act of 1980 to 

require a panel of government officials (made up of employees from the EPA, the U.S. Small 

Business Administration’s (SBA) Office of Advocacy, and the Office of Management and 

Budget’s Office of Information and Regulatory Affairs) and representatives of small entities to 

examine regulatory proposals and suggest less burdensome alternatives that would meet EPA’s 

underlying environmental protection objectives while minimizing impact on small entities. These 

panels, entitled, “Small Business Advocacy Review Panels,” issue a report that is published in 

conjunction with a proposed regulation. That way, the EPA benefits from sensitivity towards its 

impact on small business and the public benefits from a more transparent disclosure of benefits, 

costs, and potential alternatives. 

Unfortunately, the EPA did not avail itself of the Small Business Advocacy Review Panel 

process prior to proposing this rule. This is unfortunate, especially since the U.S. Small Business 

Administration, Office of Advocacy, twice advised the EPA to convene the small business panel 

well before EPA issued its proposal. 

We respectfully request that EPA to withdraw this rule. And, we further request that EPA 

convene a Small Business Advocacy Review panel under section 609 of the Regulatory 

Flexibility Act. These recommendations, if followed, will allow for EPA to develop alternatives 

that will minimize the impact on small business while reducing GHG emissions. Our 

recommendations come at a time when sensitivity towards small business not only makes sense; 

it is of vital importance for our country’s economic recovery. [OAR-2009-0472-7284.1, p.4] 

EPA‘s reliance on Section 609(c) of the RFA to avoid the required analysis is equally illogical. 

That section authorizes EPA to forgo the statutory requirement to ―prepare and make available 

for public comment an initial regulatory flexibility analysis describing the rule‘s impact on small 

entities. 5 U.S.C. § 603(a). The RFA directs that this analysis ―shall be published in the Federal 

Register at the time of the publication of general notice of proposed rulemaking for the rule. 

Thus, 609(c) does not exempt EPA from these clear mandates—rather, Section 609‘s small 

entity outreach ―requirements apply before the EPA proposes a rule. West Va. Chamber of 

Comm. v. Browner, 166 F.3d 366, 1998 WL 827315, *3 (4th Cir. 1998). [OAR-2009-0472­

7143.1, p.4] 

National Asphalt Pavement Association 

Our concern is in EPA's certification statement in the current proposal [74 Fed Reg 49629]: ' .... 

that this proposed rule will not have a significant economic impact on a substantial number of 

small entities. However, EPA recognizes that some small entities continue to be concerned about 

the potential impacts of the statutory imposition of PSD requirements that may occur given the 

various EPA rulemakings currently under consideration concerning greenhouse gas emissions . 

.... Concerns about the potential impacts of statutorily imposed PSD requirements on small 

entities will be the subject of deliberations in that consultation and outreach. Concerned small 

entities should direct any comments relating to potential adverse economic impacts on small 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

entities from PSD requirements for GHG emissions to the docket for the PSD tailoring rule.' 

[OAR-2009-0472-7224.1, pp.1-2] 

It is critical that all potentially affected entities understand the impact of EPA regulating 

greenhouse gas emissions under the light-duty vehicle proposal. In contrast to EPA's suggestion 

recommending that stationary (industrial) sources address any concerns that they have through 

comments on the upcoming 'tailoring rule' -- once EPA regulates greenhouse gases from lightduty vehicles, these sources will already be subject to PSD as defined in the Clean Air Act. 

Bottom line: the greenhouse gas threshold values proposed are totally discordant with the current 

Clean Air Act. As representatives of a small industrial source sector, we implore EPA to correct 

and address this situation now. [OAR-2009-0472-7224.1, p.2] 

For example, any state operating permit issued with greenhouse gas, i.e., carbon dioxide 

thresholds, higher than those identified within the current Clean Air Act, would be vulnerable to 

appeal and litigation. Certainly, EPA must fully evaluate the collateral impact this proposal 

would have on all other aspects of the Clean Air Act including, but not limited to, the impact on 

state and local air permitting authorities, businesses, industry and the economy in all areas of the 

country. [OAR-2009-0472-7224.1, p.2] 

Once EPA 'regulates' greenhouse gas emissions from mobile sources, the Clean Air Act requires 

that stationary sources be regulated under the threshold requirements as specified within the 

Clean Air Act - regardless of any 'tailoring rule' EPA develops - as those thresholds are specified 

within federal law. [OAR-2009-0472-7224.1, p .2] 

Not only are states and local permitting authorities wholly unprepared for the millions of entities 

that will be required to comply with the Clean Air Act once greenhouse gas standards are set by 

EPA on light-duty vehicles, but EPA has failed to carefully evaluate the number of sources that 

could be affected once the light-duty vehicle GHG proposal goes into effect. We think that EPA 

has grossly underestimated the number and types of facilities that will be impacted by the lightduty vehicle greenhouse gas proposal by becoming subject to NSR pollutants and the Title V and 

PSD requirements. [OAR-2009-0472-7224.1, p.2] 

For example, asphalt plants, typically considered as a small industrial source, would now become 

subject to Title V and PSD permitting as soon as greenhouse gases are regulated under the lightduty vehicle greenhouse gas standards. There are over 4,000 of these asphalt plants across the 

country. The same can be said of large malls and hotels, for example. Any source that emits 

more than 250 tons of carbon dioxide would now be subject to these stringent permitting 

programs, thereby increasing costs associated with paperwork, testing, and more importantly, 

control or mitigation technologies. Additionally, moving forward with this action will further 

exacerbate the economic downturn in the road construction and other small industries - some 

already in dire economic straits, by creating more uncertainty and greater operational expenses. 

[OAR-2009-0472-7224.1, p.2] 

Our industry takes compliance with the Clean Air Act seriously. If it is not the intention of EPA 

to regulate relatively minor sources of greenhouse gas emissions, then the statutory language of 

the Clean Air Act must be amended, or specific and clear legislative efforts must be provided to 

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EPA Response to Comments 

the states where these small sources operate. Inevitably, litigation will ensue. Our members, 

builders of the nation's roads, do not want to respond to litigation when their operations, as small 

industrial sources, are in compliance with the intent of the Clean Air Act - but not in conformity 

with existing statutory language that lags behind agency regulation. [OAR-2009-0472-7224.1, 

p.3] 

EPA must not move forward with regulating greenhouse gas emissions under the light-duty 

vehicle proposal until its impact on small and minor industrial sources of greenhouse gas 

emissions are taken into account. EPA has indicated it is not the intent of the Agency to regulate 

industrial sources of greenhouse gas emissions below 25,000 tons annually. In fact, finalization 

of this rule will do just the opposite - it will require small industrial sources to comply with Title 

V and PSD permitting requirements, and potentially face a spate of litigation. [OAR-2009-0472­

7224.1, p.3] 

American Chemistry Council, American Iron and Steel Institute, American Meat Institute, 

Corn Refiners Association, National Oilseed Processors Association 

EPA’s Failure to Analyze the PSD and Title V Effects of Finalizing the Motor Vehicle Rule 

Runs Contrary to Procedural Requirements 

Failure to account for the PSD and Title V implications of proposed Motor Vehicle Rule also 

violates the Regulatory Flexibility Act and the Paperwork Reduction Act. [NHTSA-2009-0059­

0094.1, p.6] [[See Docket Number NHTSA-2009-0059-0094.1, pp.6-8 for a detailed discussion 

on this issue.]] 

The PRA and the RFA promote overriding public interests in transparency and ensuring that 

costs imposed by agency actions are fully considered. These are not mere boxes for the Agency 

to check perfunctorily. Entities affected by agency actions depend on these safeguards in order to 

be kept abreast of rules that will impact them, and to know how to provide meaningful input. By 

ignoring the obvious, admitted, and enormous implications that this proposed Rule poses for 

stationary sources, EPA thwarts those public interests. [NHTSA-2009-0059-0094.1, pp.7-8] 

Peabody Energy Company 

EPA failed to address the economic and regulatory effects of making major sources subject to 

PSD regulation for their GHG emissions under a number of Executive Orders and statutes 

Despite the large economic and regulatory consequences that the motor vehicle rule will have on 

major stationary sources, EPA unaccountably failed to produce the necessary studies of these 

effects in conformance with the relevant Executive Orders and statutes. The motor vehicle rule 

docket contains an RIA and certain other regulatory reviews, but these analyses are all confined 

to the direct benefits and effects of motor vehicle GHG regulation and do not address the PSD 

effects that motor vehicle regulation will automatically trigger. [OAR-2009-0472-7223.1, pp.5­

6] 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

EPA seems to have been of the view when it promulgated the motor vehicle rule that it would 

address the PSD effects of that rule when it undertook the tailoring rulemaking. EPA did, in fact, 

produce analyses in the tailoring rule docket of PSD impacts of regulating GHG emissions under 

the CAA but only for small sources, not major sources. Indeed, EPA’s RIA and other Executive 

Order and statutory reviews in the tailoring rule docket were all premised on the notion that the 

tailoring rule reduces costs associated with PSD, on the theory that the tailoring rule defers PSD 

and Title V regulation of small sources that would otherwise occur absent the rule. [OAR-2009­

0472-7223.1, p.6] 

Peabody will comment on that premise in its tailoring rule comments, but for purposes here EPA 

completely missed the point that the tailoring rule did not reduce or otherwise affect PSD 

regulation of major source GHG emitters (other than to define the major source threshold). As a 

result, none of the Executive Order and statutory reviews in the tailoring rule or motor vehicle 

dockets addressed the effect on major sources of making GHGs regulated CAA air pollutants 

through promulgation of the motor vehicle rule. [OAR-2009-0472-7223.1,p.6] 

That failure is plain legal error. By regulating motor vehicle GHG emissions, EPA is 

automatically initiating PSD regulation of major source GHG emissions. EPA therefore has a 

responsibility under the Executive Orders and statutes discussed below to examine the economic 

and regulatory impacts of that decision. [OAR-2009-0472-7223.1,p.6] 

Moreover, EPA’s error is so fundamental that it can only be cured by EPA producing the 

necessary studies as a part of a re-noticed proposed motor vehicle rule. Each of the Executive 

Order and statutory reviews discussed below is required to be prepared at the time of the notice 

of proposed rulemaking and is intended to inform the public comment process. Particularly given 

the potentially very large costs that the motor vehicle rule will impose on major stationary 

sources and the economy in general, the public is entitled to have the benefit of EPA’s analysis 

of these costs when it files comments on the motor vehicle rule. [OAR-2009-0472-7223.1, p.6] 

Finally, it would be no defense for EPA to respond that it cannot at this time precisely monetize 

the cost of GHG BACT for large sources. In the first place, EPA did not take this position in its 

motor vehicle proposal. EPA’s reason for not assessing PSD impacts in the motor vehicle 

rulemaking docket was not because of its inability to estimate BACT costs; it was because EPA 

evidently did not think of it. Moreover, the Executive Orders and statutes discussed below do not 

require precise monetization, only estimation to the best of EPA’s ability. For instance, under 

Section 3(d) of Executive Order 12291, agencies are required to describe potential benefits and 

costs of the rule and to determine potential net benefits, including any benefits, effects, and net 

benefits that “cannot be quantified in monetary terms.” [OAR-2009-0472-7223.1, p.6] 

1. Executive Order 12291 – Federal Regulation. Executive Order 12291 provides that an agency 

promulgating a “major rule” must prepare, at the time of the notice of proposed rulemaking, an 

RIA setting forth essentially a cost-benefit analysis of the rule. EPA agrees that the motor vehicle 

rule is a major rule and prepared an RIA setting forth the costs and benefits of the rule. That 

analysis, however, did not discuss the costs and benefits of the PSD regulation that would be 

triggered automatically by the rule. Among the purposes of the RIA requirement is to ensure that 

“[a]administrative decisions shall be based on adequate information concerning the need for and 

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EPA Response to Comments 

consequences of proposed government action.” Since one of the main consequences of 

regulating motor vehicle GHG emissions is PSD regulation of large source GHG emissions, EPA 

should have included those costs in its motor vehicle RIA. [OAR-2009-0472-7223.1, p.7] 

2. Executive Order 12866 – Regulatory Planning and Review. Under Executive Order 12866, 

agencies are required to specify to the Office of Information and Regulatory Affairs (OIRA) in 

the Office of Management and Budget any actions that the agency believes are “significant 

regulatory actions.” If the agency or OIRA concludes that an action is a “significant regulatory 

action,” the agency is required to submit to OIRA the analysis set forth in Section 6(a)(3)(B). If 

the agency action is a “significant regulatory action” because it will “[h]ave an annual effect on 

the economy of $100 million or more or adversely affect in a material way the economy, a sector 

of the economy, productivity, competition, jobs, the environment, public health or safety, or 

State, local, or tribal governments or communities,” the agency is required to submit the more 

detailed analysis under Section 6(a)(3)(C). EPA concluded that the motor vehicle rule is a 

significant regulatory action under Executive Order 12866 but the analysis was legally deficient 

because it did not examine PSD impacts on large sources. [OAR-2009-0472-7223.1, p.7] 

3. Executive Order 13211 – Energy Effects. Executive Order 13211 requires that agencies 

produce a Statement of Energy Effects whenever they take a “significant energy action,” defined 

as one that is a significant regulatory action under Executive Order 12866 and is “likely to have a 

significant adverse effect on the supply, distribution, or use of energy.” The motor vehicle 

preamble says that a Statement of Energy Effects was not required because the rule will not 

adversely affect the supply, distribution or use of energy, and will in fact have a positive effect 

through improved automobile fuel economy. Again, however, this conclusion was reached 

without consideration of PSD effects on major sources. As set forth above, EPA states that, even 

with the tailoring rule limitations, almost all of the nation’s electric generating and oil refining 

fleets will become subject to PSD regulation for their GHG emissions. It is inarguable that this 

regulation will impose costs and therefore potentially affect the supply, distribution or use of 

energy. At least EPA must examine the issue. [OAR-2009-0472-7223.1, p.7] 

4. Unfunded Mandates Reform Act (UMRA). UMRA applies to any Federal mandate that may 

result in the expenditure by State, local and tribal governments, in the aggregate, or by the 

private sector of $100,000,000 or more. An agency proposing such a mandate must produce the 

analysis required by Section 202(a). [OAR-2009-0472-7223.1, p.8] 

The motor vehicle preamble states that UMRA does not apply to the motor vehicle rule as to 

possible impacts to state, local or tribal governments but that it does apply as to impacts to the 

private sector. It states that impacts to the private sector are analyzed in its RIA, but as noted 

above, that RIA is deficient because it does not consider PSD impacts. [OAR-2009-0472-7223.1, 

p.8] 

Additionally, EPA’s conclusion that UMRA does not apply as to impacts on state governments is 

incorrect. For the reasons discussed above, the tailoring rule does not automatically prevent 

small sources from being subject to PSD regulation in “most states,” that is, those that administer 

their own PSD programs subject to EPA approval. In order for small sources not to be subject to 

PSD regulation for their GHG emissions in those states, the states must amend their laws and 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

regulations setting forth the 100/250 tpy and zero significance levels. [OAR-2009-0472-7223.1, 

p.8] 

As a result, under the tailoring rule standing alone, state permitting agencies will be 

overwhelmed with new PSD permit applications. Although states may change those laws, those 

that wish to do so will require some time to amend their PSD rules through rulemaking and/or 

legislation. Thus, notwithstanding the tailoring rule, making GHGs regulated air pollutants 

through adoption of the motor vehicle rule could have very large and immediate consequences 

for state governments in overwhelming their permit systems before they can make the necessary 

rule changes. These consequences must be examined under UMRA. [OAR-2009-0472-7223.1, 

p.8] 

5. Executive Order 13132 – Federalism. Executive Order 131312 applies to “policies that have 

federalism implications,” defined as regulations and other agency actions that 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.” 

Agencies may not promulgate regulations that have federalism implications unless the federal 

government funds the States’ costs or the agency consults with the States and provides, in the 

notice of proposed rulemaking, the statement set forth in Section 6(b)(2)(B). The motor vehicle 

rule preamble states that EPA does not have to provide this statement because the motor vehicle 

rule does not impose mandates on any States. However, for the reasons just discussed, the motor 

vehicle rule does impose significant PSD permit burdens on states. EPA therefore should have 

provided the relevant statement under Executive Order 13132. [OAR-2009-0472-7223.1, p.8] 

6. CAA § 317. Section 317 provides that EPA must prepare an economic impact assessment 

before publishing a notice of proposed rulemaking in the federal register for certain specified 

types of rules. Under Section 317(a)(4), such a statement is required for “any regulation under 

part C of subchapter I of this chapter (relating to prevention of significant deterioration of air 

quality).” [OAR-2009-0472-7223.1, pp.8-9] 

Because the motor vehicle rule makes GHGs subject to CAA regulation for the first time, and 

therefore triggers PSD regulation of GHGs for the first time, there is no question that the rule is 

both a Section 202(a) rule and a PSD rule under part C. Accordingly, EPA was required to but 

failed to produce the necessary economic impact assessment. [OAR-2009-0472-7223.1, p.9] 

7. Regulatory Flexibility Act (RFA). The RFA generally requires that an agency prepare a 

regulatory flexibility analysis for any rulemaking unless it certifies that the rule will not have a 

significant economic impact on a substantial number of small entities. The motor vehicle 

preamble concluded that the rule would not cause such an impact because the rule was only 

targeted at large automakers. EPA, however, did not examine how many small entities within the 

meaning of the RFA are major sources of GHG emissions that would be subject to PSD 

regulation. Until that analysis is performed, EPA has no basis to conclude that it is not required 

to prepare a regulatory flexibility analysis. [OAR-2009-0472-7223.1, p.9] 

EPA Response: 

5-453 
 

 

 

 

EPA Response to Comments 

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory 

flexibility analysis of any rule subject to notice and comment rulemaking requirements under the 

Administrative Procedure Act or any other statute unless the agency certifies that the rule will 

not have a significant economic impact on a substantial number of small entities subject to the 

rule. If a covered agency, such as EPA, is unable to certify a rule at proposal, they must conduct 

a Small Business Advocacy Review (SBAR) panel. 

If an agency certifies that the rule at issue does not have a significant impact on a substantial 

number of small entities (SISNOSE), the agency is not required to undertake any regulatory 

flexibility analyses or conduct a SBAR panel. When considering whether or not a rule should be 

certified at proposal stage, the RFA requires the agency to look only at the “small entities to 

which the proposed rule will apply” and small entities “subject to the requirement” of the 

specific rule in question. 5 U.S.C. § 603(b) (emphases added).62 Though the agency must have a 

“factual basis” for this certification, that factual basis can be supported by the fact that the rule 

“does not directly regulate any small entities.” ATA v. EPA, 175 F.3d 1027, 1045 (D.C. Cir. 

1999). 

Courts have “consistently rejected the contention that the RFA applies to small businesses 

indirectly affected by the regulation of other entities.” Cement Kiln Recycling Coalition v. EPA, 

255 F.3d 855, 869 (D.C. Cir. 2001). The D.C. Circuit has previously addressed an RFA claim in 

the context of motor vehicle regulation, and held that EPA was not required to conduct RFA 

analyses where the rule did not directly impose requirements on small automobile manufacturers. 

Motor & Equipment Mfrs. Ass’n v. Nichols (MEMA), 142 F.3d 449, 467 (D.C. Cir. 1998) (EPA 

is only “obliged to consider the impact of the rule on small automobile manufacturers subject to 

the rule”). 

This rule, as did the rule in MEMA, regulates exclusively large motor vehicle manufacturers and 

thus has no direct impacts on any small entities.63 EPA recognizes that in some cases the Clean 

Air Act will require application of PSD permitting requirements to GHG emissions when the 

regulatory requirement to control those emissions “takes effect” under this rule. However, those 

permitting requirements are imposed by operation of section 165 of the Clean Air Act and are 

not imposed by the regulatory requirements contained in this separate regulatory action under 

section 202(a) (1). EPA is not required to base its certification decision on indirect impacts 

62 Likewise, in discussing the consideration of significant alternatives to the proposed rule in an initial regulatory 

flexibility analysis, the RFA refers to the “establishment of differing ... requirements” that take into account the 

resources available to small entities, the simplification of “requirements under the rule for such small entities,” and 

“an exemption from coverage of the rule ... for such small entities.” 

63 Small manufacturers are exempted from the GHG standards and other regulatory requirements adopted in this 

final rule. For the proposal, a limited number of small entities were subject to a proposed reporting requirement, but 

the economic impact of that proposed regulatory requirement was clearly not significant. EPA proposed to exempt 

small manufacturers and other entities from the GHG standards and other regulatory requirements, and the only 

proposed regulatory requirement they were subject to was a one-time reporting obligation to obtain such exemption. 

This single regulatory requirement did not have a significant economic impact. For the proposal, EPA was not 

required to consider the indirect impacts on these small entities of other requirements that were not contained in the 

proposed rule, but instead flow from the operation of other provisions of the CAA. EPA properly based its 

NOSISNOSE certification for the proposal on the lack of significant impact imposed by the regulations themselves 

on small entities subject to the proposed rule. For the final rule, EPA is not adopting this proposed one-time 

reporting requirement, as it is not needed. 

5-454
 
 

 

 

 

 

EPA Vehicle Program, Feasibility, and Estimated Impacts 

imposed on parties that are not subject to the regulatory requirements of this rule, such as parties 

that are not motor vehicle manufacturers. EPA properly bases its certification by considering the 

impacts of the regulatory requirements contained in the proposed and final rule, determining 

whether these regulatory requirements themselves imposed a significant impact on a substantial 

number of small entities subject to the rule. 

As this rulemaking is limited to issues involved in setting emissions standards for large motor 

vehicle manufacturers, EPA would not be able to account for any potential indirect impacts from 

separate statutory requirements on entities not directly subject to or impacted by this rule. Even 

where a rule could “doubtless have economic impacts in many sectors of the economy,” courts 

have refused to “convert every rulemaking process into a massive exercise in economic 

modeling” by requiring a full RFA analysis. Cement Kiln Recycling Coalition v. EPA, 255 F.3d 

855, 869 (D.C. Cir. 2001). 

Although the RFA does not apply to this action, EPA recognized that some small entities were 

concerned about the potential indirect impacts of the statutory imposition of PSD requirements 

that may occur given the various EPA rulemakings concerning greenhouse gas emissions. In the 

interest of providing small entities a forum to express their concerns in addition to the 

opportunity provided in the notice and comment process, EPA used the discretion afforded to it 

under section 609(c) of the RFA to consult with OMB and SBA, with input from outreach to 

small entities, regarding the potential impacts of PSD regulatory requirements on small entities 

that might occur as EPA considers regulations of GHGs. 

Section 609(c) of the RFA allows agencies to, in their discretion, apply the provisions of the 

RFA that address SBAR panels to a rule that “the agency intends to certify... but the agency 

believes may have a greater than de minimis impact on a substantial number of small entities.” 5 

U.S.C. § 609(c) (emphasis added).64 EPA does not believe that the use of this discretion requires 

a rigid application of the entirety of section 609(c). Instead, agencies may pick and choose 

elements of the SBAR panel process to apply as they deem appropriate for the rule at issue. 

EPA believes that section 609(c) of the RFA authorizes agencies to engage in outreach similar to 

that of a formal SBAR panel where, as in this action, the RFA would not otherwise apply due to 

the certification of the rule.65 EPA maintains that this action does not have any significant 

impacts on small entities directly subject to the rule, and EPA’s use of 609(c) does not indicate 

otherwise. As indicated by the word “may,” an agency has discretion to invoke this provision in 

a variety of circumstance and is not limited to those situations where it is certain that a rule has a 

greater than de minimis impact. 

64 One commenter misunderstood this provision, believing that Section 609(c) only authorizes agencies to forgo an 

Initial Regulatory Flexibility Analysis (IRFA). This is not an accurate reading of the statute. Section 609(c) applies 

where agencies certify that a rule will have no SISNOSE under 605(c). When an agency certifies no SISNOSE 

under 605(c), they are not obligated to conduct an IRFA. Since the 609(b) SBAR panel requirements are triggered 

only when EPA is “required to conduct” an IRFA, Section 609(c) discretion applies only to the SBAR panel process 

provisions of 609(b), but not the substantive IFRA requirement. The 4th Cir. opinion referenced by the commenter 

does not involve agency use of section 609(c) and has no meaningful bearing on the matter at hand. 

65 EPA does not believe that section 609(c) of the RFA offers agencies a chance to circumvent the panel process 

where they do not intend to certify that the rule does not have a SISNOSE, and EPA remains committed to holding 

SBAR panels where contemplated by the RFA. 

5-455 
 

 

 

EPA Response to Comments 

Commenters have cited almost no case law to support their claim that EPA has violated the 

RFA.66 One case, Aero. Repair Station Ass’n v. F.A.A., 494 F.3d 161 (D.C. Cir. 2007), is plainly 

distinguishable from this action. In Aero. Repair, the FAA certified a regulation that imposed 

requirements on “employer air carriers”, but which also “expressly require[d] that the employees 

of contractors and subcontractors be tested” under the regulation. Id. at 177. FAA argued that 

since the phrase “employer air carriers” did not include contractors and subcontractors, they were 

not required to consider impacts on contractors and subcontractors in fulfilling their RFA 

obligations. The court rejected the claim, finding that “the 2006 Final Rule imposes 

responsibilities directly on the contractors and subcontractors.” Id. (emphasis added).67 

In this action, the only entities that have responsibilities under this rule are motor vehicle 

manufacturers, and the rule explicitly exempts small motor vehicle manufacturers from those 

responsibilities. No other entities, whether implicitly or explicitly, have any responsibilities 

under this rule. EPA will not enforce this rule against anyone other than the large automobile 

manufacturers subject to it. 

Accordingly, EPA maintains that it has fully complied with the requirements of the Regulatory 

Flexibility Act in this action. Because this rule does not significantly impact a substantial number 

of small entities that are subject to the rule, EPA has statutory authority to certify this rule under 

the RFA. Thus, EPA was not required to conduct a SBAR panel or any regulatory flexibility 

analyses. 

EPA rejects the argument that it needs to provide additional analyses beyond that in the 

Regulatory Impact Analysis, to be responsive to various Executive Orders on analyses of the 

costs and benefits of this rule. These Executive Orders call for EPA to analyze the impacts of 

this rule and its requirements, not indirect impacts of statutory requirements that flow from this 

rule. Likewise, compliance with UMRA and Executive Order 13132 are properly focused don 

the impacts of this rule on States, not the impacts of indirect effects that flow from this rule. 

Finally, EPA believes that its RIA satisfies the requirements of Section 317 of the Act, which 

calls for an analysis of the impacts of the requirements imposed by this rule, not indirect effects 

that flow from it. 

The various comments on consideration of the economic impacts of the PSD permitting 

provisions fail to recognize that any analysis of such impacts would not aid EPA in determining 

what GHG standards to adopt in this rulemaking. They are not related to any of the issues EPA 

needs to consider and decide in determining the content of the GHG standards that will apply to 

automobile manufacturers. EPA has addressed elsewhere the separate issue of whether EPA 

should delay issuance of this rule because of concerns raised over PSD permitting. 

66 EPA is not aware of a prior situation where EPA voluntarily conducted a SBAR panel where the regulatory action 

at hand triggered a subsequent statutory obligation, and commenters have not indicated otherwise. Although EPA is 

aware of a handful of examples of other agencies voluntarily engaging in regulatory flexibility analyses where their 

regulatory action arguably triggered a statutory obligation, we note that none of those agencies conducted a SBAR 

panel prior to proposal. In addition, any analyses they completed were post proposal. See e.g. 71 Fed. Reg. 8,265 

(Feb. 16, 2006). 

67 It is also worth noting that the FAA is not a covered agency under the RFA, and thus is not required to complete 

an SBAR panel. 

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EPA Vehicle Program, Feasibility, and Estimated Impacts 

5.15. Comments on EPA Regulatory Text 

Organization:Chrysler Group LLC (Chrysler) 

Alliance of Automobile Manufacturers (Alliance) 

New York State Department of Environmental Conservation 

Comment: 

Chrysler Group LLC (Chrysler): 

Clarity of Intent 

The intent of the proposed regulatory text is unclear in several cases and additional clarity is 

required. The following comments are provided. [NHTSA-2009-0059-0124, p.39] [[See 

NHTSA-2009-0059-0124, pp.39-41 for detailed comments regarding the regulatory text]] 

Definitions 

The following concerns were noted with the definitions given in the proposed regulatory text. 

[[See NHTSA-2009-0059-0124, p.42 for detailed comments regarding the definitions in the 

proposed regulatory text]] 

Reference to Appropriate Greenhouse Gas Metric 

Throughout the proposed regulatory text, a variety of greenhouse gas metrics are referred to 

(CO2, CO2-equivalent, and CREE). The intermingling of terms can cause confusion, especially 

in cases where it is unclear whether actual CO2 emissions are meant or whether a metric which 

includes CO2 emissions is meant. Chrysler recommends that the proposed regulatory text only 

use the exact term meant in each instance. [NHTSA-2009-0059-0124, p.42] 

The following instances were identified where the apparent intended metric was CREE, but an 

alternative greenhouse gas metric was specified. [[See NHTSA-2009-0059-0124, p.42 for 

detailed comments regarding the regulatory text]] 

Reference Issues 

Some references within the regulatory text appear to be incorrect. [[See NHTSA-2009-0059­

0124, p.43 for detailed comments regarding the regulatory text]] 

Regulatory Text Changes Are Indicated, but Could Not Be Identified 

In several instances, the NPRM indicated that modifications had been made to regulatory text 

from previously existing language, but Chrysler could not identify the difference between the 

original and proposed text. [NHTSA-2009-0059-0124, p.43] 

5-457 
EPA Response to Comments 

86.1803-01 Round, Rounded, or Rounding: Comment 11 notes that the definition is revised, but 

no difference could be identified. 

86.1841-0 1 (b): Comment 21 notes that paragraph (b) is revised, but no difference could be 

identified. [NHTSA-2009-0059-0124, p.43] 

Alliance of Automobile Manufacturers (Alliance): 

Net Heating Value (NHV) Determinations (Proposed regulations in 40 C.F.R. 600.113-08 and 

600.510-12) 

In the proposed 40 C.F.R. 600.113-08(f)(4)(iii) and again in 40 C.F.R. 600.510(g)(1)(ii)(A), EPA 

proposed to use the ASTM D 240-92 test method for determining the NHV for ethanol and 

alcohol fuels. [OAR-2009-0472-6952.1, p.53] 

The current practice for determining NHV for gasoline is ASTM D 3338-92 which has superior 

precision as compared to that of ASTM D-240. ASTM D 3338 has repeatability and 

reproducibility of 9 Btu/lb and 20 Btu/lb respectively, whereas ASTM D-240 has repeatability 

and reproducibility of 56 Btu/lb and 172 Btu/lb respectively. The two methods are not equivalent 

and if the new procedure (ASTM D-240) is adopted, a bias in fuel properties can be assumed. 

[OAR-2009-0472-6952.1, p.53] 

Recommendation: 

The current ASTM D3338 process for determining the Net Heating Value (NHV) should be 

retained for fuels with ethanol blends that are ≤10%. For fuels that have a greater than 10% 

ethanol composition, EPA should work with industry on an acceptable method for determining 

NHV, possibly with a modified ASTM D 3338 calculation and a sample for distillation of the 

gasoline portion of the fuel. [OAR-2009-0472-6952.1, p.53] 

New York State Department of Environmental Conservation 

Apparent Internal Citation Errors (Federal Register Notice pages 49759-49762) 

The proposed language for §86.1848-10(c)(9). includes reference to §86.1865-12(k)(7) for the 

procedure to be used to determine the vehicles deemed to have been sold in violation of the fleet 

average C02 standards, in the event a manufacturer does violate those standards. This procedure 

is found in §86.1865-12(k)(8). Similarly there are other references to paragraph §86.1865­

12(k)(7) in §86.1865-12(j) and (k) that appear to more properly refer to §86.1865-12(k)(8). 

[OAR-2009-0472-7454, p.4] 

Carbon Related Exhaust Emissions Formula (Proposed Amendments to Section 600.113-08) 

EPA includes the CO2 formed from hydrocarbons and CO as C02 regulated by this standard. We 

concur with this approach. However the proposed Carbon Related Exhaust Emission equations in 

600.113-08(h) reduce hydrocarbons to carbon rather than carbon dioxide. [OAR-2009-0472­

7454, p.5] 

5-458
 
EPA Vehicle Program, Feasibility, and Estimated Impacts 

The formula for calculating carbon related exhaust emissions (CREE) contain an error in the 

hydrocarbon term. The equation follows: [OAR-2009-0472-7454, p.5] 

CREE = CWF(HC) + 1.571(CO) + (CO2) [OAR-2009-0472-7454, p.5] 

The purpose of the 1.571 factor for carbon monoxide is to convert the mass of CO to the mass of 

an equivalent number of moles of C02. However, the hydrocarbon term is multiplied by the 

carbon weight fraction, which converts to the mass of an equivalent number of moles of carbon. 

Another representation of the proposed equation is: [OAR-2009-0472-7454, p.5] 

CREE = CWF(HC) +(44/28)(CO) + (44/44) (CO2) [OAR-2009-0472-7454, p.5] 

To properly express CREE on a consistent basis as CO2, the equation should be: [OAR-2009­

0472-7454, p.5] 

CREE = CWF (44/12) (HC) + (44/28) (CO) + (44/44) (CO2) [OAR-2009-0472-7454, p.5] 

Or: 

CREE = 3.667(CWF)(HC) + 1.571(CO) + (C02) [OAR-2009-0472-7454, p.5] 

There appear to be similar errors in the hydrocarbon terms for other, non-gasoline, fuels. [OAR2009-0472-7454, p.5] 

EPA Response: 

Comments will be addressed below on the following topics: ASTM Test Procedure to Determine 

the Net Heating Value for Methanol and Ethanol; and Regulatory Text Clarifications. 

