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Memorandum

March 30, 2012

TO: EPA/NHTSA Docket 2017 -2025 Rulemaking on Greenhouse Gas 

& Fuel Economy Standards

From: Jeff Clarke, NGVAmerica

RE: March 26 Meeting at NHTSA HQ

The purpose of this memorandum is to summarize issues discussed at a meeting held 

at NHTSA‟s headquarters on March 26, 2012. EPA staff also participated by 

teleconference. This meeting was held at the request of NGVAmerica and its 

members. 

Overview: NGVAmerica recognizes and appreciates that the agencies have included 

incentives for NGVs in the proposed rules. Providing incentives for NGVs is 

consistent with many other efforts by the Administration to advance the use of 

NGVs, including the President‟s “All of the Above Approach” to solving our energy 

dependence problem using several alternative fuels. The President is clearly interested 

in advancing the use of light-duty NGVs as evidenced by his support for the recent 

ARPA-E announcement. That solicitation provides $30 million to develop lower cost 

storage options for passenger cars, and also provides funding for developing a lowcost home refueling device for NGVs. 

NGVAmerica believes that the EPA/NHTSA rulemaking, if properly structured,

could encourage manufacturers to greatly expand their offerings of light-duty NGVs. 

NGVAmerica provided handouts that showed the wide-variety of light duty vehicles 

currently offered in Europe: http://www.ngvaeurope.eu/cars, 

http://www.ngvaeurope.eu/vans. This illustrates the potential for manufacturers to 

expand their gasoline offerings to also include NGV models.
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Our key issue with regard to the rulemaking is the likely inability of NGV 

manufacturers to take advantage of the incentives that have been proposed. The way 

the rules have been structured and the timing of phasing in and out of the incentives, 

places NGVs at a distinct disadvantage with electric vehicles (EVs). In particular, the 

fact that we are tied to FFVs in the early years means that manufacturers in theory 

could earn very generous credits for NGVs but, in reality, likely can‟t use them 

because of the limitations or caps on credits. 

Key Priorities for NGVs: NGVAmerica urges the agencies to provide a separate

track for dual-fuel NGVs so that the fuel economy (FE) credits are not limited or 

capped, and provide a longer duration for all NGV-related incentives (both for 

dedicated and dual-fuel) in order to aid in commercializing NGVs in the light duty 

sector. EVs are given until 2025, or 300,000 vehicles per manufacturer, i.e. until they 

reach market acceptance/maturity. It is appropriate that the agencies provide similar 

incentives to NGVs.

Specific Issues Addressed by NGVAmerica: 

1. Utility Factor for Greenhouse Gas (GHG) Emissions: We support the 

proposed use of the utility factors (in place of the 50/50 fuel consumption 

assumption) for 2012 forward for purposes of GHG emissions for bi-fuel 

NGVs. However, we do not think this will actually be helpful unless also used 

for FE calculations.

2. 0.15 Factor/Divisor for GHG and FE 2012–2015: The previously finalized 

2012–2015 incentives for dual-fuel and dedicated NGVs allowed the use of a 

0.15 factor/divisor for both FE and GHG emissions. However, the fact that

NGVs are tied to FFVs means that the FE credits are likely to be of no value 

since they are capped, and the GHG credits are only of value if they can be 

carried forward. With respect to dedicated vehicles, the timeframe is too 

limited as automakers already have set production plans. Automakers typically 

need at least three years to develop a new product. Because the automakers are 

just a few months away from Model Year 2013 start-of-production, any new 

plans to manufacture NGVs will most likely not begin until at least MY2016. 

Moreover, because this is a light-duty rulemaking, providing meaningful 
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incentives for dual-fuel (or bi-fuel) vehicles is much more important initially 

because consumers and fleets will want bi-fuel until infrastructure matures. . 

The introduction of bi-fuel vehicles is an absolutely critical bridging strategy 

towards the ultimate acceptance of dedicated NGVs. 

3. Utility Factors and Use of 0.15 Divisor Post-2019: NGVAmerica supports the 

continued use of the 0.15 for fuel economy, and the use of the utility factors 

for FE and GHG after 2019 for bi-fuel vehicles. However, the fact that a 

comparable GHG credit is not provided (the rules do not allow use of the 0.15 

factor for GHG calculation after 2015) puts NGVs at a distinct disadvantage to 

EVs, which get 0 tailpipe emissions and very favorable FE calculations. 

4. FE Treatment for NGVs: NGVAmerica supports the agencies‟ decision to 

continue the use of the 0.15 factor for FE because of the petroleum reductions 

provided by alternative fuels. This is in contrast to the heavy-duty final rule 

where the agencies declined to use a 0.15 factor for purposes of calculating FE 

of alternative fuel vehicles. The extension of the 0.15 factor is legally 

supportable as an incentive for alternative fuel vehicles for the following 

reason: this incentive is distinctly different than the incentive previously 

offered such vehicles because now alternative fuel vehicles will be expected to 

actually operate on alternative fuels in order to qualify for the incentive. For 

this same reason, we believe the agencies should extend this incentive (under a 

separate track) prior to 2020 for alternative fuel vehicles that actually operate 

on alternative fuels.

5. Heavy-Duty Pickup Trucks: NGVAmerica recommends that the rules allow 

the use of the 0.15 factor for FE with respect to heavy-duty pickup trucks. 

NGVAmerica did not explicitly state this in its comments filed on February 

13th but we discussed this at the meeting and think it is appropriate, particularly 

with respect to chassis-certified pickup trucks. We also believe that the natural 

gas pickup trucks should benefit from any of the incentives provided to lightduty dedicated or bi-fuel vehicles, e.g., use of utility factors for FE, and 0.15 

factor for FE and GHG for a period of time to incentive increased sale of such 

vehicles. Alternatively, we did comment that the agencies should include NGV 

pickup trucks in the incentives proposed for advanced technology pickup 
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trucks, but provide a lower market penetration threshold for such vehicles in 

order to qualify (e.g., tie penetration to percentage of fleet sales not to all 

pickup truck sales). We agree with the comments of some of the OEMs, 

including Chrysler, that requiring specific market penetration rates is 

unnecessary and could actually discourage manufacturers from offering some 

certain improvements. 

6. Sales Multipliers: In order to provide equitable treatment with EVs and 

PHEVs, NGVs should receive similar sales multipliers on par with EVs for 

dedicated NGVs and PHEVs for dual-fuel NGVs.

7. Dedicated Vehicles: We did not comment on the treatment of dedicated 

vehicles in our written comments but we support Chrysler‟s view that NGVs

that have an emergency reserve or small (“limp home” or “pony”) gasoline 

tank should be treated as dedicated vehicles. This is consistent with the 

European classification of mono-fuel NGVs, which can have 15 liters or 

approximately 4 gallons of gasoline and still be considered mono-fuel. For 

example, the GM Zafira is powered by natural gas and has small reserve 

gasoline tank, but is considered a mono-fuel NGV (i.e., because the gasoline 

tank is exclusively considered a „backup‟ and not a primary mode of operation, 

it qualifies for incentives applicable to dedicated NGVs).

8. Aftermarket Sales: We support providing credits to OEMs who offer gaseousprep engines to the marketplace, particularly in the case where the aftermarket 

systems are not subject to the FE or GHG rules. If the OEMs could earn 

credit for vehicles that are actually up-fitted (not simply sold as gaseous-ready), 

they are likely to provide additional assistance to the aftermarket industry and 

promote increased use of alternative fuel vehicles.