Summary of working interagency draft comments on EO 12866 and EO 13653 review of 

EPA/DOT Heavy Duty GHG/fuel efficiency NPRM. Subject to further policy review. 

Interagency Working Comments on U.S. Environmental Protection Agency 

(EPA) and National Highway Traffic Safety Administration (NHTSA) draft proposed 

rule titled, “Greenhouse Gas Emissions and Fuel Efficiency Standards for Mediumand Heavy-Duty Engines and Vehicles - Phase 2.” RIN 2060-AS16; RIN 2127-AL52

Reference Case/ Baseline text in Chapter 1:

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The agencies chose to analyze these two different baselines in the central or policy case

because the agencies recognize that there are a number of factors that create uncertainty in 

projecting a baseline against which to compare the future effects of the proposed action and the 

remainingany alternatives. The chosen baselines range from assuming zero improvements across 

all vehicle categories (except for trailers) to assuming that for certain truck categories 

manufacturers will adopt technologies that have a payback of 6 months or less. The discussion 

below provides the agencies’ reasons for selecting these baselines. The agencies note that the

reasons represent their hypotheses about the baseline and these hypotheses are based on

anecdotes rather than empirical evidence from the specific categories. We seek comment and 

data on whether there is any empirical evidence on the appropriate baseline to use for the final 

rule. Due to a current lack of empirical evidence supporting the chosen baselines, the agencies 

consider alternative baseline scenarios in the sensitivity analysis presented on page X of the 

Preamble and page Y of the RIA. However, owing to time constraints, the agencies only 

analyzed payback periods of 12 months, 18 months, and 24 months, and they only applied the 

alternative payback periods to HD pickups and vans —that is, they maintained the 6-month 

payback period for other classes of trucks included in this regulation. These alternative cases are

more consistent with payback periods discussed in meetings with manufacturers and in focus 

groups for those classes. The agencies seek comment on whether there is empirical evidence 

supporting the use of the alternative, more dynamic baselines, for the final rule stage—and not 

only for HD pickups and vans, but also for other vehicle categories. The agencies also seek 

comment on other factors that may not be included in calculations of payback periods, and which 

would affect the baseline such as unaccounted benefits, costs and operational complexities and 

risks borne by vehicle builders, purchasers, and/or operators. The agencies specifically seek 

comment on how to account for these additional factors when developing the regulatory baseline 

for the final rule. 

Agency Hypotheses To Support the Central or Main Policy Case Analytical Baseline:

The composition of the future fleet—such as the relative position of individual 

manufacturers and the mix of products they each offer—cannot be predicted with certainty at this 

time. Additionally, the heavy-duty vehicle market is diverse, as is the range of vehicle 

purchasers. Heavy-duty vehicle manufacturers have reported that their customers’ purchasing 

decisions are influenced by their customers’ own determinations of minimum total cost of 

ownership, which can be unique to a particular customer’s circumstances. For example, some

customers (e.g., less-than-truckload or package delivery operators) operate their vehicles within a 
Summary of working interagency draft comments on EO 12866 and EO 13653 review of 

EPA/DOT Heavy Duty GHG/fuel efficiency NPRM. Subject to further policy review. 

limited geographic region and typically own their own vehicle maintenance and repair centers 

within that region. These operators tend to own their vehicles for long time periods, and 

sometimes for the entire service life of the vehicle. Their total cost of ownership is influenced by 

their ability to better control their own maintenance costs, and thus they can afford to consider 

fuel efficiency technologies that have longer payback periods, outside of the vehicle 

manufacturer’s warranty period. Other customers (e.g. truckload or long-haul operators) tend to 

operate cross-country, and thus must depend upon truck dealer service centers for repair and 

maintenance. Some of these customers tend to own their vehicles for about four to seven years, 

so that they typically do not have to pay for repair and maintenance costs outside of either the 

manufacturer’s warranty period or some other extended warranty period. Many of these 

customers tend to require seeing evidence of fuel efficiency technology payback periods on the 

order of 18 to 24 months before seriously considering evaluating a new technology for potential 

adoption within their fleet (NAS 2010, Roeth et al. 2013, Klemick et al. 2014). Purchasers of 

HD pickups and vans wanting better fuel efficiency tend to demand that fuel consumption 

improvements pay back within approximately one to three years. Payback periods vary across 

purchasers of HD pickups and vans for a variety of reasons, including the fact that, but some HD 

pickup and van owners accrue relatively few vehicle miles traveled per year, such that they may 

be less likely to adopt new fuel efficiency technologies, while other owners who use their 

vehicle(s) with greater intensity may be even more willing to pay for fuel efficiency 

improvements. Regardless of the type of customer, their determination of minimum total cost of 

ownership involves the customer balancing their own unique circumstances with a heavy-duty 

vehicle’s initial purchase price, availability of credit and lease options, expectations of vehicle 

reliability, resale value and fuel efficiency technology payback periods. The degree of the 

incentive to adopt additional fuel efficiency technologies also depends on customer expectations 

of future fuel prices, which directly impacts customer payback periods. There is anecdotal 

evidence that pPurchasing decisions are not based exclusively on payback period, but also 

include the considerations discussed above and in Section X.A.1. For the baseline analysis, the 

agencies use payback period as a proxy for all of these considerations, and therefore the payback 

period for the baseline analysis is shorter than the payback period industry uses as a threshold for 

the further consideration of a technology. The agencies request comment on the appropriateness 

of these reference cases. See Section X.A.1of this Preamble and Chapter 11 of the draft RIA for 

a more detailed discussion of baselines.

As mentioned above, as part of a sensitivity analysis, additional baseline scenarios were 

also evaluated for HD pickups and vans. See Section VI of this Preamble and Chapter 10 of the 

draft RIA for a detailed discussion of these additional scenarios.