ASTM Test Procedure to Determine the Net Heating Value for Methanol and Ethanol: EPA 

proposed revisions to paragraphs §600.113-08(f)(2)(iii), §600.113-08(f)(4)(iii) and 

§600.510(g)(1)(ii)(A), regarding the net heating value (NHV) used for methanol and ethanol 

fuels. The proposed regulation changes required manufacturers to use ASTM D 240-92 test 

method to determine the NHV for ethanol and methanol fuels. 

Comments submitted by the Alliance indicated that that “The current practice for determining 

NHV for gasoline is ASTM D 3338-92 which has superior precision as compared to that of 

ASTM D-240. ASTM D 3338 has repeatability and reproducibility of 9 Btu/lb and 20 Btu/lb 

respectively, whereas ASTM D-240 has repeatability and reproducibility of 56 Btu/lb and 172 

Btu/lb respectively. The two methods are not equivalent and if the new procedure (ASTM D240) is adopted, a bias in fuel properties can be assumed.” The Alliance recommended that “The 

current ASTM D3338 process for determining the Net Heating Value (NHV) should be retained 

for fuels with ethanol blends that are ≤10%. For fuels that have a greater than 10% ethanol 

composition, EPA should work with industry on an acceptable method for determining NHV, 

possibly with a modified ASTM D 3338 calculation and a sample for distillation of the gasoline 

portion of the fuel.” 

5-459 
EPA Response to Comments 

EPA agrees with the Alliance comments and has corrected the regulations in the final rule 

accordingly. The reference to ASTM D 240-92 is not needed in paragraphs §600.113­

08(f)(2)(iii) and (f)(4)(iii) and does not appear in the final rule (because NHV is not used in the 

fuel economy equation for vehicles operated on ethanol or methanol fuels). Paragraph 

§600.510(g)(1)(ii)(A) reads in the final rule as follows: 

“(ii)(A) The net heating value for alcohol fuels shall be 

premeasured using a test method which has been approved in advance by 

the Administrator.” 

EPA intends to work with the Industry to help develop an appropriate test procedure to 

determine the NHV of alcohol fuels. 

Regulatory Text Clarifications: Chrysler and the New York Department of Environmental 

Conservation submitted a list of paragraphs in the proposed regulations which Chrysler believes 

to be ambiguous, to contain typographical mistakes, or to contain incorrect regulatory references. 

EPA has made appropriate corrections in response. In addition, Chrysler commented that 

“Throughout the proposed regulatory text, a variety of greenhouse gas metrics are referred to 

(CO2, CO2-equivalent, and CREE). The intermingling of terms can cause confusion, especially 

in cases where it is unclear whether actual CO2 emissions are meant or whether a metric which 

includes CO2 emissions is meant. Chrysler recommends that the proposed regulatory text only 

use the exact term meant in each instance.” 

EPA appreciates the comments about the errata in the regulations, and the final rule has corrected 

the regulations, accordingly. The final rule also contains a number of minor amendments to 

update the regulations as needed and to ensure that the regulations are consistent with changes 

discussed in the preamble to the final rule. Regarding Chrysler’s comment about the 

intermingling of CO2 and CREE terms, the final rule revised most of the CO2 emission 

references to carbon-related exhaust emissions (CREE) references, where appropriate. The GHG 

emission standards still refer to a CO2 standard (although CREE emissions are measured and 

compared to the CO2 standard) because a CO2 standard is easier for the general public to 

understand. To prevent confusion about this concept, the final rule revised the CREE definition 

contained in §600.002-08, to read as follows: 

§600.002-08 Definitions. 

Carbon-related exhaust emissions (CREE) means the summation of the 

carbon-containing constituents of the exhaust emissions, with each constituent 

adjusted by a coefficient representing the carbon weight fraction of each 

constituent, as specified in §600.113-08. For example, carbon-related exhaust 

emissions (weighted 55 percent city and 45 percent highway) are used to 

demonstrate compliance with fleet average CO2 emission standards outlined in 

§86.1818(c). 

5-460
 
Section 6 Reserved 

6-1 
EPA Response to Comments 

6. Reserved 

6-2
 
Other Comments 

7. Other Comments ............................................................................................................ 2
 

7.1. Stationary Source and Permitting Issues.................................................................. 2 

7.2. Endangerment Finding........................................................................................... 69 

7.3. Vehicle Life-Cycle Emissions Issues..................................................................... 80 

7-1 
EPA Response to Comments 

7. Other Comments 

7.1. Stationary Source and Permitting Issues 

Organization: Air Permitting Forum 

Alliance of Automobile Manufacturers (Alliance) 

American Chemistry Council (ACC) 

American Farm Bureau Federation (AFBA) 

American Forest and Paper Association (AF&PA) 

American Iron and Steel Institute 

American Meat Institute 

American Petroleum Institute 

Arizona Public Service 

BCCA Appeal Group (the Group) 

Brick Industry Association 

California Cotton Ginners Association (CCGA) 

Charleston Metro Chamber of Commerce 

Consumers Energy 

Corn Refiners Association 

Council of Industrial Boiler Owners (CIBO) 

County of Greenville, SC 

Dow Chemical Company (Dow) 

Duke Energy 

Edison Electric Institute 

Energy-Intensive Manufacturers Working Group 

Fertilizer Institute 

Georgia Department of Natural Resources 

Georgia-Pacific (GP) 

Industry Coalition 

Mass Comment Campaign (48 comments) (unknown organization) 

Mississippi Department of Environmental quality 

National Association of Home Builders (NAHB) 

National Association of Manufacturers 

National Climate Coalition 

National Cotton Ginners Association 

National Mining Association (NMA) 

National Oilseed Processors Association 

National Petrochemical & Refiners Association 

NISEI Farmers League 

Peabody Energy Company 

SCANA Corporation 

Sierra Research Inc. 

South Carolina Chamber of Commerce 

South Carolina Department of Health and Environmental Control 

South Carolina Manufacturers Alliance (SCMA) 

South Carolina Pulp & Paper Association (SCPPA) 

7-2 
Other Comments 

Southeastern States Air Resources Managers, Inc. (SESARM) 

Spurgeon, C. M. 

Stanton, Neil 

Texas Chemical Council (TCC) 

Texas Cotton Ginners Association 

Texas Department of Agriculture 

Texas Industry Project (TIP) 

Texas Oil and Gas Association 

Utility Air Regulatory Group 

Western Agricultural Processors Association 

Wood, John 

Comment: 

Air Permitting Forum 

The Air Permitting Forum believes that comprehensive climate legislation is far 

preferable to using the existing Clean Air Act case-by-case permitting programs to 

address GHG emissions. These permitting programs are resource-intensive for both 

regulated entities and regulators. Moreover, in an arena in which efficiency is the key to 

reducing impacts, the case by-case nature of the PSD and Title V programs indicates that 

they are perhaps the least efficient mechanisms to mitigate the effects of climate change. 

In sum: [OAR-2009-0472-7253.1, p.1] 

[See Docket Number OAR-2009-0472-7253.1, pp.1-2 for detailed comments on the 

introduction] 

EPA’s Assumption that the Section 202 Rule Will Automatically Trigger PSD Permitting 

for Sources Solely Based on Their Emissions of Greenhouse Gases Is Incorrect 

The common wisdom is that the Clean Air Act and the PSD regulations require EPA to 

subject to PSD review any source that is major and any modification of a major source 

above significance levels for any pollutant. The only exception this conventional wisdom 

allows is for nonattainment pollutants. [OAR-2009-0472-7253.1, p.2] 

[See Docket OAR-2009-0472-7253.1, pp.2-5 for detailed comments pertaining to: 

Background, Relevant Statutory and Regulatory Applicability Provisions, Sections 161 

and 165(a) Limit PSD Applicability Based on the Location of the Source and Case Law 

Confirms This Limitation, and EPA Can Implement the Proper Scope of PSD 

Applicability Under the Existing Regulations] 

EPA Has Not Properly Accounted for the Costs of This Regulatory Action 

As discussed above, the Clean Air Act and the PSD regulations are structured such that 

PSD should only impose BACT for GHGs on sources that are otherwise required to 

obtain a PSD permit based on their emissions of a NAAQS pollutant. To the extent that 

EPA continues in its view that PSD will be triggered and sources will be classified as 

7-3 
EPA Response to Comments 

major for PSD solely on the basis of GHG emissions, the Agency must properly analyze 

those impacts in this rulemaking. [OAR-2009-0472-7253.1, p.5] EPA has acknowledged 

in the Proposed Tailoring Rule that, under its interpretation of the PSD applicability 

provisions, some 40,000 sources would be subject to PSD (an estimate that we believe is 

low). [OAR-2009-0472-7253.1, p.6] 

[See Docket OAR-2009-0472-7253.1, pp.5-7 for detailed comments pertaining to: If EPA 

Does Not Adopt the Proper Interpretation of the PSD Program’s Scope, It Must Include 

the Costs of Triggering PSD in Its Section 202 Rulemaking Analysis and Regardless of 

the Interpretation of the PSD Provisions, EPA Must Include the Costs of Triggering Title 

V Permitting for Stationary Sources in Its Section 202 Rulemaking Analysis] 

Alliance of Automobile Manufacturers (Alliance) 

Concerns with EPA’s Position on Implications for Stationary Source Programs Under the 

Clean Air Act 

EPA has stated in the NPRM that the issuance of regulations under Section 202 of the 

Clean Air Act will trigger application of the Prevention of Significant Deterioration 

(PSD) program of the CAA for stationary sources. 74 Fed. Reg. 49,629. EPA has 

reiterated this interpretation of CAA Section 165 in its proposal regarding reconsideration 

of the so-called Johnson Memo (74 Fed. Reg. 51,535, October 7, 2009) and in its 

proposal on the so-called Tailoring Rule for PSD (74 Fed. Reg. 55,292, October 27, 

2009). [OAR-2009-0472-6952.1, p.68] 

None of the three Federal Register notices cited above contain a thorough discussion of 

EPA’s legal and policy options with regard to Section 165, nor have they addressed the 

regulatory impact of automatically and immediately triggering PSD on the sources that 

would be directly affected. Instead, EPA has focused narrowly on the “benefits” of 

“tailoring” the threshold emissions amount to 25,000 tons for PSD and Title V 

permitting. [OAR-2009-0472-6952.1, p.69] 

The Alliance does not request, and would not support, delaying the final mobile source 

rule in order to address concerns regarding the implications for stationary sources. 

Having said that, the Alliance also believes that the implications of the mobile source rule 

for stationary sources have not been adequately addressed by the Agency, and need 

further analysis. [OAR-2009-0472-6952.1, p.69] 

The Alliance urges EPA to deal with this issue within the confines of the Johnson Memo 

and PSD Tailoring rules, as is the Agency’s apparent intent. The Alliance urges EPA to 

consider ways to avoid the automatic application of the PSD program to stationary 

sources. Moreover, to the extent that EPA concludes the application of PSD for GHGs is 

inevitable upon issuance of Section 202 regulations, the Agency should more thoroughly 

analyze the impacts of the PSD program in the context of the Johnson Memo and PSD 

Rulemakings. The Alliance does not believe that the Clean Air Act compels EPA to 

automatically and immediately trigger PSD as a result of the mobile source rule. Further 

7-4 
Other Comments 

discussion of the legal and policy issues will be provided in Alliance comments on those 

later proposals. [OAR-2009-0472-6952.1, p.69] 

American Chemistry Council (ACC) 

EPA Must Assess and Address the Motor Vehicle Rule’s Impacts on Stationary Sources 

Before Finalizing the Rule. 

EPA‘s failure to account for the Title V and PSD consequences of finalizing the Motor 

Vehicle Rule would render the final Rule both arbitrary and capricious, and also invalid 

based on other procedural requirements for rulemaking. [OAR-2009-0472-7148.1, p.2] 

The Associations acknowledge EPA‘s desire to address GHG emissions from mobile 

sources quickly, as well as NHTSA‘s need to set new fuel economy standards, which 

must be promulgated at least 18 months before the affected model year (in this case the 

2012 model year). 49 U.S.C. § 32902(g)(2). However, as proposed, the Motor Vehicle 

Rule ignores the enormous burdens the Rule would impose on stationary sources. This 

omission violates legal requirements for agency rulemaking, constitutes arbitrary and 

capricious action, and is simply bad policy. This is especially so because nearly all the 

environmental benefits EPA says will result from its promulgation of the Motor Vehicle 

Rule under CAA authority would also result from the NHTSA rule alone. Yet, unlike 

NHTSA action to raise corporate average fuel economy (CAFE) standards, the redundant 

EPA standards promulgated under the CAA would have regulatory impacts reaching far 

beyond the automotive industry and would impose billions of dollars in additional 

permitting and compliance costs. [OAR-2009-0472-7148.1, p.2] 

Thus, although the Associations take no position on NHTSA‘s proposal to increase 

CAFE standards, we vigorously object to EPA‘s proposal to finalize the superfluous 

Motor Vehicle Rule under CAA Section 202. EPA‘s failure to account here for the PSD 

and Title V burdens it elsewhere acknowledges will flow from this rulemaking renders 

this rulemaking legally invalid. EPA must fully consider those burdens in this 

rulemaking. [OAR-2009-0472-7148.1, p.2] 

[See Docket number OAR-2009-0472-7148.1, cover page 1-2 for detailed comments] 

[See Docket OAR-2009-0472-7148.1, pp. 2-8 for detailed comments pertaining to: EPA's 

failure to Analyze the PSD and Title V Effects of Finalizing the Motor Vehicle Rule Is 

Arbitrary and Capricious and EPA's Failure to Analyze the PSD and Title V Effects of 

Finalizing the Motor Vehicle Rule Runs Contrary to Procedural Requirements] 

PSD Permitting Requirements Need Not and Should Not Apply to Stationary Sources’ 

GHG Emissions Solely by Virtue of EPA Finalizing the Motor Vehicle Rule 

EPA could properly decline to consider the PSD impacts of the proposed Motor Vehicle 

Rule in this rulemaking docket only if those impacts would not, in fact, result from the 

Rule. EPA has stated that PSD requirements will be triggered when the proposed Motor 

Vehicle Rule first subjects GHG emissions from cars to control—that is, model year 

2012. See PSD Interpretive Memo Reconsideration, 74 Fed. Reg. at 51545–46. But EPA 

7-5 
EPA Response to Comments 

can interpret the statute and regulations to avoid that result and eliminate the need to 

analyze the proposed Motor Vehicle Rule‘s effect on stationary sources in this 

proceeding. Moreover, by doing so, EPA would eliminate the need for the legally 

questionable GHG Tailoring Rule. [OAR-2009-0472-7148.1, p.8] 

[See Docket OAR-2009-0472-7148.1, pp. 8-12 for detailed comments pertaining to: 

EPA‘s View that Issuance of the Motor Vehicle Rule Automatically Triggers PSD Based 

Solely on Emissions of GHGs Is Inconsistent with the Plain Meaning of the CAA and 

EPA‘s Regulations and The Phrase 'Pollutants Subject to Regulation' Is Also Most 

Reasonably Interpreted to Exclude GHGs] 

EPA Should Exercise its Discretion to Defer Finalizing a Motor Vehicle Rule 

EPA has clear legal authority to defer promulgation of an emission standard under CAA 

Section 202, even if the Agency proceeds in the near future to finalize a positive 

endangerment finding under CAA Section 202. It would be arbitrary and capricious for 

EPA not to exercise that authority because the potential economic consequences of the 

Motor Vehicle Rule are massive, and unquestionably outweigh any environmental 

benefits that would flow from EPA placing its imprimatur on the NHTSA rule. [OAR2009-0472-7148.1, p.12] 

[See Docket OAR-2009-0472-7148.1, pp. 12-14 for detailed comments pertaining 

to: Nothing Compels EPA to Finalize GHG Emissions Standards for Mobile 

Sources, Nothing Compels EPA to Finalize GHG Emissions Standards for Mobile 

Sources, There Are Numerous Compelling Reasons to Defer the Motor Vehicle Rule, and 

EPA Should Not Proceed Under CAA Section 202 Until the Agency Considers Acting 

Under CAA Section 115] 

American Chemistry Council, American Iron and Steel Institute, American Meat 

Institute, Corn Refiners Association, National Oilseed Processors Association 

The Associations and their members represent a sizeable and diverse collection of 

commercial interests. The Motor Vehicle Rule would have a substantial and direct effect 

on the Associations’ members. The Motor Vehicle Rule, if finalized, would purport to 

subject greenhouse gases (“GHGs”) to regulation under the Clean Air Act (CAA) for the 

first time. As a result, under EPA’s current interpretation of its regulations, the Rule 

would trigger Title V and Prevention of Significant Deterioration (PSD) permitting and 

emission-control requirements for millions of stationary sources owned and operated by 

the Associations’ members. These Title V and PSD requirements would impose 

unprecedented costs and burdens on the Associations’ members, EPA, and state 

regulatory authorities. [NHTSA-2009-0059-0094.1, p.1] 

The Associations acknowledge EPA’s desire to address GHG emissions from mobile 

sources quickly, as well as NHTSA’s need to set new fuel economy standards, which 

must be promulgated at least 18 months before the affected model year (in this case the 

2012 model year). 49 U.S.C. § 32902(g)(2). However, as proposed, the Motor Vehicle 

Rule ignores the enormous burdens the Rule would impose on stationary sources. This 

7-6 
Other Comments 

omission violates legal requirements for agency rulemaking, constitutes arbitrary and 

capricious action, and is simply bad policy. This is especially so because nearly all the 

environmental benefits EPA says will result from its promulgation of the Motor Vehicle 

Rule under CAA authority would also result from the NHTSA rule alone. Yet, unlike 

NHTSA action to raise corporate average fuel economy (CAFE) standards, the redundant 

EPA standards promulgated under the CAA would have regulatory impacts reaching far 

beyond the automotive industry and would impose billions of dollars in additional 

permitting and compliance costs. [NHTSA-2009-0059-0094.1, pp.1-2] 

Thus, although the Associations take no position on NHTSA’s proposal to increase 

CAFE standards, we vigorously object to EPA’s proposal to finalize the superfluous 

Motor Vehicle Rule under CAA Section 202. EPA’s failure to account here for the PSD 

and Title V burdens it elsewhere acknowledges will flow from this rulemaking renders 

this rulemaking legally invalid. EPA must fully consider those burdens in this 

rulemaking. [NHTSA-2009-0059-0094.1, p.2] 

Alternatively, EPA could defer finalizing the proposed Motor Vehicle Rule at this time. 

EPA has ample authority and discretion to do so. And if EPA deferred, NHTSA still 

could finalize its regulations, yielding nearly all the emissions reductions that EPA seeks 

through the Motor Vehicle Rule, and none of the adverse PSD consequences. Moreover, 

deferring action on this rulemaking would permit EPA to fully consider the burdens 

associated with regulating GHGs under the CAA. EPA obviously has not performed or 

considered this analysis, and instead has improperly deflected comments on these 

consequences to the proposed GHG Tailoring Rule, which is inadequate to the task. EPA 

would abuse its discretion and act arbitrarily if it rushes to finalize the Motor Vehicle 

Rule before conducting the proper analysis. [NHTSA-2009-0059-0094.1, p.2] 

There are, however, several ways in which the unprecedented PSD implications of the 

Motor Vehicle Rule could be avoided. First, EPA could interpret its PSD authority to 

ensure that only pollutants for which a National Ambient Air Quality Standard (NAAQS) 

has been set trigger PSD permitting requirements. This interpretation is faithful to the 

plain text of the CAA and EPA regulations, as well as Congress’ original vision for the 

PSD program. Moreover, this interpretation would allow EPA to finalize a rule under 

CAA Section 202(a) that sets standards for GHG emissions from mobile sources without 

triggering unprecedented, costly, and burdensome regulatory consequences for stationary 

sources. [NHTSA-2009-0059-0094.1, p.2] 

EPA Must Assess and Address the Motor Vehicle Rule’s Impacts on Stationary Sources 

Before Finalizing the Rule. 

EPA’s failure to account for the Title V and PSD consequences of finalizing the Motor 

Vehicle Rule would render the final Rule both arbitrary and capricious, and also invalid 

based on other procedural requirements for rulemaking. [NHTSA-2009-0059-0094.1, 

p.2] 

7-7 
EPA Response to Comments 

1. If finalized, the Motor Vehicle Rule would run afoul of the fundamental prohibition 

against “arbitrary and capricious” agency action. The Supreme Court has explained that 

“an agency rule would be arbitrary and capricious if the agency has relied on factors 

which Congress has not intended it to consider, entirely failed to consider an important 

aspect of the problem, offered an explanation for its decision that runs counter to the 

evidence before the agency, or is so implausible that it could not be ascribed to a 

difference in view or the product of agency expertise.” Motor Vehicle Mfrs. Ass’n v. 

State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (emphasis added). [NHTSA2009-0059-0094.1, pp.2-3] [[See Docket Number NHTSA-2009-0059-0094.1, pp.3-4 for 

more discussion on this issue.]] 

2. EPA apparently seeks to justify its failure to consider the PSD and Title V 

consequences of the proposed Motor Vehicle Rule by directing comments on these 

consequences to the proposed GHG Tailoring Rule docket. It is improper for EPA to 

ignore these comments because they relate directly to and flow directly from the 

proposed Motor Vehicle Rule. [[See Docket Number NHTSA-2009-0059-0094.1, pp.4-6 

for a detailed discussion on this issue.]] 

Because EPA contends that PSD and Title V requirements for stationary sources will 

result from this rulemaking, it would arbitrary and capricious for EPA to finalize the 

Motor Vehicle Rule without considering that consequence. For the reasons stated above, 

EPA cannot avoid that result by pointing to the GHG Tailoring rulemaking. [NHTSA2009-0059-0094.1, p.6] 

In sum, EPA has no choice but to consider the impacts of the proposed Motor Vehicle 

Rule in this rulemaking. [NHTSA-2009-0059-0094.1, p.8] 

PSD Permitting Requirements Need Not and Should Not Apply to Stationary Sources’ 

GHG Emissions Solely by Virtue of EPA Finalizing the Motor Vehicle Rule 

EPA could properly decline to consider the PSD impacts of the proposed Motor Vehicle 

Rule in this rulemaking docket only if those impacts would not, in fact, result from the 

Rule. EPA has stated that PSD requirements will be triggered when the proposed Motor 

Vehicle Rule first subjects GHG emissions from cars to control—that is, model year 

2012. See PSD Interpretive Memo Reconsideration, 74 Fed. Reg. at 51545–46. But EPA 

can interpret the statute and regulations to avoid that result and eliminate the need to 

analyze the proposed Motor Vehicle Rule’s effect on stationary sources in this 

proceeding. Moreover, by doing so, EPA would eliminate the need for the legally 

questionable GHG Tailoring Rule. [NHTSA-2009-0059-0094.1, p.8] 

The immense burdens associated with PSD permitting that the Agency states would 

follow from issuance of the proposed Motor Vehicle Rule is not mandated by the Clean 

Air Act or the PSD regulations but rather is the result of EPA’s interpretations of the 

statute and regulations. EPA’s textual analysis, however, skips a crucial step, which is 

whether the PSD program is actually applicable under the plain language of the statute 

and regulations to sources that are major only by virtue of GHG emissions or to increases 

7-8 
Other Comments 

in GHG emissions when a criteria pollutant is not otherwise experiencing a significant 

increase. [NHTSA-2009-0059-0094.1, p.8] [[See Docket Number NHTSA-2009-0059­

0094.1, pp.8-10 for a detailed discussion on this issue.]] 

The Phrase “Pollutants Subject to Regulation” Is Also Most Reasonably Interpreted to 

Exclude GHGs 

If EPA does not interpret the statutory provisions regarding applicability as discussed in 

II.A, above, EPA should recognize the unique nature of carbon dioxide (CO2) and that 

Congress did not intend such a pollutant to trigger PSD. The endangerment finding under 

CAA Title II is distinctly different from the air quality purposes of the PSD program. 

Specifically, carbon dioxide emissions from motor vehicles are required to be regulated 

under Title II where, in the Administrator’s judgment, such emissions “may reasonably 

be anticipated to endanger public health or welfare.” See 42 U.S.C. 7511(a)(1) (emphasis 

added). To the extent anthropogenic carbon dioxide emissions may reasonably be viewed 

as presenting an “endangerment” to “public health or welfare” within the meaning of 

Title II, it does not follow that EPA is thereby authorized, much less compelled, to 

regulate CO2 emissions from stationary sources under the CAA’s PSD program. 

[NHTSA-2009-0059-0094.1, p.10] [[See Docket Number NHTSA-2009-0059-0094.1, 

pp.10-12 for a detailed discussion on this issue.]] 

American Farm Bureau Federation (AFBF) 

At What Point Will The Economic Impacts on Small Businesses be Described ? [OAR2009-0472-7171.1, p.3] 

As indicated in our comments and the comments of others to the ANPR, the application 

of these programs will have significant and serious adverse economic impacts on farmers, 

ranchers, and small businesses as well as schools, hospitals and churches. For example, 

an endangerment finding automatically subjects stationary sources (buildings, facilities, 

structures) that have the potential to emit more than 250 tons of GHGs per year to costly 

and burdensome permits under the PSD program. The PSD permits require the applicant 

to comply with best available control technology as a condition for obtaining the permit. 

Title V requires entities that emit, or have the potential to emit, 100 tons per year of a 

regulated pollutant to also obtain a permit for such emissions. [OAR-2009-0472-7171.1, 

p.4] 

EPA has failed to perform the required economic impact assessment under section 317 of 

the Clean Air Act. The assessment must be conducted prior to the Tailpipe Rule 

becoming final. [OAR-2009-0472-7171.1, p.4] 

[See Docket Number OAR-2009-0472-7171.1, pp.3-11 for detailed comments pertaining 

to: The Proposed EPA 'Tailoring rule' does not change the economic implications of 

regulating GHGs under the Clean Air Act, Title V Permit Requirements Lead to Fees on 

Livestock, Application of Requirements for Prevention of Significant Deterioration 

(PSD) Permits Will Cause Adverse Economic Impacts to Agriculture, and Regulation of 

Greenhouse Gases Under the Clean Air Act Allows Little or No Flexibility] 

7-9 
EPA Response to Comments 

The de minimis amount of methane emitted from light duty motor vehicles does not 

sufficiently “cause or contribute” to the endangerment of public health and welfare to 

warrant regulation under section 202(a) of the Clean Air Act. [OAR-2009-0472-7171.1, 

p.11] 

Seeking to join the six different greenhouse gases together as a single “air pollutant” 

raises a series of questions and issues. As the agency illustrates, not only must these 

substances be found to “endanger the public health or welfare” but their emission from 

the sources sought to be regulated must “cause or contribute” to the air pollution which 

endangers the public health or welfare. Both of these requirements must be satisfied in 

order to regulate the substance. [OAR-2009-0472-7171.1, p.12] 

[See Docket Number OAR-2009-0472-7171.1, pp.11-14 for detailed comments 

pertaining to: The de minimis amount of methane emitted from light duty motor vehicles 

does not sufficiently “cause or contribute” to the endangerment of public health and 

welfare to warrant regulation under section 202(a) of the Clean Air Act.] 

Section 424 of the FY 2010 Interior-Environment Appropriations Act Prohibits the 

Promulgation of the Tailpipe Rule and the Tailoring Rule during FY 2010. [OAR-2009­

0472-7171.1, p.14] 

As indicated above, once the Tailpipe Rule has been enacted, a number of Clean Air Act 

programs and requirements are automatically triggered, including permit requirements 

under Title V. Title V is a self-executing program such that once a pollutant is regulated 

under any provision of the Clean Air Act (such as the Tailpipe Rule for GHG), no further 

rulemaking is required to make covered entities liable to obtain operating permits 

required by Title V. [OAR-2009-0472-7171.1, p.14] 

[See Docket Number OAR-2009-0472-7171.1, pp.14-15 for detailed comments 

pertaining to: Section 424 of the FY 2010 Interior-Environment Appropriations Act 

Prohibits the Promulgation of the Tailpipe Rule and the Tailoring Rule during FY 2010] 

GHG Regulation May Lead to Promulgation of National Ambient Air Quality Standards 

The Clean Air Act and the subsequent judicial interpretations placed upon it, describes 

the procedure required by the Administrator once she makes an endangerment 

determination. [OAR-2009-0472-7171.1, p.15] 

[See Docket Number OAR-2009-0472-7171.1, pp.14-15 for detailed comments 

pertaining to: GHG Regulation May Lead to Promulgation of National Ambient Air 

Quality Standards and the pertinent language in Section 108 of the Clean Air Act] 

American Forest and Paper Association (AF&PA) 

EPA Must Complete Sufficient Regulatory Impact Analyses Before Promulgating 

Tailpipe Emission Standards 

The preceding discussion showed how using Clean Air Act authorities to impose GHG 

emission standards on motor vehicles would impose huge burdens on businesses and on 

regulatory authorities, not only directly, but also because imposition of GHG emission 

7-10 
Other Comments 

limits on new motor vehicles would, pursuant to the CAA and EPA regulations, mean 

that tens of thousands of additional new and modified stationary sources would be subject 

to pre-construction PSD permitting requirements, as well as requiring Title V operating 

permits for the first time for millions of sources. In addition to just the cost and delay 

those sources would incur to apply for such permits, the massive increase in affected 

sources would overwhelm permitting authorities and result in permitting “gridlock,” 

dramatically slowing economic development and innovation. [OAR-2009-0472-7126.1, 

p.3] 

[See Docket Number OAR-2009-0472-7126.1, pp.3-4 for detailed comments] 

EPA Should Defer GHG Emission Standards for Motor Vehicles 

For the reasons described above, EPA should not promulgate motor vehicle emissions 

standards for GHGs at this time. The proposed endangerment and cause-or-contribute 

findings that are a prerequisite for such standards raised many issues of first impression 

that have not yet been adequately addressed by EPA. Congress is in the midst of actively 

considering comprehensive legislation addressing climate change and GHGs, which is 

much more appropriate than trying to force GHG regulation through Clean Air Act 

programs that were designed to address entirely different types of air pollution issues. 

And the imposition of tailpipe emission standards for GHGs will trigger massive 

stationary source permitting burdens for businesses and regulatory authorities, burdens 

that EPA has failed to assess and address as required by law. [OAR-2009-0472-7126.1, 

p.4] 

[See Docket Number OAR-2009-0472-7126.1, pp.4-5 for detailed comments] 

American Petroleum Institute 

However, and even though the direct emissions reductions and fuel economy costs and 

benefits of the proposed EPA action and the proposed NHTSA fuel economy standards 

are nearly identical, the proposal entirely ignores the fact that the EPA regulations, if 

finalized, would have dramatically broader and more costly effects than the NHTSA rule. 

Unlike NHTSA action to raise corporate average fuel economy (CAFE) standards, new 

EPA standards promulgated under the Clean Air Act (CAA) would have regulatory 

impacts reaching far beyond the automotive industry and would trigger EPA regulation of 

GHG emissions from millions of sources never previously subject to regulation of GHG 

emissions, including millions of sources not previously subject to any CAA regulation at 

all. 

Thus, while API has only very focused objections to NHTSA increasing CAFE standards 

in the manner proposed, see Part IV infra, API strongly objects to EPA finalizing its 

proposed rule under CAA section 202 authority. API urges EPA to assess and address the 

dramatically adverse impacts of its proposal under CAA section 202 before finalizing its 

rule. EPA must assess and appropriately minimize these impacts, within this rulemaking 

if EPA is to promulgate section 202(a) standards that are not flawed as a matter of law. 

7-11 
EPA Response to Comments 

First, EPA must acknowledge that only pollutants for which a National Ambient Air 

Quality Standard (NAAQS) has been set trigger Prevention of Significant Deterioration 

(PSD) permitting requirements. 

Second and alternatively, EPA has the full authority and discretion to defer finalizing 

CAA section 202(a) standards at this time. [OAR-2009-0472-7143.1, p.2] 

EPA Cannot Finalize the 202 Rule Before Evaluating and Addressing Its Impacts on 

Stationary Sources. [OAR-2009-0472-7143.1, p.2] 

EPA‘s Proposed Rule Unlawfully Fails to Analyze Its Effects. [OAR-2009-0472-7143.1, 

p.3] 

EPA May Not Shunt Comments Regarding the Effects of its Proposed Car Rule to the 

Proposed Tailoring Rule. [OAR-2009-0472-7143.1, p.4] 

EPA’s View that Issuance of the Proposed Car Rule Automatically Triggers PSD Based 

Solely on Emissions of GHGs Is Inconsistent with the Plain Meaning of the CAA and 

EPA’s Regulations. [OAR-2009-0472-7143.1, p.5] 

EPA Should Exercise its Discretion to Defer Promulgation of a Section 202 Rule: EPA 

has clear legal authority to defer action on this rule, and should do so because the 

potential economic consequences of the rule are unprecedented and the environmental 

benefits of adding its imprimatur to the NHTSA rule are nearly nonexistent. 

a. EPA Is Not Compelled to Act at This Time, and Should Exercise Its Discretion to 

Defer Finalizing New GHG Emissions Standards for Mobile Sources. 

b. There Are Numerous Compelling Reasons to Defer the Section 202 Rule 

Adding EPA’s imprimatur to nearly identical NHTSA fuel economy standards will not 

achieve any marginal environmental benefit. NHTSA standards without this duplicative 

reliance on the CAA will not trigger PSD results that EPA has labeled “absurd, 

“impossible,” and “contrary to expressed congressional intent.” The fact that the timing 

of the 202 Rule is discretionary means that EPA’s proposed PSD Tailoring Rule cannot 

be justified under the “absurd results” doctrine, and if the PSD Tailoring Rule is rejected 

the full range of “absurd” and “impossible” results will then flow from promulgation of 

the 202 rule. Further considerations also support this conclusion: Ongoing congressional 

and international deliberations may impact the validity of, or perceived necessity for, the 

proposed rule. [OAR-2009-0472-7143.1, p.9] 

These are only the topic headings, for details please refer to the docket [OAR-2009-0472­

7143.1] 

Arizona Public Service (APS) 

7-12 
Other Comments 

APS has significant concerns regarding the proposed Light-Duty Vehicle Greenhouse 

Gas Emission Standards and Corporate Average Fuel Economy Standards. Specifically, a 

comparison of the proposed benefits resulting from the EPA program to the NHTSA 

program reveals the programs to be virtually identical and that EPA's proposal provides 

no apparent additional benefit. For this reason, APS believes that EPA's action is simply 

a means to regulate greenhouse gas emissions from stationary sources through the Clean 

Air Act Prevention of Significant Deterioration (PSD) and Title V permit programs. As 

such, APS also believes the economic and environmental cost and benefits analysis of 

this joint proposal fails to assess impacts on stationary sources. [OAR-2009-0472-7107.1, 

p.1] 

If this rule is finalized, a significant number of stationary sources will become subject to 

PSD and Tide V permitting requirements. However, EPA did not include the economic 

and environmental consequences of triggering these rules. It is APS' position that EPA 

either withdraw its portion of the rule or perform a thorough economic and environmental 

cost and benefit analysis, and provide an adequate public notice and comment period to 

address the impacts to stationary sources. [OAR-2009-0472-7107.1, p.1] 

BCCA Appeal Group (the Group) 

More importantly, Congress is moving forward quickly on comprehensive legislation that 

would address the problem of climate change outside of the structure of the current Act. 

Despite a clear need to proceed with the utmost caution in this important area, EPA has 

proposed to regulate GHG emissions from motor vehicles in the Proposed Rulemaking to 

Establish Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate 

Average Fuel Economy Standards (the “Motor Vehicle GHG Rule”). Under EPA’s 

current interpretation of the CAA, the Motor Vehicle GHG Rule may (as EPA has stated 

in the Proposed PSD and Title V GHG Tailoring Rule (the “PSD Tailoring Rule”)3) 

trigger regulation of GHG emissions from millions of stationary sources, including 

hundreds of thousands of Texas sources, many of which have never before been regulated 

under the Clean Air Act (“CAA”). [OAR-2009-0472-7505.1, pp. 1-2] 

The Motor Vehicle GHG Rule, as well as its companion, the PSD Tailoring Rule, are 

fundamentally flawed, both procedurally and substantively, and Texas, as the nation’s 

leading energy producer and a leader in chemical manufacturing and agriculture, could be 

significantly impacted by these federal rulemakings. Most notably, EPA completely 

failed to evaluate the burdens of triggering PSD and Title V for GHG emissions under the 

required federal regulatory review statutes and Executive Orders. Furthermore, even had 

the Agency conducted the required burden analysis, the rule is unlawful, would devastate 

the Texas and national economies, and the burdens of regulating GHGs under CAA 

Section 202 far outweigh the insignificant environmental benefits of the GHG emission 

standards. [OAR-2009-0472-7505.1, p. 2] 

Accordingly, for all of the reasons discussed in these comments, EPA should withdraw 

the Motor Vehicle GHG Rule, and proceed with caution going forward by allowing both 

7-13 
EPA Response to Comments 

the international community and Congress time to develop a comprehensive and sensible 

approach to the global problem of climate change. [OAR-2009-0472-7505.1, p. 2] 

[See OAR-2009-0472-7505.1, pp. 2-11 for comments related to PSD and NRS for 

stationary sources in Texas. These comments include the following topics: A. The Motor 

Vehicle GHG Rule Will Disproportionately Harm Texas, B. EPA Utterly Failed to 

Account for these Devastating Impacts to Texas and the Entire U.S. in its Burden 

Analysis of the Motor Vehicle GHG Rule, C. A Full Analysis of Actual Impacts on 

Sectors Beyond Autos Would Demonstrate That the Rule Cannot be Justified—the 

Burdens Associated with the Motor Vehicle GHG Rule Would Devastate the Texas 

Economy, D. EPA Should Adopt a More Reasonable Interpretation of the Clean Air Act 

Under which the Final Motor Vehicle GHG Rule Would Not Trigger PSD For Stationary 

Sources, and E. Nothing Compels EPA to Action under Section 202 at this Time—the 

Rule Provides Little or No Benefit and Produces Overwhelming Burdens.] 

Brick Industry Association 

The Brick Industry Association (BIA) is providing these comments because we are, 

directly affected by this rulemaking, even though none of our members will be directly 

subject to the requirements promulgated as a result of this process. As this rulemaking 

has the potential to impact virtually every manufacturer (and many consumers) in the 

country by its precedent setting regulation of greenhouse gases, this rulemaking directly 

impacts all of us. The brick industry provides one of the leading wall cladding materials 

for both commercial and residential construction throughout the country. There 

are approximately seventy brick manufacturing companies in the United States, with well 

over sixty of these companies being considered 'small businesses.' [OAR-2009-0472­

11279, p.1] 

In developing the Light Duty rule, and assessing the impacts on small businesses, the 

EPA completely ignored the tens of thousands of facilities that would be impacted by the 

fact that greenhouse gases would become a regulated pollutant at some point after this 

rule goes into effect (we are aware that EPA is still evaluating which specific 'triggering 

action' will make this happen). By deliberately ignoring the broader impact of this 

rulemaking process, the EPA was able to certify that there was not a significant impact on 

a substantial number of small entities 'pursuant to the Regulatory Flexibility Act (5 U 

.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness 

Act (SBREFA) of 1996).' The EPA is disingenuous at best. [OAR-2009-0472-11279, 

p.1] 

Clearly, publishing the 'GHG Tailoring Rule' for the New Source Review Program under 

Part 50 of the Clean Air Act (published October 27, 2009, 74FR55291) represents 

significant effort on the EPA's part to mitigate the known impacts of the light Duty 

rulemaking. That proposal was also certified as having no significant impact on a 

substantial, number of small entities because it results in a net reduction of burden to 

industry over the burden that would exist if no 'Tailoring Rule' were promulgated. This 

clearly demonstrates that EPA understands that an impact occurred, based on their 

7-14 
Other Comments 

actions, that impacts industry. We assert that they also should recognize that this 

impacted industry includes a substantial number of small entities. For our industry, even 

if the Tailoring Rule is published, the Light Duty Rule means that well over half of our 

industry will be thrust into the complex, and expensive, New Source Review process for 

the very first time. Some of our industry will also be pushed back into Title V, even 

though they will only be major sources for GHG. [OAR-2009-0472-11279, pp.1-2] 

The EPA cannot reasonably assert that the Light Duty Rule has no significant impact on a 

substantial number of small entities in one rule, when less than one month later, it 

publishes another rule that attempts, but falls short, of mitigating those impacts. [OAR2009-0472-11279, p.2] 

California Cotton Ginners Association (CCGA) 

EPA should review the economic benefit of this rule, considering all costs; both of those 

currently in the docket, and those outlined in the proposed Tailoring Rule. In addition, 

EPA should clearly evaluate the benefit of regulations solely based on CAFE standards. 

Finally EPA should consider extending the comment period in this docket, considering 

the significant additional costs discussed in the Tailoring Rule Proposal. [OAR-2009­

0472-7139.1, p.2] 

[See Docket Number OAR-2009-0472-7139.1, pp.1-2 for detailed comments] 

Charleston Metro Chamber of Commerce 

Our Chamber's Environmental Committee has studied the proposed rule and have major 

concerns primarily relating to the triggering of other provisions of the Clean Air Act 

(specifically Title V permitting and New Source Review permitting). We do not believe 

that EPA has adequately evaluated those consequences or options for minimizing and 

avoiding other collateral impacts. Our interpretation is that this rulemaking will trigger 

other provisions of the Clean Air Act (specifically Tile V permitting and New Source 

Review (NSR) permitting). [OAR-2009-0472-7061.1, p.1] 

Unlike NHTSA, EPA is under no statutory deadline to promulgate the standards that it is 

now considering. It has the time and the obligation to analyze more fully its regulatory 

proposal and the wide-ranging impacts that it anticipates will likely be incurred after its 

finalization. Finally, EPA has failed even to consider possible ways in which it might 

avoid prematurely imposing significant regulatory burdens, like PSD and Title V 

requirements, on stationary sources while pursuing mobile source regulation under 

section 202(a). These are matters of the utmost significance, and EPA cannot simply 

ignore them consistent with its obligations under the CAA. For all of the foregoing 

reasons, Consumers Energy agrees with UARG and requests that EPA withdraw its 

portion of the Joint Motor Vehicle Proposal, that NHTSA revise its regulations as may be 

appropriate to address this change, and that EPA engage in a new, more thoroughly 

reasoned regulatory decision-making process while providing adequate public notice and 

opportunity for comment on these important issues. [OAR-2009-0472-7264.1, p.2] 

7-15 
EPA Response to Comments 

Specifically, EPA has failed to carefully evaluate the number of sources that could be 

affected once the Light-Duty Vehicle GHG Standards go into effect. We feel that EPA 

has grossly underestimated the number and types of facilities that will be impacted by the 

light-duty vehicle GHG proposal by becoming subject to NSR pollutants and the Title V 

and NSR permitting requirements. The South Carolina Department of Health and 

Environmental Control (SCDHEC) has identified over 800 of the currently permitted 

small sources that would become subject to Tile V and NSR permitting as soon as GHGs 

are regulated under Light-duty Vehicle GHG standards. In comparison, South Carolina 

currently has 281 Title V permitted facilities. 

[See Docket Number OAR-2009-0472-7061.1, pp.1-2 for detailed comments] 

Consumers Energy 

Consumers Energy is a member of the Utility Air Regulatory Group (UARG). We 

endorse the comments filed by UARG in this docket and incorporate them by reference. 

While we will not reiterate those detailed legal and technical comments, our comments 

will highlight several of the issues raised by UARG. [OAR-2009-0472-7264.1, p.1] 

1. It is not clear that PSD and Title V permitting requirements would be triggered by the 

proposed rule. 

2. EPA has not established that its proposal is capable of averting any endangerment 

caused by GHG emissions. Therefore, EPA is not authorized to issue proposed standards 

under Section 202(a) of the CAA. [OAR-2009-0472-7264.1, p.1] 

3. EPA has misinterpreted the legal standard for finding endangerment. 

4. EPA's proposed regulations would be largely duplicative of NHTSA's proposed 

program, adding essentially nothing. The effects of the joint program are too small to 

attack any climate-related endangerment fruitfully. 

5. The environmental and economic impacts analysis underlying the joint motor vehicle 

proposal suffers from significant weaknesses and must be revised. 

6. EPA Has Time To Take These Issues Into Consideration and Is Obligated To Do So. 

[OAR-2009-0472-7264.1, p.2] 

Although the Agency acknowledges the speculative and unquantifiable nature of the 

matters it has attempted to assess, it fails entirely to address what may be the single most 

significant issue associated with its proposed standards -- the potential application of the 

PSD and Title V permitting programs to GHGs emitted by stationary sources. EPA's 

attempt to address these issues in other rulemakings cannot satisfy its obligations to 

provide adequate public notice and opportunity for comment on the impacts of the Joint 

Motor Vehicle Proposal, and indeed, examination of EPA's analysis in the PSD 

Reconsideration Rule and the Proposed Tailoring Rule demonstrates that issues relevant 

to this rulemaking will not be analyzed in those proceedings either. [OAR-2009-0472­

7264.1, p.2] 

Council of Industrial Boiler Owners (CIBO) 

7-16 
Other Comments 

Although GHGs are not currently 'subject to regulation' under the CAA, once EPA 

finalizes the LDV rule to regulate GHG emissions under CAA Section 202, strong legal 

arguments can be made that other CAA regulatory requirements will be triggered, 

affecting stationary source CAA compliance. Due to the strong possibility that EPA 

could be legally compelled to regulate GHG emissions from stationary sources as a result 

of this regulation, it is unreasonable and arbitrary for EPA not to analyze impacts on 

stationary sources that could be required to limit their GHG emissions under a reasonable 

reading of the CAA. EPA has failed to conduct a proper regulatory impact analysis. 

CIBO takes the position overall that the CAA is an inappropriate vehicle for regulating 

GHG emissions and any effort to reduce GHG emissions from stationary sources is 

appropriately left to the federal legislature in the context of comprehensive, nationwide 

and economy-wide climate legislation. [OAR-2009-0472-7271.3, p.2] 

ACCORDING TO EPA'S OWN LEGAL ANALYSIS, GHGS ARE NOT CURRENTLY 

POLLUTANTS 'SUBJECT TO REGULATION' UNDER THE CAA 

As EPA explains in its recently proposed rule reconsidering the December 18, 2008 'PSD 

Interpretive Memo,' and supported by historic Agency practice and decisions of EPA 

officials, GHGs are not pollutants that are now 'subject to regulation' under the CAA. 

EPA [OAR-2009-0472-7271.3, p.2] has long held that for a pollutant to be 'subject to 

regulation' there must be actual control measures and not only monitoring or reporting 

requirements. [OAR-2009-0472-7271.3, p.3] 

[See docket OAR-2009-0472-7271.3, pp.2-3 for detailed comments pertaining to: 

According to EPA's Own Legal Analysis, GHGs are not Currently Pollutants 'Subject to 

Regulation' Under the CAA] 

IF GHGs ARE REGULATED UNDER SECTION 202 OF THE CAA, IT IS LIKELY 

THAT OTHER REGULATORY REQUIREMENTS WILL BE TRIGGERED 

In other pending rulemakings, EPA has clearly stated its view that EPA’s proposed 

LDV Rule, if finalized as proposed, will trigger other unrelated CAA regulatory 

requirements. Specifically, under EPA's interpretation of the CAA, regulation of GHGs 

under Section 202 will trigger requirements under the Prevention of Significant 

Deterioration (PSD) program. EPA acknowledged this in its October 27, 2009 proposed 

rule, Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; 

Proposed Rule) (Tailoring Rule). In the opening paragraphs of the Tailoring Rule, EPA 

notes that once GHGs are regulated [OAR-2009-0472-7271.3, p.3] under Section 202(a), 

PSD permitting requirements will immediately apply to stationary sources emitting 

GHGs above the significance threshold. [OAR-2009-0472-7271.3, p.4] 

[See docket OAR-2009-0472-7271.3, pp.3-4 for detailed comments pertaining to: If 

GHGs are Regulated Under Section 202 of the CAA, It is Likely That Other Regulatory 

Requirements Will Be Triggered] 

EPA HAS FAILED TO CONDUCT AN ADEQUATE ANALYSIS OF THE IMPACTS 

OF THE LDV RULE ON STATIONARY SOURCES. 

EPA has failed to conduct a complete analysis of the impacts associated with 

7-17 
EPA Response to Comments 

regulating GHGs under Section 202(a) of the CAA. EPA has openly acknowledged that 

the promulgation of standards to control GHG emissions from light-duty motor vehicles 

under Section 202(a) will inevitably trigger PSD permitting requirements for stationary 

sources; nonetheless, EPA has not included in this proposal an impact analysis that 

addresses the effect this rule will have on stationary sources. This represents a major flaw 

in the proposed rule. [OAR-2009-0472-7271.3, p.4] 

[See docket OAR-2009-0472-7271.3, pp.4-10 for detailed comments pertaining to: EPA 

has Failed to Conduct an Adequate Analysis of the Impacts of the LDV Rule on 

Stationary Sources] 

County of Greenville, SC 

Greenville County joins the SC Department of Health and Environmental Control 

(SCDHEC) in that we do not support EPA moving forward with greenhouse gas 

standards under the Clean Air Act at this time and request that EPA delay this action until 

adequate evaluation occurs. EPA has not evaluated the detrimental collateral effect that 

will occur if these standards are finalized. The additional EPA regulation comes at an 

enormous cost with virtually no additional environmental benefits from greenhouse gas 

standards on light-duty vehicles. EPA acknowledges that the only way to reduce carbon 

dioxide (CO2) emissions from light-duty vehicles is to increase fuel economy and, 

similarly, that there are no emission control technologies that reduce CO2 emissions from 

light-duty vehicles. [NHTSA-2009-0059-0101, p.1] 

According to DHEC, since the Supreme Court decision, EPA has proposed several 

actions. First, in February 2009, EPA decided to 'reconsider' the previous administration's 

decision on whether or not CO2 was a regulated pollutant under Prevention of Significant 

Deterioration (PSD). Second, in April 2009, EPA proposed a finding that greenhouse 

gases contribute to air pollution that may endanger public health or welfare. This decision 

has not been finalized but we understand that the 'endangerment finding' is currently at 

the Office of Management and Budget for review. Third, in September 2009 EPA and 

NHTSA proposed this rule to improve fuel economy and regulate greenhouse gases from 

light-duty vehicles. And finally, EPA has now proposed a 'tailoring rule' to attempt to 

address the 'absurd results' that will occur in the Title V and PSD permitting programs for 

New Source Review regulated pollutants once the light-duty vehicle GHG rule is 

finalized. 

EPA Administrator Jackson, before the Senate Committee on Environment and Public 

Works and in her January 23, 2009, memorandum to all EPA employees, expressed her 

commitment to uphold the values of transparency and openness in conducting EPA 

operations. She went on the say in her memo on transparency that, 'The success of our 

environmental efforts depends on earning and maintaining the trust of the public we 

serve. The American people will not trust us to protect their health or their environment if 

they do not trust us to be transparent and inclusive in our decision-making. To earn this 

trust, we must conduct business with the public openly and fairly.' Greenville County 

commends EPA Administrator Jackson for her commitment to transparency. 

7-18 
Other Comments 

With that being said, the county is concerned that EPA may not be as transparent as they 

should be and that they are sending mixed or confusing messages about the potential 

impact of the light-duty vehicle GHG proposal on all sources that could be impacted, in 

particular small business. EPA actually suggested to affected entities that they should not 

comment on the light-duty vehicle GHG proposal but should instead submit comments on 

the proposed 'tailoring rule.' SCDHEC experts believe that EPA was misleading to 

suggest this point and that it may inappropriately influence small business, industry, and 

other affected entities to refrain from commenting on an important rulemaking. 

It is critical that all potentially affected entities understand the impact of EPA regulating 

greenhouse gas emissions under the light-duty vehicle proposal. It will be too late to 

address any concerns that stationary (industrial) sources have in the 'tailoring rule' as they 

will already be subject to PSD, as defined in the Clean Air Act, once EPA regulates 

greenhouse gases from light-duty vehicles. There are fundamental issues related to the 

'tailoring rule.' and EPA's continued message of the 'absurd results' and 'administrative 

burden' of not moving forward with a 'tailoring rule' only confuses the real situation as 

the thresholds being proposed are 'illegal' under the Clean Air Act. Any permit issued 

with thresholds higher than those within the Clean Air Act would be vulnerable to appeal 

and litigation, even though EPA attempts to justify the tailoring rule by saying that by not 

doing so would create results 'so illogical or contrary to sensible policy as to be beyond 

anything that Congress could reasonably have intended.' We do not understand how EPA 

could know this and not also know that there is no guarantee their legal interpretation to 

exempt small sources or set different thresholds in the tailoring rule will not be 

challenged and upheld in court. EPA moving forward in this direction is very disturbing. 

As previously stated, Greenville County has concerns about the collateral effects of EPA 

moving forward at this time to regulate greenhouse gas emissions from light-duty 

vehicles. EPA must fully evaluate the collateral impact this proposal would have on all 

other aspects of the Clean Air Act including, but not limited to, the impact on state and 

local air permitting authorities, business, industry and the economy to all areas of the 

country, but in particular states like South Carolina who still employ many people in the 

manufacturing sector. As they have not fully evaluated the impact to state and local 

permitting authorities, EPA has not met the requirements under the Unfunded Mandates 

Reform Act of 2005 for the light-duty vehicle GHG proposal. EPA even states in the 

tailoring rule for stationary sources, 'State permitting authorities would be paralyzed by 

permit applications in numbers that are orders of magnitude greater than their current 

administrative resources could accommodate' yet they have not taken this into 

consideration in the light-duty vehicle greenhouse gas proposal. 

Finalizing this proposal would have a detrimental effect on our state's economy at a time 

when unemployment is currently at 11.6% and is only expected to increase. Once EPA 

'regulates' greenhouse gas emissions from mobile sources, the Clean Air Act requires that 

stationary sources be regulated under the threshold requirements as specified within the 

Clean Air Act - regardless of any 'tailoring rule' EPA develops - as those thresholds are 

specified within federal law. States and local permitting authorities are totally unprepared 

for the millions of entities which will be required to comply with the Clean Air Act once 

7-19 
EPA Response to Comments 

greenhouse gas standards are set by EPA on light-duty vehicles. The permitting process 

with SCDHEC will become so backlogged as to create a permitting moratorium. New 

business and industry will not be built; existing business will not expand; and, existing 

business and industry will not repair equipment if such repairs would require a permit. 

Again, these are detrimental effects in the economy and unintended consequences with 

the minuscule environmental benefit that would occur from EPA greenhouse gas 

standards on light-duty vehicles. [NHTSA-2009-0059-0101, pp.2-4] 

The commenter has the same concerns as SCDHEC and supports their comments. 

Regarding the impact to state and local permitting authorities, one of the areas that EPA 

has not fully evaluated is that many states, including South Carolina, have state-specific 

rules that EPA has required be promulgated and approved into the State Implementation 

Plans that address threshold levels for NSR pollutants. What EPA has also failed to 

recognize is that regardless of the thresholds they establish in the 'tailoring rule,' business 

and industry (and possibly other sources) within a SIP approved state are still subject to 

the state specific regulations - which comply with the federal Clean Air Act. This means 

that if a state were to move forward with issuing a permit utilizing the federal thresholds 

that are established under a tailoring rule, the permit would be ripe for appeal and 

litigation by third parties as the state rule is more stringent. To address this EPA has 

encouraged states to begin the process as soon as possible to revise these state specific 

requirements - even knowing that thresholds they are suggesting are illegal because the 

federal Clean Air Act thresholds are more stringent. We are positive that SCDHEC can 

not take a regulation to the South Carolina Legislature that violates federal law. 

Another area that EPA has failed to carefully evaluate is related to the number of sources 

that could be affected once the light-duty vehicle GHG proposal goes into effect. The 

DHEC feels that EPA has grossly underestimated the number and types of facilities that 

will be impacted by the light-duty vehicle greenhouse gas proposal by becoming subject 

to NSR pollutants and the Title V and PSD requirements. While SCDHEC continues to 

evaluate the specific impact to currently permitted SC sources and will make comment to 

this effect to the 'tailoring rule,' EPA has estimated that 12,000 sources in South Carolina 

could become major sources; therefore, they would become subject to Title V and PSD 

permitting as soon as greenhouse gases are regulated under light-duty vehicle greenhouse 

gas standards. In comparison, South Carolina currently has 281 Title V permitted 

facilities. In addition to all of the other associated impacts, even the smallest modification 

or expansion activity may trigger a PSD technology review and modeling analysis. The 

technology review would encompass all the triggered PSD pollutants, not just greenhouse 

gases. Economically, these facilities would have no choice but to abandon any new 

project or modification. It is interesting to note that many of these facilities would be 

subject to PSD and Title V because of natural gas combustion, which is considered to be 

a clean burning fuel. In addition, it is expected that new construction would halt because 

of these new requirements. [OAR-2009-0472-8346, p.4] 

Dow Chemical Company (Dow) 

7-20 
Other Comments 

EPA should use its discretion and postpone finalizing the proposed rule until all potential 

impacts are fully considered. 

EPA has clear legal authority to defer promulgation of a GHG emission standard under 

CAA Section 202, even if the Agency proceeds in the near future to finalize a positive 

endangerment finding under CAA Section 202. EPA should take the time to deliberately 

and carefully evaluate and consider all potential impacts of the proposed rule before final 

promulgation, as the agency itself said, “EPA recognizes that some small entities 

continue to be concerned about the potential impacts of the statutory imposition of PSD 

requirements that may occur given the various EPA rulemakings currently under 

consideration concerning greenhouse gas emissions.” (74 FR at 49629). Even the 

Supreme Court in Massachusetts v. EPA, whose ruling is the impetus for this proposal, 

indicated that EPA has “significant latitude as to the manner, timing, content, and 

coordination of its regulations with those of other agencies.” (Slip op. at 30). [OAR2009-0472-7221.1, p.2] 

EPA should not rush to promulgate this or any rule that has such an enormous impact on 

regulated entities, both industrial facilities as well as small businesses, and potentially 

devastating effect on the US [OAR-2009-0472-7221.1, p.2] economy without careful and 

considerable deliberation and discussion with affected parties. Rather, EPA should 

exercise its authority to defer promulgation of this proposed rule because the potential 

economic consequences of the Motor Vehicle Rule are massive and unquestionably 

outweigh any environmental benefits that would flow from EPA finalizing the rule. 

Instead, EPA should allow NHTSA to finalize its portion of the rule which proposes 

CAFÉ standards in order to allow that agency to meet its Model Year 2012 deadline 

without finalizing EPA’s portion of the rule that proposes GHG emissions standards. 

The NHTSA portion of the rule alone will accomplish both agencies’ stated goal of 

addressing emissions from light duty motor vehicles to significant environmental benefit 

without unleashing the devastating cascade effects of triggering the PSD program on 

small and stationary sources under the CAA. Delaying this rulemaking would eliminate 

the immediate impact of PSD on these sources, or at least allow EPA the time to evaluate 

other options and to truly recognize the potential impacts of this proposed rule 

on stationary sources. As a result, there is no need for EPA to finalize this proposed rule 

at this time. [OAR-2009-0472-7221.1, p.3] 

In this proposal, EPA needs to consider potential impacts on stationary sources of GHGs. 

As a part of this rulemaking, EPA needs to consider and assess the potential impact of 

this rule on stationary sources. Even though the Proposed Motor Vehicle Rule purports to 

concern only regulation of mobile source GHG emissions, EPA has stated in other 

proceedings that the proposed Motor Vehicle Rule’s impact is not limited to motor 

vehicles. In EPA’s Advance Notice of Proposed Rulemaking (ANPR) to seek public 

input on the ramifications of regulating GHGs under the CAA (73 FR 44354), the agency 

stated that a Motor Vehicle Rule would trigger PSD permitting requirements for GHG 

emissions from myriad stationary sources throughout the United States that had never 

before been subject to CAA regulation. Because EPA has made it quite clear that they 

believe finalizing this rule will automatically impact stationary sources, they are 

obligated to thoroughly analyze these impacts as part of this rulemaking before final 

7-21 
EPA Response to Comments 

promulgation. This evaluation should compare the impacts to any benefit the EPA rule 

provides above and beyond the proposed NHTSA Rule. [OAR-2009-0472-7221.1, p.3] 

Duke Energy 

Duke Energy Business Services LLC (“Duke Energy”), on behalf of Duke Energy 

Carolinas, LLC, Duke Energy Indiana, Inc., Duke Energy Ohio, Inc., Duke Energy 

Kentucky, Inc., and Duke Energy Generation Services (“DEGS”), therefore submits the 

following comments on the Joint Motor Vehicle Proposal. Specifically, the significant 

flaws and shortcomings of the Joint Motor Vehicle Proposal necessitate the withdrawal of 

EPA’s portion of the proposed rule. Duke Energy continues to support the enactment of 

environmentally and economically sustainable federal climate change legislation. 

Regulating GHGs under the CAA is the wrong approach. [OAR-2009-0472-7136.1, p.2] 

The U.S. Environmental Protection Agency’s (“EPA”) has stated its view that 

promulgation of the GHG motor vehicle standards will subject GHGs to the CAA 

Prevention of Significant Deterioration (“PSD”) program and the permitting requirements 

of Title V of the CAA, potentially as soon as the date on which the rule becomes final 

and effective. Duke Energy believes, however, that EPA’s legal positions in this regard 

and the analysis presented in the proposed rule are seriously flawed and must be 

corrected. [OAR-2009-0472-7136.1, p.2] 

Moreover, because of EPA’s stated view that promulgation of the GHG motor vehicle 

standards will subject GHGs to the PSD program and the permitting requirements of Title 

V of the CAA, and the fact that EPA’s proposed GHG motor vehicle emission standards 

would be an unnecessary duplication of NHTSA’s proposed fuel efficiency requirements, 

EPA’s action is more a proposal to regulate GHG emissions from stationary sources 

through the PSD and Title V permitting programs than it is a proposal to regulate GHG 

emissions from motor vehicles. Yet EPA has failed to analyze and address in its proposal 

what is likely the single most significant issue associated with its proposed standard – the 

potential application of the PSD and Title V permitting programs to GHGs emitted by 

stationary sources. This would include an analysis of the significant burdens the rule 

would place on stationary sources and the impact on jobs and the economy, at a time 

when unemployment is still rising and the economy is struggling to recover from 

recession. The EPA has instead suggested that similar issues be addressed through its 

Proposed Tailoring Rule and PSD Reconsideration Rule. Those proceedings, however, 

will not adequately evaluate the impact of EPA’s proposed joint program with NHTSA; 

indeed, EPA’s selected approach has effectively removed all meaningful opportunities to 

evaluate and provide comments on the effect of EPA’s proposed GHG motor vehicle 

emission standards on stationary sources. A decision to regulate GHG emissions from 

stationary sources is of such magnitude that it should be made only based on careful 

analysis and reasoned determinations of cost, technology, and other relevant factors. It 

should not result from a back door approach via regulation of automobile fuel efficiency 

with little more than bare acknowledgement. Given the [OAR-2009-0472-7136.1, 

p.3] significance of the impacts that are likely to result from the establishment of a CAAbased program to regulate GHG emissions from motor vehicles that, according to EPA, 

7-22 
Other Comments 

ultimately result in significant regulation of stationary sources, EPA must analyze these 

issues adequately as a part of this rulemaking. [OAR-2009-0472-7136.1, p.4] 

In addition, because EPA’s proposed regulatory program fails to add significantly to the 

results that could be achieved through NHTSA’s proposal alone, EPA should instead 

consider how it might avoid prematurely triggering PSD and Title V, including through 

the option of simply addressing carbon dioxide (“CO2”) emissions through NHTSA’s 

CAFE standards and not through emission standards promulgated under section 202 of 

the CAA. EPA is under no statutory or other deadline to promulgate CAA-based 

regulations of GHGs. It has time and the obligation to consider and analyze fully the 

various issues raised by this proposed rule, and it should make use of that time. Further, 

because EPA has additional time to analyze its options, the Agency should examine 

various mechanisms for regulating under section 202(a) of the CAA that might not result 

in the imposition of PSD and Title V on countless stationary sources. Duke Energy does 

not believe that EPA’s current proposal would necessarily trigger PSD for GHGs, and the 

Agency should assess whether it has the ability to avoid needlessly imposing such 

significant regulatory burdens through a rulemaking that should address only motor 

vehicles. [OAR-2009-0472-7136.1, p.4] 

 In summary, for all of foregoing reasons, EPA lacks the legal authority to issue its 

proposed GHG motor vehicle emission standards under section 202(a) of the CAA. Duke 

Energy therefore requests that EPA withdraw its portion of the joint Motor Vehicle 

Proposal and substantially revise its proposal to eliminate the CAA-based portion of the 

proposed program. Duke Energy further requests that EPA engage in a new and 

substantially more transparent [OAR-2009-0472-7136.1, p.4] rulemaking process that 

addresses all of the significant issues that regulation under section 202(a) of the CAA 

raises, including the ramifications for stationary sources and the economy. At the very 

least, EPA should reopen the comment period on its proposed GHG motor vehicle 

emission standards to allow the public to provide comments on these serious matters that 

EPA has, thus far, neglected. [OAR-2009-0472-7136.1, p.5] 

In addition to the above comments, Duke Energy strongly supports the comments 

submitted by the Utility Air Regulatory Group on the Joint Motor Vehicle Proposal and 

refers EPA to those comments for a more detail discussion of the issues raised above. 

[OAR-2009-0472-7136.1, p.5] 

Edison Electric Institute 

Specific Comments on the Light-Duty Vehicle Proposal 

EEI has no comment on the substance or timing of the applicability of the standards to be 

applied to light-duty motor vehicles. We understand that they can be applied through the 

NHTSA regulations without recourse to the CAA and fully support the proposal to 

implement the NHTSA regulations. [OAR-2009-0472-7212.1, p.2] 

However, we believe it is important for EPA to consider whether it should promulgate 

separate rules under the CAA at this time (which would be almost identical as the 

7-23 
EPA Response to Comments 

NHTSA regulations in their impact on vehicle GHG emissions). Given the interconnected 

nature of the CAA’s provisions for regulating mobile and stationary sources, EPA 

currently interprets the CAA such that: 1) a final CAA section 202 rule applicable to 

light-duty motor vehicles would trigger regulated status 2 for the first time for stationary 

sources emitting GHGs as well; 2) new stationary sources and those existing sources that 

modify their facilities above specified significance levels would be subject to PSD 

permitting requirements; and 3) new and existing sources would be obligated to 

incorporate applicable GHG requirements in title V operating permits. Unfortunately, 

EPA does not address or even acknowledge these ramifications for stationary sources in 

the Proposed Rulemaking, nor does the Agency acknowledge the possible CAA remedies 

to delay such a triggering event. [OAR-2009-0472-7212.1, p.2] 

EEI urges EPA to consider whether the Agency should trigger stationary source 

regulation before it has developed guidance and rules to apply to facilities that would be 

affected by such regulation. We are concerned that the agency could create a regulatory 

vacuum were it to proceed without developing needed guidance for regulated entities and 

their state and federal regulators once GHG regulations apply to stationary sources. 

While EPA has proposed two rules addressing some aspects of its regulation of GHG 

emissions from stationary sources, EPA has not proposed any approach to guide the 

applicability of CAA standards to specific facilities seeking to obtain permits. [OAR2009-0472-7212.1, p.2] 

EPA staff currently are working on a constricted schedule to prepare best available 

control technology (BACT) guidance under the PSD program, with the assistance of a 

working group of the Clean Air Act Advisory Committee (CAAAC), for permitting 

agencies charged with implementing BACT reviews for GHGs. We believe EPA should 

consider whether the guidance [OAR-2009-0472-7212.1, p.2] being developed will be in 

place when GHG regulations are applied to stationary sources and consider how the 

stationary source program could go forward without such guidance. We also request that 

EPA consider whether additional time for the CAAAC working group and EPA staff to 

complete such guidance would facilitate a more efficient and orderly transition to 

regulating GHGs under the PSD program and allow enhanced assessment of the options 

for incorporating GHG requirements into title V operating permits. [OAR-2009-0472­

7212.1, p.3] 

Given the substantial impacts of the Proposal on all stationary sources, we request that 

EPA consider whether administrative necessity requires it to coordinate the timing of this 

regulation with the issuance of guidance needed to explain how new GHG regulation will 

apply to permitting of stationary sources. This is the same standard that EPA proposes to 

apply in the Tailoring rule. Massachusetts v. EPA clearly indicated that the agency has 

discretion as to the “manner, timing, content, and coordination of its rulemaking with 

those of other agencies.” [OAR-2009-0472-7212.1, p.3] 

Importantly, if EPA delays finalizing the CAA section 202 portion of this proposal, 

NHTSA’s estimates of the impacts of the proposed CAFE standards are nearly identical 

7-24 
Other Comments 

to EPA’s estimates of the impacts of its proposed section 202 motor vehicle emissions 

standards.[OAR-2009-0472-7212.1, p.3] 

Finally, delaying the imposition of regulations on stationary sources would be consistent 

with the Administration’s transition team announcement at the end of last year that 

Congress would have 18 months to pass comprehensive climate change legislation, 

obviating the need for piecemeal GHG regulation by EPA via the CAA. Such an 18­

month period would continue through approximately July 2010 and provide additional 

time for Congress to act. Comprehensive legislation, as noted by many Administration 

officials and by EEI, is far preferable to CAA regulation to reduce GHG emissions. 

[OAR-2009-0472-7212.1, p.3] 

Consequently, EEI asks EPA to consider the timing of the issuance of its proposed light 

duty motor vehicles rule, in light of the administrative implications such rules would have 

for stationary sources, to assure that the best regulatory guidance is in place when new 

GHG related requirements take effect. EEI appreciates the opportunity to provide 

comments. Questions may be directed to John Kinsman (202-508-5711) or Emily Fisher 

(202-508-5616). [OAR-2009-0472-7212.1, p.3] 

Energy-Intensive Manufacturers Working Group 

[[These comments were originally submitted in response to the Prevention of Significant 

Deterioration and Title V Greenhouse Gas Tailoring Rule; Proposed Rule, 74 Fed. Reg. 

55292 (October 27, 2009). Because the comments are relevant to related agency 

proceedings that would culminate in the regulation of greenhouse gas emitters, including 

the energy-intensive trade-exposed (EITE) members of the Working Group, under the 

Prevention of Significant Deterioration (PSD) regulatory scheme, the commenter filed 

them in this docket.]] 

[See Docket Number OAR-2009-0472-11276.1, pp.3-42 for all comments on this issue.] 

Fertilizer Institute 

Best Available Control Technology (BACT) 

EPA explains in the preamble to the Prevention of Significant Deterioration (PSD) 

tailoring rule that the motor vehicle rule will make GHGs a regulated pollutant under the 

CAA. TFI understands that EPA has formed an advisory committee to evaluate BACT 

options and that the agency intends to issue guidance on the subject in conjunction with 

final regulations. However, EPA has failed to comply with its statutory obligations to 

analyze the cost of potential BACT to impacted industries. Whatever BACT is 

determined to be, complying with those requirements will pose a significant cost to the 

industry. [OAR-2009-0472-7279.1, p.2] 

TFI requests that an economic analysis of the implementation of BACT will have on 

industry and more details regarding acceptable BACTs to use for pollution abatement be 

conducted. [OAR-2009-0472-7279.1, p.2] 

7-25 
EPA Response to Comments 

Permitting of PSD and Title V Permitting Programs 

EPA estimates PSD permit applications would increase by 150-fold and process time for 

applications could take up to ten years. Additionally, EPA estimates that Title V permit 

applications will increase and years of delay will result in the program. TFI does not see 

any near-term benefits to the PSD rule due to the backlog of permits estimated to occur. 

Furthermore, EPA indicates it will not issue a State Implementation Plan (SIP) call or 

require states to adjust their PSD rules. The result of this will be uncertainty for 

applicants and an overwhelmed permitting system with little effective results. [OAR2009-0472-7279.1, p.2] 

TFI requests that EPA evaluate and provide a solution to the expected permitting system 

conundrum. [OAR-2009-0472-7279.1, p.2] 

Economic Impact Analysis (EIA) 

EPA, under the CAA, is required to perform an EIA for individual rulemakings under the 

CAA’s authority. Failure to perform this mandatory obligation is a clear violation of the 

CAA and jeopardizes the credibility and integrity of EPA’s ability to make informed 

policy decisions. [OAR-2009-0472-7279.1, p.2] 

TFI requests that EPA perform a full EIA and make these findings available to the public. 

[OAR-2009-0472-7279.1, p.2] 

Georgia Department of Natural Resources 

We do, however, have significant concerns with the rule as currently proposed, primarily 

related to the triggering of other sections of the Clean Air Act (specifically Title V 

permitting and New Source Review permitting). We do not believe that EPA has 

adequately evaluated those impacts. We do not believe that EPA has adequately 

evaluated the options for minimizing, or avoiding, these collateral impacts. Our concerns 

are described herein along with recommended changes to the proposed rule that will still 

produce the intended results of the rule, while minimizing, or avoiding, these collateral 

impacts. [OAR-2009-0472-7150.1, p.1] 

EPA should evaluate, as a part of this rulemaking, whether or not other sections of the 

Clean Air Act (specifically Title V permitting and New Source Review permitting) will 

be triggered by this rule. And, if these other sections of the Clean Air Act are triggered by 

this rule, EPA should evaluate, as part of this rulemaking, what the impacts of that 

triggering are. [OAR-2009-0472-7150.1, p.1] 

Our interpretation is that this rulemaking is the action that triggers other sections of the 

Clean Air Act (specifically Title V permitting and New Source Review permitting). 

However, in the proposed rule, EPA actually suggested to affected entities that they 

should not comment on this issue in this rulemaking, but should instead submit comments 

on the proposed 'Prevention of Significant Deterioration and Title V Greenhouse Gas 

Tailoring Rule' (GHG Tailoring Rule). We believe that EPA was in error to suggest this 

7-26 
Other Comments 

point and that it may inappropriately influence agencies and other affected entities to 

refrain from commenting on an important rulemaking. [OAR-2009-0472-7150.1, pp.1-2] 

The EPA GHG Tailoring Rule is a wholly independent rulemaking from the Light-Duty 

Vehicle GHG Standards rule. The GHG Tailoring rule does not trigger the Title V 

permitting and New Source Review permitting requirements; the Light-Duty Vehicle 

GHG Standards rule does. EPA should not rely upon the GHG Tailoring rule to address 

this issue, particularly in light of the fact that the GHG Tailoring rule may not be in place 

at the time that EPA finalizes the Light-Duty Vehicle GHG Standards rule. EPA has 

clearly stated its intent to finalize the Light-Duty Vehicle GHG Standards rule by the end 

of March 2010. The public comment period on the GHG Tailoring rule ends on 

December 28, 2009. EPA is expected to get thousands of comments on the GHG 

Tailoring rule and it would have only three months to address those comments and 

finalize the rule. This appears to be a monumental task if EPA is going to adequately 

review all of the comments and make necessary revisions to the proposed rule in response 

to critical comments received. EPA can not assume, as part of this rulemaking, that the 

GHG Tailoring rule will be finalized on, or before, the Light-Duty Vehicle GHG 

Standards rule is finalized. [OAR-2009-0472-7150.1, p.2] 

EPA failed to take into account the length of time that it will take for permitting 

authorities with SIP approved New Source Review (NSR) programs to go through 

rulemaking (and possibly some state legislatures), hiring, and training in order to 

implement the mandate of regulating GHG emissions under the Title V and NSR 

permitting programs. In Georgia, rulemaking will be required in order to insert the new 

GHG emission thresholds. Rulemaking will also be required in order to increase Title V 

fees consistent with the Clean Air Act requirement that permitting programs collect 

enough revenue to implement the program requirements. Given the current state of the 

economic situation in our state and country, this issue should not be taken lightly. Then, 

permitting authorities must hire and train staff to issue these complicated permits. This 

could take up to two years after the requirement is triggered. [OAR-2009-0472-7150.1, 

p.2] 

More fundamentally, the GHG Tailoring Rule appears to be legally vulnerable and may 

not provide intended relief from the statutory permitting thresholds for PSD and Title V. 

If the tailoring rule is vacated, the workload for permitting authorities will increase 

exponentially at a time when State and Local governments are experiencing severe 

budgetary challenges due to the current economic climate. Vacatur of the GHG Tailoring 

Rule seems to be a very real possibility if promulgated as proposed. In the Preamble to 

the proposed rule, EPA provides a lengthy justification for adjusting the statutory 

permitting thresholds for PSD and Title V, relying on the legal doctrines 

of 'administrative necessity' and 'absurd results.' However, if the rule is challenged the 

D.C. Circuit Court of Appeals could hold that these arguments are unpersuasive given the 

circumstances. The Court could conclude that the proper way to address an excessive 

burden imposed by statute is to ask Congress to amend the statute. The excessive burden 

doesn't empower an administrative agency to rewrite the statute. The fact that EPA 

knowingly promulgated regulations that triggered the concepts of 'administrative 

7-27 
EPA Response to Comments 

necessity' and 'absurd results,' when equivalent reductions in GHG emissions from 

vehicles could have been achieved without these collateral impacts, may weaken EPA's 

legal justification for the Tailoring Rule even further. The sound approach is to prevent 

the 'administrative necessity' and 'absurd results' by tailoring the GHG and CAFE 

standards to avoid triggering the permitting requirements, not by attempting to amend 

administratively the statutory permitting requirements. [OAR-2009-0472-7150.1, pp.2-3] 

In short, EPA failed to consider how the rule would affect state/local air permitting 

authorities. More specifically, EPA failed to comply with the Unfunded Mandates 

Reform Act of 1995. EPA states in the preamble that this rule only affects manufacturers 

of cars and light trucks. However, this action has the potential to affect state/local air 

permitting authorities immensely because it would cause GHG emissions to become 

regulated under the Title V and New Source Review permitting programs. The proposed 

rule does not take this into account. The potential impact to state/local air permitting 

authorities is unprecedented and enormous. In fact, EPA acknowledges in the GHG 

Tailoring rule preamble that 'State permitting authorities would be paralyzed by permit 

applications in numbers that are orders of magnitude greater than their current 

administrative resources could accommodate?' [OAR-2009-0472-7150.1, p.3] 

EPA claims that the proposed rule imposes no enforceable duty on any state, local or 

tribal governments. The basis for this claim is not understood and we believe it to be 

incorrect. As stated previously, the GHG Tailoring rule acknowledges that state 

permitting authorities will be 'paralyzed' by the workload created by the triggering of the 

Title V and NSR permitting provisions for GHG emissions. In the GHG Tailoring rule, 

EPA purports to reduce this burden by arbitrarily selecting new GHG emission thresholds 

of 25,000 tons per year CO2 equivalent (or in some cases 10,000 tons per year). Even if 

the GHG Tailoring rule is finalized as EPA has proposed it, we believe that EPA has 

significantly underestimated the number of sources that will become subject to the Title 

V and NSR permitting provisions due to the finalization of the GHG emission standards 

required by this rule. We will be submitting separate comments to the docket for the 

GHG Tailoring rule that address this issue. However, the GHG Tailoring rule does not 

trigger the Title V and NSR permitting provisions for GHG emissions; it only attempts to 

reduce the burden of that triggering effect. [OAR-2009-0472-7150.1, p.3] 

We believe that EPA can accomplish the goals of this rule without triggering other 

sections of the Clean Air Act (specifically Title V permitting and New Source Review 

permitting). EPA stated in the preamble that the primary goals of this rule were to 

achieve substantial reductions of greenhouse gas (GHG) emissions and improvements in 

fuel economy. [OAR-2009-0472-7150.1, p.4] 

EPA, as a policy decision, should not establish GHG emission limits under Section 

202(a) of the Clean Air Act at this time. EPA and NHTSA should, instead, establish fuel 

economy standards that accomplish the desired goals of substantial reductions in GHG 

emissions and improvements in fuel economy. Therefore, the other sections of the Clean 

Air Act (specifically Title V permitting and New Source Review permitting) would not 

be triggered. [OAR-2009-0472-7150.1, p.4] 

7-28 
Other Comments 

EPA is under no legal obligation (court decision or Clean Air Act requirement) to finalize 

GHG emission limits under Section 202(a) of the Clean Air Act at this time. The 

preamble states that 'EPA has the discretion to take into consideration NHTSA's CAFE 

standards in determining appropriate action under section 202(a), and we agree. EPA 

should take into consideration that the new NHTSA CAFE standards accomplish the 

goals of the rule and EPA should not finalize any GHG emission standards under the 

authority of the Clean Air Act at this time. [OAR-2009-0472-7150.1, p.4] 

Virtually all of the GHG emission reductions required by the proposed rule come from 

the improvement to NHTSA's CAFE standards. Therefore, the additional EPA regulation 

comes at an enormous cost with virtually no additional environmental benefits. EPA 

acknowledges that the only way to reduce CO2 emissions from light-duty vehicles is to 

increase fuel economy and, similarly, that there are no emission control technologies that 

reduce CO2 emissions from Light-Duty Vehicles. [OAR-2009-0472-7150.1, p.4] 

Georgia-Pacific (GP) 

EPA’s Failure to Fully Analyze the Burden of the Proposed Section 202 Tailpipe Rule on 

Stationary Sources Renders the Proposal Unlawful. 

Finalization of the Section 202 Tailpipe Rule, assuming EPA also finalizes its 

endangerment finding, will trigger CAA permitting actions under the PSD and Title V 

programs. In EPA’s proposed Prevention of Significant Deterioration and Title V 

Greenhouse Gas Tailoring Rule (“Tailoring Rule”), the Agency stated that the issuance of 

the Section 202 Rule will automatically trigger a dramatic increase in PSD (from 300 

permits per year to 41,000) and Title V (from 14,000 permits per year to over 6 million) 

permits for stationary sources each year. Yet, EPA failed to analyze this consequence and 

burden on stationary sources in its Regulatory Impact Analysis for the Section 202 

Tailpipe Rule and to seek public comment on this issue, violating various statutes and 

Executive Orders. [OAR-2009-0472-7122.1, p.1] 

[See Docket Number OAR-2009-0472-7122.1, pp.1-3 for detailed comments pertaining 

to: EPA Conducted an Insufficient Regulatory Review and Inadequate Public Notice] 

EPA Does Not Have to Issue the Section 202 Rule at This Time 

In the preamble to the proposed Section 202 Tailpipe Rule, EPA states that the joint 

rulemaking with the NHTSA corporate average fuel economy (CAFE) standards will 

enable vehicle manufacturers to build a single national light duty vehicle fleet that 

satisfies both CAFE and federal and California emissions standards. However, due to the 

potential enormous implications of the Section 202 Tailpipe Rule on stationary sources 

(as previously noted), and the fact that EPA has multiple options available for [OAR2009-0472-7122.1, p.3] regulating GHG from light duty vehicles, EPA should withdraw 

or postpone its Section 202 Tailpipe Rule. [OAR-2009-0472-7122.1, p.4] 

[See Docket Number OAR-2009-0472-7122.1, pp.1-3 for detailed comments pertaining 

to: EPA's proposed Tailoring Rule provides a reasonable basis for withdrawing or 

7-29 
EPA Response to Comments 

postponing the proposed Section 202 Rule and EPA has multiple options to issue lightduty vehicle emissions standards under the CAA] 

EPA Failed to Seek Comment on the Timing of its Section 202 Rulemaking Action, 

Violating the Administrative Procedure Act 

Notwithstanding the numerous issues upon which EPA sought comment in the proposed 

rule, EPA did not solicit comment on the key substantive issue that has been identified 

above – when the Agency should issue a Section 202 Rule. Without notice of this 

significant issue in the proposed Section 202 Tailpipe Rule, the proposal notice is 

unlawful under the Administrative Procedure Act and Section 307(d) as described above. 

See 42 U.S.C. § 7607(d)(3); 5 U.S.C. § 553(b)(3). [OAR-2009-0472-7122.1, p.5] 

Industry Coalition 

The Associations acknowledge EPA’s desire to address GHG emissions from mobile 

sources quickly, as well as NHTSA’s need to set new fuel economy standards, which 

must be [OAR-2009-0472-7673.1, p.1] promulgated at least 18 months before the 

affected model year (in this case the 2012 model year). 49 U.S.C. § 32902(g)(2). 

However, as proposed, the Motor Vehicle Rule ignores the enormous burdens the Rule 

would impose on stationary sources. This omission violates legal requirements for agency 

rulemaking, constitutes arbitrary and capricious action, and is simply bad policy. This is 

especially so because nearly all the environmental benefits EPA says will result from its 

promulgation of the Motor Vehicle Rule under CAA authority would also result from the 

NHTSA rule alone. Yet, unlike NHTSA action to raise corporate average fuel economy 

(CAFE) standards, the redundant EPA standards promulgated under the CAA would have 

regulatory impacts reaching far beyond the automotive industry and would impose 

billions of dollars in additional permitting and compliance costs. [OAR-2009-0472­

7673.1, p.2] 

Thus, although the Associations take no position on NHTSA’s proposal to increase 

CAFE standards, we vigorously object to EPA’s proposal to finalize the superfluous 

Motor Vehicle Rule under CAA Section 202. EPA’s failure to account here for the PSD 

and Title V burdens it elsewhere acknowledges will flow from this rulemaking renders 

this rulemaking legally invalid. EPA must fully consider those burdens in this 

rulemaking. [OAR-2009-0472-7673.1, p.2] 

EPA Must Assess and Address the Motor Vehicle Rule’s Impacts on Stationary Sources 

Before Finalizing the Rule. 

EPA’s failure to account for the Title V and PSD consequences of finalizing the Motor 

Vehicle Rule would render the final Rule both arbitrary and capricious, and also invalid 

based on other procedural requirements for rulemaking. 

[See Docket Number OAR-2009-0472-7673.1, pp.2-8 for detailed comments pertaining 

to: EPA’s Failure to Analyze the PSD and Title V Effects of Finalizing the Motor 

Vehicle Rule Is Arbitrary and Capricious, EPA’s Failure to Analyze the PSD and Title V 

Effects of Finalizing the Motor Vehicle Rule Runs Contrary to Procedural Requirements 

7-30 
Other Comments 

and EPA’s Failure to Analyze the PSD and Title V Effects of Finalizing the Motor 

Vehicle Rule Runs Contrary to Procedural Requirements ] 

PSD Permitting Requirements Need Not and Should Not Apply to Stationary Sources’ 

GHG Emissions Solely by Virtue of EPA Finalizing the Motor Vehicle Rule 

EPA could properly decline to consider the PSD impacts of the proposed Motor Vehicle 

Rule in this rulemaking docket only if those impacts would not, in fact, result from the 

Rule. EPA has stated that PSD requirements will be triggered when the proposed Motor 

Vehicle Rule first subjects GHG emissions from cars to control—that is, model year 

2012. See PSD Interpretive Memo Reconsideration, 74 Fed. Reg. at 51545–46. But EPA 

can interpret the statute and regulations to avoid that result and eliminate the need to 

analyze the proposed Motor Vehicle Rule’s effect on stationary sources in this 

proceeding. Moreover, by doing so, EPA would eliminate the need for the legally 

questionable GHG Tailoring Rule. 

[See Docket Number OAR-2009-0472-7673.1, pp.8-12 for detailed comments pertaining 

to: EPA’s View that Issuance of the Motor Vehicle Rule Automatically Triggers PSD 

Based Solely on Emissions of GHGs Is Inconsistent with the Plain Meaning of the CAA 

and EPA’s Regulations and The Phrase “Pollutants Subject to Regulation” Is Also Most 

Reasonably Interpreted to Exclude GHGs] 

EPA Should Exercise its Discretion to Defer Finalizing a Motor Vehicle Rule 

EPA has clear legal authority to defer promulgation of an emission standard under CAA 

Section 202, even if the Agency proceeds in the near future to finalize a positive 

endangerment finding under CAA Section 202. It would be arbitrary and capricious for 

EPA not to exercise that authority because the potential economic consequences of the 

Motor Vehicle Rule are massive, and unquestionably outweigh any environmental 

benefits that would flow from EPA placing its imprimatur on the NHTSA rule. 

[See Docket Number OAR-2009-0472-7673.1, pp.12-14 for detailed comments 

pertaining to: Nothing Compels EPA to Finalize GHG Emissions Standards for Mobile 

Sources, EPA Has Not Provided Adequate Reasons for Finalizing GHG 

Emission Standards for Mobile Sources at This Time, and There Are Numerous 

Compelling Reasons to Defer the Motor Vehicle Rule] 

Mass Comment Campaign (48) (unknown organization) 

To make matters worse, these regulations would start a regulatory cascade. EPA would 

start regulating emissions from millions of sources, including large buildings, churches, 

sports arenas, office buildings, farms, schools, hospitals' you name it. EPA will be forced 

to regulate greenhouse gases with many sections of the Clean Air Act, including sections 

108, 111, and 112. This will further harm our economy, reduce American jobs, and 

worsen our employment situation. NHTSA already has the ability to regulate fuel 

economy without EPA further harming the economy. 

Mississippi Department of Environmental Quality 

7-31 
EPA Response to Comments 

We do, however, have significant concerns with the rule as currently proposed, primarily 

related to the triggering of other sections of the Clean Air Act (specifically Title V 

permitting and New Source Review permitting). We do not believe that EPA has 

adequately evaluated those impacts or has adequately evaluated the options for 

minimizing, or avoiding, these collateral impacts. In addition, restrictions on GHG 

emissions from vehicles do not appear necessary to achieve the goal of reducing GHGs; 

the CAFE standards alone will achieve this goal. Our concerns are described herein along 

with recommended changes to the proposed rule that will still produce the intended 

results of the rule, while minimizing, or avoiding, these collateral impacts. 

EPA must evaluate, as a part of this rulemaking, whether or not other sections of the 

Clean Air Act (specifically Title V permitting and New Source Review permitting) will 

be triggered by this rule. And, if these other sections of the Clean Air Act are triggered by 

this rule, EPA must evaluate, as part of this rulemaking, what the impacts of that 

triggering are. 

Our interpretation is that this rulemaking is the action that triggers other sections of the 

Clean Air Act (specifically Title V permitting and New Source Review permitting). 

However, in the proposed rule, EPA actually suggested to affected entities that they 

should not comment on this issue in this rulemaking, but should instead submit comments 

on the proposed 'Prevention of Significant Deterioration and Title V Greenhouse Gas 

Tailoring Rule' (GHG Tailoring Rule).1 We believe that EPA was in error to suggest this 

point and that it may inappropriately influence agencies to refrain from commenting on 

an important rulemaking. 

The EPA GHG Tailoring Rule is a wholly independent rulemaking from the Light-Duty 

Vehicle GHG Standards rule. The GHG Tailoring rule does not trigger the Title V 

permitting and New Source Review permitting requirements; the Light-Duty Vehicle 

GHG Standards rule does. EPA must not rely upon the GHG Tailoring rule to address 

this issue, particularly in light of the fact that the GHG Tailoring rule may not be in place 

at the time that EPA finalizes the Light-Duty Vehicle GHG Standards rule. EPA has 

clearly stated its intent to finalize the Light-Duty Vehicle GHG Standards rule by the end 

of March 2010. The public comment period on the GHG Tailoring rule ends on 

December 28, 2009. EPA is expected to get thousands of comments on the GHG 

Tailoring rule and it would have only three months to address those comments and 

finalize the rule. This appears to be a monumental task if EPA is going to adequately 

review all of the comments and make necessary revisions to the proposed rule in response 

to critical comments received. EPA cannot assume, as part of this rulemaking, that the 

GHG Tailoring rule will be finalized on, or before, the Light-Duty Vehicle GHG 

Standards rule is finalized. [OAR-2009-0472-7102.1, pp.1-5] 

The commenter expresses concern about the current state of economy the negative effects 

of the proposed rule due increase in cost and administrative burden. 

National Association of Home Builders (NAHB) 

7-32 
Other Comments 

[These comments were originally submitted On December 28, 2009 to the following 

rulemaking docket: Prevention of Significant Deterioration and Title V Greenhouse Gas 

Tailoring Rule, 74 Fed. Reg. 55,292 (Oct. 27, 2009), Docket Number EPA-HQ-OAR2009-0517. Because the NAHB believes that the Tailoring Rule is intertwined with other 

EPA actions under the Clean Air Act, the NAHB requests that a copy of the NAHB's 

Tailoring Rule comments also be filed to the EPA-HQ-OAR-2009-0472 docket.] 

[See Docket Number EPA-HQ-OAR-2009-0472-11278, pp.4-22 for the comments 

specific to the PSD and Title V GHG Tailoring Rule.]] 

[See Docket Number EPA-HQ-OAR-2009-0472-11278, pp.23-42 for the legal 

comments on EPA's Tailoring Rule and interrelated agency actions.] 

National Association of Manufacturers 

On November 18, 2009, the following organizations ('the Associations') jointly requested 

that the Environmental Protection Agency ('EPA') and the National Highway Traffic 

Safety Administration ('NHTSA') extend the public comment period for the Motor 

Vehicle GHG Rule, until December 28, 2009 and that EPA extend the public comment 

periods for both the GHG Tailoring Rule, and the PSD Interpretive Memo 

Reconsideration, until January 28, 2010 (collectively, these three rulemakings are 

referred to herein as the 'GHG rulemakings'): [OAR-2009-0472-11277, p.1] 

American Bakers Association, American Chemistry Council, American Iron and Steel 

Institute, The American Meat Institute, American Petroleum Institute, Chamber of 

Commerce of the United States of America, Corn Refiners Association, The Institute of 

Shortening and Edible Oils, National Association of Manufacturers, National Chicken 

Council, National Council of Farmer Cooperatives, National Grain and Feed Association, 

National Oilseed Processors Association, National Petrochemical and Refiners 

Association, The National Renderers Association, Natural Gas Supply Association, 

Society of Chemical Manufacturers and Affiliates. [OAR-2009-0472-11277, p.2] 

On November 25, 2009, EPA Assistant Administrator Gina McCarthy replied by letter to 

Bryan L. Brendle, Director of Energy and Resources Policy for the National Association 

of Manufacturers ('NAM'), denying the extension request in its entirety. The Associations 

hereby request that EPA reconsider its denial of the Associations' original November 18 

request for extensions of the GHG rulemakings comment periods for the reasons 

explained in the request. Alternatively, the Associations request that EPA make 

comments submitted in each docket part of the docket for all three rules, considering all 

relevant comments received in the PSD Tailoring Rule docket in both the Motor Vehicle 

GHG Rule and PSD Interpretive Memo Reconsideration dockets, and vice-versa. A 

refusal to grant either or both of the Associations' necessary and reasonable requests 

would be arbitrary and capricious due to both the close timing and interrelatedness of the 

GHG rulemakings. [OAR-2009-0472-11277, pp.2-3] 

7-33 
EPA Response to Comments 

The close timing of the GHG rulemakings makes it difficult for the Associations and their 

members to fully analyze the rules, develop useful data, and submit comments on all 

relevant aspects of the rules. Problematically, the GHG rulemakings were all published in 

the Federal Register within just one month of each other. Meanwhile, many sources, 

including Associations' members, are also focused and have allocated substantial 

resources towards analyzing and preparing to comply with the final mandatory GHG 

Reporting Rule for large emitting sources, which was finalized in September 2009. 

Further compounding the already tight timeline, the GHG rulemaking comment deadlines 

fall within the holiday season-the Motor Vehicle GHG Rule comments were due during 

the Thanksgiving holiday and the GHG Tailoring Rule comments are due immediately 

after Christmas, times when many U.S. businesses and state agencies are closed and/or 

short staffed. As the Associations explained in the November 18 request, the GHG 

rulemakings are legally and technically complex, with significant and likely 

unprecedented consequences for the Associations, their members, and the U.S. economy 

as a whole. Each rulemaking on its own requires sufficient time and resources to fully 

evaluate the consequences of the rulemaking, develop data and analyses, and formulate 

appropriate comments. Given the close timing of the publication of the GHG 

rulemakings, the current comment periods are simply insufficient to allow the 

Associations a fair opportunity to do so. [OAR-2009-0472-11277, p.3] 

Furthermore, the GHG rulemakings are so interrelated that many comments on the GHG 

Tailoring Rule are equally applicable to both the PSD Interpretive Memo and the Motor 

Vehicle GHG Rule, and vice-versa. This is particularly important with regards to the 

Motor Vehicle GHG Rule's impacts on stationary sources. At the time of publication, 

Association members as well as many other U.S. businesses, states, and consumers, were 

not on notice of the Rule's severe consequences for stationary sources. The Motor 

Vehicle GHG Rule does not even mention, let alone fully address, the impacts on 

stationary sources; rather, it disingenuously presents itself as a rulemaking solely 

affecting light-duty motor vehicles. Not until October 27, 2009, just 30 days prior to the 

Motor Vehicle GHG Rule comment deadline, did the GHG Tailoring Rule's publication 

in the Federal Register put the American public and the regulated community officially 

on notice that the CAA Section 202 regulations to control GHG emission from motor 

vehicles would 'trigger PSD and title V applicability requirements for GHG emissions.' 

And EPA has still not conducted a full Regulatory Impact Analysis assessing the 

combined results of the three interrelated rulemakings. [OAR-2009-0472-11277, p.3] 

Comments submitted in the Motor Vehicle GHG Rule docket reflect the inadequacy of 

public notice regarding the Rule's impacts on sources other than motor vehicles. As the 

South Carolina Department of Health and Environmental Control explained in comments 

on the Motor Vehicle GHG Rule: 

We are concerned that EPA may not be as transparent as they should be and that they are 

sending mixed or confusing messages about the potential impact of the light-duty vehicle 

GHG proposal on all sources that could be impacted, in particular small business. EPA 

actually suggested to affected entities that they should not comment on the light-duty 

vehicle GHG proposal but should instead submit comments on the proposed 'tailoring 

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Other Comments 

rule.' We believe that EPA was misleading to suggest this and that it may inappropriately 

influence small business, industry, and other affected entities to refrain from commenting 

on an important rulemaking. [OAR-2009-0472-11277, pp.3-4] 

The absence of comments on the Motor Vehicle GHG Rule's impact on stationary 

sources in many submissions, reflects the accuracy of South Carolina's prediction. Many 

organizations have heeded EPA's direction to submit comments on PSD and Title V 

permitting requirements in the GHG Tailoring Rule docket only, and may have missed 

EPA's subsequent suggestion that the Motor Vehicle GHG Rule, and not the GHG 

Tailoring Rule, imposes these requirements. [OAR-2009-0472-11277, p.4] 

To ensure an adequate and complete record for the GHG rulemakings, to give 

commenters a fair and full opportunity to analyze the proposals individually and 

collectively, and given the close timing and interrelatedness of the rulemakings, the 

Associations respectfully request that either: (1) EPA and NHTSA extend the public 

comment deadline for the Motor Vehicle GHG Rule until December 28, 2009, and that 

EPA extend the public comment deadlines for both the GHG Tailoring Rule and the PSD 

Interpretive Memo Reconsideration until January 28, 2010; or alternatively (2) that EPA 

consider comments submitted in the GHG Tailoring Rule to be submitted in both the PSD 

Interpretive Memo Reconsideration and Motor Vehicle GHG Rule dockets, and viceversa. The Associations believe that a failure to grant this reasonable request would be 

arbitrary and capricious. [OAR-2009-0472-11277, p.4] 

The NAM supports the Administration’s goal to harmonize fuel efficiency standards by 

implementing a federal rule that will pre-empt disparate state and regional programs. 

However, manufacturers believe that the process established by EPA, by using the Clean 

Air Act as its primary statutory vehicle, is deeply flawed and will have the unintended 

and unmanageable consequence of triggering regulation of millions of stationary sources. 

By resorting to the CAA, the EPA has established a process that will undermine private 

and public efforts to recover from the deepest economic downturn since the 1930s. 

Alternatively, the EPA should promulgate a rule that adequately decouples the goal of 

achieving greater fuel efficiency and reduced light-duty vehicle GHG emissions from the 

consequence of regulating GHG emissions from millions of stationary facilities. Any 

failure to do so will inflict harm on the manufacturing sector for which the NAM must 

seek appropriate remedies, legislative or otherwise. [OAR-2009-0472-7215.1, p.5] 

National Climate Coalition 

Stabilizing atmospheric greenhouse gas concentrations will require the transformation of 

our energy, manufacturing and transportation systems. We believe that this is the work of 

Congress. Federal legislation should not only take a broad, flexible multi-sector 

approach, but also must be designed to meet multiple objectives, including energy and 

transportation security, reliability and affordability; ensuring the economic 

competitiveness of United States businesses; energy conservation; strategic technology 

development; and environmental performance. Such legislation should also allow for and 

define the appropriate involvement of other departments and agencies with expertise in 

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EPA Response to Comments 

energy, environment, security and transportation in addition to EPA – something that is 

necessary yet not permitted under the Clean Air Act. Our highest priority must be for 

Congress to establish a uniform national program that will be consistent with the 

emerging and overarching international framework. [NHTSA-2009-0059-0086.1, p.4] 

For a variety of reasons, the existing Clean Air Act is a poor mechanism for addressing 

climate change. Congressional intent in drafting the Clean Air Act was to identify and 

regulate sources based on their relatively large emissions. Such sources typically have 

also been financially able to bear the costs of regulation. By establishing major source 

thresholds, the Act excluded from regulation the large numbers of smaller sources that 

exist in the United States. The number of stationary sources subject to regulation has thus 

historically been relatively small. By all estimates, however, this number could grow by 

at least an order of magnitude, perhaps two, and affect for the first time many previously 

unaffected sources (e.g., large retail establishments, schools, hospitals and government 

facilities) if greenhouse gases are regulated in the same manner as criteria pollutants 

under NSR, and Title V — let alone §112, which has even lower thresholds for 

regulation. [NHTSA-2009-0059-0086.1, pp.4-5] 

The permitting thresholds under the Act, however, are keyed to emissions levels that are 

meaningful only in the context of regulating the local and regional health and welfare 

impacts of lower-emitting criteria or hazardous air pollutants. Even small sources have 

emissions of CO2 as a result of typical fuel use that would exceed current permitting 

thresholds on this basis. As EPA itself underscored in the ANPR and the Tailoring Rule 

Proposal, the PSD and Title V programs would sweep hundreds of thousands of sources 

not previously subject to regulation into the scope of the Clean Air Act, at great cost and 

consequence for the functioning of the economy and at great administrative burden on 

regulated sources, EPA, the states and local governments. EPA estimates that its 

approach in the Tailoring Rule would avoid over $55.6 billion in the first six years of 

regulation – or, stated differently, in the absence of the Tailoring Rule, the cost of 

compliance for affected sources and permitting agencies will increase by more than $55.6 

billion. [NHTSA-2009-0059-0086.1, p.5] 

Paradoxically, forcing the square peg of greenhouse gas emissions into the round hole of 

the existing Clean Air Act also has the potential to create adverse incentives that may 

stifle innovation and even increase greenhouse gas emissions. This could occur, for 

instance, if a company decides to delay improvements that would otherwise reduce 

emissions intensity to avoid triggering regulatory requirements, as we have seen occur 

time and time again under the New Source Review programs. A practical example of this 

situation is a turbine upgrade at an electric generating station. While the project results in 

more efficient production of electricity, if that energy efficiency were projected to result 

in more criteria pollutant emissions on an annual basis due to increased operations, it is 

likely the project would not be pursued due to the time consuming and expensive 

requirements of the New Source Review programs, including the likely need to 

implement additional controls for all pollutants that exceed the NSR pollutant thresholds. 

That is contrary to the desired outcome. [NHTSA-2009-0059-0086.1, p.5] 

7-36 
Other Comments 

Regulation under the Clean Air Act has historically focused on control of criteria and 

hazardous air pollutants to address the local or regional human health, welfare and 

environmental impacts. The architecture of the Clean Air Act is thus premised on the 

concept that state, regional and federal control of emissions will improve air quality in 

the corresponding area. This is not accurate as to greenhouse gases. The greenhouse 

effect is global -- and localized (or even United States-wide) emissions reductions will 

not result in environmental benefits to the United States in the absence of corresponding 

international action. Moreover, greenhouse gases at current and projected atmospheric 

concentrations have no known direct adverse human health impacts to which to link 

standards, and any environmental and welfare impacts only occur over substantial time, 

due to the indirect effects of aggregate global levels of greenhouse gases. Thus, 

greenhouse gases present a particular regulatory challenge. The same requirements that 

apply to emissions of criteria pollutants from stationary sources are not likely optimally 

to control and provide the most effective incentives to reduce greenhouse gases 

emissions. [NHTSA-2009-0059-0086.1, p.5] 

Because the Clean Air Act is such a poor vehicle for addressing climate change, we 

believe that further federal legislation is the best approach to reduce emissions that 

may contribute to global warming. We recognize that the Supreme Court’s decision in 

Massachusetts v. EPA may require the Agency to commence regulatory action in absence 

of, or in the face of delayed, Congressional action. Congress, however, is poised to act. 

Comprehensive climate change and energy legislation has been passed by the U.S. House 

of Representatives, H.R. 2454 - the American Clean Energy and Security Act of 2009 

(Waxman-Markey), and the Senate is considering stand alone climate change legislation, 

the “Clean Energy Jobs and American Power Act” (Kerry-Boxer), and energy legislation, 

S. 1462 - the American Clean Energy Leadership Act of 2009 (ACELA). The NCC urges 

EPA and the Administration to work in support of prompt Congressional efforts, and 

exercise its authority only where it can adopt flexible, appropriate measures to control 

greenhouse gases in a manner best designed to facilitate ultimate Congressional action. 

[NHTSA-2009-0059-0086.1, pp.5-6] 

Absent Congressional Action, Should EPA Decide To Regulate Mobile and Stationary 

Sources Under The Clean Air Act, It Must Select Appropriate Trigger Dates On Which 

Regulatory Requirements Would Apply to Stationary Sources 

EPA proposed three interrelated actions with respect to greenhouse gases emissions 

within weeks of each other: the Light Duty Vehicle Rule, the Interpretive Rule, and the 

Tailoring Rule. In the Interpretive Rule proposal, EPA supports the position that a 

greenhouse gas becomes a “regulated pollutant” once it is “subject to regulation” in the 

form of an “actual control” under a final and “effective” Clean Air Act national 

regulation. See PSD Interpretive Rule, 74 F.R. 51538-41, 51545-46. EPA proposes that 

the Light Duty Vehicle Rule, which it intends to finalize by March 30, 2010, would 

present the first such rule applicable to any greenhouse gas emissions. See PSD 

Interpretive Rule, 74 F.R. 51547. Unless Congress enacts preemptive legislation, the 

combined effect of EPA’s positions in the PSD Interpretive Rule, the Light Duty Vehicle 

Rule and the Tailoring Rule (which would phase-in and tailor application of PSD and 

7-37 
EPA Response to Comments 

Title V to stationary sources) would be to subject stationary sources to PSD and Title V 

requirements on the “effective date” of the Light Duty Vehicle Rule – as soon as 60 days 

after publication of the final Light Duty Vehicle Rule in the Federal Register 

(approximately June 2010). See PSD Interpretive Rule, 74 F.R. 51545-46; Tailoring 

Rule, 74 F.R. 55294, 55299- 55300. 

The NCC intends to submit comments on the Interpretive Rule supporting EPA’s initial 

and currently-supported interpretation that the date on which a pollutant becomes subject 

to an “actual control” under a final national rule is a better measure of the date at which a 

pollutant becomes “subject to regulation” than the other options discussed by EPA in the 

Interpretive Rule. However, we also intend to indicate that we believe EPA’s preferred 

choice of the “effective date” of such a rule, while a better choice than promulgation date, 

still does not properly mark the date on which a pollutant is actually controlled. Instead, it 

is the “first substantive compliance date” of that national rule establishing emission 

standards for greenhouse gases that is the date on which those greenhouse gases will be 

actually controlled and, thus, subject to regulation. [NHTSA-2009-0059-0086.1, pp.6-7] 

Assuming for purposes of these comments that EPA will implement the “effective date” 

approach in the Interpretive Rule rather than the “first substantive compliance date” 

approach advocated by the NCC, we request that EPA use the fullest extent of its 

discretion to set the effective date for the Light Duty Vehicle Rule as one that gives EPA, 

affected sources and permitting authorities the greatest lead time for implementation of 

the PSD and Title V programs’ applicability to greenhouse gases. In particular, we 

request that the effective date for the Light Duty Vehicle Rule be set no sooner than 

January 2, 2011 – the first date on which a 2012 model year vehicle can be produced. See 

Light Duty Vehicle Rule, 74 F.R. 49454; 40 CFR 85.2302-2304. [NHTSA-2009-0059­

0086.1, p.7] 

EPA has substantial discretion in setting the effective date of the Light Duty Vehicle 

Rule. While the effective date can be no sooner than 60 days after promulgation, there is 

no definite limit on how long after promulgation a rule must be effective. As noted by the 

Supreme Court in Massachusetts v. EPA,” EPA [] has significant latitude as to the 

manner, timing, content, and coordination of its regulations with those of other agencies.” 

Slip Op. at 30. Additionally, as documented at length by EPA in the Tailoring Rule, the 

long-held judicial doctrines of absurd results and administrative necessity support even 

agency action that would deviate from statutory language, if such action is necessary to 

avoid results contrary to Congressional intent or due to administrative necessity. See 

Tailoring Rule, 74 F.R. 55311- 55320. [NHTSA-2009-0059-0086.1, p.7] 

While the “effective date” the NCC promotes for the Light Duty Vehicle Rule would 

differ by only six months from that which would result from applying the minimum time 

between promulgation and effectiveness required by the Congressional Review Act, there 

are legal and policy factors that make these six months crucial for affected stationary 

sources and permitting authorities as they scramble to comply with PSD and Title V 

requirements as applied to greenhouse gases. The importance of affording EPA, affected 

sources and permitting authorities the necessary lead time to study and evaluate the 

7-38 
Other Comments 

emissions characteristics and control options for new pollutants prior to making 

emissions of those pollutants subject to PSD and Title V permitting requirements cannot 

be overstated. This is particularly true for sources that would be newly subject to Title V 

because of their potential to emit GHGs, and would therefore need to apply for Title V 

permits or synthetic minor permits (and their permitting authorities that would need to 

timely issue these permits). Furthermore, if phase-in approaches such as the Tailoring 

Rule are to provide true legal relief for potentially affected sources, the states which 

implement PSD and/or Title V under their own regulations will need this additional time 

- and perhaps more - to promulgate their own tailoring rules. [NHTSA-2009-0059­

0086.1, p.7] 

Thus, EPA should use the fullest extent of its discretion to set the effective date of the 

Light Duty Vehicle Rule’s emission standards for greenhouse gases in the manner that 

provides the greatest lead time for EPA, affected sources and permitting authorities to 

comply with the PSD and Title V requirements that will be triggered by the Light Duty 

Vehicle Rule. In particular, the “effective date” of the Light Duty Vehicle Rule should be 

set no sooner than January 2, 2011, the first date on which any model year 2012 vehicle 

could be produced which would have to comply with the greenhouse gas emissions 

standards in that rule. [NHTSA-2009-0059-0086.1, pp.7-8] 

The National Climate Coalition appreciates the opportunity to submit these comments 

and looks forward to providing further input. We encourage EPA to work with Congress 

towards prompt national greenhouse gas legislation. If EPA must continue to move ahead 

with rulemakings under the Clean Air Act, then we urge the Agency to exercise its 

discretion to limit application of those sections of the statute that would impose 

unintended economic harm and divert scarce public and private resources without 

commensurate benefit in stabilizing global greenhouse gas concentrations. As 

appropriate, in the course of regulating greenhouse gases under the statute, EPA also 

should seek prompt Congressional confirmation that such harmful provisions may be so 

limited or need not be implemented to address climate change. [NHTSA-2009-0059­

0086.1, p.8] 

National Cotton Ginners Association 

Neither the NCGA nor other gin associations had intended to comment on this proposal 

since our primary concern is the effect of Greenhouse Gas (GHG) regulations on 

stationary sources. For this reason, we had not exhausted much effort evaluating this 

docket until the proposed Greenhouse Gas Tailoring Rule was proposed on October 27, 

2009 (74 FR 55292). The proposed Tailoring Rule is based on the assumption that the act 

of regulating GHG emissions from automobiles under the Clean Air Act will trigger 

regulatory requirements that affect stationary sources (i.e., PSD/NSR and Title V 

programs) of GHG emissions. In supporting documents for the Tailoring Rule, EPA 

estimates that without this rule, over 6 million stationary sources will become subject to 

Title V, permitting requirements at a cost of over $38 billion. EPA is using the Tailoring 

Rule to adjust the stationary thresholds to a more manageable level, relying on “absurd 

7-39 
EPA Response to Comments 

results” and “administrative necessity” doctrines as legal justifications for modifying 

statutory thresholds. 

If the analysis of the Tailoring Rule is correct, then the additional cost burden for 

stationary sources should be reflected in the economic analysis for the Light Duty 

Vehicle GHG Rule. The impact of this rulemaking on stationary sources was not 

considered. Proper consideration of the complete cost picture is very important in this 

docket. This is especially true, considering that EPA would gain almost all of their GHG 

reductions from Light Duty Vehicles through the NHTSA CAFE standards. If EPA used 

the CAFE standards to calculate GHG reductions, the GHG reductions would remain 

very comparable, and the unnecessary regulatory burden on stationary sources could be 

avoided. 

It appears that the origin of the “absurd results” and “administrative necessity” lies in this 

very docket, and the solution to the “absurd results” and “administrative necessity” is 

achievable through the CAFE standards without significant loss of GHG reduction 

benefits. 

NCGA strongly requests that EPA review the full economic impact of this rule, 

considering all costs: both those currently in the Light Duty Vehicle proposed rule and 

those outlined in the proposed Tailoring Rule before promulgating any rule for Light 

Duty Vehicles. In addition, EPA should clearly evaluate the benefits of regulations solely 

based on CAFE standards. Finally, EPA should consider extending the comment period 

in this docket, considering the significant additional costs that are discussed in the 

Tailoring Rule proposal. [OAR-2009-0472-7209.1, pp.1-2] 

National Mining Association (NMA) 

NMA believes that the economic and regulatory implications a final motor vehicle rule 

will have for all sources of GHG emissions economy-wide will be extraordinarily 

significant. EPA has neglected, however, to conduct required statutory analyses of these 

impacts. EPA implies in this rule and explains in its proposed PSD tailoring rule that it 

understands the regulatory consequences under the CAA that will result when the motor 

vehicle rule is finalized. The agency has not, however, taken the necessary steps to avoid 

these consequences, nor to avoid the legal ramifications that may jeopardize the rule. 

[OAR-2009-0472-7237.1, p.2] 

A final light-duty motor vehicle rule will trigger regulatory requirements under the PSD 

program of the CAA that will result in significant economic and regulatory 

consequences. [OAR-2009-0472-7237.1, p.2] 

[See Docket Number OAR-2009-0472-7237.1, pp.1-2 for detailed comments] 

NMA understands that EPA has formed an advisory committee to examine BACT 

options and that the agency intends to issue guidance on the subject in conjunction with 

final regulations. EPA has failed, however, to comply with its statutory obligations to 

7-40 
Other Comments 

analyze the cost of potential BACT to impacted industries. Whatever BACT is 

determined to be, complying with those requirements will pose significant cost to 

industry. If EPA has already gathered information on the type of BACT controls that may 

be required for industrial source categories, it has not made that information available as 

part of this rulemaking docket. [OAR-2009-0472-7237.1, p.3] 

[See Docket Number OAR-2009-0472-7237.1, pp.2-3 for detailed comments] 

Until State PSD programs are revised, the severe permitting consequences of a final 

motor vehicle rule that the proposed PSD tailoring rule is designed to avoid will come to 

fruition. [OAR-2009-0472-7237.1, p.3] 

Even if the PSD tailoring rule is finalized, and is successful accomplishing what EPA 

expects it to, all of the consequences described in the tailoring proposal will still occur, at 

least in the near term. In order for the “beneficial impacts” of the PSD tailoring rule 

[OAR-2009-0472-7237.1, p.3] to come to fruition, most states would first need to adjust 

their individual PSD programs accordingly. Although EPA approves state programs 

under the State Implementation Plan (SIP) process, each state program would remain 

legal and enforceable under state law until changed. [OAR-2009-0472-7237.1, p.4] 

[See Docket Number OAR-2009-0472-7237.1, pp.3-4 for detailed comments] 

EPA has failed in its statutory obligations to analyze the impacts of its proposed GHG 

regulations on the public. 

EPA is required by relevant Executive Orders and statutes to produce studies necessary to 

fully analyze the large economic and regulatory consequences that the motor vehicle rule 

will have on major stationary sources. As has been previously stated, EPA has conducted 

an RIA with respect to the motor vehicle rule, but those analyses are limited to the direct 

benefits and effects of GHG regulation of motor vehicles, and do not address the PSD 

effects on major stationary sources triggered thereby. [OAR-2009-0472-7237.1, p.4] 

[See Docket Number OAR-2009-0472-7237.1, pp.4-7 for detailed comments pertaining 

to: Regulatory Flexibility Act, CAA § 317, and Unfunded Mandates Reform Act] 

EPA is not obligated to finalize the motor vehicle rule in the time frame it has identified 

NHTSA is under a statutory obligation to promulgate CAFE standards by March 30, 

2010. EPA has identified this same date as the date it must finalize the motor vehicle rule. 

EPA, however, is under no statutory obligation to promulgate this rule, nor a deadline to 

finalize its portion of the Joint Motor Vehicle Proposal. 

EPA has failed in its obligation under various Executive Orders and statutes to review the 

economic and regulatory impacts on major stationary sources and the economy as a 

whole that will result when the proposed motor vehicle rule is finalized and becomes 

effective. EPA’s attempts to address these issues in other rulemakings are also precarious, 

and at the very least insufficient to satisfy the identified statutory mandates. Unlike 

NHTSA, EPA is not under deadline to promulgate the proposed standards. EPA has the 

7-41 
EPA Response to Comments 

authority and obligation to fully analyze the broad-ranging and significant impacts that 

the agency itself recognizes will occur after this proposal is finalized, and to make that 

analysis available to the public. [OAR-2009-0472-7237.1, p.8] 

For these reasons, NMA urges EPA to withdraw the motor vehicle rule and undertake a 

new, public process aimed at sufficiently analyzing all of the impacts that will result from 

such action. NMA appreciates this opportunity to submit these comments. [OAR-2009­

0472-7237.1, p.8] 

[See Docket Number OAR-2009-0472-7237.1, pp.7-8 for detailed comments] 

National Petrochemical & Refiners Association 

EPA’s Section 202 Rule Should Be Withdrawn or Reproposed Since It Violates Several 

Statutes and Executive Orders. 

In the proposed rulemaking, EPA has completely failed to take into account the enormous 

economic and regulatory consequences of this rulemaking on stationary sources. Even 

though the Agency's current interpretation of the CAA considers a final section 202 rule 

to constitute a “triggering” event that would require CAA permitting actions either at the 

time of promulgation of the rule or upon the effective date of the rule, the proposed rule 

and its associated “Regulatory [OAR-2009-0472-7234.1, p.3] Impact Analysis” (“RIA”) 

thoroughly ignore this consequence, a consequence that the Agency considers to be 

legally inevitable. Specifically, this proposed rule: [OAR-2009-0472-7234.1, p.4] 

[See Docket Number OAR-2009-0472-7234.1, pp.3-5 for detailed comments pertaining 

to: Violates the Paperwork Reduction Act, Violates the Regulatory Flexibility Act, 

Violates Executive Order 12866, Violates the Unfunded Mandates Reform Act, Violates 

Executive Orders 13132 and 13175, and Violates Executive Order 13211] 

EPA Is Not Required Either to Propose or Finalize the Section 202 Rulemaking At This 

Time. 

There is no statutory schedule or judicial order applicable to this rulemaking. 

EPA is proposing to regulate GHG emissions from individual manufacturer fleets sold in 

each model year. EPA relies on CAA section 202(a) to establish an attribute-based 

approach for a CO2 fleet-wide standard based on the footprint of the vehicle. EPA 

separately relies on section 202(a) to propose per-vehicle standards for nitrous oxide and 

methane emissions. In addition, EPA cites several other sections of Title II of the CAA 

that are relevant to the standards, including provisions affecting Agency discretion with 

regard to useful life, certificates of conformity, testing requirements, and warranties. 

[OAR-2009-0472-7234.1, p.6] 

[See Docket Number OAR-2009-0472-7234.1, pp.6-10 for detailed comments pertaining 

to: There is no statutory schedule or judicial order applicable to this rulemaking, There 

would not be a significant public health or environmental impact if EPA withdraws the 

proposed section 202 standards or delays finalization of such standards, EPA proposes to 

7-42 
Other Comments 

regulate only three GHGs, and If EPA were to withdraw or delay finalization of the 

proposal rules, regulatory delay and uncertainty would not result] 

EPA May Avoid “Impossible” Results By Redefining PSD Applicability 

As indicated above, EPA is not compelled to finalize the Section 202 rulemaking at this 

time, but has significant discretion as to the manner, timing and content of any action that 

it takes to respond to Massachusetts v. EPA. In addition, however, EPA can avoid 

“impossible burdens” the Agency identified in the Tailoring Rule (e.g., the nearimmediate expansion of state and local permitting programs to include assessments of 

GHG emissions) and at the same time properly confine the effects of this rulemaking to 

light duty vehicle manufacturers. As detailed below, the Agency should redefine PSD 

applicability to follow the clear language and structure of the CAA. By doing so, EPA 

could proceed to finalize the section 202 rulemaking while not imposing “impossible 

burdens” it has projected will result from this rulemaking. EPA could also avoid 

unnecessary and unsupported reliance on administrative law doctrines in the Tailoring 

Rule and comply with the CAA in the manner in which it is plainly written [OAR-2009­

0472-7234.1, p.10] 

[See Docket Number OAR-2009-0472-7234.1, pp.10-12 for detailed comments 

pertaining to: EPA May Avoid 'Impossible' Results By Redefining PSD Applicability] 

EPA Should Withdraw Its Proposed Section 202 Rules or Delay Finalization of the Rules 

In Order to Avoid “Impossible” Burdens That Could Result from Other CAA Provisions. 

EPA’s Legal Theories For Reducing the Burdens of the PSD and Title V programs in the 

Proposed Tailoring Rule Do Not Relieve the Agency of the Requirement to Analyze the 

Burdens That the Section 202 Rule Imposes. 

Under EPA's current interpretation of the CAA and associated regulations, PSD, and 

Title V permitting requirements will apply to new, modified and operating sources of 

GHGs as of 60 [OAR-2009-0472-7234.1, p.15] days following the Federal Register 

publication of this rulemaking. Since EPA expects to finalize the light duty vehicle 

rulemaking by the end of March 2010, this would mean that EPA would seek to apply 

permitting requirements to new sources and sources undergoing a major modification 

which increased emissions by late May/June of 2010 and require various state and local 

permitting agencies to also apply these requirements. Under EPA's current interpretation 

of the relevant law and regulations, existing sources could be required to apply for Title 

V operating permits covering GHG emissions one year later. [OAR-2009-0472-7234.1, 

p.16] 

[See Docket Number OAR-2009-0472-7234.1, pp.15-18 for detailed comments 

pertaining to: EPA has the ability to avoid 'impossible' results of this rulemaking and 

EPA must take time and effort to analyze the full burden of this rulemaking] 

The Rulemaking Process Is Unprecedented and Designed to Reach a Predetermined 

Result and Therefore Violates the Requirements of the Clean Air Act and the 

Administrative Procedure Act 

The “joint rulemaking” between EPA and NHTSA is unprecedented and calls into serious 

7-43 
EPA Response to Comments 

question how each Agency exerted independent judgment in fulfilling their separate 

statutory responsibilities under the CAA and EPCA. Moreover, the history of this 

rulemaking indicates that EPA and other Administration officials engaged in a series of 

meetings which predated this proposal and predetermined the end result of the 

rulemaking process either directly or through impermissible incentives to promulgate a 

final rule within certain parameters. Therefore, the rulemaking violates sections 202(a) 

and 307(d) of the CAA and requirements of the Administrative Procedure Act. Since the 

issues involve the timing, stringency and final form of the promulgated standards, they 

are of central relevance to the rule. [OAR-2009-0472-7234.1, p.18] 

[See Docket Number OAR-2009-0472-7234.1, pp.18-21 for detailed comments 

pertaining to: This 'joint rulemaking' is unprecedented and prevents EPA from exercising 

independent judgment, Agreements between the Administration, EPA, the Department of 

Transportation ('DOT'), the State of California and auto manufacturers have 

predetermined the content and overall result of this rulemaking, EPA's consideration and 

approval of the California waiver request under section 209 of the CAA improperly 

influenced the Agency's actions in this rulemaking] 

The Proposed Rule Violates the Administrative Procedure Act since EPA Did Not Seek 

Comment on When the Agency Should Act, By Virtue of this Rulemaking, to Make 

GHGs “Regulated Air Pollutants” Under the Clean Air Act 

In its proposed endangerment determination, EPA took comment on the question of 

whether the Agency should regulate GHGs individually, or as a group. EPA has 

otherwise indicated that finalization of the endangerment determination itself will not 

make any GHG a “regulated air pollutant” under the CAA. Therefore, if EPA considers 

this rulemaking to have the effect of making several GHGs “regulated air pollutants,” the 

Agency must take comment on the question of when the Agency should take action to 

affect the regulatory status of various GHGs by making them a “regulated air pollutants” 

subject to “actual control” under the Clean Air Act. As demonstrated in this rulemaking 

and in the proposed Tailoring Rule and proposed endangerment determination, EPA fully 

understands its actions to have enormous consequences under the CAA. This notice, by 

not taking comment on when EPA should take action to impose actual controls on 

emissions of GHGs under the CAA is deficient under 5 U.S.C. 553(b)(3). In effect, the 

proposed rulemaking ignores the elephant in the room. [OAR-2009-0472-7234.1, p.22] 

[See Docket Number OAR-2009-0472-7234.1, pp.22-23 for detailed comments 

pertaining to: The Proposed Rule Violates the Administrative Procedure Act since EPA 

Did Not Seek Comment on When the Agency Should Act, By Virtue of this Rulemaking, 

to Make GHGs “Regulated Air Pollutants” Under the Clean Air Act] 

Fuel Requirements 

NPRA also notes and would incorporate by reference comments filed by the American 

Petroleum concerning proposed fuel requirements in the Section 202 Rule. Fuel 

specification changes have not been proposed in this rulemaking, however the proposed 

rule and Draft Technical Support Document describe vehicle engine and equipment 

options that EPA believes will require lowering current sulfur requirements. NPRA 

7-44 
Other Comments 

believes there is inadequate lead time for such an action which would require 

considerable analysis and assessment for its impact on refineries. NPRA also supports 

API comments with respect to ethanol blended certification fuel, flexible fuel vehicle 

credits and dedicated alternative fuel vehicles. [OAR-2009-0472-7234.1, p.25] 

NISEI Farmers League 

The Nisei Farmers League submits these comments on behalf of growers, packers, and 

shippers in California, Oregon, Utah, and Washington. NFL represents more than 1,100 

operations in these states. We did not intend to participate in this docket, as our primary 

focus relates to the effect of Greenhouse Gas (GHG) regulations on stationary sources. 

For this reason, we had not spent much effort evaluating this docket until the proposed 

Greenhouse Gas Tailoring Rule was filed on October 27, 2009. 

The proposed Tailoring Rule is based on the assumption that the act of regulating GHG 

emissions from automobiles under the clean air act will trigger regulatory requirements 

affecting stationary sources of GHG emissions. In supporting documents for the Tailoring 

Rule, EPA estimates that without the Tailoring Rule, over 6 million stationary sources 

will become subject to Title V permitting requirements, at a cost of over 38 billion 

dollars. 

It would seem logical that if the analysis in the Tailoring rule is correct, then the 

additional cost burden for stationary sources should be reflected in the economic analysis 

for this docket. To the best of our knowledge, the impact of this rulemaking on stationary 

sources was not considered. 

Proper consideration of the complete cost picture is very important in this docket. This is 

especially true, considering that EPA could gain almost all of their GHG reductions from 

Automobiles through NHTSA' s CAFE standards. It would seem that if EPA used the 

CAFE standards to calculate GHG reductions, the GHG reductions would remain very 

comparable, yet the regulatory burden on stationary sources could be avoided. 

The proposed Tailoring Rule uses the doctrine of 'absurd results' as a portion of the 

justification for the proposed rule. It would appear that the origin of the 'absurd result' lies 

in this very docket, and the solution to the 'absurd result' is achievable in this docket 

without significant loss of GHG reduction benefits. 

EPA should review the economic benefit of this rule, considering all costs; both those 

currently in this docket, and those outlined in the proposed Tailoring Rule. In addition, 

EPA should clearly evaluate the benefit of regulations solely based on CAFE standards. 

Finally EP A should consider extending the comment period in this docket, considering 

the significant additional costs discussed in the Tailoring Rule proposal. [OAR-2009­

0472-7142.1, pp.1-2] 

Peabody Energy Company 

In particular, Peabody believes that EPA has failed, as a part of the motor vehicle GHG 

rulemaking, to conduct a number of analyses required by Executive Orders and statutes 

of the highly significant economic and regulatory effects that will result from PSD 

7-45 
EPA Response to Comments 

regulation of major source GHG emissions. Unless these analyses are produced and made 

subject to comment before the motor vehicle rule is finalized, the legal status of that rule 

will be in jeopardy. Moreover, apart from legal requirements and as a matter of sound 

regulatory policy, EPA should take the necessary steps to understand the consequences 

that will necessarily flow when the motor vehicle rule is finalized and numerous 

stationary sources become subject to GHG regulation under the PSD program. [OAR2009-0472-7223.1, p.1] 

Peabody understands that EPA has proposed the tailoring rule in order to defer PSD and 

Title V regulation for what that rule defines as small (non-major) GHG emitters – those 

whose potential to emit (PTE) CO2e emissions is less than 25,000 tons per year (tpy). 

Peabody further understands that the motor vehicle rule preamble asks that “concerned 

small entities” address their comments about PSD and Title V to the tailoring rule docket. 

Except as relevant to our comments here, Peabody will withhold its detailed comments 

on the small source issue for that docket. [OAR-2009-0472-7223.1, p.1] 

However, Peabody’s concern as to PSD impacts in the present docket relates not to the 

small-source emitters but to the major-source emitters. Except for defining the major 

source threshold at 25,000 tpy CO2e, the tailoring rule does not affect PSD regulation of 

major stationary sources of GHGs and indeed specifically states that normal PSD 

requirements will apply to such major sources. Thus, the motor vehicle rule is the EPA 

regulatory decision point that triggers PSD regulation of major-source emissions of 

GHGs and therefore, as a matter of law, EPA’s responsibility to examine the PSD 

consequences of that decision on major sources arises here. Accordingly, Peabody directs 

its comments on the major source PSD issue to the present docket and urges EPA to renotice the rule for further comment when it has produced the necessary studies. [OAR2009-0472-7223.1, p.2] 

PSD regulation will have two types of consequences for major-source GHG-emitters: it 

will result in significant Best Available Control Technology (BACT) requirements, and, 

at least in the near term, will make it very difficult to obtain needed PSD permits or 

permit modifications. [OAR-2009-0472-7223.1, p.2] 

Regulating light-duty motor vehicle GHG emissions will have far-reaching economic and 

regulatory consequences by subjecting most of the nation’s industrial production to GHG 

regulation under the PSD program 

As the tailoring rule preamble explains, EPA’s motor vehicle rule will make GHGs a 

regulated pollutant under the Clean Air Act (CAA) and will therefore trigger PSD 

regulation of major source GHG-emitters. According to the tailoring rule Technical 

Support Document (TSD), at the 25,000 tpy CO2e threshold, some 13,600 sources are 

major sources of GHG emissions throughout the economy. This represents the large 

majority of the nation’s fossil fuel-fired industrial base and accounts for 87 percent of the 

CO2 emitted by every stationary source of any size in America. [OAR-2009-0472­

7223.1,p .2] [See Docket Number OAR-2009-0472-7223.1, pp.2-4 for a detailed 

discussion on this issue.] 

7-46 
Other Comments 

Despite the tailoring rule, regulating light-duty motor vehicle GHG emissions will have 

the further consequence for major sources of essentially making it impossible for them to 

obtain needed permits, at least in the near term 

According to EPA, without the tailoring rule, regulation of GHGs triggered by the motor 

vehicle rule will result in sustained regulatory gridlock in the PSD and Title V programs. 

EPA says that “the number of [PSD] permit applications would increase by 150-fold, an 

unprecedented increase that would far exceed administrative resources.” Moreover, 

“[p]ermitting authorities have estimated that it would take 10 years to process a PSD 

application, on average, and the resulting backlog would affect the permit applications for 

all sources, not just GHG emitters. This backlog would grow by tens of thousands each 

year following the triggering of PSD applicability.” EPA estimates that there would be 

“some 6.1 million” Title V permit applications, a number that is “almost 100 times 

greater than what Congress expected,” which would lead to “multi-year delays in permit 

issuance.” [OAR-2009-0472-7223.1, p.4] 

EPA also states that this regulatory gridlock would not be confined to just small sources. 

As EPA states, “a literal application of the 100/250 tpy thresholds would sweep into the 

PSD program tens of thousands of smaller sources that Congress did not intend to 

include, and the resulting strain on administrative resources would preclude the hundreds 

of larger sources that Congress did intend to be subject to the program from obtaining 

permits at least for an initial period of time.” [OAR-2009-0472-7223.1, p.4] 

EPA says that the tailoring rule will prevent these dire consequences from occurring, but 

that is not the case, at least in the near term. The tailoring rule preamble frankly 

recognizes that most states have adopted their own PSD programs. Although these 

programs are submitted to and approved by EPA as a part of the State Implementation 

Plan (SIP) process, these programs retain independent legal force under state law. 

According to EPA, “virtually all of [these state permit programs] establish the PSD 

permitting threshold at the 100/250-tpy level,” and in fact “a few states have adopted 

lower permitting threshold levels.” Similarly, “virtually all EPA approved SIPs establish 

the significance level for any new pollutant that it covers – including GHG emissions, if 

covered – at zero.” This means that, under state law in most states, once GHGs become 

regulated pollutants, any major-source modification that increases GHG emissions by any 

amount will trigger PSD applicability. [OAR-2009-0472-7223.1, pp.4-5] 

Under the tailoring rule, these state PSD provisions will no longer be enforceable as a 

matter of federal law. But, as EPA specifically states, the 100/250 tpy state thresholds 

and the zero state significance levels for CO2 will remain in effect as a matter of state 

law. Moreover, EPA says it will not issue a SIP Call, impose a Federal Implementation 

Plan, or take any other action that will require states to change their current thresholds 

and significance levels. Thus, absent state action to revise their PSD regulations, the 

regulatory gridlock that EPA predicts without the tailoring rule will occur anyway. 

[OAR-2009-0472-7223.1, p.5] 

7-47 
EPA Response to Comments 

EPA seems to be counting on the states’ unilaterally revising their PSD regulations, but 

EPA does not allow them any time to do so before GHGs become regulated pollutants 

triggering PSD and Title V requirements. Many states could take a year or more to 

change their regulations, and many require either legislative approval or legislative 

review of some kind. In the meantime, the regulatory gridlock that EPA predicts – for 

both large and small sources – will be a reality. Of course, EPA could defer the 

effectiveness of the motor vehicle rule until states have taken the necessary action, but 

that is not what EPA proposed in the tailoring rule. Under the regulatory structure EPA 

proposes to implement, a very large number of sources, both large and small, will 

become subject to PSD GHG requirements when the motor vehicle rule goes into effect, 

with the resulting regulatory quagmire, and that quagmire will abate only if and when 

most states amend their PSD rules. And indeed, since EPA will not compel states to 

change their rules, and instead takes the position that states can set any thresholds and 

significance levels below 25,000 tpy CO2e that they want, there is no assurance that 

states will in fact make the necessary changes. [OAR-2009-0472-7223.1, p.5] 

The impact of this state of affairs will ripple through the economy. As permitting comes 

to a stop because of an overwhelmed permit system, or because of uncertainty as to 

applicable regulatory requirements, construction activity for new projects and for a 

variety of building and facility expansions and upgrades will be forced to cease. This may 

not be the result that EPA. [OAR-2009-0472-7223.1, p.5] 

EPA cannot validly argue that it is not responsible for analyzing the costs of BACT 

controls for major source GHG emissions because of the state role in developing BACT 

requirements 

States that administer their own PSD programs undoubtedly play a significant role in 

determining BACT controls for major source emitters. But that fact does not relieve EPA 

of the obligation to examine the likely costs of GHG BACT controls that will be made 

necessary as a result of EPA’s decision to regulate GHG emissions from motor vehicles. 

[OAR-2009-0472-7223.1, p.9] 

As confirmed by the Supreme Court, although states have discretion in making BACT 

determinations, that discretion is ultimately controlled and circumscribed by EPA. As 

required by the CAA, the Agency promulgated regulations requiring states that 

administer their own PSD programs to submit those programs to EPA for approval as a 

part of their SIPs. EPA may disapprove a state’s PSD SIP and/or prevent construction of 

a project subject to PSD if a state, in EPA’s view, incorrectly applies BACT 

requirements. According to the Court, EPA’s authority “extends to ensuring that a state 

permitting authority’s BACT determination is reasonable in light of the statutory 

guides.” [OAR-2009-0472-7223.1, p.9] 

Thus, since it is EPA that is triggering the GHG BACT requirement by promulgating the 

motor vehicle GHG rule, and since it is EPA’s responsibility to ensure that states are 

conforming to the statutory BACT requirements that EPA is triggering, it is EPA’s 

obligation to assess the resulting economic consequences. Although EPA at this time 

7-48 
Other Comments 

perhaps cannot know exactly how stringent state BACT determinations will be, it can 

make reasonable assumptions both as to its own minimum requirements and as to likely 

states requirements. [OAR-2009-0472-7223.1, p.9] 

SCANA Corporation 

Either EPA has failed to evaluate the number of sources that could be affected once the 

Light-Duty Vehicle GHG Standards go into effect carefully, or it has recklessly 

disregarded the substantial, negative impacts. It would appear that EPA has grossly 

underestimated the number and types of facilities that will be impacted by the light-duty 

vehicle GHG proposal by making them subject to PSD pollutants and the Title V and 

PSD permitting requirements . The South Carolina Department of Health and 

Environmental Control (SCDHEC) has identified over 800 of [OAR-2009-0472-7316, 

p.1] the currently permitted small sources that they project would become subject to Title 

V and PSD permitting by virtue of the triggering provision as soon as GHGs become 

regulated under Light- Duty Vehicle GHG Standards. South Carolina currently has 281 

Title V permitted facilities. Did EPA evaluate the effects of a tripling of the number of 

Title V permitted facilities, in South Carolina alone, including the resources required to 

process them? We are being told to prepare for a three year permitting process, assuming 

resources are available. In addition to this impact, even the most minor modification or 

expansion activity may trigger a Prevention of Significant Deterioration (PSD) 

technology review and modeling analysis. And the technology review would encompass 

all of the triggered PSD pollutants, not just GHG. [OAR-2009-0472-7316, p.2] 

The GHG Tailoring rule is ill suited to address the problems caused when the Light-Duty 

Vehicle GHG Standards trigger the Title V and PSD permitting requirements. EPA must 

acknowledge that the GHG Tailoring rule may not even be in place at the time that EPA 

finalizes the Light-Duty Vehicle GHG Standards. EPA has stated clearly its intent to 

finalize the Light- Duty Vehicle GHG Standards by the end of March 2010. The public 

comment period on the GHG Tailoring rule ends on December 28, 2009. EPA 

undoubtedly will receive thousands of comments on the GHG Tailoring rule. It would be 

sheer folly to assume that it can consider and resolve those comments and finalize the 

rule in only three months, at least if EPA plans to conduct an honest and meaningful 

review of comments. No doubt, it will be a monumental task for EPA to review 

adequately all of the comments and make necessary, meaningful, and responsive 

revisions to the proposed rule. [OAR-2009-0472-7316, p.2] 

Recommended Alternative: EPA should not establish GHG emission limits under Section 

202(a) of the Clean Air Act. Instead, EPA and NHTSA should simply work together to 

establish fuel economy standards that accomplish the desired goals of substantial 

reductions in GHG emissions and improvements in fuel economy. If this simple and 

direct approach were taken, the other sections of the Clean Air Act (specifically Title V 

permitting and PSD permitting) would not be triggered. [OAR-2009-0472-7316, p.3] 

[See Docket Number OAR-2009-0472-7316, pp.1-3 for detailed comments] 

7-49 
EPA Response to Comments 

Sierra Research Inc. 

[Sierra Research Inc. Submitted Docket Number OAR-2009-0472-7977.1 as a comment 

attachment regarding the NHTSA Proposal for Average Fuel Economy Standards 

Passenger Cars and Light Trucks Model Years 2011-2015, Sierra Research, Inc., June 27, 

2008. No other comment document from Sierra Research Inc. was received.] 

South Carolina Chamber of Commerce 

Specifically, EPA has failed to carefully evaluate the number of sources that could be 

affected once the Light-Duty Vehicle GHG Standards go into effect . We feel that EPA 

has grossly underestimated the number and types of facilities that will be impacted by the 

light-duty vehicle GHG proposal by becoming subject to NSR pollutants and the Title V 

and NSR permitting requirements. While we continue to evaluate the specific impact to 

currently permitted South Carolina (SC) sources and will make comment to this effect to 

the 'tailoring rule,' South Carolina Department of Health and Environmental Control 

(SCDHEC) has identified over 800 of the currently permitted small sources that would 

become subject to Title V and NSR permitting as soon as GHGs are regulated under 

Light-Duty Vehicle GHG Standards. In comparison, SC currently has 281 Title V 

permitted facilities. In addition to this impact, even the smallest modification or 

expansion activity may trigger a Prevention of Significant Deterioration (PSD) 

technology review and modeling analysis. The technology review would encompass all 

of the triggered NSR pollutants, not just GHG. Economically, these facilities would have 

no choice but to abandon any new project or modification. It is interesting to note that 

many of these [OAR-2009-0472-7298, p.1] facilities would be subject to NSR and Title 

V permitting requirements because of natural gas combustion, which is considered to be a 

clean burning fuel. In addition, we would expect new construction to halt because of 

these new requirements. [OAR-2009-0472-7298, p.2] 

EPA must not rely upon the GHG Tailoring rule to address the fact that the Light-Duty 

Vehicle GHG Standards trigger the Title V and NSR permitting requirements. 

Furthermore, EPA must acknowledge that the GHG Tailoring rule may not be in place at 

the time that EPA finalizes the Light-Duty Vehicle GHG Standards. EPA has clearly 

stated its intent to finalize the Light-Duty Vehicle GHG Standards by the end of March 

2010. The public comment period on the GHG Tailoring rule ends on December 28, 

2009. EPA is expected to get thousands of comments on the GHG Tailoring rule and it 

would have only three months to address those comments and finalize the rule. This 

appears to be a monumental task if EPA is going to adequately review all of the 

comments and make necessary revisions to the proposed rule in response to critical 

comments received. [OAR-2009-0472-7298, p.2] 

EPA clearly believes that promulgation of the proposed Section 202(a) GHG rule will be 

extremely costly and a regulatory burden as evidenced by its preemptory promulgation of 

the Tailoring Rule. EPA explicitly states that the Tailoring Rule was promulgated for the 

sole purpose of addressing the paralyzing costs that would be borne by stationary sources 

in the wake of GHG regulation under Section 202(a). EPA notes in the Tailoring Rule 

7-50 
Other Comments 

that as soon as the Section 202(a) GHG rule is finalized, 'GHGs subject to regulation 

under that rule would become immediately subject to regulation under the PSD program.' 

If EPA had conducted a proper impact analysis of the proposed Section 202(a) GHG rule, 

it would have included an assessment of the obvious burdens that would be placed on 

stationary sources via the PSD permitting trigger. EPA cannot simply extricate portions 

of its cost analysis in order to provide a rule that is more economically feasible. Such an 

approach is arbitrary and does not provide the minimal required support for EPA's rule. 

[OAR-2009-0472-7298, p.2] 

The SC Chamber of Commerce believes that many existing facilities will need new Title 

V or PSD permits to replace, repair or improve the efficiency of aging equipment, 

including energy efficiency projects. Permitting delays will force facilities to evaluate the 

possibility of shutting down domestic operations and relocating to beyond the United 

States borders. Furthermore, small businesses, such as asphalt and concrete batch plants, 

metals manufacturing, the remaining textile industry, food packaging, wood products, 

even hospitals will be subject to many more requirements than they currently are (not just 

GHGs but also all other NSR pollutants). It will be significantly more costly for them to 

receive a permit and they will experience significant permit delays, discontinued 

construction and loss of jobs. This permitting process will grind economic development 

and industrial growth to a halt causing adverse consequences to an already struggling 

economy. [OAR-2009-0472-7298, p.3] 

[See Docket Number OAR-2009-0472-7298, pp.1-3 for detailed comments] 

South Carolina Department of Health and Environmental Control 

It is critical that all potentially effected entities understand the impact of EPA regulating 

greenhouse gas emissions under the light-duty vehicle proposal. It will be too late to 

address any concerns that stationary (industrial) sources have in the 'tailoring rule' as they 

will already be subject to PSD, as defined in the Clean Air Act, once EPA regulates 

greenhouse gases from light-duty vehicles. There are fundamental issues related to the 

'tailoring rule,' and EPA's continued message of the 'absurd results' and 'administrative 

burden' of not moving forward with a 'tailoring rule' only confuses the real situation as 

the thresholds being proposed are 'illegal' under the Clean Air Act and violate many state 

laws across the country. Any permit issued with thresholds higher than those within the 

Clean Air Act and current state laws would be vulnerable to appeal and litigation, even 

though EPA attempts to justify the tailoring rule by saying that by not doing so would 

create results 'so illogical or contrary to sensible policy as to be beyond anything that 

Congress could reasonably have intended.' We do not understand how EPA could know 

this and not also know that there is no guarantee their legal interpretation to exempt small 

sources or set different thresholds in the tailoring rule will not be challenged or if 

challenged, upheld in court. We are very concerned with EPA moving forward in this 

direction. 

Again, we have significant concerns about the collateral effects of EPA moving forward 

at this time to regulate greenhouse gas emissions from light-duty vehicles. EPA must 

7-51 
EPA Response to Comments 

fully evaluate the collateral impact this proposal would have on all other aspects of the 

Clean Air Act including, but not limited to, the impact on state and local air permitting 

authorities, business, industry and the economy to all areas of the country, but in 

particular states like South Carolina who still employ many people in the manufacturing 

sector. As they have not fully evaluated the impact to state and local permitting 

authorities, EPA has not met the requirements under the Unfunded Mandates Reform Act 

of 2005 for the light-duty vehicle GHG proposal. EPA even states in the tailoring rule for 

stationary sources, 'State permitting authorities would be paralyzed by permit 

applications in numbers that are orders of magnitude greater than their current 

administrative resources could accommodate' yet they have not taken this into 

consideration in the light-duty vehicle greenhouse gas proposal. 

Finalizing this proposal would have a detrimental effect on our state's economy at a time 

when unemployment is currently at 12.1% and is only expected to increase. Once EPA 

'regulates' greenhouse gas emissions from mobile sources, the Clean Air Act requires that 

stationary sources be regulated under the threshold requirements as specified within the 

Clean Air Act -regardless of any 'tailoring rule' EPA develops -as those thresholds are 

specified within federal law. States and local permitting authorities are wholly 

unprepared for the millions of entities who will be required to comply with the Clean Air 

Act once greenhouse gas standards are set by EPA on light-duty vehicles. Bottom line, 

the permitting process will become so backlogged as to create a permitting moratorium. 

New business and industry will not be built; existing business will not expand; and, 

existing business and industry will not repair equipment if such repairs would require a 

permit. Again, detrimental effects and unintended consequences with the minimum 

environmental benefit that would occur from EPA greenhouse gas standards on light-duty 

vehicles, as almost all of the environmental benefit comes from NHTSA's CAFE 

standards.[OAR-2009-0472-7202.1, p.3] 

Again, we ask that EPA not move forward until further review and understanding of the 

full collateral impact of regulating greenhouse gases from tailpipes is completed and 

appropriate public participation is allowed. We also challenge EPA to take this 

opportunity to develop a well thought out, comprehensive, holistic, common sense 

approach to air quality management that focuses on environmental results and not 

process. [OAR-2009-0472-7202.1, p.6] 

In summary the commenter is concerned about detrimental effect on state's economy, 

budget shortfalls and extra work load related to permitting. 

South Carolina Manufacturers Alliance (SCMA) 

ACCORDING TO EPA'S OWN LEGAL ANALYSIS, GHGS ARE NOT CURRENTLY 

POLLUTANTS 'SUBJECT TO REGULATION' UNDER THE CAA 

As evidenced by EPA's legal analysis in its recently proposed rule reconsidering the 

December 18, 2008 'PSD Interpretive Memo', and supported by historic Agency practice 

and decisions of EPA officials, GHGs are not pollutants that are currently 'subject to 

regulation' under the CAA. EPA has long held that for a pollutant to be 'subject to 

7-52 
Other Comments 

regulation' there must be actual control measures and not mere monitoring or reporting 

requirements. [OAR-2009-0472-7296, p.2] 

Although GHGs are not currently 'subject to regulation' under the CAA, once EPA 

finalizes a rule to regulate GHG emissions under CAA Section 202, legal arguments can 

be made that other CAA regulatory requirements will be triggered, thus affecting 

stationary source CAA compliance. Due to the strong possibility that EPA could be 

legally compelled to regulate GHG emissions from stationary sources as a result of this 

regulation, it is unreasonable and arbitrary for EPA to not analyze impacts on the tens of 

thousands of sources that could be required to limit their GHG emissions. EPA has failed 

to conduct a proper impact analysis. [OAR-2009-0472-7296, p.1] Such an analysis would 

identify the significant burdens the rule would place on stationary sources and the 

resulting impact on jobs and the nation's economy. The CAA is not an appropriate 

vehicle to regulate GHGs and such a task is better left for the members of U.S. Congress 

to address. [OAR-2009-0472-7296, p.2] 

[See Docket Number OAR-2009-0472-7296, p.2 for detailed comments] 

IF GHGS ARE REGULATED UNDER SECTION 202 OF THE CAA, IT IS LIKELY 

THAT OTHER REGULATORY REQUIREMENTS WILL BE TRIGGERED [OAR2009-0472-7296, p.2] 

There are strong legal arguments that indicate that if the proposed Section 202(a) GHG 

rule is finalized it will generate an array of other regulatory requirements. Specifically, it 

is likely that regulation of GHGs under Section 202 will trigger requirements under the 

Prevention of Significant Deterioration (PSD) program. This is acknowledged by EPA in 

a proposed rule published in the Federal Register on October 27, 2009 (Prevention of 

Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Proposed Rule) 

(the Tailoring Rule). In the opening paragraphs of the Tailoring Rule, EPA notes that that 

once GHGs are regulated under Section 202(a) PSD permitting requirements will 

immediately apply to stationary sources emitting GHGs above the significance threshold. 

[OAR-2009-0472-7296, p.3] 

[See Docket Number OAR-2009-0472-7296, p.3 for detailed comments] 

EPA HAS FAILED TO CONDUCT AN ADEQUATE ANALYSIS OF THE IMPACTS 

THAT THIS MOBILE SOURCE GHG RULE WILL HAVE ON STATIONARY 

SOURCES 

EPA has failed to conduct a complete analysis of the impacts associated with regulating 

GHGs under Section 202(a) of the CAA. EPA has openly acknowledged that the 

promulgation of standards to control GHG emissions from light-duty motor vehicles 

under Section 202(a) will inevitably trigger PSD permitting requirements for stationary 

sources; nonetheless, EPA has not included in this proposal an impact analysis that 

addresses the effect this rule will have on stationary sources. This represents a major flaw 

in the proposed rule. [OAR-2009-0472-7296, p.3] 

7-53 
EPA Response to Comments 

SCMA strongly requests that EPA not proceed with finalizing the proposed Section 

202(a) GHG rule because the proposed rule will trigger other regulatory requirements, 

and EPA has failed to conduct a proper impact analysis . This rule and the other recent 

GHG regulatory proposals combined demonstrate clearly that EPA should defer action to 

allow the U.S. Congress to settle on a national approach through comprehensive 

legislation that is economy-wide, which will have a better chance of balancing the 

economy-altering changes that the proposed finding will ultimately bring. [OAR-2009­

0472-7296, p.4] 

[See Docket Number OAR-2009-0472-7296, pp.3-4 for detailed comments] 

South Carolina Pulp & Paper Association (SCPPA) 

SCPPA believes that EPA has tremendously underestimated the number and types of 

facilities that will be impacted by the light-duty vehicle GHG proposal (i.e., residential 

home heating gas-fired furnaces above 0.5 million BTU/hour would trigger the major 

source thresholds for GHGs). We question whether EPA has adequately evaluated the 

consequences and collateral impacts of the proposed rule and request that EPA delay any 

action until further analysis and understanding of these impacts has been completed. 

[OAR-2009-0472-7479, p.1] 

Even the smallest modification, energy efficiency project, or expansion activity at our 

facilities could trigger a Prevention of Significant Deterioration (PSD) technology review 

and modeling analysis. The technology review would encompass all of the triggered NSR 

pollutants, not just GHG. Economically, our facilities may have no choice but to abandon 

any new project or modification. [OAR-2009-0472-7479, p.1] 

EPA must not rely upon the GHG Tailoring rule to address the fact that the Light-Duty 

Vehicle GHG Standards trigger the Title V and NSR permitting requirements. While this 

sort of rule would reduce the impacts of EPA's adoption of the GHG tailpipe standards to 

a degree, the impacts on businesses and regulatory authorities would still be dramatic, 

and they would be a direct result of the proposed GHG tailpipe standards for which EPA 

has never completed a statutorily required impact analysis. Furthermore, EPA must 

acknowledge that the GHG Tailoring rule may not be in place at the time that EPA 

finalizes the Light-Duty Vehicle GHG Standards, or may be rejected by the court as 

arbitrary and capricious and beyond EPA's Clean Air Act authority. [OAR-2009-0472­

7479, p.2] 

SCPPA believes that many existing facilities will need new Title V or PSD permits to 

operate, replace, repair or improve the efficiency of aging equipment, including energy 

efficiency projects. Permitting delays will force facilities to evaluate the possibility of 

shutting down domestic operations and relocating outside the United States. Furthermore, 

our smaller wood products facilities will be subject to many more requirements than they 

currently are (not just GHGs but also all other NSR pollutants). It will be a significant 

cost for them to receive permits and they will experience significant permit delays, 

discontinued operation, and loss of jobs. This permitting process will grind economic 

7-54 
Other Comments 

development and industrial growth to a halt causing adverse consequences to an already 

struggling economy. [OAR-2009-0472-7479, p.2] 

Recommendation 

SCPPA believes that EPA should not establish GHG emission limits under Section 

202(a) of the Clean Air Act. EPA should take into consideration that the new NHTSA 

CAFE standards accomplish the goals of the Light-Duty Vehicle GHG Standards and 

EPA should not finalize any GHG emission standards under the authority of the Clean 

Air Act. Virtually all of the GHG emission reductions required by the Light-Duty Vehicle 

GHG Standards come from the improvement to NHTSA's CAFE standards. Therefore, 

the additional EPA regulation comes at an enormous cost with virtually no additional 

environmental benefits. [OAR-2009-0472-7479, p.2] 

Southeastern States Air Resource Managers, Inc. (SESARM) 

We do, however, have significant concerns with the subject rule as currently proposed, 

primarily due to expected impacts from it triggering other sections of the Clean Air Act, 

specifically New Source Review (NSR) and Title V permitting. We do not believe that 

EPA has thoroughly examined these impacts. We further do not believe that EPA has 

adequately evaluated the options for minimizing, or avoiding, these collateral impacts. 

Our concerns are described herein along with recommended changes that will still 

produce the intended results of the proposed rule while minimizing or avoiding these 

collateral impacts. [OAR-2009-0472-7137.1, p.2] 

EPA must evaluate, as a part of this rulemaking, whether or not other sections of the 

Clean Air Act will be triggered by this rule. If so, EPA must evaluate as part of this 

rulemaking the impacts of such triggering. Our understanding is that this rulemaking is 

the action that will trigger future requirements for permitting of GHGs under the NSR 

and Title V programs. However, in the proposed rule, EPA actually suggested that ”small 

entities” should not comment on the triggering issue in this rulemaking, but should 

instead submit comments on the proposed “Prevention of Significant Deterioration and 

Title V Greenhouse Gas Tailoring Rule” (GHG Tailoring Rule).1 We believe that EPA 

was in error to suggest this point and that it may inappropriately influence small entities, 

other affected sources, and permitting agencies to refrain from commenting on an 

important rulemaking. The EPA GHG Tailoring Rule is a wholly independent rulemaking 

from the Light-Duty Vehicle GHG Standards Rule. The GHG Tailoring Rule does not 

trigger the NSR and Title V permitting requirements; the Light-Duty Vehicle GHG 

Standards Rule does. [OAR-2009-0472-7137.1, p.2] 

EPA failed to take into account in the Light-Duty Vehicle GHG Standards Rule the 

length of time that it may take for permitting authorities with SIP-approved NSR 

programs to go through rulemaking (which requires approval of state legislatures in some 

cases), hiring, and training in order to implement the mandate of regulating GHG 

emissions under the NSR and Title V permitting programs. [OAR-2009-0472-7137.1, 

p.2] 

7-55 
EPA Response to Comments 

The GHG Tailoring Rule appears to be legally vulnerable and may not provide intended 

relief from the NSR Prevention of Significant Deterioration (PSD) and Title V statutory 

permitting thresholds. If the GHG Tailoring Rule is not finalized in time or is stayed or 

vacated by the courts, the workload for permitting authorities will increase exponentially 

at a time when state and local governments are experiencing severe budgetary challenges 

due to the current economic climate. [OAR-2009-0472-7137.1, p.3] 

EPA has failed to evaluate and quantify fully the effects of the proposed Light-Duty 

Vehicle GHG Standards Rule on state and local air permitting authorities. More 

specifically, EPA does not appear to have complied fully with the Unfunded Mandates 

Reform Act of 1995. EPA states in the preamble that this rule only affects manufacturers 

of cars and light trucks. However, the proposed rule, if finalized as currently proposed, 

has the potential to affect state and local air permitting authorities immensely because it 

would cause GHG emissions to become regulated under the NSR and Title V permitting 

programs. The proposed rule does not take this into account. The potential impact to state 

and local air permitting authorities is unprecedented and enormous. [OAR-2009-0472­

7137.1, p.3] 

EPA claims that the proposed Light-Duty Vehicle GHG Standards Rule imposes no 

enforceable duty on any state, local or tribal governments. While the rule may not impose 

duties on governments as regulated entities, the negative impact of the rule on state and 

local permitting agencies cannot be overemphasized. As stated previously, the GHG 

Tailoring Rule acknowledges that state permitting authorities will be “paralyzed” by the 

workload created by the triggering of the NSR and Title V permitting provisions for 

GHG emissions. [OAR-2009-0472-7137.1, p.4] 

In the final Light-Duty Vehicle GHG Standards Rule, EPA should avoid or minimize the 

impacts of the triggering effect. EPA can accomplish the goals of this rule without 

triggering NSR and Title V permitting. [OAR-2009-0472-7137.1, p.4] 

Virtually all of the GHG emission reductions required by the proposed Light-Duty 

Vehicle GHG Standards Rule will come from improvements in NHTSA’s CAFE 

standards. EPA acknowledges that the only way to reduce CO2 emissions from light-duty 

vehicles is to increase fuel economy and that there are no emission control technologies 

that reduce CO2 emissions from light-duty vehicles. EPA states in the proposed rule that 

N2O and CH4 emissions are low and that the proposed rule is not designed to require 

technology to reduce emissions of these compounds. EPA then justifies the inclusion of 

the proposed emission standards with a seemingly conflicting statement that the agency is 

concerned about those emissions increasing in the future. Because of the enormous 

collateral consequences of regulating GHG emissions under the Clean Air Act at this 

time and because the proposed rule does not require reductions of N2O or CH4 

emissions, EPA should not finalize emission standards for N2O or CH4 as part of this 

rulemaking. [OAR-2009-0472-7137.1, p.5] 

As an alternative, should EPA promulgate GHG emission limits under Section 202(a) of 

the CAA, it may be possible to defer regulation of GHG emissions until the first vehicle 

7-56 
Other Comments 

model year required by the Light-Duty Vehicle GHG Standards Rule. [OAR-2009-0472­

7137.1, p.5] 

Spurgeon, C. M. 

To make matters worse, these regulations would start a regulatory cascade. EPA would 

start regulating emissions from millions of sources, including large buildings, churches, 

sports arenas, office buildings, farms, schools, hospitals—you name it. EPA will be 

forced to regulate greenhouse gases with many sections of the Clean Air Act, including 

sections 108, 111, and 112. This will further harm our economy, reduce American jobs, 

and worsen our employment situation. NHTSA already has the ability to regulate fuel 

economy without EPA further harming the economy. [OAR-2009-0472-7092.1, p. 2] 

Stanton, Neil 

To make matters worse, these regulations would start a regulatory cascade. EPA would 

start regulating emissions from millions of sources, including large buildings, churches, 

sports arenas, office buildings, farms, schools, hospitals—you name it. EPA will be 

forced to regulate greenhouse gases with many sections of the Clean Air Act, including 

sections 108, 111, and 112. This will further harm our economy, reduce American jobs, 

and worsen our employment situation. NHTSA already has the ability to regulate fuel 

economy without EPA further harming the economy. [OAR-2009-0472-10169, p.2] 

Texas Chemical Council (TCC) 

TCC opposes EPA's promulgation of the proposed light-duty vehicle rule because of 

significant concerns with the rulemaking process with respect to EPA's failure to perform 

an adequate review and analysis of the regulatory burdens and costs of this proposed 

rulemaking thereby depriving the public the opportunity to comment. In addition, we 

believe that the CAA was not designed, nor is it functionally suited, for the regulation of 

GHG emissions from mobile or stationary sources. Furthermore, moving forward with 

the rule is unnecessary since the corporate average fuel economy (CAFE) standard 

proposed by the National Highway Traffic Safety Administration will accomplish the 

same environmental benefits, but without the administrative and permitting burden that 

regulation of GHGs under the CAA is sure to cause. Finally, any regulation of 

GHG emissions under the CAA would harm the economic viability or the Texas 

chemical industry. [OAR-2009-0472-7290, p.2] 

The Proposed Rule Contains Significant Procedural Deficiencies 

In the proposed § 202 rulemaking, EPA considers the impact of the proposal on car and 

truck manufacturers, but provides insufficient review and analysis of the impact of this 

rule on stationary sources. The following statutes and Executive Orders require EPA to 

fully and transparently consider all regulatory costs and impacts of its proposed rules: 

Paperwork Reduction Act, Regulatory Flexibility Act, Unfunded Mandates Act, and 

Executive Orders 12866 (regulatory planning and review), 13132 (federalism 

implications), 13175 (coordination with Indian tribal governments) and 13211 (impacts 

7-57 
EPA Response to Comments 

on energy use, supply and distribution). In the proposed rule, EPA is legally required to 

consider the full regulatory impact of its action on stationary sources and cannot rely on 

other proposed rulemakings to provide that analysis. [OAR-2009-0472-7290, p.3] 

[See Docket Number OAR-2009-0472-7290, pp.2-3 for detailed comments] 

The CAA was Not Designed for the Regulation of GHG Emissions 

TCC strongly believes that the CAA is not the appropriate tool for regulating GHG 

emissions from mobile or stationary sources. Furthermore, there is no compelling reason 

- legal or otherwise - for EPA to proceed down this road at this time. In the 

Massachusetts decision, the Court gave EPA wide flexibility in the manner, timing, 

content and coordination of it regulations. Particularly in light of the fact that the U.S. 

House of Representatives has passed GHG cap-and-trade legislation, and the U.S. Senate 

is deliberating similar legislation, EPA should wait for Congress to proceed before it 

swiftly moves to regulate GHG emissions under a permitting mechanism that was not 

constructed, nor intended, to tackle the regulation of the vast number of sources that emit 

GHGs. 

[See Docket Number OAR-2009-0472-7290, pp.3-6 for detailed comments] 

Regulation of GHG Emissions under the CAA Would Harm the Texas Chemical Industry 

The Texas chemical industry is a leader in our state's economy. Our industry provides 

almost 600,000 direct and indirect jobs to Texans across the state. These jobs generate 

$27.3 billion in earnings. The chemical industry has invested more than $50 billion in 

physical assets in the state and pays over $1 billion annually in state and local taxes. 

Chemicals are also the state's number one export at over $30 billion annually. The 

products manufactured in Texas account for 60% of the U.S. chemical production, which 

go into millions of consumer products and many of which go into energy-efficient, high 

performance technologies and products for Texas and the rest of the nation, such as 

insulation, wind and solar power equipment, lightweight vehicle parts, compact 

fluorescent light bulbs and energy-efficient appliances. [OAR-2009-0472-7290, p.6] 

[See Docket Number OAR-2009-0472-7290, pp.6-8 for detailed comments] 

Texas Cotton Ginners Association 

The proposed Tailoring Rule is based on the assumption that the act of regulating GHG 

emissions from automobiles under the clean air act will trigger regulatory requirements 

affecting stationary sources of GHG emissions. In supporting documents for the Tailoring 

Rule, EPA estimates that without the Tailoring Rule, over 6 million stationary sources 

will become subject to Title V permitting requirements, at a cost of over 38 billion 

dollars. 

It would seem logical that if the analysis in the Tailoring rule is correct, then the 

additional cost burden for stationary sources should be reflected in the economic analysis 

7-58 
Other Comments 

for this docket. To the best of our knowledge, the impact of this rulemaking on stationary 

sources was not considered. 

The proposed Tailoring Rule uses the doctrine of 'absurd results' as a portion of the 

justification for the proposed rule. It would appear that the origin of the 'absurd result' lies 

in this very docket, and the solution to the 'absurd result' is achievable in this docket 

without significant loss of GHG reduction benefits. [OAR-2009-0472-7081.1, pp.1-2] 

Texas Department of Agriculture 

I am specifically concerned that the GHG provisions included in the motor vehicle 

proposal may impose Prevention of Significant Deterioration (PSD) and Clean Air Act 

Title V permitting requirements on a host of stationary sources . In the proposed PSD 

tailoring rules, EPA estimates that nationwide 'small sources' will be subject to 

approximately $38 billion in permitting costs under the Title V program. [OAR-2009­

0472-7300, p.1] 

Texas Industry Project (TIP) 

Global climate change is a serious issue that is best addressed through concerted 

international action and/or comprehensive federal legislation, rather than through 

unilateral agency regulation under the current Clean Air Act (“CAA” or the “Act”). Not 

only did the Supreme Court make clear in Massachusetts v. EPA that the U.S. 

Environmental Protection Agency (“EPA” or the “Agency”) has substantial discretion 

regarding the timing of any rules, but the Court of Appeals for the District of Columbia 

(“D.C. Circuit”) subsequently denied a petition to compel EPA action in response to 

Massachusetts v. EPA. [OAR-2009-0472-7430.1, p. 1] 

More importantly, Congress is moving forward quickly on comprehensive legislation that 

would address the problem of climate change outside of the structure of the current Act. 

Despite a clear need to proceed with the utmost caution in this important area, EPA has 

proposed to regulate GHG emissions from motor vehicles in the Proposed Rulemaking to 

Establish Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate 

Average Fuel Economy Standards (the “Motor Vehicle GHG Rule”). Under EPA’s 

current interpretation of the CAA, the Motor Vehicle GHG Rule may (as EPA has stated 

in the Proposed PSD and Title V GHG Tailoring Rule (the “PSD Tailoring Rule”) trigger 

regulation of GHG emissions from millions of stationary sources, including hundreds of 

thousands of Texas sources, many of which have never before been regulated under the 

Clean Air Act (“CAA”). [OAR-2009-0472-7430.1, p. 1] 

The Motor Vehicle GHG Rule, as well as its companion, the PSD Tailoring Rule, are 

fundamentally flawed, both procedurally and substantively, and Texas, as the nation’s 

leading energy producer and a leader in chemical manufacturing and agriculture, could 

be significantly impacted by these federal rulemakings. Most notably, EPA completely 

failed to evaluate the burdens of triggering PSD and Title V for GHG emissions under the 

required federal regulatory review statutes and Executive Orders. Furthermore, even had 

7-59 
EPA Response to Comments 

the Agency conducted the required burden analysis, the rule is unlawful, would devastate 

the Texas and national economies, and the burdens of regulating GHGs under CAA 

Section 202 far outweigh the insignificant environmental benefits of the GHG emission 

standards. [OAR-2009-0472-7430.1, pp. 1-2] 

Accordingly, for all of the reasons discussed in these comments, EPA should withdraw 

the Motor Vehicle GHG Rule, and proceed with caution going forward by allowing both 

the international community and Congress time to develop a comprehensive and sensible 

approach to the global problem of climate change. [OAR-2009-0472-7430.1, p. 2] 

[See OAR-2009-0472-7430.1, pp. 2-11 for comments related to PSD and NRS for 

stationary sources in Texas. These comments include the following topics: A. The Motor 

Vehicle GHG Rule Will Disproportionately Harm Texas, B. EPA Utterly Failed to 

Account for these Devastating Impacts to Texas and the Entire U.S. in its Burden 

Analysis of the Motor Vehicle GHG Rule, C. A Full Analysis of Actual Impacts on 

Sectors Beyond Autos Would Demonstrate That the Rule Cannot be Justified—the 

Burdens Associated with the Motor Vehicle GHG Rule Would Devastate the Texas 

Economy, D. EPA Should Adopt a More Reasonable Interpretation of the Clean Air Act 

Under which the Final Motor Vehicle GHG Rule Would Not Trigger PSD For Stationary 

Sources, and E. Nothing Compels EPA to Action under Section 202 at this Time—the 

Rule Provides Little or No Benefit and Produces Overwhelming Burdens.] 

Texas Oil and Gas Association 

Introduction 

EPA’s statement in the PSD Tailoring Rule that the Motor Vehicle GHG Rule will trigger 

regulation of GHG emissions from millions of stationary sources has substantive 

implications for TxOGA members. EPA claims that the PSD Tailoring Rule offers relief 

and “lessens the regulatory burden” associated with regulating GHG emissions under the 

ill-suited federal Clean Air Act (“CAA”). However, the proposed rule will actually 

impose burdens on stationary sources, including sources operated by TxOGA members. 

The PSD Tailoring Rule relies on questionable legal doctrines, rarely, if ever, relied on 

by courts, violates a host of procedural statutes and executive orders, and is ineffective on 

its face, as it fails to address PSD [OAR-2009-0472-11275.1, p.1] and Title V thresholds 

in corresponding state rules. Accordingly, TxOGA recommends that EPA withdraw the 

PSD Tailoring Rule and instead adopt a more rational interpretation of the CAA. [OAR2009-0472-11275.1, p.2] 

[See docket number OAR-2009-0472-11275.1, p.1&2 for detailed comments] 

By Declining to Extend the Comment Periods for its GHG Rulemaking, EPA has 

Deprived TxOGA of a Meaningful Opportunity to Comment on the Motor Vehicle GHG 

Rule and the PSD Interpretive Reconsideration 

On November 18, 2009, a group of trade associations led by the National Association of 

Manufacturers (“NAM”) submitted a request to EPA to extend the comment deadlines for 

the Motor Vehicle GHG Rule, the PSD Interpretive Reconsideration, and the PSD 

7-60 
Other Comments 

Tailoring Rule. EPA denied NAM’s request. As a result, and as explained in more detail 

below, TxOGA has been deprived of an adequate opportunity to comment on the Motor 

Vehicle GHG Rule and the PSD Interpretive Reconsideration. Accordingly, TxOGA 

respectfully requests that EPA consider the instant comments on the PSD Tailoring Rule 

timely filed in both of the other GHG Rulemaking dockets. [OAR-2009-0472-11275.1, 

p.2] 

[See docket number OAR-2009-0472-11275.1, p.2&3 for detailed comments pertaining 

to: The Close-Timing of the GHG Rulemaking Precluded A Thorough and Sufficient 

Analysis of the Rules and Public Notice Was Inadequate Regarding the Motor Vehicle 

GHG Rule's Impacts on Stationary Sources] 

EPA’s Conclusion That PSD Is Automatically Triggered By the Motor Vehicle GHG 

Rule Misinterprets the CAA 

The PSD Tailoring Rule provides that PSD requirements will be triggered when the 

Motor Vehicle GHG Rule is finalized. However, the Agency relies on two 

questionable legal conclusions to support its factual findings that GHG emissions alone 

can trigger PSD permit requirements and the conclusion that, absent an “administrative 

necessity”-based regulatory relief rule, there will be 40,000 new PSD applications per 

year. These conclusions are: [OAR-2009-0472-11275.1, p.3] 

The CAA requires that GHGs, as regulated pollutants, be considered in determining 

whether a source is a major source for purposes of PSD, even though there is no NAAQS 

for GHGs; and [OAR-2009-0472-11275.1, p.3] 

If a source is major for GHGs, it is therefore major for all other regulated pollutants – the 

“major for one, major for all” policy that EPA has applied in the past to all but 

nonattainment NSR pollutants under the program. [OAR-2009-0472-11275.1, p.3] 

[See docket number OAR-2009-0472-11275.1, pp.3-7 for detailed comments pertaining 

to: The CAA Limits PSD Applicability for GHGs to (1) Areas Designated as Attainment 

or Unclassifiable Under a GHG NAAQS or (2) Sources that Require a PSD Permit Based 

on Emissions of a Criteria Pollutant That Also Will Experience a Significant Increase in 

GHG Emissions, Alabama Power Supports the Interpretation that a NAAQS is Required 

as a Prerequisite to Regulation Under the Clean Air Act, and EPA Can Implement the 

Proper Scope of PSD Applicability Under the Existing Regulations] 

Alternatively, EPA Should Interpret the Term “Pollutants Subject to Regulation” to Refer 

Only to Pollutants With Local or Regional Impacts 

EPA should construe the phrases “any pollutant” in Section 169(1) and “any pollutant 

subject to regulation” in Section 165(a) to refer only to conventional pollutants 

whose emissions have regional or local impact, rather than any pollutant subject to 

regulation under the Act. Such an interpretation would automatically exclude GHGs, 

which are “global in nature because the GHG emissions emitted from the United States . . 

. become globally well-mixed.” In the PSD Tailoring Rule, EPA’s own analysis—which 

demonstrates that Congress could not have intended those CAA sections to require PSD 

7-61 
EPA Response to Comments 

applicability for GHGs, because, if they did, the number of sources requiring PSD 

permits would rise to absurd and unanticipated levels— supports this interpretation. EPA 

proposes only one solution to avoid the absurdity of triggering PSD for GHGs: rewriting 

the statutory PSD and Title V applicability thresholds and significance levels. [OAR2009-0472-11275.1, p.7] 

[See docket number OAR-2009-0472-11275.1, pp.7-8 for detailed comments] 

The PSD Tailoring Rule is Not a Relief Rule and Requires a Full Regulatory Impacts 

Analysis 

The PSD Tailoring Rule avoids a full regulatory impacts analysis on the basis that the 

Rule is a “relief rule.” To the contrary, EPA’s decision to interpret “subject to 

regulation” such that motor vehicle emission standards will trigger PSD applicability for 

40,000 new PSD permit applications and six million new Title V sources creates massive 

burdens for stationary sources. TxOGA members will experience significant impacts, 

including increased costs in complying with these new requirements and lengthy delays 

and/or a complete shut-down of new projects and project-expansions due to the Texas 

Commission on Environmental Quality’s (“TCEQ’s”) inability to process the influx of 

new PSD and Title V permit applications. These added costs of doing business and the 

effective permit moratorium will result in lost jobs and lost profits for TxOGA 

members. [OAR-2009-0472-11275.1, p.8] 

[See docket number OAR-2009-0472-11275.1, pp.8-13 for detailed comments pertaining 

to: Even if the PSD Tailoring Rule Offers Limited Relief for Small Sources of GHG 

Emissions, EPA Must Account for the Remaining Substantial Burdens Imposed by the 

Rule, By Failing to Assess Costs, the PSD Tailoring Rule Violates a Host of Statutes and 

Executive Orders That Require Analysis and Public Review of Regulatory Burdens, 

and The Burden Analysis for Title V was Deficient—EPA’s Reliance on States’ Ability 

to Assess Permit Fees to Cover Additional Title V Permitting Costs is Contrary to the 

Statute] 

EPA Cannot Justify the Tailoring Rule Under the Limited and Narrow “Absurd Results” 

or “Administrative Necessity” Doctrines [OAR-2009-0472-11275.1, p.14] 

[See docket number OAR-2009-0472-11275.1, pp.14-16 for detailed comments 

pertaining to: EPA’s Reliance on the “Administrative Necessity” Doctrine is 

Unsupported by Law and EPA has Misapplied the Doctrine of Absurd Results] 

EPA’s Tailoring Rule Is Facially Invalid Because It Proposes to Illegally Rewrite SIP and 

Title V Approvals 

To implement its proposed approach, EPA imagines a broad, multi-state SIP revision, 

retroactively inserting new major source and modification thresholds into a majority of 

the states’ existing, approved SIPs. EPA is not suggesting that any state has asked for 

such a revision. Instead, EPA is announcing an assumption—that states lack the resources 

to implement EPA’s view of the new challenge it is creating—and inserting into the 

states’ plans EPA’s chosen approach to managing the challenge. EPA is rewriting the 

7-62 
Other Comments 

states’ SIPs, an approach that turns on its head the structure that Congress established for 

SIP planning. The implications of this approach would reach well beyond the current 

issue, and would contravene settled law on the role of EPA and the states in SIP 

planning. [OAR-2009-0472-11275.1, p.17] 

[See docket number OAR-2009-0472-11275.1, p.17-19 for detailed comments pertaining 

to: The PSD Tailoring Rule’s Retroactive Re-interpretation of SIP and Title V Submittals 

and Approvals That Occurred Years (and in Some Cases Decades) Ago Violates 

Established CAA SIP Revision Procedures and is Unlikely to be Sustained by the Courts 

and Even if EPA Could Accomplish the Reinterpretation of SIPs and State Title V 

Programs Under Federal Law, the PSD Tailoring Rule Provides No Burden Relief 

Because States Will be Obligated to Follow Adopted State Regulations and Apply the 

100/250 Ton Thresholds] 

If EPA Concludes that the CAA and PSD Must Apply to GHGs, EPA Cannot Choose 

“Winners and Losers” Among Different Regulated Entities by Ignoring Clear CAA 

Definitions. EPA’s Decision to Set the Thresholds Between 10,000 and 25,000 Tons 

CO2e/Year is Arbitrary and Capricious 

Finally, EPA’s selected major source thresholds of 25,000 tpy for PSD and Title V and 

significance level of 10,000-25,000 tpy for PSD are arbitrary and capricious because 

there is no health and/or welfare basis for these cut-offs. GHGs, such as CO2, are 

distributed roughly equally throughout the global atmosphere. As a result, localized 

emissions, unlike emissions of other pollutants currently regulated under the Act, have no 

direct effect on the region that is the source of the emissions. This stands in sharp contrast 

to the pollutants currently regulated under the CAA (e.g., ozone), which create local air 

quality problems. Therefore, GHG emissions should be viewed on a global scale for 

purposes of setting applicability thresholds and significance levels. [OAR-2009-0472­

11275.1, p.19] 

[See docket number OAR-2009-0472-11275.1, pp.19-20 for detailed comments] 

Finally, Nothing Compels EPA to Action under Section 202 at this Time—the Rule 

Provides Little or No Benefit and Produces Overwhelming Burdens 

EPA has clear legal authority to defer promulgation of Section 202 GHG emission 

standards thereby avoiding the need for the PSD Tailoring Rule altogether, even now that 

the Agency has proceeded to finalize the endangerment and cause or contribute findings 

under CAA Section 202. Massachusetts v. EPA recognizes that EPA retains significant 

discretion regarding timing of rules. And in fact, it would be arbitrary and capricious for 

EPA to not exercise this discretion because the economic consequences of the Motor 

Vehicle GHG and PSD Tailoring Rules are so disastrous, while the GHG emission 

standards themselves will not yield any benefits distinct from the Department of

Transportation’s (“DOT”) proposed corporate average fuel economy (“CAFÉ”) 

standards. There are numerous compelling reasons to defer promulgating motor vehicle 

GHG emission standards at this time. [OAR-2009-0472-11275.1, p.20] 

7-63 
EPA Response to Comments 

[See docket number OAR-2009-0472-11275.1, pp.20-21 for detailed comments 

pertaining to: The Benefits of the Section 202 GHG Emission Standards Could be 

Largely Achieved Through CAFE Standards Alone and Delaying Promulgation Would 

Avoid 'Absurd' and 'Impossible' Results] 

Utility Air Regulatory Group 

Because EPA Has Not Established that Its Proposed Section 202(a) Rules Will Avert to 

Any Significant Extent the Endangerment EPA Proposes To Find -- and, to the Contrary, 

Has Presented Information that Shows Those Rules Will Not Meaningfully Address That 

Endangerment -- EPA Lacks Any Statutory Basis for Promulgating Those Rules. [OAR2009-0472-7262.1, p.8. Full discussion on pp.8-10] 

EPA's Proposed Motor Vehicle Rules Would Be Essentially Duplicative of NHTSA's 

Proposed Standards and, in Any Event, the Projected Effects of the Joint Program Are 

Too Slight To Fruitfully Attack Any Climate-Related Endangerment. [OAR-2009-0472­

7262.1, p.11. Full discussion on pp.11-16] 

Agency Analyses of the Environmental and Economic Impacts Associated with the Joint 

Motor Vehicle Proposal Are Either Entirely Absent or Substantially Deficient; EPA Must 

Prepare Proper Analyses for Public Review and Comment If It Decides To Proceed with 

This Rulemaking. [OAR-2009-0472-7262.1, p.16. Full discussion on pp.16-21] 

EPA Must Take Into Account Reasons Why Promulgation of Final Section 202(a) Rules 

for GHGs Should Not Trigger PSD and Title V Permitting Requirements. [OAR-2009­

0472-7262.1, p.16. Full discussion on pp.21-24] 

For all of the foregoing reasons, and those presented in UARG's other comments, EPA 

must withdraw its proposed motor vehicle rules (and NHTSA should revise its 

regulations, if necessary, to address this change). If EPA decides nevertheless to proceed 

with its rulemaking, it must prepare and publish a supplemental notice of proposed 

rulemaking that corrects the deficiencies in the proposed rules as described in these 

comments. 

Western Agricultural Processors Association 

The Western Agricultural Processors Association submits these comments on behalf of 

the tree nut processing industry in California. WAPA did not intend to participate in this 

docket, as our primary focus relates to the effect of Greenhouse Gas (GHG) regulations 

on stationary sources. For this reason, we had not spent much effort evaluating this 

docket until the proposed Greenhouse Gas Tailoring Rule was filed on October 27, 2009. 

The proposed Tailoring Rule is based on the assumption that the act of regulating GHG 

emissions from automobiles under the clean air act will trigger regulatory requirements 

affecting stationary sources of GHG emissions. In supporting documents for the Tailoring 

Rule, EPA estimates that without the Tailoring Rule, over 6 million stationary sources 

7-64 
Other Comments 

will become subject to Title V permitting requirements, at a cost of over 38 billion 

dollars. 

It would seem logical that if the analysis in the Tailoring rule is correct, then the 

additional cost burden for stationary sources should be reflected in the economic analysis 

for this docket. To the best of our knowledge, the impact of this rulemaking on stationary 

sources was not considered. 

Proper consideration of the complete cost picture is very important in this docket. This is 

especially true, considering that EPA could gain almost all of their GHG reductions from 

Automobiles through NHTSA' s CAFE standards. It would seem that if EPA used the 

CAFE standards to calculate GHG reductions, the GHG reductions would remain very 

comparable, yet the regulatory burden on stationary sources could be avoided. 

The proposed Tailoring Rule uses the doctrine of 'absurd results' as a portion of the 

justification for the proposed rule. It would appear that the origin of the 'absurd result' lies 

in this very docket, and the solution to the 'absurd result' is achievable in this docket 

without significant loss of GHG reduction benefits. 

EPA should review the economic benefit of this rule, considering all costs; both those 

currently in this docket, and those outlined in the proposed Tailoring Rule. In addition, 

EPA should clearly evaluate the benefit of regulations solely based on CAFE standards. 

Finally EP A should consider extending the comment period in this docket, considering 

the significant additional costs discussed in the Tailoring Rule proposal. [OAR-2009­

0472-7140.1, p.1] 

Wood, John 

In addition, under this regulation, the EPA would have the authority to regulate not only 

moving, but also stationary emitters of carbon dioxide. This would include almost 

everything that releases carbon dioxide; obvious ones like factories, businesses, and 

farms; and not-so-obvious ones, like schools, hospitals, and housing areas. This would 

also allow the government to step in and control things which they are not meant to 

control, such as churches or other places of worship. This regulatory cascade would 

therefore allow the government to control almost every facet of our lives. [OAR-2009­

0472-7157.1, p.3] 

EPA Response: 

As indicated by the above comment summaries, EPA received numerous comments on 

issues related to the impacts on stationary sources, due to the Clean Air Act’s provisions 

for permitting requirements related to the issuance of the GHG standards for new motor 

vehicles. These comments fall into several categories of issues: 1) comments related to 

EPA’s interpretation of the CAA’s provisions for subjecting stationary sources to permit 

regulation after GHG standards are set; 2) comments suggesting that EPA should fully 

assess (or had underestimated) the stationary source permitting impacts before finalizing 

the GHG vehicle rule; 3) comments suggesting that EPA did not adequately consider the 

permitting impact on small business sources; 4) comments suggesting that EPA should 

defer setting GHG standards for new motor vehicles to avoid any stationary source 

7-65 
 

EPA Response to Comments 

permitting impacts; 5) comments stating that EPA failed to provide adequate public 

notice under section 307(d) of the Clean Air Act and the Administrative Procedure Act; 

and 6) comments related to the impacts on state and local air agencies in issuing 

stationary source permits . 

The first category of comments pertains to EPA’s interpretation of the CAA’s provisions 

for when pollutants are “subject to regulation” for the purposes of the federal PSD 

permitting program after this rule is promulgated. This issue is addressed in EPA’s final 

action on Reconsideration of Interpretation of Regulations that Determine Pollutants 

Covered by Clean Air Act Permitting Programs (“permitting program interpretation”), 

which was issued on March 29, 2010. Among other things, the Agency’s final permitting 

program interpretation explains that the PSD permitting requirements will not apply to a 

newly regulated pollutant until a regulatory requirement to control emissions of that 

pollutant “takes effect.” In addition, the permitting program interpretation addresses 

several questions regarding the applicability of the PSD and Title V permitting programs 

to GHGs upon the promulgation of EPA regulations establishing limitations on emissions 

of GHGs from vehicles under Title II of the CAA. As explained in the permitting 

program interpretation, EPA has determined that PSD and Title V permitting 

requirements will not apply to GHG emissions until at least January 2, 2011, which is the 

earliest date by which model year 2012 vehicles meeting the proposed GHG standards 

can be sold in the United States. This determination is consistent with the request made 

by a number of commenters here, including the National Climate Coalition. 

The second category of comments suggests that EPA must fully assess the permitting 

impacts on stationary sources, including its estimates of how many sources are likely to 

be subject to GHG permitting requirements. These are issues that EPA is addressing in 

developing its final action on the proposed Prevention of Significant Deterioration and 

Title V Greenhouse Gas Tailoring Rule, 74 FR 55292 (October 27, 2009) (“Tailoring 

Rule”). The various comments on consideration of the economic impacts of the PSD 

permitting provisions fail to recognize that any analysis of such impacts would not aid 

EPA in determining what GHG standards to adopt in this rulemaking. Impacts on 

stationary source are not related to any of the issues EPA needs to consider and decide in 

determining the content of the GHG standards that will apply to automobile 

manufacturers. The same response applies to those commenters stating that EPA must 

assess impacts on stationary sources in this rule if it is promulgated before the tailoring 

rule. Analyses of indirect impacts on stationary sources are not legally relevant to the 

standard setting issues under consideration in this rule. Moreover, as noted above, EPA 

has determined in the permitting program interpretation that GHGs will not be air 

pollutants “subject to regulation” earlier than January 2, 2011, consistent with the GHG 

control requirements finalized in this rule. In addition, EPA plans to finalize the 

Tailoring Rule in the very near future, and the final Tailoring Rule will address the 

applicability of PSD requirements for GHG-emitting stationary sources that are not 

presently subject to PSD permitting. EPA addresses below the separate issue of whether 

EPA should delay issuance of this rule because of concerns raised over PSD and Title V 

permitting. 

7-66 
 

 

 

 

Other Comments 

The third category of comments, relating to small business impacts, is addressed in 

Section 5.14 of this Response to Comments document, including EPA’s response to 

comments regarding compliance with the Regulatory Flexibility Act. As stated in that 

response, EPA is certifying that the rule does not have a significant impact on a 

substantial number of small entities after considering the impacts of the regulatory 

requirements contained in this final rule, on the small entities directly subject to the rule. 

Accordingly, EPA is able to certify this rule under the RFA because small entities are 

exempt from regulation under the rule. As explained in that response, this rulemaking is 

limited to issues involved in setting emissions standards for large motor vehicle 

manufacturers, and EPA would not be able to account for any potential indirect impacts 

from separate statutory requirements on entities not directly subject to or impacted by this 

rule. Accordingly, because the RFA requires the agency to look only at the “small entities 

to which the proposed rule will apply” and small entities “subject to the requirement” of 

the specific rule in question, 5 U.S.C. § 603(b), the RFA does not apply to small entities 

indirectly affected by the regulation of other entities. 

The fourth category of comments suggested that EPA should defer setting GHG 

standards for new motor vehicles to avoid such stationary source permitting impacts. 

EPA is issuing these final GHG standards for light-duty vehicles as part of its efforts to 

expeditiously respond to the Supreme Court’s nearly three year old ruling in 

Massachusetts v. EPA, 549 U.S. 497 (2007). In that case, the Court held that greenhouse 

gases fit within the definition of air pollutant in the Clean Air Act, and that EPA is 

therefore compelled to respond to the rulemaking petition under section 202(a)(1) by 

determining whether or not emissions from new motor vehicles cause or contribute to air 

pollution which may reasonably be anticipated to endanger public health or welfare, or 

whether the science is too uncertain to make a reasoned decision. The Court further ruled 

that, in making these decisions, the EPA Administrator is required to follow the language 

of section 202(a)(1) of the CAA. The Court stated that under section 202(a), "[i]f EPA 

makes [the endangerment and cause or contribute findings], the Clean Air Act requires 

the agency to regulate emissions of the deleterious pollutant." 549 U.S. at 534. As 

discussed above, EPA has made the two findings on contribution and endangerment. 74 

FR 66496 (December 15, 2009). Thus, EPA is required to issue standards applicable to 

emissions of this air pollutant from new motor vehicles1. 

The Court properly noted that EPA retained "significant latitude" as to the "timing ... and 

coordination of its regulations with those of other agencies" (id.). However, it has now 

been nearly three years since the Court issued its opinion, and the time for delay has 

passed. In the absence of these final standards, there would be three separate federal and 

state regimes independently regulating light-duty vehicles to increase fuel economy and 

reduce GHG emissions: NHTSA’s CAFE standards, EPA’s GHG standards, and the 

GHG standards applicable in California and other states adopting the California 

standards. This joint EPA-NHTSA program will allow automakers to meet all of these 

requirements with a single national fleet because California has indicated that it will 

accept compliance with EPA’s GHG standards as compliance with California's GHG 

1

 EPA consequently disagrees strongly with the view of Duke Energy and others that “EPA lacks the legal 

authority to issue its proposed GHG motor vehicle emission standards under section 202(a) of the CAA”. 

7-67 
 

 

EPA Response to Comments 

standards. 74 FR at 49460. California has not indicated that it would accept NHTSA’s 

CAFE standards by themselves. Without EPA’s vehicle GHG standards, the states will 

not offer the federal program as an alternative compliance option to automakers and the 

benefits of a harmonized national program will be lost. California and several other 

states have expressed strong concern that, without comparable federal vehicle GHG 

standards (not fuel economy standards), the states will not offer the federal program as an 

alternative compliance option to automakers. Letter dated February 23, 2010 from 

Commissioners of California, Maine, New Mexico, Oregon and Washington to Senators 

Harry Reid and Mitch McConnell (Docket EPA-HQ-OAR-2009-0472). The automobile 

industry also strongly supports issuance of these rules to allow implementation of the 

national program and avoid “a myriad of problems for the auto industry in terms of 

product planning, vehicle distribution, adverse economic impacts and, most importantly, 

adverse consequences for their dealers and customers.” Letter dated March 17, 2010 

from Alliance of Automobile Manufacturers to Senators Harry Reid and Mitch 

McConnell, and Representatives Nancy Pelosi and John Boehner (Docket EPA-HQOAR-2009-0472). Thus, without EPA’s GHG standards as part of a federal harmonized 

program, important GHG reductions as well as benefits to the automakers and to 

consumers would be lost.2

 In addition, delaying the rule would impose significant 

burdens and uncertainty on automakers, who are already well into planning for 

production of MY 2012 vehicles, relying on the ability to produce a single national fleet. 

Delaying the issuance of this final rule would very seriously disrupt the industry’s plans. 

Instead of delaying the LDV rule and losing the benefits of this rule and the harmonized 

national program, EPA is directly addressing concerns about stationary source permitting 

in other actions that EPA is taking with regard to such permitting. That is the proper 

approach to address the issue of stationary source permitting, as compared to delaying the 

issuance of this rule for some undefined, indefinite time period. 

Some parties have argued that EPA’s issuance of this light-duty vehicle rule amounts to a 

denial of various administrative requests pending before EPA, in which parties have 

requested that EPA reconsider and stay the GHG endangerment finding published on 

December 15, 2009. That is not an accurate characterization of the impact of this final 

rule. EPA has not taken final action on these administrative requests, and issuance of this 

vehicle rule is not final agency action, explicitly or implicitly, on those requests. 

Currently, while we carefully consider the pending requests for reconsideration on 

endangerment, these final findings on endangerment and contribution remain in place. 

Thus under section 202(a) EPA is obligated to promulgate GHG motor vehicle standards, 

although there is no statutory deadline for issuance of the light-duty vehicle rule or other 

motor vehicle rules. In that context, issuance of this final light-duty vehicle rule does no 

more than recognize the current status of the findings -- they are final and impose a 

rulemaking obligation on EPA, unless and until we change them. In issuing the vehicle 

rule we are not making a decision on requests to reconsider or stay the endangerment 

finding, and are not in any way prejudicing or limiting EPA's discretion in making a final 

decision on these administrative requests. 

2

 As discussed elsewhere, EPA’s GHG standards achieve greater overall reductions in GHGs than 

NHTSA’s CAFE standards. 

7-68 
Other Comments 

A fifth category of comments stated that EPA had failed to give adequate notice under 

section 307 (d) of the Clean Air Act and the Administrative Procedure Act because EPA 

did not solicit comment on when to issue the vehicle rule or present information on 

stationary source indirect impacts. EPA in fact “recognize(d) that some small entities 

continue to be concerned about the potential impacts of the statutory imposition of PSD 

requirements” and directed commenters to address those concerns in the PSD tailoring 

rule. 74 FR at 49629. The number of comments received certainly indicates that 

commenters were aware of the issue. More to the point, EPA gave notice on all issues 

relevant to this rulemaking. Commenters that request consideration of the economic 

impacts of the PSD permitting provisions fail to recognize that any analysis of such 

impacts would not aid EPA in determining what GHG standards to adopt in this 

rulemaking. Such impacts are not related to any of the issues EPA needs to consider and 

decide in determining the content of the GHG standards that will apply to automobile 

manufacturers. 

Finally, a number of state entities stated that EPA failed to comply with the Unfunded 

Mandates Reform Act of 1995 because the rule has the potential to affect state/local air 

permitting authorities because it would cause GHG emissions to become regulated under 

the Title V and New Source Review permitting programs. This issue is addressed in 

comment response 5.14. 

7.2 Endangerment Finding 

Organization: Arthur G. Randol 

Clark, Roy 

Coalition for Responsible Regulation 

Competitive Enterprise Institute 

Custom Lights and Iron 

Ford, Jonathan 

Hagen, David L. 

Shaw, Donald F. 

Weber, David 

Comment: 

Arthur G. Randol 

A commenter resubmits comments and attachments previously submitted on the April 24, 

2009 Proposed Endangerment and Cause or Contribute Findings for Greenhouse Gases 

Under the Clean Air Act (herein referred to as the Findings) and the associated Technical 

Support Document (TSD) dated April 17, 2009. The commenter notes the submitted 

comments and attachments include detailed references to science, data, and models used 

to justify comments in the Endangerment Finding which are also the basis for this 

proposed vehicle rule. The comments pertain to the validity of models used for the 

Endangerment Finding analysis, consideration of economic welfare and national energy 

7-69 
EPA Response to Comments 

security consequences, implications for the National Ambient Air Quality Standards 

(NAAQS) regulation, and implications for energy costs. [See OAR-2009-0472-7254.1, 

pp.1-6, and OAR-2009-0472-7254.2, pp.1-44 for significant commentary on the 

Endangerment Finding] 

Coalition for Responsible Regulation 

CRR strongly opposes EPA's proposed Greenhouse Gas Vehicle Emission Standards 

Rulemaking, 74 Fed. Reg. 49454-49789 (Sept. 28, 2009) ('Proposed Vehicle Rule'), on 

the grounds that it presupposes a finding that GHGs, including CO2, endanger public 

health or welfare. EPA does so prematurely, without scientific basis, and when a 

separate, still-pending EPA rulemaking is currently evaluating this key scientific issue. 

Notwithstanding EPA's explicit acknowledgement that the regulation of GHGs 

contemplated in the Proposed Vehicle Rule cannot take place until the Proposed 

Endangerment Finding is first finalized, EPA has nevertheless proceeded to make a de 

facto endangerment finding in its Proposed Vehicle Rule without a supporting 

administrative record and without adequate consideration of the underlying climate 

change science, data or literature. In conclusory, unsubstantiated fashion, EPA asserts: 

'[t]he primary greenhouse gases of concern are directly emitted by human activities ... 

These gases, once emitted, remain in the atmosphere for decades to centuries ... The 

heating effect caused by the human-induced buildup of the greenhouse gases in the 

atmosphere is very likely the cause of most of the observed global warming over the last 

50 years. The key effects of climate change observed to date and projected to occur in the 

future include, but are not limited to, more frequent and intense heat waves, more severe 

wildfires, degraded air quality, heavier and more frequent downpours and flooding, 

increased drought, greater sea level rise, more intense storms, harm to water resources, 

continued ocean acidification, harm to agriculture, and harm to wildlife and ecosystems. 

74 Fed. Reg. at 49508. See also id at 49630, where a number of similarly unsubstantiated 

statements are made. 

Virtually every one of EPA's bold assertions about climate change in the Proposed 

Vehicle Rule are factually and/or scientifically either demonstrably incorrect or lack 

supporting scientific basis. Some of CRR's members, as well as other commenters, have 

already systematically rebutted all of EPA's assertions, with supporting scientific 

documentation, in the detailed Comments the Coalition submitted in EP A's Proposed 

Endangerment Rulemaking [OAR-2009-0472-7053.1, p.1] 

Clark, Roy 

The commenter asserts the emission of greenhouse gases from motor vehicles does not 

pose any threat to the Earth’s climate. The commenter indicates: “In spite of everything 

that has been published about CO2 induced global warming and the effects of related 

greenhouse gases, no quantitative relationship between climate change and atmospheric 

CO2 concentration has ever been demonstrated because none exists. The entire global 

warming case is based on the empirical speculation that the observed 100 ppm 

7-70 
Other Comments 

anthropogenic increase in atmospheric CO2 concentration over the last 200 years has 

produced an ‘average’ increase of 1 degree Celsius in the meteorological surface air 

temperature.” 

The commenter asserts that this is flagrant scientific fraud based on deliberate distortions 

of the historical temperature record and invalid computer simulation by an elite group of 

climate ‘scientists’ which has been made abundantly clear by the recent availability of 

long requested documents from the UK Hadley Climate Center. [OAR-2009-0472­

7179.1, p. 1] 

Shaw, Donald F. 

A commenter asserts the globe has not warmed for the last 11 years and recent peerreviewed papers have indicated that the latest IPCC report (2007) exaggerates the 

temperature rise by using large positive feedback factors. The feedback factors are not 

scientifically determined and some noted scientists claim that they are actually negative. 

The commenter indicates that some scientists have recently indicated that the effects of 

methane and aerosols have been underestimated and that the impact of CO2 on warming 

may be only half that previously believed and the IPCC report erroneously dismisses 

natural variations as well as methane and other gasses as being significant. [OAR-2009­

0472-7270, pp. 1-2] 

Custom Lights and Iron 

Another commenter indicates that the climate change science is weak at best and it is 

necessary to wait for better data. The commenter indicates there has been no proof of 

warming since 1997 based on observational data despite increasing CO2 in the 

atmosphere. [OAR-2009-0472-7110, p.1] 

Hagen, David L. 

A commenter notes the EPA’s Endangerment and Cause or Contribute Findings for 

Greenhouse Gases Under Section 202(a) of the Clean Air Act are critically flawed by 

ignoring: 

 The global oil production rates and the necessity of rapidly finding alternatives to 

replace rapid declines in existing oil production. 

 The costs and rate limitations to providing alternative fuels. 

 The investment required to develop alternative fuels. 

 The Principles of Scientific Forecasting. 

 The Hurst-Kolgomorov parameters of natural climate change. 

The commenter also asserts the EPA is relies on politically-biased science by relying 

only on the IPCC which has a political mandate to find evidence for anthropogenic 

climate change. The commenter also indicates the EPA reliance on IPCC models is 

fatally flawed by ignoring the major impact of solar/climate correlations, and 

overestimating the influence of CO2. [OAR-2009-0472-7218.1, p.2] 

7-71 
EPA Response to Comments 

Competitive Enterprise Institute 

The proposed standards are authorized only if EPA determines that “air pollution” related 

to GHG emissions from new motor vehicles “may reasonably be anticipated to endanger 

public health or welfare.” However, as explained in my comment on EPA’s 

endangerment proposal, EPA has not exercised its judgment with regard to the 

fundamental scientific issues – detection, attribution, and sensitivity – deferring instead to 

literature reviews produced by external authorities. Moreover, the core scientific issues 

are more “unsettled” today than at any time in the past decade. For example, MIT 

Professor Richard Lindzen’s recent satellite study of top-of-the-atmosphere radiative flux 

indicates that climate sensitivity is six times lower than the mid-range estimate of the 

Intergovernmental Panel on Climate Change (IPCC). [OAR-2009-0472-7281.1, p.9] 

Ford, Jonathan 

The commenter asserts that CO2 is not a pollutant. [OAR-2009-0472-7674] 

Weber, David 

I have not seen convincing scientific evidence that CO2 causes global warming and I 

have not seen any evidence that global warming will be bad for the environment or that 

global warming is a health issue. The EPA paper saying that GHG's are a health and 

safety risk is incorrect and it is not backed up with any data. I have seen on-line reports as 

evidence that the recent warming of the last 100 years (compared to the last 2000 years of 

direct or indirect measurements) is a normal fluctuation from natural forces and that it is 

unrelated to CO2 in the atmosphere. 

But, even if GHG's do increase temperature, my opinion is that the world would be 

greener if the average temperature was higher. A warmer earth would increase the 

temperature of the world's oceans. The higher temperature will cause higher rainfall. 

Plants grow best with higher rainfall, higher temperature and higher CO2 concentration. 

So, the area of usable agricultural land (i.e. non-desert land and non-permafrost land) will 

increase if we have more GHG's and higher temperatures. 

The Supreme Court [Massachusetts v. EPA] ruled that the EPA may regulate CO2, only 

if, they determine that CO2 is a GHG and that GHG's are a health risk. They have not 

done so for either postulate. So, this EPA regulation is not constitutional. [OAR-2009­

0472-1410] 

EPA Response: 

This rulemaking is on the issues relevant to issuing emissions standards for new motor 

vehicles under Section 202(a) of the Clean Air Act. The comments are not relevant to the 

issues and decisions before the Agency in this standard setting rulemaking, as they relate 

to the separate rulemaking on the endangerment and contribution findings. 

7-72 
 

Other Comments 

EPA has made a decision on the endangerment and contribution findings, with final 

Findings published in the Federal Register on December 15, 2009 (74 FR 66496). 

Comments in that rulemaking were carefully reviewed and considered in that rulemaking 

and addressed in the associated Response to Comments document, available at: 

http://www.epa.gov/climatechange/endangerment.html. EPA is not responding to them 

here as they are not relevant to this rulemaking. 

EPA refers commenters to the Response to Comments Document associated with the 

endangerment findings, available at 

http://www.epa.gov/climatechange/endangerment.html, for 

numerous detailed responses to comments, including the following topics: 

 attribution of observed climate change to anthropogenic emissions of greenhouse 

gases (Volume 3) 

 validity of observations and data used by EPA to determine trends in increasing 

global mean temperatures (Volume 2) 

 discussion of the use of IPCC, USGCRP, and NRC reports as the primary scientific 

basis for the Findings, and response to claims that IPCC is a politically biased 

organization (Volume 1) 

Finally, EPA refers the commenter to the Findings, TSD, and Response to Comments 

document for detailed discussion of the multiple lines of evidence that the climate system 

is warming and that most of that warming over the last 50 years is very likely due to 

human emissions of GHGs. 

Organization:Arthur G. Randol 

Clark, Roy 

Coalition for Responsible Regulation (Holland & Hart) 

Congress of Racial Equality 

Ford, Jonathan 

Hagen, David L. 

Shaw, Donald F. 

Spurgeon, C. M. 

Wood, John S. 

Comment: 

A few commenters refer to the computer files released from the Climate Research Unit 

(CRU) at the East Anglia University, UK and indicate it seriously questions the veracity 

of the temperature data that has been widely used in the IPCC and other reports. The 

commenter indicates that according to news reports the released files and e-mails 

revealed that the leading scientists from the US and UK (that provide key temperature 

data to the IPCC) have apparently fudged the data to exaggerate warming and suppress 

temperature declines using “tricks” and cherry-picked data. The commenter also asserts 

there is evidence that the peer review process has been corrupted and technical papers 

suppressed that question the reported plots and temperatures. Another commenter 

7-73 
 

 

EPA Response to Comments 

indicates the recently released CRU e-mails show scientists refusing to release the data 

and models for independent scientific review. 

A commenter indicates: “Due to the recent release of the e-mails and data from “Climatic 

Research Institute at the University of East Anglia” (which has excessive influence over 

the IPCC), this proposed rulemaking as well as any other actions related to Greenhouse 

Gas Emission Standards must be postponed until an independent audit of any climate 

temperature increase due to CO2 has been scientifically verified and all data for this 

determination has been made public, along with the questionable computer model used.” 

Commenters request that the EPA suspend any actions pending the outcome of all 

investigations. One commenter indicates “[i]n light of recent developments within the 

scientific community on climate data and manipulation of the peer-review process, EPA 

should hold off on any further proposed rulemaking regarding any GHG’s until a formal 

and full investigation is completed.” 

EPA Response: 

This rulemaking is on the issues relevant to issuing emissions standards for new motor 

vehicles under Section 202(a) of the Clean Air Act. The comments are not relevant to the 

issues and decisions before the Agency in this standard setting rulemaking, as they relate 

to the separate rulemaking on the endangerment and contribution findings. 

EPA has made a decision on the endangerment and contribution findings, with final 

Findings published in the Federal Register on December 15, 2009 (74 FR 66496). 

Comments in that rulemaking were carefully reviewed and considered in that rulemaking 

and addressed in the associated Response to Comments document, available at: 

http://www.epa.gov/climatechange/endangerment.html. EPA is not responding to them 

here as they are not relevant to this rulemaking. 

EPA addressed comments on the recently disclosed CRU e-mails in Volume 11 of the 

Response to Comments document associated with the final Findings, which is available 

at http://www.epa.gov/climatechange/endangerment.html. In addition, EPA has received 

multiple administrative petitions for reconsideration of the Findings, which raise issues 

related to the released CRU emails. Responses are under development and will be made 

public when completed. Also see the response to the following comment. 

Organization: Coalition for Responsible Regulation (Holland & Hart) 

Comment: 

The commenter opposes EPA’s Proposed Vehicle Rule on the grounds that it presupposes 

a finding that GHGs endanger public health and welfare and EPA does so prematurely, 

without scientific basis, and when a separate, still pending EPA rulemaking is currently 

evaluating this key scientific issue. The commenter urges the EPA Administrator not to 

finalize the proposed Vehicle Rule until EPA's Proposed Endangerment Finding has been 

rejected or supported by sound and comprehensive scientific evidence; and until 

7-74 
 

 

 

Other Comments 

whatever ensuing Petitions for Reconsideration or Petitions for Review regarding the 

Proposed Endangerment Finding have been finally mid fully resolved. The commenter 

asserts that proceeding with the Proposed Vehicle Rule prior to finalization and judicial 

review of the Proposed Endangerment Finding would violate EPA’s statutory charge, as 

reinforced by the Supreme Court in Massachusetts v. EPA, 549 U.S. at 533, to first make 

a finding of GHG endangerment, only after which EPA may prescribe regulations and 

promulgate standards to control GHG emissions. [OAR-2009-0472-7053.1, p.4] 

EPA Response: 

EPA has made a decision on the endangerment and contribution findings, with final 

Findings published in the Federal Register on December 15, 2009 (74 FR 66496). This 

rulemaking is on the issues relevant to issuing emissions standards for new motor 

vehicles under Section 202(a) of the Clean Air Act. The comments are not relevant to the 

issues and decisions before the Agency in this standard setting rulemaking, as they relate 

to the separate rulemaking on the endangerment and contribution findings. 

EPA has made a decision on the endangerment and contribution findings, with final 

Findings published in the Federal Register on December 15, 2009 (74 FR 66496). EPA 

notes that these comments, references, and attachments previously submitted by the 

commenter were carefully reviewed and fully addressed in the Final Findings published 

in the Federal Register on December 15, 2009 (74 FR 66496) and associated Response to 

Comments document, available at: 

http://www.epa.gov/climatechange/endangerment.html EPA is not responding to them 

here as they are not relevant to this rulemaking. 

EPA is issuing these final GHG standards for light-duty vehicles as part of its efforts to 

expeditiously respond to the Supreme Court’s nearly three-year-old ruling in 

Massachusetts v. EPA, 549 U.S. 497 (2007). In that case, the Court held that GHGs fit 

within the definition of air pollutant under in the Clean Air Act, and that EPA is therefore 

compelled to respond to the rulemaking petition under section 202(a) by determining 

whether or not emissions from new motor vehicles cause or contribute to air pollution 

which may reasonably be anticipated to endanger public health or welfare , or whether 

the science is too uncertain to make a reasoned decision. The Court further ruled that, in 

making these decisions, the EPA Administrator is required to follow the language of 

section 202(a) of the CAA. The Court stated that under section 202(a), "[i]f EPA makes 

[the endangerment and cause or contribute findings], the Clean Air Act requires the 

agency to regulate emissions of the deleterious pollutant." 549 U.S. at 534. As discussed 

above, EPA has made the two findings on contribution and endangerment. 74 FR 66496 

(December 15, 2009). Thus, EPA is required to issue standards applicable to emissions 

of this air pollutant from of new motor vehicles. 

The Court properly noted that EPA retained "significant latitude" as to the "timing ... and 

coordination of its regulations with those of other agencies" (id.). However it has now 

been nearly three years since the Court issued its opinion, and the time for delay has 

passed. In the absence of these final standards, there would be three separate federal and 

7-75 
 

 

EPA Response to Comments 

state regimes independently regulating light-duty vehicles to increase fuel economy and 

reduce GHG emissions: NHTSA’s CAFE standards, EPA’s GHG standards, and the 

GHG standards applicable in California and other states adopting the California 

standards. This joint EPA-NHTSA program will allow automakers to meet all of these 

requirements with a single national fleet because California has indicated that it will 

accept compliance with EPA’s GHG standards as compliance with California's GHG 

standards. 74 FR at 49460. NHTSA’s CAFE standards by themselves would not lead to 

this result. Without EPA’s vehicle GHG standards, the states will not be able to offer the 

federal program as an alternative compliance option to automakers and the benefits of a 

harmonized national program will be lost. California and several other states have 

expressed strong concern that, without comparable federal vehicle GHG standards, the 

states will not be able to offer the federal program as an alternative compliance option to 

automakers. Letter dated February 23, 2010 from Commissioners of California, Maine, 

New Mexico, Oregon and Washington to Senators Harry Reid and Mitch McConnell 

(Docket EPA-HQ-OAR-2009-0472). The automobile industry also strongly supports 

issuance of these rules to allow implementation of the national program and avoid “a 

myriad of problems for the auto industry in terms of product planning, vehicle 

distribution, adverse economic impacts and, most importantly, adverse consequences for 

their dealers and customers.” Letter dated March 17, 2010 from Alliance of Automobile 

Manufacturers to Senators Harry Reid and Mitch McConnell, and Representatives Nancy 

Pelosi and John Boehner (Docket EPA-HQ-OAR-2009-0472). Thus, without EPA’s 

GHG standards as part of a federal harmonized program, important GHG reductions as 

well as benefits to the automakers and to consumers would be lost.3 In addition, delaying 

the rule would impose significant burdens and uncertainty on automakers, who are 

already well into planning for production of MY 2012 vehicles, relying on the ability to 

produce a single national fleet. Delaying the issuance of this final rule would very 

seriously disrupt the industry’s plans 

Instead of delaying the light-duty vehicle rule and losing the benefits of this rule and the 

harmonized national program, EPA is directly addressing concerns about stationary 

source permitting in other actions that EPA is taking with regard to such permitting. That 

is the proper approach to address the issue of stationary source permitting, as compared 

to delaying the issuance of this rule for some undefined, indefinite time period. 

Some parties have argued that EPA’s issuance of this light-duty vehicle rule amounts to a 

denial of various administrative requests pending before EPA, in which parties have 

requested that EPA reconsider and stay the GHG endangerment finding published on 

December 15, 2009. That is not an accurate characterization of the impact of this final 

rule. EPA has not taken final action on these administrative requests, and issuance of this 

vehicle rule is not final agency action, explicitly or implicitly, on those requests. 

Currently, while we carefully consider the pending requests for reconsideration on 

endangerment, these final findings on endangerment and contribution remain in place. 

Thus under section 202(a) EPA is obligated to promulgate GHG motor vehicle standards, 

although there is no statutory deadline for issuance of the light-duty vehicle rule or other 

3

 As discussed elsewhere, for a variety of reasons EPA’s GHG standards achieve greater overall reductions 

in GHGs than NHTSA’s CAFE standards. 

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Other Comments 

motor vehicle rules. In that context, issuance of this final light-duty vehicle rule does no 

more than recognize the current status of the findings -- they are final and impose a 

rulemaking obligation on EPA, unless and until we change them. In issuing the vehicle 

rule we are not making a decision on requests to reconsider or stay the endangerment 

finding, and are not in any way prejudicing or limiting EPA's discretion in making a final 

decision on these administrative requests. 

Organization: Consumers Energy 

Comment: 

The Joint Motor Vehicle Proposal contains a number of significant flaws and 

shortcomings that necessitate withdrawal of EPA's portion of the proposed rule. EPA's 

analysis demonstrates that it cannot properly reach an affirmative endangerment finding 

given the inability of the emission standards to avert or to attack fruitfully the source of 

GHG-related endangerment. Because an affirmative endangerment finding in this context 

cannot be legally made, EPA lacks the authority to finalize its proposed GHG motor 

vehicle emission standards under section 202(a) of the CAA. In addition, the analyses of 

economic and environmental costs and benefits of the Joint Motor Vehicle Proposal are 

wholly insufficient and cannot support EPA's proposed standards. [OAR-2009-0472­

7264.1, p.2] 

Unlike NHTSA, EPA is under no statutory deadline to promulgate the standards that it is 

now considering. It has the time and the obligation to analyze more fully its regulatory 

proposal and the wide-ranging impacts that it anticipates will likely be incurred after its 

finalization. Finally, EPA has failed even to consider possible ways in which it might 

avoid prematurely imposing significant regulatory burdens, like PSD and Title V 

requirements, on stationary sources while pursuing mobile source regulation under 

section 202(a). These are matters of the utmost significance, and EPA cannot simply 

ignore them consistent with its obligations under the CAA. For all of the foregoing 

reasons, Consumers Energy agrees with UARG and requests that EPA withdraw its 

portion of the Joint Motor Vehicle Proposal, that NHTSA revise its regulations as may be 

appropriate to address this change, and that EPA engage in a new, more thoroughly 

reasoned regulatory decision-making process while providing adequate public notice and 

opportunity for comment on these important issues. [OAR-2009-0472-7264.1, p.2] 

EPA Response: 

This rulemaking is on the issues relevant to issuing emissions standards for new motor 

vehicles under Section 202(a) of the Clean Air Act. The comments are not relevant to the 

issues and decisions before the Agency in this standard setting rulemaking, as they relate 

to the separate rulemaking on the endangerment and contribution findings and to other 

pending actions before EPA. See the responses above for further discussion of EPA’s 

reasons for issuing this vehicle rule at this time. In addition, the comment provides no 

details on their objections to EPA’s analyses of environmental and economic impacts. 

7-77 
EPA Response to Comments 

EPA has made a decision on the endangerment and contribution findings, with final 

Findings published in the Federal Register on December 15, 2009 (74 FR 66496). 

Comments in that rulemaking were carefully reviewed and considered in that rulemaking 

and addressed in the associated Response to Comments document, available at: 

http://www.epa.gov/climatechange/endangerment.html. EPA is not responding to them 

here as they are not relevant to this rulemaking. 

Organization: Duke Energy 

Comment: 

Duke Energy Business Services LLC (“Duke Energy”), on behalf of Duke Energy 

Carolinas, LLC, Duke Energy Indiana, Inc., Duke Energy Ohio, Inc., Duke Energy 

Kentucky, Inc., and Duke Energy Generation Services (“DEGS”), therefore submits the 

following comments on the Joint Motor Vehicle Proposal. Specifically, the significant 

flaws and shortcomings of the Joint Motor Vehicle Proposal necessitate the withdrawal of 

EPA’s portion of the proposed rule. Duke Energy continues to support the enactment of 

environmentally and economically sustainable federal climate change legislation. 

Regulating GHGs under the CAA is the wrong approach. [OAR-2009-0472-7136.1, p.2] 

The U.S. Environmental Protection Agency’s (“EPA”) has stated its view that 

promulgation of the GHG motor vehicle standards will subject GHGs to the CAA 

Prevention of Significant Deterioration (“PSD”) program and the permitting requirements 

of Title V of the CAA, potentially as soon as the date on which the rule becomes final 

and effective. Duke Energy believes, however, that EPA’s legal positions in this regard 

and the analysis presented in the proposed rule are seriously flawed and must be 

corrected. [OAR-2009-0472-7136.1, p.2] 

The Joint Motor Vehicle Proposal and its supporting documentation makes clear that 

EPA’s proposed GHG motor vehicle emission standards are largely duplicative of 

NHTSA’s proposed program and that EPA’s proposal will not add in any significant 

manner to the GHG reductions and associated impacts of NHTSA’s proposed CAFE 

standards. Therefore, EPA cannot properly reach an affirmative endangerment finding to 

satisfy the requirements of the CAA’s test for finding “endangerment,” rendering EPA’s 

proposed GHG motor vehicle emission [OAR-2009-0472-7136.1, p.2] standards legally 

(and scientifically) unjustified. Because an affirmative endangerment finding cannot be 

legally made, EPA lacks the authority to finalize its proposed GHG motor vehicle 

standards under section 202(a) of the CAA. [OAR-2009-0472-7136.1, p.3] 

EPA Response: 

This rulemaking is on the issues relevant to issuing emissions standards for new motor 

vehicles under Section 202(a) of the Clean Air Act. The comments are not relevant to the 

issues and decisions before the Agency in this standard setting rulemaking, as they relate 

to the separate rulemaking on the endangerment and contribution findings. 

7-78 
Other Comments 

EPA has made a decision on the endangerment and contribution findings, with final 

Findings published in the Federal Register on December 15, 2009 (74 FR 66496). 

Comments in that rulemaking were carefully reviewed and considered in that rulemaking 

and addressed in the associated Response to Comments document, available at: 

http://www.epa.gov/climatechange/endangerment.html. EPA addressed comments in that 

rulemaking claiming that EPA could not make an endangerment finding because of the 

relationship of EPA’s GHG standards to NHTSA’s CAFE standards. See 74 FR 66496, 

66507-508 (December 15, 2009). EPA is not responding to them here as they are not 

relevant to this rulemaking. 

Organization: Texas Commission on Environmental Quality 

Comment: 

In providing these comments, the TCEQ emphasizes that it does not support EPA's 

actions to regulate GHG under the federal Clean Air Act (CAA). As stated in TCEQ 

comments dated June 23, 2009, to EPA's Proposed Endangerment and Cause or 

Contribute Findings for Greenhouse Gases, the CAA is not an appropriate vehicle for the 

regulation of GHG, and the proposed endangerment finding, if finalized, would likely 

force EPA to begin regulating other sources through other major CAA programs resulting 

in significant impacts to the economy of Texas and thus, the nation, without measurable 

environmental benefits. TCEQ recommends that EPA not finalize the GHG emission 

standards for light-duty vehicles under the proposed rule. [OAR-2009-0472-7180.1, p.1] 

EPA Response: 

This rulemaking is on the issues relevant to issuing emissions standards for new motor 

vehicles under Section 202(a) of the Clean Air Act. The comments are not relevant to the 

issues and decisions before the Agency in this standard setting rulemaking, as they relate 

to the separate rulemaking on the endangerment and contribution findings or on other 

pending or potential rulemakings. 

EPA has made a decision on the endangerment and contribution findings, with final 

Findings published in the Federal Register on December 15, 2009 (74 FR 66496). 

Comments in that rulemaking were carefully reviewed and considered in that rulemaking 

and addressed in the associated Response to Comments document, available at: 

http://www.epa.gov/climatechange/endangerment.html. EPA is not responding to them 

here as they are not relevant to this rulemaking. See responses to comments above 

concerning EPA’s reasons for issuing the light-duty vehicle rule now instead of delaying 

issuance of the rule. 

Organization: Georgia-Pacific (GP) 

Comment: 

Since the carbon-neutral motor vehicle emissions of CO2 from biofuels do not contribute 

to the increase in atmospheric CO2 concentrations which constitute the public 

7-79 
EPA Response to Comments 

endangerment in EPA’s view, EPA lacks a statutory basis for restricting motor vehicle 

CO2 emissions to the extent that they result from use of biofuels. 

[See Docket Number OAR-2009-0472-7122.1, pp.6-9 for detailed comments pertaining 

to: Biofuel Combustion Is Carbon-Neutral and EPA Must Account for the CO2­

Neutrality of Biofuels To Be Consistent With Its Endangerment Finding] 

EPA Response: 

EPA’s authority to adopt emissions standards under section 202(a)(1) is not limited to 

motor vehicles powered by fuels other than biofuels. Vehicles operating on biofuels do 

emit GHGs, and as discussed in the preamble, from a lifecycle perspective biofuels such 

as ethanol are not carbon neutral in the sense the commenter uses. 

This is also fully consistent with the endangerment and contribution findings. EPA 

included all motor vehicles emissions in calculating emissions for purposes of the 

contribution finding, and did not exclude emissions from vehicles operated by biofuels. 

In addition, the content or form of the emissions control to follow under section 202(a)(1) 

was not relevant to the determination that the air pollution of atmospheric concentrations 

of GHGs endanger public health and welfare. See also Section 5.7.2 of this Response to 

Comments document. 

7.3 Vehicle Life-Cycle Emissions Issues 

EPA’s proposed GHG emissions standards are tailpipe-based standards, consistent with 

other EPA vehicle emissions standards. Although EPA did not ask for comment on this 

issue, we did receive four comments from organizations recommending that EPA not 

only account for vehicle tailpipe GHG emissions, but also GHG emissions associated 

with other steps of the vehicle life-cycle. The structure of this section is to provide a 

sampling of excerpts of these four comments, followed by an EPA response. 

Organization: American Iron and Steel Institute 

University of Pennsylvania, Environmental Law Project 

US Steel Corporation 

Washington State Department of Commerce 

Comment: 

American Iron and Steel Institute 

Clearly, the regulation's purpose is to reduce the energy consumption and greenhouse gas 

emissions (mainly CO2) associated with the combustion of fuel during the driving cycle 

of light-duty vehicles for the U.S. fleet. AISI is concerned that focusing only on the 

driving-phase of a vehicle's life will lead to increased energy consumption and CO2 

emissions while reducing vehicle affordability. This is because technology selections will 

be made to lower driving phase energy use and GHG emissions that will increase energy 

use and GHG emissions in other phases of vehicle life, more than offsetting the driving 

7-80 
Other Comments 

phase reductions. A methodology based on Life Cycle Assessment [LCA] of the vehicle 

[considering all phases of a vehicle's life as opposed to only the driving phase] will 

ensure energy reduction and GHG reductions occur. [OAR-2009-0472-7088.1, p.2] 

1. Life Cycle Assessment (LCA): In order to ensure the steps taken by automakers to 

comply with the proposed rule result in lower energy use and GHG emissions, it is 

critically important that energy use and GHG emissions over the full life cycle of the 

vehicle are considered. Clearly, the reduction in fuel consumption per mile over the 

driving phase, as the proposed rule stipulates, will directly reduce energy use and GHG 

emissions for the driving phase of the vehicle's life. However, by ignoring the 

consequences of the likely steps automakers may use to comply with a driving phaseonly rule [such as mass reduction through materials substitution] higher energy use and 

GHG emissions will result. [OAR-2009-0472-7088.1, p.3] 

The proposed rule already considers an expanded view [beyond driving phase emissions] 

by encouraging the use of air conditioning refrigerants with low global warming 

potential. AISI recommends the proposed rule include energy use and GHG emissions 

attributable to vehicle materials and their manufacturing phase. A methodology is 

described below. [OAR-2009-0472-7088.1, p.3] 

An article (Attachment 1) published by American Metal Market in May 2008 by Dr. 

Roland Geyer of the University of California-Santa Barbara, thoughtfully explains, in 

general, the concerns about regulations and unintended consequences. He includes 

examples of an overenthusiastic approach to the regulation of a single phase of a life 

cycle, while ignoring the full life cycle of the process or product regulated. A diagram 

showing energy consumption and GHG emissions during the life cycle of a vehicle is 

shown in Figure 2. The LCA approach is detailed in ISO Standard 14040 Series. Geyer 

has produced a methodology, endorsed by ISO peer review, through which energy use 

and CO2 emissions resulting from the selection of materials for vehicles can be evaluated 

for the entire life cycle of the vehicle. AISI recommends that materials selection for 

vehicles be evaluated by a model [such as the Geyer model] that considers life-cycle 

impact on energy use and GHG emissions. Similar studies and public statements about 

this approach have been made by automakers. For example, recently published 

information from Mercedes in its S-Class Environmental Certificate (Attachment 2) 

shows how car makers are using LCA in materials decisions. [OAR-2009-0472-7088.1, 

p.3] [[Attachment 1 is Docket Number OAR-2009-0472-7088.2 which is copyrighted 

material and not available on FDMS. Attachment 2 is Docket Number OAR-2009-0472­

7088.3.]] 

EPA and NHTSA should promulgate regulations that require manufacturers to meet 

regulations by the lowest life cycle emissions solution, for example by selecting 

comparatively low energy and low C02 materials like high-strength steel. Materials that 

lower the overall life-cycle energy use and GHG emissions of the vehicle should be 

preferred to those that consume more energy and raise the total GHG burden. [OAR2009-0472-7088.1, p.6] 

7-81 
EPA Response to Comments 

Methodologies for conducting life cycles assessment of vehicles are well established 

through exiting tools such as ISO Standard 14040 Series. Vehicle manufacturers already 

have the in-house capability of conducting LCA for materials selection and there are 

many published examples where these studies have been applied. Many materials 

suppliers have established materials energy and CO2 emissions databases. The tools for 

implementing a life cycle assessment guideline for materials selection are already 

established and in use by some manufacturers (Attachment 2). [OAR-2009-0472-7088.1, 

p.6] 

AISI strongly recommends the proposed rule incorporate the energy and emissions 

associated with creating the materials used in building the vehicle and the energy and 

emissions saved at end of life through recycling. In this way, the reduction in emissions 

during the driving cycle will not be offset by increases in energy use and GHG emissions 

associated with use of energy- and GHG intensive materials and the lowest total impact 

on the environment will be achieved. [OAR-2009-0472-7088.1, p.6] 

AISI supports a national standard that can be uniformly applied in order to reduce the 

consumption of fuel and the emissions associated with light vehicles. However, the 

current proposal to regulate based only the vehicle driving phase may very well increase 

energy use and GHG emissions while increasing vehicle cost. Increased vehicle cost 

would further delay the adoption of compliant vehicles, slowing the reduction in 

emissions. [OAR-2009-0472-7088.1, p.8] 

To avoid these outcomes, we strongly recommend EPA and NHTSA incorporate all life 

cycle energy use and GHG emissions associated with light-duty vehicles into this rule. A 

life cycle approach is more consistent with achieving the objectives of the Clean Air Act, 

the Energy Independence and Security Act (EISA) of 2007, and President Obama's 

October 5,2009 Executive Order on Federal Leadership in Environmental, Energy, and 

Economic Performance. [OAR-2009-0472-7088.1, p.9] 

University of Pennsylvania, Environmental Law Project 

Significantly, the EPA/DOT joint proposed rulemaking also fails to take into account a 

few potentially major factors because it fails to do a complete life cycle impact 

assessment. Thus, while the rule would achieve the admirable goal of reducing source 

emissions of GHGs from motor vehicles in operation, the rule could potentially increase 

overall global GHG emissions. [OAR-2009-0472-7286.1, p. 19] 

Automobile manufacturers (and their parts suppliers) may need to build more advanced 

facilities or convert existing facilities in order to produce the more advanced vehicles that 

will be required by the proposed rule. This building process will require the extraction 

and processing of raw and recycled materials into useable building materials, 

transportation of those building materials to the site of existing or new facilities, and 

construction. Each of these steps in the renovation or new construction process will be a 

source of new GHG emissions attributable to the proposed rule. [OAR-2009-0472­

7286.1, p. 19] 

7-82 
Other Comments 

Aside from the actual physical buildings where parts are manufactured or motor vehicles 

assembled, the tools required for manufacturing and assembly are likely to become more 

complex and energy intensive. The manufacture and use of these new tools will require 

additional GHG outputs. Moreover, vehicles will likely be manufactured of lighterweight materials in order to meet higher fuel economy requirements; some of these 

materials may be more energy intensive to produce or recycle, leading to increased GHG 

emissions in those processes at least indirectly attributable to the proposed rule. [OAR2009-0472-7286.1, p. 20] 

Finally, consumers will be resistant to purchasing new vehicles because of the increased 

up-front cost, even with a net savings due to reduction in fuel costs, because they may not 

take the net savings into account or may not value those savings as highly as an upfront 

cost savings. In any case, in order to reduce up-front costs to consumers of new vehicles, 

manufacturers (and their suppliers) may increase the proportion of vehicle parts produced 

and motor vehicles assembled in countries with cheaper labor. Notwithstanding the likely 

impact on the domestic job market, this will also create a greater need to transport such 

parts to assembly plants and assembled vehicles to their points-of-sale. This will also 

result in increased GHG emissions attributable to the proposed rule. [OAR-2009-0472­

7286.1, p. 20] 

Importantly, this report does not claim to be able to predict the increase in GHG 

emissions that will be associated with the manufacturing and transportation of the more 

advanced vehicles that the EPA/DOT joint rule will necessitate. Instead, it aims only to 

point out that such a complete life cycle analysis should be performed in order to assess 

the net effect the rule will have on GHG emissions. [OAR-2009-0472-7286.1, p. 20] 

US Steel Corporation 

Life Cycle Assessment (LCA): It is important to consider the impact of compliance to the 

proposed aggressive fuel economy regulations on energy and CO2 emissions over the full 

life cycle of the vehicle. Clearly, the reduction in fuel consumption per mile over the 

driving phase, as the proposed NPRM would stipulate, will directly reduce energy use 

and CO2 emissions for the use-phase of the vehicle’s life. However, by ignoring the 

consequences of those probable technologies (one of which is mass reduction through 

materials selection) to be used by car companies to achieve these results, it is possible for 

higher-energy and CO2-intensive manufacturing of low density materials to offset the 

benefit of the regulations imposed on the driving phase alone. [OAR-2009-0472-7197.1, 

p.3 full discussion follows in document] 

[[These comments were submitted as testimony at the Detroit public hearing. See docket 

number OAR-2009-0472-6185, pp. 102-103.]] 

The methodology for a life cycle approach as well as establish an ISO standard 1440, 

many vehicle manufacturers are already implementing this methodology in vehicle 

designs. The concern is vehicle makers may select technologies that increase the full life 

7-83 
EPA Response to Comments 

cycle energy and CO2 footprint of the vehicle in order to comply with the tailpipe-only 

regulations. 

We will continue to invest in steel technologies that reduce the full life cycle energy and 

the CO2 footprint of the vehicle. Since the 1990s the North American Steel Industry has 

reduced the energy and carbon intensity of steel by 33 percent, more than doubling the 

target set by the protocol. Looking to the future, the steel industry is exploring over 100 

independent CO technologies to reduce or eliminate carbon emissions associated with 

steel making. We continue to develop new grades of steel both independently and in 

partnership with the National Science Foundation and universities that will enable 

additional lightweighting. And at the end-of-life steel will continue to be the most 

recycled material on the planet, more than all other materials combined. 

The combinations of these investments will reduce the energy and CO2 intensity of the 

steel supply, reduce the amount of steel needed per vehicle, reduce the tailpipe emissions 

through weight reduction, and reduce the emissions at the end-of-life through recycling. 

However, without the appropriate regulations, these opportunities to reduce the energy 

use and CO2 emissions associated with a vehicle may not be realized. 

The current fuel economy and tailpipe emissions regulations may result in the unintended 

consequences of increasing the full life cycle energy used and CO2 emissions of the 

vehicle. 

It is my recommendation and request on behalf of U.S. Steel that the EPA and NHTSA 

develop policies that comprehend the full life cycle environmental impact associated with 

the vehicle and encourages vehicle manufacturers to choose technologies that result in the 

lowest environmental impact on the entire vehicle's life. 

Washington State Department of Commerce 

[Following comments are from LA Testimony, OAR-2009-0472-7283, pp.123-124] 

EPA is structuring their regulation -- standards, cost-benefit analysis, et cetera -- on the 

basis of GHG emitted directly from the vehicle. We urge EPA to explore the areas in the 

regulation where the use of life-cycle GHG emission would not be prevented by statute. 

We believe a life-cycle approach would be particularly important and helpful to provide 

the right incentives, A, to different vehicle technologies at a given point in time; and, B, 

to a given vehicle technology over time. 

EPA Response: 

EPA’s final GHG emissions standards are vehicle tailpipe-based standards. The four 

commenters all suggested that EPA consider accounting for GHG emissions associated 

with other steps of the vehicle life-cycle. The American Iron and Steel Institute and US 

7-84 
Other Comments 

Steel Corporation primarily focus on the GHG emissions impacts associated with 

producing the materials used in vehicle and component assembly and in materials end-oflife considerations (i.e., recycling or disposal). The University of Pennsylvania, 

Environmental Law Project goes further and suggests that EPA should consider the GHG 

emissions impacts of building and operating new, more advanced assembly facilities and 

tooling, and even the potential GHG emissions impacts that might be associated with a 

greater reliance on imported vehicles and components, on the theory that technologies 

with a higher up-front cost might be more likely to be produced in countries with lower 

labor costs. Each of these three commenters makes the point that these non-tailpipe GHG 

emissions considerations could reduce the effective GHG savings of the program. The 

University of Pennsylvania, Environmental Law Project suggests that the non-tailpipe 

GHG emissions impacts “could potentially increase overall global GHG emissions.” 

EPA understands the technical issues associated with life-cycle analysis. But, vehicle 

life-cycle GHG emissions impacts are beyond the scope of this rulemaking. EPA has 

wide discretion under section 202(a) and has chosen to first focus on vehicle tailpipe 

GHG emissions, both because tailpipe emissions are the largest single source of vehicle 

life-cycle GHG emissions, and because the EPA motor vehicle program has traditionally 

focused on tailpipe emissions. The time involved in developing a methodology and the 

necessary data, noticing all of the information and assessing the public comments would 

significantly delay issuing GHG standards in time for MY 2012 and perhaps later model 

years as well, undermining any potential benefits of the approach. In addition, extending 

the vehicle tailpipe GHG emissions standards to include other steps of the vehicle lifecycle would reduce the harmonization with NHTSA’s CAFE program, and EPA has 

reasonably considered such harmonization to be appropriate in this rulemaking. 

7-85